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February 12, 2013 at 2:04 am #606487
Hopefully Boeing can get the battery issue resolved quickly. Having a strong Boeing is important to our local economy.February 12, 2013 at 5:25 pm #784432
“Quickly” done come and gone, my friend. But that’s not necessarily a bad thing. If this gets resolved too quickly then there’s a risk that Boeing execs might just start believing their own BS about how this was just a minor glitch with a single part.
It is not, in fact, just a glitch with a part. It’s a major screw-up, which happened as the inevitable result of a wrong-headed production philosophy.
Boeing’s 787 Dreamliner has suffered numerous electrical system flaws beyond the battery problems that led to its current grounding, according to engineers with knowledge of the situation.
Company engineers blame the 787’s outsourced supply chain, saying that poor quality components are coming from subcontractors that have operated largely out of Boeing’s view.
The Seattle Times has been doing some first-rate reporting on this. If they don’t get a Pulitzer for it, something ain’t right.February 12, 2013 at 5:28 pm #784433
If there’s any Boeingers out there (current or former) who want to comment anonymously on this thread, drop me a line and I’ll post your comments – with anonymous attribution – under my own moniker.
DP_Editor at comcast dot netFebruary 12, 2013 at 5:56 pm #784434
I read part of a post recently from a major Business School that had been doing research on the outcomes of outsourcing. (Going to try and find it again today.)
They came up with 5 or 6 major concerns that lots of companies in the rush to save a buck for the next few quarter’s bottom lines, experienced. They outsourced core competencies and failed.
Essentially, the results were spotty at best and indicated that they dramatically undervalued the upside of keeping the production in-house and local- and mistook short term potential gains for long term ones and the capacity to control their fate.
Again, most of that was predictable if anyone had stopped and really thought about it. Oh wait, you mean some did?? Here’s one company that built it’s state-of-the-art manufacturing here in the USA and is proud of what they do: WeatherTechFebruary 12, 2013 at 6:05 pm #784435
I’m no expert, but blaming the whole problem on outsourcing isn’t valid. It is entirely customary to outsource, say, a battery. I don’t think an airplane or automobile manufacturer has made a battery “in house” for 60 years. That being said, it is a major screw-up. But it sounds like the problem is design/engineering was flawed or there was a hardware manufacturing flaw in the battery or related systems. Should have been caught and addressed during design or testing.February 12, 2013 at 6:15 pm #784436
Hey Skeeter, take it from someone who has close friends high up the food chain – 3yrs. late, billions over budget, and design/production flaws that ground your brand new fleet? Yeah, even THEY acknowledge internally that outsourcing was the root cause of all of this.
Was it a new technology? Yes. Was it bound to have some growing pains? Sure. Did they make a huge error trying to outsource the production of this? Absoloutely. And they’d tell you that if they could.
Problem is, this isn’t an isolated incident with outsourcing. It’s fairly common.
And as someone who comes across as a nationalist to at least some degree (am I wrong about that?), why don’t you get all up in Boeing’s grill about giving important, high-paying technology work to guys in Europe and Asia? Why doesn’t that get under your craw? Does the word “unions” possibly have anything to do with it?February 12, 2013 at 6:51 pm #784437
The word “union” has a lot to do with it, wake. (As in union busting.)
Also the word “stock dividends.”
But it sounds like the problem is design/engineering was flawed or there was a hardware manufacturing flaw in the battery or related systems. Should have been caught and addressed during design or testing.
–Absolutely correct, skeeter. But read down further in the Times piece:
“For the 787, they changed the structure” of the supply chain, said Christopher Tang, professor of business administration at the UCLA Anderson School of Management and lead author of a much-cited 2009 case study of outsourcing on the 787. “You only know what’s going on with your tier 1 supplier. You have no visibility, no coordination, no real understanding of how all the pieces fit together.
“With a brand new design and so many parts and so many players, it’s a major challenge,” Tang said. “Can the management team trace all the way down the tree to every single supplier and unit? That’s really difficult.”
This was a new level of outsourcing with the 787. And with it came a new level of risk. The people in charge didn’t get that, apparently. Perhaps they should have taken a class on chaos theory.February 12, 2013 at 7:20 pm #784438
They knew there was risk, DBP, they just had two overriding mindsets. One – they’re the best damn integrators in the world with a top-notch team of Jack Welch Trained management. We got this.
And two – they crunched numbers and it looked like they could crank several more % points of profit out of the deal AND bust up unions at the same time. Winner, winner, chicken dinner.
Let’s see if the financial and ego spanking they’re getting actually fosters change or, what I suspect is the more likely outcome, that they publicly admit some errors and privately stay the course. We’ll see. At the very least, they’ll continue the union busting, cuz that’s a no-brainer. Witness the South Carolina plant.February 12, 2013 at 7:20 pm #784439
I don’t know that I’m a nationalist. Haven’t thought about it much.
I am, however, a direct shareholder of Boeing stock. I’ve been a shareholder since August 2008. If Boeing management determined that it was in the best long-term interests of the shareholders to outsource and that led to high-paying jobs overseas, then so be it. If a Japanese company is good at making batteries and a german company is good at making motors and so forth I don’t have a problem with outsourcing. I can’t even pretend to have knowledge of how to design and build an airplane. I’m a finance guy.
A company has an obligation to make environmentally conscious decisions in the best interest of the shareholders. It is in the best interest of the shareholders for the company to treat employees fairly so that the employees work hard and make a commitment to the company.
As for unions, I’m not a big fan except, perhaps, when it comes to worker safety. Manufacturing is moving to the Southern U.S. or overseas. Unions think short-term and that is their guarantee of failure.February 12, 2013 at 7:23 pm #784440
Agreed the Times is doing a great job covering this story. I have family in California and they tell me that the 787 is getting a lot of attention down there, too. This is a story of national importance, not just regional.February 12, 2013 at 7:24 pm #784441
Holy crap, did you just say, “unions think-short term”????
And you own equity in publicly traded companies and you can say that with a straight face???
Stunning. Just stunning…February 12, 2013 at 7:26 pm #784442
See, there’s this thing called stock ratings. Think Standard & Poors. You know, the ones being investigated for illegally propping up stock values for failing companies trying to make a quarterly number so the execs can get the bonus.
You know, think Enron.
But, yeah, UNIONS think short term…February 12, 2013 at 7:29 pm #784443
And I have a substantial portfolio of equities too, skeet. I’m just realistic about the kind of crap I have personally witnessed with quarterly shenanigans. If that ain’t short termitis, then nothing is.February 12, 2013 at 8:15 pm #784444
Wake, I think we are talking about two different topics. I’m not disagreeing with you.
Do accountants sometimes think short-term? Sure. So do investment analysts.
When I said that unions think short-term, what I mean is that a union that consistently disagrees with an employer about wages or benefits virtually guarantees that the employer will create future jobs in right-to-work states. So, in my opinion, unions sometimes get short-term benefits but over the long-term put their members at a disadvantage. Look at job growth in Texas, South Carolina, and Alabama. Now compare that with job growth in Washington, California, and Oregon.
Workers (including myself) should be very wary of forming a union and making demands from an employer. If I am replaceable by a worker in another state or another country, my negotiating power is not nearly as strong as I think it is.
Again – I am not disagreeing with your insightful posts. I’m just not sure we’re talking about the same subject.February 12, 2013 at 8:46 pm #784445
Point taken, Skeets. Thanks for the clarification. I wasn’t just talking about accountants thinking short term, I’m thinking top 2 and 3 level mgmnt with bonuses tied to stock performance. I’ve seen guys bend themselves into pretzels to make a number/get an analyst to bite with decisions detrimental to the long term. And not just a couple of times, either.
But your point on unions is a good one but ignores the underlying conundrum. If a union doesn’t hold the line somewhere, their existence is irrelevant. I absolutely grant you that they often cut off their noses to spite their faces with management and taking some ill-advised stands BUT having said that, their job is to maximize the well-being of their skilled workers AND the health of the company. Those two things are NOT ALWAYS mutually exclusive. It requires intelligent and long-term thinking on both sides of the table. And if you hadn’t noticed, the unions are fighting with both hands tied behind their backs with the “right to work for less” state laws and outsourcing to places with “slavey” labor.
There WAS a time, not that long ago, in the late 80’s and early 90’s when management philosophy encouraged mutual cooperation between mgmnt and labor. And it had successes. But that quickly got lost under the weight of Randian zeitgeist and short-termitis that swept through Wall Street.
This will end. And the tables will turn again as the inexorable race to the bottom’s outcomes become apparent to all – including the wealthy. The golden goose of the American consumer is coughing and has a crackle in its lungs. This bodes well for no one.February 12, 2013 at 10:04 pm #784446
Good point. If unions and companies could recognize that they ultimately share the same goal, then everyone would be better off.February 12, 2013 at 10:25 pm #784447
And, if anyone asked me when that “spirit of cooperation” took the headshot, I can give you a specific day. I would point without hesitation and directly to Reagan’s breaking of the Air Traffic Controller’s union.
That decision signaled to every CEO and Board on WS that gov’t wouldn’t interfere with union busting and the rest is a sad history. If you didn’t need to negotiate with a union that represented some of the most intense work on the planet, with lives in the balance every minute of every day, when would you need to?
From that moment on, management had a get out of jail free card they could use to walk away from any negotiating table. And they popped champagne corks in every boardroom of every union industry in the country. It might have taken a few years for them to play the cards but they knew they had them and that was all that mattered.
And at the end of a decades long battle, all that will have been won is to have made a few thousand people very rich while gutting a nation’s long-term economic health. Nicely done, Saint Ronnie.February 12, 2013 at 10:55 pm #784448
Very lyrical, wake. And now, in that same spirit, I have a riddle for you.
What do you call a Dreamliner in the rain?February 12, 2013 at 11:14 pm #784449February 12, 2013 at 11:30 pm #784450
funkietooParticipantFebruary 14, 2013 at 3:54 am #784451
Nice try DBP but I’m not gonna be the one to out your moist airplane!
I will however suggest an alternative: How about Sparky?February 14, 2013 at 3:15 pm #784452
I was hiking somewhere up north a few years back and had a conversation with someone who claimed to be one of the chief engineers on the Dreamliner project. He was complaining about the impossible timeline from design to production, and the numerous shortcuts being taken to get there sooner. Have to say, it was not a reassuring conversation.February 14, 2013 at 4:12 pm #784453
Yes, the MODERN, integrated, world-class management version of Boeing was attempting to recreate the magic of the “Impossibles” who built the 747 in an amazingly short time. Quite a feat it was, and done with everyone from the factory floor folks all the way up to the tippy top pitching in. And all co-located for the most part.
787? Not so much.
Way underestimated efforts for everything in design, manufacturing and integration. With virtually all of it dispersed around the globe.
They’ll get it straightened out eventually. The question is, how do they approach things going forward now that they’ve got egg on their faces and spent billions over budget??
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