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Autor: (© wallstreet:online AG / SmartHouse Media GmbH),20:52 18.08.2003
The Downfall of a Great American Airplane Company - An Insider`s Perspective
Subject
Recently, there has been much attention focused on the "Boeing brain drain" that may have contributed to the February loss of Shuttle Columbia. However, most people do not realize that a similar "brain drain" is occurring within the Commercial Airplane division of Boeing.
Because of Boeing`s massive layoffs and strategy of offloading design work to foreign design centers, the company has lost control of its engineering processes. The recent actions of the Boeing Company in its Commercial Airplane division are seriously jeopardizing the quality and safety of its airplanes. Hopefully, the company`s current course of action will not lead to the same tragic consequences that occurred on February 1, 2003.
Our Credentials
Before we begin, we wish to establish our credentials. Since we are current Boeing employees, we obviously don`t want to give information that can positively identify us.
This paper was composed by a group of aerospace design engineers with many years at the Boeing Company. We have been involved in several new airplane programs across a variety of functions and have intimate knowledge of the inner workings of Engineering at Boeing.
We are "in the trenches" every day, involved in the nuts-and-bolts business of designing airplanes. We have a unique and in-depth insider`s view of the damage being sown at the Boeing Company by Phil Condit and his cohorts.
Introduction
During the past several years, Boeing Commercial Airplanes has been
offloading its design engineering work to foreign "design centers".
American engineers and technical designers are being laid off by the
hundreds while Russian engineers are quietly hired at the Boeing Design
Center in Moscow. Many of the Russian engineers are not nearly as
experienced as the American engineers being laid off. Engineering
layoffs
have cut so deeply into Boeing`s talent pool that knowledge has been
irretrievably lost. And the layoffs continue.
Soon Boeing may reach (if it hasn`t already) a "point of no return"
where
irreversible damage has been done to the company`s ability to design and
build safe airplanes, even with its so-called "risk-sharing partners".
Boeing`s senior management has often stated that they are not willing to
"bet the company" on another new airplane program as they famously did
with
the 747. They are pursuing a strategy of accumulating a network of
"risk-sharing partners" so Boeing can concentrate on its core competency
of
"large scale systems integration."
We are willing to state that Boeing`s management is "betting the
company" on
a misguided and ridiculous outsourcing plan that is gutting the company
of
its hard-won knowledge base and human assets. The safety and quality of
Boeing airplanes is at jeopardy because of the foolhardy actions of
Boeing`s
senior management, and even the hint of safety and quality issues with
Boeing`s airplanes can have disastrous results for its Commercial
Airplane
business.
The former executives of McDonnell-Douglas (which arguably as a company
was,
in the end, a complete failure in the design and manufacture of
commercial
aircraft) have taken control of Boeing and seem determined to gut the
commercial airplane business - all in the name of "increasing
shareholder
value". Harry Stonecipher, John McDonnell and Mike Sears, along with
Phil
Condit and Alan Mulally are destroying what was very recently a vital,
dominant American company. These men will probably enjoy massive
short-term
gains in the value of their stock options, but there is a price; the
loss of
the long-term viability of Boeing in the commercial aircraft business.
We
have to look back less than a decade to see where these men are leading
Boeing - to the once glorious McDonnell-Douglas Commercial Aircraft
division which has since faded into oblivion.
The design and manufacture of commercial aircraft has been a lucrative
business for the United States for many decades. The aerospace business
has
consistently been the largest exporter in the United States economy.
Boeing
is willingly and recklessly giving this business away to its future
foreign
competitors.
It is time Boeing`s practices become public knowledge.
Some Perspective
It is important to remember that Boeing`s commercial aircraft business
is a
bit different from the standard manufacturing company. Boeing design
airplanes - not washing machines, toasters or clock radios.
Every day, millions of people entrust their lives and the lives of their
friends and family to the quality of Boeing airplanes. Every day, your
and
our husbands and wives, sons and daughters, fathers and mothers climb
aboard
a 727, 737, 747, 757, 767 or 777 with faith that experienced Boeing
engineers did their job well. Although many airplane passengers pray to
God
for a safe flight, it is often Boeing engineers who, with their skill
and
knowledge, have the power to grant that prayer.
Currently, Boeing is making severe cuts in its design engineering staff.
The cost savings probably look great on paper. But the real question is
how
do these cuts affect a company in which airplanes are designed?
Airplanes -
on which millions of people fly each year. Airplanes - to which we
entrust
our lives every time we fly. Airplanes - that can experience
catastrophic
failure due to engineering errors.
Due to their current strategy of off-loading design work to
inexperienced
engineers and laying off their own highly experienced employees, Boeing
management has created an environment where these errors are much more
likely to occur.
The most telling statement about the trend of engineering at Boeing is
this
statement, which is heard more and more often from fellow engineers:
"After
seeing how engineering is done here today, I`m afraid to fly on the next
new
Boeing airplane."
Some Facts About Airplane Design
It is obvious that an airplane, especially a large commercial aircraft,
is a
very complicated machine to design and build. What the general public
does
not understand is that, however difficult they think it is to design and
build an airplane, their belief is not one-fiftieth as complicated as
the
reality.
It takes many years of experience to learn the intricacies of airplane
design. Not only does an engineer need to understand how to design
detail
parts, assemblies and installations, but also where the parts are
manufactured, how the parts are manufactured and how they are put
together.
Engineers are required to understand lead-times and scheduling to make
sure
drawings are released on time to support vendor requirements. The
responsibilities of an engineer are immense.
In addition, engineers need to control the configuration of the
airplane.
The parts that go on an airplane depends on many factors:
1) The base model (737, 747, 757, 767, 777)
2) The derivative (737-700, 737-800, 737-900, 757-200, 757-300,
777-200ER, 777-300, 777-300ER, 777-200LR)
3) Standard options (Small cargo door, large cargo door, overwing
exits,
in-flight entertainment systems)
4) Customer-specific options (Seats, purser stations, the color of
the
carpet)
There are literally millions of possible configurations. Knowing which
parts go on which airplanes is a very important part of an engineer`s
job.
The systems Boeing has implemented to control airplane configuration (as
part of the DCAC/MRM effort) are immensely complex and constantly
changing.
There are many technical designers and engineers who spend large
portions of
their time just learning and understanding these systems. Most
engineers
only have a cursory knowledge of these systems and rely on local
"experts".
The problem is that these local "experts" are becoming fewer and farther
between and their numbers are diminishing rapidly as layoffs continue.
Boeing is lucky that the FAA does not have an audit planned in the near
future.
The Offloading of Boeing`s Design Engineering
The key to Boeing`s success has never been its plants, tools and
buildings,
but its superior engineering and its willingness to take calculated
risks.
Both of these assets are disappearing rapidly.
Although much emphasis has been put on such manufacturing concepts as
"lean
manufacturing" and "just-in-time inventory", it is important to realize
that
regardless of the efficiencies of the manufacturing process, an airplane
or
any product cannot succeed without quality engineering design. In the
past,
Boeing`s elite engineering corps has met the challenge and produced the
world`s best commercial aircraft.
Currently, Boeing is rabidly pursuing a strategy of offloading
engineering
design work to overseas "design centers". This process began more than
a
decade ago with "design transfers" to the Japanese (Kawasaki, Mitsubishi
and
Fuji Heavy Industries). It continues today at a more rapid and
frightening
pace.
Boeing Design Center - Moscow
Currently, the fastest growing off-load "design center" is located in
Moscow, Russia. There are around 350 engineers employed at this center.
They are designing primary and secondary structures, interiors, floors
and
other systems.
There appears to be a common misconception that Russia is a land of
promise
where the streets are paved with PhD aerospace engineers begging for
jobs.
The belief is that not only do these brilliant engineers have
doctorates,
but they have decades of top-notch aircraft design experience. In
addition,
they are willing to work for 20 to 25% of the pay that American
engineers
receive. How can Boeing lose?
The reality is that BDC Moscow is manned with few experienced engineers
and
many, many greenhorns - inexperienced engineers who have graduated
within
the past few years. Boeing engineers are being pressured to off-load
design
work to Moscow - to these legions of inexperienced engineers.
Even if we assume that all of the Russian engineers have PhDs and are
experienced, ask yourself the following questions:
1) How and where did they gain aircraft design experience? On what
new
Russian airplane programs have they cut their teeth in the past 10-15
years?
2) How do Russian commercial aircraft compare to the quality,
efficiency
and safety of Boeing`s airplanes?
3) Which leads to the final question: Based on Russian commercial
aviation history, do we really want to fly a commercial airplane
designed by
Russian engineers?
The Russian engineers have to be given some credit. They are nice guys,
likeable and smart with relevant college degrees, but they lack several
important traits:
1) Experience designing airplanes.
2) The ability to speak English well enough to have an in-depth
technical conversation.
3) The ability to take initiative and to come up with creative
solutions.
This final point is an important one. Decades of communist rule have
apparently made it difficult for some Russians to make decisions. They
want
to be told what to do, down to the most minute detail.
Designing a new airplane with the Russians is like working with a bunch
of
new college hires - except these new hires don`t speak English very
well -
if at all! Are there any volunteers for who wants to fly on their class
project?
All that seems to matter to Boeing`s senior management is that Russian
engineers are significantly cheaper than American ones. It is important
to
note that although the Russians are cheaper, a number of significant
inefficiencies are introduced:
1) The language barrier
a. It is difficult enough discussing technical issues with an
American
engineer, let alone with a Russian who has only taken 3 months of
English
classes.
2) Time zones
a. The only way to communicate with BDC Moscow is via e-mail,
conference
calls and video conferences. The problem is that there is only a 1 or 2
hour window of opportunity to hold conference calls or video
conferences.
b. Because of the brevity and ineffectiveness of conference calls,
Boeing engineers waste hours and even days trying to resolve issues via
e-mail - when it would only take 10 minutes to walk to the next cube to
explain to Phil what needs to be done.
3) Physical distance
a. Documents take days to reach Moscow. Once again, if the work was
done within Boeing, it would only take 10 minutes to walk to Harry`s
desk
and drop off the document.
b. CATIA models need to be transferred to Russia in a process that
takes
hours. If the work was done locally, a model could be transferred
almost
instantaneously.
Out-sourcing has made a complicated process exponentially more
complicated.
In the engineering world, complicated processes are known to produce one
thing consistently - errors.
The initial results on the quality of work from BDC are frightening.
Much
of their work on recent programs has had to be completely re-done.
Changes
that were supposed to be made aren`t made properly, and changes that
shouldn`t have been made are widespread. Luckily, (until recently)
there
have been enough experienced Boeing engineers to catch these errors.
This
is no longer the case after the last painful round of layoffs. It is
only a
matter of time before a potentially dangerous error slips by.
Yet another concern is that the majority of Russian engineers working at
the
Boeing Design Center in Moscow are contract (temporary) employees who
are
overseen by a much smaller number of Boeing direct employees. What
keeps
these engineers from remaining loyal to Boeing? There is a very real
threat
that Boeing will face a situation in the near future where their
domestic
(American) talent has been ravaged and the Russian engineers move on to
other opportunities (such as contracting overseas for much higher
salaries
or within Moscow at Airbus` newly opened Moscow Design Center).
Is it really a wise business decision to hand over proprietary knowledge
to
foreign engineers or even worse, foreign contract engineers? Common
sense
would say no. Phil and Harry seem to think that this is the way to
"increase shareholder value".
We think that they are destroying the company.
Airbus in Moscow (and Puget Sound?)
It wouldn`t be fair to omit the fact that Airbus has also opened a
Design
Center in Moscow. However, the main difference between Airbus and
Boeing is
that Airbus is smart and doesn`t intend to have the Russians do primary
systems and structures design, instead limiting them to interiors work.
Airbus isn`t willing to give away the "crown jewels".
In fact, there is a large contingent of Boeing engineers who would
welcome
the opening of an Airbus Design Center in the Puget Sound region. What
better way for Airbus to "stick it to Boeing" than to open a Design
Center
in Boeing`s back yard and poach a large number of highly talented
aerospace
engineers who would willingly jump ship?
Many of us would be sorely tempted to work at the Airbus Design Center -
Seattle. At least with Airbus, we would be working for management that
makes rational long-term business decisions.
Boeing`s "Core Competency": Large-Scale Systems Integration
Boeing has stated that they want to concentrate on their "core
competency",
which Phil Condit says is "large-scale systems integration".
Integration takes place at the individual engineer level, which is where
Boeing is cutting. The front-line engineer is where the rubber meets
the
road, but Boeing has made it clear that engineers are merely "costs" to
the
company, not assets.
The relevant questions to ask here are:
* How can Boeing hope to successfully be a "large-scale systems
integrator" if they don`t have enough experienced, qualified engineers
to do
the integration?
* If Boeing`s engineers no longer understand the technical aspects of
the airplane`s design and manufacturability, how can they integrate?
At What Point Do Boeing`s Suppliers Decide They No Longer Need Boeing?
We have heard that Phil Condit`s perfect vision for Boeing is where all
of
the design and manufacturing work is offloaded. Meanwhile, Boeing
(consisting of Phil and his secretary) sits in a penthouse office in
Chicago
at the top of the pyramid and collects a fat profit margin, thus
"enhancing
shareholder value". As comic as this may seem, it is probably not far
from
the truth.
Boeing is throwing away thousands of irreplaceable engineers while
giving
away to its vendors knowledge based on decades of empirical data from
Boeing`s countless tests and studies. This knowledge, both in the
Design
Manuals and in the engineers` heads is Boeing`s competitive advantage.
Boeing is training and arming its future competitors.
The Boeing vision is that eventually the "partners" will design and
manufacture body sections, already "stuffed" with the required systems
(electrical wire bundles, hydraulics systems, insulation, etc). All of
these activities would be coordinated and "integrated" by a small staff
of
Boeing engineers. The body sections would then be shipped to Everett
(or
Wichita or Long Beach or Fort Worth), where a small group of Boeing
assembly
workers would button the sections together.
In all honesty, does this deserve the lion`s share of the profits? How
much
better can the Japanese complete this function in Japan?
At what point do Boeing`s suppliers decide that they no longer need
Boeing?
JAI (consisting of Mitsubishi, Kawasaki and Fuji Heavy Industries) is
more
than capable to do the manufacturing. In addition, they can do the
stress
analysis and design work. Boeing has spent the last 10 years handing
over
their computer "templates" for stress analysis - along with books
containing
all of Boeing`s hard-won knowledge of fatigue analysis, structural
damage
tolerance and corrosion prevention, which was accumulated over decades
of
testing and in-service experience.
If JAI is capable of doing both the design and manufacturing of airplane
structural components, Rolls Royce, Pratt and Whitney and GE provide the
engines, Rockwell-Collins provides the avionics and interior components
are
BFE (Buyer Furnished Equipment), what does Boeing bring to the table?
Boeing`s doing the easy part! Why would these companies allow Boeing to
sit
at the top of the pyramid and take the fattest profits? (Hint: The
answer
isn`t "Boeing`s core competency of large-scale systems integration".)
Employee Morale
How can current employee morale, especially among Boeing engineers, be
described? There is no hyperbole too outlandish to describe how low
morale
has fallen.
There is a strong adversarial feeling that has developed among engineers
against management - especially upper management. Engineers believe
that
management would like nothing more than to eliminate the entire Boeing
engineering department. Perhaps they`re right.
There is a pervasive feeling of doom and fatalism. Engineers believe
that
there is no future for them at Boeing. The engineers with 20 or more
years
at Boeing are stoically waiting for that golden day when they will
retire
and wash their hands of the mess that Phil Condit and Harry Stonecipher
have
created.
It is frightening to see how few experienced engineers are left in the
company. When the company is forced to bring in contractors to do
high-level design work, it is indicative of a major problem. There are
not
enough people left to do even a small development program. How will
Boeing
handle the 7E7?
In addition, Boeing is handing out WARN notices to direct employees
while
these same employees are surrounded by on-site Russian and Japanese
engineers!
Performance Management
One of Boeing`s criteria in its "Performance Management" is to measure
how
front-line
management and lead engineers are offloading work to Moscow. The more
work
the lead engineers and managers are willing to offload and the bigger
the
smile on their faces as they do so, the more likely they will not be
laid-off but will be promoted and given raises.
Can you imagine it - having your career depend on how willing you are to
give your job away and to train your replacement in the process? Even
if
you are cheerful in supporting the offloading of engineering work, your
reward may still be a WARN notice. How`s that for a morale-builder?
How`s
that for an environment in which airplanes are designed?
The 7E7 and Future Airplane Programs
It can arguably be stated that Boeing has cut their engineering staff so
deeply that they do not have enough remaining talent to tackle a new
airplane program.
It is well-known that Boeing`s engineering staff is greying. Many of
the
engineers are within 10-15 years of retirement age - and most of those
are
counting the years, months, days, hours and minutes until that magical
time.
Trust us when we say that there has already been a huge loss of "tribal
knowledge" that can never be recovered. In 5-10 years, when these
greying
engineers begin to retire, the resulting knowledge loss may well prove
fatal
to Boeing Commercial Airplanes.
Boeing is rapidly approaching, if they have not already passed, the
"Point
of No Return". The layoffs have been so deep that knowledge and
engineering
ability has been irrecoverably lost.
The Effect of Development Cost on Product Quality
There were a series of lessons supposedly learned from the fantastic
success
of the 777 airplane program. A tremendous amount of money was spent
developing this airplane, much of it on trail-blazing new techniques
such
as:
? Concurrent Product Design
? Digital Pre-Assembly/Mockup
? Co-location of personnel (i.e. designers, stress
analysts,
manufacturing engineers)
? Integration of customers into the design process
This "front-loading" of cost, where money was spent on the engineering/
development of the airplane, paid off spectacularly. The rework in the
factory dropped precipitously, saving millions in ongoing manufacturing
costs. The number of rejection tags dropped by over 50%. The factory
said
that building the 777 was like putting together Tinker Toys.
Today, the 777 is one of Boeing`s two best-selling airplanes.
However, now Harry Stonecipher and John McDonnell want to cut
development
costs on the 7E7 to 40% of 777 levels. Do they expect to get an
airplane of
similar quality to the 777 for that price?
Engineers are already forced to make unpleasant compromises with their
design because of the shocking scarcity of resources - compromises that
threaten the quality, safety and performance of the airplane.
We believe that Boeing Commercial Airplanes is headed down the same path
as
McDonnell-Douglas. Tight-fisted executives dole out miserly portions of
budget to "save money" and "increase shareholder value". What they end
up
with are inferior products that fail in the marketplace.
If proof is required, ask yourself: "What is left of McDonnell-Douglas`
commercial aircraft business?"
The 717.
Isn`t that proof enough of where Boeing is being led?
Are we willing to entrust the future of Boeing`s Commercial Aircraft
business to the same people who destroyed McDonnell-Douglas?
Conclusion
The Boeing Company is headed down a dark and dangerous path. It is
heading
down this path at a reckless pace with little regard to long-term
consequences. High-level executives are making decisions that, on
paper,
may look promising, but are in truth destroying the company. The safety
and
quality of Boeing airplanes is at jeopardy because of the foolhardy
actions
of Boeing`s senior management.
There has been little discussion about this in the media. Perhaps this
story is not newsworthy. However, everyone with whom we have spoken has
been...let`s say "shocked" (although that does not do it justice)...when
told of what is going on. We am not prone to exaggeration. We are
engineers. We live and breathe logic and facts. We are witnessing
first-hand the destructive effects of Phil Condit`s "Vision 2016".
There
may not be a Boeing Commercial Aircraft Company in 2016 because of Phil
Condit.
What has been described herein is truth. We can only hope it also turns
out
to be "newsworthy".
Subject
Recently, there has been much attention focused on the "Boeing brain drain" that may have contributed to the February loss of Shuttle Columbia. However, most people do not realize that a similar "brain drain" is occurring within the Commercial Airplane division of Boeing.
Because of Boeing`s massive layoffs and strategy of offloading design work to foreign design centers, the company has lost control of its engineering processes. The recent actions of the Boeing Company in its Commercial Airplane division are seriously jeopardizing the quality and safety of its airplanes. Hopefully, the company`s current course of action will not lead to the same tragic consequences that occurred on February 1, 2003.
Our Credentials
Before we begin, we wish to establish our credentials. Since we are current Boeing employees, we obviously don`t want to give information that can positively identify us.
This paper was composed by a group of aerospace design engineers with many years at the Boeing Company. We have been involved in several new airplane programs across a variety of functions and have intimate knowledge of the inner workings of Engineering at Boeing.
We are "in the trenches" every day, involved in the nuts-and-bolts business of designing airplanes. We have a unique and in-depth insider`s view of the damage being sown at the Boeing Company by Phil Condit and his cohorts.
Introduction
During the past several years, Boeing Commercial Airplanes has been
offloading its design engineering work to foreign "design centers".
American engineers and technical designers are being laid off by the
hundreds while Russian engineers are quietly hired at the Boeing Design
Center in Moscow. Many of the Russian engineers are not nearly as
experienced as the American engineers being laid off. Engineering
layoffs
have cut so deeply into Boeing`s talent pool that knowledge has been
irretrievably lost. And the layoffs continue.
Soon Boeing may reach (if it hasn`t already) a "point of no return"
where
irreversible damage has been done to the company`s ability to design and
build safe airplanes, even with its so-called "risk-sharing partners".
Boeing`s senior management has often stated that they are not willing to
"bet the company" on another new airplane program as they famously did
with
the 747. They are pursuing a strategy of accumulating a network of
"risk-sharing partners" so Boeing can concentrate on its core competency
of
"large scale systems integration."
We are willing to state that Boeing`s management is "betting the
company" on
a misguided and ridiculous outsourcing plan that is gutting the company
of
its hard-won knowledge base and human assets. The safety and quality of
Boeing airplanes is at jeopardy because of the foolhardy actions of
Boeing`s
senior management, and even the hint of safety and quality issues with
Boeing`s airplanes can have disastrous results for its Commercial
Airplane
business.
The former executives of McDonnell-Douglas (which arguably as a company
was,
in the end, a complete failure in the design and manufacture of
commercial
aircraft) have taken control of Boeing and seem determined to gut the
commercial airplane business - all in the name of "increasing
shareholder
value". Harry Stonecipher, John McDonnell and Mike Sears, along with
Phil
Condit and Alan Mulally are destroying what was very recently a vital,
dominant American company. These men will probably enjoy massive
short-term
gains in the value of their stock options, but there is a price; the
loss of
the long-term viability of Boeing in the commercial aircraft business.
We
have to look back less than a decade to see where these men are leading
Boeing - to the once glorious McDonnell-Douglas Commercial Aircraft
division which has since faded into oblivion.
The design and manufacture of commercial aircraft has been a lucrative
business for the United States for many decades. The aerospace business
has
consistently been the largest exporter in the United States economy.
Boeing
is willingly and recklessly giving this business away to its future
foreign
competitors.
It is time Boeing`s practices become public knowledge.
Some Perspective
It is important to remember that Boeing`s commercial aircraft business
is a
bit different from the standard manufacturing company. Boeing design
airplanes - not washing machines, toasters or clock radios.
Every day, millions of people entrust their lives and the lives of their
friends and family to the quality of Boeing airplanes. Every day, your
and
our husbands and wives, sons and daughters, fathers and mothers climb
aboard
a 727, 737, 747, 757, 767 or 777 with faith that experienced Boeing
engineers did their job well. Although many airplane passengers pray to
God
for a safe flight, it is often Boeing engineers who, with their skill
and
knowledge, have the power to grant that prayer.
Currently, Boeing is making severe cuts in its design engineering staff.
The cost savings probably look great on paper. But the real question is
how
do these cuts affect a company in which airplanes are designed?
Airplanes -
on which millions of people fly each year. Airplanes - to which we
entrust
our lives every time we fly. Airplanes - that can experience
catastrophic
failure due to engineering errors.
Due to their current strategy of off-loading design work to
inexperienced
engineers and laying off their own highly experienced employees, Boeing
management has created an environment where these errors are much more
likely to occur.
The most telling statement about the trend of engineering at Boeing is
this
statement, which is heard more and more often from fellow engineers:
"After
seeing how engineering is done here today, I`m afraid to fly on the next
new
Boeing airplane."
Some Facts About Airplane Design
It is obvious that an airplane, especially a large commercial aircraft,
is a
very complicated machine to design and build. What the general public
does
not understand is that, however difficult they think it is to design and
build an airplane, their belief is not one-fiftieth as complicated as
the
reality.
It takes many years of experience to learn the intricacies of airplane
design. Not only does an engineer need to understand how to design
detail
parts, assemblies and installations, but also where the parts are
manufactured, how the parts are manufactured and how they are put
together.
Engineers are required to understand lead-times and scheduling to make
sure
drawings are released on time to support vendor requirements. The
responsibilities of an engineer are immense.
In addition, engineers need to control the configuration of the
airplane.
The parts that go on an airplane depends on many factors:
1) The base model (737, 747, 757, 767, 777)
2) The derivative (737-700, 737-800, 737-900, 757-200, 757-300,
777-200ER, 777-300, 777-300ER, 777-200LR)
3) Standard options (Small cargo door, large cargo door, overwing
exits,
in-flight entertainment systems)
4) Customer-specific options (Seats, purser stations, the color of
the
carpet)
There are literally millions of possible configurations. Knowing which
parts go on which airplanes is a very important part of an engineer`s
job.
The systems Boeing has implemented to control airplane configuration (as
part of the DCAC/MRM effort) are immensely complex and constantly
changing.
There are many technical designers and engineers who spend large
portions of
their time just learning and understanding these systems. Most
engineers
only have a cursory knowledge of these systems and rely on local
"experts".
The problem is that these local "experts" are becoming fewer and farther
between and their numbers are diminishing rapidly as layoffs continue.
Boeing is lucky that the FAA does not have an audit planned in the near
future.
The Offloading of Boeing`s Design Engineering
The key to Boeing`s success has never been its plants, tools and
buildings,
but its superior engineering and its willingness to take calculated
risks.
Both of these assets are disappearing rapidly.
Although much emphasis has been put on such manufacturing concepts as
"lean
manufacturing" and "just-in-time inventory", it is important to realize
that
regardless of the efficiencies of the manufacturing process, an airplane
or
any product cannot succeed without quality engineering design. In the
past,
Boeing`s elite engineering corps has met the challenge and produced the
world`s best commercial aircraft.
Currently, Boeing is rabidly pursuing a strategy of offloading
engineering
design work to overseas "design centers". This process began more than
a
decade ago with "design transfers" to the Japanese (Kawasaki, Mitsubishi
and
Fuji Heavy Industries). It continues today at a more rapid and
frightening
pace.
Boeing Design Center - Moscow
Currently, the fastest growing off-load "design center" is located in
Moscow, Russia. There are around 350 engineers employed at this center.
They are designing primary and secondary structures, interiors, floors
and
other systems.
There appears to be a common misconception that Russia is a land of
promise
where the streets are paved with PhD aerospace engineers begging for
jobs.
The belief is that not only do these brilliant engineers have
doctorates,
but they have decades of top-notch aircraft design experience. In
addition,
they are willing to work for 20 to 25% of the pay that American
engineers
receive. How can Boeing lose?
The reality is that BDC Moscow is manned with few experienced engineers
and
many, many greenhorns - inexperienced engineers who have graduated
within
the past few years. Boeing engineers are being pressured to off-load
design
work to Moscow - to these legions of inexperienced engineers.
Even if we assume that all of the Russian engineers have PhDs and are
experienced, ask yourself the following questions:
1) How and where did they gain aircraft design experience? On what
new
Russian airplane programs have they cut their teeth in the past 10-15
years?
2) How do Russian commercial aircraft compare to the quality,
efficiency
and safety of Boeing`s airplanes?
3) Which leads to the final question: Based on Russian commercial
aviation history, do we really want to fly a commercial airplane
designed by
Russian engineers?
The Russian engineers have to be given some credit. They are nice guys,
likeable and smart with relevant college degrees, but they lack several
important traits:
1) Experience designing airplanes.
2) The ability to speak English well enough to have an in-depth
technical conversation.
3) The ability to take initiative and to come up with creative
solutions.
This final point is an important one. Decades of communist rule have
apparently made it difficult for some Russians to make decisions. They
want
to be told what to do, down to the most minute detail.
Designing a new airplane with the Russians is like working with a bunch
of
new college hires - except these new hires don`t speak English very
well -
if at all! Are there any volunteers for who wants to fly on their class
project?
All that seems to matter to Boeing`s senior management is that Russian
engineers are significantly cheaper than American ones. It is important
to
note that although the Russians are cheaper, a number of significant
inefficiencies are introduced:
1) The language barrier
a. It is difficult enough discussing technical issues with an
American
engineer, let alone with a Russian who has only taken 3 months of
English
classes.
2) Time zones
a. The only way to communicate with BDC Moscow is via e-mail,
conference
calls and video conferences. The problem is that there is only a 1 or 2
hour window of opportunity to hold conference calls or video
conferences.
b. Because of the brevity and ineffectiveness of conference calls,
Boeing engineers waste hours and even days trying to resolve issues via
e-mail - when it would only take 10 minutes to walk to the next cube to
explain to Phil what needs to be done.
3) Physical distance
a. Documents take days to reach Moscow. Once again, if the work was
done within Boeing, it would only take 10 minutes to walk to Harry`s
desk
and drop off the document.
b. CATIA models need to be transferred to Russia in a process that
takes
hours. If the work was done locally, a model could be transferred
almost
instantaneously.
Out-sourcing has made a complicated process exponentially more
complicated.
In the engineering world, complicated processes are known to produce one
thing consistently - errors.
The initial results on the quality of work from BDC are frightening.
Much
of their work on recent programs has had to be completely re-done.
Changes
that were supposed to be made aren`t made properly, and changes that
shouldn`t have been made are widespread. Luckily, (until recently)
there
have been enough experienced Boeing engineers to catch these errors.
This
is no longer the case after the last painful round of layoffs. It is
only a
matter of time before a potentially dangerous error slips by.
Yet another concern is that the majority of Russian engineers working at
the
Boeing Design Center in Moscow are contract (temporary) employees who
are
overseen by a much smaller number of Boeing direct employees. What
keeps
these engineers from remaining loyal to Boeing? There is a very real
threat
that Boeing will face a situation in the near future where their
domestic
(American) talent has been ravaged and the Russian engineers move on to
other opportunities (such as contracting overseas for much higher
salaries
or within Moscow at Airbus` newly opened Moscow Design Center).
Is it really a wise business decision to hand over proprietary knowledge
to
foreign engineers or even worse, foreign contract engineers? Common
sense
would say no. Phil and Harry seem to think that this is the way to
"increase shareholder value".
We think that they are destroying the company.
Airbus in Moscow (and Puget Sound?)
It wouldn`t be fair to omit the fact that Airbus has also opened a
Design
Center in Moscow. However, the main difference between Airbus and
Boeing is
that Airbus is smart and doesn`t intend to have the Russians do primary
systems and structures design, instead limiting them to interiors work.
Airbus isn`t willing to give away the "crown jewels".
In fact, there is a large contingent of Boeing engineers who would
welcome
the opening of an Airbus Design Center in the Puget Sound region. What
better way for Airbus to "stick it to Boeing" than to open a Design
Center
in Boeing`s back yard and poach a large number of highly talented
aerospace
engineers who would willingly jump ship?
Many of us would be sorely tempted to work at the Airbus Design Center -
Seattle. At least with Airbus, we would be working for management that
makes rational long-term business decisions.
Boeing`s "Core Competency": Large-Scale Systems Integration
Boeing has stated that they want to concentrate on their "core
competency",
which Phil Condit says is "large-scale systems integration".
Integration takes place at the individual engineer level, which is where
Boeing is cutting. The front-line engineer is where the rubber meets
the
road, but Boeing has made it clear that engineers are merely "costs" to
the
company, not assets.
The relevant questions to ask here are:
* How can Boeing hope to successfully be a "large-scale systems
integrator" if they don`t have enough experienced, qualified engineers
to do
the integration?
* If Boeing`s engineers no longer understand the technical aspects of
the airplane`s design and manufacturability, how can they integrate?
At What Point Do Boeing`s Suppliers Decide They No Longer Need Boeing?
We have heard that Phil Condit`s perfect vision for Boeing is where all
of
the design and manufacturing work is offloaded. Meanwhile, Boeing
(consisting of Phil and his secretary) sits in a penthouse office in
Chicago
at the top of the pyramid and collects a fat profit margin, thus
"enhancing
shareholder value". As comic as this may seem, it is probably not far
from
the truth.
Boeing is throwing away thousands of irreplaceable engineers while
giving
away to its vendors knowledge based on decades of empirical data from
Boeing`s countless tests and studies. This knowledge, both in the
Design
Manuals and in the engineers` heads is Boeing`s competitive advantage.
Boeing is training and arming its future competitors.
The Boeing vision is that eventually the "partners" will design and
manufacture body sections, already "stuffed" with the required systems
(electrical wire bundles, hydraulics systems, insulation, etc). All of
these activities would be coordinated and "integrated" by a small staff
of
Boeing engineers. The body sections would then be shipped to Everett
(or
Wichita or Long Beach or Fort Worth), where a small group of Boeing
assembly
workers would button the sections together.
In all honesty, does this deserve the lion`s share of the profits? How
much
better can the Japanese complete this function in Japan?
At what point do Boeing`s suppliers decide that they no longer need
Boeing?
JAI (consisting of Mitsubishi, Kawasaki and Fuji Heavy Industries) is
more
than capable to do the manufacturing. In addition, they can do the
stress
analysis and design work. Boeing has spent the last 10 years handing
over
their computer "templates" for stress analysis - along with books
containing
all of Boeing`s hard-won knowledge of fatigue analysis, structural
damage
tolerance and corrosion prevention, which was accumulated over decades
of
testing and in-service experience.
If JAI is capable of doing both the design and manufacturing of airplane
structural components, Rolls Royce, Pratt and Whitney and GE provide the
engines, Rockwell-Collins provides the avionics and interior components
are
BFE (Buyer Furnished Equipment), what does Boeing bring to the table?
Boeing`s doing the easy part! Why would these companies allow Boeing to
sit
at the top of the pyramid and take the fattest profits? (Hint: The
answer
isn`t "Boeing`s core competency of large-scale systems integration".)
Employee Morale
How can current employee morale, especially among Boeing engineers, be
described? There is no hyperbole too outlandish to describe how low
morale
has fallen.
There is a strong adversarial feeling that has developed among engineers
against management - especially upper management. Engineers believe
that
management would like nothing more than to eliminate the entire Boeing
engineering department. Perhaps they`re right.
There is a pervasive feeling of doom and fatalism. Engineers believe
that
there is no future for them at Boeing. The engineers with 20 or more
years
at Boeing are stoically waiting for that golden day when they will
retire
and wash their hands of the mess that Phil Condit and Harry Stonecipher
have
created.
It is frightening to see how few experienced engineers are left in the
company. When the company is forced to bring in contractors to do
high-level design work, it is indicative of a major problem. There are
not
enough people left to do even a small development program. How will
Boeing
handle the 7E7?
In addition, Boeing is handing out WARN notices to direct employees
while
these same employees are surrounded by on-site Russian and Japanese
engineers!
Performance Management
One of Boeing`s criteria in its "Performance Management" is to measure
how
front-line
management and lead engineers are offloading work to Moscow. The more
work
the lead engineers and managers are willing to offload and the bigger
the
smile on their faces as they do so, the more likely they will not be
laid-off but will be promoted and given raises.
Can you imagine it - having your career depend on how willing you are to
give your job away and to train your replacement in the process? Even
if
you are cheerful in supporting the offloading of engineering work, your
reward may still be a WARN notice. How`s that for a morale-builder?
How`s
that for an environment in which airplanes are designed?
The 7E7 and Future Airplane Programs
It can arguably be stated that Boeing has cut their engineering staff so
deeply that they do not have enough remaining talent to tackle a new
airplane program.
It is well-known that Boeing`s engineering staff is greying. Many of
the
engineers are within 10-15 years of retirement age - and most of those
are
counting the years, months, days, hours and minutes until that magical
time.
Trust us when we say that there has already been a huge loss of "tribal
knowledge" that can never be recovered. In 5-10 years, when these
greying
engineers begin to retire, the resulting knowledge loss may well prove
fatal
to Boeing Commercial Airplanes.
Boeing is rapidly approaching, if they have not already passed, the
"Point
of No Return". The layoffs have been so deep that knowledge and
engineering
ability has been irrecoverably lost.
The Effect of Development Cost on Product Quality
There were a series of lessons supposedly learned from the fantastic
success
of the 777 airplane program. A tremendous amount of money was spent
developing this airplane, much of it on trail-blazing new techniques
such
as:
? Concurrent Product Design
? Digital Pre-Assembly/Mockup
? Co-location of personnel (i.e. designers, stress
analysts,
manufacturing engineers)
? Integration of customers into the design process
This "front-loading" of cost, where money was spent on the engineering/
development of the airplane, paid off spectacularly. The rework in the
factory dropped precipitously, saving millions in ongoing manufacturing
costs. The number of rejection tags dropped by over 50%. The factory
said
that building the 777 was like putting together Tinker Toys.
Today, the 777 is one of Boeing`s two best-selling airplanes.
However, now Harry Stonecipher and John McDonnell want to cut
development
costs on the 7E7 to 40% of 777 levels. Do they expect to get an
airplane of
similar quality to the 777 for that price?
Engineers are already forced to make unpleasant compromises with their
design because of the shocking scarcity of resources - compromises that
threaten the quality, safety and performance of the airplane.
We believe that Boeing Commercial Airplanes is headed down the same path
as
McDonnell-Douglas. Tight-fisted executives dole out miserly portions of
budget to "save money" and "increase shareholder value". What they end
up
with are inferior products that fail in the marketplace.
If proof is required, ask yourself: "What is left of McDonnell-Douglas`
commercial aircraft business?"
The 717.
Isn`t that proof enough of where Boeing is being led?
Are we willing to entrust the future of Boeing`s Commercial Aircraft
business to the same people who destroyed McDonnell-Douglas?
Conclusion
The Boeing Company is headed down a dark and dangerous path. It is
heading
down this path at a reckless pace with little regard to long-term
consequences. High-level executives are making decisions that, on
paper,
may look promising, but are in truth destroying the company. The safety
and
quality of Boeing airplanes is at jeopardy because of the foolhardy
actions
of Boeing`s senior management.
There has been little discussion about this in the media. Perhaps this
story is not newsworthy. However, everyone with whom we have spoken has
been...let`s say "shocked" (although that does not do it justice)...when
told of what is going on. We am not prone to exaggeration. We are
engineers. We live and breathe logic and facts. We are witnessing
first-hand the destructive effects of Phil Condit`s "Vision 2016".
There
may not be a Boeing Commercial Aircraft Company in 2016 because of Phil
Condit.
What has been described herein is truth. We can only hope it also turns
out
to be "newsworthy".
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