It has been a good year for Mike Bair. As the man in charge of the 787 Dreamliner, Bair is leading one of the most successful product launches...
It has been a good year for Mike Bair.
As the man in charge of the 787 Dreamliner, Bair is leading one of the most successful product launches in Boeing’s history.
With 364 orders and commitments in hand, and proposals outstanding for 500 more planes, 787 sales have vastly exceeded expectations and helped catapult Boeing past Airbus as the world’s top seller of commercial jets.
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The jet’s design process is on schedule. General Electric and Rolls-Royce, Bair said, are enjoying “the smoothest engine-development programs I’ve ever been involved in.” The project is even under budget.
Yet on a year-end conference call with the media Wednesday, Bair declined to take any of the credit.
“I’m really, really proud of our team. They’ve just done a spectacular job on all fronts,” Bair said. “It’s exciting. It’s humbling. It’s fun.”
Bair may be modest because he understands there is much work to be done before the 787 fulfills the promises Boeing has made to customers, suppliers and shareholders.
“It’s been a big year for the team, ” Bair said, but “next year is going to be as challenging if not more challenging.”
If 2005 was all about signing up launch customers and finalizing the airplane’s configuration, 2006 will shift the focus to the partners who make up the 787’s vast global supply chain.
Boeing is relying on its suppliers more than ever before for the detailed design of the components they will build.
Companies ranging from Mitsubishi Heavy Industries in Japan to Alenia in Italy and Vought in Texas must now engineer parts and manufacturing processes that will keep the 787 on track.
So far, so good, Bair said.
“Messier-Dowty [a French supplier] is machining the first landing gear, and parts are starting to flow in a number of other areas in the supply chain,” he said.
For much of 2005, Boeing had 600 to 800 engineers from partner companies in the Puget Sound area helping it finalize the 787’s high-level configuration.
Those engineers are now back home, building factories, securing machine tools and planning production.
A big question looming over them: How many 787s does Boeing ultimately plan to build each year?
Bair and Boeing Chief Executive James McNerney have insisted Boeing will stick to a conservative delivery schedule in the first 18 months of the program so that it can smooth any startup wrinkles that arise. The first delivery is slated for summer 2008.
Still, Bair said Wednesday the company’s conservative target has increased to 112 deliveries between mid-summer 2008 and the end of 2009, up from its previous target of 96.
“We found a way to pull a few back into the end of 2009,” Bair said.
For 2010 and beyond, Boeing and its partners are still assessing what the optimal production rate should be.
If all its outstanding sales proposals turn into orders, Bair said, 787 production will be essentially sold out through 2012. Such potent demand could tempt Boeing to raise production rates considerably, so that it can rake in as much revenue as possible.
But Bair, McNerney and Commercial Airplanes CEO Alan Mulally remember the problems Boeing encountered in 1997 and 1998 when it raised output too high, too fast.
Making sure there are no kinks in the supply chain is the biggest concern.
“It’s all a very carefully orchestrated, very carefully watched process, so we don’t repeat what we did to ourselves in the late 1990s,” said Bair.
Not only does Boeing face the challenge of building hundreds of 787 Dreamliners, it also will be building them in several different styles.
Bair left little doubt Wednesday that Boeing will eventually build a stretch version of the largest 787, to be dubbed the 787-10, prodded by requests from Emirates, the wealthy Middle Eastern carrier based in Dubai.
Such a plane would seat about 300 passengers in a three-class configuration and could have expanded range capabilities. It would not be available before 2012.
The baseline model currently offered, the 787-8, will have around 210 seats in a three-class configuration, while the larger 787-9 will hold 250 seats in three classes.
“It’s fairly obvious to us that, one, it’s very doable. It’s a very modest investment,” Bair said. “It’s an airplane we see a market for, spurred on by Emirates, which is clearly very interested in an airplane like that.”
Emirates had been expected to decide at the Dubai Air Show in November between the 787 and Airbus A350 for a hefty 50-plane order, with most industry insiders expecting Airbus to win the day.
However, Emirates ordered 42 777-300ERs at the show but said it needed more time to mull over the 787 versus A350 decision because neither airplane met its requirements.
Boeing’s openness to launching the 787-10 could turn the campaign in its favor.
Skeptics have cautioned that a 787-10 would cannibalize sales for one of Boeing’s most popular jets, the 777-200ER, which has a similar seating capacity.
But Bair has an answer for that problem, too.
“Better us to step on [the 777] than somebody else,” he said. “If you can do a product that the market is clamoring for, you’d be silly to deny it.”
David Bowermaster: 206-464-2724 or email@example.com