Boeing: September 2008 Archives

Reuters is reporting that Boeing will reassess its delivery schedule to ANA and JAL at the conclusion of the IAM strike:

Boeing says to reassess 787 Japan delivery schedule

TOKYO, Sept 30 (Reuters) - Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) said on Tuesday it would reassess the delivery schedule for its new 787 Dreamliner aircraft to the Japanese market when a strike ends.

Six of the first 25 787s are for Japanese customers, including the first production unit (ZA007/JA801A) and Dreamliner One (ZA001), both for All Nippon Airways.

Both airlines are also the launch customers for the shorter-range 787-3 aircraft which is set to be the second Dreamliner variant after the 787-9 scheduled for introduction in 2012. The report does not indicate if there is a solidification or reassessment of the 787-3 planning, which currently has no public timeline.

This comes on the heels of last week's announcement that a similar reassessment was coming for QANTAS and its 787s.

Boeing Completes 787 Dreamliner 'High Blow' Test

EVERETT, Wash., Sept. 27, 2008 -- Boeing [NYSE:BA] successfully completed a high-pressure test, known as "high blow," on the 787 Dreamliner static test airframe at its Everett factory today. The test is one of three static tests that must be cleared prior to first flight. During the test, the airframe reached an internal pressure of 150 percent of the maximum levels expected to be seen in service - 14.9 lbs. per square inch (1.05 kilograms per centimeter) gauge (psig). It took nearly two hours to complete the test, as pressure was slowly increased to ensure the integrity of the airplane.

"We had every confidence going into this test because of the extensive work we've done on larger and larger pieces of composite - from small coupons to fuselage sections," said Pat Shanahan, vice president and general manager of the 787 program. "Still, it's very rewarding to see a whole airplane being tested and having the results we expected.

"I am so proud of the team that has worked on this program and the progress we are making."

Image Credit: The Boeing Company

The remaining two tests will structurally validate the leading edges and trailing edges of the wings of ZY997 before Dreamliner One can fly. Boeing did not announce a timeline for when these tests will be conducted.

Steve Creedy of The Australian posted an item on the impact of the IAM strike on 787 deliveries for QANTAS. This is the closest Boeing has come to acknowledging an impact on the 25 deliveries set for 2009. The article says QANTAS (Jetstar) was to get its first 787-8 (ZA021) in November 2009.

"I can just say that when the team went out on strike all production stopped," Boeing Commercial Airplanes marketing vice-president Randy Tinseth said. "None of us know when the strike will be over. When it is over we can give you a new schedule."

Incoming Qantas chief executive Alan Joyce said last week Boeing was still telling the airline its 787s would be delivered in November next year but an update was due this week.

Before the strike, Qantas was facing further delays of up to three months after completion of the first aircraft slipped by eight weeks.

QANTAS also indicated that it was still interested in the 787-10 and A350 XWB.

Speaking at the airline's A380 delivery event in Toulouse on 19 September, Qantas chief executive Geoff Dixon and his successor designate Alan Joyce revealed that the airline was in "the early stage of talks" with Boeing on the 787-10 as well as with Airbus about the A350 XWB.

The 787-10 is a proposed stretched version of the -9, seating around 300 passengers, making it similar in size to the -200 variants of the 777. Joyce, who was named as Dixon's successor in July, considers the 787-10 to be "a requirement", but acknowledges that Boeing is "not there yet".

Last week JAL finalized its 787 compensation deal with Boeing for 767 and 777 and clarified its delivery time frame for its first 787 (ZA020), which was set for October.

Two weeks ago, Boeing chief financial officer James Bell told investors to expect at least a month's delay:

"Right now it's a one-for-one day slip on the 787 and all other programmes as well."

Back in the factory, it appears as though Boeing has been able to delivery many of those idling 737s at Boeing Field. Inside 40-26, the Dreamliner One's engines have been removed again and there's no explanation currently as to why this happened. Also, the start of static testing is on hold due to data acquisition issues. Can anyone shed some light on this?

Static testing for the 787 Dreamliner is set to begin early next week, a key milestone on the road to first flight, Boeing has confirmed.

ZY997, Boeing's static 787 test airframe, will be put through a series of grueling structural tests to validate the strength of the composite structure.

The tests are expected to continue through the fourth quarter of 2008.

The static test will begin with the "high-blow" test to validate the pressure seals inside the aircraft cabin. During the test, Boeing will raise the internal pressure of the cabin to 14.9 PSI, or about 1.5 times normal pressurization.

Because of the 787's composite one-piece barrel design, there are significantly fewer points along the fuselage where pressure seals could fail.

During the test, the aircraft will be draped in plastic wrap in the event the cabin breaks a pressure seal. If this occurs, the plastic will billow out easily identifying the source of the leak.

In a health and safety advisory sent to staff ahead of the test, "creaking and popping noises are normally noted" due to the "expansion and flexing" of the structure during static testing.

The aircraft, which will never fly, was rolled on April 25 to the static test rig inside Building 40-23 where the testing will take place.

Boeing has not yet determined if it will bring the wings to ultimate load, or the point at which they break. The FAA requires all aircraft structure to withstand 150% of the maximum loads that will ever be encountered in flight.

In January 1995, wings of Boeing's 777 were brought to 154% of maximum design load in before they snapped with an explosive bang. The wings were deflected 24-feet before they succumbed to the punishing loads.

Even with the commencement of static testing next week, all 787 assembly is still frozen as the IAM strike begins its third week, though a certain portion of static testing must be completed before Dreamliner One can take to the sky.

Image credit: FlightBlogger

Unfinished 737s await completion at Boeing's Renton, Washington factory this week

With jetliner production frozen, Boeing and the International Association of Machinists and Aerospace Workers, the company's largest union, struggle with the future of the company.

The confrontation centres on the role of outsourced responsibilities once held by machinists inside Boeing facilities.

The outcome of the battle between Boeing and the IAM is likely to have an impact on the company well beyond the troubled early years of the 787 programme.

In a cyclical industry, Boeing's business case for outsourcing pits oversight against stability. The shared responsibility and risk of the programme, Boeing argues, insulates the company from the painful cyclical industry downturns, opting for stability over direct control of suppliers.

Without having to manage a native workforce beyond a core final assembly team, Boeing would need only to specify the rate at which suppliers deliver to the company, maximizing productivity and better managing the aircraft backlog. The responsibility for managing the workforce is the responsibility of the suppliers and sub-contractors, not Boeing, potentially avoiding significant layoffs of its own in the event of a downturn.

The goal is to "get the volatility out of the programme," said Ron Epstein, industry analyst with Merrill Lynch.

Epstein emphasized that the key to success becomes the strategies employed in managing the outsourcing.

Though the underlying business case for outsourcing pre-supposes a supply chain able to meet the demands of its customer.

In the first 16 months of final assembly operations, the significantly outsourced 787 supply chain found itself unable to keep pace with the early and aggressive demands of the programme schedule, forcing at least a 15 month delay in the first delivery to Japan's All Nippon Airways.

Boeing has worked to regain oversight and drill down into its suppliers to regain the stability it had hoped to have.

Both the IAM and SPEEA, the union of engineers readying for a contract battle of its own, contends that the 787 programme would have been able to avoid its early problems had a larger share of work been allocated to Boeing employees.

The IAM and its membership of 26,800 roundly rejected Boeing's best and final contract offer 3 September, which provided an 11% increase in pay over three years, plus bonuses.

Though the Union voted 80% to reject the contract and 87% in support of a strike. The union membership emphasized that it was not the pay increase it took issue with, but new contractual provisions opening the door for expanded outsourcing for the movement of parts to Boeing's legacy programs inside the company's facilities. Currently, that responsibility is sub-contracted solely for the 787 programme.

The strike, which is into its second week has left four 787 flight test aircraft, about a dozen and a half 777s and twice as many 737s, and a handful of 767 and 747s languishing at various states of assembly at three Boeing facilities in Washington State.

There is no sign that the contract battle and strike are nearing a conclusion.

"I think there'll be at least a one-month delay," said James Bell, Boeing Chief Financial Officer at an investor conference. "Right now it's a one-for-one day slip on the 787 and all other programs as well."

On the other side of the picket line, the union appears to be preparing for a prolonged fight, advising its members that, "If you have ongoing prescriptions, fill them NOW and fill them again before the end of September."

The union membership loses it health insurance on 1 October.

As prepared for Flight International Magazine next week. Photo credit: FlightBlogger

The Wall Street Journal is reporting that the DoD has hit the stop button on the tanker contract:

The Department of Defense is calling off a hotly disputed $40 billion competition to replace its aging fleet of aerial-refueling tankers because officials don't think they can pick a winner before the next presidential administration as planned.

The decision is a major victory for Boeing Co., which had lost the initial competition in February to a team comprised of Northrop Grumman Corp. and the parent company of Europe's Airbus. Boeing's protest of that decision was upheld by the Government Accountability Office, leading to a new round of bidding.

President McCain or President Obama will be inheriting this mess. Any odds on bets that this becomes an issue in the Presidential campaign?

EVERETT -- Jetliner production is set to halt at 12:01 AM in Puget Sound, costing The Boeing Company as much as $100 million per day and further stymieing its struggling 787 Dreamliner program with the walkout of 27,000 machinists.

Negotiations between Boeing and the International Association of Machinists and Aerospace Workers Union (IAM) collapsed after a 48-hour contract extension yielded no new breakthrough.

Boeing says that for the, "787 in particular, a protracted strike could risk the ability to fly in the fourth quarter," adding "mitigation plans are in place to minimize impact of work stoppage."

The 787 programme is already fifteen months behind schedule.

All aircraft completed prior to the strike will be delivered on schedule, and Boeing pledges continuing support for all aircraft in service.

Boeing has estimated that it will deliver between 475 and 480 aircraft in 2008, a number that is likely to be impacted with the strike.

For the Next Generation 737, Boeing's highest production rate aircraft, each day that the strike rolls on means one less 737 delivered to airlines, many in desperate need of fuel efficient aircraft to replace aging fleets.

In the first half of 2008 Boeing delivered 187 737s.

For the widebody twin-engine 777 programme, every five days means one less aircraft delivered. During the first half of 2008 Boeing averaged a production rate of just under seven per month to deliver 39 777s to its customers.

Currently, Boeing has eleven 777 aircraft at various states of completion on the flight line at its Everett, Washington facility, including four for Emirates, two for Brazil's TAM, and one each for Cathay Pacific, Air Canada, Qatar Airways, Asiana Airlines and fledgling trans-pacific Australian carrier V Australia, which is set to begin service from Sydney to Los Angeles on 15 December.

In addition, the 777 freighter program is undergoing a certification campaign with two aircraft based at Boeing Field in Seattle. The first 777F is set to be delivered later this year.

For Boeing's lowest rate production aircraft, the widebody 767 and 747 lines, the first half of 2008 saw an output of roughly one per month, delivering six and nine aircraft respectively.

An IAM strike also halts production for the 747-8F, which is scheduled for roll-out in February of next year.

On 3 September, 87% of the IAM membership--Boeing's largest union--voted to strike, with 80% rejecting the company's best and final offer. Later that evening, Boeing and the IAM leadership agreed to a 48-hour extension in the contract to negotiate with the assistance of a federally appointed mediator.

"Despite meeting late into the night and throughout the day, continued contract talks with the Boeing Company did not address our issues," said Tom Wroblewski, IAM district president, in an open letter to the union membership.

Boeing also expressed its disappointment in the outcome of the negotiations.

"Over the past two days, Boeing, the union and the federal mediator worked hard in pursuing good-faith explorations of options that could lead to an agreement. Unfortunately the differences were too great to close," said Scott Carson, president and CEO of Boeing Commercial Airplanes who was present at the negotiations.

This will be the first time the IAM has voted in favor of a strike in back-to-back contract negotiations. The union's 2005 strike lasted for 28 days.

As IAM prepares to strike, both sides indicated it was the responsibility of the other to step up and return to the negotiating table.

"We are interested in speaking to the IAM," said a Boeing spokesman. "And when we hear from [the IAM] we'll be able to [continue negotiations]."

"If this Company wants to talk," said Wroblewski. "They have my number, they can reach me on the picket line.

Photo Credit: FlightBlogger

Saying Hello to the Dreamliners
The Boeing Factory Tour is a tradition of mine every time I come to Seattle.

Naturally, I checked in on the 787. Dreamliner One is surrounded by a gated red fence requires anyone working with the airplane to check in and state your purpose for working with the aircraft.

The aircraft was on its own wheels and its flaps (all installed) and spoilers were extended. Yellow testing lights were on signifying the on-going functional testing of all the aircraft's systems. Another thing I noticed was that ZA001 had its nose cone attached and it appeared to be new! It was painted fresh white, not the shades of blue we saw at the roll-out.

I could also see some flight test equipment installed in the cabin. The engine inlets were shielded with red covers and the chevron-edged cowlings were installed.

Down the line, ZA002-ZA004 all had their nose cones tipped up, revealing the honeycomb radar underneath. Also, ZA003 was sporting a bright red rudder for Northwest. ZA004 was surrounded by tooling and the MOATT (mother of all tooling towers) which had been installing the vertical and horizontal stabilizers. I could also see the wings for ZA005 laying beside ZA004, as well as the tail cone and horizontal stabilizer in the aft soak area.

I'm going to Disneyworld!
Okay, I'm not going to Disneyworld, but Boeing and the IAM certainly are.

According to one veteran machinist deeply familiar with Boeing/IAM labor policy, had the IAM refused to accept the help of a federally appointed mediator and the 48-hour extension, immediate beginning a strike, the IAM would have been deemed negotiating in bad faith, opening themselves up to legal action.

Article 24 of the existing contract allows for a potential extension of up to 1 year if the union agrees to it. It has never been done for this long, though it was done for 5 days in 1986 to give additional time to the Union membership to see the changes to the contract and vote. The same could be done this time around to call for a vote later this weekend without going on strike. A simple majority (50%+1) is required to approve the new contract.

Right now, Boeing and the IAM are in a media blackout while the extended negotiations are underway.

777F's Busy Summer
Flight Testing at Boeing is going as strong as ever. I spotted the second 777F for Air France weaving in tight turns in the skies above Boeing Field today while driving north on I-5 to Everett. Both aircraft are based at BFI.

One thing you didn't know about the IAM contract
Reading the contract today I thought it was interesting was that Boeing has now added "or same-gender domestic partner" after group benefits were previously allocated only for spouses.

Twenty-three hours forty-seven minutes to go.

SEATTLE -- At Flights Pub in Everett, a local bar in the parking lot of a shopping center not far from the Boeing's widebody final assembly line, Machinists could be heard spontaneously chanting "Strike!" venting their frustration over the events of the evening.

It had been just over three hours since the IAM leadership and Boeing agreed to a 48-hour extension in negotiations to identify and resolve what vice president for Human Resources and chief Boeing negotiator Doug Kight called the "critical few details" remaining in the contract.

Though as one veteran business reporter asked of Kight at Boeing's 10:45 PM press conference that, "it sound to me like there are probably as many issue as there are union members. What if they come to you with a list a mile long with issues?"

Kight responded:

"At this stage in the process, we've been talking for months and months, hours and hours and hours on all aspects of the contract, all subjects. When you get to this stage in the process you have to narrow the issues. It'll be very, very challenging to make progress if this doesn't occur."

Though, the frustration by union members was not limited to management. The reaction at the IAM lodge meeting halls near Boeing Field captured the sentiment of the membership.

The announcement of Boeing's desire to return immediately to the table was met with jubilant cheers, but moments later, the mood turned sour when IAM chief negotiator Mark Blondin informed his membership of the 48-hour extension in negotiations, even with 87% supporting a strike.

"They have 48 hours to bring a deal that's acceptable to you, or it's on," said Blondin.

The announcement was met with very visible displeasure, including comments not suitable for print.

Many machinists were frustrated by what they felt was the IAM not supporting their overwhelming vote to reject Boeing's best and final offer and go on strike.

"We stood in solidarity with them, they didn't stand with us," remarked one Everett-based machinist at Flights Pub.

Amid the frustrations of assembled machinists, Bondin attempted to get a word in edgewise over the loud protests of the machinists:

"We have told you all along that it is our job as negotiators to go to the table and negotiate you a contract that is acceptable to you, not to negotiate a strike."

The following morning, there are indications across many Boeing factories that even without the formal commencement of a strike, jetliner assembly has ground almost to a complete halt. One machinist tells FlightBlogger that "droves" of staff at Renton, site of 737 final assembly, were sent home for inactivity and, "a lot of people didn't go in at all."

Even with the 48-hour extension, many machinists were defiant in the face of both the IAM membership and Boeing.

"I'm on strike," remarked another machinist. "My contract expired yesterday at midnight."

This is a breaking story and will be updated as more details become available.

SEATTLE -- The International Association of Machinists, Boeing's largest union, has voted to strike, rejecting Boeing's "best and final" offer for a new three-year contract.

UPDATE 9:51 PM: IAM leadership has agreed to return to the bargaining table with Boeing to continue to negotiate a contract with a NRLB Federal Mediation & Conciliation Service appointed mediator in exchange for a 48-hour hold in the commencement of any strike. IAM members present angrily reacted and indicated that the 87% vote in favor of a strike and 80% rejection of the contract should stand initiating a strike at 12:01 AM. Currently, no strike is authorized.

UPDATE 9:45 PM: IAM leadership indicates Boeing is ready to return to the table, in exchange for 48 hour delay in strike. Union members present react with expletives, mostly of the four-letter variant.

UPDATE 9:41 PM: IAM votes 87% in favor of a strike. 80% reject contract. Jetliner production halts at 12:01 AM.

UPDATE 9:39 PM: "The Final Countdown" blares as Union Leadership enters the press conference hall.

IAM: "You don't tell us what our members want, we tell you what our members want."

UPDATE 9:27 PM: Official confirmation of a tally is not yet available.

This will be the first time the IAM has voted in favor of a strike in back-to-back contract negotiations. The union's 2005 strike lasted for 28 days.

SEATTLE -- The early ballots have arrived at the IAM 751 meeting halls near Boeing Field. Roughly fifty ballot counters are separating and counting ballots. Blue ballots represent votes supporting or rejecting the contract, red ballots represent strike votes. Counting of the approximately 25,000 ballots is expected to take several hours.

Cheers were heard earlier coming from another counting room; observers speculated that these signified early returns from IAM sites in Oregon and Kansas.

EVERETT, WA -- I write from the just across the flightline at Paine Field at the Boeing Factory. The sound of airhorns can be heard blaring from the march of machinists taking place at the other side of the field at the world's largest building right now.

Driving from Seattle to Everett, one quickly realizes just how intertwined The Boeing Company is in the fabric of the Pacific Northwest. A forty minute trip on Interstate 5 takes you past Boeing Field to the Everett Factory.

As I drove up the freeway and overlooked BFI, a brightly blue and white painted 777F sat on the ramp; it's large cargo door open busily being worked on.

Approaching Everett, the doors to Building 40-23 were just slightly ajar revealing the static test airframe in its massive blue metal test rig.

Though on this day, where my eyes would usually be drawn to the new aircraft on the ramp, a large gathering of sign-carrying blue-shirted machinists is today's purpose for being here.

Looking out at Boeing right now reveals just how much is at stake. The result of the vote should be known by 6:30 PM PT.

Seven hours, twenty-three minutes to go.

The headline says it all really. I'm heading to Seattle this morning to cover the IAM vote tonight in person.

I'll be twittering (tweeting), updates all day (and likely all night) as they become available. News of the vote will be instantaneously sent out via twitter the moment the result is known.

With that being said, I want to hear from you, Boeing employees, to get your viewpoint. To strike or not to strike? What do you think

With just over twenty-four hours to go before the contracts of 26,800 machinists expire, Boeing's beleaguered 787 is quickly running out of margin to achieve its first flight in the fourth quarter with a fresh slip in assembly completion.

According to several sources inside the 787 program and others familiar with the schedule, assembly completion of Dreamliner One is now tentatively targeted for early October, a slip of about five weeks.

Assembly completion was initially set for August 31, just four days prior to the expiration of the IAM's three-year contract.

The change in the internal schedule is separate from the looming spectre of a potential strike.

Boeing spokesperson Yvonne Leach reaffirmed that 787 is "on track for first flight for the fourth quarter of this year."

According to another source familiar with the schedule change, the remaining work centers largely on the installation of flight test instrumentation and cabin equipment.

The slip was necessitated by the production of long lead-time parts resulting from design changes, as well as small, but time-consuming, issues arising from systems integration.

When Boeing announced its recovery plan for the 787 program in April, the first flight of ZA001 was slated for late October. A five-week schedule slip would push first flight to early-to-mid December.

Yet anecdotally from suppliers, indications exist that first flight could slip to the early part of 2009, though these are currently unconfirmed.

787 Program Vice President and General Manager, Pat Shanahan, said in July at the Farnborough air show that he was "eating margin" built into the schedule to provide a buffer between first flight and the close of the year.

Shanahan also said at the time first flight was set for November.

A December first flight would still meet Boeing's projected fourth quarter target for ZA001. Though the change in the schedule underscores just how tight the 787 schedule currently is, even before any impact of a potential IAM strike.

Yet with the slip, the 787 program is not without progress. Dreamliner One recently had all its movable control surfaces reinstalled and landing gear swing tests were successfully initiated.

In addition, section 43, the Kawasaki-built forward barrel of the center fuselage, was declared shop complete.

Even with the remaining work left to complete assembly of Dreamliner One, aircraft is set to move out of the factory to a slant position in Building 40-24 later this month, once the fatigue airframe is moved to the test rig.

The vacancy created by ZA001 leaving Building 40-26 allows Dreamliners Two, Three and Four to advance on the line, making way for assembly of Dreamliner Five, the first GEnx powered 787. The first four 787s are powered by Rolls-Royce Trent 1000 engines.