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Maverick

Where Boeing went wrong.

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1 hour ago, Maverick said:

I couldn’t cut and paste this without it being a complete mess. 

Here you go. 

The Long-Forgotten Flight That Sent Boeing Off Course

A company once driven by engineers became driven by finance.0

The isolation was deliberate. “When the headquarters is located in proximity to a principal business—as ours was in Seattle—the corporate center is inevitably drawn into day-to-day business operations,” Condit explained at the time. And that statement, more than anything, captures a cardinal truth about the aerospace giant. The present 737 Max disaster can be traced back two decades—to the moment Boeing’s leadership decided to divorce itself from the firm’s own culture.

For about 80 years, Boeing basically functioned as an association of engineers. Its executives held patents, designed wings, spoke the language of engineering and safety as a mother tongue. Finance wasn’t a primary language. Even Boeing’s bean counters didn’t act the part. As late as the mid-’90s, the company’s chief financial officer had minimal contact with Wall Street and answered colleagues’ requests for basic financial data with a curt “Tell them not to worry.”

By the time I visited the company—for Fortune, in 2000—that had begun to change. In Condit’s office, overlooking Boeing Field, were 54 white roses to celebrate the day’s closing stock price. The shift had started three years earlier, with Boeing’s “reverse takeover” of McDonnell Douglas—so-called because it was McDonnell executives who perversely ended up in charge of the combined entity, and it was McDonnell’s culture that became ascendant. “McDonnell Douglas bought Boeing with Boeing’s money,” went the joke around Seattle. Condit was still in charge, yes, and told me to ignore the talk that somebody had “captured” him and was holding him “hostage” in his own office. But Stonecipher was cutting a Dick Cheney–like figure, blasting the company’s engineers as “arrogant” and spouting Harry Trumanisms (“I don’t give ’em hell; I just tell the truth and they think it’s hell”) when they shot back that he was the problem.

 

McDonnell’s stock price had risen fourfold under Stonecipher as he went on a cost-cutting tear, but many analysts feared that this came at the cost of the company’s future competitiveness. “There was a little surprise that a guy running a failing company ended up with so much power,” the former Boeing executive vice president Dick Albrecht told me at the time. Post-merger, Stonecipher brought his chain saw to Seattle. “A passion for affordability” became one of the company’s new, unloved slogans, as did “Less family, more team.” It was enough to drive the white-collar engineering union, which had historically functioned as a professional debating society, into acting more like organized labor. “We weren’t fighting against Boeing,” one union leader told me of the 40-day strike that shut down production in 2000. “We were fighting to save Boeing.”Egineers were all too happy to share such views with executives, which made for plenty of awkward encounters in the still-smallish city that was Seattle in the ’90s. It was, top brass felt, an undue amount of contact for executives of a modern, diversified corporation.

 

One of the most successful engineering cultures of all time was quickly giving way to the McDonnell mind-set. Another McDonnell executive had recently been elevated to chief financial officer. (“A further indication of who in the hell was controlling this company,” a union leader told me.) That, in turn, contributed to the company’s extraordinary decision to move its headquarters to Chicago, where it strangely remains—in the historical capital of printing, Pullman cars, and meatpacking—to this day.

If Andrew Carnegie’s advice—“Put all your eggs in one basket, and then watch that basket”—had guided Boeing before, these decisions accomplished roughly the opposite. The company would put its eggs in three baskets: military in St. Louis. Space in Long Beach. Passenger jets in Seattle. And it would watch that basket from Chicago. Never mind that the majority of its revenues and real estate were and are in basket three. Or that Boeing’s managers would now have the added challenge of flying all this blind—or by instrument, as it were—relying on remote readouts of the situation in Chicago instead of eyeballing it directly (as good pilots are incidentally trained to do). The goal was to change Boeing’s culture.

 

And in that, Condit and Stonecipher clearly succeeded. In the next four years, Boeing’s detail-oriented, conservative culture became embroiled in a series of scandals. Its rocket division was found to be in possession of 25,000 pages of stolen Lockheed Martin documents. Its CFO (ex-McDonnell) was caught violating government procurement laws and went to jail. With ethics now front and center, Condit was forced out and replaced with Stonecipher, who promptly affirmed: “When people say I changed the culture of Boeing, that was the intent, so that it’s run like a business rather than a great engineering firm.” A General Electric alum, he built a virtual replica of GE’s famed Crotonville leadership center for Boeing managers to cycle through. And when Stonecipher had his own career-ending scandal (an affair with an employee), it was another GE alum—James McNerney—who came in from the outside to replace him.

As the aerospace analyst Richard Aboulafia recently told me, “You had this weird combination of a distant building with a few hundred people in it and a non-engineer with no technical skills whatsoever at the helm.” Even that might have worked—had the commercial-jet business stayed in the hands of an experienced engineer steeped in STEM disciplines. Instead McNerney installed an M.B.A. with a varied background in sales, marketing, and supply-chain management. Said Aboulafia, “We were like, ‘What?’’’

 

The company that once didn’t speak finance was now, at the top, losing its ability to converse in engineering.

It wasn’t just technical knowledge that was lost, Aboulafia said. “It was the ability to comfortably interact with an engineer who in turn feels comfortable telling you their reservations, versus calling a manager [more than] 1,500 miles away who you know has a reputation for wanting to take your pension away. It’s a very different dynamic. As a recipe for disempowering engineers in particular, you couldn’t come up with a better format.”

And in some of the internal exchanges now coming to light, you can see the level of estrangement among engineers, operators, and executives that resulted. A Boeing vice president, Mike Sinnett, told American Airlines pilots that the MCAS software system implicated in the 737 Max crashes didn’t have “a single-point failure,” as reported—asserting that the pilots themselves constituted a second point of backup—showing both a misunderstanding of the term and a sharp break from Boeing’s long-standing practice of having multiple backups for every flight system. Meanwhile, experienced Boeing engineers rolled their eyes as some software-development tasks (not specific to MCAS) were outsourced to recent college grads earning as little as $9 an hour, who were employed by an Indian subcontractor set up across from Seattle’s Boeing Field.

The current Boeing CEO, Dennis Muilenburg, is being pilloried for his handling of the disaster, and accused of harming the company by prioritizing profit. But the criticism misses the point, Aboulafia told me. “The difference between doing MCAS right and MCAS wrong was not an economic thing. It’s a culture thing.”

Some errors you see only with the magnifier of hindsight. Others are visible at the time, in plain sight. “If in fact there’s a reverse takeover, with the McDonnell ethos permeating Boeing, then Boeing is doomed to mediocrity,” the business scholar Jim Collins told me back in 2000. “There’s one thing that made Boeing really great all the way along. They always understood that they were an engineering-driven company, not a financially driven company . If they’re no longer honoring that as their central mission, then over time they’ll just become another company.”

It’s now clear that long before the software lost track of its planes’ true bearings, Boeing lost track of its own.

 

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When money becomes the primary focus.  Everything else is ignored to the point there is no money left.

 

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FMEA process and Boeing - some history, (January 25, 2013), specifically regarding batteries. The article does not mention an early, serious battery issue with the ELT - AAIB Report.

What Went Wrong with Boeing's 787 Dreamliner

The production of the jet that was eventually dubbed the Dreamliner was plagued with manufacturing delays, cost overruns and sinking worker morale.

By SCOTT MAYEROWITZ

Published Jan 25, 2013 at 6:07 AM | Updated at 6:49 AM CST on Jan 25, 2013

AP

An All Nippon Airways flight sits at Takamatsu airport in Takamatsu, western Japan after it made an emergency landing Wednesday, Jan. 16, 2013. The flight to Tokyo from Ube in western Japan landed at the airport after a cockpit message showed battery problems, in the latest trouble for the Boeing 787 Dreamliner.

The 787 Dreamliner was born in a moment of desperation.

It was 2003 and Boeing — the company that defined modern air travel — had just lost its title as the world's largest plane manufacturer to European rival Airbus. Its CEO had resigned in a defense-contract scandal. And its stock had plunged to the lowest price in a decade.

Two years after the 9/11 terrorist attacks, financially troubled airlines were reluctant to buy new planes. Boeing needed something revolutionary to win back customers.

Salvation had a code name: Yellowstone.

It was a plane that promised to be lighter and more technologically advanced than any other. Half of it would be built with new plastics instead of aluminum. The cabin would be more comfortable for passengers, and airlines could cut their fuel bills by 20 percent.

But once production started, the gap between vision and reality quickly widened. The jet that was eventually dubbed the Dreamliner became plagued with manufacturing delays, cost overruns and sinking worker morale.

In interviews with The Associated Press, a dozen former Boeing engineers, designers and managers recounted the pressure to meet tight deadlines. Adding to the chaos was the company's never-before-tried plan to build a plane from parts made around the globe.

The former Boeing workers still stand behind the jetliner — and are proud to have worked on it. But many question whether the rush contributed to a series of problems that led the Federal Aviation Administration last week to take the extraordinary step of grounding the 787. Other countries did the same.

Even before a single bolt was tightened, the Dreamliner was different. Because executives didn't want to risk all of the billions of dollars necessary to build a new commercial aircraft, they came up with a novel, but precarious, solution.

A global network of suppliers would develop, and then build, most of the parts in locations as far away as Germany, Japan and Sweden. Boeing's own employees would manufacture just 35 percent of the plane before assembling the final aircraft at its plant outside Seattle.

The decision haunts Boeing to this day.

The FAA's order to stop flying the Dreamliner came after a battery fire aboard a 787 in Boston and another battery incident during a flight in Japan. It was the first time the FAA had grounded a whole fleet of planes since 1979, when it ordered the DC-10 out of the sky following a series of fatal crashes.

Inspectors have focused on the plane's lithium-ion batteries and its complicated electrical system, which were developed by subcontractors in Japan, France, Arizona and North Carolina.

Boeing declined to comment about the past but said its engineers are working around the clock to fix the recent problems.

"Until those investigations conclude, we can't speculate on what the results may be," the company said in a statement. "We are confident the 787 is safe, and we stand behind its overall integrity."

For decades, Boeing has been responsible for the biggest advances in aviation. The jet age started in 1958 with a Pan American flight between New York and Paris that took just eight and a half hours aboard the new Boeing 707.

In 1970, Boeing ushered in the era of the jumbo jet with the 747. The giant plane, with its distinctive bulbous upper deck, made global air travel affordable. Suddenly a summer vacation in London wasn't just for the rich.

By the start of the 21st century, change was much more incremental. Consolidation had left the world with two main commercial jet manufacturers: Boeing and Airbus.

Boeing executives initially had not considered government-backed Airbus a serious competitor. But in 2003, the unthinkable happened. Boeing delivered just 281 new jets. Airbus produced 305, becoming for the first time the world's biggest plane manufacturer.

American jobs — and pride — were at stake.

And that wasn't all. Airbus was starting to develop its own new jet: the A380, the world's largest commercial plane, capable of carrying up to 853 passengers, or the equivalent of at least five Boeing 737s.

"They were scaring everybody," said Bryan Dressler, who spent 12 years as a Boeing designer. "People here in Seattle have been through the booms and busts of Boeing so many times, even the slightest smack of a downturn makes people very edgy."

Airbus believed that larger airplanes were needed to connect congested airports in the world's largest cities. Boeing executives weren't so sure.

They believed airline passengers would pay a premium to avoid those same congested hubs with long nonstop flights between smaller cities. Now they just needed to develop a plane that would somehow make such trips economical.

It had been 13 years since Boeing started development of a new plane, the 777. The company had recently scrapped two other major projects: a larger version of the 747 and the Sonic Cruiser, a plane that would fly close to the speed of sound.

A development team with a knack for assigning new planes code names based on national parks had just the thing: Project Yellowstone.

The plane — eventually rechristened the Dreamliner after a naming contest — was unlike anything else previously proposed.

Half of its structure would be made of plastics reinforced with carbon fiber, a composite material that is both lighter and stronger than aluminum. In another first, the plane would rely on rechargeable lithium-ion batteries to start its auxiliary power unit, which provides power on the ground or if the main engines quit.

While other planes divert hot air from the engines through internal ducts to power some functions, the 787 uses electricity. Getting rid of those ducts is one thing that makes the plane lighter.

There were also benefits for passengers. The plane's extra strength allowed for larger windows and a more comfortable cabin pressure. Because composites can't corrode like aluminum, the humidity in the cabin could be as much as 16 percent, double that of a typical aircraft. That meant fewer dry throats and stuffy noses.

Before a single aircraft was built, the plane was an instant hit, becoming the fastest-selling new jet in history. Advance orders were placed for more than 800 planes. Boeing seemed to be on its way back.

"Employees knew this was going to be a game changer, and they were stoked that the company was taking the risk to do something big," said Michael Cook, who spent 17 years as a computer developer at Boeing.

But this was no longer the trailblazing, risk-taking Boeing of a generation earlier. The company had acquired rival McDonnell Douglas in 1997. Many McDonnell Douglas executives held leadership positions in the new company. The joke was that McDonnell Douglas used Boeing's money to buy Boeing.

The 707 and 747 were blockbuster bets that nearly ruined the company before paying off. McDonnell Douglas executives didn't have the same appetite for gambling.

So the only way the board of directors would sign off on the Dreamliner was to spread the risk among a global chain of suppliers. In December 2003, they agreed to take on half of the estimated $10 billion development cost.

The plan backfired as production problems quickly surfaced.

"I saw total chaos. Boeing bit off more than it could chew," said Larry Caracciolo, an engineer who spent three years managing 787 supplier quality.

First, there were problems with the molding of the new plastics. Then parts made by different suppliers didn't fit properly. For instance, the nose-and-cockpit section was out of alignment with the rest of the plane, leaving a 0.3-inch gap.

By giving up control of its supply chain, Boeing had lost the ability to oversee each step of production. Problems sometimes weren't discovered until the parts came together at its Everett, Wash., plant.

Fixes weren't easy, and cultures among the suppliers often clashed.

"It seemed like the Italians only worked three days a week. They were always on vacation. And the Japanese, they worked six days a week," said Jack Al-Kahwati, a former Boeing structural weight engineer.

Even simple conversations between Boeing employees and those from the suppliers working in-house in Everett weren't so simple. Because of government regulations controlling the export of defense-related technology, any talks with international suppliers had to take place in designated conference rooms. Each country had its own, separate space for conversations.

There were also deep fears, especially among veteran Boeing workers, that "we were giving up all of our trade secrets to the Japanese and that they would be our competition in 10 years," Al-Kahwati said.

As the project fell further behind schedule, pressure mounted. It became increasingly clear that delivery deadlines wouldn't be met.

Each success, no matter how small, was celebrated. The first delivery of a new part or the government certification of an engine would lead to a gathering in one of the engineering building atriums. Banners were hung and commemorative cards — like baseball cards — or coins were handed out.

Those working on the plane brought home a constant stream of trinkets: hats, Frisbees, 787 M&Ms, travel mugs, plane-shaped chocolates, laser pointers and lapel pins. Many of the items can now be found for sale on eBay.

"It kept you going because there was this underlying suspicion that we weren't going to hit these targets that they were setting," said Matt Henson, who spent five and a half years as an engineer on the project.

The world got its first glimpse of the Dreamliner on July 8, 2007. The date was chosen not because of some production milestone but for public relations value. It was, after all, 7/8/7.

Tom Brokaw served as the master of ceremonies at an event that drew 15,000 people. The crowd was in awe.

It was "beyond experiencing a rock star on stage," said Dressler, a former Boeing designer. "This thing is so sexy, between the paint job and the lines and the fact that it's here now and you can touch it."

But like so much of show business, the plane was just a prop. It lacked most flight controls. Parts of the fuselage were temporarily fastened together just for the event. Some savvy observers noted that bolt heads were sticking out from the aircraft's composite skin.

Boeing CEO Jim McNerney told the crowd that the plane would fly within two months.

Instead, the company soon announced the first of what would be many delays. It would be more than two years before the plane's first test flight.

To overcome production problems, Boeing replaced executives and bought several of the suppliers to gain greater control. Work continued at breakneck pace.

"We were competing against time. We were competing against the deadline of delivering the first airplane," said Roman Sherbak, who spent four years on the project.

Then on a cold, overcast morning in December 2009, it all came together.

A crowd gathered at Paine Field, the airport adjacent to Boeing's factory. The Dreamliner climbed deftly into the sky for a three-hour test flight.

But there were still plenty of glitches, including an onboard fire during a November 2010 test flight. Smoke had entered the cabin from an electronics panel in the rear of the plane. The fleet was grounded for six weeks. This month's safety problems appear unrelated.

Deliveries were pushed back yet again.

Passengers wouldn't first step aboard the plane until Oct. 26, 2011, three and a half years after Boeing first promised.

That first, four-hour journey — from Tokyo to Hong Kong — was more of a party than a flight. Passengers posed for photos as they climbed stairs into the jet. Alcohol flowed freely. Boeing executives were on hand, showing off the plane's new features. Everybody, it seemed, needed to use the bathroom if only to check out the bidet and giant window inside.

More airlines started to fly the plane. Each new route was met with celebration. Travelers shifted itineraries to catch a ride on the new plane.

Boeing had hoped by the end of 2013 to double production of the Dreamliner to 10 planes a month. There are 799 unfilled orders for the plane, which carries a $206.8 million list price, although airlines often negotiate deep discounts.

Then, this month, all the progress came to a jarring halt.

First, a battery ignited on a Japan Airlines 787 shortly after it landed at Boston's Logan International Airport. Passengers had already left the plane, but it took firefighters 40 minutes to put out the blaze.

Problems also popped up on other planes. There were fuel and oil leaks, a cracked cockpit window and a computer glitch that erroneously indicated a brake problem.

Then a 787 flown by Japan's All Nippon Airways made an emergency landing after pilots learned of battery problems and detected a burning smell. Both Japanese airlines grounded their Dreamliner fleets. The FAA, which just days earlier insisted that the plane was safe, did the same for U.S. planes.

Each new aircraft comes with problems. The A380 had its own glitches, including an in-flight engine explosion that damaged fuel and hydraulic lines and the landing flaps. But the unique nature of the 787 worries regulators.

American and Japanese investigators have yet to determine the cause of the problems, and the longer the 787 stays grounded, the more money Boeing must pay airlines in penalties.

"It's been a very expensive process, and it's not going to let up anytime soon," said Richard Aboulafia, an aerospace analyst with the Teal Group. "At this point, the aircraft still looks very promising. I don't think anybody is talking about canceling orders but people are nervous about the schedule."

As investigators try to figure out the cause of the plane's latest problems the world finds itself in a familiar position with the Dreamliner: waiting.

Copyright Associated Press

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