Can Boeing maintain 787 build rate?

The first several months of 2013 proved to be a trying time for Boeing as it launched its new and revolutionary 787 Dreamliner aircraft to the subsequent string of problem after problem while the new planes got acclimated.

Battery fires and circuitry problems were nearly a weekly occurrence, and airlines worldwide were forced to divert flight after flight as the problems mounted. Throughout the year, these problems settled, but Boeing is now facing yet another issue with its technological centerpiece, but this time on the production end.

 

At a pace of 10 units per month, the 787 is the fastest produced twin-aisle jet in the world, but employees with the company are concerned that the company won’t be able to maintain that rate. Reuters reported them as saying that the two factories that assemble the 787 are struggling to cope with a ramp-up in production that started late last year, and a huge backlog of unfinished work threatens to slow output.

Boeing’s plant in North Charleston, South Carolina reportedly has thousands of uncompleted work orders, and has been sending pieces to the Boeing plant in Everett, Washington, which is larger, to be completed so that the company can maintain its 10-a-month rate, Reuters quoted the employees as saying and adding that a work order encompasses everything from attaching a part to installing a duct system entirely.

One employee — which the site noted as being senior-level — said that much of it had to do with the 787′s complex wiring systems, and fuselage sections were being shipped in from South Carolina with large bundles of wires that were not connected properly.

It’s not a lack of knowledge or ability that’s hindering the South Carolina facility, the senior-level employee to Reuters, but shortage of workers altogether. “There are not enough of them to match the rate increase,” he said. “They can’t keep up.”

Though Boeing knows of the strain on the production line, the company maintains that it’s working through it and will meet its production goals for 2014. ”While we try to minimize it, traveled work is something we deal with in all production programs,” Boeing spokesperson Marc Birtel told Reuters. “The 787 program remains on track to meet its delivery commitments in 2014 and we are producing 787s at a rate of 10 per month as planned.”

Given that the 787 is one of Boeing’s highest-volume planes, its ability to produce them is a crucial component of Boeing’s financial performance for the year. the cash generated will be sunk into new plane development, and for appeasing shareholders’ thirst for dividends and buybacks.

As it stands now, Boeing hopes that the North Charleston factory will put out three jets per month by mid-year, while Everett fills in the remaining seven, Reuters said.

(Justin Lloyd-Miller - Wall Street CheatSheet / Reuters)