Current Weather
The Spy FM

Grounding Of 787s Creates Doubts About ‘Business As Usual’ At Boeing

Filed by KOSU News in Business.
January 30, 2013

Boeing generated more cash than expected last year and reclaimed the top spot over rival Airbus as the world’s biggest airplane maker.

But all that was overshadowed by the fact that its entire fleet of 787 Dreamliners is grounded after batteries on two of its planes either overheated or caught fire.

“For 2013, our first order of business, obviously, is getting the 787 back into service,” Boeing CEO James McNerney says.

With the National Transportation Safety Board and the Federal Aviation Administration investigating the incidents, McNerney said repeatedly on a conference call he could not hazard any guesses about how and when the review would turn out. .

“I can’t predict an outcome and I’m not going to,” he says. “We’re in the middle of an investigation. We’re making progress on the investigation. We’ve got every expert in the world looking at this issue.”

In the meantime, McNerney says, Boeing plans to keep building the planes on schedule.

“Business as usual, let’s keep making planes and then let’s ramp up as we’ve planned,” he says.

But some are not so sure about continuing the assembly line.

“I’m skeptical, only because we don’t know what we don’t know,” Scott Hamilton, an aviation industry consultant, says.

Without new information, he says it’s impossible to gauge the potential impact of the Dreamliner grounding on Boeing.

“We don’t know what the problem is, we don’t know what the solution is, we don’t know what the design of the fix will be, we don’t know how long the planes will be on the ground,” Hamilton says.

The investigations’ focus have centered on the plane’s new Lithium-ion batteries — notable for both their power and volatility. Several media reports said airlines had returned large numbers of faulty batteries. In Wednesday’s call, however, McNerney dismissed those issues as routine maintenance unrelated to the recent overheating incidents.

“I’m a little surprised that McNerney was so definitive in dismissing the possible connection because I don’t think we know,” Hamilton says.

Boeing’s struggles with the Dreamliner go back in time.

Initial production faced over three years of delays and billions of money in extra costs. The complexities stem in part from the use of new, fuel-efficient technology and materials, and the plane is made from thousands of components made by over 100 manufacturers.

So far, the planes have been grounded for two weeks.

Oppenheimer aviation analyst Yair Reiner says the longer the investigation drags out, the more it’s an indication the problem is complicated — perhaps going beyond just battery issues — and therefore more expensive to fix.

“That progress seems to be evolving more slowly than they might have earlier expected,” Reiner says.

He says coming off a strong 2012 puts Boeing in a good position heading into difficulties. Still, he says, the company really wants to avoid slowing its manufacturing schedule — which could anger airline customers waiting for their new fleets.

“Boeing still has a leash of several weeks, maybe a couple of months, to resolve this before it will likely have to slow down production,” he said.

The company’s stock closed up one percent today and is down three percent since its planes were grounded. [Copyright 2013 NPR]

Leave a Reply

7PM to 9PM The Oklahoma Rock Show

The Oklahoma Rock Show

The Oklahoma Rock Show filters through dozens of submissions a week to find the best in new local music. Ryan LaCroix is the host and mastermind behind the show and teaches at the Academy of Contemporary Music at the University of Central Oklahoma (ACM@UCO).

Listen Live Now!

9PM to 5AM The Spy

The Spy

An eclectic mix of the Spy's library of more than 10,000 songs curated by Ferris O'Brien.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center