Boeing Says 787 Back on Track

The new chief of the 787 program at Boeing(BA Quote) says he has stepped up oversight of outsourced work on the widely anticipated aircraft, and he assured that the first delivery will occur on schedule late next year.

Boeing also said it can deliver 109 of the new aircraft in 2009, as projected, although it declined to offer specifics of the timetable. "We have not found any fundamental flaws in our production system design that would lead me to believe it's not doable," said Pat Shanahan, during a conference call with analysts and media.

Shanahan took over as vice president and general manager of the 787 program in October, replacing Mike Bair, shortly after Boeing said the first delivery would be pushed back by six months until November or December of 2008.

The first all-composite aircraft, the 787 is distinguished by several factors -- high fuel efficiency, low maintenance, long range, even longer delays in the development of its only competitor, the Airbus A350, and the good fortune to be coming to market as the airline industry enters a period of unprecedented globalization.

However, at this point, Boeing has encountered postponements in a complex, newly designed manufacturing process involving outsourcing to contractors scattered around the world.

In response, Shanahan developed an exacting management method with daily meetings "in a factory within yards of the first airplane," followed by nightly three-to-four-hour meetings with senior officers "to ensure the right processes are being followed and proper discipline is in place.

"The biggest constraint continues to be the traveled work," Shanahan said. "I've spent much of my time redesigning the process so we can accomplish that traveled work, [and] we're starting to turn the corner here."