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.

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......

 

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

[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.]

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.

    737 WedgeTail for RAAF

    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!

    JSDF KC-767

    787

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.

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.'

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.

 As my friend Jim said: 

- 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. 

- 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.

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

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

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:

Tuesday, June 23, 2009

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.

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.

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

Some Reference Materials

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:

"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....

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. 

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."

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.

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.

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%
 

Boeing delay hurt its credibility on Wall Street

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 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. 

Flight Magazine Feb 2009
 

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

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.

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

"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.

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