Boeing Fails to Resolve 787 Incomplete Parts Delivery

Photographer: Daniel Acker/Bloomberg

Boeing struggling with incomplete parts, slowing down production. Close

Boeing struggling with incomplete parts, slowing down production.

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Photographer: Daniel Acker/Bloomberg

Boeing struggling with incomplete parts, slowing down production.

Boeing Co., more than two years behind schedule on producing the 787 Dreamliner, said it’s still struggling with incomplete parts from suppliers, requiring the planemaker’s employees to do 10 times more work than planned.

Suppliers Spirit AeroSystems Holdings Inc. and Mitsubishi Heavy Industries Ltd. will increase the work they complete to 100 percent of what was expected within the next 10 aircraft sections delivered, Pat Shanahan, the head of Boeing’s commercial jet programs, said today.

The former Vought Aircraft plant in North Charleston, South Carolina, that Boeing bought last year is still “cleaning up” disruptions caused by parts shortages, he said. Boeing is using a new manufacturing system for the Dreamliner that relies on suppliers around the world to build completed sections of the plane, flying them in to be snapped together.

“Our challenge is Charleston,” Shanahan told investors in remarks broadcast online from Philadelphia. “That’s why we’re there.”

Boeing, whose only larger commercial rival is Airbus SAS, has tried to improve the construction of fuselage sections at Vought since identifying it as a “problem” partner in 2008 and bought the factory to gain more control. The company decided last year to build a second 787 assembly plant in the area to prevent disruptions in the event of a strike at its Seattle manufacturing hub.

Flight Testing

The next fuselage section sent to Boeing’s Everett, Washington, plant -- after a monthlong delivery freeze implemented in April to let suppliers catch up -- will be 70 percent more complete than the last unit sent in 2009, Shanahan said. Vendors are starting to see the learning curve they’d expected, he said.

Boeing fell $3.21, or 4.9 percent, to $63 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 16 percent this year.

Flight-testing of the plane has gone “remarkably well” since its maiden flight in December, said Jim Albaugh, head of the company’s commercial division.

“We’ve not seen anything in flight test that bothers us,” Albaugh said. “Knock on wood, it’s almost flying too well.”

No major redesigns have been required, Shanahan said, and “every change we’ve had, we’ve been able to correct within a week.”

The fifth of six jets planned for the test fleet will be in the air “in a few weeks,” he said. The 787 -- the first airliner built from carbon-fiber composites -- is scheduled to be delivered to the initial customer by the end of this year, after five delays from the original May 2008 target.

Better Tests

While the first four planes haven’t flown as much as Boeing had planned, crews have been able to make up time with more efficient tests and better data, said Mike Carriker, the chief test pilot. Icing tests that had been planned to last a week were done in five days because the company’s meteorology department located icing conditions, he said.

Engineers are “in full swing” on designing the 787-9 and will have a firm configuration ready by the middle of this year, with production set to begin in the first quarter of 2012, Shanahan said.

Boeing is retaining greater design responsibility for the derivative and is embedding engineers at suppliers’ sites to avoid some of the challenges faced by the first model, the 787- 8, he said.

To contact the reporter on this story: Susanna Ray in Seattle at sray7@bloomberg.net.

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