Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
crankypants
Topic Author
Posts: 57
Joined: Wed Jan 22, 2020 1:11 pm

Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 4:25 am

So in the news cycle today, Boeing was ordered to pay a fine of $6.6 million (read: pocket change lost in the couch) for some performance obligation or other - which was kind of the headline of the piece.

Boeing to pay another $6.6M in fines over safety concerns, FAA says

https://seekingalpha.com/news/3666641-b ... s-faa-says

It quotes Reuters as the source, but the real news - the stuff that is really important, was buried inside and it involves the 787 program. From the Reuters article, I quote:

Boeing is beginning painstaking repairs and forensic inspections to fix structural integrity flaws embedded deep inside at least 88 parked 787s built over the last year or so, a third industry source said.

The inspections and retrofits could take up to a month per plane and are likely to cost hundreds of millions - if not billions - of dollars, though it depends on the number of planes and defects involved, the person said.


Boeing is almost guaranteed to take a forward loss on the program, which means all 3 lines are now in the red. The 777X recently took a $6.5 billion write off in Q4/2020, the Max is down some $20 billion and now the Dreamliner is in bad shape.

This does not include the arrangements BA must now make with regulators and airlines around the world for the other 900 or so 787's in service. Most likely the aircraft will be MTOW limited - god help them if they have to pay for someone to open them all up and inspect each fuselage join joint.

As quoted by a recent interview with an ALC exec, some Dreamliners are approaching the 12 month delivery date (some have passed it) and we could see some cancellations (no penalty - deposit returned) for the type.

What a mess for Boeing.
 
User avatar
ElroyJetson
Posts: 897
Joined: Fri May 26, 2017 5:04 am

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 4:41 am

Sad to see what has happened to a once proud company, Boeing pretty much invented modern commercial aviation. To allow their brand to be so tarnished is truly a shame. But this is what happens when you allow bean counters and non-technical engineering staff to make the decisions regarding how to produce commercial jet aircraft. One would hope Boeing will learn from this experience but I am truly doubtful.
 
Opus99
Posts: 1813
Joined: Thu May 30, 2019 10:51 pm

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 4:51 am

They will eventually sort themselves out
 
airsmiles
Posts: 165
Joined: Mon Sep 14, 2009 9:14 pm

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 6:58 am

ElroyJetson wrote:
Sad to see what has happened to a once proud company, Boeing pretty much invented modern commercial aviation. To allow their brand to be so tarnished is truly a shame. But this is what happens when you allow bean counters and non-technical engineering staff to make the decisions regarding how to produce commercial jet aircraft. One would hope Boeing will learn from this experience but I am truly doubtful.


I think you need to be careful who you are insulting when you refer to bean-counters. The reality is that finance types are working to policies and directives from senior management. There’s constant pressure to do “more for less”, rewards come to those know how to push the boundaries etc. The whole culture for finances types is nothing like what it was a generation ago and largest businesses are the worst offenders. The buck stops at the very top, so direct your anger there please.
 
Flaps
Posts: 1689
Joined: Sat Feb 05, 2000 1:11 pm

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 9:31 am

Got to wonder. Watched McDonnell destroy what was good with Douglas Commercial. Has the McDonnell Douglas group now done the same to Boeing's commercial programs?
 
Flying-Tiger
Posts: 4087
Joined: Mon Aug 23, 1999 5:35 am

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 9:40 am

crankypants wrote:
What a mess for Boeing.


Add to this the KC-46 troubles, and it leaves only the 737NG "Mil AV", 767 freighter and 777 freighter lines as "running as they should" - though all are on low frequency.

One can assume that the most competent teams have already been but onto the KC-46, 737Max and 777X projects for trouble shooting, that doesn´t leave a lot for the 787 anytime soon.

We can only hope Boeing to be able to solve these problems soon, and be back in arena as a viable competitor. We don´t need a duopoly shrink to a monopoly...

airsmiles wrote:
I think you need to be careful who you are insulting when you refer to bean-counters. The reality is that finance types are working to policies and directives from senior management. There’s constant pressure to do “more for less”, rewards come to those know how to push the boundaries etc. The whole culture for finances types is nothing like what it was a generation ago and largest businesses are the worst offenders. The buck stops at the very top, so direct your anger there please.


I would actually go a step further. It´s not management per se looking for an increase in profit, but usually the shareholders - and that´s both institutional ones (among them the ones managing retirement funds...) as well as private investors. The requirement to have ever increasing dividend payments and shareholder value stems from they expecation, and I argue that a management in place is usually mostly executing the will of the shareholders. Over longer term this leads companies to retreat on investment and reap fruits of past investments, and prepares ill for future. There´s a reason why family-owned companies usually far better longer-term than stock market listed ones.
Flown: A319/320/321,A332/3,A343/346, A359, A380,AT4,AT7,B712, B732/3/4/5/7/8/9,B742/4,B752/3, B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,... 330.860 miles and counting.
 
crankypants
Topic Author
Posts: 57
Joined: Wed Jan 22, 2020 1:11 pm

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 12:23 pm

Flying-Tiger wrote:
crankypants wrote:
What a mess for Boeing.


Add to this the KC-46 troubles, and it leaves only the 737NG "Mil AV", 767 freighter and 777 freighter lines as "running as they should" - though all are on low frequency.

One can assume that the most competent teams have already been but onto the KC-46, 737Max and 777X projects for trouble shooting, that doesn´t leave a lot for the 787 anytime soon.

We can only hope Boeing to be able to solve these problems soon, and be back in arena as a viable competitor. We don´t need a duopoly shrink to a monopoly...



airsmiles wrote:
I think you need to be careful who you are insulting when you refer to bean-counters. The reality is that finance types are working to policies and directives from senior management. There’s constant pressure to do “more for less”, rewards come to those know how to push the boundaries etc. The whole culture for finances types is nothing like what it was a generation ago and largest businesses are the worst offenders. The buck stops at the very top, so direct your anger there please.


I would actually go a step further. It´s not management per se looking for an increase in profit, but usually the shareholders - and that´s both institutional ones (among them the ones managing retirement funds...) as well as private investors. The requirement to have ever increasing dividend payments and shareholder value stems from they expecation, and I argue that a management in place is usually mostly executing the will of the shareholders. Over longer term this leads companies to retreat on investment and reap fruits of past investments, and prepares ill for future. There´s a reason why family-owned companies usually far better longer-term than stock market listed ones.



First to the fix issue:

I don't know of too many companies who run a manufacturing production line, that can pull together a previously idle team, to address the needs of the 787 issues - unless they reduce production. The breadth and scope of the fix is mind boggling, according to my friend who used to work there as an engineer.

Let's say you have a fully assembled aircraft. The inspectors need to have access to each joint that is made between the barrel sections. What has to happen is that each seam needs to be fully exposed; so seats have to be removed, then the bins, then the siding/ceiling panels (if it is installed like house siding, where one piece is engineered to 'click' into another then it all has to come out.). These items have to be carefully noted and stored. The all the insulation has to be removed. If there is a galley or lav that covers a joint, it has to go. Any plumbing or electrical that impedes access must be moved (sometimes it must be cut). The same has to happen beneath the cabin floor.

THEN....the inspection guys can do their jobs and have the repair guys do theirs.

Then, everything that has been cut must be spliced and repaired. Then everything goes back in.
Just think of all the job specific individuals needed to get this done.

They quote one month per aircraft, to do this. There are 88 of them (probably not all fully assembled) to be inspected and repaired.

There is also the little matter of the 900 or so Dreamliners flying around the world? What will regulators do? Can they afford to let the planes fly until a heavy maintenance check? I have another friend who is a structural engineer who has worked for BA as a sub contractor - knows a lot about regulators. He believes they will limit MTOW's on the 787. Boeing will have to compensate airlines for that, as well as the repair bill. Ouch.

On the beancounters:

So many different strings to that bow, but the main point IMO is the great unwashed get their marching orders from the C-Suite boys. Company culture starts at the top and Calhoun has been around pretty long. You have to look no further then him, as to why they are in the mess they are. If he would let the engineers have a greater voice in how things are done, they wouldn't be in the mess they are...
 
NZ321
Posts: 1334
Joined: Fri Jul 31, 2015 8:00 pm

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 12:33 pm

Were the production problems also with a/c assembled at Everett or only from Charleston? Curious to understand this more fully and why it would be if the problem is localised in Charleston and the quality control is at such a daunting level that Boeing is closing the Everett production line right now. I do understand that the 78X can't be assembled in Everett as things stand, but the situation that is unfolding seems to have the potential to derail Boeing's possibilities for future and repeat orders well into the future. Thoughts?
Plane mad!
 
frmrCapCadet
Posts: 4693
Joined: Thu May 29, 2008 8:24 pm

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 2:53 pm

Is this likely to result in an another senior executive getting fired with a multiple $tensof-millions bonus?
Buffet: the airline business...has eaten up capital...like..no other (business)
 
User avatar
ssteve
Posts: 1479
Joined: Fri Dec 02, 2011 8:32 am

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 3:27 pm

The beancounters get maligned because it's hard to put line items down for how much place, geographical separation, etc will affect things. Cynical "this won't go well" foresight... it's also easy to say that and hard to put numbers on it. It's almost like the C suite needs better devil's advocates when making this sorts of decisions. Someone to argue hard against what everyone else in those rare atmospheres thinks is a good idea.

That's how it's supposed to work @ my company -- kickoff is supposed to report "risks" which are then "mitigated" by management. Rarely works that way in reality. It's more "we want to sell this -- make it so."
 
crankypants
Topic Author
Posts: 57
Joined: Wed Jan 22, 2020 1:11 pm

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 3:45 pm

NZ321 wrote:
Were the production problems also with a/c assembled at Everett or only from Charleston? Curious to understand this more fully and why it would be if the problem is localised in Charleston and the quality control is at such a daunting level that Boeing is closing the Everett production line right now. I do understand that the 78X can't be assembled in Everett as things stand, but the situation that is unfolding seems to have the potential to derail Boeing's possibilities for future and repeat orders well into the future. Thoughts?


Good question about the locales - I'm going to check with my two guys to see what they have to say. Apparently, from what I have read, this problem is in addition to the shimming issue where pieces were forced together to fit.

On future aircraft:

For an opinion on this, I often turn to the numbers - cause more often then not, they determine what is going to happen.

So Boeing currently has $63 billion in long term debt. They're paying some $2,5 billion in annual interest payments. They recently went to market to get some $13 billion to pay off their revolver. They also had to give some $3 billion to the pension fund at years end, to make up the shortfall there - which they did by giving up stock. The same stock they spent $43 billion on. They are still short some $12 billion to the pension fund.

The best year BA ever had was 2018, with over 800 planes delivered and the entire company selling for $101 billion in revenues. On that, they made $12 billion in profit. BCA was responsible for 60% of sales revenue and $8 billion in profit. two-thirds. Defense and service was the other $4 billion.

The 777X just took a loss of $6.5 billion last quarter. The 787 is still down some $18 billion in sunk costs from the battery issue and will now most likely have to book a loss for the fuselage problem. Neither of those jets are moving, the 777X until 2023.

The Max is starting to move, with BA working on the glut of inventory they have. HOWEVER, there is this tidbit from a recent filing from LUV:

https://seekingalpha.com/news/3645010-s ... e-in-march

"Taking into account planned retirements of its 737-700 aircraft, the Company does not intend to grow its fleet in 2021, compared with its fleet of 747 aircraft as of December 31, 2019. The details of the Boeing Agreement, which included the settlement of 2020 estimated damages relating to the grounding of the Company’s 737 MAX 8 aircraft, are confidential. However, as a result of certain delivery credits provided in the Boeing Agreement, as well as progress payments made to date on undelivered aircraft, the Company currently estimates an immaterial amount of aircraft capital expenditures in fourth quarter 2020 and full year 2021."

Southwest has arranged to take from Boeing 35 Max 8's in 20/21. Here is the important detail:

However, as a result of certain delivery credits provided in the Boeing Agreement, as well as progress payments made to date on undelivered aircraft, the Company currently estimates an immaterial amount of aircraft capital expenditures in fourth quarter 2020 and full year 2021."

SWA is not giving Boeing any more money for the 35 Max's they are getting through the end of 2021. Think about that for a minute.

How many other airlines are also getting a sweet deal on their deliveries?

The question then becomes; Where does Boeing get the $15-20 billion needed to launch either the NMA or 737 replacement, or any other aircraft, for that matter? Put it on the credit card, too?

In the best year BA ever had, they made $12 billion. To retire the long term debts they have, will require 4-5 such years, without any hiccups. Do you see that happening in the near future? They are rated one notch above junk status, borrowing gets a lot more expensive after that.

Boeing made their bed by spending cash that should have gone to a new design, on stock buybacks. Now it will either be a bailout or they will have a tough slog ahead for the next half a decade.
 
User avatar
ssteve
Posts: 1479
Joined: Fri Dec 02, 2011 8:32 am

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 6:30 pm

crankypants wrote:
The question then becomes; Where does Boeing get the $15-20 billion needed to launch either the NMA or 737 replacement, or any other aircraft, for that matter? Put it on the credit card, too?


When rates are being held low, the federal reserve is hoping the answer to this is "yes" and would like many other companies that are considering investing in growth to answer "yes" too.

What they do not want to happen (but does) is for companies to borrow money at low rates to finance stock buy backs. That happens, too.
 
User avatar
FLALEFTY
Posts: 927
Joined: Tue Jan 31, 2006 11:33 am

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 7:41 pm

ssteve wrote:
crankypants wrote:
The question then becomes; Where does Boeing get the $15-20 billion needed to launch either the NMA or 737 replacement, or any other aircraft, for that matter? Put it on the credit card, too?


When rates are being held low, the federal reserve is hoping the answer to this is "yes" and would like many other companies that are considering investing in growth to answer "yes" too.

What they do not want to happen (but does) is for companies to borrow money at low rates to finance stock buy backs. That happens, too.


I am beginning to think that Boeing will end up getting a government bailout similar to what GM received after the 2007 Great Recession struck.

However, they could temporarily stave off the "wolf at the door" by putting Boeing's defense business up for bid between LockMart and NorGrum. That could net them enough money to continue doing "triage" and "emergency surgery" on BCA.
Last edited by FLALEFTY on Fri Feb 26, 2021 7:42 pm, edited 1 time in total.
 
majano
Posts: 301
Joined: Sun Oct 14, 2018 10:45 am

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 7:42 pm

airsmiles wrote:
ElroyJetson wrote:
Sad to see what has happened to a once proud company, Boeing pretty much invented modern commercial aviation. To allow their brand to be so tarnished is truly a shame. But this is what happens when you allow bean counters and non-technical engineering staff to make the decisions regarding how to produce commercial jet aircraft. One would hope Boeing will learn from this experience but I am truly doubtful.


I think you need to be careful who you are insulting when you refer to bean-counters. The reality is that finance types are working to policies and directives from senior management. There’s constant pressure to do “more for less”, rewards come to those know how to push the boundaries etc. The whole culture for finances types is nothing like what it was a generation ago and largest businesses are the worst offenders. The buck stops at the very top, so direct your anger there please.

Well said Sir /Madam. This insult is used way too often on this forum. The most recently retired Boeing CEO was an engineer.
 
crankypants
Topic Author
Posts: 57
Joined: Wed Jan 22, 2020 1:11 pm

Re: Boeing 787 Production Woes - 2021

Fri Feb 26, 2021 9:34 pm

ssteve wrote:
crankypants wrote:
The question then becomes; Where does Boeing get the $15-20 billion needed to launch either the NMA or 737 replacement, or any other aircraft, for that matter? Put it on the credit card, too?


When rates are being held low, the federal reserve is hoping the answer to this is "yes" and would like many other companies that are considering investing in growth to answer "yes" too.

What they do not want to happen (but does) is for companies to borrow money at low rates to finance stock buy backs. That happens, too.



And what happens when there is no way to pay back what you borrow?
 
User avatar
piedmontf284000
Posts: 488
Joined: Wed Jun 15, 2016 12:00 pm

Re: Boeing 787 Production Woes - 2021

Sat Feb 27, 2021 12:19 am

crankypants wrote:
ssteve wrote:
crankypants wrote:
The question then becomes; Where does Boeing get the $15-20 billion needed to launch either the NMA or 737 replacement, or any other aircraft, for that matter? Put it on the credit card, too?


When rates are being held low, the federal reserve is hoping the answer to this is "yes" and would like many other companies that are considering investing in growth to answer "yes" too.

What they do not want to happen (but does) is for companies to borrow money at low rates to finance stock buy backs. That happens, too.



And what happens when there is no way to pay back what you borrow?


Chapter 11
 
crankypants
Topic Author
Posts: 57
Joined: Wed Jan 22, 2020 1:11 pm

Re: Boeing 787 Production Woes - 2021

Sun Feb 28, 2021 4:12 am

NZ321 wrote:
Were the production problems also with a/c assembled at Everett or only from Charleston? Curious to understand this more fully and why it would be if the problem is localised in Charleston and the quality control is at such a daunting level that Boeing is closing the Everett production line right now. I do understand that the 78X can't be assembled in Everett as things stand, but the situation that is unfolding seems to have the potential to derail Boeing's possibilities for future and repeat orders well into the future. Thoughts?



So...I had a conversation with my ex-BA engineering buddy, who still stays in touch with the old gang from work. He's pretty sure that the issues stem from the SC plant because, as he put it, the airplane guys are all in Washington.

Apparently there is a list at Boeing, called something like an AOG list - which is a team of experienced airplane people, with all their passports up to date, all immunisation shots done, tools & clothes packed at ready to leave at a moments notice, who are guaranteed to roll in 24 hours or less, anywhere they are needed. This list of people come from the regular production crew, but with the recent cutbacks at BA and the spate of retirements, may not be as skilled as they once were. These are the people fixing the problems.

From what he has heard/read - there are a few problems (here's where he went on for 5 minutes explaining the intricacies of straight fibres in a composite design and a bunch of technical jargon too obscene to repeat here).

One issue was the shimming thing, which caused incorrect thickness to be used when the barrels were joined. Another one is the dimpling around the fasteners which happened when the uneven areas were stressed and forced together (which led to the straight fibre class I rec'd) and finally there appears to be uneven seams due to the process of curing (the whole sucking the air out to get the resin to seep into the joints).

He's not sure that enough data has been accumulated to allow the engineers to certify a quick fix yet (another involved class I got) but what he says is happening is that the joints are being taken apart carefully, the resin is being removed and redone to within tolerances. In other words, a big cluster.

It is his opinion that they reason Boeing is going through such tough times, is that there is a disconnect between those doing the programming/planning and people with airplane knowledge. MCAS worked exactly as designed - but nobody was there to say "Hang on a sec, what happens if the AoA sensor gets whacked by a bird, or something" or maybe there was, but nobody listened to them...

There was a lot more we discussed, but that's all for now.
 
hivue
Posts: 2125
Joined: Tue Feb 26, 2013 2:26 am

Re: Boeing 787 Production Woes - 2021

Sun Feb 28, 2021 5:31 am

piedmontf284000 wrote:
crankypants wrote:
ssteve wrote:

When rates are being held low, the federal reserve is hoping the answer to this is "yes" and would like many other companies that are considering investing in growth to answer "yes" too.

What they do not want to happen (but does) is for companies to borrow money at low rates to finance stock buy backs. That happens, too.



And what happens when there is no way to pay back what you borrow?


Chapter 11


First borrow some more. After that clean up the mess with Chapter 11.
"You're sitting. In a chair. In the SKY!!" ~ Louis C.K.
 
AirBoat
Posts: 70
Joined: Sun Jan 18, 2015 11:58 am

Re: Boeing 787 Production Woes - 2021

Sun Feb 28, 2021 9:15 am

As said above, any composite part will shrink when it cures. I am assuming that they are manufactured in temperature and humidity controlled factories, but if the catalyst amounts vary, the rate of setting and shrinkage can differ, which requires the shimming. This is a difficult task to get right. Airbus used a metal skeleton with carbon panels fixed to it on the 350. Does Airbus have any problems like this?
 
StTim
Posts: 3809
Joined: Thu Aug 08, 2013 7:39 am

Re: Boeing 787 Production Woes - 2021

Sun Feb 28, 2021 11:08 am

AirBoat wrote:
As said above, any composite part will shrink when it cures. I am assuming that they are manufactured in temperature and humidity controlled factories, but if the catalyst amounts vary, the rate of setting and shrinkage can differ, which requires the shimming. This is a difficult task to get right. Airbus used a metal skeleton with carbon panels fixed to it on the 350. Does Airbus have any problems like this?


Not heard of any A350 issues so far.

If the 787's currently in operation become weight limited it is going to harm operations for a lot of airlines.

I feel for the employees at Boeing as they don't seem able to catch a break at the moment.
 
brindabella
Posts: 711
Joined: Fri Apr 30, 2010 10:38 am

Re: Boeing 787 Production Woes - 2021

Sun Feb 28, 2021 11:21 am

AirBoat wrote:
As said above, any composite part will shrink when it cures. I am assuming that they are manufactured in temperature and humidity controlled factories, but if the catalyst amounts vary, the rate of setting and shrinkage can differ, which requires the shimming. This is a difficult task to get right. Airbus used a metal skeleton with carbon panels fixed to it on the 350. Does Airbus have any problems like this?


Worth checking I think.

Posts on this site reported that Airbus finally went to CFRP panels on CFRP frames.

cheers
Billy

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos