Boeing's Screamliner

AL'S EMPORIUM
The Wall Street Journal
January 20, 2013

Globalization has led to globule-ization for Boeing.

Lithium-ion batteries in its new 787 Dreamliners have been smoking and spewing corrosive liquids. Aviation authorities around the globe grounded the planes last week until Boeing can prove its melting batteries safe.

Such a grounding hasn't happened since 1979, when engines came loose from McDonnell Douglas DC-10s.

The 787 Dreamliner represents Boeing's future, but now it's stranded on the tarmac.

Boeing CEO Jim McNerney promised to return the plane to service: "We stand behind its overall integrity."

He has been in charge since 2005. Before him, an ethics-preaching Phil Condit was forced to resign after a corruption scandal involving inflated government contracts. Before Mr. Condit, a married Harry Stoncipher was forced to resign after a tryst with a female underling.

This is costing untold millions of dollars a day. Did you hear the one about the Polish airline? On Wednesday, the same day authorities grounded the Dreamliner, LOT Polish Airlines was planning to inaugurate Dreamliner service between Chicago and Warsaw.

Tomasz Balcerzak, vice president at the state-controlled airline, wasn't laughing. He said LOT would seek a lot of compensation from Boeing.

No one knows whether Boeing has a little bug to address or a major flaw that could take months to correct.

The Dreamliner is a Toyota Prius in the sky. It's made of carbon composite parts so it's lighter and uses 20% less fuel. Its electrical system replaces heavier mechanical and hydraulic systems of typical jets. Lighter, faster-charging, lithium batteries are essential. Boeing must find a way to keep them from burning and forcing emergency landings like one All Nippon Airways made in Japan last week. If the batteries must be replaced with heavier ones, the switch could force a costly redesign.

The Dreamliner is already years late to market. It's been plagued with cost overruns and other glitches such as fuel leaks. Its parts are outsourced from suppliers around the world and assembled by a company that's grown too-big-to-fail.

U.S. taxpayers supply billions to foreign airlines buying Boeing planes through the Export-Import Bank. And when Boeing isn't gorging on federal pork, it's shaking down cities for economic-development plums.

"Boeing is a poster child for corporate tax incentives," Kansas state Rep. Jim Ward, a Wichita Democrat, complained to Bloomberg News in January 2012—after Boeing decided to shut down its 80-year-old Wichita plant. Kansas officials had helped Boeing land a fat U.S. Air Force contract and had lavished the company with billions in municipal-bond funding and tax incentives.

In 2001, Boeing pitted Chicago, Dallas and Denver against each other in a contest to see which city would cough up the most loot for its corporate headquarters. The company had been based beside its workers in Seattle since 1917. Now Chicago is stuck with it.

In 2011, the National Labor Relations Board accused Boeing of opening a plant in South Carolina as an illegal retaliatory strike against its union workers in Washington. This highly politicized spat was resolved, but it was no morale builder.

Boeing's melting batteries may be a sign the company has grown too big since its megamerger with McDonnell Douglas in 1997. Globule-ization is what happens when a bloated, corporate bureaucracy tries to innovate.

Source:  http://online.wsj.com