IAD787 From United States of America, joined Jun 2005, 505 posts, RR: 44 Posted (7 years 10 months 2 weeks 5 days 9 hours ago) and read 21336 times:
Just wanted to post this news item that just broke on the wires. Boeing is acquiring Vought's 50% share of Global Aeronautica in Charleston. This is a major development in the 787 program. The center fuselage integration will now be a joint venture between Alenia and Boeing, rather than Alenia and Vought. This was a question I raised back in December on my blog:
So, it's interesting to see the progression of where the program is now. This appears to be the center piece of the recovery plan and retaking management of the supply chain. By putting Boeing in Charleston, they gain the oversight for Vought next door as well.
Fair Use Excerpt:
SEATTLE, March 28 /PRNewswire-FirstCall/ -- The Boeing Company (NYSE:BA) announced today it has agreed to acquire Vought Aircraft Industries' interest in Global Aeronautica, LLC, a South Carolina fuselage sub-assembly
facility for Boeing's newest airplane, the 787 Dreamliner. After the transaction is complete, Global Aeronautica will become a 50-50 joint venture between The Boeing Company and Alenia North America, a subsidiary of Italy's Alenia Aeronautica -- a Finmeccanica company. Vought will continue to produce the aft fuselage for the 787 at its facility adjacent to Global Aeronautica in North Charleston.
BrianDromey From Ireland, joined Dec 2006, 4112 posts, RR: 10
Reply 4, posted (7 years 10 months 2 weeks 5 days 9 hours ago) and read 21143 times:
Quoting Stitch (Reply 1): Makes sense. Vought was always the weakest link and even though they have improved, they're still the poorest-performing major subcontractor.
Surely Vought were a risk sharing partner, rather than a sub contractor?
I assume Boeing saw that things were going seriously wrong at this location and felt that such drastic intervention was necessary. I assume Boeing people are on the way to critical positions as we speak?
Im surprised at this move in one sense, I was convinced that Boeing would persevere with the risk-sharing model as much as possible. I suppose this was just a step too far, and ultimately Boeing lost control. At least Boeing had a convenient blame partner and now can come to the table as a night in shining armor!
Next flights: MAN-ORK-LHR(EI)-MAN(BD); MAN-LHR(BD)-ORK (EI); DUB-ZRH-LAX (LX) LAX-YYZ (AC) YYZ-YHZ-LHR(AC)-DUB(BD)
Slz396 From , joined Dec 1969, posts, RR:
Reply 5, posted (7 years 10 months 2 weeks 5 days 9 hours ago) and read 21145 times:
Good move in my view, although it is a consequence of the mess the 787 program is in right now.
I think the timing is interesting: Boeing are about to admit to another round of delays, so they want to present the world with a plausible new solution too, which is a good idea of course. Given the solution, I have a feeling the delays about to be announced are going to be quite serious indeed...
Anyway, the lesson from all this must be that copying Airbus' working methods are easier said than done and working with partners isn't nearly as easy and painless as it may look when everything goes well. Outsourcing: yes, loosing control: no. It is a very delicate exercise so it seems.
Revelation From United States of America, joined exactly 11 years ago today! , 15137 posts, RR: 27
Reply 7, posted (7 years 10 months 2 weeks 5 days 9 hours ago) and read 20983 times:
Quoting Nycbjr (Reply 3): sounds like Boeing is cleaning things up, lets hope this is the start of getting this program back on track.. I want to see this baby flying!
I don't think it'll have much short term effect. Certainly it won't impact first flight. If anything, it shows Boeing has had to spend a lot of bandwidth in the background sorting this situation out. It also shows that Vought could not make the transition from second tier supplier to first tier supplier.
It should have benfitial effect on the mid and long term, though.
I wonder if Boeing will sell it off again once everything is sorted out?
Revelation From United States of America, joined exactly 11 years ago today! , 15137 posts, RR: 27
Reply 8, posted (7 years 10 months 2 weeks 5 days 9 hours ago) and read 20932 times:
Quoting BrianDromey (Reply 4): I assume Boeing saw that things were going seriously wrong at this location and felt that such drastic intervention was necessary. I assume Boeing people are on the way to critical positions as we speak?
I'd presume so. And so there has to be knock-on effect since these people were presumably already assigned to other tasks.
Quoting BrianDromey (Reply 4): Im surprised at this move in one sense, I was convinced that Boeing would persevere with the risk-sharing model as much as possible. I suppose this was just a step too far, and ultimately Boeing lost control.
I too thought Boeing would stick to the model, but clearly they felt something had to be done.
This is also why I asked if Boeing will sell off the operation once they get it up and running they way they want it to be running.
Quoting BrianDromey (Reply 4): At least Boeing had a convenient blame partner and now can come to the table as a night in shining armor!
JayinKitsap From United States of America, joined Nov 2005, 769 posts, RR: 1
Reply 9, posted (7 years 10 months 2 weeks 5 days 8 hours ago) and read 20737 times:
In construction, many of the large projects are done by Joint Ventures. Properly structured, a JV has different agreements, labor contracts, and similar advantages. I think Boeing will stay in the JV with Alenia. I believe that Alenia is new to stuffing fuselages themselves but are probably handling the structures part of the work. By JV'ing with Alenia, Boeing in 1 stroke improves the situation for Alenia and Boeing. Now the picture will be much clearer as to what Vought's shortfalls are. If they are still unsat, look to Alenia, Spirit, or GA to purchase the Vought 787 facility within 6 months.
Art From United Kingdom, joined Feb 2005, 3561 posts, RR: 1
Reply 11, posted (7 years 10 months 2 weeks 5 days 8 hours ago) and read 20631 times:
Quoting Slz396 (Reply 5): I think the timing is interesting: Boeing are about to admit to another round of delays, so they want to present the world with a plausible new solution too, which is a good idea of course.
I think this is indicative of a further delay being announced. I can see Boeing saying something along these lines: These guys held us up so we bought them to take control back. Unfortunately they have held things up to such an extent that first deliveries will not now take place until * (where * = choose a date that cannot be wrong).
Jimboski93 From United States of America, joined Dec 2007, 20 posts, RR: 0
Reply 12, posted (7 years 10 months 2 weeks 5 days 8 hours ago) and read 20589 times:
Quoting Slz396 (Reply 5): I think the timing is interesting: Boeing are about to admit to another round of delays, so they want to present the world with a plausible new solution too, which is a good idea of course. Given the solution, I have a feeling the delays about to be announced are going to be quite serious indeed...
Nail on the head...
BA needs to specifically address what the problems are, and specifically address the steps they are taking to solve them.
Now they can push a lot of blame on Vought / Global Aero and avoid signaling that the program has problems throughout.
When are they gonna have this update call? Anyone want to make bets? Tonight? Next Friday? I assume it'll be a Friday call after the close of the markets. They'd probably like to put this news out, let people digest over the weekend, and have investors get in on Monday morning and read all the analysts' notes saying "Boeing stock already undervalued - new schedule provides clear skies ahead".
Swallow From Uganda, joined Jul 2007, 559 posts, RR: 0
Reply 13, posted (7 years 10 months 2 weeks 5 days 5 hours ago) and read 19972 times:
Quoting Jimboski93 (Reply 12): I assume it'll be a Friday call after the close of the markets
Well, this news broke on a Friday so there is certainly a pattern here.
Signs of major surgery taking place. Take charge of your weak link so that you can reassure investors that the ship is onf course.
We expect to hear on the 787 update call that,'...the design is sound, new technologies OK in the lab, ...travelled work continues to decline, we are working with our suppliers, parts inventory is improving, center wing box is fixed, orders continue to roll in...,estimated dates for power on and first flight are... '
I wonder how fuel burn on the GEnx and T1000 is coming along. Last we heard, both were 1-2% over target. That coupled with weight creep is bound to encroach on performance guarantees.
6YJCX From Jamaica, joined Dec 2007, 23 posts, RR: 0
Reply 15, posted (7 years 10 months 2 weeks 5 days 5 hours ago) and read 19798 times:
I believe that there are two relationships -Vought and Global Aeronautica in Charleston and this suggests that only the GA 50% share has been bought. What about the Vought fully owned operation in Charleston, is this not where a lot of the problems arose with barrel construction and how does this fix that problem?
NYC777 From United States of America, joined Jun 2004, 5917 posts, RR: 45
Reply 16, posted (7 years 10 months 2 weeks 5 days 4 hours ago) and read 18931 times:
Quoting 6YJCX (Reply 15): I believe that there are two relationships -Vought and Global Aeronautica in Charleston and this suggests that only the GA 50% share has been bought. What about the Vought fully owned operation in Charleston, is this not where a lot of the problems arose with barrel construction and how does this fix that problem?
It'll probably allow Vought to focus it's resources exclusively on sections 47/48 (the rear fuselage) and not have to worry about also integrating the main fuselage sections. That is now up to Boeing and Alenia.
Stitch From United States of America, joined Jul 2005, 33653 posts, RR: 85
Reply 17, posted (7 years 10 months 2 weeks 5 days 4 hours ago) and read 18848 times:
Quoting Astuteman (Reply 14): There's a MASSIVE difference.... (of course, you could have been having a bit of fun - apologies if i missed it)
I honestly use them interchangeably in this context out of convenience, if nothing else. I understand that they're fronting money and sharing the revenues, which is different from a "traditional" sub-contractor who is usually paid on a fixed-price contract, but I really wasn't trying to diminish or disparage Vought, Alenia, Spirit or the Heavies.
Ken777 From United States of America, joined Mar 2004, 9066 posts, RR: 10
Reply 18, posted (7 years 10 months 2 weeks 5 days 3 hours ago) and read 18507 times:
I believe that this is great new for Boeing. There has been a problem and Boeing has spent months trying to get it fixed under the original structure. Since that apparently didn't work out they've put their money where they needed to and can provide "influence" to clear the problem up.
The first thing I think will happen will be the transfer of some Boeing executives to positions that can provide that influence, with some Vought execs moving out - one way or another.
I can also see Boeing, in the short to medium term, looking at alternatives - especially in the "stuffing" area. Spirit has shown that they can produce and they, along with similar companies who are delivering, may well try to add to their work share.
Hopefully Boeing's purchase will lead to a standard that was called for when the risk partner program was set up and production can ramp to the projected levels in the near future.
Jimboski93 From United States of America, joined Dec 2007, 20 posts, RR: 0
Reply 19, posted (7 years 10 months 2 weeks 5 days 3 hours ago) and read 18187 times:
Quoting Ken777 (Reply 18): I can also see Boeing, in the short to medium term, looking at alternatives - especially in the "stuffing" area. Spirit has shown that they can produce and they, along with similar companies who are delivering, may well try to add to their work share.
I'm a big fan of Spirit myself, but I think one of the main obstacles to increasing share is the ongoing wrestling match between the Tier 1s and Boeing.
Spirit and others have put massive amounts of capital into these programs and don't get paid until certification. Some of the Tier 1s have come to a near halt to their 787 work because Boeing isn't ready to accept more components, and why should they put more $ into the program when certification is so far off.
Boeing has been saying that they will compensate their suppliers, but that talk seems to be just that - talk. Boeing has customers and suppliers asking for penalty payments. Plus, the Tier 1s want $ for the out of scope resdesign work they've done.
Par13del From Bahamas, joined Dec 2005, 8597 posts, RR: 8
Reply 20, posted (7 years 10 months 2 weeks 5 days 3 hours ago) and read 17942 times:
I can see this being used as a reason for further delays in "ramping" up production, but no way this can be used to delay Power On or first flight.
Funny thing though, Boeing may be going to the table telling the world that it is taking this action to ensure integrity of its supply chain, wonder how the unions will react as in I told you so? Fact is that Boeing let the ball slip in its inspections of some of its risk sharing partners months ago, the chickens as they say have come home to roost and the funds saved by lower or not doing enough inspections are going to pale in comparison to the penalties paid to irate customers.
Is the another case of penny wise pound foolish, especially in light of all the issues Airbus had with their latest offering, one would think that the mentality of "won't happen here" would have driven all concerned to higher levels to ensure that there was no quid pro quo.
EA772LR From United States of America, joined Mar 2007, 2838 posts, RR: 11
Reply 21, posted (7 years 10 months 2 weeks 5 days 3 hours ago) and read 17822 times:
Quoting Slz396 (Reply 5): Anyway, the lesson from all this must be that copying Airbus' working methods are easier said than done and working with partners isn't nearly as easy and painless as it may look when everything goes well.
Boeing is not and was not copying Airbus's methods. Boeing has taken their process of building planes with multiple partners and outsourcing to a much larger degree than even Airbus was. Part of the 'newness' of the 787 isn't just the airplane itself, but the process of building and executing the plane with all of Boeing's multiple partners. But you are right in that Boeing has learned a lot and will continue to learn. A natural growing pain if you will.
Quoting Slz396 (Reply 5): It is a very delicate exercise so it seems.
We often judge others by their actions, but ourselves by our intentions.
EPA001 From Netherlands, joined Sep 2006, 5698 posts, RR: 40
Reply 22, posted (7 years 10 months 2 weeks 5 days 2 hours ago) and read 17366 times:
Let's hope that this will help to get the program back on track asap. The customers are waiting, the suppliers need to get paid, and the production ramp up will still be a lot of work. Now Boeing has to come up with a revised planning and try to stick to that.
The B787 is such a beautiful and promising plane, it should be flying (test flights and after that the commercial flights of course) as soon as possible. Then we can enjoy this beauty in all its glory, as a passenger or just as a spotter just loving to see beautiful planes operating around the world.
R2rho From Spain, joined Feb 2007, 3437 posts, RR: 2
Reply 24, posted (7 years 10 months 2 weeks 5 days 1 hour ago) and read 16475 times:
So Boeing subcontracts to Vought to save costs, bring in a risk-sharing partner bla bla and all that stuff that CEO's love to say nowadays... only to end up buying Vought's stake and bringing it back "in-house" (at least from a financial point of view).
Airbus should take note of this. The way they're handling their plant sales, they're going down the same path as Boeing. And will make the same mistakes. But it seems that A&B never learn from each other...
: Great news for Boeing. It seems they have started taking radical measures to bring the 787 back on track (e.g., the recently announced changes in qual
: Not unique to the 787. It has been delivered for the past 5 years on both Airbus and Boeing products.
: The question on my mind here is what are the 'long-term' consequences, and are we still supposed to 'accept' that Boeing has not outrightly lied durin
: They're not new to stuffing fuselages at all, but the 787 fuselage is quite a new stuff for everybody, ain't it? Will take a while for all the contra
: Not really. I liken it dealing with employees. None are ever perfect, just that some are more imperfect than others. You (if you're a good manager) t
: And there you have it. The "risk-sharing", which I guess means the subcontractor borrows the necessary capital dollars from its own bank and accepts
: Let's hope they don't try to sell it as such (power-on delay) at the next update You can pretty much count on that being the unions' reaction. There
: Sorry, I think I have to respectfully disagree, although I do understand what you're saying. However, I note that you've only taken areas of my post
: While the purchase may have been an option that has been on the table for a while it probably was only that - one of the options. Having planned to re
: I think we will have to agree to disagree on this point. It's likely that the project plan has work units 2weeks to 1month in length on it. ITts enti
: Sadly the 787 has suffered from Mullaly's departure - and I am not sure Ford is the better for it.
: Buying out Vought's half of Global Aeronautica may be one way of compensating a supplier. For Vought, this may have been just the sort of cash infusi
: I believe the new design is more aerodynamic. The shark fin was just an abstract. There is more to this aircraft than it being "softened"
: Not sure I buy that in its entirety, but perhaps if you add "in the timescales you require", I'd be more comfortable. When you change both the proces
: That's not the kind of risk that "risk-sharing," in the context of the 787 supply chain, refers to. Risk-sharing on the 787 means that the partners p
: Vought needed cash. No use in turning to their owner Carlyle, who is embroiled in the subprime crisis. The only asset they had to trade in was their
: Who would have thought. My parameteric forecasting model is now inching towards 2011.
: It was meant (my bad for not spelling it out) to be implied. "Can't in the time that's needed", is for all intents and purposes on a project like thi
: I'd like to argue with you on that point..... But I can't .. Regards
: Care to share that model with the rest of us? Tom.
: Things can be very different when you are having parts made by a subcontractor than when you are making them in-house. The company at which I spent mo
: That's what I think will be announced indeed: admitting to having massive problems with LN1 and a very well considered decision to skip the plane all
: If thye need another year and a half from where they are now to EIS Boeing's stock and thus its value will be in the toilet. So fa the major delay wo
: Don't buy that, and for what it's worth, Boeing themselves say there are other more critical programme drivers. I believe them. As a "for example", h
: Hence them taking drastic measures like insourcing previously outsourced risk shares. It is going to cost them a lot of time and money, but it may (a
: I must admit that I'm not entirely disagreeing with many of your points in principle, and I think it's more we are looking at it from different persp
: Sure they have. LN001 has had to be built from the frame-up like a 737 when it was never meant to be built that way. As they have built it from the f
: So, LN1 is being pulled apart (again), what is happening with the two static test&fatigue frames? Every two months or so (I recall) we've heard one of
: I have to respectfully disagree Stitch, although I am understanding what you're trying to put forward. As pointed out previously, first it was 'only'
: It did arrive at PAE with absolutely nothing intact, and Boeing knew it was going to arrive that way and told them to ship it anyway. Boeing's plan w
: What is the basis for the claim that nothing has happened in the past 9 months? What exactly do you think the thousands of people crawling all over L
: I share the opinion of many others that something more substantial is rather likely to be the reason for the delays than that what is announced in th
: That was all my comment was meant to portray, Tom. Don't need to wait for Stitch to answer that. Of course they do. I might be a production engineer
: Astuteman, I think yiou are pretty close to it with your asessment. I still believe that there are some bigger issues which have not been surfaced ye
: Not at all. It seems that at first the problem was pure unavailability of parts, e.g. frames, shear ties, floor beams, clips etc. This stemmed from s
: Far from off-base - spot on IMO. What I think many here (myself included) are annoyed about is that Boeing is keenly aware of just what you are sayin
: Since you have had a very similar experience (although I know few of the details of the problems on the Astute) I suspect that you are right on. It c
: Or option three...this project is of sufficient scope that the delays really do take this long to fix. This is not a car, or a washing machine, or a
: The basis of this very simply conclusion is the observation that the second delay was announced about 3 months after the first one which was for 'jus
: So you don't have a DMU of the complete airplane? And there are no Boeing manufacturing engineers in suppliers' LCPTs? I'd guess Boeing should be awa
: Your opinion is perfectly valid, even if you make cars. Airbus has been looking at the Toyota model with great interest, for example. In manufacturin
: You make precisely the same mistake that you later accuse Boeing of making -- the notion that the unstuffed LN1 could be dealt in a reasonably short
: In July 2007 we were led to believe that first flight would happen a month or two later, i.e. August/September 2007. It now looks like it won't fly un
: a) was not meant to do what Boeing was supposed to do at his production line. A was meant to ship the parts back to supplier to complete it to the le
: Don't understand why it took them so long to do this. They should have just dumped these guys the minute that it was clear that they weren't performin
: That presumes the "non-performance" was purely on the part of the partner company. I suspect its not that simple. Regards
: Noted! I think that Boeing misses Alan M. and some of the other former execs. more than they are willing to admit. Just seems that there aren't many
: Yes indeed Stitch, but that is actually not what I said. I stated: In other words, and as you have confirmed, Boeing knew exactly the state of incomp
: As much as I would love to know every detail of the project, Boeing is under no obligation to satisfy my curiosity. They have to worry about customers
: It would be interesting to know whether or not the original outsourcing contracts between Boeing and the risk-sharing partners gave Boeing buy out opt
: Whoa now, before I get completely confused. Nope, I'm not a production engineer but are you seriously telling me that Boeing have no complete plans f
: There are plenty of bolts, fasteners and other off-the-shelf systems that Boeing did not design and does not hold plans for. Of course Boeing has com
: Yes indeed, I both accept and understand the context here....but surely they still have plans (or at the very least have detailed knowledge) of every
: Announcing delays of equal magnitude doesn't mean equal progress, it means you're progressing slower than you thought you would. Just think of it lik
: Oh, and you don't think there will be negative press if/when the next round of delays is announced? I must have missed something in your logic.......
: They have as much knowledge of the parts as they need to do final assembly and to produce maintenance documentation. That usually means you do not go
: Except for a bit of a PR black eye, negative press means nothing to Boeing...or Airbus. PR is, literally, for the public, not the airline customer. D
: Completely with you on this one, Tom. Boeing's PDM will only go down to a certain level (which will be fairly low, but..) Bought-in components, like
: That's the question! What did they do? Just replace fasteners and do the other things they said? Either they are not good at replacing fasteners (and
: Like Astuteman said in #82, it's not a question of "just" replacing fasteners and doing wiring and such. If it's a replacement, you have to: find the
: You illustrate very well the complexity of the process. I am aware of this. It does IMHO not explain the length of the time it has taken so far. Reme
: Multiply, don't add. What's happening on LN1 is probably 100X or 150X slower than a straight build from start to finish. The process that the operati