Production of Boeing’s 787 Dreamliner finally resumed on January 29 after last year’s significant delays caused by both a prolonged work stoppage and quality problems among its supply chain outsourcing partners. According to an article in ReliablePlant.com, five of the six airplanes designated for upcoming flight tests are now in varying stages of production. The fastener rework is nearly complete on one of the planes and progressing well on two other planes, but, all is not well at Boeing.
Boeing issued a news release in late January outlining both 4th quarter and 2008 earnings. In essence, the company lost $56 million during the last three months of 2008, and net income for the full year fell 34 percent to $2.7 billion. “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,” said Chairman, President, and Chief Executive Officer Jim McNerney. “Our imperative going forward is improving execution where it needs to be improved, maintaining strong performance across all our production programs, and preserving our financial strength to grow in these challenging economic times.” Boeing had earlier announced a headcount reduction of 4500 in its commercial airplanes division, and as much as 10,000 persons overall.
Meanwhile, the International Association of Machinists (IAM) called on Boeing management to “end their misinformation campaign” regarding the 57-day work stoppage that occurred last year. A blog posting by James Wallace of the Seattle Post-Intelligencer presents a view of the union position. “The strike was triggered by a Boeing strategy to create a separate and lower class of employees in its manufacturing facilities; one with lower pay, fewer benefits and a cut-rate retirement plan” read the union statement. The union statement goes on to declare: “Boeing’s global outsourcing of design and manufacturing has been a failure. They lost control of the final product and held Machinists out for 57 days, over language that could have been offered and accepted on day one.” If you really want to get a sense of the emotions brought on as a residual to the union statements, just read the various comments deposited on this PEI blog.
We have previously noted in this blog column that many challenges remain for Boeing and its suppliers to be able to return to normal levels of output and delivery after the 10 week disruption and the various supply chain outsourcing snafus. Boeing will have little choice but to practice higher levels of supplier, sub-contractor and union collaboration and innovation to overcome continual supply chain hurdles. This latest rancor doesn’t help.
With 2009 commercial aircraft orders completely sold-out, and 895 net orders for 787 Dreamliners in backlog, Boeing is in a position that is probably the envy of most multi-nationals these days. Instead of business literally falling off the cliff, Boeing has difficulty delivering on the business it has. It would behoove all those involved at Boeing to move-on, learn from these latest snafus, and get those planes delivered. The participants in the Boeing supply chain and our world economy depends on no less.
Don’t you agree?