Boeing 787 DreamlinerBoeing's Dreamliner is the nightmare that won't let up. Based on a Seattle Times report, it looks likely that the 787 -- already three years late -- is saddled with enormous technical problems that could delay it two more years and cost Boeing (BA) $12 billion, 120% more than its original budget.

I've written about the litany of problems -- too much outsourcing, inability to predict how composite materials would behave in the real world, problems with the electrical and environmental control systems and labor issues. But the latest news suggests that the entire thing is much worse than previously known.

The 787 still has 865 orders (although it had 120 more prior to cancellations). And it costs anywhere from $161 million to $205 million a copy -- yielding a backlog of at least $139 billion. Using interviews from anonymous Boeing employees, the Seattle Times uncovered big problems. Here are the most significant:
  • Cost overruns. The 787 was originally expected to cost $5 billion to develop, but now analysts think it will cost $12 billion or perhaps $18 billion to complete.
  • Inability to fly long distances. The Federal Aviation Administration (FAA) is threatening to withhold certifying the 787 to fly the intercontinental routes that airlines expect it to serve.
  • Rain in the plane. This is the humorous term for heavy condensation dripping inside the jet's composite plastic fuselage. Boeing claims to be working on a solution, but who knows whether it will work.
  • Management problems. I have heard about big communications problems where management will fire people who give bad news. Employees working on the 787 complain about poor supplier oversight and a management system that a senior engineer told the Seattle Times is "totally broken. This program is not like anything we've seen. It's a screwed-up mess."
  • Supplier problems. Boeing has had well-documented problems with the Rolls-Royce engines shredding their mini-blades, horizontal tails being poorly built by Italy's Alenia and electrical system problems that caused a fire in a test flight in Laredo, Texas.
  • Unfinished aircraft in inventory. To deliver the 20 787s built since the six flight-test planes, mechanics will have to complete "more than 100,500 tasks," according to the Seattle Times.
What I find most striking is how Boeing seems to have strayed so far from what made it great. It has confronted delays with new aircraft in the past, but its management used to be very focused on getting people to identify problems on the shop floor, bring ideas for solutions to management and move forward to fix them.

But with the 787, that approach seems to be out the door. Boeing decided to outsource 60% of the design and manufacturing of the 787 so it could shift the risk onto its suppliers and speed up development. Boeing was too trusting of these suppliers, which continue to disappoint.

Combine that extreme outsourcing with the use of a new technology -- composite plastics instead of aluminum -- and you get an engineering nightmare that just doesn't seem to end.

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Probably much ado about nothing in the long run. As with any new technology, there are always glitches, but that's what the 787 flight-testing program is all about. The government has already "certified" many portions of the air- worthiness tests conducted on the 787. I haven't read one government report that raises eyebrows about the 787 program, and I doubt the author has, either. Much of this piece is pure speculation and negative hype. And, no, I'm not a Boeing employee, just an airplane enthusiast.

January 07 2011 at 9:39 PM Report abuse rate up rate down Reply

It all boils down to greedy managers looking to the short term for their bonus! Build it quick and cheap w/o considering the long term affects! Simple as that!!!

December 23 2010 at 10:35 AM Report abuse rate up rate down Reply

sEAT MORE TRAINS! - charter member of Whoppy Goldburg's Flying Club

December 23 2010 at 10:24 AM Report abuse +1 rate up rate down Reply

Looks like they wrote a check they cannot cash, they should have promised R & D, Not an actual Oceanic Jetliner. "New and Improved"?, yeah after TEN yaers of testing baby.

December 23 2010 at 9:45 AM Report abuse rate up rate down Reply

Plastic airplanes have been around for a number of years. This isn't the issue. Seems the outsourcing is a problem. Maybe it's good that AOL posted this trashing of a US company to the world. At first, I figure AOL would just love to air a large US corporations dirty laundry (thanks AOL). But maybe it's a wakeup call to US companies to start DOING THE WORK THEMSELVES!!!

December 23 2010 at 9:33 AM Report abuse +2 rate up rate down Reply
2 replies to mcatanese's comment

Wasn't Boeings outsourcing policy a sales tool to compete with Airbus & prevent any national campaign to build their own commerical airliner just like Europe did with EADS?

December 23 2010 at 10:16 AM Report abuse +1 rate up rate down Reply

Thanks AOL for exposing Boeing mediocrity , their bean counter tried to cut cost as much as possible without regard of quality , where is the old Boeing Corporation.
Outsourcing is not bad when the supplier is qualified .
In this case and many other US corporation have simply sold everything out to the first one coming , that is the highest level of trahison .
Let's not forget that boeing is no longer a private Co they are heavily financed by the governement.
Want to compete with Europe? check the size of Europe V/S the USA , there is no comparaison.

December 25 2010 at 5:19 PM Report abuse rate up rate down Reply

This is why jobs need to be kept here in the United States. Sure it costs a couple extra dollars, but at least we know what we need to do to get it done ON TIME.

December 23 2010 at 9:19 AM Report abuse +3 rate up rate down Reply
1 reply to whofoundnemo12's comment

But, you have to wonder if this were all done here in the first place, might it have been cheaper in the long run, with shorter R&D time and expense? After reading this, I'd be afraid to board one of these planes even if they debug it. What made America great was American know-how and work ethic, not outsourcing.

December 23 2010 at 10:55 AM Report abuse rate up rate down Reply
Stan the man

Plastic Airplanes belong in a MODEL KIT not in the airline industry. You can fix todays aircraft But try fixing plastic in todays world. You can't dent them only Break them. Put them back in the Model builders kit to put together for display! Get back to basics!

December 23 2010 at 9:17 AM Report abuse +3 rate up rate down Reply

It seems that Boeing took a page out of the US military's playbook on Iraq: Don't tolerate criticism, and outsource (to Blackwater for the government, and to the places with the lowest pay for Boeing) at the expense of the grunts on the frontline/ assembly line, and most importantly...go bankrupt in the process.

December 23 2010 at 9:01 AM Report abuse +2 rate up rate down Reply


December 23 2010 at 8:47 AM Report abuse +2 rate up rate down Reply

Scratch the 787, before it scratches all its passengers.

December 23 2010 at 8:46 AM Report abuse +3 rate up rate down Reply