Boeing rips a page out of Airbus' book
By Byron Acohido, USA TODAY
SEATTLE — Is Boeing morphing into Airbus?
By turning to contractors in several countries to supply most of its newest jetliner model — including the wings — Boeing not only breaks with tradition but apes a strategy its rival, Airbus, has used for years.
Even the method that Boeing has chosen to bring the large sections of its proposed 7E7 to the USA for assembly is a bow to Airbus, a consortium of European aerospace companies that this year will take more orders and deliver more commercial jets than Boeing.
Boeing says it will modify at least three 747-400 jumbo jets to air-ship the large parts, imitating Airbus' use of a bulked-up A300-600 jet — nicknamed Beluga — to shuttle airplane sections between factories in Germany, France, the United Kingdom and Italy.
Boeing now relies mainly on ships, rail cars and trucks for transporting airplane parts to its assembly plants in Washington and California. By adding air freight — handled by what looks like a 747 on steroids — Boeing hopes to push more detailed work to key partners, much like Airbus does with its members.
"This isn't your father's Boeing anymore," says aviation industry consultant Scott Hamilton. "Boeing is following Airbus' lead more and more these days."
Boeing is pointing toward a decision, perhaps in the next few weeks, on where the 7E7 will be assembled. Company directors are expected to formally green-light the model by Dec. 31, putting the first delivery in 2008.
More than a dozen cities and states offered incentive packages to land the 7E7 plant, led by Washington state's offer of $3.2 billion in regulatory and tax concessions. Whoever gets the plant will reap only 1,200 new factory jobs, a far cry from the 10,000 workers Boeing needed in the 1980s to produce a 747 every 23 days.
While the airliner project itself is tentative, planning for 7E7's manufacture is well along. Earlier this month, Boeing announced the formation of a "7E7 Council," composed of senior executives from six outside suppliers, plus Boeing divisions in Wichita and Tacoma, Wash. The council will act as the 7E7's contracting hub. Instead of dealing with Boeing headquarters, thousands of suppliers will work through the council members, each of whom will become responsible for delivering largely completed airplane sections.
Cutting costs and time
Boeing's goal is to pare costs and reduce assembly time. Using Japanese-style just-in-time inventory techniques, it wants to roll a new 200- to 250-seat 7E7 out the factory door every three days, instead of every 12 to 17 days as it now does with its other models.
"We're really trying to integrate our partners into this process, so they can optimize the production sequence in order to drive the most efficient production system up and down the supply chain," says Mike Bair, senior vice president of the 7E7 program.
A confluence of forces is driving Boeing to change the way it builds airplanes, including:
The Airbus threat. Boeing's rival is betting that airlines will need larger aircraft to get more travelers in and out of big hub airports. So it is developing the 550-seat A380 for delivery in 2006. To trump the A380, Boeing proposed a stretched 747, then the Sonic Cruiser, a model that would fly at nearly the speed of sound. Both drew little interest from airlines. So it has moved on to the 7E7, whose chief selling point is economy. Using fuel-sipping engines and lightweight composite materials, the 7E7 will be designed to operate 20% more cheaply than the similar-size 767, which Boeing has been delivering since 1982, or the Airbus A330. Boeing believes the 7E7's thriftiness will help airlines profitably pair smaller cities on mid- to very long-range routes, opening up markets.
Digital advances. The rise of computing power and the Internet have made it possible for Boeing to collaborate in real time with engineers in several nations. As a result, Boeing has increasingly dispersed design work to engineers in Russia, China and Japan, tapping their expertise, while also improving its chances for sales in those markets.
New materials. Wider use of lightweight composite materials will make the 7E7's modular assemblies easier and cheaper to move from suppliers' factories to Boeing's assembly plant. Most of the 7E7's fuselage, about a third of its underlying structure, and the entire wing are expected to come from Japan. Having cut 35,000 jobs the past two years, Boeing wants to shift the burden for hiring during good times — and layoffs in bad times — to major partners. Only the nose, cockpit and part of the tail are likely to be built by Boeing.
Suppliers gain authority
That means thousands of Boeing suppliers will have to figure out how to pitch their goods and services to Boeing's prime partners, who may be located in a different state or overseas, says John Vicklund, president of a not-for-profit consulting firm, Washington Manufacturing Services.
"This is happening everywhere in manufacturing; in electronics, wood products, textiles, you name it," Vicklund says. "As a smaller shop, you don't have to roll over and play dead. It depends on whether you're willing to change your way of doing things."
Some critics say Boeing's rush to offload key jobs to outside suppliers is shortsighted. For its entire history, Boeing has jealously guarded its techniques for manufacturing airplane wings. Now Mitsubishi Heavy Industries of Japan is making a strong bid to manufacture the 7E7's wing in Japan.
"In the end, if we teach everybody how to make the major parts, why is Boeing even needed?" asks Jennifer MacKay, president of the Society of Professional Engineering Employees in Aerospace, the union that represents Boeing engineers and technical workers. "Having a viable workforce is what put Boeing where it is today, yet this is the very thing they're cutting."
A model of the 747-400 freighter, with its forward hump widened and extended the length of the fuselage, underscores how Boeing is positioning itself to let Japan supply the 7E7's wing. The freighter appears to have room to accommodate the 7E7's 21-foot-wide fuselage sections and 85-foot wing sections. By cutting shipping time from a month by sea to less than a day by air, Boeing estimates it could save up to 40% in shipping and inventory expenses.
But it still wants access to a shipping port. "If something were to happen, and we had to go to a backup plan, and we didn't have water access of some kind, we would have no way to get parts to final assembly," Bair says.
) He turns not back who is bound to a star. - Leonardo Da Vinci.