Boeing Tightens Its Grip on Dreamliner Production
Company Is in Talks to Buy Fuselage Factory From Supplier; Supply-Chain Woes Have Dogged 787 Program
By PETER SANDERS -- WSJ
JULY 2, 2009

Boeing Co. is in negotiations to purchase operations from one of its main suppliers, as part of an effort to gain more control over the supply chain of its troubled 787 Dreamliner program, according to a person familiar with the matter.

The company is close to announcing that it will buy a facility from Vought Aircraft Industries that makes sections of the 787 fuselage. The facility is located in North Charleston, S.C. The person familiar with the matter said negotiations have been under way for months.

Officials from Boeing, of Chicago, and Vought, an aerospace contractor based in Dallas, declined to comment. Closely held Vought is owned by private-equity firm Carlyle Group.

The news was earlier reported on FlightBlogger, an aerospace-industry blog.

Terms of the deal were unknown.

The move would represent another admission by Boeing that it needs to take a more direct role in the manufacturing process of its marquee product. When Boeing first rolled out plans for its Dreamliner, it said that it was reinventing the way it builds commercial airplanes. Instead of manufacturing most of the plane at its Everett, Wash., facility, many parts would be made by suppliers around the world. The parts then would be shipped to Boeing's plant for final assembly.

Boeing, however, quickly discovered that keeping track of the different suppliers -- and keeping the whole project on schedule -- was more difficult than it had anticipated. Delays accumulated, and the plane is now two years behind schedule.

Bringing more of the production in-house could increase Boeing's ability to manage the complex project.

The move also potentially paves the way for a second 787 assembly line once Boeing is able to ramp up production, far from the current facility in Everett, an option Boeing officials have said recently they are exploring.

The company currently has about 850 Dreamliners on order.

Last year, Boeing also moved to roll up another supplier operation owned by Vought. In June 2008, it finalized an agreement to acquire Vought's interest in Global Aeronautica LLC, also in South Carolina, which does fuselage subassembly.

It remains unclear how Boeing's latest proposed move might affect the 787 delivery timetable. Last week, Boeing announced another delay in the 787 program after it disclosed a problem during stress tests of the plane's wings.

Boeing has yet to release a new time frame for test flights and first deliveries.

Boeing's supply-chain woes have dogged the program since 2007, months after the Dreamliner was rolled out in its public debut that July. The company that fall admitted it was suffering from problems with vendors in places as far flung as South Carolina, Italy and Japan.

At one point, a global shortage of airplane fasteners hindered Dreamliner production. Quality-control issues at various suppliers also plagued the program.

Boeing sent hundreds of its employees around the world to help monitor and fix problems in the production process, but with the latest move to acquire Vought's 787 operations, the company will be able to provide stricter oversight and control at the facility in South Carolina.

United's got nothing left to sell. US Air's management is inept, but helped by their low costs as a result of the meltdown of organized labor.

I hope American does not go bankrupt and restructure. If they do and if they emerge, they are going to be a very tough competitor.

As fr Vought, they bid on Boeing's contract (and won) with no engineers. Well, they had two. One of the two was a industrial engineering - tool designer type. Then (shockers) they had engineering problems with what they outsourced.

Agreed. I think that AMR will skirt it, but there are a few others that will not.

ACL,

Great article on Boeing.........and about freeking time eh?

Ferd

Heyas,

As I said before: The "Last Man Standing" game is a VERY dangerous one to play, and sunk two airlines into bankruptcy when the SAME management tried it before.

They'd better be darn sure this time.

USAir and TWA were days away from Chapter 7, and yet they are still with us (after a fashion). UAL is from Big Os home town...lot's of IOUs to be turned in on that one. We were told a few years ago that the traditional airline merger is dead, and no one in their right mind would try one again, yet here we all are, the the midst of the biggest one ever.

Nu

The reason he thinks it is because there is truth to it - management has brainwashed us -w hen issues arise such as scope - we scream we want to keep 100 seat flying - the senior pilots immediately reply - "What do "I" have to give up for this?"

Again - WHY do we have to give to get always?
Because Mgmt has us thinking that way.....they'd have been great at running a POW camp in 'Nam.

It is a calculated risk. The senior pilots have figured out that no matter how much scope they sell it will not bite them in the six until after they are gone. IE it will not effect them, so the sale of scope has zero risk for them.

Guy with 10-15 years left are probably correct in that statement.
Problem is, it really is telling of their character.
I will retire in the top 20 and scope will always be one if not the number one concern for me. The only way it becomes a non-issue, is if we perform all branded flying.

So when do we start? Let's get a few heads together and come up with something that will benefit the pilots, all other employees, our shareholders as well as the company, instead of the "I am a big union and we have power" scenario. Like most, I do NOT want DAL to go down the alley a few other airlines are exploring right now, I do NOT want a scab in the same company I work for, I do NOT want a single DAL flight to operate without DAL pilots onboard. Think about the marketing value alone...

I am ready when you are.

Sorry, but I disagree comletely with the senior pilots statement. What percentage of the overall group would the "senior" pilots comprise...everyone is off of probation...everyone gets to vote. When you look at the percentage of pilots that vote in any election, now that's disgusting. If you don't vote, you can't complain.

Yes, pilots will say what do I have to give up.. they do and everyone needs to look at the complete package that is being offered.

This board offers the same examples of what do I have to give up, "Call in Honest" and the Jump Seat Program...it worked in a comparable sized group up North, so it should work for the new company, but "what do I have to give up comes up again."

Just some food for thought. How is ALPA going to handle the upcoming battle of cabatoge by foreign airlines that it represents through IFALPA? Are those foreign airlines going to join up with the RJDC guys and sue because ALPA is fighting against cabatoge which will cost those airlines members jobs?