DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
April 12, 2024
With announcements of another 787 and another 747-8 delay this week, the credibility of Boeing being able to deliver on its promises has taken another hit -- and leaves folks wondering if these aircraft will enter service in the first quarter of 2011. The additional costs from delays and corrective measure threaten profitability and the timing of 737 and 777 replacement/enhancement programs, eroding Boeing’s future competitive position.
Care to share?

The impact of further delays at Boeing on operations, finances, and product update strategies will be significant, as further delays to the 787 and 747-8 programs will result in additional charges, increased operating costs, and likely impact product development strategies and timing for the 737/777 replacement/enhancement programs.

The 787 has been delayed until late first quarter 2011 through quality issues with Alenia and problems with the Rolls-Royce engines, and emerging reports that the 747-8 will be delayed as well, evidenced by a change in program management at the end of this month, and continued mid-weight, near cruise speed structural flutter in the flight test program.  While the program is still scheduled for 2010, a delay and further announcement appears inevitable.

Technical problems will eventually be solved, although Boeing has been subject to more surprises than for programs in the past, and the 787 and 747-8 should have first deliveries in 2011.

How did Boeing get into so much trouble?  The problem at Boeing is threefold — and not easily solved.   The first is the result of poor management decisions, the second is retaining talent, and the third is corporate culture.

This First Problem is Management:

Boeing is suffering from poor decision-making at the senior level, as evidenced by the failures in the 787 supply chain and shared responsibility for producing the aircraft.  Company leadership under Jim McNerney has been too slow to react.  Quality issues that became evident during the initial delays eventually resulted in Boeing purchasing Vought, but not soon enough to stem the tide.  The same may need to occur with Alenia, given the recently emerging quality control issues requiring significant repairs to the test aircraft.

After the merger with McDonnell Douglas, Boeing focused on becoming a systems integrator, outsourcing key elements of the aircraft rather than build it themselves, and manage the commercial sector more like the military focus of its acquisition.  Unfortunately, this did not play well either with labor relations nor corporate culture, neither of which were ready for such a transition.

While current management inherited a mess from Harry Stonecipher and a McDonnell Douglas dominated board, it did not act decisively to change strategies and restore a culture that transitioned from engineering dominated to one dominated by MBAs and focused on outsourcing, cost reduction, and eliminating core competencies in civil aviation.

Boeing management bit off more than they could handle by taking on a program that encompassed both new technology and establishing a complex, integrated global supply chain at the same time.  Either of these major changes, by themselves, would have represented a major challenge.  Together, they proved impossible. Early critics of Boeing taking on both risks simultaneously proved prophetic.

Boeing would have been better off to produce the 787 internally, and will likely need to move further in that direction to maintain quality control in the program, as it cannot afford to continually rework substandard quality deliverables from its supply chain.  While Boeing continues to indicate that its supply chain is improving, being three years late on initial deliveries is costing the company dearly in both customer compensation and market credibility.

Of course, Boeing has been shuffling resources and management between the two programs under development. The latest 747-8 management re-shuffling is the result of a shortage of resources from stealing talent to solve 787 problems.  Will the revolving door of executives solve the 747-8 problems?  It will, in due time, with appropriate resources.

While Boeing is pushing the envelope in advanced materials, difficulties have resulted that would not typically be expected from a world-class organization.  Structural failures in the wing box can only have resulted from incorrect engineering assumptions, or lack of knowledge of the behavior of new technology materials.   Neither of the above excuses provides comfort to potential passengers of this aircraft.

The problems with the airplane are being solved, albeit at a snails pace, and the supply chain issues are being resolved by either purchasing suppliers or placing additional Boeing personnel on site to bring quality up to standards.  This has been a costly program for Boeing, with the total budget for the 787 now above $20 billion and continuing to climb.  And with each delay, on both the 787 and 747-8 programs, losses continue to mount.

Having squandered a five year plus lead over Airbus into a mere two year lead, the real impact is on new programs.  If Boeing were earning revenues from an on-time 787 today, it would have the cash flow to enhance the 777 to better compete with the A350 XWB, as well as fund a replacement aircraft for the 737.  Airbus, with heavy A380 and A400M losses, and heavy development costs for the A350XWB, would not have been able to respond.  Now Boeing must make a choice of which aircraft development program it can undertake, after a 100% cost overrun on the 787.

Strategically, Boeing has given Airbus new life.  The A350 is now outselling the aging 777, and a re-engining of the A320 family will put pressure on the 737NG.   Compounding the competitive issues, Boeing also now faces new competition from the C919 in China and MS-21 in Russia, each with new technology engines making them more efficient than the current 737NG.

Boeing could have built two new airplanes if the 787 and 747-8 were on time and on budget.  But mismanagement has crippled financial reserves, and one of the two needed programs will need to wait.   Boeing’s talk of a 737 replacement near 2020 may be based more on its own financial difficulties than the availability of new technology engines, as the Pratt & Whitney Geared Turbo Fan and CFM International LEAP-X will both be available by 2016 for the MS-21 and C919, respectively.

The second problem is talent:

The tumultuous ups and downs in the aviation industry resulted in several rounds of cutbacks and layoffs over the last decade.  Unfortunately, management decided to cull many of the more experienced, and thereby more expensive, personnel from the workforce.  That experience on the line, and the stability that it brings, went out the door, and hasn’t been replaced.   Adding a second production line for the 787 won’t be an easy training task with inexperienced employees.

Engineering talent presents a different problem for Boeing.  Labor relations with the Society of Professional Engineering Employees in Aerospace (SPEEA), the major union representing engineers and technical workers at Boeing, has been testy for some time.  Back in 2004, the union head indicated that Boeing “makes no bones about its willingness to be second best.”

Jennifer MacKay, President of SPEEA, in 2004 indicated that Boeing senior management decided that it would focus on one thing, large-scale systems integration, and let other companies focus on being world class at all those other things Boeing used to do.   Judging by the results, they haven’t achieved either goal on the commercial side of the business.

Boeing has a talent gap, as today is finding it difficult to attract top-flight new engineering talent from universities.  Times have changed.

The third problem is culture:

Boeing’s culture has changed over the last decade, and a mistrust of former executives from McDonnell Douglas since the merger continues to haunt the company. Merging two cultures is always difficult, but in Seattle, many of the rank and file believe that current management is following the a new strategy – focusing on the defense business while relegating commercial aircraft to second class status.   They believe Douglas suffered the same fate under McDonnell management, and the result was a departure from the commercial aircraft business.

Recently, Boeing management has hired a consultant to examine the corporate culture in a planned two-year process to make improvements.  What took management so long to realize that there was something amiss?  The changes, significantly negative, have not only been quite visible, but widely publicized by industry observers, and even the local press in Seattle.

“Insourcing” has become a common term at Boeing, referring to employees transferred to a different unit or supplier to perform the same job at a lower price.  Of course, that hasn’t been culturally well received.

The “old-timers’ in Seattle remember a more congenial time, when everyone was focused on being the best, building the most reliable aircraft, and fending of competition by building a better airplane.   Management was local, and actually walked the floor and had a feel for concerns, rather than being off site in Chicago communicating through a chain of command.

Perhaps the worst element of Boeing has been a tendency to “shoot the messenger” that brings bad news, which of course, results in no communication up the chain and a management that has inadvertently created a culture that has left it in the dark.  There are rumors of a cadre of old line Boeing employees that are so frustrated that they are simply doing the assigned tasks, rather than richly collaborating as in the past.  The “we’ll do it your way – by the book only and not one iota beyond” attitude has contributed to problems that could have been detected earlier not being solved.

It takes a long time to change a corporate culture, and a long time to rebuild it once it is broken.  The corporate culture is broken at Boeing.  While they’ve recognized it and hired a consultant to help change things, can they be solved before the 737 and 777 replacement programs begin?

The Bottom Line

Will Boeing recover and once again assume the mantle of leadership in commercial aviation it ceded to Airbus?  We certainly won’t see 80% market share for Boeing ever again, and with competition from Canada, Brazil, China and Russia ready to attack the heart of the narrow-body market by mid-decade, Boeing’s market share in commercial aircraft will be closer to 25% than 50% two decades from now.  The realization that squandering a strategic opportunity to gain an insurmountable lead against Airbus has been lost, and the Boeing now lacks the resources to develop the new aircraft it needs, on a timely basis, will haunt the company for decades to come.

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73 thoughts on “Additional Delays Cripple Boeing’s Strategy and Finances

  1. Again Boeing has missed the bus. Will Boeing be able to hire experienced works or go the way of the South Carolina, no experience or skills???

  2. Nothing will change unless current management is ousted. Never should have let go of Mullaly.

  3. It is interesting – Ford has become much more nimble with Alan there and Boeing has slid.

    “The “we’ll do it your way – by the book only and not one iota beyond” attitude has contributed to problems that could have been detected earlier not being solved” is very evident when on 7/8/7 you claim the plane will be flying in 90 days. The senior managers that stuck to that must have had very bad eyesight, if they know aviation manufacturing and looking at the plane on the line – how could they have imagined that.

  4. There was never any alternative to outsourcing as much work as possible, despite the continual Puget Sound bitterness about “McDonnell Douglas management” decisions. With that region’s union workforce the costs of developing and producing everything internally would have made the 787 an absolute nonstarter in the world marketplace. Only by taking advantage of cheaper labor elsewhere could the plane ever have been viable. So be grateful that somebody realized that, and made the hard decision to snub the unions and make the choices that were necessary after decades of the union’s own predatory contract negotiations and strikes. Otherwise Boeing’s future would be dismal at best.

  5. I’m not sure that wages in Japan or even Italy, nor the cost of doing business in these countries, is less than in the USA.

    Scott Hamilton

  6. I hear you. Its a fair point.

    But looking back, surely Boeing has undertaken a study of what the costs of the 787 are now compared to what they might have been with the (initial) work done internally? Had this been done, 787 program risk would have been much lower, the plane would likely be certified and customers taking delivery over a year ago – even allowing for some delay. You probably know these numbers.

  7. Unfortunately, Boeing leadership made most of it’s outsourcing decisions on flawed and incomplete data, then refused to listen when the kid said the Emperor had no clothese on! The accountants had dazzled them with the glitter of voodoo economics and glossed over what the engineers knew would be trouble areas. It will take a complete culture change to regain what has been so thoroughly devalued and demoralized. Not impossible, but very daunting. Just think……in ten years management will reward consultants to “discover” the efficiencies of co-location, dedicated experienced labor pool and the necessity of controlling ones own key technologies. And the cycle goes on.

  8. It was sure a good move to offload, (NOT!!!!) and then Blame the union workers for daring to stand up for their GOD given right’s… If corperate greed hadn’t been behind all the outsourcing mistake’s all would have been built inhouse and flying high right now.

  9. Being familiar with the 787 program, and living in the Puget sound area, I would like to chime in on the 787 issue with a few thoughts. First off, Mr Vandervons point about the IAM union is a common beleif, and the union certainly isnt spotless, but the problems that have plagued the 787 clearly would have actually been largely avoided had Boeing mgmt listened to the union (or the workers if you prefer)regarding this program. Both before the program was off the ground, and throughout to today. Both of the company’s largest unions, IAM and SPEEA have warned Chicago of the quality issues they were seeing in an effort to bring this work back, and to save the cow from which all derive their milk. It does appear that change is on the horizon. With the appointment of Jim Albaugh as head of BCA, their has been a definite rhetoric adjustment, and people who know the man personally tell me: “If anyone can bring this thing back into focus, and turn around the relationship between Mgmt and labor at the same time, it’s Jim.” Having lived in this area for many years I can tell you this. Boeing has never openly discussed the labormgmt problems in the way I hear now before. Much less, hire a firm to come in and find the problems. Me, I beleive Boeing is still capable of great things. I’m waiting to see wht Mgmt does with the results of this consultation when it tells them that change has to include upper mgmt as well. If it’s the same ‘ol same ‘ol, someone will put together a 10 minute pwer point presentation to show to the workforce, underlining how much the workers are valued, but how most of these problems are their fault. If it isn’t the usual???? Who knows? I, for one beleive that if this company would really improve it’s relationship with the people who build the airplane, and build back the trust, the sky isn’t the limit to what Boeing can do. Pun intended. -RW

  10. Well, after 3+ decades with the company,and family at ALL levels, I can tell you that you are ignorant of the subject. No one at the corporate level ever captures hidden or lost costs do to overwhelming rework, caused mostly by those we’ve contracted to build junk.
    They don’t want to chart it, as it will show how incompetant they are. I’ve worked in shops for years where untold numbers of “rework” orders were done at Boeing expense,..by those “lazy Union members” that everyone likes to complain about. And did you notice that the first thing that Jim Albaugh did when they put him charge, was to hire back as “advisors” , 5 or more retired “Boeing” senior managers ? He told the entire workd at that point that he didn’t have a clue as to how to run the business. Too much change, too quickly, simple as that. We used to be a conservative company, that knew it’s business.now we are managed by a group that hasn’t got a clue as to how to keep a business going for more than a few years

  11. This attitude of arrogance has caused Boeing’s current difficulty and our nation as well. The answer is simple.

    NAFTA and GATT were a LIE and gutted the countries Manufacturing and Infrastructure endangering all of us. It must be stopped.

  12. There are as many issues with the 787 but engineering knowledge is first and foremost. There are just as many Boeing engineering mistakes as partner driven mistakes. Boeing tried to build a revolutionary plane with poor talent and weak leadership. Until Boeing can recruit top tier talent and leaders the company will continue to tread water. Boeing needs a culture revolution starting with the retirement of the people who are just plodding along until retirement with no care or accountability. There is a lack of urgency with anyone over the age of 40 that is not in senior management and that needs to change to compete in this world. There is a culture divide and arrogance that brings productivity to a standstill.

  13. Von, Van, whatever your name is. Currently
    Boeing would not be in this condition if it
    wasn’t for the outsourcing and cheap labor.
    The astronomical cost of reworking their shoddy work is more than enough to cover union wages. You need to get your facts straight.

  14. EXCUSE ME!! Mullaly WAS the management for the 787!!! Please check the org chart to see who was CEO of Commercial Airplanes when all those brilliant decisions about outsourcing integration were made! I think you will find that ARM was the man. I hate to rain on the parade that Mullaly would have been the answer. He was a big part of the problem.

    This was a great and insightful article. It was best in that it did not name names. It is too easy to pin solutions and problems to names. The problems and solutions are much larger than one person – even a CEO. (I just double checked. Harry was mentioned, but … Hell, everybody hated Harry!!)

  15. Since 1997, Boeing has repurchased shares worth over $20 billion. That much capital could have funded a very successful new model program, with money left over for contingencies or a second new model. As it was, Boeing shareholders received nothing of lasting value.

    Boeing always had the option of funding a new program internally. The Directors chose to use the money for entirely non-productive uses.

  16. You must be out of your everloving mind to say such
    a thing! We of Boeing never failed! In 80 years
    of building the Best Aircraft in the world the 787
    is way late and way over cost and we all are paying
    every day for the incompetance of our upper management

  17. van wake up amd smell the coffee I could not
    disagree with you more . The 787 would be flying
    by now and Boeing would have spent much less
    money if they would not have outsourced. We Union
    workers are the ones paying the bills right now
    not the Upper class snobs like you>
    There are always better choices and the wrong
    ones were made here we have billons in cost
    over runs . What goes around comes around .
    I guess your job is 100 % safe right .
    remember karma

  18. Right on Kern Von is out to lunch we would
    be way ahead if we had built 787 it would
    be on time and budget we have never failed
    Pride in Boeing Aircraft is what we have
    in out Hearts and Souls

  19. Stan, do you see any indication in all this that a very subtle and disguised corporate takeover has occurred? It sure makes me wonder to see all that was of high value being sold off (assets, capital and key technologies). Also, as you point out, the strong cash position of the company has been gutted. I do have to wonder sometimes.

  20. you are right Mulally was 100% responsible for the outsourcing and wants to kill the working man . He would slap his mother to get a dollar more for himself at the expense of every one else. It is good he went to Ford, henry Ford hated the worker too. Only Henry was smart enough to double the wage to keep them on the assembly line. Mulally was lways saying things like it is a slap in the face of every pasaat present adn future Boeing worker to have to pay this much for our hired held and blame the union like he had a gun to his head. Actually any strike was created by the company to allow for all the outsourced parts suppliers to catch up with behind schedule parts. With a strike, a month or tow of no unemployment compensation was a free way to lay off all union workers. We all just went on unpaid vacations until Mulally would stop the insane take aways at the same time that he was getting millions in bonus money for long term growth as measured in stock price. Long term growth was 20 trade days of a stock price above threshold levels. Mulally would pay airline money for the right to release the airplane orders so he could hold them secret until his 20 days of bonus was reached. if the stock price would start to dip a new release would say that some airline had just ordered 2 billion in planes , actually the plane orders were inked months earlier. He was just another bad manager, who was passed over because Jim McNearney was window dressing and from outside the company, he is just as bad or worse. He was a failed engine executive, and rode the shirtails of better managers.

  21. Actually the early versions of management decisions to outsource was that they had to give work to countries that buy the Boeing plane or they would not get the orders. That is a total liar statement as just about anything Boeing managment says. Most of the outsources parts cost more to make outside the USA dut to higher wages like Japan and italy for example, you think capitalistic union wages are high, then try socialism wages and you will be shoced into reality. The IAM produces much more product with much higher quality at a much lower basic wage and burden cost to Boeing.

    This chage is exactly like the article said. When the fool Condit payed way too much for McDonnel he also got the Harry Stonecipher model. harry was the CEO so stupid as to leave his computer on with love letters to his gold digger girlfriend a junior Boeing executive Harry lost half his wealth to his wife who divorced him and gee his lover dumped him too. But Boeing got the worst of both worlds the failed big mac executives , the change from building the plane in the USA to outsourcing and the worst management of Boeing and big mac, a perfect recepy for failure sorry about the spelling

  22. your right as I have said trying to explain the problem to top level Boeing managers is like trying to explain to Caligulia that he is a sex perfert. Boeing executives god their jobs by FBI- friends, brothers and inlaws, the workers that know what is going on got to very low levels of work authority by SKA skill knowlegde and ability and the two worlds will never blend because the skilled employee’s have no authority over their high priced but no skill higher managers who never worked a day in their life, they sit around and have meetings all day long and eat high priced fruit bowls, starbucks, and expensive ice cream snacks and look at charts, it is so stupid

  23. well let a socialist run the country and that is what you get tickle up is what should work , trickel down means taking my tax dollar and giving it to other people , that is not why I give my money away, I dont give it to beggars the lawmakers do for me

  24. Dear Mr. Veteran_eng

    Your name implies that you are a
    Veteran Engineer over 40. Maybe you
    are speaking of yourself about
    the poor engineering talent and the
    “plodding along until retirement”
    attitude. I work at Boeing and
    respect the talents and ethics of
    the senior engineers.

  25. Yeah, im sorry but no one hear can seriously say say that building parts of the wings in Oklahoma then sending them to japan for assembly to just have them shipped Everett for install is cheaper then building in house around puget sound. People need to open their eyes. America is no longer the country it used to be employees are streched thin paid considerably less then comporable employees in Europ and Japan.

  26. Well then all these senior managers should take a pay cut and show the under 40 year old workers how it is done, and if you are over 40 and a senior manager, where did you gain your cutting edge composite technology expert status working for Team Tango.Senior managers usually have a skill set that is at least 20 years out of date and a lot of experience with what did work on aluminum,and other metals, not on new technology, the fixes are being generated at the shop floor by workers who see the problem and then fix it. This has always been the final fix, blue collar workers tell the engineer what they need and the liason engineer takes dictation and then engineers the fix per the blue collar worker.The engineer gets to try to make it right in design, then the mechanic has to fix it when the engineer is wrong

  27. AGE? C’mon what a ridiculous remark. Boeing should acquire or keep the people doing the BEST job, regardless of age, wage or location. That’s it. I don’t care how much money Boeing executives say they are trying save. Bottom line, is THEIR bottom line. They will get their bonuses and stock, make a profit, sell it and move on. Now, I know how it feels to be pillaged and plundered. There isn’t going to be a Boeing company 20 years from now.

  28. Mullaly was a major part of the problem. He should have resisted Condit and Stonecipher’s push to outsource major and critical portions of the 787. Failing in that effort, he should have at least recognized that this was a “different, potentially breakthrough” airplane and set a development plan accordingly instead of assuming another round body aluminum follow on of the 707.

  29. Statement in quotes below is accurate.————-“but in Seattle, many of the rank and file believe that current management is following the a new strategy – focusing on the defense business while relegating commercial aircraft to second class status.”————-Some examples.
    All former McDonell Douglas sites in So Cal enjoy complimentary health and fitness centers. For employee’s spouse too. In fact they built a brand new one recently in Long Beach. Not so for Seattle employees. Site wide BBQs in So cal are common. Take your kid to work day is accepted practice in So Cal. Not allowed in Seattle except for a limited program for High schools kids only.

  30. well well well,, we have issue at boeing and have had for many years,, but if you think changing managers is the fix or have the mechanics fix it ,, well that is wrong for sure,, the blame is US all of us when i should have pushed back I could not when i was speaking out I was not invited back to the table
    if we dont fix it here on the 787 ,, but we will we are boeing the greatest airplane builder in history.
    now get up off your butt and lets get to work make it happen do it right the first time show the young and educated how to do it when to do it ,,
    we all made bad calls but we can still play fight and bleed together ,, don’t ever give up
    teach your Manager and your new engineer or IAM OR SPEEA person we will do it the boeing way ONLY.
    THE PAST IS THE PAST and we can do this people

  31. As an engineer on 787, its completely true that those of us who stuck a paw in the air early on and pointed out that things were NOT all roses were told to STFU and sit down. It was ALL going to be OK and we were NOT being TEAM PLAYERS. 80% or better of what we flagged has come to pass and some things that we didn’t even see coming, mostly at Partner sites in the business end of things. We called 95% or better of the technical things early on in the program.

    Its EXTREMELY frustrating to watch your Sr managers fritter away a lead in both tech and time looking at charts and denying reality.

    I still have a ways to go before i can retire, but I’m well over 40 and CERTAINLY not marking time. I also have one and potentially both of my sons working at Boeing in different capacities, I’d like it to be around for them.

  32. A similar but fuller analysis of the changes at Boeing and the impact on employees and the culture can be read in a new book, Turbulence:Boeing and the State of American Workers and Managers(Yale U Press). The book traces the story of Boeing Commercial from 1996 to 2006 and beyond. I think readers might find it interesting. I should add that I’m one of the authors and would welcome feedback from anyone who reads it.

  33. I would also guess selling off a major Site like Wichita, and booting out 2400 over 40 employees with many years of skill was not a wise choice. For some reason Hiring a burger flipper because their cheaper just don’t calculate a good aircraft skill level. After the merger in 97 the leadership lost their mind and the billfold took over. And why would you put a looser like Harry in charge, he broke every company he ever ran in the ground including Boeing. With the poor Management and Leadership in that company, Their is no way it will ever hold the Glory it once did in the past. I hate to say “You can’t fix stupid”. But I have years of material to teach Leadership classes now.

  34. I mostly agree with the article with the exception of one major point. The Engineering Talent Boeing has retained contains talent that is second to none. However, this talent is being under utilized and misapplied in ways that are appalling. MSEE and PhDEE’s are being used as wire designers, database programmers, and program managers (bean counters). Similar misapplication of talent is occurring uniformly across all engineering disciplines in Boeing.

    This is a shameful waste of Human Resources. However, in the extremely unlikely event that Boeing Management ever comes to it’s senses, it is the one thing that could pull their fanny out of the fire.

    I think it more likely that these poor misapplied unfortunates will eventually be used as scapegoats for Management’s poor decisions.

  35. Watching the demise of Boeing has been tough, as both an employee and now a contractor. Funny how contractors now are considered alien and certainly not part of who counts. There are always conflicts, but when you don’t have a team atmosphere, the passion is lost and the desire to do good goes out the window. Current environment is esp tough. . .don’t dare speak up when you see areas for improvement…you’ll be replaced by someone who’s a go-doer. The company I knew 10 years ago has all but disappeared, and it all started when Boeing bought McDonnell Douglas. By the way, it wasn’t a merger. But Sears had 51% of the stock, and so the story goes.

  36. Woodswalker –

    Can you send me contact information? I’m writing an article for an academic journal, using Boeing as a case study, and I would like to talk to you.

    stans@speea.org

  37. Experienced manfacturing engineers…the ones who turn the design engineers dreams into parts, plans and tools for the skilled mechanics to assemble have been turned into buttonpressing computer jockeys wiht systems that are glitchy, unreliable and do not deliver the promised performance. We have not been delivered the functionality from Dassault Systemes that we were promisxed in Blockpoint 2…as of a few weeks ago I think we had BP14.something.

    You are right..the talent is THERE (here) but its mostly horribly missused.

  38. the unions complain that the sky is blue, so why would management want to listen to more demand for GOD GIVEN right to a job…

  39. GEEZ,,,what does your reply have to do with the 787,,if you want to exercise, join the YMCA and pay for it yourself

  40. ya know, if it wern’t for REWORK maybe
    Boeing wouldn’t need so many union toads, betcha never thought of that,,work is work so quit complaining…

  41. Not much of this is true. There’s a bbq that employees have to pay for, annually and its not side-wide but per program. Many programs choose not too do it.

    There has never been a take your kid to work day in the 6 years I’ve worked here. Sometimes there is a family day on a Saturday where they open the hangar but offices are off-limits and you’re not being paid.

    The lgb fitness center is nice its purpose is to _decrease_ medical insurance costs, not as a benefit to employees. I’m surprised Seattle hasn’t done it yet.

  42. Sounds like Boeing is going the way of (broadcaster) ClearChannel:

    – buy up as many radio stations as it can.

    – decimate the inventory/cashflow to feed the corporate head.

    – try to ‘lead locally’ by having ineffective personnel in charge (bean counters), via corporate HQ, rather than pay local, experienced people to be in charge.

    – when the ‘outlets’ start slipping, HQ sells them off to another group…leaving the new owners with a mess and low morale among remaining employees.

  43. I started out working from the toolbox and retired from management. If anyone thinks that albaugh is a solution, they are on drugs. He’s another chart boy subscribing to the lies of “You don’t have to know the product, all you have to know is how to manage”. My guys called him “all-blah”. Shop guys can see right through the b.s.

  44. Substitute “Microsoft” for “Boeing” and this blog reads like the other Seattle area mess.

    The wiseacre who designed this de-centralized business model should be summarily executed, offsite, with various outsourced groups holding responsibility for individual appendages. Estimated death delivery is early 2012, although quality issues with instruments and instructions could affect that date. It should be noted that “Google” could potentially kill him faster.

  45. Well, at least the SoCal folks get a bone once in a while. In 10 or 15 years, we’ll be lucky if there are any SoCal facilities left. We’ll just have layoff notices or forced relocations then.

    I hope the heritage Boeing folks enjoy those retirement medical benefits. That was denied to heritage MDC folks.

    I’d bet a paycheck that the heritage MDC folks would trade all the open houses, gyms and bring-your-kid-to-work-days to get their retirement medical back.

  46. Mullaly smallaly incompetent management is the most irresponsible deficit any company should have to own! I’ve witness the mental challenges that befall several “managers” if you want to use the word so carelessly. If the un-trainables are not monitored then how can you expect anything but a substandard piece of equipment. COME ON….REALLY???

  47. Although appearing to be a scholarly dissertation of what ails Boeing on the surface with the symptoms accurately characterized, the determination of the root causes is pure conjecture and in some case dead wrong as to the source of much of the problems. The culture at Boeing has always been top down. It has always been one that avoided conflict or confrontation, to face the music. Rather the NW Scandinavian/Dutch culture that avoids such things still pervades. Boeing’s past success was based on occasional significant risk taking moves made by legendary gamblers and it’s 80% market share was because it had a solution for every size and distance one would want. It if had been lean and mean, Airbus nor anyone else would not been able to even establish a beachhead in the market nor would it’s margins been so middling to poor when it had those kinds of market shares.

    It’s too easy to blame the MDD management or on the MBAs’ or the military program management culture.

    What needs to happen is to promote and truly empower those leaders at the lowest possible level that demonstrate the kind of culture Boeing needs to survive in the 21st Century regardless of whether that is insourcing, outsourcing or simply selling licenses. A culture that is open, honest, metric driven, where processes are the means and not the ends and people (with their experiences and education) are valued as much as the physical property and deployed where they bring the greatest benefit to the stated goals.

  48. I think that both this article and the related comments, while having some truth, suffer from generalization and gross simplification of the issues. To eliminate any ambiguity, yes I do work for Boeing and on the 787 program. I think in general people like to point their finger and assign blame on one thing or another. That tendency in itself will keep people from seeing the actual problem in all it’s complexity.

    If there a management problem? Absolutely. Are they the only problem? No.
    Is there a Everett workforce issue with people just”putting in their time” and not taking accountability? Yep. Is that the only reason the 787 and similarly the 787 program is having trouble? No.

    You get the picture. What actually happened is (excuse my use of the cliche’ term) “a perfect storm” of a bunch of issues at the same time.

    My laundry list of issues contributing to current problems: (no importance is placed on the issues’ order in the list)
    1. Management detached from issues
    2. Management making bad decisions from a company standpoint
    3. Management not fostering an environment conducive to an upstream transfer of knowledge of issues and a downstream response to correct issues
    4. Decision to turn Boeing engineering into a large scale systems integrator without having a supply stream to support such a decision
    5. Loss of critically skilled engineering by retirement/ layoffs without replacement of a comparable skill-set
    6. No accountability at any level of the management/workforce chain for failures, missed deadlines, etc.
    7. Allowing a corporate culture where many get to a point where they just “put in their time” no more, no less, with no real effort being put to the team’s/program’s/company’s success
    8. Deciding that they were going to develop a new airplane program with new processes, new tools, new technologies, new supply chain, new business methodology all at the same time and still do the whole process faster than everyone knew that it could be done.
    9. Lying to themselves (internally) and others (externally) when issues started coming up until it finally became impossible to deny
    10. Once a problem was admitted, setting an impossible plan to fix the problem before the a real plan based on accurate data and knowledge can be created
    11. I could go on but I think people get the point…

    many things happened…I think the important thing will be to see what people do in the future to bring ourselves back from the brink…Lets hope for the best, and work for it.

  49. You are crazy. Compare the cost of designing and building the 777 . Add inflation, and you still think the 787 was a deal? At least the overpaid “Whiners” knew how to design and build. The real reason the costs have skyrocketed is because of the use of the Enovia and 3d release system. The idea hee was to eliminate the cost of making drawings. Guess what, they still needed drawings, only now the guys who didnt design the parts were doing them (planners, ME’s Indians, Rusians……)and wouldnt you know it, stuff doesnt fit, design intent wasnt met. I have no idea how they are going to certify this plane. Sounds to me like you are the guy writing the management press releases.

  50. It was a game of liars poker. There was no return on investment when you used 7 years, so Poof!!! wave of the wand (or MBA degree) and there you have it a 5 year program!!

    What amazes me it the idiot who decided to rool this plane out on 7-08-07 is still working there. Do you people have any idea of the disruption this caused ion the supply chain?

  51. You hit the nail on the head with your remark ” The corporate culture is broken at Boeing” Recently they sent a very unimpressive and arrogant recruiter to UT Austin who made a fool of himself. With people like Jeff Donahue around Boeing is going to need more than good luck in trying to hire talent.

  52. Been in the comml aviation ind for well over 22+ yrs.
    All but the past 2/half (on the 787 prog)have been in the airline ind. I tell people/friends…had I not been here to see it for myself, I never would’ve believed a company that’s been building comml aircraft for as long as Boeing has, could screw something up SO miserably. This place is beyond belief.
    And the arrogance is second only to the towering egos.
    They have no one else to blame but themselves. And Charleston is NOT going to be the salvation of the 787. In fact, I give it about 2 yrs, before the IAM gets back in down there because of Boeing management shooting there mouths’ off and pissing employees off…the only thing they seem to be to be good at anymore …

  53. As a retire “heritage” Boeing employee, I couldn’t agree more with you. When “McDonnell Douglas bought Boeing with Boeing’s money” the company started its massive downhill slide. I sat in many, many meetings where “Best Practice” was discussed and it was always MDC practices. Now Boeing is paying dearly for this and other major mistakes. A classic case of a great company getting greedy.

  54. OK. you are all bashing the Boeing Company for missteps. What is your solution know? Are you going to step up to the plate and offer something different? I am. I love this company for what it has provided for me and my family and will do my best to make sure it succeeds. Don’t count Boeing out. This is a first class company and innovation is the name of the game.

  55. One other major issue within Boeing Commercial is the highly burdened (matrix organization model) management structure, with extremely high numbers of high level positions (VP’s & Director titled people). This kind of organization structure creates a lot of confusion within the process. Not only does this type of management organization cause poor communication and lack of credible decision making, but adds greatly to cost & delays in bulding products. In summary, Boeing Comercial needs talented people, not an over burdened organization structure.

  56. When I was young, I was proud to say I was a Boeing engineer. It was a job that held high status. In my youth, I assumed I would work longer, but I took early retirement in 1998 at age 55 partly because I didn’t like the way the company was headed. I saw the handwriting on the wall a few years before when Integrated Product Teams (IPTs) which merged several disciplines came into vogue. Instead of staying with a chain of technical command that understood the job, so-called “managers” from other disciplines who did not have a clue came into the picture. In a program I worked on a few years before I retired, people in my IPT wanted to “vote” on raising the design allowable values, which are based on pure statistical analyses of test data. This is like voting on whether or not the earth is flat. The golden handshake given to engineers over 55 in 1995 just gave a lot of good talent a way out to get away from the approaching disaster. If I had been old enough I might have left then. At the time, one of my colleagues stated that the company was “harvesting the fruit and cutting down the trees.” IPTs worked okay as long as they included senior engineers who could help mentor younger members of the team and check their work. In the old days such mentoring occurred on the floor naturally. But once the senior people started leaving, and the younger engineers were surrounded by people who didn’t have the knowledge needed to train them, that mentoring process fell apart. One purpose of the IPTs was to speed up drawing signoffs by having people of different disciplines (engineering, manufacturing, finance, etc.) located together under a common manager; however, the new process pushed decisions that could have expensive consequences to a lower level and removed the technical chain of command that could more easily conduct checks and catch mistakes. Back then our only saving grace was our main competitor was making the same mistake, but it appears that Airbus is seeing the light and moving past us. And there are new competitors on the horizon. Years ago I once worked on a project in which design and staff people were co-located, and that was successful because we still reported back through our respective technical leaders so the checking process was maintained. Now when I get together with my retired colleagues we all feel badly that the company for which we so proudly worked has fallen so far. Sadly, my main concern now is that Boeing stays alive as long as I do so I can keep getting my pension.

  57. As a contract engineering consultant, over the last 21 years, I have worked at over 15 different companies in three different countries – from my experience I found the Boeing 777 program in 1992, at the Wichita facility, by far the most organized program I have ever seen – It was miles above everyone else – and yet the Wichita facility was one of the first things Boeing got rid of — very odd to me.

  58. This Letter has said the same things I have been saying for 10 years get Douglas out of Boeing’s business.I’m suprise they didn’t change the name to douglas lack of knowing how to build airplane dump.

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