Boeing to duplicate Puget Sound work for 787
Boeing plans to make all the parts for the 787 Dreamliner currently produced in the Puget Sound region at a second location so that the second final assembly line being set up in North Charleston, S.C., can operate independently.
By Dominic Gates
Seattle Times aerospace reporter
Local Boeing workers have long complained that only the vertical tail fin of the 787 Dreamliner is built in the Puget Sound region.
But now even that small claim to uniqueness is going to be shared, as Boeing continues to turn the screws on the Machinists union after their two-month strike in 2008.
The company said Monday it plans to use suppliers to replicate production of all 787 parts produced in its Puget Sound-area factories — in Auburn, Everett, Fredrickson — and in Portland, so that a second final-assembly line being established in North Charleston, S.C., can operate independently.
The plan includes setting up a second Boeing facility or finding a supplier to build the vertical tail fin, now made in a state-of-the-art composites-manufacturing center in Frederickson, near Tacoma.
But it appears likely the tail fin will be built by Boeing in Charleston in a building close to the second assembly line for which ground is being cleared.
Boeing spokesman Jim Proulx cited strikes in the Puget Sound region as a major factor in the decision. With a second supplier for every part, Boeing potentially could continue producing Dreamliners in South Carolina even if the Machinists went on strike here.
"Repeated labor disruptions have affected our performance in our customers' eyes," Proulx said. "We have to show our customers we can be a reliable supplier to them." The second production line "has to be able to go on regardless of what's happening over here," he added.
Tom Wroblewski, president of International Association of Machinists (IAM) District 751, said Boeing's move is "another poor decision is a long line of poor decisions on this 787 program."
"Which part of that airplane has come in on time or ahead of schedule and at or under cost?" Wroblewski asked rhetorically of the troubled jet program, about 2 ½ years late and billions of dollars over budget.
"It's the vertical fin," he answered. "That's the piece that's been designed and engineered and built by Boeing workers here in Puget Sound.
"Why does the company insist on spending hundreds of millions of dollars to build a new facility in South Carolina, to bring in tooling, and now to supply that production line, when they have got the capability right here?" Wroblewski said.
He said Boeing could avoid strikes without that expense by bargaining in good faith with the Machinists. Meanwhile, he said, union members are saving the program by working on fixing the problems, many of which originated with other suppliers.
Boeing expects to fly the 787 for the first time next week. "We prove our worth every single day around here," Wroblewski said. "This airplane is going to fly, and it's going to fly because of us."
But by the time Wroblewski sits down in 2012 for the next contract negotiations, Boeing aims to have an alternative 787 parts pipeline in place, ready to bypass the Machinists.
Ray Conner, vice president and general manager of supply-chain management and operations, sent a message Monday informing all Boeing Commercial Airplanes managers of the dual-sourcing decision.
"We will immediately begin identifying, selecting and contracting with suppliers to stand up fully operational coproduction by 2012," Conner's message said.
Proulx said Boeing has not determined how much work will be replicated within the company in the new Charleston facility and how much may go to outside suppliers.
When Boeing broke ground on its Charleston assembly line in November, the company disclosed extensive plans for other buildings at the facility. Among these is a "fin and rudder shop," which suggests the tail fin may be built at Boeing Charleston.
But Proulx said, "It's too soon to say what will go where."
He said the replication of parts sourcing also would "accommodate the ramp-up" required to shift to a planned rollout of 10 planes a month by the end of 2013.
The latest Boeing employment data collected by the state shows that, as of the end of 2007, a little more than 5,200 people worked at Auburn and almost 1,600 in Frederickson.
The interiors fabrication unit is only a small part of the Everett work force, which then numbered almost 28,000. Boeing said about 1,400 employees work in Portland.
Boeing also has fabrication facilities in Australia, Canada and Salt Lake City. The work done at those locations won't be duplicated.
The common denominator among Frederickson, Auburn, Portland and Everett is that all are covered by the IAM District 751 contract.
Frederickson produces the 787 vertical tail fin including composite and metal subcomponents. Portland produces torque tubes, side-of-body chords and engine mounts for the 787. A unit in Everett produces interiors for the 787 cabin. Auburn produces 787 heat shields and the tail cone muffler.
In addition, highly skilled specialist machinists in Auburn provide emergency or urgent manufacturing capabilities, with the ability to make any structural part for any airplane at short notice if any supplier fails to deliver on time.
IAM spokeswoman Connie Kelliher said that because of all the glitches in the supply chain, Auburn machinists are making many 787 parts and sending them to Boeing's final-assembly line in Everett and to supplier facilities.
"Auburn is one of the largest suppliers to the 787 right now," she said. "A lot of them are for the suppliers because they couldn't deliver their parts."
A machinist who asked not to be named because he is not authorized to speak to reporters said workers in Auburn are the top machinists in the company and typically take 10 years to learn the job and get the skill level needed there.
Conner's message said the union knew this was coming.
"We informed the (IAM) of our plans to begin dual sourcing during the company/union discussions preceding our decision to place the second 787 line in South Carolina," Conner's message to managers stated. "We remain committed to strengthening our working relationship with the union."
Ray Goforth, executive director of the white-collar union at Boeing, the Society for Professional Engineering Employees in Aerospace (SPEEA), said Boeing's decision to dual source shows the company "has learned the wrong lessons from the debacle of their 787 supply chain."
Much of the delay in the jet program is attributable to a paralyzed supply chain. Some suppliers Boeing signed up failed to deliver the needed parts on time or delivered them incomplete.
"This is Boeing trying the global supply-chain model again," Goforth said.
Boeing's Proulx said potential external suppliers are being assessed "based on capabilities, based on their ability to produce high-quality components and at the best value."
"We'll review supplier expertise, and we'll ensure that the right level of training and oversight is in place to make sure the performance standards are met," he said.
Conner's message to managers emphasized the decision means duplication, not replacement, of work done in this region.
""We are not moving any work that Boeing employees are currently performing — we are just adding additional sources," Conner said.
However, SPEEA's Goforth said that once the buildup of 787 orders is filled, he sees little business sense in Boeing duplicating work. He fears Charleston and outside suppliers eventually will get more work and this region will get less.
"Why would you keep duplication of industrial capacity?" he said. "It looks like they could be getting out of the business of manufacturing those parts here at some point."
Dominic Gates: 206-464-2963 or firstname.lastname@example.org