Boeing (BA): Pole Axed By Its Own People

May 9, 2008 by Douglas A. McIntyre

The Boeing (BA) Dreamliner has been delayed so many times that it defies counting. The plane was to have been out already and delivered to some customers. It has been hit by three setbacks. Boeing management has blamed suppliers for getting out key components too late. It is a convenient excuse which misses the point that the people running Boeing were not paying any attention.

The problems have gotten so bad that some airlines which were promised the plane have said they will insist on compensation for late deliveries. Boeing’s stock has suffered accordingly.

Boeing has now been handed another surprise. Its unions plan to slowdown work on the Dreamliner. They feel that if they had been given the work, and the cash that went with it, to build key sections of the plane, that the delays would have been mitigated. Why use outside suppliers when your own people are so good?

The unions feel that they have Boeing cornered, and they are right. According to Bloomberg "unions say they made concessions as air travel fell after the 2001 terrorist attacks and will strike if needed for better wages and benefits."

It was not enough that Boeing management could not see supplier problems coming from way off in the distance. Perhaps the trouble could not have been solved completely, but it should have been addressed well before the three series of delays.

Now the people who run Boeing will be accused, and accused fairly, of not seeing problems brewing with their own employees.

Boeing has stuck to its earnings forecasts, assuming that it could make up for lost time with the Dreamliner. The unions will make sure that the heads of Boeing eat their projections. The stock will go down, and there will be hell to pay. Management still mean managing.

Douglas A. McIntyre