Boeing Says Bumps in the Road Should Be Expected in New Production Processes

As it builds the first of its 787 jetliners, Boeing Co. (BA) is grappling with production snags ranging from fuselage sections that didn't fit together perfectly on the first try to an industrywide shortage of the fasteners that hold the plane together.

But the company insists it expected bumps in the road as it started assembling its first all-new plane in more than a decade, and it says it's resolving problems as quickly as they crop up.

The latest hiccup: A 0.3-inch gap where the left side of the nose-and-cockpit section didn't line up with the fuselage section behind it.

Boeing has fixed the problem, which company spokeswoman Mary Hanson characterized as "a normal part of the production process" for new airplanes, whether they're built mostly from carbon-fiber composites like the 787 or from aluminum.

"You go through these issues of building airplanes all the time," she said. "They'll join together perfectly, ultimately. You learn as you do these things, and you make adjustments along the way, and the process gets better."

The Seattle Times reported on the fuselage problem Tuesday after receiving a photograph purportedly taken during the final-assembly process.

Hanson said she could not verify the authenticity of the picture or confirm whether the company routinely takes such photographs as it evaluates its production process and works with its suppliers to solve problems.

The Seattle Post-Intelligencer, citing an unidentified source, reported Tuesday in its aerospace blog that the gap was 1.75 inches wide before Boeing started working to fix the problem. Hanson declined to comment on the report. "The issue is resolved and we've moved on," she said.

Boeing started assembling its first 787 last month, and Hanson said none of the problems encountered so far threaten to delay the plane, which is scheduled to take its first flight around late August and enter commercial service in May 2008.

The 787 will be the first large commercial airliner built mostly from light, sturdy composite materials instead of aluminum, making the plane more fuel-efficient and less expensive to maintain.

Boeing has lined up a vast network of suppliers around the globe that are manufacturing large pieces of the 787, which are then flown on a superfreighter to the final assembly plant in Everett, north of Seattle, where the plane is essentially snapped together.

Because the production process is nothing like Boeing has ever done before, Paul Nisbet, an aerospace analyst with JSA Research Inc., said he hasn't been surprised to hear about production problems.

"I would certainly expect that when you're revolutionizing the way you build the airplane, the first one coming together is going to have some weak points," Nisbet said.

Nisbet compared Boeing's continued confidence about staying on schedule with the 787 to the production problems that forced rival Airbus SAS to delay deliveries of its A380 superjumbo by two years, wiping more than $6 billion off the company's profit forecasts for 2006-2010.

Airbus spokesman Clay McConnell said the A380 program is on the rebound and that customers are giving the company "rave reviews of our ability to recover" from production problems.

The surge in plane orders that both Boeing and Airbus have enjoyed in recent years has put enormous pressure on suppliers of airplane fasteners.

Large sections of the first 787 arrived at the final assembly plant with lots of temporary fasteners that will have to be replaced with permanent ones, an issue first reported in the Post-Intelligencer.

Though Boeing knew about the fastener shortage ahead of time, Scott Strode, vice president of airplane development and production for the 787, said it proved to be a bigger challenge than the company had anticipated.

"We were surprised at how much detailed management we had to do on all of those little fasteners to get them here, but we are getting them here," Strode said when Boeing kicked off final assembly on the first 787.

Alcoa Inc., the world's largest producer of aerospace fasteners and a supplier for the 787, had Boeing visit a few of its Southern California plants in recent weeks as it works on ways to meet demand, Alcoa spokesman Kevin Lowery said.

"Build rates are quite strong and the demand for fasteners for the 787 is stronger than anyone expected," Lowery said.

Boeing has also had to work with Italy's Alenia Aeronautica after the horizontal stabilizer it made for the first 787 arrived with dings that indicated it might have been improperly handled during shipment.

Last week, a top executive at Vought Aircraft Industries in South Carolina, a key 787 partner, resigned amid reports that analysts found its plant to be less impressive than those of other 787 suppliers.

Vought spokeswoman Lynn Warne said the company "is working diligently" to resolve what she characterized as "supplier issues."

Vought builds the 787's rear fuselage sections in a plant in Charleston, S.C., while Global Aeronautica, a joint venture between Vought and Alenia, has a nearby plant where mid-body fuselage sections built in Italy and Japan are joined together.