MORE DELAYS FOR THE DREAMLINER

Boeing just can’t get it right. Airbus is reeling over poor orders, especially the A380 and Boeings order book is overflowing with firm orders for 737-800’s, 777’s and 787’s yet it cannot get itself into gear. The 787 has been delayed for five more weeks because they can’t fuse the aluminum wings to the body which is made of composite materials. The part that does the job is called a shear tie and Boeing engineers have discovered the wings might separate from the fuselage if exposed to extreme hot or cold temperatures. The jet is already two and half years behind schedule. They still cannot determine what the fix is. Just about every airline in the world has orders into Boeing for the 787 and just as well the recession is working in Boeing’s favor. I am sure there are a few carriers breathing a sigh of relief that they don’t have to take delivery right now and as the delays grow longer the greater the penalties Boeing has to cough up with. It is a great deal for the airlines but a savage blow to Boeing’s reputation.

Good news is Boeing is ramping up 737-800 production another 10% and 777 orders are holding firm. Airbus have been experiencing cancellation in orders and options. For years the European Union and especially France has been propping up Airbus. With the financial crisis enveloping Europe, Airbus might have to start selling their aircraft based upon the real costs of production. This bodes well for Boeing as over the past month the Euiro has devalued nearly 25% against the greenback. The only way Airbus was able to outsell Boeing over the last ten years has been government subsidies have allowed them to have better pricing.

Boeing is a story of outsourcing gone crazy. Much of the blame for production delays is suppliers have either not been able to deliver on time or their parts did not meet up to specification or quality. So much of the stuff should have been manufactured by Boeing-owned factories where quality and production could be controlled from within. This would have avoided Boeing having to fork out $billions in penalties to airlines for delays in delivery. Ever since Boeing moved “mahogany row” from the Everett manufacturing complex to Chicago, their once smooth manufacturing process has gone to hell in a hand-basket.

Tags: 737-800, 777, 787, Airbus, Boeing