Boeing’s 787 Dreamliner close to arrival

Within the next two months, Boeing’s first 787 – the company’s new, fuel-efficient wide-bodied jet – should finally be operational in the hands of All Nippon Airways, its launch customer.

It will cap a long and tortuous journey for the world’s second-biggest aircraft maker by revenues. The 787, whose fuselage makes unprecedented use of composite materials, was plagued by design, engineering and production issues problems that pushed it more than three years behind its original schedule.

With 835 orders worth $163bn at list prices from at least 56 customers, Boeing’s next big headache could be increasing production fast enough to meet its commitments.

The continuing problems with the 787 were highlighted last week when Boeing was forced to suspend deliveries from its suppliers to its assembly plant while its mechanics caught up on work.

The aircraft maker is planning to produce 10 787s per month by 2013 – an aggressive target from a standing start that some observers fear will strain its supply chain and productive capabilities. Should it fail, Boeing will not only suffer more reputational damage from delays to its flagship programme, but will also be hit financially.

Already, the company is negotiating financial penalties for airline customers unhappy with the delays. Boeing will also have to pay out to suppliers such as Spirit AeroSystems, after the 787’s woes wreaked havoc on their production schedules.

Michael Hartnett, chief executive of RBC Bearings, a Boeing supplier based in Connecticut, said in a recent conference call: “When they actually release that 787 for production …there’ll be a big surge in demand and right now I think the entire marketplace of subcontractors that support that build are sceptical.”

One reason for the scepticism is that Boeing wants to ramp up its 787 output plans while simultaneously increasing production across its commercial operations by 40 per cent in the next two years – putting an immense burden on the supply chain.

Another question mark is overproduction. Even though Boeing’s Seattle-area plant has produced the first 787s, the process is not yet working as envisaged. The company insists it has resolved quality issues through its global supply chain and that production is working almost to plan, but workers on the factory floor say otherwise.

“Some parts coming in still need reworking, plus we’re still ‘travelling’ jobs, and we’ll be doing it for years,” says one 787 line worker, referring to the need to move tasks from one assembly station to another, as work cannot be completed on time.

Production in Seattle will be complicated by Boeing’s need to set up a “surge line” in a former paint hangar to retrofit 787 models that were assembled before all the aircraft’s design problems were ironed out.

A further production challenge will be getting Boeing’s new plant in South Carolina, which officially opened last month, to produce three 787s a month within two years. Because the plant is brand new, Boeing is depending on workers with no commercial aerospace experience, although some have come from the US Air Force.

A legal dispute with its machinists’ union means that no workers will come from Seattle to help train the new workers. Instead, they will have to learn their jobs from videos.