We sat down with Pat Shanahan, who heads up Boeing airplane programs, at the Paris Air Show for a short conversation.
One of the messages top executives have repeatedly said in recent months is that they will not do two new airplane programs, following the challenging and unhappy experiences on the 787 and 747-8 developments. We asked about this and more.
Hamilton: Why not do two programs—wouldn’t it give you a great competitive advantage over Airbus to do two at once?
Shanahan: It would always be an advantage to bring a product to the market sooner, and if you have a better product to bring to the market sooner, that is always an advantage. The issue is scope and complexity. Doing a replacement for the 737 and 777 at the same time, the work statement is enormous.
When Jim [Albaugh, CEO of Boeing Commercial Airplanes] talks about not trying to do things of the scale simultaneously, it speaks more in terms of managing development long term. Historically, we did things periodically. The span would be 8-10 years before we started a major development program. We’d rather be in a state of continuous development. The advantage to doing that is you are developing a workforce that is continually becoming more productive and efficient. At the end of day, you wind up with lower costs to do more development and development sooner.
Would a derivative program of a 777 and a new program for the 737 class be considered two simultaneous development programs?
There’re always scenarios where the resources of the projects can overlap. It’s a matter to the degree what the work statement is.
How can you accommodate production rates of 60 per month for a New Small Airplane (NSA)? That means starting at a time when rates on the 737 are 42 per month. Is there physical room in Renton to start a third line for a new airplane or will you be forced into a “greenfield” site, wherever that is?
There are a lot of options in Renton. From a space standpoint, we are really not physically constrained. We can accommodate a third production line in Renton.
How much more of the 787-9 and NSA will be back “in-house.” Where is “in-house” and what is quantified as percentages?
I think it’s easier to talk about the -9 than the next airplane. I think broadly speaking, the distribution was 40% designed internally on the 787-8. Now the redistribution is 60% designed in-house on the -9. The fundamental supply chain on the -9 hasn’t changed. There is some mixing-and-matching as we move work around. We’ve changed ownership (in Charleston, where Boeing bought Vought and Global Aeronautica).