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Boeing Checks 787s’ Wings for Cracks on Mitsubishi Notice

Boeing Co. (BA) is checking for hairline wing cracks on about 40 of its 787 Dreamliners after supplier Mitsubishi Heavy Industries Ltd. (7011) alerted the planemaker about possible risks to the aircraft.

A change in the wing-manufacturing process at Tokyo-based Mitsubishi may have led to cracks in a section of a wing rib, Marc Birtel, a Boeing spokesman, said yesterday by e-mail. All the affected jets are still in production, and Boeing is taking corrective steps, Birtel said, without elaborating.

New inspections add to Boeing’s struggles with its marquee jet, whose 2011 commercial debut came more than three years late. After boosting monthly production to 10 Dreamliners from seven at the end of 2013, Boeing has struggled to match deliveries to the new assembly tempo, with only eight planes handed over this year through February.

“This looks to be a one-off, but obviously it gets a lot of attention given the history of this program,” Peter Arment, a New York-based aerospace analyst with Sterne, Agee & Leach Inc., said by telephone after the wing cracking was disclosed.

Boeing fell 0.4 percent to $128 at 5:14 p.m. yesterday in New York in extended trading. The stock closed at $128.54, leaving the shares down 5.8 percent this year and trailing the 1.6 percent advance for the Standard & Poor’s 500 Index.

Photographer: Andrew Harrer/Bloomberg

New inspections add to Boeing Co.’s struggles with the Dreamliner, its marquee jet, whose 2011 commercial debut came more than three years late. Close

New inspections add to Boeing Co.’s struggles with the Dreamliner, its marquee jet,... Read More

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Photographer: Andrew Harrer/Bloomberg

New inspections add to Boeing Co.’s struggles with the Dreamliner, its marquee jet, whose 2011 commercial debut came more than three years late.

Delivery Target

Arment said the price was little changed by news of the inspections because Boeing said it still intends to deliver 110 Dreamliners this year, as expected, and revenue from customers won’t decline. He rates Boeing as a buy.

No airlines got any planes that might have wing cracks, according to Boeing and Mitsubishi Heavy, which didn’t detail when the manufacturing changes occurred or what they entailed. The Japanese company said by e-mail that it was investigating “to determine the cause and implement countermeasures.”

Dreamliners are the first commercial jets built chiefly of spun composite fibers instead of the traditional aluminum. The composite wing is distinctive for its 190-foot (58-meter) span and raked tips and, according to Boeing’s website, is about 20 percent lighter because of the new materials.

Mitsubishi Heavy is among the manufacturers that designed and built larger, finished components for the 787 under a production model Boeing created to cut development costs. Snarls in the plane’s global supply chain and setbacks with its groundbreaking technology, including materials and electronics, contributed to the plane’s tardy debut.

Those delays prompted analysts to tag the plane with sobriquets such as “7-Late-7” and “Lateliner.”

Two Factories

Boeing builds Dreamliners at its main wide-body plant, in Everett, Washington, and at a newer facility in Charleston, South Carolina.

At Charleston, Boeing produces 787 center fuselage sections, with wiring and other components already installed for the Everett operation, in addition to a separate final assembly line where jet components from around the world are melded into finished aircraft.

The South Carolina plant has added contract workers to end a “bottleneck” in the so-called mid-body assembly that left fuselage sections sent to Everett incomplete, with jobs not done and parts to be installed later and out of sequence, according to Chief Executive Officer Jim McNerney.

“This is what we do all the time, which is to find bottlenecks and attack them and fix them,” McNerney said at a Cowen & Co. conference in New York on Feb. 5.

Two Versions

The assembly difficulties intensified because the mid-body in the 787-8 model is the segment that is most different from the larger -9 version, which Boeing is just now starting to build, McNerney said.

“This is not about a development program struggling,” McNerney said at the conference. “We’ve had those struggles, now we’re into production.”

Deliveries of the 787 totaled 122 to 17 airlines through February, according to Boeing’s website. With its lightweight construction, upgraded engines and other technological advances, the plane is more fuel efficient than comparable twin-aisle models, according to Boeing.

In 2013, regulators grounded the global fleet for three months after lithium-ion batteries melted down on two 787s, and Boeing had to redesign the case for the cells before the jets won clearance to resume flying. In the U.S., the Federal Aviation Administration’s directive to park the plane was the first of its kind since 1979.

To contact the reporter on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net James Callan

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