Monday, January 21, 2013

The Tip of Boeing's Iceberg?


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1/21/2013 @ 9:16AM |23,836 views

Why 787 Dreamliner Battery Woes Are the Tip of Boeing's Iceberg


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DSC_8034 Second Dreamliner built for ANA
DSC_8034 Second Dreamliner built for ANA (Photo credit: Wikipedia)
During the last two weeks I was in Hong Kong and Singapore, watching with trepidation the reports of fuel spills and burning batteries on the Boeing (BA) 787 Dreamliner — 50 of its roughly 800 orders — at a $207 million list price — have been delivered so far. Fortunately for one of my colleagues who was scheduled to fly on a 787 back to Boston, the FAA grounded all of them.
When it comes to the technical problems of the 787, the analogy that comes to mind is the iceberg. After all, 10% of its volume is typically above water and the other 90% is below the surface.

Sure the self-immolating batteries are getting plenty of attention at the moment. For example, according to the Wall Street Journal, Japan‘s transport ministry said Monday that it inspected the headquarters of GS Yuasa Corp. in Kyoto — the maker of the batteries that burned up. Needless to say, before the battery problems go away, the cause of the fires must be identified and fixed.
But the other 90% of the 787′s problems may well be below the surface. As I wrote in You Can’t Order Change, there is a host of other troubling problems that spring from the original conception of the 787.
In the past, Boeing has outsourced manufacturing but maintained tight control over design. In that way, Boeing was able to make sure that the pieces that other companies made would fit together well because Boeing engineers understood what each part would do and how they would interact when the plane was flying.
But with the 787, Boeing departed from this approach. Instead — to save money and supposedly to boost quality and speed time to market — Boeing outsourced 60% of the design and manufacture to suppliers. This shifted the investment on to the suppliers who would only get paid once airlines started paying for the 787s.
But it also meant that each supplier of, say, the wings or the batteries that supplied power to the engines or auxiliary systems, would use their own approach to both the design and the manufacture.
For its part, Boeing assumed that its suppliers would share its commitment to quality and meeting ambitious delivery deadlines. But this did not happen and the 787 missed at least seven deadlines and went way over budget.
Furthermore, the 787 is made of carbon fiber material, rather than aluminum. This means that it should be lighter and able to fly at lower altitudes since carbon fiber will not rust, as aluminum does, if it flies in the more humid parts of the atmosphere.
Using carbon fiber also means that Boeing has no previous experience with how the material behaves in flight. So it is hard to build software that will predict how, for example, the wing will maintain its hold on the fuselage during flight.
Moreover, I received reports from a Boeing insider back in 2009 on problems with the 787′s electrical and environmental control systems. The electrical system — that includes GS Yuasa’s lithium-ion battery – is manufactured by French company Thales SA, according to Reuters.
These problems are continuing to cost Boeing plenty. For example, Bloomberg estimates the price tag at $550 million for Boeing to compensate airlines that have lost business thanks to pulling the 787 out of service.
But it does not require a huge amount of imagination to suggest that the cost of the 787 to Boeing could rise much higher. After all, public statements by airlines suggest that they have confidence in the 787′s long-term future.
But what if the airlines and Boeing are now scrambling underneath the surface to investigate and fix a whole host of problems with the 787 whose purported 20% fuel savings offered a big profitability boost to the long-suffering airline industry?
Meanwhile, the time it is likely to take to thoroughly investigate and fix the battery problem alone ought to ground the 787 for months. This could extend the time period over which Boeing must pay compensation to the airlines.
But those costs are nothing compared to the cost to Boeing’s reputation if the 787′s problems end up causing passenger injury or death.
Hopefully, Boeing will bear in mind one of the lessons of the Titanic — don’t push a new technology beyond its limits.
More on Forbes:

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