Boeing (BA) is a big company with many different projects. But one of them, its 787 Dreamliner, has been delayed six times already. This 250- to 330-seat aircraft now has 840 orders (down from 850), which amounts to a $148 billion backlog. While I've reported on conversations with people who claim that the 787 has problems with its environmental control system and its electrical system, The Wall Street Journal on Friday offered another bombshell technical glitch.
Before going into detail about this latest problem, it's worth thinking about how Boeing got here. As I wrote in my book about the company, You Can't Order Change, Boeing decided to do two new things with the 787. First, it outsourced 60% of the design and manufacturing. In the past, Boeing had done all its design work itself and only outsourced some of its manufacturing.
Second, Boeing decided to use composite materials instead of aluminum, which helped it get all those orders. That's because composite materials are lighter and stronger -- leading to more fuel efficiency and greater passenger comfort.
But as the Journal notes, composite materials also have a negative feature. It's very difficult to design software that will predict accurately how they will behave in the real world. As a result, engineers try designs that appear sound in the computer models, only to discover problems when they try to fly the real aircraft. So far, there have been unpleasant surprises with so-called wrinkling on the wing and other problems where the wing attaches to the fuselage.
The latest snafu, Journal reports, is with metal bolts that were part of a fix developed to solve another problem in the area where the wing attaches to the fuselage. These metal bolts -- called freeze plugs -- cause the layers of composite material to crack in the area around them, according to a memo from Boeing engineers written last month.
Not Fit to Fly?
The engineers don't think the 787 should fly until the problem is fixed. The memo states: "Noted conditions are structurally and functionally acceptable to Engineering for GROUND TESTING ONLY," and adds, "NO FLIGHT TEST IS ALLOWED." But Scott Fancher, vice president and general manager of the 787 program, still thinks everything's on track. "Composites are the right material choice for the 787 Dreamliner. We are progressing well toward first flight and are on track to fly by the end of the year."
Boeing took a $2.5 billion charge last quarter for all the problems with this Nightmareliner and will pay hundreds of millions in penalty charges, according to the Journal.
One hopes that FAA inspectors will catch any additional problems before the 787 is certified to fly -- but what if problems develop after the aircraft is certified?
I'm not sure what's worse: the discovery of these problems by engineers so late in the game or management's full-steam-ahead determination. But since that $148 billion represents more than half of Boeing's declining $254 billion backlog, the financial pressure to succeed with the 787 is crushing.