In the US it is still 8 July, the second anniversary of the sham rollout of the flightless Dreamliner wonderjet and there is another problem.
The cash isn’t coming in.
This is supposed to be the start of year two of deliveries, originally planned to begin in May 2008.
The design and manufacturing partners in Japan, Italy, China, and outside Boeing in the US, borrowed in some cases significant capital to fund their risk and reward sharing equity in the 787 Dreamliners.
And now they face unknown further delays and costs. Including debt costs. Debt servicing with no firm prospect of sales revenue is potentially as lethal a stress test for this project as the wing-body join that failed static testing late in May and is keeping the 787 grounded until further notice.
It may well explain Boeing’s mixture of cash and commitments to one of its US partners, Vought, this week, which sees it take over its South Carolina facility which is dedicated primarily to the Dreamliner.
While the Japanese and some other components are thinly disguised lashings of foreign state aid for Boeing, Vought was a partner left naked by the unthinkable delays to this family of plastic fantastic high composite (and it now seems high weight) jets.
On 22 July Boeing is expected to say more about when and how the design of the Dreamliner will be fixed. But of course, Boeing is already on record as saying it has mastered the technology, and as recently as 17 June, that it would fly by 30 June, and after that, gave assurances that the fix was really truly minor, and could fit in the palm of a hand and might involve a delay of three months.
Jon Ostrower has posted a very incisive commentary on the internal as well as external communications problems with the 787 on Flightblogger today.
Add that to the question as to what happens to risk sharing partners who may not see any sales revenue from this project for another 1.5-2.5 years, and ask if anything less than the dismissal of the CEO of Boeing, James McNerny, and that tier of management responsible for the calamities that have beset this program is acceptable.
Not after Boeing begs DC to be nationalised, or ’supported’, as seems inevitable, but now. Immediately.
3 Comments
It’s looking more and more like Boeing bit off more than they could chew. In the comments to the linked article someone makes the very valid point that for the 787 program they changed both technology and process at the same time; in other words, they made two high risk changes in the one program.
I think the rot started when Boeing moved HQ from Seattle to Chicago, so that top management was isolated from the company’s bread-and-butter and its corporate history. There seems to have been too much management by buzzword in the 787, with good marketing-speak being mistaken for what was actually possible or sensible.
I hope the composite-airliner concept *is* workable, as otherwise Airbus is heading up a blind alley with the A350 – instead of one screwed-up airliner manufacturer, both will be affected. Forced into it by pressure from its customers.
The US aerospace industry has form on this: (1) the Boeing 2707 SST. Announced with great fanfare to use a titanium airframe so it could go Mach 3 instead of the Concorde’s Mach 2. Scrapped after total redesign due to enormous expense after cruelling orders for Concorde. Helped discredit SSTs in general. (2) the “Orient Express” of the Reagan government. Turned out to be a bluff, much money wasted in other projects (eg Hotol) from other nations thinking that the US had mastered both SSTO and scramjets to make it work. Both SSTO and scramjets still struggling to regain credibility.
Malcolm, you make some very good points.
A professional colleague based in Seattle reckons the rot started when Boeing ‘acquired’ McDonnell Douglas (MDac).
Turns out it was a reverse takeover with many of the MDac management types getting senior positions in the Boeing hierarchy.
Moving Boeing HQ to Chicago was one of the outcomes, supposedly to rid the group of the Seattle vs Long Beach/St Louis rivalry.
According to my colleague, this is when Boeing mastered the art of ‘a total indifference to reality’. See http://www.ausairpower.net/APA-NOTAM-190209-1.html
Actually, the word that he used was a tad stronger and is often associated with burning britches.
Jon Ostrower’s very incisive commentary includes the following reference to the management of the Boeing B-787 Dreamliner program.
“They talk of a ‘kill the messenger’ culture has established itself inside the program, where the push to move ahead and show marked progress is often in conflict with requiring the often uncomfortable task of ensuring that ‘power’ has ‘truth’ in its hands to make good decisions and communicate progress outwardly.”
This pretty much says it all. This reflects the organisational disease known as ‘Group Think’, pure and simple.
Group Think is one of the ways “that individually very smart people can, collectively, make really very dumb decisions”.