Boeing (BA) has already delayed the first delivery of its 787 Dreamliner several times. But today's unintended announcement that the aircraft manufacturer has actually shut down production at the plant of a supplier in Naples, Italy is causing me to lose track of the number of delays in the 787 program.
In June, Boeing announced what I counted was its fifth delay in the 787 program due to problems with composite materials where the wing joins the fuselage. But today, a June 23rd memo leaked to the press reveals that Boeing canceled production at the Naples plant because its supplier, Alenia, was making parts for the 787's mid-fuselage whose composite skin was wrinkling.
CEO James McNerney came to Boeing to clean up ethical problems, but by deciding not to officially announce this latest problem, it appears that concerns about transparency are undermining his clean-as-a-whistle reputation.
The timing and the content of this memo are both significant. The memo suggests that Boeing knew about the Alenia problem at the end of June when it announced the latest 787 delay due to a separate technical problem -- weakness where the wing and fuselage join -- but neglected to share the Alenia closing information with the public. Boeing now claims that the Alenia problem is minor and a workaround is being designed and installed. Yet the Alenia plant is still idle.
The second reason that this memo is important is that it reveals yet another problem with the composite material -- supposedly stronger and lighter than aluminum -- that is such an important part of Boeing's ability to promise greater fuel efficiency.
Earlier this year I published a book on Boeing that describes McNerney's management techniques. I devoted a chapter to analyzing the problems of its Dreamliner -- an aircraft which has garnered 850 orders due to its promise of greater fuel efficiency and passenger comfort.
Why is Boeing having all these problems with the 787? As I wrote in my book, Boeing took two big risks in its approach to the 787. First, it used a new technology, composite materials, and second it outsourced both the design and manufacture of 60 percent of the aircraft in order to lower the financial risk to Boeing. I question whether Boeing has figured out how to manage these risks.
As things stand, it is unclear when Boeing will deliver the 787 -- it has not set a new date. Nor is it clear that Boeing can solve the technical problems that are inherent in its use of this composite technology. Boeing's computer models have failed to predict the aircraft's real-world physical behavior.
Boeing has overcome such problems in the past. But with the leak of this June memo about Alenia, one has to wonder what other "minor" problems are lurking beneath Boeing's surface.
Peter Cohan is a management consultant, Babson professor and author of eight books including, You Can't Order Change. Follow him on Twitter. He has no financial interest in the securities mentioned.
