The heroic effort set the tone for a sprawling Wichita operation that for years has built the cockpits, nose and fuselage sections for some of Boeing's best-selling airplanes.
During 2005, the Tribune closely examined Boeing Co.'s high-stakes effort to regain primacy in the aviation industry and revolutionize air travel during a critical period for one of Chicago's most prominent companies.
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Because the Chicago-based aerospace giant believes modern economics dictate a new strategic model, one that may point to how business will be conducted in a global marketplace in the coming decades.
On Tuesday, Boeing announced that it will unload its plants in Wichita, Tulsa and McAlester, Okla., for $1.2 billion as part of a wrenching effort to restructure itself into a new kind of competitor. Onex Corp., a Canadian holding company, will buy the plants and vows to make them grow more quickly by taking on work from military programs, smaller aircraftmakers and even Boeing's European archrival, Airbus SAS.
Wichita will continue to supply parts to Boeing, but Onex believes it can cut costs by filling up its plants with fresh business from other planemakers.
"It's counterintuitive," said Seth Mersky, managing director of Onex. "You might have thought Boeing's biggest concern would have been don't do business with Airbus. But in fact, it's quite the contrary. They want this factory full, because a full plant will lower the cost for everybody."
Boeing's move is part of a vast restructuring that will forever change the way it makes airplanes. Using its newest plane, the 787 Dreamliner, as a template, Boeing is moving away from its legacy as a wrench-turning manufacturer. The new Boeing will be a master planner, marketer and snap-together assembler of high-tech jetliners.
A sprawling team of suppliers will do the rest, from detailed design to heavy manufacturing. Working in production plants from Japan to China to Italy and France, they will assemble huge airline sections, stuff them with everything from electronics to seats, then airlift them to Seattle. There, the massive parts must fit to tolerances within thousandths of an inch.
"The globalization, sooner or later, asked for this sort of change," said Vincenzo Caiazzo, chief operating officer of the U.S. operation of Alenia Aeronautica, Boeing's Italian partner on the 787 and also a supplier to Airbus.
"The new way has to be about partners. Just one company cannot have the responsibility for developing an aircraft."
Boeing doesn't have much choice. Over the last five years, Airbus has soared past Boeing to take the lead in the $50 billion-a-year commercial airliner market. Created 35 years ago, in part as a giant European jobs program, Airbus has made a dramatic ascent that has transferred billions of dollars in wealth to Europe and eliminated tens of thousands of U.S. jobs.
Boeing is attempting to fight back with the 787, originally known as the 7E7 and the first plane to be made chiefly of carbon-reinforced plastic.
Enlisting the hearts, minds and pocketbooks of a global consortium of industrial partners, Boeing hopes to cut costs and improve design, and in the process become the world's biggest aircraftmaker again.
This isn't just the typical relationship between manufacturer and subcontractor. Boeing will hold the partners to strict, fixed-price contracts intended to slash costs and boost productivity. It wants to draw on their expertise while passing off big chunks of the project's risk.
The partnerships won't work if Boeing can't give up its command-and-control style. Boeing is trying to do that, even though it has not reached a final contract with several of its major partners, months after the first deadline passed. A deal is coming soon, all parties say, but the delay reflects the partners' ongoing concerns about the enormous financial risk of a development project estimated to cost $10 billion.
There is a longer-term risk too. Engineers working on the 787 program fear that the mass outsourcing of design work is causing a brain drain. Others fear the export of know-how might create a powerful new competitor one day.
Shake it up