The build quality of the horizontal stabilisers, aft and central sections of the 787 produced by Alenia have continued to be the weak link in the production set up and are under almost constant scrutiny as Boeing looks to improve quality. Boeing must bring this work back in house to ensure stability and progress to the 787 program.
Boeing has had to learn the hard (and expensive) way that farming out too much of the advanced work statement on the 787 to global partners has not worked as well as it had hoped when the program kicked off back in 2004. Despite having bought out the Global Aeronautica stakes from Alenia and Vought, the company is still having build quality issues that should not be occurring three years after assembly of the 787 first began.
“Well, there have been a couple of what I would characterize as workmanship issues there that we just worked through…where the workmanship was not what we wanted it to be, and we do what we always do, which is to work with our suppliers to resolve them. And that’s been the case with Alenia,” said Boeing CEO, Jim McNerney during the second quarter earnings call.
“I don’t mean to single out Alenia…As far as I know, we have largely worked through what is going on with Alenia,” he added.
Boeing 787-8, ZA003 on static display at the Farnborough Air Show 2010
Image copyright/owned by FleetBuzz Editorial.com
Acquiring the Alenia operation may be considered a risky move, however, leaving it longer will continue to compound that risk as Boeing looks to ramp up rates towards 10-per-month by 2013 and also bring the 787-9 to the production line too.
Boeing has to consider its options just as it did when it had to move for the Global Aeronautica buys.
Does it stick with Alenia and continue to suffer build quality issues that hinder the production ramp up, hurt deliveries and fall foul of customer obligations and part with yet more compensation? Or does it bite the bullet and make yet another expensive purchase and bring the work back under its control and remove the ongoing risks?
The reality is that Boeing has little choice but to eventually buy out the Alenia operation and bring direct oversight and management control to the 787 production set up. By moving the Alenia’s production system to Charleston (where there is ample real estate for expansion) for example, not only does Boeing solidify its aerospace expansion outside of Everett, but it also allows the company to further self-develop its own expertise, knowledge and experience of producing large composite aerostructures that will be vitally important for when the time comes to replace the 737, 747 and 777 families.
Even if Boeing had to invest in new autoclaves, it would be a worthwhile endeavour. It could theoretically procure bigger autoclaves within which it could bake bigger monolithic structures that would form the basis of any eventual 777 successor and dispense with the need to ship them Everett and build such airplanes in Charleston with a workforce accustomed to working solely with composites.
The downside here is that such an acquisition would almost certainly push the 787 program towards a loss position (or perhaps depress whatever profitability, if any, is left), but by keeping the work in house, leveraging the production capabilities and economies of scale through improved output will push costs down over time.
Deliveries later down the line will command much higher margins than the preceding units as the 787 matures into a more versatile machine as continued learning and LEAN initiatives improve build quality.
Boeing needs to now isolate and remove the last major headache that the 787 is suffering – and that can only occur if it brings back the work currently with Alenia – if after such a purchase there are still outstanding quality issues, questions will be asked as to whether the training regime is robust enough to cope with building the airplane – and that’s something difficult to put a price on.
