Dog of the Dow #4: Boeing (BA)

The 787 program has been a tough one. Boeing noted, before this program started, that they were going "be a technology" company again, concentrating on major advancements. Two of the major 787 changes: distribution of the costs of new programs (outsourcing) and, in the case of the 787, a major increase in the usage of composites (solid composite tube/barrel). The 787 program is not evolutionary; it is revolutionary! The schedule slides are disappointing but not entirely surprising. Major military programs, e.g. the stealth ATF, are almost always over budget and late because of the “stretch goals”; the 787 had many stretch goals. Airbus’s success drove Boeing’s decision to “go for the gold”. Without a superior product, the EU & Airbus would drive Boeing out of the commercial aircraft business (not to mention Japan, China, Russia et al). If the 787 lives up to its SPECS, the 787 will be a “game changer”; e.g. Airbus decided not to do a composite barrel because it would further delay their A350, i.e. they couldn’t match the 787 in a realistic time period!

Time will tell if the new Boeing business strategy works. The short term results are not proof that it has failed; it’s far to early to write the history of the 787.

Thats what happens when you contract out. Boeing was always able to meet or exceed thir goils prior to trusting subcontractors.

Mr. Navellier,
It is easy to throw out a comment such as "It's tough to trust a company that is this poorly run". The 787 has been an extremely challenging technological advancement in aerospace and the future of commercial aviation. What do you base the poorly run comment on. Do you have any data to back that up? One new product line that has had technical and supply chain challenges also does not represent the entire company. What about all of the products Boeing delivers every day to commercial and defense customers. Boeing is not building corollas. These are very complex integrated systems and assemblies.