Monday, May 6, 2024

Boeing Problems 5-6-24

In 2011, Boeing lost control of their commercial aircraft manufacturing by building its parts in separate states and failing to provide engineering oversight.  They adopted the suicidal practice of “design anywhere and build anywhere”. 

Boeing was founded in 1916 in Seattle Washington and kept its engineering and manufacturing together in one location. They designed and built the B-17 and B-29 bombers in the 1940s. Boeing developed military jets such as the B-47 Stratojet and B-52 Stratofortress bombers in the late-1940s and into the 1950s.

Boeing had some experience building aircraft in other locations, but were careful to provide engineering support to the groups who manufactured them. The Boeing-designed B-17 bomber was assembled also by Vega (a subsidiary of Lockheed Aircraft Corp.) and Douglas Aircraft Co., while the B-29 was assembled also by Bell Aircraft Co. and by Glenn L. Martin Company. In 1942 Boeing started the development of the C-97.

Boeing used company funds to develop the 367–80 jet airliner demonstrator that led to the KC-135 Stratotanker and Boeing 707 jetliner. Some of these were built at Boeing's facilities in Wichita, Kansas, which existed from 1931 to 2014.

Boeing would take orders for commercial airliners, hire the workers, complete the orders and lay off the workers. In the 1960s, Boeing’s manufacturing employee headcount bounced up and down (boing, boing, boing).

Design Engineers were always busy with the next new design. This included the 707 in 1958, the 727 in 1960, the 747 in 1966 and the 737 in 1967.

In the 1970s, sales of commercial airliners slowed and Boeing headcount went from 83,700 in 1968 to 20,750 in 1971.

In the 1980s, sales of the 737 improved Boeing had to offer new aircraft and developed the single-aisle 757, the larger, twin-aisle 767, and upgraded versions of the 737. 

In the 1990s several military projects went into production, including Boeing support of the B-2 stealth bomber. As part of an industry team led by Northrop, Boeing built the B-2's outer wing portion, aft center fuselage section, landing gear, fuel system, and weapons delivery system. At its peak in 1991, the B-2 was the largest military program at Boeing, employing about 10,000 people. 

Boeing was one of seven competing companies that bid for the Advanced Tactical Fighter. Boeing agreed to team with General Dynamics and Lockheed so that all three companies would participate in the development if one of the three companies' designs was selected. The Lockheed design was eventually selected and developed into the F-22 Raptor.

Phil Condit became CEO in 1993 to 2003

In the mid-1990s, the company developed the revamped version of the 737, known as the 737 "Next-Generation", or 737NG. It has since become the fastest-selling version of the 737 in history, and on April 20, 2006, sales passed those of the "Classic 737", with a follow-up order for 79 aircraft from Southwest Airlines.

In 1994, Boeing introduced the twin-engine 777, with a seating capacity of approximately 300 to 370 passengers and the longest range twin-engine aircraft in the world, the 777 was the first Boeing airliner to feature a "fly-by-wire" system

In 1995, Boeing chose to demolish the headquarters complex on East Marginal Way South instead of upgrading it to match new seismic standards. The headquarters were moved to an adjacent building and the facility was demolished in 1996. In 1997, Boeing was headquartered on East Marginal Way South, by King County Airport, in Seattle.

The following lists of Boeing Revenue and CEOs from 2000 to 2024. Revenue is controlled by customer demand. The Board of Directors elects the CEO. Designs take a few years, so CEOs often inherit the previous CEO’s approved designs. Then they hope for the best and play musical chairs.

Boeing Revenue B

2000 $58.2B Condit Boeing guy

2001 $54.07B

2002 $50.36B

2003 $52.46B Stonecipher GM guy

2004 $53.92B

2005 $61.53B McNerney GE guy

2006 $66.39B

2007 $60.91B

2008 $68.28B

2009 $64.31B

2010 $68.74B

2011 $81.7B

2012 $86.62B

2013 $90.76B

2014 $96.11B

2015 $94.57B Muilenburg Boeing guy

2016 $94.6B

2017 $101.13B

2018 $76.56B

2019 $58.16B

2020 $62.29B Calhoun -GE guy

2021 $66.61B

2022 $77.79B

https://companiesmarketcap.com/boeing/revenue/

Boeing CEOs

Philip Condit was CEO from 1996-2003 Hired at Boeing in 1965

Harry Stonecipher became CEO from 2003-2005. Hired by GM in 1958, moved to GE in 1960.moved to McDonnell Douglas in 1994, joined Boeing as CEO in 1994.

James McNerney became CEO from 2005-2015. Began career in 1965 at P&G then GE.

Dennis Muilenburg became CEO from 2015-2019. Hired at Boeing in 1985

Dave Calhoun became CEO from 2020-2024. Worked at GE.

Source: Fortune Magazine April-May 2024

In 2018, Boeing 737s began to crash under Muilenburg. The first in Indonesia and the second in Ethopia. There were flaws in the software design that took flight control away from the pilots without their knowledge based on data from a single sensor, ultimately led to the two 737 MAX crashes in 2018 and 2019, causing the deaths of 346 people. This occurred under Muilenberg.

https://en.wikipedia.org/wiki/History_of_Boeing

In 2024, under Calhoun, a Boeing 737 lost a door in mid-flight due to poor manufacturing. Also, the 787 Dreamliner may also have problems. The Federal Aviation Administration is investigating claims made by a Boeing engineer who says that sections of the fuselage of the 787 Dreamliner are improperly fastened together and could break apart mid-flight after thousands of trips.-Apr 9, 2024

In 2024, Boeing has 2268 orders for the 777s and has delivered 1727 of them.  A 777 is a wider plane so only having 9 seats, which some airlines do, means wider and more comfortable seating than the 787.

Boeing CEO History

Philip Condit, 1996-2003. Boeing guy

Harry Stonecipher, 2003-2005.  GM guy

James McNerney, 2005-2015.  GE guy

Dennis Muilenburg, 2015-2019. Boeing guy

Dave Calhoun 2020-2024. GE guy

Source: Fortune Magazine Jan-Feb 2024

Comments

Boeing’s Problems began in 1994 before Condit, when they added computer controls in the cockpit and forgot to train the pilots. They put the last brick on the load when they bought Rockwell Missile Systems in 1996 and entered the defense business and merged with McDonnell Douglas in 1997.

Boeing needs to fix its manufacturing problems and reconnect engineering support to all manufacturing. It also needs to fix its design problems.

Boeing has been unwieldly for some time. Top management pushed revenue growth, sales and deliveries and failed to focus on quality and safety.  Fortune Magazine is focused on Boeing CEOs. The Boeing Board should have the Boeing employees elect the next CEO.

Airbus delivered 735 commercial aircraft during the year. Its revenues for FY 2023 amounted to €65.4B. Boeing revenue for 2023 was $77.79B. However, 99% of Boeing's revenue comes from the first two units: Commercial Airplanes (60%) and Integrated Defense Systems (39%).  Boeing’s commercial aircraft revenue was $46.674B in 2023, Airbus was the global leader in commercial aircraft in 2023.

In 1996, I was brought in to consultant to Rockwell Missile Systems and staff up the Brimstone Missile development team. In 1997 I was asked to stay after the Boeing take-over.  I was asked if I thought Boeing would move their missile contracts to McDonnell in St. Louis despite the lower costs in Gwinnett GA and I said “yes”. I believed that McDonnell agreed to the acquisition to increase their missile business. Boeing did move the contracts and closed the plant in Gwinnett. Rockwell had developed the Hellfire and several other missiles and was easy to recruit for. Engineers followed their favorite missiles from company to company. They loved Rockwell because we didn’t move around and would bring back retirees to help. Rockwell was union-free and McDonnell Douglas and Boeing were not.

I witnessed Japan’s take over the US auto market in the 1980s and I see the same flaws in the US commercial airline market in the 2020s. US manufacturers had already solved the quality problems in the 2000s with high-speed manufacturing, targeted automation, the formation of teams in Lean Manufacturing using process mapping to achieve continuous improvement.

Norb Leahy, Dunwoody GA Tea Party Leader

 

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