- Outsourced Lunacy
- Incompetence at Boeing
Boeing would like to focus on design (which was greatly subsidized by US taxpayers) and on painting the airplane. As for manufacturing one of the most complex project items commonly purchased, Boeing does not see it as a core competency. How does a country fall from a high economic perch? It does so by having companies like Boeing and many others sell out the country for short term profits and quick cost savings. Boeing’s long history of management alcoholism and McKinsey/Accenture inspired outsourcing may end up giving Obama another company to manage in the near future.
This is the type of idiocy that is now read about on a routine basis in the US business press. Boeing decided to bring out a new airliner, without first figuring out if it was possible to outsource so much of the plane’s assemblies. The new phrase as Boeing is that “we need to take more control of our manufacturing.” What a concept, that a company should actually be involved in the manufacturing of its items that it paints its name on. This must be a severe challenge for the Boeing management, which as long had a reputation for having a high percentage of its management class as alcoholics. While everyone “knows” that unions are mindless and that only executives have the answer to a companies decisions, it’s interesting how the International Aerospace Machinists appear to have out-forecasted the pickled Boeing executives once again. The IAM essentially predicted exactly what has transpired. What we can’t figure out is why Boeing is trying to cut costs. They have been accused of defrauding the government of billions, so they should be flush with money from the various defense industry over-billing they have been running for decades now. This should give them enough cushion to actually manufacture their commercial products.
Incompetence at Boeing
Furthermore, the incompetence of the outsourcing is absolutely shocking. Boeing relied upon suppliers estimates, that had never done this type of work before. The contracting and subcontracting (where the lead contractor skims the money, and passed on the work) sounds like something out of Haliburton’s playbook (after Katrina the government was charge $1000 per tarp, after multiple iterations of subcontracting, the actual work was performed by minimum wage, and in some cases illegal alien labor).
Here is the quote for Reuters:
The Boeing Company’s public acknowledgment that outsourcing is causing problems with the 787 program is lip service until action is taken to correct problems created by a global network of suppliers and inexperienced workers, according to the Society of Professional Engineering Employees in Aerospace (SPEEA), IFPTE Local 2001. Officials at SPEEA and other unions, including the International Aerospace Machinists (IAM), repeatedly warned the aerospace giant that it was a mistake to part out highly complex aerospace products to inexperienced workers around the world. More than one year after a ceremonial “roll out” of a 787 shell, the same aircraft remains in the factory incomplete and missing parts from suppliers. “Continued statements that everything is fine with the 787 global supply network just don’t fly,” said Ray Goforth, executive director of SPEEA.
Last week, the company announced plans to place full-time Boeing inspectors at key suppliers to reduce flaws and maintain quality. The announcement, reported by the Puget Sound Business Journal, said Boeing will first target about one dozen problem companies. SPEEA’s Goforth said more inspections at suppliers escalates cost and avoid the real problem – Boeing’s great experiment to outsource large parts of the engineering and manufacturing of the next major leap in air travel failed. “It’s time for Boeing to stop the lip service and take real action,” Goforth said. “Face the fact that the global network is a failure and bring the critical work back so the experienced employees can get the 787 back on track.” Boeing’s original plan for the 787 called for the first flight in August 2007. By now, large sections were expected to be arriving complete in Everett. The goal was to snap the large parts together in as little as three days. Instead, the program is 18 months behind schedule with no firm date for a first flight. Earlier this month, Azerbaijan Airlines became the first airline to cancel a 787 order. Boeing needs more than paid advertising and internal campaigns to regain the trust of customers and employees. The most recent Rittenhouse Ranking Survey of corporate candor ranked Boeing 98th, six spots below Exxon Mobil. The annual survey evaluated 100 Fortune 500 companies and CEOs for fair, open and sincere communications. Facing a strike by the IAM and preparing to open contract talks with SPEEA in October, Boeing last week launched a radio advertising campaign in the Puget Sound region aimed at convincing employees and the public of its good intentions. The advertising bolsters an intense internal workplace campaign aimed at employees and their managers.
“Instead of thanking and rewarding employees for correcting the errors of suppliers and management, Boeing is banking profits and shifting costs onto employees,” Goforth said. On October 28, SPEEA begins main table negotiations with Boeing for 21,000 employees in Washington, Kansas, Oregon, Utah and California. Negotiations begin in May for 700 engineers at Spirit AeroSystems, Inc. in Wichita, Kan. A local union of the International Federation of Professional and Technical Engineers (IFPTE), SPEEA represents more than 24,731 aerospace professionals at Boeing, Spirit, Triumph Composite Systems, Inc., in Spokane, Wash., and at BAE Systems, Inc., in Irving, Texas.
The Boeing Company’s public acknowledgement that outsourcing is causing problems with the 787 program is lip service until action istaken to correct problems created by a global network of suppliers andinexperienced workers, according to the Society of ProfessionalEngineering Employees in Aerospace (SPEEA), IFPTE Local 2001.Officials at SPEEA and other unions, including the InternationalAerospace Machinists (IAM), repeatedly warned the aerospace giant that it was a mistake to part out highly complex aerospace products to in experienced workers around the world. More than one year after aceremonial “roll out” of a 787 shell, the same aircraft remains in the factory incomplete and missing parts from suppliers.SPEEA’s Goforth said more inspections at suppliers escalates costand avoid the real problem – Boeing’s great experiment to outsource large parts of the engineering and manufacturing of the next majorleap in air travel failed.”It’s time for Boeing to stop the lip service and take realaction,” Goforth said. “Face the fact that the global network is afailure and bring the critical work back so the experienced employeescan get the 787 back on track.”Earlier this month, Azerbaijan Airlines became the first airline to cancel a 787 order.
A quote from Evolving Excellence
The 787 is the first jet in Boeing’s 91-year history designed largely by other companies. To lower the $10 billion or so it would cost to develop the plane solo, Boeing authorized a team of parts suppliers to design and build major sections of the craft, which it planned to snap together at its Seattle-area factory. But outsourcing so much responsibility has turned out to be far more difficult than anticipated.The supplier problems ranged from language barriers to snafus that erupted when some contractors themselves outsourced chunks of work. An Italian company struggled for months to gain approval to build a fuselage factory on the site of an ancient olive grove. Boeing overestimated the ability of suppliers to handle tasks that its own designers and engineers know how to do almost intuitively after decades of building jets. Program managers thought they had adequate oversight of suppliers but learned later that the company was in the dark when it came to many under-the-radar details. But many of these handpicked suppliers, instead of using their own engineers to do the design work, farmed out this key task to even-smaller companies. Some of those ended up overloading themselves with work from multiple 787 suppliers, Boeing says. The company says it never intended for its suppliers to outsource key tasks such as engineering, but that the situation seemed manageable at the time. “We tended to say, ‘They know how to run their businesses,’” says a Boeing executive familiar with the company’s thinking. When mechanics later opened boxes and crates accompanying the fuselage sections, they found them filled with thousands of brackets, clips, wires and other items that already should have been installed. In some cases, officials say, components came with no paperwork at all, or assembly instructions written in Italian, requiring translation.
These quotes are evidence that shareholders have little rights. By all accounts, Boeing management should be cleansed and a brand new management put in place.
Americans, not turned away from an ideology based on experience post articles like the following: