09 March 2008

Wide ranging reports - 787 Delayed again - implications

Sadly as we have reported frequently here, the 787 is running late again. The project is still not hitting its milestones. While Boeing was quietly crowing last year when the full extent of the A380 delays became apparent and insisting that there aggressive time line was solid, it now becomes clear that this was off base.

So I will reiterate our position on the situation with the 787. It will take years to bring the project to full production run rate. Our estimate is that this will not occur until well into 2010 possibly even later. The issues yet to be resolved are numerous and complex. Even after they are solved turning the solutions into a viable production line with smooth processes is far from being assured. Boeing is very fortunate in that after the design issues are resolved they have a cadre of execs who have solid moving production line experience who came from Toyota and Ford etc. But the hump to get over is/will continue to be a big/long one. We will continue to monitor the situation and hope to report some estimates on impact later.

Lest it seem that we are beating up on Boeing alone, let me just say that these are issues that will face Airbus in much the same way with the A350. Unlike Boeing with a single current project to worry about - Airbus has 4. The A380, The A330 Tanker/Military, The A350XWB and do not forget the A400M which is a pretty sick project at the moment.

I say again...

Take the time and its actually OK to add fudge factor to the overall project. Take a deep breath and really think hard. For Boeing - you have one more chance for a schedule correction. Get it right this time. For Airbus - learn and don't get too aggressive with the schedules. For the suppliers - you have two years of missed schedules and delivery lines. Spirit in KS will be particularly vulnerable having a strong dependence on Boeing.

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