787 Dreamliner teaches Boeing costly lesson on outsourcing

Reading this story doesn't give you a real feeling of comfort about flying on this airplane. I think I'll wait until it's been in service awhile.

better than any airbus they have tried to fly through the weeds. i would be the first paying passenger on the first revenue 787 flight if i could afford it.

Not entirely sure, TTail.

To be blunt, Boeing took a punt on doing the same thing that Airbus had done, and it cost them dearly; in time, money (funding, and penalties), and their reputation. They now know what Airbus has gone through in relation to composites and getting them from multiple resources.

Having seen the B787 up close and personal, I can guarantee that it flies, but the price it cost to get it to fly (read: QUALITY) has cost Boeing.

There is no question that either Boeing or Airbus makes safe airplanes.....the question lies in the costly and time consuming ways of production

Lets see if Boeing can learn from this on the clean-sheet 737 replacement!
Service entry planned for 2020...

I think Boeing learned some good lessons from the 787 program.
1) Engineering and constructing a composite aircraft is harder than you think.
2) Unions will kill you every time.

I will not be surprised the day they announce a complete shutdown of the Everett plant. They already figured out they can put the production line somewhere else for a lot less money.

Union SHMunions

If it means that the plane will be safer when it eventually flies, then I don't care how long it takes to build one.

It's not only the aerospace industry that's outsourcing, but also the auto industry and even our own government. The FAA found that privatizing control towers and Flight Service has actually cost the tax payer more in the long run, but then the bean counters in government and private industry as a whole, don't think long term. They are very short term thinkers.

Outsourcing for sales: The global outsourcing issue is a major political driver today, not the security of American (or more politically correct, "domestic") jobs and skills. Major point in case is the military tanker contract. Why on earth would such a valuable asset be outsourced? Building and sustaining our military capability should be paramount to national security, but we're willing to outsource (bid) it? The 787 is a technological wonder for sure, and yet another American vision that is a reality, but at a cost too great to keep repeating. We outsourced many of the 777 components to foreign entities as well, forcing many American suppliers, workers, and our next generation technical job market into bankruptcy. We, American, are not going to be able to bail out the world markets. Our industrial capabilities should be not only our single most protected national resource, but it should be recognized as a major component of our national security.

I think the most interesting part of the article is: "Among the least profitable jobs ... is final assembly — the job Boeing proposed to retain. But its subcontractors ... would hang on to the highly profitable business of producing spare parts over the decades-long life of the aircraft."

The financial impacts of subcontracting could be negative far in the future for them on this aircraft.

Chris13
I was wondering how long it would take someone to blame the 787 fiasco on the unions. No matter how you look at this problem, an honest person can't blame this one on the unions (creators of the middle class).

Unions have far out lived their primary purpose...realistic hours, REASONABLE wages, getting children out of the workplace, etc.. Whether it's a company or the government they have the "tail wagging the dog" and a "gun to everyones head". They alone have driven our manufacturing base out of the country.

A careful reading of the article does not blame the fiasco on the Unions but rather points out that the Unions were correct on one major point of contention - unbridled outsourcing effect on the company and the Country. pcraig seems more on point with the fact that the Rosie the Riveter, (my words), technological and industrial might of this Country in WW-II should not be given away through excessive outsourcing....particularly when our industrial capabilites are as important to our national security today as they were in WW-II

Mergers and Acquistions give us CEOs and CFOs that reside long enough for a cup of coffee.....quarterly thinking, make the stock go up, get my bonus and get out of dodge. Only the Japanese listened to Macolm Baldrige in the beginning

Everything works hand in hand to cause the problems and prevention. The only thing not working hand in hand is union and management. It is totally adversarial. If it isn't win big-lose big it isn't acceptable. Until the two can accept that they are interdependent there will be only further deterioration. Workers need management and management can only outsource everything to China until the Chinese say we will provide our own management now thank you very much .

Virtually every unionized industry in the US has been moved offshore as a result. Look at ship-building, textiles, footwear, autos, etc. Unions are greedy, self-egandizing, psuedo-extortionist and need to be treating like the imature children that they emulate. If anyone doubts this, read up on any of the industries list here. In 2001, I lost my job in a tech documentation company to out sourcing to India and the Philippines. Now the AMMs and MMs are mostly back in-house or US sourced because the corrections, graphacs, and re-writes costs were too high. It seems (to me) that the industry managed to bring the work back to non-union shops. This might be their salvation.

Boeing is so taken with itself they think they should be the only provider of aircraft in the world.....their poor performance and planning on this aircraft only brings to the fore that they are in reality a a third world aircraft company....Scares me to fly on their junk....

Yes yes, its the evil Unions that destroy everything - HOGWASH! If all the workers made management pay you would have to sell aircraft for Trillions each! I never hear the executives complain about the over inflated compensations they get.. But when a blue collar worker wants to keep his job and make a decent living at it, he's evil.

I think anyone who belies this is an idiot. At the end of the day, if we keep offshoring our jobs there wont be anyone left who makes any money in this country (other than CEO's and other executives and managers) to actually buy airline tickets, or buy cars, or anything else for that matter.

Even if outsourcing saves money, its a waste. Capitalism is good, very good! but its been perverted. There should be compassion in capitalism. Those who help build your company, and actually MAKE something, they are not the enemy, they are your colleagues. They are the team members that deserve a quality of life just like the rest of the executives. They don't ask for the biggest home, or the nicest car, but there is a moral contract... a contract to at least not use them, and then throw them away like refuse... ensuring they don't lay awake at night hoping they don't lose their job, their home and their car, lose their children's education or retirement. These guys have a contract with management, one that understands that leaders should have more, earn more, play more.. and they are okay with that. But when homes cost hundreds of thousands, and the average car costs 25k, and college costs 120K now and god knows how much for their kids in the future, they deserve to make enough.

So unions are necessary because without them, management would use and abuse their workers. And even with them this happens. This needs to change! Only then will our economy right itself

Oh, Beautiful, For Spacious Skies
For Amber Waves of Grain,
For Purple Mountains Majesties
Along the Fruited Plains.
America, America, God shed his grace on thee.
LET'S NOT KEEP FORGETTING THIS!
WAKE UP AMERICA, BEFORE IT IS TOO LATE.
Self Reliance and Ingenuity got us where we are,
But we seem to be slipping.

Just another aftermath of greed driven deregulation. Keep this up and we will all need to start speaking Chinese since they will shortly own everything in the United States.

Chris13: I can't believe you read the article before making your comments. Please read the article again.

Boeing was warned about the profitability and quality issues of relying so much on outsourcing by someone who had seen the same playbook used on the DC-10 at McDonnell-Douglas. That warning was ignored by top management. Unions had nothing to do with it.

That's something of a theme in this country. Tech bubble warnings: ignored. Housing bubble warnings: ignored. Outsourcing bubble warnings: ignored. Next up: budget-slashing-during-fragile-recovery bubble warnings!

Yes, unions are good. Just ask the parents of students in Wisc. You know, the ones that aren't in school because of the epidemic in 8 school districts that have them closed for 3 days. Funny though, only the teachers are sick. Seems to me that there are enough knowledgeable people to split from Boeing and create an improved company. That's been happening for decades but everyone's happy with the status quo so of course quality is the first thing to disappear. I'm sorry, I forgot if you don't work it's because you're not a union member. Yes, unions are good.

Unions are necessary evils - (not in every company) - just like I hate lawyers but will hire one if charged with a crime. You want to bring schools into it? fine. But don't use a specific example of anything to disprove a wide angle view. Is anyone here under the assumption that school teachers make too much money? Yes, I am sure there are a few single teachers you could come up with that make a lot, but as an industry... would you say they make too much? If not for the unions would they have what they have? If not for the power of collective bargaining would they get the benefits they were fighting for? its a resounding no! You want to talk about the inconvenience of a handful of days school was out of service compared to the amazing work these teachers do.. I am not a teacher, but thank god there are teachers out there so that I don't have to home school my kids! How much is that worth to you? Teaching your kids while you are too busy making a living.

The unions do not reduce quality, management trying to cut corners does. Whether its lowering a budget so that cheaper components must be used or because less people have to do more peoples work... maybe less rest... you want to tell me that a mechanic will do as good a job when he is dragging ass on hour 15? Or maybe you think its fair to tell people that the company won't pay overtime because its too expensive...but this project MUST be done tomorrow at midnight. So people have to work off the clock to get it done so that management doesn't get upset and fire them for going into overtime?

These employees deserve representation, and jobs should stay in this country. There should be a federal tax on all offshoring of jobs.. that way our own citizens can make enough money to actually survive and thrive and buy what we are selling.

Im happy Boeing got hurt financially. Maybe it will serve as a lesson to Boeing as well as other companies that offshoring of jobs is not the answer. Yes, they need to be competitive.. but lets not race to the bottom!

There are two models in capitalism
1. Cost based
2. Quality based

If everyone is focused on only cost, everyone will undercut eachother and no one makes money, has job security, etc etc.

Look at Audi.. they charge what they charge and they sell their cars. In fact, their sales are up 400 percent in the past few years DURING THE RECESSION!!! why? because quality is important, money is only part of the equation.

If you are one of these people who believe the only way to compete is by undercutting and being cheaper.... god help you and the rest of us whom you employ