Execution 2009
November 17th, 2008
For Boeing, 2008 may go down as its “annus horribilis“.
On the back of three years of quadruple figure orders, the battle to match the order intake with output that matches its success has been one that has not gone smoothly. After losing the hotly contested, but now deferred KC-X tanker competition to seeing the 787 Dreamliner suffer setbacks to its first flight, last weeks news that legacy airplanes in the 747-8F/I and 777F would also be delayed was probably about as bad as one could imagine.
Boeing Commercial Airplanes President & CEO Scott Carson was not shy to state that the crippling 58-day walkout by the IAM had been “deeply disappointing”.
Image courtesy of Boeing
“Better that Boeing get these two programs right than provide a product that does not meet the customer agenda. Disappointing though the rescheduling of these programs are coming as they do alongside protracted delays in the 787 Dreamliner program we as observers have a tendency to expect too much to be achieved in a too short time period from aircraft development programs.
Boeing has of course not helped in execution and just as it was back in 1968 when it was developing too many programs at one time (737. 747, 727 stretch, and Atlas) so it may be doing once again. Clearly I must also have some concern that in the great cost clear out that took place back in the mid nineties Boeing may have allowed too many skilled development engineers to go. Right or wrong they are paying a heavy price for a situation that is partly of their own doing,” says senior strategist Howard Wheeldon.
So what will 2009 bring?
Not more of the same, that’s for sure.
By allowing the 747-8F/747-8I to slip, 2009 can be dedicated to allowing full engineering and flight test resources to be thrown in the 787’s direction. With the 747-8F already slightly overweight, the company will use the time to push forward its plans to bring this down - given the inherent supplier base and network infrastructure supporting the 747, moving forward towards delivery in late 2010 will give the company extra time to iron out the kinks.
As we know, launch customer Cargolux was “surprised by the length of the delay,” but in hindsight, it will also then take delivery of a much more mature platform for its freight operations.
With capacity cuts taking place across the globe, Lufthansa will not be worried too much that the 747-8I has been delayed - its already had to wait long enough for the A380.
The 737 and 777, like the 747, are well established products.
Boeing tells FleetBuzz Editorial.com that approximately two-thirds of the 777F certification has already been completed. Flight testing and certification should be wrapped up by late Decemeber/early January, paving the way for delivery thereafter.
Image courtesy of Randy’s Journal
Execution on the 787 program is what will be key for 2009.
With key milestones such as power on, gear tests, brake software maturity and wingbox destruction validation already completed, getting the Dreamliner airborne sooner rather than later is critical.
There’s no doubt challenges remain, but if it means Boeing now uses the expertise of its IAM/SPEEA staff to bring back more of the work to stabilise not only the 787-9, but the current 787-8 line which is in need of extra manpower and resources to allow a kick-start in production, thus helping to eat into the record backlog- then so be it.
Airbus’ own A380 had been delayed almost two years and comparisons between that and the 787 emerging are no coincidence, even though the nature of their respective setbacks are very different.
However, taken into context, with oil prices plummeting below $60 a barrel, respite is certainly in order for those carriers that had been hoping to take delivery of 787’s this year.
Perhaps 2008 hasn’t (so far) turned out to be all that bad.
Boeing will be judged on how well in 2009 that it uses the time that it has created for itself and its product portfolio.
Execution, Execution, Execution.
Entry Filed under: 787 Dreamliner, Aeroplane, Aerospace, Air Transport, Air Travel, Airlines, Airplane, Airplane Order, Airplanes, Airport, Airports, Aviation, Boeing, Boeing 737, Boeing 747, Boeing 747-8, Boeing 747-8F, Boeing 747-8I, Boeing 777, Boeing 777-200LR, Boeing 777-300ER, Boeing 777F, Boeing 787, Boeing 787 Dreamliner, Boeing 787-3, Boeing 787-8, Boeing 787-9, Boeing Commercial Airplanes, Boeing Orders, IAM, SPEEA, Scott Carson
13 Comments Add your own
1. Chris Wallace | November 17th, 2008 at 2:42 pm
The first thing they should execute is the dismissal of most of the senior executives of Boeing Commercial Airplanes along with their current Chairman and CEO - McNerney.
Then they should execute the promotion of James Bell to Chairman/CEO and Shanahan to head of Commercial Airplanes with a 12-month mandate to get everything perfect or he’ll be shown the door, as well.
The current BCA management team has shown themselves to be incapable of executing to plan and their own actions - and in-actions - have made a bad situation far worse. And McNerney let it all happen, so he needs to go, as well. Bell at least kept the lights on during his time as interim Chairman and it is now clear passing him over was a mistake, as it looks like it was doing the same to Mullaley and letting him go to Ford. Ford might be on the ropes, but at least he’s kept them solvent and is working hard to get their “787″ - Euro-spec vehicles for America - into customer’s hands ASAP.
2. boeing investor | November 17th, 2008 at 4:03 pm
Who’d be your choice to run 787??
3. Aurora | November 17th, 2008 at 5:13 pm
This will probably disappoint some people, but Lufty has announced that they have no plans to cancel the 748, but instead will seek compensation. My condolences to the Boeing haters.
http://money.cnn.com/news/newsfeeds/articles/djf500/200811170810DOWJONESDJONLINE000281_FORTUNE5.htm
4. mike j | November 18th, 2008 at 3:24 am
I like blogger 1 statements… would need to also execute the Bored Of Directionless too, because they put/keep all the current execs there.
At some point when things get too messed up, it won’t matter who is put in their place, it might become unfixable.
But I would go for cutting thier bonuses/pay.
5. boeing investor | November 18th, 2008 at 3:22 pm
Thanks for that post Aurora - too many people are quick to write off the 747-8I yet dont bat an eyelid at the A350-1000.
What is it, 50 orders, 5 years on sale costing how many billions of taxpayer funds?
6. mike j | November 19th, 2008 at 9:21 am
For the title “Execution 2009″ and in reading the rest of this article’s topic, regarding Boeing (Management, how the show is run, etc), I can only pray for sanity and sensible-heads to prevail…
On the factory floor and in the day-to-day activity, this is rare and many times non-existant.
And so far, since the strike ended, I’ve seen only very small impovements, if any.
7. Steve | November 19th, 2008 at 9:56 am
“What is it, 50 orders, 5 years on sale”.
Industrial launch of the A350XWB was December 2006, so that would be less than two years. But who’s counting?
8. boeing investor | November 19th, 2008 at 10:18 am
Steve - I referred to “sale” not industrial launch.
http://news.bbc.co.uk/1/hi/business/4085631.stm
4 years, my bad, only one out
9. Sarah | November 19th, 2008 at 1:21 pm
Both Carson and McNerney should be fired. Carson sent several negatiive emails out to the IAM employees
just before the strike just to make then mad. Which is exactly what happened. When I seen an email that he had sent out to the Boeing IAM I was stunned at how little he thought of what these people have to go through to get an Airplane built. NONE of these CEO’s ever go on the floor to see the real action they just sit in the plush offices not really knowing what is happening in the real world of Boeing. They want to make a name for themselves but they have not got a clue as how run a business efficiently. Now Boeing is in Business with China financing Airplanes. Why did the Senators of Washington State even allow that. Are we (USA)not endebted to China enough? What is Boeing thinking? I honestly don’t see Boeing around in 20 yrs as the Board Of Directors keep hiring CEO’s that are more concerned with padding their own pockets than protecting the company.
10. FleetBuzz Editorial.com | November 19th, 2008 at 1:26 pm
Sarah, could you contact me at your earliest convenience please?
Email
Thanks in advance!
11. keesje | November 19th, 2008 at 2:41 pm
If the “A350-1000 sold 50″ in 4 years, I think it is interesting to notice the 747-8i was discussed with airlines from early 2003. EIS is schedule for 2011 for the 8i.
Maybe Boeing Investor can produce an inspiring one-liner out of that..
12. Steve | November 19th, 2008 at 2:59 pm
Boeing investor - first firm sale of the A350XWB was AFTER industrial launch. The XWB has over 550 sales and committments in less than two years since industrial launch.
Singapore Airlines signed an LOI at Farnborough in July 2006, but did not sign a firm contract for a year.
http://en.wikipedia.org/wiki/Airbus_A350XWB
“On 4 January 2007, Airbus announced that Pegasus Aviation Finance Company had placed the first firm order for the A350 XWB with an order for two aircraft, though the variants were unspecified at the time.”
13. boeing investor | November 19th, 2008 at 4:01 pm
Steve - Apologies, I didn’t separate the A350/A350XWB. I was going by Air Europa’s order for 10, which I believe has since been terminated. No disagreement with you on the XWB/Pegasus Av order
Keesje:
Splitting heirs, but the 747-8I is a derivative and one destined for a niche market. As usual, you compare apples to oranges.
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