NORTH CHARLESTON, S.C. -- The aerospace industry may come to view the second week of June as a turning point for Boeing ( BA), when the aircraft maker got its 787 Dreamliner back on track. If that is the case, the change will largely reflect improvements Boeing has made at its North Charleston complex, where two plants operated by suppliers produce 787 fuselage sections with parts shipped from around the world. At both plants, Boeing has stepped in to assure reliability. The story of Boeing's 787 delays has been told many times. The world, hungry for aircraft, eagerly awaits this model, which is 20% more fuel efficient than the comparably sized Boeing 767. But a series of embarrassing postponements have pushed back delivery of the first 787 from mid-2008 to the third quarter of 2009. On Tuesday, Boeing permitted a dozen reporters from around the country to tour the three-year-old North Charleston complex for the first time. The tour indicated, in the words of Joy Romero, vice president of the 787 program at Vought Aircraft Industries, that "Boeing is saying 'Look, yes, we had some problems, and we're getting over those problems.'" Boeing Steps Up Presence, Production On Wednesday, Boeing said it had completed a deal to acquire 50% of the joint venture that operates one of the North Charleston plants. On Thursday, Boeing said it had turned on the electrical power in the first 787 Dreamliner -- more than a year behind schedule, but nevertheless a key milestone signaling the start of critical systems testing that can be conducted only when the airplane has power.
Ideally, for Boeing, the week's events would bring a perceptual change resembling what happened when competitor Airbus took its A380 on tour for demonstration flights in the spring of 2007. Suddenly, the airplane's image went from colossal failure to engineering marvel, albeit one that fell two years behind its initial delivery schedule. Over the following eight months of 2007, Airbus received 33 new A380 orders, about a sixth of the total orders to date. So far, Boeing's share price does not reflect a turnabout in perception of the 787's progress. Delivery delays largely explain a decline from near $108 in July 2007. The stock was at $75 in recent trading Monday afternoon. Current trading also reflects the perceived possibility the U.S. Air Force may reconsider awarding a $35 billion contract for maintenance of refueling tankers to Northrop Grumman ( NOC) rather than Boeing. A Complex Process Gets Underway In retrospect, it seems Boeing was initially overly optimistic about the speed with which it could design and implement an innovative 787 production process, one that involved manufacturing and assembling components around the world, then shipping them to the company's home base in Everett, Wash., for final assembly. "Boeing anticipated a startup like others,
but this is the first time Boeing has not done a lot of the work it normally does," said Romero, a Boeing veteran who has run the Vought plant since October. Her predecessor resigned in June to pursue other opportunities. "We are building a complicated piece of machinery," Romero said. "Boeing is using an extensive model for supply chain and it has taken some time to work out. But it will come out fine."
The Vought plant assembles the rear section of the fuselage. An adjacent plant, which assembles the center section of the fuselage, is operated by Global Aeronautica, a 50-50 joint venture between Italy's Alenia Aeronautica and Boeing, which just completed a buyout of Vought's share. From its plant, Vought shipped its first section to Everett in May 2007. The shipment met Boeing's production schedule, but the section arrived with just 16% of its structure complete because so few of the parts had arrived in North Charleston. The section for the fourth aircraft was shipped June 6, with 98% of its structure and 87% of its systems complete. Two more completed fuselage sections are sitting in the Vought facility, waiting to be shipped but delayed because Boeing has slowed its production schedule. On Tuesday, a section for the 18th aircraft was placed into a huge autoclave, where it was heated and pressurized to cure the composite material into a hardened laminate, the final step before components are installed. At the Global Aeronautica plant, CEO Mario Capitelli said production quality is improving. Sections for five airplanes, including two test airplanes, have been delivered so far, and sections for three more are in the plant. When complete, each section has 440 wire bundles. The third airplane unit was delivered with less than 20; last week, workers had installed 300 bundles on airplane number four. "
We're on our way to 440," Capitelli said. To transport fuselage sections and other parts around the world, Boeing designed a huge cargo airplane, called a Dreamlifter, on a 747 base. The world's biggest aircraft by volume, it can transport a complete fuselage section or a wing: either one, with a shipping cradle, weighs about 130,000 pounds. Evergreen International Airlines, which operates the flights for Boeing, bases about 20 pilots in North Charleston. Charlie Post, director of large cargo freight for Evergreen, said flight schedules are driven by production schedules. So far, "we're not flying as much as we thought we would," he said. "But it's picking up."