NOT ACCEPTABLE !!!!!
 
I have to admit that when Airbus was struggling with their string of A380 delays, I found the reading quite enjoyable.  As each of their promises evaporated and their top management got the boot and their credibility fell to zero, I thought how much better we were than they.  "Then rejoice in your brother's progress and Judge not, lest ye be judged"  would have been a more benevolent thought process.  And, it turns out, I was thinking of the old Boeing, not, apparently, the Boeing of today.   

Boeing has lost "the touch."  To the group of people known as its retirees, (myself included), it's a source of pain and chagrin.  For they remember 'back when.'  Our alma mater's 75 year hard won reputation for excellence, honesty, credibility, and 'can-do', are being frittered away.  Steadily.  Quickly.  Its management are demonstrably incompetent, people selected in a committee environment to meet goals unrelated to the business, and promoted without the required skill sets or experience.  Its ethics problems are the meat of pundits, and have cost major contracts, bidding opportunities, and huge fines.  And caused embarrassment - especially for us retirees.    Its programs are hopelessly delayed and over budget.  Almost all of them.  It excuses abject program performance with almost incoherent whining and drivel.  It's employee relations, despite fancy talk and metrics, are perpetually strained.  It's business model seems more a reflection of the 'fad of the month' club and in any event is poorly executed.  Our Dean Thornton "God-given" market share has fallen below 50%.  Its financials continue to be supported by legacy programs that have existing production lines and large backlogs.  When those backlogs get worked off, or melt away in the current economic environment, the day of inevitable reckoning will be nigh.  Like the car companies and mortgage brokers, the hand writing is on the wall, and has been for a long time, and the unraveling, it seems, always comes, and always occurs faster than expected.  If not for an equally incompetent competitor in a duopoly, the end would have perhaps come already.

Over and over and over again, the P.R. Dept cranks out statements like these

"While we have made some progress over the past several weeks completing work on our early production airplanes and improving parts availability across the production system, the pace of that progress has not been sufficient to support our previous plans for first delivery or first flight," said Scott Carson, president and CEO of Boeing Commercial Airplanes. "We deeply regret the impact these delays will have on our customers, and we are committed to working with them to minimize any disruption to their plans."

You've heard those tired old press conferences that sports coaches have with the media after yet another loss.  Yeah, I'm talking the Mariners, the Huskies, the Seahawks.  100 season losses, or a winless season, and the Coach says how proud he is of his players, how hard they've worked under adversity, yadda yadda.  Losers!  This is the talk of losers.

These days, it's 'Boeing talk.'  Most of those coaches get the gate.  Right in mid-season.  Boeing needs to be giving some of their losers the gate too - before it's too late - and a lot of them are right at the top.  And stop the Double Talk!



The 787 "Rolled Out"  on 8 July 2007 - (7/8/07 - get it?) - with Tom Brokaw and Jim McNerney presiding.

It now appears that it will be TWO YEARS from Rollout to First Flight

Virtually ALL Boeing airplanes have made their First Flights within 3-4 months following Rollout.

How many people would deem that "a success"?

Scott Carson would......

 

"Pat's experience and proven record managing demanding and complex programs will allow him to build on the 787 team's success.  He knows how to deliver results, ... and has the leadership skills to get the job done."

 Oct 2007 Management shake-up announcement by Scott Carson of Mike Bair's replacement by Pat Shanahan, as the Program announced a six month slide.


"Scott brings demonstrated leadership in program management, systems integration and technology development to the 787 program.


All of these appointments reflect great depth and strength in our management team and position us for continued success."

Dec 2008 announcement by Scott Carson of Pat Shanahan's replacement by  Scott Fancher (After 14 months of "success", Shanahan  got "kicked upstairs" as the Program announced another six month slide.


Jim Riggleman took over as Seattle's manager on Friday with an upbeat attitude, urging players to "let's go get 'em."  The Mariners (25-47) are on pace to become the first team with a $100 million payroll to lose 100 games.*

McLaren fired; Riggleman new Seattle manager - July 2008  [* Note:  Actuals were $121M payroll; 101 losses.]




**************************************


I prefer to remember the winning coaches, and their teams in sports.  Guys like Vince Lombardi, Tom Landry, Bill Parcels.  They were leaders and they were managers.   'Winning isn't Everything - it's the ONLY thing!'  Boeing used to operate that way - we made schedule.  We had our own star coaches.  T. Wilson.  Dean Thornton.  Harold Haynes.  Joe Sutter.  Ed Wells.  Jack Steiner. The list is long.  We were a schedule driven company.  We had the right engineering.  The right manufacturing.  The Right Stuff.  Now, we clearly have none of the above.  We're adrift, apparently without rudder or captain.  Actually, as I'll show below, we're going backwards.  Fast.



NO!  NOT ACCEPTABLE !!!

Boeing announces program delay

Yes, I know - you've seen this unending string of 787 delay announcements before.  Embarrassing, aren't they?  Oh! - this isn't the 787.  Not even the 747-8.  

It's the 767 Freighter conversion program - the 767-200SF.  Confirmed  1 Dec 2008, the program developed with Alenia of Italy "has been hampered by a series of engineering hurdles and is running more than a year late."  This exclusive licensing agreement was signed in October 2003 - yes, that's over 5 years ago, and is using Boeing Type Certificate data, engineering and tooling from new built 767 Freighters.  It's taking longer to convert a freighter than it took to build the whole damn airplane in the first place!

The conversion, involving installing cargo doors and floors in 10 ex American Airlines passenger aircraft, was due to begin test flying from Boeing Field in 2007. Actually, in an announcement in the May 2000 magazine Flight International -  - 8.5 years ago,  it was noted that  "Boeing has completed 80% of the engineering work for its 767SF (Special Freighter) conversion programme and is beginning an aggressive marketing campaign to secure a launch customer.  "We're deeply into the design," says Boeing Airplane Services (BAS) maintenance services director, Jerry Smith. "It's available pending a launch customer."  [Note:  Launch customer Cargo Aircraft Management subsequently signed up, allowing the agreement with Alenia to be signed.]  Eight and one half years later, we state the program is being "hampered by a series of engineering hurdles."

Interestingly, Israel Aircraft Industries has been converting 767-200s, and now -300s into freighters, using its own engineering data and designs, and generating their own STC.  Like most after market conversion houses, they  found "The price of the Boeing data was too steep," as was said by Richard Gauvin, director of sales and marketing for Alcoa-SIE. - a 757 conversion consortium.  IAI has converted more than 15 airplanes for GECAS and Airborne Express, with first deliveries in 2004.  Timco in North Carolina has also built conversions, using engineering developed by FSI.    Varig in Brazil has performed 767 Freighter conversions.  And the Russians are also investigating performing freighter conversions.

What's the result for Boeing?

767-200SF delay prompts CHI to plan switch to IAI.  (Flight International - January 2008.)


Ongoing delays in Boeing and partner Alenia Aeronavali's 767-200 Special Freighter (SF) cargo conversion programme have prompted launch customer Cargo Holdings International (CHI) to turn to Israel Aerospace Industries' Bedek Aviation Group.  The delays  prompted CHI to transfer the four remaining 767-200s under its contract  to the rival conversion specialist, (the first of which was delivered in March 2008.)

 Boeing, with the STC, engineering and tooling in hand, are unable to move forward on this project - and, interestingly, cite "engineering hurdles" as the reason.  


***********************

747-8

The 747-8 Program was launched Nov 14, 2005.  In an announcement EXACTLY 3 years later, on Nov 14, 2008, Boeing announced "Delivery of the first 747-8 Freighter will move from late 2009 to the third quarter of 2010. The first 747-8 Intercontinental passenger jet delivery moves from late 2010 to the second quarter of 2011."  That's about 58 months from launch to delivery.

It's interesting to note that the first 747 was ordered 13 April 1966, rolled out 30 Sept 1968, flew 9 Feb 1969, and was certified 30 Dec 1969.  First delivery was made 13 Dec 1969, exactly 44 months after the contract was signed.  Along the way, Boeing built a whole new factory, and blazed an unknown trail in wide-body airplane / high bypass ratio engine construction.


The mantra around Boeing when I retired was stuff like "being nimble."  So  --  after more than 40 years, with the technology, factory, most of the tooling, and 1400 completed production units in hand, Boeing has increased the time to develop an airplane - a derivative airplane - by about 14 months.  Now, That's progress!

    747-8

Oh!  By the way!  At the same time the 747 was being designed and built, Boeing was also designing, building and certifying the 727-200, the 737 - another all-new airplane (including  another all-new factory), and the SST (not built.)  And followed that up with the truly revolutionary YC-14.  In the 1978-82 time period, Boeing again designed and built two brand new airplanes in parallel - the 757 and 767.  The B-2 was also in works.  That's talent!  In baseball, they call that Bench Strength.  If a star player goes down, there's another capable player to slip right in.  In about 6 years, Boeing could design 5 different airplanes.  Now, they can't design one.

"Our entire team has worked hard to mitigate growing schedule risk on this program but have been unable to overcome the collective impact of work statement increases to the original design, a tight supply of engineering resources, and the recent Machinists' strike," said Boeing Commercial Airplanes President and CEO Scott Carson. "We are clearly disappointed in what this schedule change means for our customers, employees, suppliers and other stakeholders. However, it is the appropriate and prudent decision to ensure a successful program, and we are committed to working with our customers to mitigate any disruption it causes them."  747-8 delay announcement - Nov 2008

[Note 1:  According to Av Week - Dec 15 issue - besides Engineering woes, "supplier problems also now envelope the 747-8 development.]

[Note 2: Is Boeing contemplating canceling the program?  See article in Reference section at the bottom.]

**********************************

WedgeTail

Interestingly, the same Dec 1/2008 issue of Av Week that reported the 767 Freighter conversion delays, reports further delays in the six 737 Wedgetail radar AEW aircraft for Australia.  Originally due for delivery years ago, the program was slid one more time in July 2008 for another year until July 2009.  Now Boeing is unable to say when the first aircraft will be received, saying in a statement "we are reviewing the schedule with our customer to determine the best way forward...." according to Maureen Dougherty, Boeing’s vice president for 737 AEW&C programs.   Excuse me - "the best way forward...."?  What in the hell is that all about?

Maybe we ought to junk them and give them their money back?  We'd probably save a ton of money.

"This latest slip in the program schedule has once again cost Boeing financially,  taking an additional $274 million charge in its fourth-quarter (2007) results. An earlier delay announced in 2006 cost the manufacturer a $496 million charge against its second-quarter (2007) earnings."  So far, Boeing has taken charges of over $1 Billion on this program - a firm fixed price contract involving 6 airplanes.  That's $166M per airplane!  And who knows what compensation will be due the customer for late delivery.  As my Dad used to joke, I guess we're gonna make it up in volume.

[Note:  In 2nd Quarter 2008, Boeing took another charge against this program of $248M.]

    737 WedgeTail for RAAF

Similar aircraft are being built for the Turkish Air Force.  These are called "Peace Eagle."  (Who thinks these up?)  In May, 2007, "Boeing confirmed  fresh delay to Turkey’s 737 AEW&C project."  Deliveries have been further delayed until 2010 due to software and equipment issues with the modified Boeing 737-700 aircraft.  “Upgrading the sensors is going more slowly than expected,” says Maureen Dougherty, Boeing’s vice-president for the 737 AEW&C project. “To increase the performance, the software and the equipment will be modified,” she said

I don't know Maureen, and I'm not trying to single her out, but her P.R. provides an attractive target. Boeing's website does not provide a bio.   From what I can gather, she's been in charge of this project for some years and is still on the job in late 2008.  A man named Patrick Gill preceded her.  She talks a lot about Leadership.  This program is a great exhibition of "Leadership."  Maybe we need to re-evaluate our use of another term - Management Or, how about Accountability.   I wonder what her compensation package looks like?  Is she getting lots of stock options and annual bonuses?  Like the executives in the banks about to fail......

Yes - I know - she'll say  'I just don't understand.'  Airplanes and systems and avionics are more complex and didn't exist nor were they as challenging to build in "the good old days."  What a crock!  Only 19 years elapsed from the first flight of the Model 40 fabric covered biplane to the sleek six-jet B-47.  Talk about progress!  In those 19 years, Boeing built and flew a lot of airplanes including the Model 80, 247, XB-15., B-17, 307 Stratoliner, 314 Clipper, B-29, and the C-97.  The next 20 years saw the 707, 727, 737, 747 and the B-52.  And the Bomarc, and Minuteman, and Saturn V..............

    19 Years of Boeing Progress 



Problems?  That's what they pay you the big bucks for, Maureen.  It's called Management!  Where is your Master Schedule?  Where are your tracking meetings?  Weekly?  Daily (like at 6 AM in the tunnels under the 747 factory?)  Where is the accountability?  What do you folks do? - (see the article at the bottom) - visit work areas to "thank people for a job well done."  Kumbaya.  "Well Done?"  Losing over a billion dollars and being years and years late on a program is a "job well done?"

Clearly, I am in a time warp.  An old fogey, over-the-hill.  Yes, Boeing is in the new paradigm.  Reflective of society, where there are no failing grades in the Seattle Public Schools, where everyone gets a diploma, where Little League games are played without scores so as not to upset the players, and with exams that have "no wrong answers."  A sure recipe for disaster.  We're there.



On 11 Feb 1960, the CIA signed a contract with Kelly Johnson and Lockheed's Skunk Works for 12 Mach 3.2 reconnaissance planes (known as A-12s, YF-12s, later SR-71s.)  This airplane required --  NEW - EVERYTHING new!  New structural materials (titanium), new fuels, new engines, new engine oil, new hydraulic fluids, new aerodynamics, new computerized ram air inlet systems, new crew escape systems.  Even new tires.  The first airplane rolled out 26 Feb 1962 and flew two months later on 26 April.  Time to roll out - 24 months; time to first flight - 26 months.  38 months after contract signing, it was flying at Mach 3 with an all new set of engines (J-58s.) 

Probably the most advanced airplane ever built.  Just imagine the challenges to overcome!   And done without  a bunch of whining about "software and equipment issues" and drivel like  “Upgrading the sensors is going more slowly than expected,”  Huh?

    SR-71 Blackbird


It is  interesting to also note that half a dozen competing AEW projects have been proposed, produced, and introduced during this time period by other aerospace companies, using an assortment of mostly business jet and regional jet airframes.

Although suppliers and union work stoppages are frequently referred to as "the usual suspects" in the press releases, it must be stated that the 737 Wedgetail, KC-767 Tanker, 767 Freighter conversion, 747-8, and 787 have all been plagued with publicly acknowledged "engineering problems."  The Wedgetail had structural problems with the crown mounted antenna; the KC-767 with wing-tip hose and drogue supersonic flows, the 767 Freighter conversion with who knows what; likewise the 747-8; and the 787 engineering problems  - I'm talking structural and aerodynamic - too numerous to mention.  

By way of additional comparison (these are  getting ugly, aren't they?), the USAF E-3 Sentry, or AWACS radar airplane, was first flown in 1972, engineering test and evaluation began in Oct 1975 and the first airplane was delivered in March 1977.  About 60 months all up, and 18 months from the start of system wring-out.  The Wedgetail - well - who knows.  The airplanes were ordered way back in 2000, and rolled out in Oct 2002.  They've been sitting on the Boeing Field ramp for six years.  Getting flat spots on the tires.

  It looks like the program will be a whopping 108 months - or more - from order to delivery.  Now that's progress!



Perhaps you remember this?

May 25, 1961 - "the United States should set as a goal the "landing of a man on the moon and returning him safely to the earth by the end of the decade."  John F. Kennedy.

July 20, 1969 - Neil Armstrong and Buzz Aldrin land on  the Moon.

Elapsed time = 98 months


*********************************

KC-767 Tanker

The KC-767 Tanker Program for Italy and Japan is another program woefully behind schedule, and also running up red ink.  In  2007, Boeing charged $152M against that program due to cost over-runs and schedule slides.  It was one of the factors cited by USAF in awarding the Tanker program to Airbus.  This program had/has major engineering problems - including bad aerodynamics, that have lead to a series of redesigns and mods.  This is supposed to be the era of "computational fluid dynamics" simulation capabilities, using super computers and all the rest.  Japan selected the 767 Tanker in 2001; the contract with Japan was signed 3 Apr 2003; the first airplane was delivered 19 Feb 2008 - 58 months later, with a delivery delay penalty payment being imposed on Boeing.

[Note: In 2008, Boeing charged off another $85M against this program.]

By way of comparison, the KC-135 was ordered by USAF in 5 August 1954; the first airplane flew in August 1956 (24 months later) and the first delivery occurred in June 1957. (33 months.)

    JSDF KC-767

It took Boeing more than 2 years longer to modify an existing 767 airframe and deliver an airplane off a functioning production line.  Not a flattering comparison.
 But a necessary one.  The change from the propeller KC-97 to the KC-135 was revolutionary.  The 767?  Hardly.

I haven't the time or energy to dissect the full Space and Defense side of the business, but from my knot hole, it's in a shambles.  F-35 Fighter contract lost (Hey, I thought that's why we bought McD in St. Louis).  Lawsuits on satellite business and launch systems - lost.  Ethical lapses that caused huge fines (the biggest everin U.S. history) and disbarment from bidding opportunities.  And, there's the Connexion by Boeing debacle.

What's carrying the company forward are the Legacy programs, like the 737, 767, and 777, with big backlogs and in-place production set-ups.  A new project?  Forgetaboutit!  Boeing management deserves an F grade.  Big time!  For retirees like myself, it's an embarrassment.



*********************************

787 Program

The 787 continuing program delays are what triggered this little outburst.  The Official Announcements, in their dreary sameness, are provided below in the reference section.

When the 787 Program was launched, a group of a few hundred folks were sent down to the Bomarc site and told to come up with a "new" way to design and build airplanes.  Sometimes, a clean sheet of paper is a good thing; other times, someone with grit under their fingernails is what is needed. Maybe you've noticed how "smart" some young people think they are compared to their "elders", and how much a'learnin they have ahead of them - a lot of it the hard way.

The main difference between this airplane and previous airplanes (other than the composite construction - which has not turned out to be the main problem) was the assignment of increased responsibilities to the supplier network, to enable us to create a "snap together" airplane that could be assembled in three days.  Some  design responsibility went to the suppliers, with the additional task of delivering "stuffed" sections to the final assembly line - something Airbus has, in fact, been doing for decades.  Now, here's the big change.  In the past, we had on-site teams at the supplier - to help and monitor their progress at making our stuff.  I know, they were my responsibility for 10 years.  Liaison and Industrial Engineers, Inspectors, Tooling and Manufacturing experts.  They lived there at the supplier, day-in and day-out.  When things got rocky, we sent in more people to ensure we'd get our stuff, -- on time.   In the "old days", if necessary,  we would send in a big team and make the parts needed right in the supplier's own plant.  Or make them ourselves down in Auburn.  Or buy the supplier.  To paraphrase Jimmy Cagney's line in Mr. Roberts - "there ain't nothing that was gonna stand between us, and those parts!"

This time around, we didn't have "suppliers" we had "partners."  All of which is B.S.  - our partners are partners in name only - they basically sign contracts similar to those of the past, with the change being, Boeing expected them to "participate" in the up-front "risk-sharing" financials, without their ever participating in the down-stream profits. 

Then, we took these work packages and threw them over the fence.  Because these were now "our partners" and not just measly old suppliers, we expected them to design and build the hardware, and provided little in the way of on-site assistance and surveillance.  What's worse, we allowed factories to be built in "greenfield" sites - to save money you know - staffed by people with virtually no aerospace experience.  We believed our own line of B.S. - or to quote a famous Boeing phrase - "we were drinking our own bath water."  So we saved a nickel and spent a dollar.  With the increased supplier responsibilities, we should have monitored them more - not less!

    787

Airplane Number One was a shell for many months after Rollout while armies of engineers climbed over it - there had been a complete loss of Configuration Control - meaning that the airplane was being designed on the factory floor, and the drawings were incomplete.  Throw in the new supplier responsibilities, and you have a real witch's brew.

Suppliers can be a lot like I was when I went to college - I was assigned a term-paper in September due in May, and started it the night before it was due.  Continual on-site surveillance, coordination, and help, is what is necessary to make all this come to fruition.  Without it, you get "nasty surprises," which is what the 787 is getting now.  It's incredible to me that a Boeing manager (Mike Bair) would stand up in public and say they were surprised by the state parts were arriving in.  What!!!  Where have you been???

There's a lot of finger pointing going on right now, and a lot of it at suppliers.  The unions are certainly weighing in.    The problem IS NOT with suppliers, the problem is with Boeing.  Boeing views themselves as have "large scale project integration" as one of their core competencies. I happen to agree with that.  However, to be a Project Integrator, you have to be a Project Manager.  The problem is solely and entirely Boeing's fault.  They needed to manage the program, and they have not.

A reporter from one of the papers called me a couple of years ago, and asked me what I thought of the first 787 schedule delays.  I recited the oft quoted six stages of an aerospace project.  Having never heard of them before, he thought they were a kick.  They are:

Euphoria
Disillusionment
Panic

Search for the Guilty
Punishment of the Innocent
Reward for the Uninvolved.

I asked him to pick for himself which stage he thought Boeing was currently in.  I  invite the reader of this humble tome to do the same.

****************************

Suppliers

I was asked - Do you still believe this global-supply setup was a good idea?

My answer is "You bet!"  Despite the IAM's posturing, Boeing cannot, and has never, built, complete airplanes.  No manufacturer does.  Boeing's percentage of "Buy" in the Make/Buy split, has always been way below the rest of American manufacturing.  Parts always came from outside - sometimes more, sometimes less.  Suppliers are necessary, and not a 'necessary evil' either.  This time, we wanted them to do some design and stuffing work, without ever providing the needed support.  Oh, and by the way, check out the 787 kick-off  orders from airlines in Japan (ANA) - or the 767 or 777.  The 787 might not exist at all, and the Boeing factories might not be near as busy without our relationships with that country's manufacturers.  The unions ought to think about that before they go mouthing off about suppliers.

Nevertheless, I wonder what Boeing's game plan is with regard to suppliers - or even IF they have a game plan.  On the one hand they have shut down or spun off portions of the company, like Spokane and Wichita.  On the other, they have bought suppliers - like in Hawker de Havilland in Australia, Rockwell Tulsa, Vought (Global Partner share) - bringing once outside suppliers into the Boeing fold.  Scott - What IS the plan???


So how did Boeing get in this pickle?  Is there really a problem?  We have this huge backlog......

Jim Blue once had a painting commissioned.  It showed General Custer  on his horse surrounded by members of his Cavalry.  He's holding his index finger in the air, and proclaiming "We're Number One!"  Off in the wispy distance can be seen a line of Sioux warriors, coming over a distant ridge.................

Does this quote from the Seattle Times in March 2007 sound like General Custer?

To hear Mike Bair tell it, the biggest problem with the new 787 Dreamliner manufacturing schedule has been the olive trees.

The trees, that is, that Italian partner Alenia had to move before it could build its factory in Grottaglie, a city in southeast Italy.

"They had to transplant all the olive trees," Bair said. "

In an apparent bid to convince skeptics Boeing will not falter as Airbus has done in the final stages of its new jet program, Boeing Commercial Airplanes CEO Scott Carson joined Bair on the call.

"We are doing what we do best at Boeing, and that is use all of our intelligence, skills and resources to make sure that we deliver," said Carson.


Boeing has a lot of problems - a lot.  Despite their claims otherwise, they have clearly lost their management skills.  The reason aerospace is such a high stakes game, with a high cost of entry, is because of the complexity and skill sets needed to be successful.  Product definition, marketing, sales, design, tooling, manufacture, supplier management, testing, delivery, and service.  A program must be MANAGED.  When done successfully, it looks easy - but only dummies (or, perhaps, some in Boeing Top Management), think it's easy.  Like watching Griffey shag fly balls, or Horowitz play the piano, or Peggy Fleming ice skate, pro's make it look easy.  Only dummies THINK it is easy.  What I'm trying to say  is Boeing got stupid, and started to think our success happened because we were so good - like falling out of bed in the morning -- instead of due to the intelligence, skill, and hard work of a  lot of experienced people.  They MADE it look easy -- it wasn't easy.

And, this isn't one or two programs.  That would be --   if not acceptable -- at least somewhat understandable.  This is permeating almost all of the current programs.  Programs need to be Managed.  They ALL have rough spots in the road that must be overcome.

An airplane is built to a Master Schedule.  And managed in War Rooms.  With continual Progress Meetings.  All the functions contribute to the building of the schedule, and all sign off.  Engineering.  Tooling.  Manufacturing.  Finance.  Then they are expected to meet the schedule.  To "Make Their Bar" in factory jargon.  Progress against the schedule is tracked at all levels continuously. They each have their own War Rooms.  When the inevitable problems arise, they are surfaced, elevated, worked.  Additional resources are allocated.  Here's the "secret sauce"  -  once you agree to your portion of the schedule - you're expected to meet it!  'The dog ate my homework' is Not Acceptable!

People who try to "hide the wienie" are usually outed, and can get the gate.  It's a true Team effort - from the days before they had Team Players (a Boeing euphemism for "Yes-Man.")  From the days before they bragged about "Working Together," and painted that on the side of the airplanes.  Boeing schedules were sacrosanct.  You could put a Milestone on the chart for balloons, buttons, and  hotdogs for the Roll-Out and the First Flight.  And you could order the catering two years ahead of time without  fear.  Today?

About 1990, I received a call from a man named Bob Bartz.  He was, I think, the McD V.P. in Long Beach responsible for Douglas Purchasing.  He asked if he could come and visit to discuss "production  problems" being experienced in Long Beach.  After clearing this unorthodox request with the head shed, I agreed to the meeting.  Sitting in my office on a rare snowy day, he confessed that Douglas was envious of Boeing's scheduling prowess.  Their troubles making production schedule had been going on for decades, and they wondered if there was some "secret sauce" that Boeing used.  What I described to him was the above paragraph.  Master Schedules and War Rooms were the secret method, and Management and Accountability were the secret sauce.  And the discipline to drive towards a common goal.  To make schedule.  Engineering tracked their off-board drawing releases through the ESWR system.  Purchasing (Materiel) had their Shortage Meetings.  Buyers would appear weekly before management, and would do anything to ensure that they had their supplier's part situation under control.  It was Management 101.

Our meetings were called STAND UP meetings - they were intended to be short, concise and to-the-point.  We didn't want anybody relaxing in their chairs, leisurely sipping their first cup of morning coffee.

Fast forward a few years, and Douglas -  Long Beach now had a Boeing sign on their big office building in Long Beach.  Condit and Stonecipher made sure the company we bought for $16 Billion didn't feel they were playing second fiddle to a bunch of cocky know-it-alls in Seattle.  We were too "in-bred."  So McD people were brought north and integrated into high positions while joint teams  worked out merging the cultures.  Here's a tip -  don't integrate the Super Bowl champs with the last place team.  Only bad things will result. Guess what?  Both things did !   Now Seattle caught the Long Beach disease - declining market shares and bad schedule problems.  And to think, we PAID for this.

Maybe "T" had it right, Harry!

Recalling the ``old Boeing," Stonecipher shared a conversation he once had with former Boeing Chairman T. Wilson.

``I told him Boeing is arrogant."   He (Wilson) responded: `And rightly so!' "

 

You know, Harry, the Green Bay Packers were 'arrogant' too, and so were the New York Yankees.  Winners, some people would call them........ 

Note:  Someone took me to task for 'embracing' arrogance.  He was right, of course.  Boeing has been arrogant, and not in a good way either.  Actually, it was a vice I preached against during my working years.  In this case, I choose to use the word in a more benign way - meaning 'spark', 'spunk', 'winning attitude.'


 

Bill B., one of my many correspondents, put it succinctly:
When I came to Boeing 40 years ago, it was

 "Kick ass, Take names, Build planes",

now it is

"Sit down, Hold hands, Build plans"

Boeing hasn't been tending to their knitting for a long time, and the chickens are coming home to roost.  It used to be "Over budget, and they yell at you - Bust a schedule and you get fired."  Now, busting schedule is de rigueur.  Accepted.  Failure is accepted.  It permeates their language and their mindset.  Now, we don't even provide a schedule.  We don't want to get nailed down by the media, and our customers.  We talk in nebulosity's - in terms of "assessments", and vague dates given in calendar quarters - even years!  "We deeply regret the impact these delays will have on our customers,....."  We are unable to manage our programs.

And that doesn't mean that Boeing was a Devil's Island to work at.  Actually, quite the opposite.  It was great.  People were smart, worked hard, - often off the clock.  Dedicated.  Excellence was our pedigree and our mantra - it was expected and it was delivered.  It was the legacy handed down to us from those who went before - 50 years of greatness.  The first 747 was built while the factory buildings were built around it.  The people called themselves The Incredibles.

 

There's one more thing I find painful to say.  Airbus built this big airplane - the A380.  And they took a two year schedule slide.  They're still not out of the woods.  But their problems were in PRODUCING the customer's airplanes, not in designing, testing, and certifying the basic airplane.  The first test airplanes came together pretty well.  And the cert program seemed fairly straight-forward.  They wound up in the unique predicament of having a certified airplane, but unable to deliver product.  The problem seems to be in the complex wiring supporting each customer's huge variation in passenger amenities.  Their engineering and  supplier management and manufacturing seemed under control.

Boeing only wishes it had those problems.  Our first airplane is going to be almost two years from Rollout to First Flight!  That's two years!  Our problems are far more basic than worrying about the passenger entertainment system.

***************************


I like metrics - macro metrics.  They tell you where you REALLY are, without the fluff.

In March 1944, Boeing delivered 365 B-17s from Plant 2 in just the one month.  Parts from everywhere  --  in wartime.  Engines, propellers, landing gear, windshields, aluminum sheet, tires.  It didn't happen by accident and there were no computers, no emails and no employee surveys.

The B-47 was designed, built and flown in 24 months from contract signing.  The 707 Prototype - the Dash 80 - in 26 months.  The 727 in 26 months. The 737 in 26 months.  747 in 34 months.  757 - 34 months.  767 - 38 months.  

Now, the 787 is looking at - what? - maybe 62 months. 

 This is NOT ACCEPTABLE, and some people need to be held accountable - maybe get fired! 


Yet, what do we hear?   Yvonne Leach, a spokeswoman for the 787 program, said "This is a huge, complex project, and that means the assessment is pretty complicated as well,"  adding that "the assessment involved talking with suppliers and evaluating work to be done by Boeing. But we know how to do it."

 "Know how to do it"?
-- I don't think so Yvonne!!!

"We're laser focused on what needs to be done to prepare for first flight," said Pat Shanahan, 787 program vice president. "We will overcome this set of circumstances as we have others in the past, and we understand clearly what needs to be done moving forward." (December 11, 2008)


"...we understand clearly what needs to be done moving forward."   Pat - I think you need to stop saying this.  The evidence is quite to the contrary.

 I do think these people are in denial.




Check out the 777 program.  Despite what is said about the 787, the 777 was a "high-tech" airplane.  A great airplane and a great program.  It was digitally designed and built.  It had no engineering mockup.  Drawings were released to suppliers as "digital data sets" - an all-new concept.  Parts were built and inspected to those data sets.  It didn't have "shims", despite some comments elsewhere in the press.  It had an advanced fly-by-wire flight control system and avionics architecture.  Mulally insisted that the airplane not be designed "on the shop floor", and it wasn't.  Off-board drawing releases were made to the factory when they were complete. Actually, the 757 and 767 Programs, were likewise advanced for their time, and all three airplanes were managed to a Master Schedule, and were ON-TIME.  These were basic Boeing skills, learned from the time you got your first badge.  It was like learning to walk.  Where are these skills now?  Maybe on the floor of the Bomarc site.


- Boeing has lost a good portion of its expertise, and finds itself with few people that have the knowledge and expertise to design and build a new airplane.  The 1995 "early out" was, in retrospect, a hemorrhage of enormous talent.  Much of this was unappreciated at the time, and perhaps is still unappreciated.  A lot of this loss was also the corporation's own doing.  They have wallowed in political correctness for more than a decade.  As I wrote to then president Ron Woodard in dismay in 1994, "If all the good people leave, whose gonna be left - the duds?"  The answer is now plain to see as the emperor has no clothes.  Maybe P.C. will work in Seattle politics or bridge and ferry repairs (or school achievement scores), but in the cold harsh world of building commercial airplanes, at some point the rubber is gonna meet the road.

 As my friend Jim said: 

The whiz kids call it "cross pollenization",  I call it Skill dilution at a level where it can do the most harm.  For years, these new directors were saved from themselves (sort of) because they had lieutenants who knew the ropes and counseled them.  The brain drain of '95 plus natural attrition has pretty much taken care of that.

Matrix management is a disaster in the making.  It makes it easy for people to dodge responsibility.  The way things worked successfully at Boeing, or anywhere else for that matter, is when for every job, there is just one ass to kick when it isn't done. 

 Bob, its a very tough situation and as such, calls for tough measures.  These times call for old "Bull of the woods" types like Sessions or Buckley who will just not tolerate late engineering, shortages, schedule slippage, etc.  Alas, where does one find those guys now??  Whether its too late or not, is hard to tell.  I'm sure of this much; Its much, much, worse than you can read in the papers.

- This is not about personalities.  I never met ex-Mariner managers John McLaren or Jim Riggleman.  I believe they were nice guys who would make great friends and neighbors.  But they got the gate for poor performance - and they deserved it.  Some of the hardest things I did as a manager were relieving people who were 'nice guys', in fact some were good personal friends.  I have never met McNerney, nor Carson, nor, for that matter, Ms. Dougherty.  I believe they are genuinely nice people and obviously very smart.  But performance counts.  Clearly, they are not on-top of the situation.  I hate to use the word 'lying', but they are not being told the truth, or they wouldn't stand up in front of a roomful of analysts and reporters, and solemnly declare that the "new" date was a firm date.  My inside intelligence indicates there are more "bad surprises" lurking in the future, and there is a real question as to whether Carson and McNerney have been apprised of these.  Just perhaps, the "Team-Player / Yes-Man / Group-Think culture has arrived at its inevitable conclusion - people afraid to stand up and tell the boss something he doesn't want to hear.  Pity.

- It's NOT enough to be  smart, sit in the meetings, and think you're "learning the business."  Watching Power Point presentations.  (Used to be Vue-Foil presentations in the "old days.")  Yes, you can be really smart, but you need to know what questions to ask.  You need to have that sixth sense that tells you that you are out on thin ice and getting ready to fall through. You don't absolutely have to be a techie (Bill Allen wasn't), but then you need some really good techies working for you, people you can trust.  The current Boeing management doesn't have those people - Condit got rid of them - that's why they keep standing up in front of the press and the financial community swearing on a stack of bibles that the "new" schedule is the real McCoy and cast in concrete.  The engineers have let them down repeatedly, and their credibility has been reduced to zero.  P.R. flacks are putting out Press Releases that even to them, must be getting tiresome.  Their language sounds more and more like a losing sports coach about to get fired.

- Like a lot of American industry - the wrong people are at the top.  Check the resumes and education of the top guys - the bios are on the Boeing web site.  Historically, bean counters do poorly managing technological companies.  Boeing has usually excelled when engineers were at the top -  Claire Egvedt, Phillip Johnson, T. Wilson, Jim Johnson, Alan Mulally.   Good bean counters - people like Harold Haynes - needed to be on the sidelines keeping the engineers honest.  Look at companies that have thrived when the  guy in charge was a tech nerd.  They do well because the boss knows what's going on, or at least knows what questions to ask.  Good ones can instinctively smell a rat in the woodpile.  (And, yes, Bill Allen has always been one of my heroes - I know, he was a lawyer.  There are no absolutes.)

My opinion:  If you want to run a tech company, you need to be a techie.  Check out Bill Gates at Microsoft, Steve Jobs at Apple, Andy Grove at Intel,  Bob Galvin - Motorola, T. Wilson and Claire Egvedt at Boeing, Art Collins of Collins Radio, or , say, my friend Gerry Block at Sandel in San Diego. LeRoy Grumman, Jack Northrop, Kelly Johnson - the list is long.  What we've got (in the great American "new tradition"), are bean  counters.  MBA's and lawyers.  As Bill Conway, the management guru I was good friends   with, used to say - "This business that being a good manager is  all that's needed is nonsense.  If you want to run a baking  company, you better know a hell of a lot about baking!"  I note, parenthetically, that the last Steinway just died at 92 (of  Steinway & Sons piano fame.)  His grandfather started him out working in the factory for two years to learn how to build pianos, before he ever let him in the office. 

Old Chinese Proverb

I HEAR, .....and I FORGET

I SEE, .....and I REMEMBER

I DO, .....and I UNDERSTAND

- And, just maybe, Boeing is reflective of our society as a whole.  As Boeing has worried about everything but building airplanes - Affirmative Action goals, Diversity, United Way contribution levels, and Employee Surveys, 4 day work weeks, -- all the while - on the other hand - playing hardball with its unionized workforce - forcing strikes, and fostering shall we say - a lack of loyalty by employees - they have stopped tending to their knitting.  Obviously, the work force, as our population in general, has changed.  A bunch of mostly white guys with pocket protectors, argyle socks and wingtip shoes living in Bellevue, have been replaced by a more diverse workforce.  But that workforce needs to be trained, mentored, nurtured - to squeeze the drops of wisdom from the previous generation.  Instead, what has clearly happened - from my knothole - is for people to be promoted beyond their skills, experience, and abilities.  Promoted for an EEO scorecard.  Quite a few wind up in very high positions.

Get enough of the wrong people in charge, and you pass V1 speed - there's no turning back.   "The Tipping Point."

Here's a test - check out the bios of all the Boeing Directors.  What you'll find is, going back 15 years, or more,  - a lot of people began moving into high positions without much experience in the particular discipline.  They move rapidly through the chairs, without staying long enough in a place to really learn something (or to get blamed when things start heading south.)  But they do build a helluva fancy resume.

This is a recipe for disaster, -- enough of these unskilled folks, and the train stops running.

  The result can be like tossing your kids in the middle of the lake.  Some kids will learn to swim quickly, the others will drown.

**************************************

Check out the article in the Reference section below from the company rag  --  it explains part of the problem.  "Touchy-feely" garbage jargon  and words like "leadership" are thrown around with abandon. "Representing the "Leadership Team, Ms. Dougherty recognized employees for the good work and successes."   What successes?  The Program is going to be 10 years old, $1 Billion dollars over budget (ALL Boeing money), and they talk about "success."  Sports teams at every level understand what performance is, and what success means.  The UW football team just went winless for the entire season.  The coach got fired.  The Mariners fired their coach in mid-season.  When the A380 program slipped for the second or third time, the top dogs got fired.  Somebody needs to get fired.  Starting with Maureen, perhaps, (nothing personal, Maureen), and working up from there.

********************************

Before I quit this rant, I want to mention one last thing - a  subject known as "Chicago."  Phil and Harry moved the HQ there, amid a lot of wailing by the locals.  They were dismayed by the loss of prestige and all the rest.  It was a big change for an 80 year old company.  The stated reason was to avoid forcing the local operating units to constantly squirm under the direct glare of the head shed guys.  At the time, it never made much of an impression on me, one way or the other.  The number of people actually making the move was miniscule.  I didn't think they'd start building 747s near the Loop.

I was wrong.  Now, I'm reminded of another old Boeing phrase - "You can't hoe the garden from the living room."  Headquarters is too removed from the action, and what's worse, the Seattle operating units  do their best (from what I'm told) to keep them in the dark.  HQ definitely seems a little - shall we say "thin" - in technical depth, and that deficiency, along with the distance, is really starting to bite.

-------------------------------------


Update - 23 Jun 2009:   787 First Flight indefinitely delayed for sixth time -  Details below.


Conclusions


It takes us longer to modify a 767 into a Freighter, than it took to design, build and certify the 767.

It takes us longer to build a 'poor man's AWACS' on a 737 platform, than it took to build the original AWACS on a 707.

It takes us longer to build a KC-135 Tanker replacement using an existing airframe, than it took to build the original KC-135.

It takes us longer to build a 747 stretched derivative airplane, than it took to design, build and certify the 747.

It is taking us longer to design and build a new model airplane than ANY previous airplane in the history of the company.

These comparisons are NOT ACCEPTABLE !!!  *

 Boeing has lost its touch.  Boeing is going backwards.  We are unable to manage large programs - our ultimate core competency. Not on one program, but on many.  The metrics cited above show it clearly.  We are going backwards. Engineering is messed up.  The supplier base is messed up.  Almost every new program winds up hugely over budget and enormously behind schedule.  Our ethics are suspect, and our credibility is zero. Without a big backlog of producing legacy programs, we would be in a world of hurt.

Suddenly falling gas prices negatively impact the urgency for airlines to acquire more fuel efficient airplanes - read that 787.   The falling economy reduces  traffic and the cash flow needed to buy new equipment, and parking excess airplanes to reduce capacity certainly works against accepting new ones. The exchange rate of the Euro has plunged, creating a huge easing of the monetary burden that has been mercilessly pressuring Airbus financials.  The brewing Perfect Storm demands more in the way of management skills at the very time when Boeing seems to have lost them completely.  Getting caught in this storm, at this time, is entirely Boeing's doing - all of the above Programs should be producing product and revenue streams at this very time.  Passengers should be riding on those 787s at this moment, and the flight line should be full of airplanes nearing delivery.  They should be....but, they're not.

I recall my boss once coming around to tell me of a new job - a new 'opportunity' - "Somewhere in the world is someone who can make this project happen, and,  --  with a pregnant pause --  I hope it's you.", he said, as he turned and left my office. "Oh!, I thought - if you put it in those terms."   Maybe those words need to be spoken again.  Soon.


Bob Bogash

* the Title borrowed from the "turnaround king, the Tennessee Hillbilly"  - Harry Stonecipher

    "that is not acceptable," Stonecipher said."  See newspaper article below.


Post Script:  As this rant has made the rounds in draft form, a few things became quite clear.  None of us in the retiree corps are at all happy with the state of the Company today.  And the reasons for this situation seemed to mostly resonate along the points I have try to make above.  I don't want, nor do others, to be seen as sitting on the sidelines bitching without a solution.  All of us are solutions-oriented and solutions-driven.  But what is the solution?  A decade or two of bad habits and mistaken personnel decisions are tough to erase.  A company the size of Boeing moves with glacial speed.  But I think I speak for many people who have written me, we are all concerned with our alma mater and most are willing to try and help right the ship.

A first step in any such transformation is acknowledgement and recognition.  These dumb Press Releases, and Letters to Employees, and absurd articles in the company magazine really need to stop.  We DO NOT "understand what needs to be done", and the 787 Program, in particular, is NOT a "success."  Maybe if we start there, we can move on to the solutions.


Post Script Nbr 2

Many people suggested this page be forwarded to the top management or Board of Directors.  In fact, it was supplied to Scott Carson (who never replied) in December, and to Jim  McNerney in January 2009.  The latter transmittal included a volley of emails and snail mail letters from retired Senior Executives.  Mr. McNerney replied very quickly, albeit somewhat tepidly, acknowledgeing our concerns and the problems we have outlined.  He never responded to our offer of help, and no request for such help, to my knowledge,  has ensued in the almost three months since.

Back to My Home Page


Comments?

I have  received numerous emails from retired and current Boeing people - some known, some unknown to me.  I have reconnected, in fact, with some folks I haven't seen or spoken to in 30-40 years!  Not one has found fault with what I said.  Many of these people are at Director, VP, and GM levels. 

I have collected some of the comments and have placed them here:

http://www.rbogash.com/boeing_comments.html

You can also contact me, either through my Home Page Links or more directly at this address.


If I had to distill all the comments to a few kernels of wisdom, they might look like these:

1.      Failure to hold people accountable for meeting program schedules and milestones.

2.      Creating a matrix organizational structure that leads to confusion over responsibilities and Problem No. 1

3.      Fostering a "Yes-Man" environment under the guise of "Teamwork"  inhibiting free voicing of  legitimate program and technical concerns.  Fear in  the workplace in an  atmosphere that preaches, indeed brags, about the lack of such.

4.      Foolishly discarding decades of  systems knowledge, hard-won,  in  exchange for un-proven, often computerized systems, embraced for their  so-called "newness" and hi-tech  hype.  Total failure to even recognize the value of legacy systems.

5.    Failing to recognize the high value of experience present in the seasoned workforce, replacing that knowledge with promises from in-experienced   people who have to learn on-the-fly, and reinvent the wheel.  

6.    A senior management without technical skills to sniff out problems, combined with the elimination of a  layer of seasoned technical people who, in the past,  have acted as advisers to make up for that deficiency.

7.     Embracing the corporate culture, and promoting people representing that culture, from a merger partner that was, in fact, a failing enterprise, with a long  history of the sorts of problems that have now been transplanted into Boeing.  

8.    Promoting people without skills, experience, or abilities to achieve some sort of politically correct  employee 'face' for the business enterprise at the  expense of complete loss of program execution capabilities.

9.    A very poor job of mentoring younger, less-experienced employees, and passing the baton from one generation to the next.  This was especially  exacerbated during the 1995 "early-out" mass retirement process.

10.    A total meltdown in our ability to manage our supplier base; to coordinate design and build requirements; to assist them in their execution; to monitor their progress in a timely manner; and to intervene in advance of a crisis.


Tuesday, June 23, 2009

Boeing again delays initial 787 test flight

By Dominic Gates

Seattle Times aerospace reporter

Boeing disclosed a serious new setback to its 787 Dreamliner program just days before the airplane was to fly, announcing today that the first flight will be postponed for weeks because the plane needs structural reinforcement.

Engineers found a structural defect that dictates "a need to reinforce an area within the side-of-body section of the aircraft," the company said.

Boeing chief executive Scott Carson said that "structural modifications like these are not uncommon in the development of new airplanes," and called the fix "a limited and localized structural reinforcement (that) is quite manageable."

But investors reacted sharply, sending Boeing stock down $3.97, or 8.5 percent, to $42.93 after two hours of trading Tuesday.

Adding to the delay's impact is uncertainty: Boeing said it will be "several weeks" before it will even come up with a new schedule.

"First flight and first delivery will be rescheduled following the final determination of the required modification and testing plan," the Boeing statement said.

In a conference call early Tuesday morning, Scott Fancher, the head of the Dreamliner program, said that late in May engineers, performing wing bend tests on the airplane that is set aside inside the factory specifically for ground testing, found that strain gauges showed higher stress than predicted by the computer models at multiple points along the upper part of the wing-to-body join.

Fancher emphasized that the issue does not represent a fundamental problem with the new carbon-fiber composite plastic material from which the airplane is constructed.

"Composites are the right material," said Pat Shanahan, head of airplane programs, "We will correct this situation and do it with both care and urgency."

Fancher said the issue occurred at about 18 locations on each wing, in areas no bigger than one or two square inches each. The areas affected are where the wing made by Mitsubishi in Japan is joined to a part of the center fuselage body made by Fuji, also of Japan.

When engineers checked the areas flagged by the instruments measuring the strain, they found evidence that the structure was indeed stressed. Asked if that meant delamination of the composite material, Fancher didn't specify exactly but hinted that visible damage was apparent.

"We saw a number of things indicative of what the strain gauges were saying," Fancher said.

Boeing insists it can fix the problem with a modification to strengthen the structural areas in question. Fancher said that will involve "a relatively small number of parts and a relatively simple modification."

"We're talking about a couple of parts that can literally be held in your hand," at each of the 36 locations affected, Fancher said.

However, given the two years of delays leading up to this last-minute showstopper, such assurances have a big credibility problem. The lack of a new schedule is also an issue.

In the weeks ahead, Fancher said, engineers must assess several different possible modifications, select the best, then design and test it. In the meantime, he said, Dreamliner No. 1 will proceed with as far as the taxi tests on the ground. But it cannot fly.

Once a modification is developed, all the airplanes — those already built and those in process of being built — will have to be modified.

The news came just a week after Boeing executives at the Paris Air Show, including Carson, offered assurances that the plane would fly by month-end.

Carson said on the conference call that initial analysis suggested first flight could go ahead even as Boeing tried to fix the problem. However, late last week, after the executives had returned from Paris, the decision was made to halt first flight.

"While difficult, this was the prudent step for us to take.," Carson said.

Customers have also begun to react. Japanese airline All Nippon Airways (ANA) issued a brief statement all but pleading for information on when it can get its airplane.

"We are disappointed that the first flight of the 787 will be postponed, and urge Boeing to specify the schedule for the program as a whole as quickly as possible," the ANA statement said.

*********************************************

CHICAGO (Dow Jones)--Boeing Co.'s (BA) announcement Tuesday of another holdup on its new 787 Dreamliner didn't sit well with investors already wary of problems surrounding the company's defense programs and pension-cost headwind.

Shares of Boeing, which have sunk on worries about the 787 as well as the weak commercial aircraft market, traded recently at $43.46, down 7.5% for the day. That's well off the year-high of $76.48.

JSA Research cut Boeing's stock rating to hold from buy, saying it needs more clarity from Boeing on 787 plans.

"At this point, Boeing has provided us with nothing but uncertainty," said Paul Nisbet, president of the independent research company.

While the 787 is the focus of attention, Boeing has also suffered setbacks on the defense side of its business, which accounts for about half of its $60 billion in annual revenue.

Boeing said the long-awaited first flight of the 787, to have taken place this month, would be delayed because the plane failed a stress test.

Boeing will need to reinforce a joint between the wings and body of the plane, Scott Carson, head of Boeing's commercial-airplanes unit, said Tuesday.

The company, which last week confirmed the flight schedule, said it may take several weeks to redo its schedule for the first 787 flight, and for first delivery of the aircraft, earlier planned for early 2010.

Nisbet said that, in the worst case, customers could have to wait months longer for the new planes, which are already two years behind their original schedule.

"We also have to consider how this will affect suppliers like Spirit, Rockwell Collins and Goodrich," Nisbet said. Typically, manufacturers like Boeing and rival Airbus must compensate both customers and suppliers when aircraft production is delayed.

Boeing also faces rising pension expenses. Analyst Brent Miller at Gradient Analytics said Boeing's pension fund this year is underfunded by $8.4 billion, which could hurt future earnings. While a recovery in world's financial markets may help to recoup some of that unrealized pension-fund loss, Boeing likely will be on the hook to increase pension contributions for the next several years, Miller said.


Update:  On 11 Dec 2008, Boeing announced a(nother) major re-organization of the Commercial Airplane production organization.  (See below.)  Will it be enough?  Time will tell.

Update:  On 4 May 2009, Boeing announced another 787 Program re-organization.  Details below.


Some Reference Materials

787 Delay Announcements
Boeing [NYSE: BA] today announced an updated schedule for its all-new 787 Dreamliner program that moves the commercial jet's first flight into the second quarter of 2009 and first delivery into the first quarter of 2010.

Boeing is evaluating the specific impact of this delay on customer delivery dates and will provide customers with updated schedules once completed. The company is also determining any financial impact from this schedule change and will incorporate that into updated financial and overall airplane delivery guidance that will be released at a later date.  787 delay announcement - Dec 2008

[Note:  According to Av Week Dec 15/2008 issue, this is the FIFTH delay to First Flight and the FOURTH major revision to deliveries.]

------------------------------------

"Over the past few months, we have taken strong actions to confront and overcome start-up issues on the program, and we have made solid progress," said Boeing Commercial Airplanes President and CEO Scott Carson. "Nevertheless, the traveled work situation and some unanticipated rework have prevented us from hitting the milestones we laid out in January. Our revised schedule is built upon an achievable, high-confidence plan for getting us to our power-on and first-flight milestones. Also, while the fundamental technologies and design of the 787 remain sound, we have inserted some additional schedule margin for dealing with other issues we may uncover in testing prior to first flight and in the flight test program."

"We deeply regret the disruption and disappointment these changes will cause for our customers, and we will work closely with each of them to minimize the impact," said Carson. "We have taken significant action to improve supply chain and production system performance, such as our investment in Global Aeronautica, but based on our assessment, the prudent course is to proceed with a more gradual ramp up to full-rate production."  787 delay announcement  - Apr 2008

---------------------------------------

"While we have made some progress over the past several weeks completing work on our early production airplanes and improving parts availability across the production system, the pace of that progress has not been sufficient to support our previous plans for first delivery or first flight," said Scott Carson, president and CEO of Boeing Commercial Airplanes. "We deeply regret the impact these delays will have on our customers, and we are committed to working with them to minimize any disruption to their plans."

Deliveries of the strong-selling Dreamliner are now slated to begin in late November or December 2008, versus an original target of May 2008. First flight is now anticipated around the end of first quarter 2008.  787 delay announcement - Oct 2007

 

Airbus sacks two top executives in major shakeup following A380 delays

PARIS – The French co-CEO of Airbus parent EADS and the company's German chief of its civilian jet unit have been ousted in a dramatic shakeup, following devastating delays in the A380 superjumbo program.

Parent company EADS vowed today to put Franco-German management tensions behind it and resolve the crisis at Boeing's chief competitor in the world commercial aviation market.

"We'll work hard and we'll work jointly to bring EADS back on course," former co-Chief Executive Noel Forgeard's replacement, Louis Gallois, said in a joint statement with German co-CEO Tom Enders, who survived the reshuffle.

Politicians and trade unions welcomed the changes at EADS, announced Sunday, in which Airbus CEO Gustav Humbert was also forced to step down, and replaced by Frenchman Christian Streiff — a former executive with building materials maker Compagnie de Saint-Gobain SA.

In their joint statement, the two EADS co-CEOs said Airbus was the company's "immediate priority."

The crisis at the defense group followed its announcement last month that the Airbus A380 superjumbo was likely to suffer fresh delays of up to seven months.

3 Jul 2006

Toyota's chief may be replaced

Toyota President Katsuaki Watanabe may be replaced next year by Akio Toyoda, grandson of the company's founder, after forecasting the first loss in 70 years, people familiar with the matter said.

Watanabe intends to take responsibility for Toyota's operating loss forecast of $1.7 billion for the year ending in March, said one of the people, who asked not to be identified because a decision hasn't been announced.

Toyota announces first loss since 1938.    

25 Dec 2008

-----------------------------------------

Toyota tapped Akio Toyoda, grandson of the Japanese automaker's founder, as president Tuesday, paying homage to its roots at a time when the company faces its first operating loss in 70 years.

The U.S.-educated Toyoda, 52, is the first founding family member to take the helm at Japan's No. 1 automaker in 14 years. He promised a reaffirmation of the company's core principles, such as valuing ideas from the ranks - a management approach called "kaizen" that has made Toyota Motor Corp.'s production methods famous in industry circles around the world.

Analysts say Toyoda faces enormous challenges. Just hours before his appointment, Toyota announced that global sales last year fell for the first time in 10 years, falling 4 percent to 8.972 million vehicles.

"Toyota is raising the flag," said Yasuaki Iwamoto, auto analyst at Okasan Securities Co. in Tokyo. "It sends a strong message that moves toward change will be sped up. And that's an important message."

20 Jan 2009



Aviation Week Year End Round-up

“There may be no better time to buy Boeing Co. stock.” As I reflect on the 49 Market Focus columns we published this year, that’s the one line I’d like most to take back. It was written in March, after Boeing’s shocking (and now overturned) loss of the U.S. Air Force tanker contract to an EADS NV-Northrop Grumman Corp. team. Boeing shares had declined from a peak of $107 five months earlier to less than $80. “You’d better believe this is not going to be an $80 stock,” one bullish analyst was quoted as saying. He was technically correct: Shares were trading around $41 last week.

  22 Dec 2008



Some Recent Program Quotes


Mar 2007

To hear Mike Bair tell it, the biggest problem with the new 787 Dreamliner manufacturing schedule has been the olive trees.

The trees, that is, that Italian partner Alenia had to move before it could build its factory in Grottaglie, a city in southeast Italy.

"They had to transplant all the olive trees," Bair said. "

In an apparent bid to convince skeptics Boeing will not falter as Airbus has done in the final stages of its new jet program, Boeing Commercial Airplanes CEO Scott Carson joined Bair on the call.

"We are doing what we do best at Boeing, and that is use all of our intelligence, skills and resources to make sure that we deliver," said Carson.

------------------------------------

Sept 2007

A new delay of up to 12 weeks in the first 787 Dreamliner flight is fueling skepticism among aviation analysts that Boeing can deliver the pioneering all-composite airliner to its first customer next May as scheduled.

"I have a feeling May is not a reasonable date now," said Adam Pilarski, lead analyst with aviation consultancy Avitas.

But Boeing executives insisted Wednesday they'll meet the timetable by having a large team of test pilots fly around the clock.

"Is this a fiasco in the making? I don't think so," said Howard Rubel, an analyst with Jefferies Group, "There's nothing here that says they won't deliver a very flightworthy airplane."

"We are moving forward," Bair said. "We have an experienced team that understands the issues and knows how to bring home complex airplane programs like this."

----------------------------------
Oct 2007

"We are disappointed over the schedule changes that we are announcing today," said Boeing Chairman, President and Chief Executive Officer Jim McNerney.

"While we have made some progress over the past several weeks completing work on our early production airplanes and improving parts availability across the production system, the pace of that progress has not been sufficient to support our previous plans for first delivery or first flight," said Scott Carson, president and CEO of Boeing Commercial Airplanes. "We deeply regret the impact these delays will have on our customers, and we are committed to working with them to minimize any disruption to their plans.

---------------------------------------

Apr 2008

We've just heard the last 787 delay call," said Joe Campbell, a Lehman Brothers analyst. "I think they'll make this schedule from here in. They can do this."

Boeing originally planned to deliver its first 787 next month.

According to the new schedule laid out by Boeing Commercial Airplanes Chief Executive Scott Carson, the plane won't fly until October and won't be delivered until the third quarter of next year.

Boeing also said it will build the planes more slowly, so its customers will get only 25 Dreamliners next year, rather than the 109 proposed last fall. It will ramp up production to 10 per month by 2012.

That small 2009 delivery total reassured observers because it seems more realistic than the previous forecast.

Boeing "finally came up with a number that makes sense," said another prominent Wall Street analyst who asked not to be named because his investment bank doesn't permit him to be quoted in the media.

Boeing's shares rose almost $4 on the news, closing at $78.60  ($78 in April - $37 in December.)

Lehman Brothers, in an analytical note published last week ahead of the announcement, estimated that a 14- to 16-month delay would add between $3 billion and $5 billion in extra manufacturing costs and customer contract penalties.


"Over the past few months, we have taken strong actions to confront and overcome start-up issues on the program, and we have made solid progress," said Boeing Commercial Airplanes President and CEO Scott Carson. "Nevertheless, the traveled work situation and some unanticipated rework have prevented us from hitting the milestones we laid out in January. Our revised schedule is built upon an achievable, high-confidence plan for getting us to our power-on and first-flight milestones. Also, while the fundamental technologies and design of the 787 remain sound, we have inserted some additional schedule margin for dealing with other issues we may uncover in testing prior to first flight and in the flight test program."

The company said in January it would be conducting a comprehensive assessment of its supply chain and production system capabilities to determine the details of the 787's flight test program and initial delivery profile. As a result of that assessment, the first-year delivery plan announced today will be followed by a more gradual ramp up to full-rate production than previously planned.

"We deeply regret the disruption and disappointment these changes will cause for our customers, and we will work closely with each of them to minimize the impact," said Carson. "We have taken significant action to improve supply chain and production system performance, such as our investment in Global Aeronautica, but based on our assessment, the prudent course is to proceed with a more gradual ramp up to full-rate production."

----------------------------------------

Dec 2008???

Expected Formal Announcement of another 787 Program Delay


Text  To Be Furnished when released -  Boilerplate available above.

***************************

And, here it is!  Update 11 Dec 2008

Confirmed - another 787 Program Delay + another  Re-org !

EVERETT, Wash., Dec. 11, 2008 -- Boeing [NYSE: BA] today announced an updated schedule for its all-new 787 Dreamliner program that moves the commercial jet's first flight into the second quarter of 2009 and first delivery into the first quarter of 2010. The new schedule reflects the impact of disruption caused by the recent Machinists' strike along with the requirement to replace certain fasteners in early production airplanes.

"Our industry team has made progress with structural testing, systems hardware qualification, and production, but we must adjust our schedule for these two unexpected disruptions," said Boeing Commercial Airplanes President and CEO Scott Carson.

Prior to the strike that halted much of the company's commercial airplane work from early September into November, the 787 was to make its first flight late in the fourth quarter of 2008. First delivery was slated for the third quarter of 2009.

"We're laser focused on what needs to be done to prepare for first flight," said Pat Shanahan, 787 program vice president. "We will overcome this set of circumstances as we have others in the past, and we understand clearly what needs to be done moving forward."

Included in the preparations for first flight, Shanahan said, are finalizing and incorporating remaining engineering changes and completing systems testing, qualifications and certification.

Boeing is evaluating the specific impact of this delay on customer delivery dates and will provide customers with updated schedules once completed. The company is also determining any financial impact from this schedule change and will incorporate that into updated financial and overall airplane delivery guidance that will be released at a later date.

****************************

Comment:

No where is the word "delayed" or "slide" used - now the newspeak is  simply  "updated schedule."  Our recurring delays are  now covered as just  schedule 'updates.'

Also, my math must be faulty, as I don't understand how a two month strike causes a six month schedule slide.


Restructuring Announcement - 11 Dec 2008

***This message is being sent by Scott Carson, president and CEO of Commercial Airplanes, to all Commercial Airplanes employees.***
 
Restructuring and leadership changes

 

As you know, we currently have a record jetliner backlog, while at the same time we have encountered challenges in our airplane development programs and within our supply chain. The current economic slump is further compounding difficulties for our customers, who urgently need the newest and most efficient jetliners to help them succeed in today’s dynamic and competitive environment.

 

Today we are announcing a series of leadership changes and a restructuring to better align resources across development programs and strengthen our oversight of the global supply chain.

 

        Carolyn Corvi, who previously led Airplane Programs, has decided to retire at the end of December after a 34-year Boeing career. Carolyn has been a driving force behind the company’s successful implementation of lean production techniques. On behalf of everyone at Commercial Airplanes and the entire Boeing enterprise, I want to thank Carolyn for her outstanding vision and leadership in transforming our production system and dramatically improving our productivity throughout her career.

 

        Ray Conner is named vice president and general manager of a new organization, Supply Chain Management and Operations. Ray reports directly to me, and his new organization combines Supplier Management, Fabrication, Propulsion Systems and the Manufacturing and Quality functional organization. Ray brings years of experience in sales, program management, manufacturing and supply chain management.

 

        Pat Shanahan is named vice president and general manager of a restructured Airplane Programs organization. Pat reports directly to me, and his organization is responsible for all current commercial airplane production and development programs, including the 787 and 747-8. Pat has an excellent track record as a program management executive in both Commercial Airplanes and Integrated Defense Systems.

 

The new Airplane Programs and Supply Chain Management and Operations organizations will work together closely to drive lean initiatives, productivity and execution throughout the entire global value chain. The ultimate goal is to deliver value to our customers and protect our competitiveness in this challenging market environment.

 

In addition, we’re announcing the following leadership changes:

 

        Scott Fancher, who previously was vice president and general manager of IDS Missile Defense Systems, is named vice president and general manager of the 787 program, reporting directly to Pat Shanahan. Scott brings demonstrated leadership in program management, systems integration and technology development to the 787 program.

 

        Marlin Dailey is named vice president of Sales for Commercial Airplanes, replacing Ray Conner. Marlin, who most recently led the Commercial Airplanes Sales efforts in Europe, Russia and Central Asia, reports directly to me. 

 

All of these appointments reflect great depth and strength in our management team and position us for continued success. I look forward to the leadership of these individuals, and I’m counting on your support as we face the challenges and opportunities in the year ahead. 

 

Scott

 

Comment:

"reflect great depth and strength in our management team "

Hmmmmmm.....

"position us for continued success. "

What  success is Scott referring to?  This is - -- beyond strange....


  Date: Monday, May 4, 2009, 11:12 AM

***The following message is being sent to all 787 employees from Scott
Fancher, 787 vice president and general manager.***

787 announces realignment

Hello 787 Team,

We continue to make solid progress toward first flight. In the past two
weeks alone we have completed systems/structure integration testing,
factory gauntlet, first flight static test conditions, and ground
vibration tests. Last Monday, Airplane 1 left the factory for the last
time to complete inspections of the fuel tanks in preparation for
fueling. And yesterday Airplane 1 transitioned to the flight line to
begin the final push to first flight. Your teamwork, commitment and
leadership have made this possible.

As we approach first flight, the Leadership Team has taken time to
reflect on where the program is going. Managing a complex flight test
program, ramping to rate and customer support, combined with the
development of the 787-9, requires a flexible organizational structure
to ensure all of our commitments are met. As a team, we developed a set
of "first principles" to guide these discussions:

We have one program and one integrated work statement to deliver
Product integrity cannot be violated.
 
Clear Responsibility, Accountability and Authority (RAA) is essential
Commitments to our customers and shareholders must be met
Balanced focus on product, customer, and services must be maintained
After much discussion, we have come to the conclusion that a
product-team-focused organization is essential to meeting these
imperatives. Today, we are announcing a re-alignment of the 787 program
to strengthen the Life Cycle Product Team (LCPT) that we have today.

Product development efforts will be aligned under Mark Jenks for the
787-9 and Dan Mooney for the 787-8. Mark and Dan will partner to lead
this organization which will consist of LCPTs that have total RAA for
the design, development, integration, test, build, delivery and support
for the systems and structures on the program. Existing engineering,
supplier management, services and support teams will be product aligned
and assigned to these LCPTs. We also are significantly expanding the
role of our Airplane Level Integration Team to include the systems
engineering activities which are critical to the ongoing development
efforts on the program.

We also are augmenting our Chief Project Engineering (CPE) organization
led by Mike Delaney. Chief Engineer roles are being added for systems
and structures, as well as adding program certification and safety. Mike
Sinnett is named Chief Engineer Systems, and Jim Ogonowski is named
Chief Engineer Structures. This expanded role of the CPE will ensure
design integrity across the program.

Bob Noble will continue to lead our supply chain efforts in partnership
with Tim Coyle.  Bob's focus will be to support the LCPTs on supplier
issues, integrate business and execution issues with our partners and
oversee our remote-site efforts. Tim will continue to provide direct
leadership for all of our Charleston, South Carolina activities.

Mike Fleming will continue to lead our Services efforts to prepare for
delivery and support of our products. Mike will provide integration of
all of these activities and work with the LCPTs to ensure services
products are delivered on-time and meet our customer's expectations.

Pat Kelley will continue to lead our Final Assembly efforts as we
complete our flight test airplanes and begin to ramp to rate for
production.

Barb O'Dell will continue to lead our Quality efforts as we complete the
alignment of factory and supplier quality under a single program quality
organization.

We also are pleased to announce the selection of several new LCPT
leaders. Each of these leaders brings a wealth of technical knowledge
and team leadership experience to his assignment, consistent with our
new LCPT structure, and will report to Mark and Dan. Please join me in
welcoming them to these new roles and the team:

*         Kevin Crowley is named the 787 director for the Systems LCPT.
Kevin joined the 787 team in 2008 and successfully led the Hamilton
Sundstrand team to flight qualification. Kevin was previously the
director of SBINET Program Management Office in Integrated Defense
Systems.

*         Kurt Kraft, currently the director of 787 Airframe, is named
the 787 director of the Forward and Aft Body LCPT. Kurt has extensive
787 product knowledge and is a strong technical leader, which will be
key to this challenging work statement.

*         Eric Lindblad, currently the director of 747 Manufacturing, is
named the 787 director of the Mid-body LCPT.. Eric's extensive
engineering and manufacturing background make him an important addition
to the team.

*         Cliff Hall joins the 787 team as leader for the Wing LCPT.
Cliff comes to us from the International Tankers program where he was
the program manager. His program management role and previous experience
in metal and composites structures design make him a great addition to
the team.

*         Charlie Hix and Tom Galantowicz continue in their roles
leading the Propulsion and Interiors LCPTs, respectively.

In addition, Mark Stockton is named 787 director of Mid-body Engineering
reporting to Eric; Jess Trostle is named 787 director of Wing
Engineering reporting to Cliff; and Geary Long is named acting director
for Forward and Aft Body Engineering reporting to Kurt.

In Final Assembly and Delivery, Don Fudge is named 787 director of Final
Assembly Production Support reporting to Pat Kelley.

Finally, Mike Song is named director of 787 Supplier Quality reporting
to Barb O'Dell.

Each day, progress is being made, risks are being retired, and we are a
step closer to delivering this great product to our customers as
promised. I would like to ask you for your support of this realignment
as we continue to address the challenges in front of us.

Thank you for your hard work, commitment and support!

Scott

**************************************

"closer to delivering this great product to our customers as promised."

Scott - what "promise" are you referring to???

Boeing Names Shanahan to Lead 787 Program, Bair to Lead Business Strategy and Marketing

SEATTLE, Oct. 16, 2007 -- Boeing Commercial Airplanes President and CEO Scott Carson today named Pat Shanahan vice president and general manager of the 787 program. Shanahan moves from vice president, Missile Defense Systems at Boeing Integrated Defense Systems, and succeeds Mike Bair, who will become vice president Business Strategy and Marketing for Commercial Airplanes, replacing Mike Cave, whose move to a position at Boeing Corporate Offices was announced earlier today.

Both changes are effective immediately.

"Pat's experience and proven record managing demanding and complex programs will allow him to build on the 787 team's success as we tackle the challenges we face in bringing our new production system fully on line," Carson said. "He knows how to deliver results, understands our customers and their requirements, and has the leadership skills to get the job done.

"Mike has taken the 787 program from a concept to a market-leading position," Carson added. "The customer focus and knowledge he brings from that experience--as well as the insight and knowledge of our new business model and supplier base--will help us immeasurably as we take our next steps with future products, services and business strategy."

The move marks a return to Commercial Airplanes for Shanahan, who has led both the 757 and 767-400ER programs. He moved to IDS in 2002, first to lead Boeing's Rotorcraft division, operated from the company's Philadelphia and Mesa sites, before taking over leadership of Boeing's missile defense programs--including the Ground-based Midcourse Defense System (GMD)--in 2004.

Boeing is the prime contractor on the GMD, leading a team of top aerospace companies that have successfully developed, tested and deployed a highly innovative and technically complex system for defending against ballistic missile attacks. The latest test of the system--the technical challenges of which are often described as "hitting a bullet with a bullet"--occurred Sept. 28 when the Boeing-led GMD system was able to track, intercept and destroy a ballistic missile target over the Pacific Ocean.

Bair has been responsible for all aspects of the 787 program since its launch in 2004. The 787--which will provide airlines with unmatched fuel efficiency, environmental performance and passenger comfort--has enjoyed the most successful launch of any airplane program in the history of commercial aviation, with 710 orders from 50 airlines from around the world.

Previously, Bair served as vice president and general manager for Commercial Aviation Services, where he was credited with successfully restructuring the services business for improved competitiveness and performance. 


Boeing 787 Program Ends Year with Celebration of Progress


EVERETT, Wash. , Dec. 06, 2006 -- Customers, partners and employees gathered at the Boeing [NYSE: BA] Everett factory today to celebrate the virtual rollout of the Boeing 787 Dreamliner and the program's progress over the last year.

Mike Bair, vice president and general manager of the 787 program, hosted the event.

"Today's virtual rollout is the culmination of many months of effort by thousands of team members at Boeing and its 787 partners," said Bair. "Through the use of our new digital toolset, provided by Dassault Systemes, the team has proven the ability to manufacture 787 designs."

While the detailed analysis and demonstrations created by the team remain proprietary for competitive reasons, the program did share a number of engineering-based simulations ranging from part installations to the final assembly factory flow in Everett.

"The engineering data behind these simulations gives us confidence in our assembly processes and our ability to meet our commitments to our customers," Bair said. "Our tools have enabled us to model the entire production process from our partners' factories to our own. We have found errors in simulation that would have been costly to find in production and have been able to design corrections quickly to keep the program on track."

For many of the partners, the simulations were paired with footage of actual work on their first test and production parts.

During the ceremony, Bair said that the first production wire bundle had been delivered from Labinal to Korean Air's Aerospace Division for installation in the wing tip being manufactured in Korea.

In addition, the program unveiled the new paint scheme for its 747-400 Large Cargo Freighters and announced that those airplanes will be named "Dreamlifters."

"The Dreamlifter is a vital tool that allows us to create a production flow around the world that is very efficient," said Bair. "We look forward to receiving the second Dreamlifter from EGAT in Taiwan early next month. It will arrive in Seattle already painted and ready to participate in the ongoing flight test program."

Additionally, the program unveiled the Dreamliner Gallery, a new facility in Everett, Wash., that provides 787 airline customers a more streamlined approach to airplane configuration.

"The Gallery provides a single location for airlines to configure their 787s," said Bair. "All catalog selections will be physically present in the Gallery for customers to see, touch and evaluate prior to selection. Previously, this was done at various locations around the world."

Also in preparation for the airplane's entry into service, Boeing is working with ANA and Northwest Airlines on a Service Ready Operational Validation program that will happen at the end of the flight test program and prior to first deliveries. A 787 will be used on actual airline routes, replicating the rigors and demands of commercial service.

"This is similar to the programs we have used with great success on other programs," said Bair. "It is one of the last steps we take to ensure that the airplane, the airlines, and the infrastructure are ready for 787 revenue service."

Bair congratulated the team for a spectacular 2006 and reminded everyone that 2007 is when many of the program's major milestones must be completed.

"We open our Everett factory next year and start producing airplanes," Bair said. "We will have our rollout and first flight and will begin the flight test program. Every year has been important as we move toward starting deliveries in 2008 but next year will be the most demanding experience for many of us.

"This is why we came to work for Boeing," he added, "to create new airplanes that bring new levels of performance to our customers and new levels of comfort and convenience to the passengers of the world.

"It's a challenge, no doubt about it. This is the team, all of us together - our customers, our partners and each of us - who will bring this airplane to life. It's an amazing journey from where we started just four years ago. But the best part is yet to come."




How Boeing P.R. brags about a Program  in a Train Wreck.

BOEING FRONTIERS JUNE 2008


"Leadership champs"

How an IDS program thanks employees for exemplifying leadership


Employees in Integrated Defense Systems’ Airborne Early Warning
and Control program are receiving impromptu visits from program
executives. But there’s no reason for these teammates to panic.
These visits are meant to thank people for a job well done.
AEW&C program executives spend time each week learning leader-
ship lessons from their employees. Their staff meetings include time to
recognize program teammates who recently have exemplified one or
more of the Boeing Leadership Attributes.

“After we’ve identified someone and discussed how they specifi-
cally demonstrated a leadership attribute, one of us volunteers to con-
tact that employee in his or her work area,” said Maureen Dougherty,
vice president/program manager, AEW&C. “It’s nothing formal. We just
want to say ‘thanks,’ let them know that they’ve been recognized, and
reinforce the leadership qualities they demonstrate.”

Dougherty said recognizing leaders this way has been a practice in
AEW&C for about a year. It was, in part, a response to the Employee
Survey, which showed that employees wanted better recognition for
good work. It also challenged the leadership team to spend more time
focusing on the leadership attributes." Many of these stories are inspir-
ing and give us ideas on how we can improve our own leadership skills,”
Dougherty said.

Response to the program has been good. Employees are taken by
surprise when an executive shows up at their work stations to say" thank
you" for demonstrating strong leadership in a tough environment. It also
gets a positive response from nearby co-workers.  About half the people
recognized are managers, and half are nonmanagers.

In most cases, the executive contacting the employee is not part of
that employee’s chain of command; instead, the executive is there rep-
resenting the leadership team. Dougherty noted that this strengthens
integration and collaboration across the organization.

Mike Harlan – When a new program plan was developed to meet delivery dates in
Project Wedgetail, Mike Harlan, AEW&C flight-test team leader, and his team were
brought in to develop a flight-test plan. For his quick work, Harlan was contacted by the
head of AEW&C, Maureen Dougherty, who told him his contributions had been recognized
by the leadership team. “It was quite a surprise to be recognized,” Harlan said. “I was
part of a team of really smart and innovative people who rolled up their sleeves and found
a way forward through a challenging situation.”

Jeanne Simeona – Responding to an immediate need for a
critical skill manager in Turkey, Human Resources representative
Jeanne Simeona expeditiously worked through the procedures
needed to find the right candidate for the job. Consequently, the
position with the Peace Eagle program was filled quickly; and
the program’s leader, Mark Ellis, brought Simeona’s good work
to the attention of the AEW&C leadership team. “I’ve suggested
to HR management that these leadership recognitions be made
a best practice,” Simeona said.

The team recognizes three to five employees each week.The recognition is strictly verbal—no
award, object or gift is presented—and Dougherty believes the simplicity of the approach makes
it more meaningful.

While there’s no requirement that AEW&C groups use this recognition strategy, Dougherty said
some are taking a similar approach. Word about its success has been spreading across IDS.
Dougherty emphasized that leadership must go beyond the management ranks for a program
to be successful. “The programs and systems we’re working on are so complex and geographi-
cally dispersed, it’s critically important that we have strong leaders throughout the organization,”
she said." We need people who can use their skills and experience to step up and take on the big
challenges.”

She added, however, that people must be thoughtful enough to understand when they should
be leading and when they should be following. The best leaders know how to do both.


Here's a bizarre item - a new book just coming out!
 [Note: The author is NOT Jim McNerney]




Book hails McNerney as 787 problems persist

Last updated December 15, 2008 5:22 p.m. PT

By BILL VIRGIN
P-I COLUMNIST

WHAT IS IT about Boeing executives and the timing of books by and about them?

Five years ago, a preview copy of Chief Financial Officer Mike Sears' book, "Soaring Through Turbulence," arrived in our newsroom about the same time he was fired in a defense contracting scandal.

Last week brought a review copy of a new book, to be published in early January, by management consultant Peter Cohan, "You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing."

The book arrived on the same day that Boeing announced yet another delay in the 787, and yet another shake-up in the management team overseeing that project.

Trying to keep pace with breaking news and current events is often a risky proposition for print media, none more so than book publishing, what with its long lead times for researching, writing and production.

Still, recent history -- generally and specifically -- would suggest that a degree of caution might be in order before anointing a CEO as the latest management guru. Hero worship of corporate CEOs was out of favor even before the stock market and the economy took a header, and it won't be until well after the calamity has passed that we know who really could run a company and who just talked a good game.

Today's genius can be tomorrow's bum. American Banker, after all, famously named Washington Mutual's Kerry Killinger its 2001 "Banker of the Year," a recognition it is unlikely to repeat for 2008. And the story offered for public consumption is often far different from what's observed by those on the inside, when it comes to assessing credit and blame.

(It should be noted that, unlike Sears' book, McNerney didn't write this one. Indeed, direct quotes from McNerney in "You Can't Order Change" come from press releases and speeches, the endnotes indicate no interviews with him, and a Boeing spokesman confirms that there were no interviews or contact with McNerney for the book.)

In the specific case of Boeing, the dust-jacket blurb for Cohan's book calls McNerney "a rising superstar among today's CEOs." Contrast the book's laudatory tone for McNerney's job at Boeing since joining the company in mid-2005 with the current score card of performance: continuing problems on getting the 787 to market, the hit to its credibility with investors and customers, lingering questions about Boeing's long-term production strategies, a bruising 57-day strike by Machinists in this state and contentious negotiations with SPEEA, and a stock price that is less than half of where it was earlier this year, and is below when McNerney took over.

Some of those events, like the strike, likely occurred after the book's writing. But others, such as the 787 delays, were already well known and in fact are extensively discussed in the book.

To the extent that Boeing's stock price slump is the result of the economic downturn, McNerney gets a mulligan. Boeing did not create the recession. Investors hate pretty much every stock at the moment, regardless of how well or poorly managed those companies are individually. Regardless of whether it had a hand in lighting the fire, every company is likely to get singed by the recession.

But to the extent that the stock price reflects investor unhappiness over Boeing's inability to deliver on promises for the 787 -- that one clearly is his.

There is little that is radical, or terribly new, about McNerney's management philosophy, at least as explained in "You Can't Order Change." Among the highlights: an emphasis on developing leaders within the company. Tying compensation policy to long-term growth in value instead of short-term stock-price gains. Increasing intracompany teamwork. Depending more on internal growth than acquisitions for growth. Boosting productivity and building global product development. Taking the lead in ethics compliance and environmental change.

But if bromides and bullet points were all there were to running a large corporation, anyone with a management textbook could do it. The tricky part is execution, as Boeing and McNerney have discovered, particularly on those items related to productivity and global product development.

"McNerney isn't satisfied just to look at Boeing abilities versus Airbus," Cohan writes. "He looks up and down the chain of potential suppliers, and if he sees that someone else can do a job better than Boeing, he will outsource the job so that Boeing can focus on doing what it does best and deliver the best product to customers."

But as the book notes later, McNerney's objectives of relying more on suppliers "were ambitious, and in seeking to achieve them, he ran into problems." In some cases it has meant dispatching teams of Boeing employees to suppliers and subcontractors to unsnarl snags and correct production problems. In one instance, Boeing bought a partner out of a joint venture to do the job itself.

Cohan's book assigns blame for the 787's delays on an unrealistic rollout timetable (the drive by marketing to have it occur on 7/08/07) and a lack of accurate information from subordinates. McNerney, he says, "has shifted from a delegate-and-trust approach to a trust-but-verify one."

Adds Cohan, "Though the delay in delivering the 787 is disappointing to Boeing's customers and clearly demonstrates its need to improve, McNerney's efforts to confront and overcome Boeing's problems are likely to make Boeing a stronger competitor." The global product development supply model, he says, will "pay off in the long run."

Those are hopes and predictions, though, not assertions supported at the moment by the record. Would Boeing have run into the same problems with the 787 had Harry Stonecipher not been caught canoodling via company e-mail with an underling and stayed on as CEO? We'll never know.

Is McNerney the right guy to correct Boeing's problems? Maybe we'll know in a couple of years. (In a bit of unintentional and inadvertent brilliance, McNerney may get bailed out of some displeasure over the 787 delays if the recession -- in the form of reduced passenger traffic -- and lower fuel prices make airlines less impatient to get the planes they've ordered.)

And does the global development and supply model really work, or does it generate more problems than it solves? There's a question upon which Boeing's future rests -- and which, whatever the answer, might even make for an instructive management-theory book for would-be CEOs.



As Stock Prices Fall, CEO Salaries Rise
 

Aviation Week & Space Technology Mar 23 , 2009 , p. 12

Joseph C. Anselmo

Washington

Aerospace and defense companies are beginning to disclose their executive compensation for 2008, and though the industry’s investors have lost a lot of money some of its top executives aren’t faring too poorly.

Boeing Co. had a rough year, with more delays to its new 787 jet, a machinists strike, a downturn in demand for commercial aircraft and numerous challenges in its defense unit. The company’s net income was down 34% from 2007 and its share price declined by more than 50%. Yet three of Boeing’s top four executives received hefty raises, according to data from Equilar Inc., an executive compensation research firm.

Chairman, President and CEO James McNerney’s total compensation was up 14% from 2007 to $14,765,410, including a 43% hike in his cash bonus to more than $6 million. CFO James Bell and James Albaugh, president of the Integrated Defense Systems unit, each received 23% increases, with Albaugh’s compensation reaching $5,089,237. The exception was Scott Carson, president of the Commercial Airplanes unit. His compensation declined more than 18% to $3,213,486 and his bonus was cut 13% to $854,610.

Lockheed Martin Corp. Chairman, President and CEO Robert Stevens took a 5% pay cut in 2008—but still made $22,863,062, including a $12.8-million cash bonus and $7.8 million in stock and option awards. The next-highest compensation went to Executive Vice President Christopher E. Kubasik, who runs Lockheed Martin’s Electronic Systems business. He took home $5,523,153, a 3% decline.
 

 Note:
 

Lockheed's Revenues increased 2.1% 2007-2008; Net Income increased 6.1%;

LMT Stk price decline 1 year - 40%  (BA -60%.)  2 year -30% (BA -60%)

Over two years 2006-2008, LMT's Revenues increased 35.4%;  Net Income increased 27.2%
 



Here's what's important these days - skylights, upgraded restrooms, better signs and  a new bus stop.


Say, Ross, how many 787s rolled out or flew this year?  747/767/777s?  Didn't you deliver any airplanes - you know - AIRPLANES???

 

***This message is being sent to all Everett site employees on behalf of Ross R. Bogue, vice president and general manager of 747 Program and Everett Site.***

Reflections on 2008

Before we close the books on 2008 and depart for the holiday break I want to reflect on the past year. Clearly, 2008 has been another eventful year for Boeing Commercial Airplanes and for the Everett site. We witnessed many positive achievements and some unfortunate events as well, such as the strike by our Machinist co-workers amid the backdrop of national and international economic turmoil. Just last week, a reorganization of Airplane Programs and the establishment of the Supply Chain Management and Operations organization were announced. We may yet encounter other changes resulting from the transition to those reorganized groups in the New Year. But for now we should all remain focused on supporting our customers, implementing the Boeing Production System and producing the most exceptional airplanes in the world. 

Each individual program and site organization made progress this year as well as faced a boatload of unexpected challenges. Many of you have seen a message from your respective program or organization leaders this week in that regard.  The purpose of this message is to acknowledge the myriad other activities that have taken place on the Everett site to reduce the site’s impact on the environment and improve office space and the flow of people and vehicles and material. 

Environmental, Health and Safety (EHS) performance:  

• Lowest lost work day case rate in site history
• Most successful EHS and Ergonomics Fair to date with 15,000 attendees
• Workplace basics implemented site wide
• Tobacco Free Workplace implemented site wide
• The Environmental Management system strengthened: ISO 14001 periodic audits passed successfully; zero notices of violation and zero fines levied.
• Outstanding performance on all environmental measures: 
    • site energy consumption, greenhouse gas emissions, hazardous waste generation,and 
     use of hazardous materials well under their reduction targets
    • water conservation met the reduction target
    • solid waste recycling rates over the target
    • alternative commuting participation exceeded a new stretch target by 9 percent

Future Factory progress:
• Twenty-five skylights installed (one previously installed in 2007)
• Ten factory restroom pairs upgraded with new fixtures, partitions, flooring, basins, wall coverings, and improved ventilation
• More than 2,500 people moved into eight renovated office towers that include up to 150 meeting spaces, or three times more than in the office areas they have replaced
• Two new multipurpose rooms provided – one near the 747 and one near the 767
• Directional and location signage – or wayfinding – installed to help people efficiently get where they are going.

Logistics and efficiency improvements:
• Clearly marked and reconfigured walkways, traffic lanes and fire lanes inside the factories improve the safety and efficiency of material handling and pedestrian and vehicle movement
• New walkways, channeling fencing, lighting and reconfigured parking stalls create a safer environment and improve the flow of pedestrians and vehicles on the south apron and west and north sides
• A new bus plaza, turnstiles and better gate access improve the flow of people and vehicles on the west and north sides
• Redrawn traffic lanes and staging areas boost material handling safety and efficiency and improve traffic flow on the south apron
• Inside and outside shuttles to help employees get to and from parking lots and move around the site efficiently and without their personal vehicles
The December 2008/January 2009 issue of Frontiers magazine features many of these activities, which is a fitting tribute to the hard work by many on this site.  Click here to view the feature article and photo spread on Future Factory and here for the article on parking and sidewalks. 

During 2009 we will see additional changes and more safety and environmental improvements on the site. Future Factory will wind down with the installation of nine additional skylights and additional office tower construction projects. Future Factory will then transition to Future Office (which will we hear more about in the coming months). Safety and efficiency improvements will extend to the factory’s east side and flight line. And, we will continue to focus on all environmental measures and maintain Everett as an environmental leader and innovator. 
Finally, with the changing dynamics of the national and global economies, it is difficult to predict what the future may hold for our business. All I can say with certainty is that Boeing, and in particular the employees on the Everett site, will overcome any future challenges with creativity, resourcefulness and perseverance. 
Thank you for all you did this year for Boeing, the Everett site and for your program or organization. I also want to acknowledge and thank those individuals who will have to work during the holiday break. We fully appreciate your dedication. 
Have a wonderful and safe holiday season and break.

Ross R. Bogue


Boeing delay hurt its credibility on Wall Street

Wed Jan 16, 2008 3:37pm EST

By Bill Rigby - Analysis

NEW YORK (Reuters) - If you want to know what's going on with Boeing Co's new 787 Dreamliner, ask anybody but Boeing.

The U.S. aircraft maker has consistently been late acknowledging problems with its new high-tech plane, long after industry blogs and Wall Street analysts have blown the whistle.

The company generally declines to answer specific questions about the project and the sheer inaccuracy of its projections are eroding its credibility.

Boeing's problems are starting to resemble the spiraling setbacks at rival Airbus, whose A380 superjumbo was two years late, throwing parent EADS into financial disarray and ending the careers of several executives.

On Wednesday, the U.S. plane maker finally faced up to the second major delay on the revolutionary, carbon-fiber aircraft, putting it about nine months behind its original schedule.

The announcement, only a month after Boeing executives assured investors everything was on track, was widely predicted by industry watchers.

The delay forced Boeing to concede it will not build 109 787s by the end of 2009, an ambitious promise that most analysts had already lost faith in.

Wall Street is now asking why the latest assurances should be any more reliable than the last.

"Another delay, with no revised delivery schedule, and no guarantee that there will not be further push-outs," said Robert Stallard at Bank of America, in a research note. "(That) leaves Boeing investors in a difficult position."

UNRAVELING FAST

The latest delay caps a remarkable six months of unraveling for Boeing's 787 program.

A gleaming shell of the first plane was triumphantly paraded in front of 15,000 employees and customers in July 2007, amid confident forecasts the first test flight would be in August or September. Boeing now says it will not fly until at least June this year, as it grapples with unfinished work from suppliers and bolt shortages.

Wall Street is now taking a "show me" stance on the company, whose shares have plummeted since last summer.

"Boeing is likely to remain under pressure until they can hit at least one of their public milestones on the program," said Myles Walton at Oppenheimer & Co.

The company's stock performance reflects the loss of confidence. The shares are down 26 percent from their all-time high last July, before the 787 schedule started falling behind.

Some analysts say the dip is a good time to buy shares, but more rate Boeing stock a "hold" until uncertainty clears.

"Investors are likely to require clear signs that this is the last of the delays, which will take some months to prove out," said Heidi Wood at Morgan Stanley.

CREDIBILITY TEST

Boeing is starting to feel the heat.

"We know our credibility is being tested on this program," said Scott Carson, the chief of Boeing's commercial plane unit, on a conference call on Wednesday. "We will pass this test."

But given the complexity and necessary secrecy of the program, Boeing is struggling to point to concrete achievements that are moving the plane along.

The head of the 787 program, Pat Shanahan, spoke of "demonstrated performance" on certain areas of the plane on Wednesday, but did not go into specifics, leaving the question of Boeing's credibility still largely a matter of trust.

Boeing attempted to defuse the credibility issue by withdrawing delivery targets for any 787s beyond the first one, now scheduled for early 2009.

Carson said the company needs to do more work before it establishes a new production schedule, based on "hard, assessed facts," rather than "shallower analysis," an acknowledgment that its previous projections were seriously flawed.

It was a painful moment for Carson and Boeing generally. Delaying the schedule was "a difficult call for us to make," he said, on the conference call to analysts and reporters. "We don't want to be in a position where we do all this with you again."


BOEING'S ARROGANT IMAGE MUST GO, STONECIPHER SAYS

BY KAREN WEST P-I Reporter
Thursday, March 26, 1998

In a blunt assessment of the new Boeing Co., its president said yesterday the company is still struggling to shed its longtime image as unwieldy and arrogant and has not yet reached the ``global status" it is striving for.

Harry Stonecipher also said he's embarrassed by the company's ``dismal" 1997 financial performance and is determined to turn things around.

``We at Boeing are struggling to shake off vestiges of parochialism and insularity in the way we think," Stonecipher said in a speech to the Rotary Club of Seattle yesterday. ``We've been a very inwardly looking company. People like to call us global - we sell lots of products globally - but we haven't yet achieved the global status that we seek."

Since joining Boeing as the company's No. 2 executive last August, Stonecipher has been on a mission to improve Boeing's bottom line.

Known as a corporate ``turnaround king," the 60-year-old ``Tennessee hillbilly" has had lots of practice.

Before becoming president and chief executive of McDonnell Douglas, Stonecipher spent seven years turning around Sundstrand Corp., a maker of aerospace products that had faced scandals and criminal charges related to military contracts.

The key to profits, Stonecipher said, is to lower operating costs and be willing to change - areas Boeing still needs to work on.

And to reach global status, Boeing has to ``embrace the world, engage the world" and be open to new ideas.

``The scariest thing that happened to me during a review one day was I had an engineering manager stand up to me and say, `let me tell you something: we have frozen a design and no one will change it!' I said, well . . ."

Stonecipher's message to that manager was ``you have no chance to get costs down unless you are really willing to change."

``Trying to do the same thing better is the hardest way in the world to save money - you have to do it different."

Recalling the ``old Boeing," Stonecipher shared a conversation he once had with former Boeing Chairman T. Wilson.

``I told him Boeing is arrogant. He (Wilson) responded: `And rightly so!' "

``There's a great difference between pride and arrogance," Stonecipher told the business group. ``And we are working on it every day."

Stonecipher, who described himself as ``profitability driven," said that for years he has defended the widely viewed perception that he is only interested in making money.

``After a while I just said, you're right, I am."

He said that while Boeing's name, reputation and market share matches such business giants as Coca-Cola and General Electric, the company's financial status doesn't stack up.

``We have returns that can't even see the bottom of Coca-Cola - that is not acceptable," Stonecipher said.

``The Boeing Co. is a great company with a tremendous future but it has a record of financial results that has ranged from a little better than average in recent years to absolutely dismal in 1997. That's something we can and we will fix."

Boeing's lingering aircraft production problems have resulted in $2.6 billion in charges against earnings and contributed to a 1997 loss of $178 million, the company's first annual loss in half a century.

``Quite frankly, I'm embarrassed that Boeing, which is the world's biggest and most respected aerospace company, and is loaded with extremely bright and talented people, that we have a market cap(italization - the total value of the company's stock) that's only about a quarter of that of Microsoft," he said, noting that the Redmond-based software maker is only a fraction of the size of Boeing and has only been a public company since 1986.

He said he's ``further embarrassed" that GE - a company closer to Boeing's size - ``has a market capitalization that is five times that of The Boeing Co."

Stonecipher said the best companies today are not only growing but ``exceeding the expectations of their customers and ratcheting up earnings at the same time. It can be done."

That's the message he and Boeing Chairman Phil Condit are sending to the company's other high executives.

``We don't make excuses for where we are. We recognize where we are on a number of fronts and we intend to fix those."

Stonecipher said the biggest threat to Boeing is the company itself.

``We have lots of competitors, but Airbus is not our problem, Lockheed Martin is not our problem, Japan is not a threat, China is not a threat. . . . The biggest threat to The Boeing Co. is failure to execute inside. That's what we are working on."

Stonecipher, the same man who was described as the Gen. Dwight D. Eisenhower of McDonnell Douglas, says he is perfectly comfortable in his new role as Boeing's No. 2 officer. (Boeing acquired McDonnell Douglas last year in a $16 billion stock deal.)

``I can stop a lot of spears for Condit and I can also throw a lot for him."


Boeing posts loss, announces 10,000 job cuts

AP Manufacturing Writer

Boeing Co., the world's second-largest airplane maker, swung to a surprise fourth-quarter loss, hurt by a labor strike that disrupted deliveries. It also announced job cuts totaling 10,000 and forecast 2009 earnings that missed Wall Street expectations.

The news comes on top of waning demand for the company's commercial jets. Airlines are cutting spending and air travel has declined amid the global economic slowdown. Boeing recently said it plans to cut about 4,500 positions from its commercial aircraft business as a result of the worsening market conditions.

On Wednesday, Boeing executives said an additional 5,500 positions in other parts of the company, including its defense division, were to be eliminated through attrition and layoffs throughout the year.

The Chicago-based company reported a fourth-quarter loss of $56 million, or 8 cents per share, on Wednesday. That compared with profit of $1.03 billion, or $1.36 per share, a year earlier. Results were dragged down by charges totaling $1.79 per share, including the effects of a now-settled machinists strike and delayed deliveries of 747 jets.

Analysts polled by Thomson Reuters, on average, expected earnings of 78 cents in the fourth quarter. Those estimates typically exclude one-time items.

JSA Research analyst Paul Nisbet said the results were "surprisingly poor," noting the unexpected charge for the new 747 jumbo jet. "I'll be interesting to hear the explanation for that."

The FactSet-derived consensus forecast stood at a profit of 76 cents a share. Estimates typically exclude one-time charges, but analysts had factored the impact of the strike into their forecasts.

"We knew this was going to be a messy quarter given the impact of the strike...but it certainly missed [analysts' consensus ] number," said American Technology analyst Peter Arment.

Fourth-quarter revenue fell 27 percent to $12.68 billion. Passenger and cargo jet deliveries fell by more than half as a strike by production workers paralyzed the company's Seattle-based commercial aircraft operations for 58 days through early November. Analysts had expected revenue of $13.40 billion in the quarter.

Looking ahead, Boeing expects per-share earnings of $5.05 to $5.35 for 2009, short of the $5.68 forecast by analysts. Boeing's 2009 revenue outlook of $68 billion to $69 billion was in line with expectations.

Shares of Boeing rose 99 cents, or 2.3 percent, to $44.21 in late morning trade.

The company's 2009 financial forecast assumes stable deliveries over the next few years of commercial airplanes that are in production. Its commercial aircraft business expects to deliver between 480 and 485 airplanes this year.

Boeing delivered just 50 planes in the last three months of 2008, compared with 112 planes during the same period a year earlier.

In November, Boeing further delayed the first test flight and delivery of its much-anticipated 787 jetliner, the world's first large commercial airplane made mostly from carbon-fiber composites, blaming the strike and lingering production problems.

It also delayed deliveries of 747-8 cargo and passenger jets, partly due to the strike, and deliveries of 737s, 747s, 767s and 777s as it replaces defective fasteners used to attach wiring and other components inside the planes' fuselages.

"The progress we made in many areas of Boeing during 2008 was outweighed by the impact of the strike and our performance on some key development programs," Jim McNerney, Boeing's chairman, president and chief executive, said in a statement.

To date, Boeing said 58 customers had placed 895 orders for 787s, excluding a recently canceled order from one customer for planes scheduled for delivery late in the next decade.

Boeing, which ranks as the world's No. 2 airplane maker after France's Airbus SA, reported 2008 net income of $2.7 billion, or $3.71 per share, down 34 percent from 2007.

Commercial jet orders declined by half in 2008, after three consecutive years of exceptionally strong growth. Still, the aerospace company has orders for a record 3,700 planes.

28 Jan 2009

 

Boeing hints at possible reassessment of 747-8

 

Boeing has hinted that it might have to rethink its slow-selling and delayed 747-8 programme, amid the continuing failure to land a second airline for the passenger model, combined with a slowdown in demand for cargo aircraft.

 The airframer took a $685 million charge last year stemming from cost overruns and schedule delays on the 747-8 programme.

 While Boeing executives have restated their support for the commercial viability of the aircraft, chief executive Jim McNerney warns that the continuation of the programme should not be seen as a foregone conclusion: "We still see a viable business proposition here. Now obviously if we ever got to a point where we didn't, we'd have to work with our customers to come up with another answer."

 Boeing has 106 orders for the 747-8F and a further 28 for the 747-8 passenger model - 20 for Lufthansa and the remainder for VIP customers. But in November, deliveries of the first 747-8F were pushed back by at least six months to the third quarter of 2010, and of the 747-8 by at least four months to the second quarter of 2011. 

"Obviously, we have applied a judgement that says we have a very competitive airplane here that has already got a good start on orders," says McNerney. "If we didn't believe the revenues would outweigh the costs we wouldn't go forward with it."

 ATI understands that Boeing has studied various options for the programme, including terminating the 747-8 and running the 747-8F as a stand-alone. This would require the renegotiation of Lufthansa's launch order and compensation. But with no active sales campaigns ongoing for the 747-8, other than a potential long-term deal to replace Air Force One, Lufthansa faces the serious prospect of being the only airline customer for the passenger version, and this in itself could have financial implications for Boeing such as residual value guarantees. 

Despite its healthier order book, the 747-8F could also need re-examining. The cargo industry is in the middle of a slump because of the downturn, and industry sources say several 747-8F customers are seeking to delay deliveries. 

 

What McNerney's "other answer" to the 747-8 could be is unclear. Cargo industry sources say that near-term capacity could be provided by readily-available 747-400 freighters combined with Boeing-supplied conversions of ex-passenger -400s.

Flight Magazine Feb 2009
 

Walk away from a Program!!!  This isn't Connexions.   I never thought I'd live to see the day.


China People's Daily
UPDATED: 11:16, June 21, 2006

Boeing denies Dreamliner delivery delay
 ZoomIn ZoomOut    

Boeing China issued a statement on International Finance News to deny the rumor that the Chicago-based company will delay its 787 planes delivery. The rumor swirled around the global market following Airbus' announcement of the delay of its A380 delivery. Boeing confirmed the punctual operation of the 787 planes as scheduled.

The statement says Boeing 787 is still under development and the contingencies so far in this period is in their expectation. It affirms that similar problem are unavoidable in the R&D stage, as what has been shown by their experienced in other airplane project.

The delay was first reported by Business Week. According to Business Week, the recent test on the nose of the plane found the overall weight of the aircraft is much heavier than expectation and there is flaw in the design of communication software. If these problems can not be solved timely and effectively, they will threaten the safety of the aircraft. So Boeing had to make technical improvement and carry out test again, which would result in the delay of 787 Dreamliners delivery originally scheduled in 2008.

Mei Yuanmei, a manager of Boeing China said these problems are normal in the process of optimizing the production and the company has found out causes and effective solutions to solve them.


I guess it's true - the first six are basket cases......  Hmmmmm,  I wonder if we can get one for the Museum?

787 flight test aircraft not allocated to customers

 

Boeing has confirmed that the first six 787 test flight aircraft, once destined for customers ANA, Delta Airlines and Royal Air Maroc are no longer assigned to specific airlines.

 "As we made adjustments to the latest delivery schedule, our customers had the opportunity to take production airplanes that better suited their business needs for a variety of reasons, including schedule," said Boeing.

 But the airframer remains confident of placing the six refurbished flight test aircraft with customers.

 Morocco's Royal Air Maroc has also moved into the early production stream assuming ownership of two delivery spots previously held by Air China and China Eastern, with JAL taking an additional Dreamliner from another spot held by China Eastern.

 In addition, this new information appears to confirm that Delta Air Lines, which excluded 18 787s from an order table listed in a recent US Securities and Exchange Commission filing, does not intend to be an early 787 customer, even though the airline confirms that it retains firm orders for the type.

 According to the schedule of the first 30 aircraft, Qantas and Air India have assumed control of spots previously held by Delta. The Australian airline, which will use the aircraft in its low-cost Jetstar subsidiary, previously expected to receive three 787s over three months, will now take delivery of its first five 787s over four months.

 Boeing expects to fly the first 787 by the end of the 2nd quarter of 2009.


3 Apr 2009
*******************************************************

‘Humbled’ Boeing Prepares to Fly 787


Demonstrating a degree of public humility many feel has been all too absent among the bankers collectively responsible for the global financial crisis, Boeing Commercial Airplanes CEO Scott Carson offered no further excuses for the delays that have plagued the 787 and 747-8 this month during the J.P. Morgan Aviation and Transportation Conference in New York. “The stumbles we have made have been embarrassing for us,” Carson said. “They’ve been embarrassing for our customers, who were counting on us to have the right product in place at the right time.”

To avoid further embarrassment “will require us to be humble,” continued Carson. “This will require us to not be taken at our word, but to be [judged] by our actions.”

Boeing continues to target the second quarter for first flight of the 787, on which the company has now cleared all the equipment for first flight, he said. Now fully assembled, according to the CEO, the first flying prototype next leaves the factory for washing and repainting, then returns to the factory for a series of gauntlet tests with ground power on all the airplane’s systems. Finally, engineers will run all the systems under ship’s power to, in Carson’s words, make sure they play together and run reliably for first flight.

Meanwhile, said Carson, Boeing continues to make “solid progress” toward a third-quarter 2010 first delivery of the 747-8, the first wing for which was ready to come out of its jig and be placed into the so-called lay-down position in preparation for attachment to the fuselage.


http://www.ainonline.com/news/single-news-page/article/humbled-boeing-prepares-to-fly-787/


Bernstein Research sees further 787 delays, bigger range shortfall

Boeing's 787 customers face delivery delays of up to an additional six
months, according to a report issued Friday by New York-based
Bernstein Research that also suggest a 10%-15% range shortfall for
early delivery aircraft.

The May 1 client report, a wrapup after Boeing's 787 certification
briefing on April 29, is Bernstein's sixth reassessment of 787
production and forecasts that the manufacturer will not reach its
target production rate of 10 aircraft per month until mid-2013, six
months later than the latest target.

Bernstein warned that it is "not comfortable with assuming that
[Boeing] will achieve its goal of making first delivery in Q1 2010 to
All Nippon Airways, and even less comfortable assuming a production
rate of 10 per month by the end of 2012," and has thus "stretched the
time from first flight to the target production rate by an additional
six months, with production rates reaching six per month at the end of
2012 and reaching 10 per month in mid-2013." At its April 29 briefing,
Boeing reiterated its plan to fly the 787 by June 30.

The report also expressed concern about the effect on production rates
of the redesign required to address weight issues. Bernstein said it
understands from customer and supplier discussions that the first
production 787s are likely to be roughly 8% overweight, with range
10%-15% less than promised. "That will translate into a range near
6,900 nm., well below the promised 7,700-8,200 nm. range," it claimed.


"These values are worse than for most development programs and suggest
that substantial redesign work will be necessary. . .but the Tier 1
suppliers have not yet validated their production capacities with the
new production technology, and if substantial redesign is needed to
reduce weight, it will further complicate a rapid increase in delivery
rates," the report added.

In more bad news Bernstein cast doubt on the ambitious certification
timeline for the 787, which it termed "challenging." It warned that
the program involves substantial changes in materials, systems and
manufacturing technology, creating many opportunities for surprises to
emerge during the test program. "There will also be the challenge of
getting all six aircraft ready for testing as planned," it said.


1 May 2009

******************************************************



Boeing Suffers Rating Cut    

Boeing Ratings Outlook Cut by Fitch

Fitch Ratings lowered to negative its long-term credit ratings outlook
on The Boeing Company (BA) and its financial unit, Boeing Capital Corp.

Fitch said the long-term issuer default rating of A+ on Boeing and
Boeing Capital Corp., along with other ratings, were supported by
financial flexibility, large order backlog, and the company's balanced
portfolio approximately equally split between defense and commercial.

However, the rating agency cited several risks and uncertainties
prompting the lowered ratings:

1) Concerns about the recession's impact on the commercial aerospace
industry. Defense companies have been adversely impacted during the
recession by exposure to commercial aviation as consumers travel less
and airlines cut capacity.

2) Downward pressure on U.S. Defense Department budgets.

3) Concerns about the health of the aircraft financing market, given
very tight credit markets, and Boeing's significant inventory stockpile
last year.

4) Fitch said its revised ratings reflect expectations of production
cuts later in 2009 and into 2010. The rating agency cited the potential
for further delays in Boeing's 787 Dreamliner program.

Boeing has already delayed the 787 aircraft's launch by about two years;
however, last week the company announced that it still plans the first
test flight during the current 2nd quarter of 2009.

Fitch said it will review Boeing's ratings if there are additional
delays to the 787 program. The rating agency believes keeping the plane
on schedule will help reduce inventories and likely decrease research
and development expenses.

1 May 2009


Or, for the latest,  just Google  "boeing delays"



A Little Reference - What sports teams do for "Non-Performance"

Seattle Mariners firing of Manager John McLaren - It all sounds............ so familiar.

McLaren joins Bavasi on the Mariners' firing line

By DAVID ANDRIESEN
P-I REPORTER

The players will apparently get one more chance.

John McLaren will not.

Three days after firing general manager Bill Bavasi, the Mariners on Thursday followed by giving McLaren the ax hours before the team left for a three-city interleague road trip.

 

"On a personal level, this was a very difficult decision to make," Pelekoudas said. "John McLaren and I, and many of us in the organization, go back a long way. But from a strictly professional level, I felt this was the right thing to do for the ballclub and for the further advancement of the organization and for our efforts to try to get better this year."

Pelekoudas emphasized that winning as many of this season's remaining 90 games as possible is a high priority, though Armstrong acknowledged the odds of getting back into playoff contention were "practically zilch."

Unlike McLaren's replacement of Hargrove, when the Mariners gave McLaren the manager title with no strings attached, they consistently referred to Riggleman as being manager for the remainder of the season.

That's in part because the person who will decide on next season's manager might not have been hired yet. Armstrong said the new general manager will be free to choose "his or her" (perhaps tipping his hand that Dodgers assistant GM Kim Ng is on the short list) field manager. Pelekoudas has an "interim" title, though he'll be a candidate for the job.

Lee Elia, named hitting coach when Pentland was fired June 9, will now assume the title of bench coach. Pelekoudas said Elia would still retain a supervisory role over the hitting program, much as he did when he was on Piniella's coaching staff. Jose Castro, the Mariners' minor league hitting coordinator, will join the major league staff as hitting coach and report to Elia.

McLaren was Piniella's right-hand man in Cincinnati, Seattle and Tampa Bay before going his own way to resume the job of Mariners bench coach under Hargrove in 2007. McLaren coached 11 seasons in Seattle, more than any coach in franchise history.

McLaren always wanted to be a manager, interviewing for jobs throughout his coaching career, but got his chance under unusual circumstances when Hargrove simply walked away midway through a winning season. McLaren led the Mariners to a 43-41 record to end the 2007 season and was brought back without hesitation for 2008.

The Mariners made bold moves in the offseason and fancied themselves contenders this spring. McLaren bragged about the team's "five No. 1" starters, guaranteed Richie Sexson would be named comeback player of the year and said unequivocally that anything short of a playoff berth would be a failed season.

But the Mariners have been a disaster from the start and are on pace to go 56-106 -- which would be the worst season for a franchise that has had plenty of lousy seasons. Nearly to a man, the players are well below their career averages.

For most of the season, McLaren stoically stood by his underachieving players, though the strain of seeing his long-awaited chance at managing slip away began to show as time went on.

On June 4, Bavasi locked the players out of their postgame spread and made them sit at their lockers, while McLaren stood before reporters and delivered a contrived, expletive-filled rant.

It was the action of a man who knows he's running out of time, and McLaren probably did know. When a talented team underperforms that badly, firing the manager is Baseball 101.

"There wasn't one game, there wasn't one homestand, there wasn't one series that really led to this decision," Pelekoudas said. "I think it was a culmination of really just watching the team's play for a period of time.

"We hadn't shown any improvement for the past couple of months. In fact, we were probably regressing. John worked extremely hard to make this club better. I don't think anybody worked harder than him."

Does the fact that three people have been fired in recent weeks, while no player has lost his job, send a mixed message about accountability to the players?

"I don't think it does, because they know the other shoe could drop at any time," Pelekoudas said. "I'm not saying it's going to drop tomorrow or going to drop at all. But I think they always know that that shoe is always there. They should know it's always there."

Thursday, the shoe dropped on John McLaren.



Air NZ Says Boeing To Further Delay Delivery Of 787s

WELLINGTON (Dow Jones)--Air New Zealand Ltd. (AIR.NZ) said Wednesday that aircraft maker Boeing Co. (BA) has confirmed further delays in the delivery of its first 787-9 aircraft.

The national carrier, which is 76% owned by the New Zealand government, said it is continuing to discuss compensation over the delays with Boeing.

"Boeing confirmed yesterday a further 12-month delay could be expected with the first 787-9 aircraft to be delivered to Air New Zealand in the first quarter of 2013," the carrier said in a statement. The first delivery was originally scheduled for the end of 2010.

The fresh delay snags Air New Zealand's strategic drive to spruce up its fleet and long-haul operations, although the airline has said recently that there won't be any major disruptions to its network.

Dec 23, 2008 18:35:39 (ET)


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