No more moonshots stifles innovation

Boeing CEO said there will be no more “moonshots” at Boeing when it comes to future airplane development. Airbus says it will focus on derivatives rather than new airplanes.

After the program debacles of the Airbus A400M and A380 (plus the development cost of the A350) and Boeing 747-8 and 787, we can appreciate the sentiment. However, Boeing CEO Jim McNerney’s statement that doing a new airplane every 25 years is, essentially, bad policy, is disheartening.

Boeing used to be the shining example in the US of innovative technology: The B-17, B-29, B-47, B-52, 707, the versatile 727, the 747, the ETOPS 767, the incredibly reliable 777 and now the 787 (even as troubled as it has been). The 737, best-selling airplane that it is, was not a ground-breaking technology and neither was the 757. But each became solid stable mates in the 7 Series line up.

Airbus also offered ground-breaking technology and concepts. Fly-by-wire. Common cockpits across the family line. Re-engining the A320 family (forcing a reluctant Boeing to do the same with the 737). A technologically impressive A380, even if it’s hardly been the sales success Airbus hoped for.

Innovation and the willingness to taking industrial-leading chances make a company great.

In contrast, McDonnell Douglas is a prime example of derivative mentality. As any aviation geek knows, Douglas Aircraft Co. was an industrial leader. The DC-1, DC-2 and DC-3. The DC-4E begot the DC-4, which was the foundation of the DC-6/7. The DC-8, in the end an also-ran to the 707, was nonetheless a good airplane that became better with the Super DC-8. The DC-9 was a winner. And there it stopped. The MD-80/90 were essentially derivatives of the DC-9. The DC-10 wasn’t ground-breaking; it used current technology on a larger scale. The MD-11 was a derivative of the DC-10.

MDC’s reluctance to invest in new airplanes led to its exit from commercial aviation (it was down to a 7% share in 1997) and, ultimately, from business as an independent company.

McNerney’s suggestion that a replacement for the 757 could be a derivative of the 737 or the 787 is troubling. The 737-9 is already a compromised airplane that can’t be stretched again without major changes. Higher landing gear, a new wing, bigger engines, not to mention a fuselage cross section dating to the 1950s. Doing all this amounts to a new airplane, similar to that of the 727-757 scenario. Old timers will remember the 757 started out as a derivative of the 727 and evolved into a new design, albeit with a similar fuselage.

The 737 needs its own replacement by the next decade. Thus, the next new airplane at Boeing needs to cover the 757 and 737 families, something starting at about 170 seats, going to 220-250 and a range of 3000-4200nm. A 737-based airplane or a down-sized 787 won’t do this. (And McNerney’s prospect of a 787 shrink is hardly the answer; shrinks just don’t do well, as Airbus has seen with the A350-800.) A clean-sheet design is needed that, in Boeing’s term, harvests technology and doesn’t go for ground-breaking and challenging technologies. This is largely what the 757 was. Boeing issue at the time was the simultaneous development of the 757 and 767.

Airbus is facing similar issues. Understandably and equally burned by its own costly program difficulties, like Boeing, officials want to make money rather than spend money. Hence the new focus on derivatives. The A320neo. The prospect of an A330neo and of an A380neo. This new attention for derivatives, with the A320neo already accomplished, lends additional weight toward going forward with the A330neo. The A380neo is too distant, and there is a pressing need to do something with the A330. This also lends some weight to the prospect of developing an A350-1100.

McNerney’s approach raises concerns. Fortunately, he is nearing retirement, probably in 2016–Boeing’s 100th Anniversary. Let’s hope his successor doesn’t follow the McNerney-McDonnell Douglas philosophy.

30 Comments on “No more moonshots stifles innovation

  1. Both manufacturer’s need to do the next step: integrated development. Sounds nice and easy, actually it is not. It more or less questions the entire disciplinary organsiation. However, if we want to evolve over current technology I cannot see any alternative.

    Both manufacturers need to do developments from time to time to retain the capability. Chinese industry is pushing, and despite organisational disadvantages the large number of projects will turn out a capable organization. The technical superiority of the US industry in the 1950-1970 era wasn’t due to exceptional genetics, but due to generous funding, many projects and best minds heading into aeronautics (today they go finance).

    For business-minded CEOs new aircraft are devilish. Never do. Company will create profits for CEO’s term, and leave business safely after the CEO’s cashes his stock options.

  2. Both OEMs need to develop new technologies. The question is, in what direction? Passenger comfort and appeal is what both need, but balanced with the airline’s need to make a profit on each flight. New high tech engines are nice, but costly, but advancements in operating weight control and aerodynamics can improve the gas mileage too. I don’t think we need to advance avionics until airspace separation between two or more airplanes is needed. But I do think we need some pilot training in “old school” airplane operation. Computers on todays airplanes can do just about everything but taxi to/from the runway. Leaving “seat of the pants” flying out of the loop is disastrous, as we saw with AF-447.

  3. I wouldn’t put 1 kopec on the words of Jim, as I’d be very suspicious if those same words came from Fabrice : both CEO employ in the innermost spheres of the OEM’s human matrix a protected core of some extremely creative Artists who will not stop creating, whatever strategies those top guys decide to convey externally to Media.

    The only difference in focus that might occur, if those Artists are left unguided – unchannelled – is that their creativity may go wild so they may come up with some totally weird, unsuspected concepts which will immediately set the mental wheels spinning again at the top, and we’re back to square one : Never Say Never Again !

  4. I always thought that Boeing went too far with the 787. In my opinion it was too bold in its choice of technologies. But now I am afraid Boeing might be going in the opposite direction. I believe a more middle ground is where the future lies.

    Airbus thought that the all-electrical concept for the A350 was too risky, with little additional return. It also chose a more flexible approach with composite panels rather than barrels for the fuselage. And it had an architecture that made room for either Lithium batteries or the more conventional Ni-Cad technology.

    The same thing could be said of Bombardier which chose Ni-Cad batteries while opting for more efficient electric brakes. It also chose composite for the wings while retaining Aluminium-Lithium for the fuselage. That is in my view a more balanced approach.

    I call this philosophy conservative innovation. It optimizes the return while minimizing the risks.

    • I agree that the 787 is a technological revolution, but I’m not so sure how that is going to translate into profit….especially with the recent news concerning the A330 NEO. Not only is this aircraft program looking more optimistic – according to Airbus CEO Fabrice Bregier – but Steven F. Udvar-Házy says the A330 NEO could sell over a 1000 Aircraft. Most importantly, John Leahy of Airbus – who has more street cred than anyone on the industry – also thinks the Airbus A330 NEO could rack up a 1000+ orders.

      Now…I figure this development has got to put a lot of pressure on the profitability of the Boeing 787 – which hasn’t even broke even yet and whose costs are expected to rise to over $25 Billion Screaming Dineros. For the 787 Program….I don’t see how this looks good.

      To me…and I could be wrong….the 787 Program looks like a Technological Moonshot with the potential for only very meager returns….if any returns! Seriously….I don’t even see how any of it’s technology could be rolled into the 777x. I mean, did Boeing make the wings for the 787 so they could apply the lessons to the 777x? Is Boeing going to use CFRP panels on the 777x. Looks like the answer is….”NO” as far as I can tell.

      Truely…this was a Moonshot – and just like the original Moonshot, all that was produced was bragging rights. At least so far. I mean, maybe the 787 will become very profitable one day, but no one has shown us how this might happen.

      Meanwhile, Airbus is busy readying the A350-900 for production. If Airbus is successful – if they can deliver a plane they can build below cost – then I believe they will stuff the 777 Program into the wastebin of history. If Airbus is not able to build an A350 at a reasonable cost…then much suffering and gnashing of teeth are to follow. We will soon see if Airbus’ more conservative approach to A350 development and build will pay off.

  5. I don’t see a focus on derivatives meaning a lack of innovation. The development model that requires infrequent major step changes (ie 100% new aircraft) has some benefits for innovation, but so to does the development model that requires frequent gradual changes (ie derivatives). If a “787” in 2040 has at some stage been re-engined, then re-winged, then re-fuselaged, with bist of re-materialed and re-avioniced thrown in, it could be termed a derivative yet still be almost as state of the art as a clean sheet replacement yet having been able to bring advances earlier in the development pipeline and vastly reduced program risk.

    • A well planned product that is to be produced for a couple of decades should have provisions incorporated that enable easy leveraging of predictable advances in technology.
      the A340/A330 familiy shows that Airbus seems to have done quite a resonable job in that respect. 2/4 engines to handle changes in ETOPS, FBW to finetune aero and range sizing low in the target window to allow for improved engine efficiencies without having to handle a too heavy airframe ( i.e. growing range into a window and not out of it )

  6. The writer has an old-fashioned view which intimates that the air-framers lead the way and not engine manufacturers. In the last 20 years, the majority of innovations have come from GE, PW and RR. The engine makers have invested and continue to invest in new materials, manufacturing methods and mass reduction. The air-framers get the benefit of advances in engine technology, but we are now at the tipping point where the largest unit investment is in engines and MRO programmes, rather than the airframe.

  7. Just another excuse to cut research as per MDC mismanagement. Besides which by getting rid of those pesky- hi paid experienced engineers and techs ( AKA SPEEA ) we can cut costs. Dont need no tribal experience, can do everything on the cheap as shown by the purty powepoint pictures put together by our crack(ed) powe point rangers. Even better, by the time the effluent hits the turbine, Mr McNearney will be long gone.

    IMHO he deserves a moon shot in the traditional fashion. Moon over McNearney !

  8. It is not necessary to change. Survival is optional.

  9. My personal moonshoot: A322 with folding wingtips.
    Boeing has a patent for folding wingtips but Airbus also. The Airbus patent especially mentions a small aircraft.

  10. It becomes even more evident that MD bought Boeing using Boeing’s money/assets-in return for the merged company to use the “Boeing” name.
    Distressing indeed!

  11. The key weaknesses in the 787 program were very weak project management and system integration. Those weaknesses are built into the business strategy, which is notoriously weak on communication, coordination and problem-solving. Ultimately, McNerney’s aversion to moonshots is motivated by the intrinsically poor business model, not daunting technologies.

    • The issue with the B787 wasn’t bad management … it was outrageous target setting. The same program with a lighter schedule, more investments, more buffer space … probably more of a success. Seeing it from today, a large proportion of issues in the B787 were not coming from uncontrollable technology but rather from “too fast too many”. The irony is that the B787 was the financially most attractive program at launch, and became the financially worst program at EIS and beyond.

      • The MCD model and outsourcing was the major problem- as has been well documented in the Book Turbulence.

        Add to that the GE Jack welch model ( since determined by Jack to be flawed ) of ‘ shareholder value- fear and pain for employees, etc.

        And here is an example of some old MDC outsourcing games

      • The 787 was attractive at launch, only because the assumptions in the business model were unrealistically optimistic. The business case assumed exceptionally fast learning curve. Perhaps most impressive was the assumption that “coordination costs” could be avoided, with success depending on market forces at little or no cost to the program. This makes perfect sense in a business school, but not on the shop floor in an aerospace factory.

        Senior management on the 777 program recognized this weakness in the business model, and built in a stronger problem-solving culture and teamwork from the start – even with outsourcing. Senior management on the 787 drank the “market forces” Koolaid, and imposed a very weak problem-solving culture.

          Overweight 787s prompt Air India to ask Boeing for compensation

          The airline is demanding compensation from Boeing for delivering 787 Dreamliner aircraft that don’t meet promised fuel-efficiency targets because the planes are heavier than planned…..
          Why not take the range-payload shortfall out of McNearneys bonus and that of his cadre of power point rangers – thus protecting shareholder value ??

          Overweight ?  Not meeting contract ?  Range issues ?  – Sounds like the DC-10/11 fiasco wherein MDC had to pay a few airlines for the lack of seat fares on certain long routes cus of range shortage at near max loads.  That was thanks to the MDC Aero- mensas re wing design.  Those same mensa types then poluted the BA aero group and tried to sell their ‘ cure’  ( trailing edge inboard wedge ) on 747, and 737.

          Result was a few millions screwup on 737 wing redo for a very minimal benefit.  Thus was born aeropartners and the now famous winglet- first  allowed to be used on BBJ simply to differentiate them from commcial planes, provided they did not ‘ harm’ anything.  ( sort of like the chrome wheel spinners on the pimpmobiles ).
          When flight tests showed then difference between the ‘ wedge” and the winglets- the MDC mensas had a fit and argued about structural issues, and mainly the not invented here issues.

          Looks like deja vue all over again.

      • 787 was a “religious” work of beauty, all superficial, no sound foundation.
        Compare to medieval cathedrals ( forex York minster ) that would not have been buildable ( or survived ) but for the foundation of the roman legionary headquarters underneath. pure luck.
        A Cargo Cult for airplane building, so to speak.

  12. Richard Aboulafia wrote a very insightful piece in 2011 about how we’re moving towards “an engine-centric world.”

    Perhaps the aircraft mfrs. are waking up to the fact that investment in (expensive) airframe projects have comparatively marginal gains when compared to the on-going huge leaps in engine technology (where investment is rewarded with big improvements)?

    • … Layman’s observation (above) touches on this issue too.

    • Airbus has held up this insight for quite some time now allowing not much more than 10% improvements from a new design over existing designs beyond engine gains. ( which, old design done right 😉 , can be applied to old an new )

  13. Run your company like Douglas Aircraft, suffer the fate of Douglas Aircraft.

  14. This is more or less an admission that Boeing’s business/management model is no longer conducive to new airplane development.

    McNerney has made a fateful choice. His choice is to adhere to the business model and practices as applied to the 787’s troubled introduction, and at the same time to forgo any ongoing future benefits from it’s advanced technologies, developed at huge cost.

    He forgets that the competition gets choices as well.

    All this throws timely introduction of 777x into doubt. Boeing will use the introduction of the derivative to introduce these same practices on that airplane as well.

    The current production/management system of the 777 is one large aspect of what made 777x a safe bet for smooth entry into service. I fear Boeing now plans to introduce 787 style chaos into the 777x program.

  15. Well, somebody will build a new 36m CFRP wing, or a 50m CFRP wing. It doesn’t have to be Boeing.

  16. Any company (or country) that focus’ on safe short-term profit over innovative risk will sooner than later join the dinosaur graveyard. That is one reason that Douglas had to join with McDonald’s to create McDonald-Douglas. Then MD followed suit to “merge” with Boeing (read as MD bought Boeing with Boeing’s money).

    Short-term profit (isn’t that the Share Value mantra?) had been glommed onto by too many US companies. We’ll we survive? Who knows. Maybe China will buy the US with US $$. Oh, I forgot. China already holds a large chunk of the US national Debt.

    • Its not mcDonalds ( hamburgers) but McDonnell. Although the MDC types do seem to believes it takes the same skill to flip burgers or make post it notes as to build airplanes

      • It’s a shame because McDonalds is actually a fairly well run company with efficient and happy empoyees.

  17. Too often upper management isolates itself in their Ivory Tower, and feed each other’s egos generating “great ideas” that have been bounced around the ivory tower occupant’s desks/brains with little to no input/reference to the real world down below, and the reality of how the real world actually functions.
    Traditionally the Ivory Tower accusation was used for advanced educational institutions where frequently it fit to a “T”, but it is obvious it has invaded the current corporate world in a big way.
    There are LOTS of “Great Ideas” in this wide world that don’t/can’t actually “Fly”….

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