A New Route for Boeing’s Latest Model

In a cavernous building in Long Beach where 2,500 mechanics and engineers assemble the Boeing 717 aircraft, a 2-foot-tall bell sits silently atop a balcony.

The bell, which sounds whenever a plane is sold, has tolled rarely, and instead has become a stark reminder of the airplane’s uncertain future.

But this month, Boeing Co. launched an ambitious plan that could brighten the outlook on the factory floor.

With hopes of bolstering sales and improving the prospects of the struggling program by cutting production costs, Boeing has begun building the 106-passenger plane on a moving assembly line, a first for the industry.

Under the new process, Boeing hopes to churn out a plane every 20 days, a significant gain on the 65 days the old system required. The technique would also slash costs by more than half, making the plane’s price more competitive and in turn boosting the viability of Southern California’s last commercial airplane program.

How well the technique improves production and reduces costs could also be crucial to Boeing’s decision to develop a smaller 85-passenger version of the 717, which would also be built in Long Beach, aerospace analysts said.

In addition, a successful outcome could prompt the world’s largest airplane maker to employ the technique at other manufacturing plants.

“The whole company is watching,” said Fred Mitchell, executive vice president of operations for commercial airplanes at the Seattle-based company. “If we are successful down there, we will re-host it up here.”

Boeing officials are already considering applying techniques learned in Long Beach at its new $400-million plant in Decatur, Ala., where it makes the next generation of Delta rockets. And in Renton, Wash., workers are in the early stages of putting together a similar moving assembly line to build the 737, the world’s most popular commercial jetliner.

“It’s going to be our model,” Mitchell said of the 717 plant.

Pierre Chao, an aerospace analyst with Credit Suisse First Boston, said successful implementation of the moving line is critical to the viability of the 717, which is about to enter a crucial period in its development. It’s at about this point--two years after introduction--that airplanes either fly or flop.

“The real fork in the road will be the next two years,” Chao said. “In other programs this is when sales really began to take off. If the moving line can lower the cost of manufacturing and be much more competitive on price, that would dovetail very nicely to when you also want to be hitting the marketplace very hard.”

So far, it’s been a struggle. Though Boeing received 149 orders--mostly during the plane’s launch--it has not been able to sign up a major airline. In a recent filing with the Securities and Exchange Commission, Boeing suggested it would need to sell at least 200 to break even.

And Trans World Airlines Inc., one of the 717’s biggest customers, is in financial trouble, putting future purchases in jeopardy. The airline, which recently posted another money-losing quarter, has a contract for 50 717s and so far has taken delivery of only nine. The other major order for 50 717s was placed by AirTran Airways, which is also trying to recover financially.

At the same time, competition is heating up. Brazilian jet maker Embraer struck a deal this month with a Russian research institute to develop a jet that can carry more than 100 passengers, in direct competition with the 717. The largest plane Embraer makes carries about 50 passengers.

And last year, Boeing lost a critical battle with its main rival, Airbus Industrie, when British Airways ordered 12 Airbus A318s with an option to buy 12 more. It was a major blow, because Airbus hasn’t even built the airplane yet, and an order from the airline was seen as critical to garnering other customers.

The 717 is listed at $31 million to $34 million depending on the configuration, but it sells for about $25 million because of discounts based on volume and other factors, analysts said. Boeing won’t say how much it hopes to reduce the cost. The Airbus A318, which will be launched in 2002, is listed at $36 million to $42 million.

“[The 717] has had a lot of headaches,” said Adam Pilarski, an aviation consultant with Reston, Va.-based Avitas Inc. and former chief economist with McDonnell Douglas Corp. “It’s a good plane, but there is lot of competition. They have their work cut out.”

The 717’s future has been tenuous from the beginning. Boeing inherited the plane--then called the MD-95--from McDonnell Douglas when the companies merged three years ago. Production of the MD-11, the MD-80 and the MD-90 was halted shortly after the merger.

Dropping the other McDonnell production lines, coupled with the slow start of the 717, left room for construction of the moving line without disrupting production. As planes were being assembled on one side of Building 80, construction of the line, which included digging a tunnel the length of the facility, began on the other.

Although the production technique has been a staple of the automobile industry for the more than 80 years since its invention by Henry Ford, it is a radical departure from the way planes have typically been made.

For as long as anyone can remember, commercial planes have been put together in discrete stages, mainly because of their complexity and low volume. For instance, Boeing’s 747, the large commercial jetliner, has 125 miles of wiring and 3 million parts.

During World War II, military aircraft were briefly built on a moving assembly line, mainly to churn out planes as quickly as possible. But they were also far less complex than planes are today. When demand for airplanes slowed to a trickle at war’s end, the industry quickly shifted back to the old way.

“We didn’t think about it,” Mitchell said. “‘It was a cultural thing. That’s just the way it was done.”

At Boeing’s Renton facility, a typical plane factory, much of the 737 is assembled as it is parked in a slant position, similar to the way parking spaces are arranged in shopping malls. Mechanics then surround the plane with equipment and tools and add parts to it.

About every two to eight days--depending on the work required--the plane is moved by means of an overhanging crane or a tow truck to another slanted position and more parts are added.

At the first position, for instance, insulation and wiring are installed in the fuselage. In the next position, the wings are joined to the plane’s body, and in the final stage, passenger seats are added.

The plane is moved eight times before it leaves the Renton plant. Each move entails a crew of about 150 working the night shift removing equipment around the plane, shifting the plane to a new position and then setting up the next set of equipment and tools.

At Long Beach, the airplanes will now be hoisted onto a cradle pulled by a pair of chains under the factory floor. As it moves down the line, at about half an inch per minute, parts of the plane will be added.

This month the line moved under its own power for the first time, pulling three planes forward to the next station. The line will “pulse” forward about every six days and is expected to move continuously by summer.

The process, known as “lean manufacturing,” also means a change in the way mechanics work on the airplanes. Mechanics will no longer have to run to the toolshed or the parts room, sometimes in another building, to get the necessary equipment.

Under the new process, the parts and tools will be brought to the mechanic “like a surgeon working on a patient,” said Michael E. Graziano, director of Lean Enterprise for the Long Beach plant. He said that in the standard system, mechanics wasted a lot of time scurrying around for tools and parts.

“We want to treat the mechanic like a surgeon, and we don’t want the surgeon to leave the operating room,” Graziano said.

But not everyone is embracing the new production technique. Some Long Beach workers, bruised by years of layoffs, fear the moving line will mean more job cuts. About 5,000 of 7,500 commercial aircraft jobs in Long Beach have been slashed in the last three years.

Mike McQueen, a 20-year veteran who installs doors on the 717, said his co-workers are worried that automating the process is a way for Boeing to reduce the work force even more. But McQueen, a team leader and shop steward for the union, said he’s been able to convince some that the new line is necessary to keep the program alive.

“It’s hard teaching old dogs new tricks, but we need to do this, or we might be out of a job anyway,” McQueen said.

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Boeing’s Long Beach Division: A Timeline

1941: Donald W. Douglas opens aircraft assembly plant next to Daugherty Field, now Long Beach Airport, mainly to produce military airplanes for World War II.

1958: DC-8, a four-engine commercial jet, makes first flight.

1965: DC-9, a twinjet with aft-mounted engines, makes first flight.

1967: Douglas Aircraft Co. merges with McDonnell Co. to create McDonnell Douglas Corp.

1968: DC-10, a wide-body trijet, begins production.

1972: Last DC-8 is delivered. In all, 556 built.

1980: MD-80 series of twinjets begins production.

1982: Last DC-9 made. In all, 976 built.

1989: Last DC-10 made. In all, 386 built.

1990: MD-11, a wide-body trijet, makes first flight.

1993: MD-90, a twinjet, makes first flight.

1997: McDonnell Douglas merges with Boeing Co.

1998: Boeing 717 begins production.

1999: Last MD-80 is delivered. In all, 1,191 built.

Spring 2000: Last MD-90, the 114th, is built.

Summer 2000: Last MD-11, the 200th, is built.