Darling of Jet Industry, Bane of the Picket LineDreamliner Outsourcing at Heart of Boeing StrikeBy Sholnn FreemanWashington Post Staff WriterWednesday, September 10, 2008; D01Think of it as the Toyota Prius of the sky.Built with advanced plastics and carbon fiber from Japan instead of traditional aluminum,the Boeing 787 is much less of a gas-guzzler than other big jets.And like the Prius, the plane is quite hot. Even though the 787 is nearly two years behind schedule, it is the darling of the aviation world, given high fuel prices. Boeing says it has an eye-popping 895 orders, the most successful launch for a commercial jet.With a list price of $150 million to $200 million, the Boeing 787, also known as the Dreamliner, is expected to boost Boeing's profitability well into the next decade.The plane is also at the heart of why 27,000 electricians, riveters and painters covered by the International Association of Machinists and Aerospace Workers went on strike Saturday against Boeing.The workers are assembling the Dreamliner near Seattle from components built elsewhere. Although Boeing has been outsourcing work on planes for years, the level of subcontracting on the 787 is making the machinists insecure."Our members worked very hard and took less during the lean years," said Mark Blondin,a negotiator with the machinist union. "And when the new airplane came, they outsourced it out. All we do is final assembly. There is a deep resentment among our members."Much of the front section and the wings are made in Japan, for example. Parts of the tail are made in South Carolina, a right-to-work state. This outsourcing threatens their jobs, Boeing workers say, even as it has led to delays in building the planes."The percentage has gotten higher and higher and higher, and our members are saying enough is enough," Blondin said. "These are good jobs but if you don't get enough protections, they can go away tomorrow."Blondin said workers agreed to concessions on work rules and lower pay for new hires to keep Boeing healthy in the period after the Sept. 11 terrorist attacks left airline industries in disarray."It's a real slap in the face," Blondin said. "We want that work here in these factories."Union leaders are pressing Boeing to limit outside contractors and want to revisit changesin previous contracts that they say watered down language that allowed the union to challenge subcontracting initiatives. And they want job guarantees for the current workforce over the three-year contract.Connie Kelliher, a spokeswoman for the union, said the demand is feasible given Boeing's $275 billion backlog for plane orders."They are watching the production upturn on the plane, and they see Boeing's future financial strength," said aviation analyst Richard Aboulafia. "They think they have the upper hand, and they do."Analysts estimate that, per month, a strike could cost Boeing $2.85 billion in deferred revenue and $259 million in earnings.Union members are walking picket lines at the gates of Boeing's two main assembly plants in Everett and Renton, Wash. The strike has closed parts plants and other facilities in Wichita and at Edwards Air Force Base in California.The 787 has yet to leave the ground. Its delayed maiden flight had been expected for laterthis year, but some analysts say the strike could force the date back even more. A Boeing spokesman said assembly has stopped because of the strike.The heavy-industry divisions of Mitsubishi and Kawasaki of Japan are constructing muchof the front section of the 787 as well as its wings. Parts of the tail end are being built by Dallas-based aircraft parts maker Vought Aircraft Industries in South Carolina.Global Aeronautica, a 5-year-old South Carolina joint venture, does sub-assembly work integrating pieces that make up the back half of the plane. The firm was owned by Voughtand Alenia North America, a division of Italy's Finmeccanica. Vought and Global Aeronautica share a manufacturing campus adjacent to the Charleston, S.C., airport. Large parts are shipped to Washington on a modified 747, called the Dreamlifter.In March, Boeing stepped in to buy out Vought's share of the joint venture as program delays kept piling up. Boeing said the move was meant to "overcome supply-chain challenges of the program."According to the union, basic assemblers at Vought and Global Aeronautica start out at about $14 an hour. Similar work by unionized machinists at Boeing pays $19 to $21 per hour. The top unionized hourly rate at Boeing is $27 an hour."We truly believe if they had left the design in the hands of Boeing engineers and the build in the hands of the machinists that plane would be flying today," Kelliher said.Analysts say the delays are partially because of the complexity of the 787 design, particularly the use of composite materials for the airframe which some analysts describeas revolutionary for a jetliner. Peter Arment, aviation analyst at American Technology Research, said the 787's advanced design, the unusual manufacturing process and Boeing's accelerated schedule all slowed the plane's development."They've pushed the envelope, and there are some teething issues," Arment said. "Those are really at the heart of why we've seen slippages in the schedule."In the late 1990s, engineers and executives at Boeing began to think about developing a new jet in the midsize category to slot below the 777 and replace the 767. The first concept was a high-performance design that would fly nearly at the speed of sound.Officially announced in March 2001 and called the Sonic Cruiser, the plane would travel at higher altitudes and with greater range than any traditional airliner. It was a direct attempt to leapfrog Airbus's proposed A380 super-jumbo jet.Later that year, the Sept. 11 attacks ushered in a bleak period for Boeing as millions of fearful travelers avoided the skies. Boeing was forced to scale back production of passenger jets as airlines hemorrhaged huge loses, laid off tens of thousands of employees and reduced flight schedules. Boeing engineers shelved the Sonic Cruiser and turned their attention to a jet that focused on efficiency: the
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