Monday, April 23, 2018
Business News

Electronics outsourcing weakened Boeing's control over 787 systems

Ten years ago, Boeing had 1,200 engineers in Everett, Wash., designing electronic controls for all its airplanes and a plant in Texas where another 1,200 people built the hardware.

The company created the engineering unit in the early '80s because all systems on a modern jet are managed by electronics.

"It was a strategic move to control the electronics itself," said Dwight Schaeffer, a former senior manager at the plant, known as Boeing Commercial Electronics.

Yet as Boeing launched the 787 Dreamliner program in 2003, management dispersed all those Everett engineers, outsourced their work, then sold the Texas plant. The move was intended to cut Boeing's costs.

On jets before the 787, Boeing Commercial Electronics integrated components from different suppliers so they worked together properly. And if suppliers got in trouble, BCE stepped in and got the job done.

"Now they don't have that capability," said Jerry Packard, another former BCE manager. "That's all lost."

Now, after this year's costly three-month grounding of the 787 because of battery problems, that approach is getting new scrutiny.

Longtime industry analyst Richard Aboulafia worries it may bring the 787 more grief. "Without complete oversight of the subsystems, they might be finding systems glitches for years," he said.

In the aftermath of a rash of 787 systems problems — electrical power-distribution panels and generators as well as batteries — the dissolution of Boeing Commercial Electronics shows how Boeing dealt away in-house expertise and relinquished control over systems suppliers.

BCE designed and built electronic boxes and circuit cards that controlled a multitude of crucial systems on all Boeing planes before the 787.

As a senior manager at BCE, Schaeffer said its role as an integrator of subsystems gave it a clear overview of how a jet's systems came together.

"No supplier would trust another," said Schaeffer. "But the suppliers would trust us not to give away their secrets."

On the 777 program, for example, Honeywell supplied a system to detect when the weight of the plane was on the landing gear; Allied Signal supplied a smoke-detection system for the cargo hold; Hamilton Standard (later Hamilton Sundstrand) supplied an electrical anti-ice system; Fenwal Controls supplied a system to detect leaks in air ducts; Walter Kidde supplied a fire-detection system.

These were all controlled by a single BCE-designed electronics box, as were other systems designed and built by BCE itself, including the hydraulics monitoring and the passenger cabin's environmental controls.

To make it all work together, BCE controlled both the physical format of this vital communications nexus as well as the electrical and software standards for each system. Another key BCE role was bailing out suppliers that got into trouble.

Schaeffer and Packard, now retired, trace some of the 787's problems to losing control of systems design and the disbanding of BCE.

They agreed to speak out publicly against company policies in hopes that Boeing will reverse direction for future jet programs.

Boeing insists that the way it outsourced 787 systems was not significantly different from what it has done in the past.

Instead of relying on multiple suppliers sending in pieces Boeing integrated, the jetmaker had its major systems partners "design, build and integrate subsystems," spokesman Larry Wilson said. "We streamlined our approach."

Mike Sinnett, Boeing senior vice president and 787 chief project engineer, in April told a National Transportation Safety Board investigative hearing on the battery failures that the company maintained tight oversight and overall control on its systems partners.

Compared with the radically new role for 787 airframe suppliers, Boeing's relationship with 787 systems suppliers was "more traditional," he said.

Some suppliers saw the changes as more radical.

Clay Jones, chief executive of Rockwell Collins, which supplies the 787 cockpit avionics suite, said in an interview last year that on the Dreamliner, "Boeing fairly dramatically changed its attitude of how to work with suppliers."

He said Boeing elevated the role of suppliers like his company to that of "true partners."

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