Boeing provided more insights into its decline into incompetency overnight which deserve to be studied by large businesses in general.
Chief executive Jim McNerny said that it would cut a total of 10,000 jobs this year in response to the effects of the global financial crisis, saying “We must prepare the company, including being more aggressive in terms of productivity.”
Fine. But how about being more aggressive about retaining or recruiting the skills sets it needs to deliver quality products on time and to specification? Boeing has already lost the capacity to put something as fundamental as the right rivets or fasteners in the right holes in its massively overhyped and underperforming Dreamliner project. It disclosed that when the prototype manages to fly, sometime this year, it will do so without replacing some of those wrong parts because they are in ‘hard to reach’ locations.
The company says this is not a safety of flight issue, because the incorrect fasteners will be replaced before the jet is stripped of its test equipment and refurbished for delivery to an airline. This is hardly the point. It lost the skill to correctly assemble aircraft. It couldn’t catch the misplacement of tens of thousands of fasteners with a quality control process. It hasn’t been able to get the Dreamliner into the air since it rolled out a shell on 8 July 2007 and claimed it would fly as soon as August or September that year.
So what residual skills are going to get shown the door in Seattle? And what exactly does improved productivity mean for a project in which Boeing farmed out design and construction responsibilities and the associated investments and risks to a range of US and overseas sub contractors who in some cases haven’t performed to anything like the required standards?
Qantas CEO Alan Joyce has already said Boeing is so late with the project that the airline group could cancel its order of 65 Dreamliners plus options or purchase rights for a further 50. Jetstar CEO Bruce Buchanan has said the early Dreamliners which the low cost subsidiary was to have started putting into service late last year might not be able to fly non-stop to the US.
Boeing’s guidance on first flight is vague, but it may be by the end of this June. At the earliest, this would mean entry into service for the lead customers in the middle of next year, but there is no clarity at this stage as to whether Jetstar will get its first 787s by the end of the next year, or sometime in 2011.
The Dreamliner model that most excites Qantas, the 787-9 , is officially not deliverable until sometime in 2013. Which for Qantas is starting to sound like 2014.
This is a disgraceful situation.