SEATTLE POST-INTELLIGENCER
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Boeing confirms another 787 delay
Company is under pressure to deliver
Last updated April 9, 2008 8:53 p.m. PT
By JAMES WALLACE
P-I AEROSPACE REPORTER
After a third embarrassing delay that will push back deliveries of its 787 Dreamliner by another six months, The Boeing Co. is under the gun to finally deliver on a revised and much more conservative schedule.
"There are no technical inventions here. It's a matter of burning through the work," 787 boss Pat Shanahan said in a conference call with media and analysts to explain the latest delays.
The program is about 15 months behind schedule.
First flight, originally set for late August or September 2007, has slipped again, this time from June until sometime in the fourth quarter.
And customers won't get the first Dreamliners until the third quarter of 2009. Under Boeing's original schedule, deliveries were to begin next month.
Shanahan and Scott Carson, chief executive of Boeing Commercial Airplanes, said they are confident the new schedule can be met. It is more conservative and has built-in "margins" in case other issues come up, they said.
Boeing has nearly 900 orders for the Dreamliner.
"I believe in this airplane," Carson said. But he added that he knows Boeing will be judged by "our actions ... not on our words."
Industry analysts said Boeing must come through this time.
"This is the last chance to retain their customers' trust," said Richard Aboulafia of the Teal Group, a consulting firm. "Their credibility has taken a hit, but they can make it good if they keep to the new schedule. This is a schedule they say is conservative. If it's for real, the world will forgive them for everything."
Instead of delivering 109 jets by the end of next year, Boeing drastically cut that number to only 25.
Boeing also said it will ramp up 787 production at a slower and more traditional pace. It expects to be producing 10 planes a month at its Everett factory in 2012 rather than in 2010.
Investors reacted by sending Boeing shares to the biggest one-day gain since November 2006. Boeing shares rose $3.58 to close at $78.60.
J.B. Groh of D.A. Davidson said the announcement of only a six-month delay was "a bit of a relief." A longer delay would have signaled more serious problems. On the other hand, a shorter delay would have been viewed as unrealistic, he said.
Shanahan said progress has been made in getting the remaining work done on the first flight test plane. But two issues, he said, drove the newest delay of two months in turning on the plane's internal power, which now won't happen until June.
One involves the center wing box, the massive structure where the wings are attached to the fuselage. It must be strengthened with about 200 clips and brackets and about 500 fasteners, he said.
And doing this rework slowed critical wiring in that part of the fuselage.
The other issue has been the amount of travel work, or unexpected jobs that Boeing workers must accomplish because of work that traveled from its partner facilities to the Everett plant. Not enough progress has been made in catching up on that work, he said.
Boeing's two biggest unions, which represent engineers and the machinists who assemble its jets, quickly weighed in, blasting the company for outsourcing much of the 787 work to partners.
"Boeing outsourced everything it could to lower costs, and it's hurting this program and the company," said Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace. "Employees are performing heroic efforts to get the 787 back on track, and they are getting no help from corporate leaders in Chicago who consistently ignored the truth coming from employees in engineering offices and the factory floor."
Tom Wroblewski, president of the local Machinists union, suggested that he and Carson spend a week on the 787 assembly line.
"Let's go to the plant floor and listen to the experts who have been building airplanes for 73 years," he said.
Four planes are in final assembly at the Everett plant -- two for ground tests and the first two flight test planes.
Six planes will be used for the 787 flight-test program, which will last eight months. Shanahan said all six planes should be flying by early next year.
Sections of the third flight-test plane will arrive at the end of the month, Boeing said, with sections for the fourth arriving in June. The condition of assembly of the third flight-test plane is about 75 percent better than the first plane, Boeing said.
Cai von Rumohr of Cowen and Co. said it will take awhile to know if Boeing will be able to meet the latest schedule.
"We continue to believe that the critical milestone for determining whether all the bad news is on the table is apt to be a week or two after first flight," he said in a note to investors.
He also said Boeing faces charges of more than $4 billion because of the delays and late penalty payments that will have to be made to customers. That's as much as Boeing earned in 2007.
Carson would not discuss how much Boeing will have to pay unhappy customers. He said it will be awhile before Boeing knows just how many of the nearly 900 Dreamliners that it has sold will be delivered late.
Boeing said its 2008 financial projections have not changed, and it will provide more details when it reports first-quarter earnings on April 23.
The first Dreamliner customer, All Nippon Airways of Japan, issued a harsh statement in response to the latest delay.
"We are extremely disappointed. This is the third delay in the delivery of the first aircraft, and we still have no details about the full delivery schedule," the airline said in an e-mailed statement. "We would urge Boeing to provide us with a 120 percent definitive schedule as soon as possible."
In addition to the initial 787- 8 model, All Nippon Airways and Japan Airlines are the only customers for a short-haul version called the 787-3.
That variant was to come next, but Boeing said the second model produced will be the bigger 787-9. Delivery of that plane, though, will be delayed from late 2010 until early 2012.
Boeing did not give a schedule for entry into service of the 787-3. There has been speculation that Boeing won't go ahead with its development.
John Leahy, chief operating officer for Airbus, told The Wall Street Journal he does not believe the delays will benefit Airbus unless Boeing discovers a serious design issue; Carson and Shanahan said there are none.
Airbus is developing the A350 to compete against the 787. The first variant of the Airbus plane is set to enter service in 2013. It is bigger than the 787.
Aboulafia, the Teal Group analyst, said he doubts Boeing will lose any orders because of the delays.
"It is the only game in town," he said. "There are few places for customers to defect to."

P-I aerospace reporter James Wallace can be reached at 206-448-8040 or jameswallace@seattlepi.com. Read his Aerospace blog at blog.seattlepi.com/aerospace


Thursday, April 10, 2008 - Page updated at 10:00 AM
Permission to reprint or copy this article or photo, other than personal use, must be obtained from The Seattle Times. Call 206-464-3113 or e-mail resale@seattletimes.com with your request.

MIKE SIEGEL / THE SEATTLE TIMES
These Dreamlifters sitting at Paine Field in January are modified Boeing 747s used to carry huge parts of the 787 made by the Dreamliner's suppliers to the Everett plant for final assembly.

Dreamliner delivery plans
NUMBER OF PLANES to be delivered by the end of 2009:
112
Original estimate
109
Revised
(October 2007)
25
Latest
Latest delay of Boeing 787 pushes back first delivery to third quarter of 2009
By Dominic Gates
Seattle Times aerospace reporter
Boeing now expects to deliver the 787 Dreamliner between 14 and 16 months late — yet industry analysts greeted the plan as good news, saying the company Tuesday finally gave them a schedule they could believe.
The first deliveries of the strong-selling new airplane already had been postponed twice before Wednesday's announcement of a new six-month delay. But many Boeing watchers took the latest bad news as affirmation that things were no worse than expected.
"We've just heard the last 787 delay call," said Joe Campbell, a Lehman Brothers analyst. "I think they'll make this schedule from here in. They can do this."
Boeing originally planned to deliver its first 787 next month.
According to the new schedule laid out by Boeing Commercial Airplanes Chief Executive Scott Carson, the plane won't fly until October and won't be delivered until the third quarter of next year.
Boeing also said it will build the planes more slowly, so its customers will get only 25 Dreamliners next year, rather than the 109 proposed last fall. It will ramp up production to 10 per month by 2012.
That small 2009 delivery total reassured observers because it seems more realistic than the previous forecast.
Boeing "finally came up with a number that makes sense," said another prominent Wall Street analyst who asked not to be named because his investment bank doesn't permit him to be quoted in the media.
Boeing's shares rose almost $4 on the news, closing at $78.60
Company officials had previously blamed Boeing's major supplier partners in Italy; Japan; Charleston, S.C.; and Wichita, Kan.; for the delays in finishing the first airplane, which was rolled out to great fanfare last July but is still not expected to be ready to fly for another six months.
During Wednesday's conference call, 787 program chief Pat Shanahan admitted the supply chain remains his biggest worry.
"Where do I think the inherent risk is? I think it's in the capabilities of the supply chain to do the things that we need to have done," said Shanahan "That's the untested part of this production model.... That's where our energy and attention is."
Not surprisingly, local union officials had another take on the supplier situation.
Tom Wroblewski, president of Machinists union District 751, said in a statement that it was past time for "bringing the production of components to the place Boeing has called home for more than 70 years."
"Bring work back"
Likewise, the company's white-collar engineering union, the Society of Professional Engineering Employees in Aerospace (SPEEA), called on Boeing "to correct its flawed reliance on global partners and bring the work back."
"Sending engineers around the world to help suppliers simply transfers all the aerospace knowledge to other companies in other countries," said SPEEA's executive director, Ray Goforth.
Campbell, of Lehman Brothers, in an analytical note published last week ahead of the announcement, estimated that a 14- to 16-month delay would add between $3 billion and $5 billion in extra manufacturing costs and customer contract penalties.
He said the outsourcing of 787 production creates a split: Problems arise at the suppliers, but "the program fixes and ultimately the program costs mostly reside with Boeing. It's still their airplane."
Boeing will ultimately suffer a considerable hit to its bottom line from the delay.
But the impact is obscured by its accounting method, which spreads the massive costs of a jet-development program over hundreds of aircraft and many years.
Although research-and-development costs will likely increase as a result of the schedule change, Carson said, Boeing expects no change to its 2008 profit forecast, and profit growth in 2009 should also be strong.
Meanwhile, Boeing has moved to help its suppliers financially, because they ordinarily don't get paid for their work until an airplane is delivered.
In a filing Wednesday with the Securities Exchange Commission, Spirit AeroSystems of Wichita, which makes the forward fuselage and cockpit of the 787, said Boeing has agreed to pay in advance for the 45 nose sections the supplier had originally contracted to deliver in 2008. Spirit will get about $387 million this year.
Under the original contract, Spirit wouldn't have been paid until the plane was certified.
But with the delays stretching past a year, all the major suppliers balked at Boeing's request to continue producing parts without any money coming in for the work, as if they were subsidiaries of Boeing.
"For Spirit it's great," said the Wall Street analyst who requested anonymity. "For Boeing, it keeps the supply chain going and motivated."
Help for partner
That was part of the reason Boeing last month bought out Vought's share of the Charleston 787 fuselage-assembly plant, providing financial relief to the Dallas-based partner that still builds the rear fuselage sections in Charleston.
The suppliers didn't get all the blame in Tuesday's conference call by Boeing executives, though.
Boeing recently discovered in a structural test that the center wing-box — a heavy piece that holds the wings — needed to be redesigned.
Shanahan blamed "an analysis error" for the problem, which caused a month's delay in finishing the plane's midsection.
Cai von Rumohr, an analyst with Cowen & Co., said the center wing-box error is "kind of a biggie," and that until the airplane flies, "there's still residual risk."
Shanahan said that Dreamliner No. 1 is slowly nearing completion, with the wings nearly ready and the forward fuselage progressing.
"As my boss tells me, don't confuse effort with results. Get the airplane built," he said. "I feel confident about the path forward."
Shanahan said he has built extra margin into the new schedule to cover unforeseen problems. The ramp-up of production to 10 a month will be prudent, and Boeing may increase that rate later.
Ultimately, Boeing must pay its airline customers for the 787 delays. It will take years to work out the penalty payments.
John McMahon, chief executive of Irish airplane-leasing company Genesis, said that given the looming global economic downturn, some airlines will find "it may not be such a bad thing" that their high-priced new assets are pushed out a year.
Airlines who wanted new planes for growth will be harder hit than those who want to replace older planes, whose lives can be extended, McMahon said. But all will likely complain bitterly to Boeing of the harm they are suffering.
Last chance?
Is this latest revision of the schedule Boeing's last chance to get the Dreamliner right?
In reality, no. The Dreamliner is the only midsize new airplane on the horizon. Airbus' A350 won't be delivered earlier than 2013 and likely will be later.
"It can't be a last chance," said a senior executive with an international airline that has 787s on order, speaking on condition he not be identified. "What other choices do we have to get airplanes in 2011 or 2012?"
Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Dreamliner delays

First flight First delivery
Original timeline Aug. 27, 2007 May 2008
Revised (Oct. 2007) March 2008 Nov.-Dec. 2008
Revised (Jan. 2008) June 2008 Left open
Latest (April 2008) Oct.-Dec. 2008 July-Sept. 2009

James Wallace on Aerospace
« UPDATE: 787 briefing | Main

Updated: Boeing delays 787 for third time
Boeing, as expected, on Wednesday announced the third major delay of its 787 Dreamliner.
Executives will give a detailed update on the program shortly and I'll have complete coverage afterward.
Boeing pushed back first flight by at least three months, and postponed first deliveries by about six months.
First flight won't come until the fourth quarter of this year, rather than June.
The first 787 delivery, to Japan's All Nippon Airways, will take place in the third quarter of next year.
"Our revised schedule is built upon an achievable, high-confidence plan," Boeing Commercial Airplanes Chief Executive Scott Carson said in a statement.
Boeing expects to deliver only 25 jets by the end of 2009, less than a quarter of its previous plan to deliver 109.
ANA just e-mailed me the following response:
We are extremely disappointed: this is the third delay in the delivery of the first aircraft, and we still have no details about the full delivery schedule. We would urge Boeing to provide us with a 120% definitive schedule as soon as possible."
As it is night time in Japan we will not be able to get comment from our executives until morning. Thank you for your understanding.
This is the Boeing news release:
EVERETT, Wash., April 09, 2008 -- Boeing [NYSE: BA] today announced a revised plan for first flight and initial deliveries of the 787 Dreamliner that includes additional schedule margin to reduce risk of further delays on the program.
While significant progress has been made assembling Airplane #1, first flight is being rescheduled due to slower than expected completion of work that traveled from supplier facilities into Boeing's final assembly line, unanticipated rework, and the addition of margin into the testing schedule. The new delivery schedule is based on a more conservative production plan developed with the 787 partner team. That schedule now targets approximately 25 deliveries in 2009.
First flight of the all-new airplane will move into the fourth quarter of this year rather than the end of the second quarter, and first delivery is now planned for the third quarter of 2009 instead of first quarter.
Company officials expressed confidence in the new plan and the steps being taken to accelerate program performance.
"Over the past few months, we have taken strong actions to confront and overcome start-up issues on the program, and we have made solid progress," said Boeing Commercial Airplanes President and CEO Scott Carson. "Nevertheless, the traveled work situation and some unanticipated rework have prevented us from hitting the milestones we laid out in January. Our revised schedule is built upon an achievable, high-confidence plan for getting us to our power-on and first-flight milestones. Also, while the fundamental technologies and design of the 787 remain sound, we have inserted some additional schedule margin for dealing with other issues we may uncover in testing prior to first flight and in the flight test program."
The company said in January it would be conducting a comprehensive assessment of its supply chain and production system capabilities to determine the details of the 787's flight test program and initial delivery profile. As a result of that assessment, the first-year delivery plan announced today will be followed by a more gradual ramp up to full-rate production than previously planned.
"We deeply regret the disruption and disappointment these changes will cause for our customers, and we will work closely with each of them to minimize the impact," said Carson. "We have taken significant action to improve supply chain and production system performance, such as our investment in Global Aeronautica, but based on our assessment, the prudent course is to proceed with a more gradual ramp up to full-rate production."
Pat Shanahan, 787 vice president and program manager, echoed Carson's comments about the progress being made in 787 factories.
"The work that remains to be done on Airplane #1 is well defined, and we can see our way to -- and have confidence in -- the new milestones we have set for it," said Shanahan. "We have addressed the major challenges that slowed our progress while trying to complete the primary structure -- the parts shortages, engineering changes, and manufacturing changes -- and we are well into the systems installation that is the precursor to putting power on the airplane for the first time. We have also worked closely with our partners to achieve higher levels of completion of their parts of subsequent airplanes, and we will continue to drive improvements in the supply chain and production system performance," he said.
For tracking program progress, Shanahan outlined a series of milestones that will occur before June 30: 787 static and fatigue structural test airplanes will move to their testing locations; Airplanes #3 and #4 will enter final assembly; hardware airworthiness qualifications will be complete; and power on will be achieved.
Shanahan also said the program has changed the timing of the introduction of two 787 derivatives. The 787-9, a larger variant of the airplane, will be the first derivative of the baseline 787 with delivery planned for early 2012. The 787-3, a shorter-range model previously slated to deliver in 2010, will now become the second derivative of the airplane family.
While research and development costs will likely increase as a result of the 787 schedule change, Boeing expects no change to 2008 earnings guidance. The company continues to expect strong earnings per share growth in 2009 and will provide complete 2009 financial guidance when it holds its first-quarter 2008 earnings conference call later this month. The outlook for the company's defense business and in-production commercial airplane programs remains strong.
UPDATE:
The 787 conference call with Scott Carson and Pat Shanahan just ended. Highlights:
1. "Power on" is pushed back from April until June. This was the result of still too much travel work but also the center wing tank issue. The tank must be strengthened with 200 clips and brackets and about 500 more fasteners. The tank rework, which was described as "routine," came at a bad time, when wiring was to be installed in the mid fuselage of the first flight test plane.
2. All six flight test planes should be flying by early 2009.
3. Boeing expects to have assembled 18 planes, not including the flight test planes, by the time the flight test program ends and the Dreamliner is certified.
4. 787-9 will be delivered in early 2012 rather than late 2010.
Scott Carson said Boeing continues to study the market for the short-haul 787-3, but at this point still plans to go forward with that model after the 787-9.
5. Current schedule has production hitting 10 planes a month by 2012. But Boeing can't yet say how many of the nearly 900 planes sold will be late. Carson could not discuss late penalty payments, saying there must be "complex" talks with customers.
6. Static test plane No. 2 will be out of the 787 bay by the end of the month so assembly can begin on plane No. 3.
UPDATE 2:
Here is my story:
By James Wallace
P-I aerospace reporter
After a third embarrassing delay that will push back deliveries of its 787 Dreamliner by another six months, The Boeing Co. is under the gun to finally deliver on a revised and much more conservative schedule.
"There are no technical inventions here. It's matter of burning through the work,'' 787 boss Pat Shanahan said in a conference call with media and analysts to explain the latest delays.
The program is about 15 months behind schedule.
First flight, originally set for late August or September of 2007, has slipped again, this time from June until the 4th quarter.
And customers won't get the first Dreamliners until the third quarter of 2009. Under
Boeing's original schedule, deliveries were to begin next month.
Shanahan and Scott Carson, chief executive of Boeing Commercial Airplanes, said they are confident the new schedule can be met. It is more conservative and has built-in "margins" in case other issues come up, they said.
Boeing has nearly 900 orders for the Dreamliner.
"I believe in this airplane,'' Carson said.
But Carson added that he knows Boeing will be judged by "our actions'not on our words.''
Industry analysts said Boeing must come through this time.
"This is the last chance to retain their customers' trust,'' said Richard Aboulafia of the Teal Group, a consulting firm. "Their credibility has taken a hit but they can make it good if they keep to the new schedule. This is a schedule they say is conservative. If it's for real, the world will forgive them for everything.''
Instead of delivering 109 jets by the end of next year, Boeing drastically cut that number to only 25.
Boeing also said it will ramp up 787 production at a slower and more traditional pace. It expects to be producing 10 planes a month at its Everett factory in 2012 rather than in 2010.
Investors reacted by sending Boeing shares to the biggest gain since November 2006. Boeing shares gained $3.58 to close at $78.60.
J.B. Groh of D.A. Davidson, said the announcement of only a six-month delay was "a bit of a relief.'' A longer delay would have signaled more serious problems. On the other hand, a shorter delay would have been viewed as unrealistic, he said.
Shanahan said progress has been made in getting the remaining work done on the first test flight plane. But two issues, he said, drove the newest delay of two months in turning the plane's internal power on. This important milestone won't happen until June, he said.
One of those issues, he said, involves the center wing box, which is the massive structure where the wings are attached to the fuselage. It must be strengthened with some 200 clips and brackets and about 500 fasteners, he said.
And doing this rework slowed critical wiring in that part of the fuselage.
All the wire bundles are in the plane, he said. And the installation of the plane's systems is well along.
The other issue responsible for the delay in "power on," according to Shanahan, has been the travel work, or unexpected jobs that Boeing workers must accomplish because of work that traveled from its partner facilities to the Everett plant. Not enough progress has been made in catching up on that work, he said.

Six planes will be used for the 787 flight test program, which will last 8 months. Shanahan said all six planes should be flying by early next year.
Final assembly is already underway on the second flight test plane at the Everett factory.
Sections of the third flight test plane will arrive there at the end of the month, Boeing said, with sections for the 4th plane arriving in June.
The condition of assembly of the third flight test plane is about 75 percent better than the on the first plane, Boeing said. That's up from a 50 percent improvement in the condition of assembly on the second plane.
Cai von Rumohr of Cowen and Co. said it will take a while to know if Boeing will be able to meet the latest schedule.
"We continue to believe that the critical milestone for determining whether all the bad news is on the table is apt to be a week or two after first flight," he said in a note to investors.
He also said Boeing faces charges of more than $4 billion because of the delays and late penalty payments that will have to be made to customers. That's as much as Boeing earned in 2007.
Carson would not discuss how much Boeing will have to pay unhappy customers. He said it will be a while before Boeing knows just how many of the nearly 900 Dreamliners that it has sold will be delivered late.
Boeing said its 2008 financial projections have not changed and it will provide more details when it reports first-quarter earnings on April 23.
The first Dreamliner customer, All Nippon Airways of Japan, issued a harsh statement in response to the latest delay.
"We are extremely disappointed. This is third delay in the delivery of the first aircraft, and we still have no details about the full delivery schedule,' the airline said in an e-mailed statement. "We would urge Boeing to provide us with a 120% definitive schedule as soon as possible."
In addition to the initial 787-8 model, All Nippon Airways, along with Japan Airlines, are the only customers for a short-haul version called the 787-3.
That variant was to come next, after the 787-8. But Boeing said the second model produced will be the bigger 787-9. Delivery of that plane, though, will be delayed from late 2010 until early 2012.
Boeing did not give a schedule for entry into service of the 787-3. There has been speculation that Boeing won't go ahead with its development.
John Leahy, chief operating officer for Airbus, told the Wall Street Journal he does not believe the delays will benefit Airbus unless Boeing discovers a serious design issue – Carson and Shanahan said there are none.
Airbus is developing the A350 to compete against the 787. The first variant of the Airbus plane is scheduled to enter service in 2013. It is bigger than the 787.
Aboulafia, the Teal Group analyst, said he doubts Boeing will lose any orders because of the delays.
He noted the 787 is the only all-new plane of that size.
"It is the only game in town,'' he said. "There are few places for customers to defect to.''
Posted by James Wallace at April 9, 2008 7:43 a.m.
Categories: 787 Dreamliner, Boeing

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Boeing likely to reveal new 787 delay
6-month setback would be third
Last updated April 7, 2008 10:42 p.m. PT
By JAMES WALLACE
P-I AEROSPACE REPORTER
The Boeing Co. will likely announce a delay of at least six more months for the 787 Dreamliner when executives provide an update on the program this week, according to a person with knowledge of the matter.
That would push the program back some 14 months from its original schedule, which had the first Dreamliners being delivered to airlines next month.
Boeing is now approaching the same kinds of delays with the 787 that Airbus experienced with its double-decker A380, which was about 18 months late.
Another 787 delay has been widely expected. Several industry analysts as well as the biggest customer for the plane have all predicted in recent weeks that Boeing would announce a delay of anywhere from six to nine months when it next updated the 787 program.
Boeing said Monday that update, for analysts and media, will come Wednesday, during a conference call with Scott Carson, chief executive and president of Boeing Commercial Airplanes, and Pat Shanahan, vice president of the 787 program.
This will be the third major delay that Boeing has announced on the 787, and industry analysts say the company can't afford a fourth.
The update call "will be critical for Boeing to rebuild credibility," Douglas Harned of Bernstein Research said in a recent note to clients.
"It will be important for management to lay out a timeline of milestones, describe the path to meet those milestones and ensure that progress is visible to investors and customers," he wrote.
Two of those milestones are what's known as "power on" and first flight.
Boeing announced the first delay of six months in October. In January, Boeing announced another delay, this one of three months. At the time, Boeing said "power on" would probably not occur until early in the second quarter, with first flight slipping to the end of June. The 787 was originally supposed to have flown for the first time in late August or early September of 2007.
The "power on" milestone is significant because it means enough of the 787 systems and wiring have been installed so the first plane can operate under its own power.
Boeing also will provide a new 787 delivery schedule in its call Wednesday.
Since early this year, Boeing has been working closely with its 787 partners to better understand how quickly they can ramp up production.
Boeing has already acknowledged that it will not be able to deliver 109 planes as promised by the end of next year. Given another delay of at least six months, it is unlikely that Boeing will be able to deliver even half that many in 2009.
The 787 program delays are the result of mostly production-related issues, including a shortage of parts such as fasteners.
But there are also design issues. Boeing acknowledged last month, following public comments by Steven Udvar-Hazy, founder and chairman of International Lease Finance Corp. and the biggest 787 customer, that it will have to strengthen the center wing box, which is the key structure where the wings are attached to the fuselage. The center wing box also holds fuel.
But the biggest driver of the 787 delays has been Boeing's global partners. They manufacture the composite wings and fuselage of the Dreamliner, and are supposed to install wiring and systems. Boeing is mostly responsible for final assembly of those large sections at its Everett plant.
One of those partners, Vought Aircraft Industries, has had the most problems in meeting 787 production requirements. Late last month, Boeing announced it is buying out Vought's share of Global Aeronautica in Charleston, S.C. This is a joint venture with Alenia Aeronautica, another key 787 partner.
The Charleston facility is the 787 fuselage assembly hub, where fuselage sections made by Vought, Alenia and the Japanese are joined together before being flown to Everett for final assembly.
By buying out Vought's share and taking a direct role in Global Aeronautica, Boeing is betting that it will be able to get the 787 program back on track.

P-I aerospace reporter James Wallace can be reached at 206-448-8040 or jameswallace@seattlepi.com. Read his Aerospace blog at blog.seattlepi.com/aerospace.

Labor Trouble Brews at Marshals Service
By Stephen Barr
The Washington Post
Wednesday, April 9, 2008; D04

There are some unhappy employees at the U.S. Marshals Service.
About 220 criminal investigators at the Justice Department agency have formed Marshals Unified to protest a "conversion program" that permits deputy marshals to become criminal investigators without going through the regular civil service competition for jobs.
"The new conversion program, in effect, violates federal merit-system principles that dictate fair implementation and execution of the hiring and promotion practices of federal agencies," lawyers for Marshals Unified wrote to John F. Clark, director of the Marshals Service.
The dispute, which has gone on for months, demonstrates the ill feelings that can develop in federal agencies when officials change hiring and promotion practices to fill gaps in staffing or meet the demands of increased workloads. Those bad feelings often turn into grievances or court actions if employees perceive that agency managers have no interest in acting on their complaints.
In the Marshals Service case, the conversion program has allowed deputy marshals to become criminal investigators while putting in less time to reach the top career position -- General Schedule grade 12 -- for that occupation, according to lawyers for the investigators who have filed grievances. It permits an investigator to rise to GS-12 a year or two sooner than investigators who followed the regular merit promotion rules.
The program often allows those who convert to be paid more, despite having less experience than investigators in the older merit system. Every paycheck issued to a converted investigator represents a violation of the government's principle of equal pay for equal work, the lawyers said.
When some investigators complained about the conversion program to Clark, they were told to take their concerns to the agency's human resources office, according to the lawyers.
After several months passed with no attention, the investigators sent a letter to Clark through their lawyers. The agency directed them to file individual grievances, and 181 did so.
The grievances, however, were denied by the agency because of "untimeliness," according to a letter from David Anderson, the deputy assistant director for human resources at the Marshals Service.
The grievances were filed in January, too long after the conversions took place, from May 2003 to August 2006, he wrote.
David Turner, a Marshals Service spokesman, said in an e-mail that the deputy conversion program was developed "to enhance the efficiency" of the agency, which has tried to make the program "as fair as possible."
Turner said he could not comment further because grievances are pending.
William L. Bransford, one of the lawyers representing Marshals Unified, said a second grievance has been filed and investigators are awaiting a response from the agency. About 300 marshals were put at a financial disadvantage because of the conversion program, Bransford said.
"You would think an agency with that many unhappy employees would talk to them," he said.
Nominee for Labor Relations Authority
B. Chad Bungard has been nominated by the president for a five-year term as general counsel of the Federal Labor Relations Authority.
If confirmed by the Senate, he would replace Colleen Duffy Kiko, who left last month to become a member of the Employees' Compensation Appeals Board at the Labor Department.
Federal unions prefer that the general counsel's position be filled at the Labor Relations Authority in hopes that their claims will be prosecuted and that the administration will pay more attention to labor-management disputes.
Bungard is general counsel of the Merit Systems Protection Board. Previously he was chief counsel and deputy staff director of the federal workforce subcommittee of the House Oversight and Government Reform Committee

Nothing wrong here in Seattle, where a King County Prosecutor can, in a fit of pique, allegedly assault a woman with his car and then not be properly investigated, nor held accountable for his actions, leaving the victim confused and angry that there is differential treatment for she and her boyfriend than for King County Prosecutor, Scott Peterson. Danatte Griffin says, "He [Peterson] didn't just tap me. He hit me pretty good, in her interview with KIRO News of Seattle. Griffin suffered severe bruising on her upper thighs that she said was caused by Peterson's backing into her with his car, despite her making her presence known to him. Griffin was trying to save a parking space for her boyfriend when Peterson drove up and forcefully took the parking space Griffin was standing in. According to a witness who saw the incident, Peterson impatiently pushed Griffin out of the way with his bumper despite knowing she was standing there waiting.


Unbelievably, Peterson, the lead prosecutor in the recent Boeing Whistleblower trial, was not thoroughly investigated, charged and prosecuted by King County for the alleged assault. The police investigation appears to have been less than it should have been, supporting Griffins complaints of deferential treatment of Peterson in this case. In fact, witnesses of the assault on Griffin, say that they were not even contacted during the investigation, though multiple people saw the incident. The victim's boyfriend however was prosecuted and convicted of assault for taking exception to Mr. Peterson's attitude and actions toward Griffin. Griffin wonders why she and her boyfriend are treated differently than Scott Peterson, King County Prosecutor.

Peterson, after finally agreeing to be interviewed, said "he was having a bad day" and that he "owed the woman an apology." KIRO News is investigating the alleged existence of a good old boy system of protecting insiders inside the King County Justice System. When one puts this incident into comparison with how Scott Peterson conducted the public tarring and feathering of Boeing Whistleblower, Gerald Eastman, this is all the more egregious.

The link:
www.kirotv.com/video/3532554/index.html?taf=sea

This is pretty pathetic considering the times had a large part of this! VM
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"Confusion about law" forces mistrial in Boeing worker case
By Mike Carter
Seattle Times staff reporter
A judge declared a mistrial in the case of an ex-Boeing worker accused of improperly accessing sensitive computer files at work after a King County Superior Court jury failed to reach a verdict Monday after nearly five days of deliberations.
The jury had deadlocked in the computer-trespass prosecution of Gerald Eastman, and jurors were sent home just before noon "because there was confusion about the law and how it applied to the facts of this case," said Senior Deputy Prosecutor Scott Peterson.
Eastman was charged with 16 counts of computer trespass, a charge normally reserved for hackers who force their way into somebody else's personal computer. In this case, however, Eastman was accused of taking files and other information from an employee-accessible system and leaking it to The Seattle Times. Eastman also gave information to the Seattle Post-Intelligencer, according to evidence presented at trial.
Eastman, who worked at Boeing for 18 years — much of it as a quality-control inspector — argued that he had access to those files.
Testimony at his trial indicated that he spent hours every day surfing internal company Web sites, and investigators allege he downloaded more than 8,000 files that police later found saved on his home computer.
Boeing and prosecutors claimed that 16 stories in The Seattle Times contained information from downloaded documents.
On his personal blog, The Last Inspector, the 46-year-old Eastman wrote that one of the jurors came up to him afterward and "shook my hand and said, 'you're my hero.'
"He ... and the other juror(s) who saw that I did not break the law in the case are my heroes, obviously," Eastman wrote.
Peterson and Eastman's attorney, Ramona Brandes, said the jury was irrevocably split, 10-2, for conviction.
Brandes said the jury was faced with a "vague statute" that does not specifically say it is a crime for an employee to access information that an employer doesn't want him to have. Given the facts of the case, she said, the jury's failure to reach a verdict was not surprising and showed that the panel had paid close attention during the trial.
"I am very pleased," she said.
Peterson said he will meet with King County Prosecutor Dan Satterberg "in the next few weeks" to determine whether the case can be retried. He said the jury had sent out several questions in the past few days relating to their "confusion."
Satterberg will meet with Boeing officials, as well, Peterson said.
"We have to decide whether this is a weakness in the evidence that just can't be overcome, or whether we would be successful with another group of 12 people," Peterson said.
Boeing spokesman Peter Conte said the company will welcome a meeting with Satterberg, "but you should know that any decision will be made by the prosecutor."
Eastman was arrested at work in May 2006, briefly held in the King County Jail and fired about that time.
Boeing began an investigation into news leaks and Eastman was identified in 2006 as an employee who had downloaded thousands of pages of documents, some of which contained information that wound up in news stories. Eastman later acknowledged that he had leaked information to The Times.
About that time, Boeing received an e-mail titled "Leaks to The Seattle Times" that identified Eastman as the leaker.
The company began an investigation into Eastman and soon after contacted Seattle police.
As part of efforts to obtain a search warrant, a Boeing official estimated the company stood to lose $5 billion to $15 billion if even a portion of the documents allegedly copied by Eastman were "released to the wrong hands," according to a written declaration provided to police investigators.
There was no evidence at trial that any information of that sensitivity was ever leaked.
Eastman, who was fired for violating company policy, has said he was trying to address serious quality-control issues at the airplane manufacturer.
Mike Carter: 206-464-3706 or mcarter@seattletimes.com

Bush's OSHA: No Laws? No Crimes
By Elizabeth de la Vega
t r u t h o u t | Perspective
Tuesday 08 April 2008
Ninety-seven years ago this month, just eight days after the March 25, 1911, Triangle Shirtwaist Factory fire , in which nearly 150 young men and women suffered horrific deaths, Rose Schneiderman rocked the Metropolitan Opera House.
She was not singing. But her voice, pellucid and sharp, carried the house:
"I would be a traitor to these poor burned bodies if I came here to talk good fellowship. We have tried you good people of the public and we have found you wanting."
Who was Rose Schneiderman? She was, in the words of Frances Perkins (who later became Franklin D. Roosevelt's labor secretary): "an unknown little girl." It was a realistic - not unkind - description of this factory worker, who earned a paltry $5.00 a week for grueling ten-hour days spent sewing linings into golf hats. To the indifferent eyes shaded by those natty caps, the Polish immigrant with a sixth-grade education was almost certainly invisible, or, at best, a curiosity to be observed on a Sunday afternoon East Side-slumming tour.
On Sunday, April 2, however, all eyes were riveted upon the 29-year-old labor organizer with "fiery red hair" who was commanding the Opera House stage.
The Triangle Shirtwaist Factory building, it had been said, was fireproof. And so it was: The structure survived unscathed. The people inside, however, did not. The owners had cut costs by packing seamstresses and chain-smoking fabric cutters into a cramped wood space, eschewing rudimentary procedures necessary to avoid the accumulation of flammable oily rags and littered fabric. Even worse, to avoid the theft of an odd scrap of lace or ribbon, they had locked all but one door to streamline the bosses' daily inspection of pockets and handbags on the employees' way out. So, when the inevitable conflagration began, the mostly teenaged workers - for some of whom the only identifiable remains were their engagement rings (14 in all) - had no way out. They were left to roast to death or hurtle themselves to the pavement.
Suddenly humanitarians after this tragedy, the same Gilded-Age revelers who had caroused through the East Side as if it were Disneyland were moved to donate to Red Cross victims' funds.
Schneiderman was having none of it. It was much too late to offer "a couple of dollars for the sorrowing mothers, brothers and sisters by way of a charity gift." It was also, she reminded them:
"[n]ot the first time girls have been burned alive in the city. Every week I must learn of the untimely death of one of my sister workers. Every year thousands of us are maimed. The life of men and women is so cheap and property is so sacred."
Certainly, much has improved for factory workers since 1911. But, as workers at the Imperial Sugar Co. in Port Wentworth, Georgia, could attest, life is still cheap and property is still sacred. On February 8, 2008, 12 employees there were burned to death and dozens more critically injured because Republicans are committed to making sure no pesky regulations upset that perverse calculation - regardless of the human suffering it entails.
In the early 1900s, as a former New York City fire chief testified regarding factory conditions after the Triangle fire, there was "nobody responsible for anything." Now, of course, we have an office - the Occupational Safety and Health Agency (OSHA) - that is at least putatively responsible for workplace safety. Specifically, OSHA is legislatively mandated to (1) enact industrial standards for toxic substance exposure and site protection; and (2) conduct inspections to ensure those standards are followed.
Unfortunately, OSHA started becoming anemic during the 1990s, and now it is positively spectral. With fewer employees than it had 30 years ago, yet twice the number of workplaces in its charge, OSHA would need 133 years to inspect every business over which it has jurisdiction.
The far more serious problem with OSHA's performance, however, is that, under the Bush administration, it has deliberately avoided setting any significant industrial standards. (To be precise, it has set one, regarding the permissible level of workplace exposure to the known carcinogen hexavalent chromium, but only after a court ordered it to do so.)
OSHA's abdication of its duties is not a matter of incompetence. It is, as Rep. John Barrows (D-Georgia) pointed out in a March 12, 2008, Workforce Protections Subcommittee Hearing of the House, Education and Labor Committee, a purposeful unwillingness to act. Or, to put it more colorfully, as Barrows did:
"When you've got an agency that don't know its job or don't care about its job, or has all kinds of reasons for not doin' its job, it's a little bit like goin' bird huntin' and havin' to tote the dog."
OSHA's failure to enact mandatory standards has not only been fatal to its mission; it has been fatal to the workers.
The Imperial Sugar refinery disaster, for example, followed a long-known pattern of explosions involving finely powdered and, therefore, highly combustible materials, such as chemicals, flour, metals and, of course, sugar. As William Wright, interim executive of the US Chemical Safety Board (CSB), explained at the March 12 Workforce Protections Subcommittee hearing, witnesses familiar with the Port Wentworth facility described seeing snow-like piles of accumulated sugar dust on floor joists, pipes and equipment. When this highly combustible powder was dislodged by an as-yet-unknown event, it fueled the massive explosion and fire.
Like so many factory fires before it, the Imperial Sugar Co. catastrophe was both predictable and preventable. In 2006, the CSB, after identifying 281 combustible dust fires responsible for 119 deaths and numerous injuries, formally urged OSHA to immediately establish mandatory combustible dust hazard regulations.
This report was not a news flash to OSHA. The year before, OSHA itself had issued a bulletin entitled "Combustible Dust in Industry: Preventing and Mitigating the Effects of Fire and Explosions," which had detailed a gruesome history of catastrophic explosions resulting from combustible dust and suggested procedures for prevention of future similar disasters. OSHA emphasized, however, the procedures were not mandatory. Failure to follow them would not be a basis for any adverse action whatsoever:
"This Safety and Health Information Bulletin is not a standard or regulation, and it creates no new legal obligations. The Bulletin is advisory in nature, informational in content, and is intended to assist employers in providing a safe and healthful workplace."
After the CSB issued its report in 2006, did OSHA decide to put some teeth into its recommendations? No. It established a National Emphasis Program to further encourage voluntary employer action.
What about now, after yet another disaster caused by combustible dust? Well, according to Director Edwin Foulkes, OSHA is "saddened by the tragic loss of life that resulted from the Imperial Sugar explosion [and] will not rest until we ensure that all employees go home safely to their families and friends at the end of every work day." So concerned is Foulkes that he has, on behalf of OSHA, sent out a very large number of letters - 300,000 to be exact - reminding employers about dust hazards.
Foulkes has also promised to investigate the issue of mandatory combustible dust standards, but we should not expect those any time soon. Why? Because, as the Triangle Shirtwaist Factory owners discovered when they were acquitted of manslaughter charges after the fire, the best way to avoid criminal liability for even the most egregious workplace malfeasance is not to have any laws at all. Despite infuriating testimony about previous warnings and blocked egress, the jury was unable to find owners Isaac Harris and Max Blenck had violated or failed to comply with any legal requirements: There weren't any.
It was a perfect void of government responsibility. And it is into this very same early-twentieth-century abyss the Bush administration has been dragging us for the past seven years. No regulations, ergo, no violations. No violations, ergo, no criminal culpability. Employers - unfettered by oversight or even laws - can live free and profit. Employees, on the other hand, can live free and die. Meanwhile, however, charitable donations continue to pour in for the families of the Imperial Sugar Co. victims who have been killed or maimed as the result of this unconscionable bargain.
A century has passed since Rose Schneiderman rebuked the citizens at the Metropolitan Opera House in the wake of the Triangle Shirtwaist Factory fire, but were she alive today, I have no doubt that we would again be found wanting.
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Elizabeth de la Vega is a former federal prosecutor with more than 20 years of experience. During her tenure, she was a member of the Organized Crime Strike Force and chief of the San Jose Branch of the US attorney's office for the Northern District of California. Her pieces have appeared in a variety of print and online publications including Truthout, TomDispatch.com, The Nation, The Los Angeles Times, Salon, Mother Jones and The Christian Science Monitor. The author of "United States v. George W. Bush et al," she may be contacted at ElizabethdelaVega@Verizon.net or through Speakers Clearinghouse.
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