The burden of the 787

There are now two Boeings, New Boeing and Legacy Boeing. The 787 carries the burden of proving that the death of the old company was worth the price of crafting the new one.

Good thing we'll have some of these to sell.

Good thing we'll have some of these to sell. Boeing Company

This week, there's yet another delay in the delivery date of Boeing's new 787 Dreamliner, a nightmare of a project that is already three years late and an emblem of the troubles besetting New Boeing. Awkwardly for such a forward-thinking enterprise, the company had previously said that it will never do that again even before the first plane is out the door.

We say New Boeing because people in Seattle have a history with the company, and have lived with and through its changes. The old-school Boeing we remember, now referred to semi-officially as "Legacy Boeing," is kind of like Classic Coke: a brand loved in part for what it is not. Your daddy's Boeing is not New Boeing, the aircraft company whose internal cultural struggles are exemplified by a plane that can't quite get off the ground. It was a plane that was supposed to embody the embrace of globalization, but perhaps found that too heavy a load to bear.

The old Boeing — big, paternalistic, risk-taking, engineer-driven — did not die without help. It was the victim of a kind of self-administered corporate death panel, a series of executive decisions driven by changes in the corporate world and the global market place. That struggle is documented in a fascinating new study, Turbulence: Boeing and the State of American Workers and Managers (Yale University Press, 2010) by Edward S. Greenberg, Leon Grunberg, Sarah Moore, and Patricia B. Sikora. It's the result of an academic study of a cohort of workers at Boeing's Commercial Airplane Division from 1997 through 2006. Using employee interviews and surveys, the authors have compiled a qualitative and quantitative view of what Boeing workers have been through, and how they've coped with change.

The authors are quick to point out that Boeing went through change that has been typical of American industries competing in a new world. Indeed, Boeing seems like the perfect case study. Like many other corporations, it adopted change designed to radically alter its internal culture.

There was a wave of Toyotaization — a determination to eliminate waste and maximize efficiency. There was the Total Quality Management boomlet; there was the merger with (some say takeover by) McDonnell-Douglas. There was the shift from Boeing as a "family" to the new concept of "team." There was a determined effort to change the way planes were conceived and built, shifting from hand-crafting to computers, from customization (reportedly 1,000-plus versions of a 747 bulkhead) to the 787's uniform "snap together" mode, from relying on in-house talent to outsourcing.

There were also efforts to make the company less lazy, sexist, racist, and corrupt. Former Boeing CEO T. Wilson was once asked how many people worked at Boeing and replied, "About half of them." The bureaucracy of old Boeing, its good 'ol boy culture, and its bribery scandals are often lost in the haze of nostalgia for what was good: the right stuff attitude, the commitment to quality and craftsmanship, the sense that Boeing took care of its people with great pensions, healthcare, and loyalty.

And, along with everyone else, Boeing had to adapt to competition, strikes, layoffs and downturns, and rapid technology shifts.

But something was lost in transformation. The succession of new management fads made employees cynical and created new competitive cliques. The shift from being a Boeing family made many feel uncared for, and even blamed. Some workers bristled at having to take mandatory ethics classes when it was Boeing's top brass who were implicated in scandals. Already somewhat used to job insecurity from cyclical layoffs, employees now had to contend with an attitude that was focused not on nurturing or mentoring workers, but a new landscape of balkanized teams that, according to one, operated on a "shoot the wounded" basis. Instead of Boeing pride, workers were exhorted to put shareholders first. It was a conscious decision to back-seat the engineering culture. 

As Boeing CEO Harry Stonecipher, who had headed McDonnell-Douglas, said at a Seattle Rotary meeting in 1998, employees at Boeing had to "quit behaving like a family and become more like a team. If you don't perform, you don't stay on the team." That, according to the authors of Turbulence, caused some to believe an unbreakable bond had been broken.


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Comments:

Posted Wed, Jan 19, 8:54 a.m. Inappropriate

First, understand that "McDonnell Douglas" was McDonnell, and then added Douglas. Second, "McDonnell Douglas" stopped being "McDonnell Douglas" when John F. McDonnell took over from "Sandy" McDonnell. That's when TQMS came in, the A-12 was cancelled, they lost the F-22/F-23 competition, and let that offensive jackass Stonecipher in, all in the space of a couple of years.

That said, Boeing, or "McBoeing" if you insist, has done its share of self-mutilation. They promote unprepared, unseasoned people into positions of authority in the name of "diversity" (and this isn't a racist arguement, it is an engineering one based on personal observation. It creates more easily pliable engineering managers, who if they have an ounce of sense recognize that they now have to "go along to get along"), depend on the ignorance of the public as to how much of their tanker is "American", and disregard the advice of suppliers based on super-irrational (and totally misplaced) arrogance.

Compare their performance on the 777 and the 787. What stands out most clearly is the assumption of huge risks over the objection of engineers and outsourcing across the entire planet in the (now vain and shattered) hope of saving a nickle. Has anyone who was part of the decision-making process been fired? Why not?

I wouldn't fly on a 787 until they have at least 5 years in service. Keep watching the skies.

Posted Wed, Jan 19, 9:09 a.m. Inappropriate

I don't see how you can tell this tragic story without mentioning Phil Condit, the little engineer that couldn't. As Ron Woodard famously quipped, McDonnell-Douglas bought the company with Boeing's own money. That's Phil's legacy.

woofer

Posted Wed, Jan 19, 9:33 a.m. Inappropriate

Another factor that contributes to Boeing's dysfunctional operation ( neither mentioned in the article nor in the Turbulence book ) is the following:

The work environment for Boeing's engineering, software development, and other technical people is extremely crowded, noisy and distracting.

As a result, work takes much longer to complete, more mistakes are made, and it is more difficult for Boeing to attract and retain the best people.

I believe that this issue deserves much more attention than it has been getting, especially for a company that makes airplanes.

NURBS

Posted Wed, Jan 19, 10:44 a.m. Inappropriate

Well Nurbs,

If they'd actually build some decent engineering buildings instead of the atrium laced hell holes that are the towers (40-88 and 40-87) it would be a start. The echoing (and squeaky escalators) in here is horrendous.

planetes

Posted Wed, Jan 19, 10:45 a.m. Inappropriate

Want to see the old Boeing in action? Look no further than Ford Motor Company. Alan Mulally took with him the culture of "bet the company and win" with him to Ford.

The new Boeing is like New Coke, a failure. They obviously aren't going back 100% to the old build it in house, but the outsourcing of critical pieces has been been a total management failure.

GaryP

Posted Wed, Jan 19, 10:47 a.m. Inappropriate

"TQMS" I remember that era well. It translated for McDonald Douglas employees to "Time to Quit and Move to Seattle"... little did they know that it wouldn't matter.

GaryP

Posted Wed, Jan 19, 10:58 a.m. Inappropriate

"Quatermass" writes" "First, understand that 'McDonnell Douglas' was McDonnell, and then added Douglas. Second, 'McDonnell Douglas' stopped being 'McDonnell Douglas' when John F. McDonnell took over from 'Sandy' McDonnell. [Then they] let that offensive jackass Stonecipher in..."

Which team was in charge when DC-10s were dropping out of the skies like bats in a wind farm? Are any of those executives working on the 787 program?

dbreneman

Posted Wed, Jan 19, 12:52 p.m. Inappropriate

The 777 was also heavily outsourced, but enjoyed a highly integrated problem-solving engineering culture. Program leaders encouraged coordination, made detailed plans and tracked progress closely, brought in all major stakeholders, built relationships of trust and confidence and demanded that bad news travel upward where practical solutions could be developed as early in the program as possible.

For the 787, multiply all that by -1.

In the 787 program, Boeing turned its back on technical competence, and placed its bet on market efficiency.

Sorscher

Posted Wed, Jan 19, 10:52 p.m. Inappropriate

How much did they sink in to the ill conceived Sonic Cruiser program, to produce a plane that would have burned 40 percent more fuel to go ten (or less,) percent faster? Only people who believed oil would stay at 10 bucks a barrel forever could have believed in it. Nutty...

Posted Thu, Jan 20, 2:11 p.m. Inappropriate

In terms of "family" and "team", the "contentious strike by white collar engineers" was a Boeing Family Affair resulting from the Condit/Stonecipher effort to break the SPEEA union and push their "team" agenda. Surprisingly the "family" of engineers struck back in unexpected solidarity. SPEEA has grown in size and strength ever since and remains a bastion of strength for what's left of "family" at The Boeing Company.

Madison

Posted Thu, Jan 20, 9:39 p.m. Inappropriate

It's hard to be the first anything, like Boeing has been for decades. But this article was it: the first Mossback piece I've actually finished and enjoyed. Thanks for the insightful assessment of an industry leader in the region.

Posted Thu, Jan 20, 10:04 p.m. Inappropriate

Having spent most of my career at Boeing as an engineer, I find many of the points in this article ones that I could testify to, having witnessed the witless upper management attempts to manage the share value rather than the products we built. Boeing was built on engineering products that are the result of many, many compromises, but it was engineering that carried the day, supported by knowledgible management that trusted it's engineering staff. My hope is that the 787 fiasco (3 years behind schedule, poor quality vendors, buying their way back into some of the off-loaded manufacturing, etc.) is teaching them a lesson. Let's hope they are learning it!

Bsquared

Posted Thu, Jan 20, 10:45 p.m. Inappropriate

Oh where to begin...

First and foremost, the 787 Program needs to be considered in the context of the financial expectations of Wall Street that existed at the time of launch. With a now combined Boeing-McDonnell Douglas board and with an ex-General Electric executive at the helm (Stonecipher), there was an expectation that the 787 needed to avoid the past excesses of the 777 Program. The biggest problem of the 777 was that the non-recurring costs associated with the engineering, tooling and facilities required when an airplane is designed were very high and had a detrimental affect on Boeing's balance sheet.

The solution was to out-source the design using a Partner business model where rather than Boeing carrying the non-recurring costs on its books, the suppliers carry the costs instead. With this being the situation, every decision was made with an eye towards minimizing Boeing's capital expenditures and passing the cost of the investment to the suppliers.

The basis for this approach was the McDonnell Douglas MD-95 airplane program. The MD-95 was an updated version of the DC-9 incorporating a new flight deck and new engines. One thing that it did not do though was to incorporate any significant structural changes or system architecture changes. When the MD-95 was launched, McD-D sought overseas risk sharing partners to offset the costs. The Program was very successful in that regard. And with no structural changes or changes in how the airplane was manufactured, the MD-95 Partners were able to complete the manufacturing. Of course, this was to be expected. McDonnell Douglas had for many years notoriously underinvested in the Douglas product line and the airplane no longer was technologically advanced either structurally or aerodynamically. The MD-95 Partners were essentially building an airplane from the same drawings that the DC-9 was built from. It was 1960s technology. One should also remember that McDonnell Douglas used the threat of moving final assembly to Texas to wring labor concessions out of the Long Beach unions. The airplane though was not a hit with the airlines just as the MD-11 had not been a major success either.

So after Stonecipher famously makes his 1998 team-vs-family speech, it is now time to execute the MD-95 strategy on the 787 Program. And it fails. It fails for many reasons. Too short of a schedule. Too many non-airplane managers on the program. Poor work statement development. Failure to obtain firm contracts. Supply chain problems. But probably the biggest reason it fails is because Stonecipher failed to realize that building something new is hard and that it takes a unique skill set. It is easy building an airplane that has been built before, i.e. MD-95. It is difficult to design something that works from a blank piece of paper, or in this case, a blank computer screen.

Posted Fri, Jan 21, 11:36 a.m. Inappropriate

I too stumbled on the Team / Family concept. So I read closer. Harry Stonecipher said:"Quit behaving like a family and become more like a team. If you don't perform, you don't stay on the team." Basically you don't get to pick your family, you learn to deal and work with them. I have seen an administrator rip the core out of company's with that new age "team" think. It is "Do what I say or move on!"
My other observation is, that when you lose sight of your product, you lose the company. Wall street manipulations for the stockholders are part of the reason we are losing our manufacturing base.

dman

Posted Fri, Jan 21, 2:47 p.m. Inappropriate

They moved headquarters to Chicago and outsourced the 787, both big mistakes, but I think the end of the Cold War and the loss of the "Senator from Boeing" would have made time difficult for anybody.

DannyK

Posted Sun, Jan 23, 4:40 p.m. Inappropriate

The problem with this country is that all businesses have broken with that part of the best part of our economic strength were those people with the Apollo 13 attitudes.

They were given the reigns of making products mostly on US soils, with people they could meet and talk to, and rely on. They knew the people in another state were as reliable, as smart, and as inventive as them. They knew all about survival, having survived 2 world wars, the Korean war, and the Vietnam war.

Because they knew deep inside, that they could do it, they did it.

Today is different. No one is allowed to think, to create, to spark an idea. Profit and tedious delays run everything in nearly every company into the ground.

How are the technology companies of today collecting such huge piles of money? Because no one is in their face telling them what not to do, because nearly all of it is still cutting edge.

Posted Sun, Jan 23, 5:40 p.m. Inappropriate

Most of the comments are very true; the newspaper report is true also, the book if well is a bit outdated, is an uncovering reality, the company's tax relief granted by then WA. governor Gary Locke, was more an agreement to subside WA. State than rather to help in order to promote, inside of the 787's "company", as one of the readers mention, there is NO control of anything, no one dares to "make waves", it is all about to keep the job until I can, Engineering Planning, Quality, along with Management, are 100% "divorced" of each other, index fingers point in all directions; what do you call a 21 years old "kid" who is promoted to Supervisor?, what help can you expect from someone who never had any experience in airplanes and now is a Lead person?, what you can expect from a female foreign born and still "fresh" in the control of the English Language and now is a Quality Inspectress?, so if you complain to the Manager, he tells: "they will learn", yes indeed, everybody learn, always is true, but WE are building an airplane capable of carrying more than 300 people at about 30,000 feet, is that all about EOE?,, hell NO!, aviation as I knew all my life was about SKILL and SAFETY, right now YOU cannot expect that out of the 787 program in no how, a lot of females employees started as a "MT", Manufacturing Technician, no longer after, a lot of them are MANAGERS now, some are LEAD persons, yes indeed, "they will learn"; TIME will tell when the -result- of all this take an undesireable toll.

JULIO

Posted Thu, Jan 27, 11:11 a.m. Inappropriate

I finished Turbulence last nite (read it on my K3). We have been involved in the acquisition and conversion of used Boeing airliners since the early 1970s. We were on Boeing's Contractor's List and attended Boeing Traning Courses, bought Tech material and attended most of the Special Meetings up to 2000. The new team decided they didn't need our "type" because they had IDS. But that could be a story in it's self!

We were involved with Head of State, VIP, garden variety business jets and some very interesting DARPA projects.

We worked with "uncle Phil's blessing on several projects and had received a "No technical objection" on a 707 re-engineing project for a Saudi project. Re turbulence . . . Don't overlook the Appendix material. There are answers and more questions raised. I'm going thru them now. Check our Newsletter at "Tatsco" later today or Monday. No registration, no comment block just read it and send us your thoughts. We will respond to every message. BTW, I got lost in all the stuff about TEAMs at Boeing. I'm old fashion . . . I thought Teams were about winning the game . . . Not Changing The Game.

The Change needed at Boeing is to retire Jm McNery(sp?) and let Albaugh try it for a while. He has made some very frank statements lately! Oh, by the way, close the Chicago offices.

Yours in Safety,

Jim Helms
Serving in Civil Aviation since 1955

tatsco

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