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Boeing reveals source of 787 supply problems and sends representatives to Japan and Italy to clear suppliers' bottleneck

Boeing is sending engineering and manufacturing assistance to 787 partners Fuji Heavy Industries, Kawasaki Heavy Industries and Mitsubishi Heavy Industries in Japan as well as to Italy’s Alenia Aeronautica to aid their structural work for the aircraft.

During an earnings conference call yesterday to discuss the company’s 2006 results, Boeing chief executive Jim McNerney said Boeing is putting resources at all four manufacturers to mitigate scheduling and technical risk.

“I think we’ve made good progress on them [the four companies], and obviously there are flare-ups in the others [suppliers] from time to time that we address quickly,” says McNerney.

He notes, however, that “all of the investments we have made to date, and foresee making at this time, are within the research and development estimates we have provided in our guidance”.

Addressing a bottleneck in the supply chain, notably with Alenia and Mitsubishi, McNerney says: “What we’re doing with Mitsubishi and Alenia, specifically, is adding a lot of our resources to supplement theirs to get them through the knot hole and both are making some good progress.

“It’s an ‘oh my God’ exercise as you know to build aircraft, but part of the task is to recognise you have a problem early, over-resource the issue and keep a culture of co-operation…moving forward with you and your partner.”

McNerney notes that he was “just in Japan the other day [with the] Mitsubishi guys” and while “we’re not totally out of the woods yet…the progress is good and the prognoses is good there”.

Some 787 work has travelled from Japan to Charleston, South Carolina where Global Aeronautica, a 50/50 joint venture between Alenia North America and Vought Aircraft, is producing 787 fuselage segments. But McNerney believes this is a positive thing because “the work is spread out a little bit”.

He says most of Boeing’s supplier contracts “do leave room for accommodation when more or less work happens than anticipated” and that the manufacturer is having “robust” discussions about this with partners.

Boeing, meanwhile, is “by and large happy” with its 787 systems partners. “There are some a little behind schedule. But most of the work is centered on the structure side in terms of our cooperative effort,” says the manufacturer’s chief executive.

Good progress is also being seen in Boeing’s 787 weight reduction programme, which was launched in the second half of 2006. “That is a core engineering activity that we turned the game up on as the aircraft, like all aircraft, started to come in a little heavy,” says McNerney. “I’m feeling comfortable about the progress on that weight reduction programme, and getting the aircraft down to what it needs to be for customers.”

He says the company continues to expect to deliver the 787 on time with first delivery in May 2008 “and in accord with our contractual commitments”. It has already received 452 firm orders for the type.

A decision on creating a second 787 final assembly line has not been made. “The good news is we don’t have to make that decision right now, although it is a question we’re going to have to increasingly ask,” says McNerney, noting: “Our suppliers are delighted to have that discussion”.

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