Boeing won't commit on new Dreamliner delivery dates

On a day when Boeing should have been celebrating that it beat rival Airbus in booking jet orders last year, the U.S. planemaker instead faced urgent questions about a new delay to its vital 787 Dreamliner program.

The answers in a morning teleconference were not very reassuring.

Boeing executives showed a good grasp of what needs to be done to get the first Dreamliner into the air. But they acknowledged they are still reviewing how the latest three-month delay will affect production and delivery of subsequent airplanes.

They aren't ready yet to commit to a new schedule for deliveries, said Boeing Commercial Airplanes chief executive Scott Carson, because "We don't want to be in a position where we do this with you all again."

Carson and Dreamliner program chief Pat Shanahan said they are confident the first flight of the new airplane will be pushed out only three more months — until June, which is ten months behind the original schedule.

But timing of the next steps is less clear. Five further aircraft must be swiftly rolled out to conduct full flight tests and certify the plane before deliveries to customers can start.

Executives said Boeing needs to have detailed discussions with all its supplier partners, and an assessment based on those talks won't be complete until "the end of the quarter."

Only then will Boeing know precisely the impact on its flight test and delivery schedule. A delay of at least three months in deliveries seems certain — but it could be longer.

"We have resisted the temptation this time to make a broad and sweeping generalization about where we are on all the rest of the aircraft until we have completed our assessment of the condition of assembly on airplanes 2 through 6, the ones that are critical to our flight test program," said Carson.

Despite that uncertainty, Carson insisted that the 787 global manufacturing plan is going to produce the game-changing new aircraft that Boeing has promised and airlines have ordered in record numbers.

"We have tested the technology on the airplane, we've tested the build plan and we've tested the team," Carson said. "Everything that we're seeing in terms of the health of the technology and what it's going to deliver continues to give us high confidence in this program."

The teleconference with media and Wall Street analysts provided a detailed account of the assembly delays on the first Dreamliner, which has turned into a production fiasco.

Progress on plane #1

There was some good news here: Shanahan said parts shortage are no longer holding up this first airplane.

However, many of those parts are still sitting beside the assembly line. Mechanics unable to install them because the work is all out of sequence.

"About a month ago, we had on airplane #1 over 10,000 fastener shortages," Shanahan said. "We're down to 100s."

Further, out of several thousand system component parts that go into activating the airplane — including flap actuators, pumps, computers, and generators — only 27 are missing today.

"By Monday, we'll have all 27 of those parts," Shanahan said. "So if the airplane were available on Monday, with the wiring, the tubing and the ducting, we would be able to install all of those system components." The next step would be to turn on the power on the airplane and begin testing to ensure the systems work, which was scheduled to begin in late January.

Unfortunately, the airplane won't be available Monday because the wiring, tubing and ducting aren't fully installed. Shanahan said he expects the airplane's power won't be turned on until March.

Beyond that goal of "power on," Shanahan said he's missing only another 20 system component parts needed to get to the next milestone, when the airplane is taxied on the ground under its own power.

With parts shortages now manageable, the out-of-sequence work is the big issue.

Boeing underestimated how long it would take to complete work the major partners were intended to do on the first airplane.

Shanahan said the work that "traveled" down the supply chain has clogged the Everett production system, which was designed to be a lean operation tailored to efficiently perform only final-stage assembly work and system tests.

"We thought we could modify that production system and accommodate the traveled work from our suppliers," Shanahan said. "We were wrong."

It has been "very onerous and time consuming" to reconcile the engineering records from supplier partners with the reality of the assembled sections received, and then to adjust the Everett production process, Shanahan said.

He said planning the optimal sequence of aircraft assembly work typically takes a year, but Boeing had to organize the "traveled work" in months.

"That dramatic compression has produced inefficient assembly sequence," he said.

"We thought late December we would really turn the corner so we could start installing the systems racks and the wiring," Shanahan said. "We have not been able to finish that assembly work."

The critical task now, he said, "is getting all the partner supplier factories doing the work they were supposed to be doing and so we're doing the work we were supposed to be doing."

That's what will determine if the follow-on airplanes can be built much more quickly than Dreamliner #1 is coming together.

Asked why he is confident now that this latest plan will work, Shanahan narrowed his answer to airplane #1: He cited the progress with parts shortages, completing the primary structure of airplane number one, and testing of wire bundles still to be installed.

"I can see a path forward based on how much work we've completed" he said. "I'm confident that we've got the right plan and it's really about focus and execution."

Carson acknowledged that Boeing had offered similar assurances last fall.

"I know our credibility is also being tested on this program," said Carson, "It is up to us to deliver on what we say we will do."

A victory in 2007 orders

Meanwhile, in Europe, Airbus released its 2007 orders data. The result: for the second year in a row, Boeing came out on top.

Airbus had 1,341 jet orders for the year, 72 short of Boeing's tally of 1,413 new jet orders.

Airbus said its orders are worth about $157 billion at list prices. Boeing's orders were worth $171 billion at list prices.

Boeing stock plunged almost 5 percent yesterday when news broke of the 787 delay. In mid-day trading today, the share price was up about 4 percent.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com