www.thepersimmongroup.com
Name Your Plane: Boeing’s 787 Dreamliner and
Communication Management
Understanding the impact of project and program communication on both the actual and perceived
success through examination of the Boeing 787 Dreamliner case
Larry Winters, PMP and Kim Saylor
The Persimmon Group
September 2010
Executive Summary



Boeing’s introduction of the 787 Dreamliner
represents a pivotal effort by the company to
maintain its position in the commercial aviation
market.
The extremely high-risk project has been fraught with
numerous delays that have pushed delivery of the
plane out by at least two years.
Communications by Boeing’s executives, project
team, and customers has evidenced significant
communication management challenges with the
delays and development problems associated with the
787 Dreamliner.
Introduction
Beginning with the “Name Your Plane” competition, The
Boeing Company embarked on an odyssey unlike any
other in its long history. The plane with the name at stake
was at that time called the 7E7, but eventually became
known to the world as the Boeing 787 Dreamliner. This
announcement came in 2003, after more than a decade
without development of any new commercial airliners by
the company. 1 For this reason, it carried the hopes of the
company’s return to dominance of this market, the
restoration of leadership in aviation innovation, and the
regaining of ground against rival commercial aviation
company Airbus. The 787 Dreamliner aimed to achieve
all of these goals through its promise of greater fuel
efficiency and durability. In turn, it was to allow for less
expensive and more direct flights. It simply aimed to be
Patrick Oppmann, “Boeing Dreamliner completes maiden flight,” CNN,
December 15, 2009, http://articles.cnn.com/2009-1215/us/boeing.dreamliner_1_boeing-dreamliner-paine-field-boeing-executive-vicepresident?_s=PM:US, accessed August 2010.
1
the efficient and environmentally friendly plane that could
revitalize the struggling commercial aviation market.
Recognizing the shared aspirations for the project, Boeing
opened a “Name Your Plane” competition to the public.2
Reflecting on the contest’s winning name, vicepresident of branding Rob Pollack stated, “The people of
the world made a great choice. The name Dreamliner
reflects a new airplane that will fulfill the dreams of
airlines and passengers with its efficient operations,
enhanced cabin environment, and the ability to allow
profitable connection to more cities without stopovers.
The name also demonstrates how the airplane’s
economics will enable more people around the world to
fulfill their dreams of traveling to new places,
experiencing new cultures and staying connected to one
another.” 3
Boeing
Founded in 1916, Boeing was initially called the Pacific
Aero Products Company. The name was soon changed to
Boeing Airplane Company. Initially Boeing’s operations
focused around manufacturing aircraft for the United
States during World War I, but their efforts diversified
after the to include manufacturing of aircraft for airmail
transport. Boeing’s management recognized that in order
to accelerate the company’s growth, it needed to design,
mass produce, and sell its own aircraft. After World War
M. Vinya Kumar, “The Making of Boeing’s 787 ‘Dreamliner’,” ICMR Center for
Management Research OPER/053 (Nagarjuna Hills, Hyderabad, India, ICMR,
2006), p. 3.
3
Edward Marek, “The Boeing 7E7 ‘Dreamliner,’ a Plane Designed for
Manufacture and the Customer,” July 2, 2003, post on blog “Talking Proud:
Service and Sacrifice,” http://www.talkingproud.us/Culture/Dreamliner/
Dreamliner.html, accessed September 2010.
2
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II, the focus of the company shifted from the defense
industry to commercial jets. 4
The Boeing 707, introduced in 1952, was Boeing’s
first commercial jet. It was followed in 1960 by Boeing’s
first jumbo jet, the 747. This large-bodied plane went on
to be the company’s most successful aircraft. The 1970s
and 1980s saw Boeing introduce long-range planes
through the 757 and 767 models, and commuter planes
through the 727 and 737 models. Finally, the 777 model
was introduced in 1994. 5 During this time, Boeing
solidified its place at the helm of the commercial aviation
industry by providing innovation and quality that
exceeded its competitors and by consistently delivering
more planes.
The most notable of these competitors was Airbus
Industrie, a European aerospace company originally
founded as a consortium of European aerospace
manufacturers. With the introduction of the A300 and
A300B2 in the early 1970s, Airbus sought to make a mark
on the commercial aviation industry. However, it was the
release of the A320 in 1982 that solidified Airbus’s
presence in this market – over 400 orders for the plane
were received even before the first flight. By the late
1990s, the A330 and A340 models offered by Airbus had
been highly successful, and were countered by only one
big seller from Boeing – the 777.6
After decades of dominating the commercial aviation
Figure 1: Boeing and Airbus have together dominated the commercial
aviation market over the past 20 years.
industry, Boeing now found itself falling behind Airbus
and ceding leadership of the commercial aviation market.
During this time, Boeing suffered from a lack of direction
and an inability to meet customers’ needs. Projects like
the 747X and “Sonic Cruiser” had been shelved due to
lack of buyer interest, especially after pressures imposed
on the airline industry by the September 11th terrorist
attacks on the United States and rising fuel prices. 7
Customers called for greater fuel efficiency rather than
speed. By the early 2000s, Boeing was under sharp
pressure to deliver a new airplane to meet this changing
demand and effectively counter Airbus.
During this time, however, Airbus’s activities were
not without disruption. Their own projects had come up
against obstacles, most notably the A380. The doubledeck, wide-body A380 was developed in the early 2000s,
and experienced significant barriers in production.
Delays in production of the aircraft “eventually stretched
out two years” and damaged the company’s reputation. 8
Despite these obstacles, Airbus was able to gain ground
against Boeing through the offering of a greater quantity
of more modern aircraft. Boeing’s challenge, then, was to
counter this growth by Airbus while also learning from
their mistakes in new aircraft development.
The 787 Dreamliner
It was in this environment that Boeing announced the
7E7, named as such for the efficiency to be offered by the
Figure 2: Until the last decade, Boeing had a significant edge over
Airbus in number of planes delivered.
new
plane. It was not meant to be a super jumbo jet, but rather
a mid-sized, fuel-efficient jet that could meet the need for
“long-range, point-to-point flights that airlines want to
7
Boeing Company, “History: Heritage of Innovation,” Boeing Company website,
http:// www.boeing.com/history/index.html, accessed August 2010.
5
Kumar, “The Making of Boeing’s 787 ‘Dreamliner’,” p. 3.
6
Ibid., p. 2.
4
Ibid., p. 1.
Dominic Gates, “Boeing’s customers expect more delivery delays for 787
Dreamliner,” The Seattle Times, March 12, 2008,
http://seattletimes.nwsource.com/html/boeingaerospace/2004276088_boeing21.
html, accessed August 2010.
8
Name Your Plane: Boeing’s 787 Dreamliner and Communication Management
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offer.”9 To accomplish this feat, Boeing would employ
methods and design elements as yet unseen in the airline
industry.
Significant use of composite materials,
extensive outsourcing, and an expansive supplier network
were all factors that Boeing incorporated in order to
accomplish this pivotal project. However, these all
represented critical success factors that could easily make
or break the project. If Boeing could not ensure that the
incorporation of these three elements was executed
effectively, they risked the failure of the project and
further loss of ground against Airbus.
the globe would enable Boeing to reduce costs; tap into
the greatest expertise available, regardless of location;
and, avoid delays that could be caused if the aviation
industry’s Machinist union were to strike. Strikes by the
union in the past had caused Boeing to encounter costly
delays and renegotiations.
Boeing’s outsourcing decision was deliberately made
to help make the 787 Dreamliner’s production process
more efficient. However, it would inevitably change the
nature of control that Boeing had over its ability to
produce the plane, a fact that increased the risk of the
project significantly.
Composite Materials
Distributed Aircraft Production
At the very beginning of the project, Boeing declared that
fifty percent of the plane was to be made of composite
materials, futuristic substances that offered advantages
over the steel, aluminum, and titanium currently present
in commercial aircraft. 10 These composites included
materials such as carbon fiber-reinforced plastic, and were
strong and light compared to currently used materials.
While the main advantage to composite materials was the
greater fuel efficiency (up to twenty percent less than
competing aircraft) that could be achieved through their
use, other benefits were expected. 11 The materials could
withstand greater pressures and would mitigate corrosion,
contributing to the durability of the plane. In the end, it
would be less costly to operate than competitive offerings,
would be more environment-friendly, and would reduce
overall maintenance costs as compared with aluminum
planes.
Outsourcing
Early in the project, Boeing announced that they planned
to outsource sixty-five percent of the Dreamliner’s
airframe and assembly work overseas. In fact, only one
part – the vertical tail fin – was to be built in Boeing’s
Washington factories. 12
The purpose for this move was three-fold:
construction of the plane in outsourced locations around
David Hirschman, “Boeing Hopes 7E7 Will Fulfill Airlines’ Dream,”
www.ajc.com, July 9, 2003, quoted in M. Vinya Kumar, “The Making of Boeing’s
787 ‘Dreamliner’,” ICMR Center for Management Research OPER/053
(Nagarjuna Hills, Hyderabad, India, ICMR, 2006), p. 2.
10
“Boeing set to unveil Dreamliner,” CNN, July 6, 2007,
http://www.cnn.com/2007/TRAVEL/07/06/bt.dreamliner/index.html, accessed
August 2010.
11
Michael Oneal and David Greising, “Boeing bets big on a plastic plane,”
Chicago Tribune, January 12, 2005, http://www.chicagotribune.com/news/
nationworld/chi-0501120278jan12,0,7928616.story, accessed August 2010.
12
Joseph Weber, “Boeing to Reign in Dreamliner Outsourcing,” Bloomberg
Businessweek, January 19, 2009, http://www.businessweek.com/bwdaily/
dnflash/content/jan2009/db20090116_971202.htm?campaign_id=rss_daily,
accessed September 2010.
9
One of the most innovative strategies that Boeing
intended to employ during the development of the 787
Dreamliner was that of its distributed aircraft production
method. To a greater extent than was typical for the
company, Boeing intended to have large sections of the
plane constructed and assembled in areas around the
globe. This was in part due to the fact that the use of
composite materials would allow for the plane to be built
in large continuous pieces. The pieces, after being
produced around the world, were intended to be shipped
to the company’s Everett, Washington, location for final
assembly. This method would save Boeing millions of
dollars and labor hours currently invested into the
assembly of the aircraft.
The effort, then, would require the collaboration of
nearly six thousand engineers around the world. To help
mitigate some of the risk associated with this very
distributed supplier network, Boeing required that
suppliers were also risk sharing partners in the 787
Dreamliner project. Included in this risk sharing program
were the governments of Japan and Italy, the states of
Washington and Kansas, and numerous other suppliers.
Popular Press as a Snap-Shot of Communication
Boeing recognized that much of the company’s future
ability to compete in the commercial aviation market
hung on their efforts with the 787 Dreamliner. Though
they needed to regain ground lost to Airbus, they also
needed to re-establish their leadership in the minds of
customers and the public at large. As such, they used the
opportunity not only to develop an excellent product
offering, but also to involve and engage the public in the
creation of the plane. In the words of Rob Pollack, vice
president of branding for Boeing commercial airplanes
marketing, “You can expect to see a whole new approach
to how we tell the world about the airplane and encourage
participation and feedback in the work we are doing. We
Name Your Plane: Boeing’s 787 Dreamliner and Communication Management
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are looking at our new airplane as an opportunity to
change the way we do business.”13
Executive Communication
“This [the 787] is a big deal for us. If we don’t get it
right, it influences our future in the business,” said
Michael Bair, Boeing vice-president.14
Boeing’s executive communication throughout
development of the 787 Dreamliner undeniably evidenced
their recognition of the importance of Boeing’s public
image. Consistently, this was demonstrated by their
efforts to downplay any delays or setbacks that occurred
in the development process. Often, delays in the 787
Dreamliner’s timeline were immediately preceded by
assurances that the project was on schedule, and that
everything would be delivered as promised.
Unfortunately, that proved time and again to not be the
case.
Unveiling of the 787 Dreamliner
After five years of planning, the June 2007 unveiling of
the 787 was a reason for celebration among Boeing
executives, employees, customers, and admirers
worldwide. The event, a true party, involved some fifteen
thousand invited guests and included Boeing’s partners in
Japan and Italy via satellite links. The crowd hooted and
hollered as the plane was revealed to the crowd inside the
factory building. The excitement and elation in the crowd
was palpable.
The plane, however, was not completely what it
seemed. It could have told a very different story. In the
words of Seattle Times reporter Dominic Gates, “The 787
Dreamliner is heavier than it should be. It’s got 1,000
temporary fasteners holding things in place. It’s missing
some systems and final wiring.”15
Indeed, the plane’s situation was eventually revealed
to be even more tenuous than what Gates described. The
revealed plane was actually just a hollowed shell of what
was to be presented. During the June assembly of the
plane, engineers had discovered a 0.3-inch gap between
joints of the plane, which had come from different
suppliers in Boeing’s distributed network.16
The
adjustment required significant disconnecting and
“Boeing, AOL Time Warner Kick Off Campaign to Unveil New 7E7 Airplane,”
Boeing press release, May 5, 2003, on Boeing website,
http://www.boeing.com/news/releases/2003/q2/nr_030505g.html, accessed
September 2010.
14
“Will Boeing’s New Idea Really Fly?,” Businessweek, June 23, 2003,
http://www.businessweek.com/magazine/content/03_25/b3838036.htm, accessed
September 2010.
15
Dominic Gates, “Boeing unveils 787 Drealiner in worldwide production,” The
Seattle Times, July 8, 2007, http://seattletimes.nwsource.com/html/
businesstechnology/2003780379_787main09.html, accessed August 2010.
16
Ibid.
reconnecting internal parts to adapt. As a result, the plane
was incomplete at the time of the unveiling, but the
decision was made to go forward. Some of even the outer
structure of the celebrated plane was fake, as the wing
slats were painted wood.
“Standing up a brand new [airplane] program is a
pretty terrifying process early on,” said Michael Bair, who
by that time had been named head of the Dreamliner
program. “There’s a lot of angst” throughout the 787
global supply base, he indicated. 17
Communication from executives through the press,
however, assured customers and the public that
production of the plane was well on track. Now that the
unveiling was complete, it was ready for a much more
important milestone: the first flight in September of 2007.
Six Month Delay
The 787 Dreamliner’s first flight was expected in
September of 2007. However, by October of 2007 it was
now impossible for executives to deny that the project
was behind schedule: there was no way that the plane
would fly in its current state. Despite reassurances from
Boeing executives months earlier, Boeing announced at
this time that there had been a six-month delay to the
project.18
Comments made after this first delay, in late 2007,
indicated that the problems might not all be resolved.
Bair expressed frustration as he alluded to problems with
suppliers. “Some of these guys we won’t use again,” he
said of suppliers. 19 It was becoming evident that the parts
arriving for assembly were not necessarily created to the
quality standard or technical specification that had been
expected.
However, Boeing quickly distanced itself from Bair’s
comments, going so far as to remove him and replace him
with a new lead, Pat Shanahan. In December of 2007,
Shanahan reassured the public that he “intends to stick to
the jet program’s new schedule.” 20 Despite the six-month
delay in the first flight, according to Shanahan, delivery
of the planes would occur as stated in 2008. He reassured
customers and the public: “We meet daily in the factory
within yards of the first airplane. I personally meet with
the senior managers for three to four hours a night to
13
17
Ibid.
“Building the 787 Dreamliner: a timeline,” The Seattle Times, December 15,
2009, http://seattletimes.nwsource.com/html/boeingaerospace/2010050966_787
timeline15.html, accessed August 2010.
19
Dominic Gates, “Boeing’s Dreamliner chief sticking to schedule,” The Seattle
Times, December 12, 2007, http://seattletimes.nwsource.com/html/
boeingaerospace/2004066475_787update12.html, accessed August 2010.
20
Ibid.
18
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review progress.”21 Boeing’s partners, he says, “have the
same sense of urgency and intensity.”22
“Of course, the plan assumes no major unknowns are
uncovered in flight test.” 23
Additional Delays in 2008
January of 2008 saw the announcement of an additional
three-month delay in the 787 Dreamliner production
schedule. In April 2008 another delay was announced,
putting the entire project now fifteen months behind
schedule.
At this point, executives within Boeing began to
acknowledge problems with the project, though they
continued to claim that no further delays were expected.
Bob Noble, vice president of 787 supplier management,
was particularly involved with managing the extensive
problems that had developed within Boeing’s network of
suppliers for the 787 Dreamliner.
“Stressful. Very, very stressful,”24 he said of his job.
However, he paired this with a reassurance that this was
to be expected. “Every airplane I’ve ever worked on has
had a parts problem when it started up.” Furthermore, he
says, “I’ve never lost faith in the airplane and the
production system.” 25
In July of 2008, Shanahan continued reassurances
that the 787 Dreamliner was still on track for its first
flight in the fall of 2008. He publicly joked that Boeing
had “after school detention on Saturday” for those
suppliers that were behind on certification tracks. He
characterized his role in troubleshooting as “a great game
of whack-a-mole.” 26 His statements seemed to
demonstrate a cavalier attitude, which indicated to the
public that he was confident in the production of the
plane.
First Flight Delayed Indefinitely
The plane was on schedule to fly by the month’s end,
according to Boeing Commercial Airplanes CEO Scott
Carson. The chief executive used the June 2009 Paris Air
Show as an opportunity to assure customers and the
public that the plane was to be flown as intended before
July.
21
Ibid.
Ibid.
Ibid.
24
Dominic Gates, “Chief of 787 Dreamliner’s supply chain takes stress in stride,”
The Seattle Times, June 14, 2008,
http://seattletimes.nwsource.com/html/boeingaerospace/2004476707_noble14.html
, accessed August 2010.
25
Ibid.
26
Dominic Gates, “Dreamliner on track despite some glitches, 787 chief says,” The
Seattle Times, June 16, 2008,
http://seattletimes.nwsource.com/html/businesstechnology/2008053808_farnshana
han16.html, accessed August 2010.
22
23
However, on June 23rd, 2009, Boeing stunned the
world by postponing the first flight indefinitely. “It will
be several weeks before the news schedule is available,”
read Boeing’s official statement. 27 In late May, it seemed,
Boeing engineers had found a structural defect while
conducting stress tests on the plane. This was particularly
unsettling, as the novel composite material of the plane
was likely to require more rework and adaption to adjust
to any problems or defects that were found.
Still, stated Carson, “structural modifications like
these are not uncommon in the development of new
airplanes.” He called the fix “quite manageable.” 28
Team Communication
Early Reservations
The launch of the 787 Dreamliner project was the cause
for excitement throughout Boeing. However, members of
the 787 Dreamliner team expressed quite a bit more
realism about the project, even to the point of reservation.
Indeed, these were the individuals who would be
responsible for ensuring that the plane was actually
constructed and could actually take flight.
At the beginning of the project, Chief Engineer Walt
Gillette admitted that he “was not confident of
manufacturing aircraft using composites.”29
He
recognized the difficulties that might arise from the use of
these new materials, and acknowledged that they
introduced much more risk into the production process
than had previously been the norm. As he described it,
“This is a journey none of us has been on. There’s no
answer at the back of the book.”30
Some, though, embraced the view of the project as
communicated through management, and helped to
continue to build excitement around the production of the
plane. Blake Emery, Director of Differentiation Strategy
for the 787 Dreamliner project, was one of those
individuals. Described as “arty” and “stylish,” Emery
understood the efforts of Boeing to keep the production of
the 787 Dreamliner slick and seamless.31
“Boeing 787 Dreamliner faces yet another delay,” CNN, June 23, 2009,
http://articles.cnn.com/2009-06-23/travel/boeing.787.delay_1_dreamliner-boeingcommercial-airplanes-new-orders?_s=PM:TRAVEL, accessed August 2010.
28
“Boeing again delays initial 787 Dreamliner flight,” The Seattle Times, June 24,
2009, http://seattletimes.nwsource.com/html/boeingaerospace/2009372399_web
787delay23.html, accessed August 2010.
29
M. Vinya Kumar, “The Making of Boeing’s 787 ‘Dreamliner’,” ICMR Center
for Management Research OPER/053 (Nagarjuna Hills, Hyderabad, India, ICMR,
2006), p. 8.
30
Michael Oneal and David Greising, “Boeing bets big on a plastic plane,”
Chicago Tribune, January 12, 2005, http://www.chicagotribune.com/news/
nationworld/chi-0501120278jan12,0,7928616.story, accessed August 2010.
31
Dominic Gates, “Boeing unveils 787 Drealiner in worldwide production,” The
Seattle Times, July 8, 2007, http://seattletimes.nwsource.com/html/
businesstechnology/2003780379_787main09.html, accessed August 2010.
27
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“I’m really happy with the way people who love
airplanes are talking about it,” said Emery. “It’s a hit.”32
Allegations of Safety Concerns
In September of 2007, Boeing experienced the first direct
threat to the execution of the 787 Dreamliner project
through an accusation by a fired former employee. The
employee, a veteran senior engineer, went public with
allegations that the new 787 Dreamliner was unsafe, and
that the company was not doing enough to test the plane’s
crashworthiness.
Describing the issue, Vince Weldon claimed that the
issue was “well-covered up” by Boeing, but that a
significant issue existed. 33 He claimed that the composite
fuselage of the plane would be very brittle, and would
create a more severe impact shock in the event of a crash.
Furthermore, a fire would cause the composite material to
break down, releasing toxic fumes and tiny inhalable
carbon slivers. He also alleged that the lightning
preparedness of the plane was not sufficient.
Boeing vigorously denied Weldon’s assertions,
reassuring customers and the public alike that the planes
had been well-tested and were safe for passengers. His
comments were dismissed as those of a disgruntled
former employee. 34
While Weldon’s comments understandably provoked
attention in the press, it is important to note that this
allegation represented only one former employee’s
comments against Boeing. It seemed that most Boeing
employees did not feel the need to raise similar concerns.
Union Setbacks
Throughout the 787 Dreamliner project, Boeing has
experienced delays, occasionally significant, due to
strikes by the Boeing Machinist union. This union, a
branch of the AFL-CIO, is comprised of about 45,000
active, retired, and laid-off workers at The Boeing
Company. 35
Though Boeing had experienced employee strikes in
the past, the last Machinist strike before the 787
Dreamliner project occurred in 1995. However, the
possibility of a strike was always considered to be a risk,
and Boeing’s effort to distribute the production of the
plane was their attempt to mitigate this risk.
32
Ibid.
Dominic Gates, “Fired engineer calls 787’s plastic fuselage unsafe,” The Seattle
Times, September 18, 2007, http://seattletimes.nwsource.com/html/
boeingaerospace/2003889663_boeing180.html, accessed August 2010.
34
Ibid.
35
I am District 751, “About District 751,” I am District 751 organization website,
http://www.iam751.org/pages/about751.htm, accessed September 2010.
33
In 2005, Boeing experienced its first setback in the
787 Dreamliner program at the hands of a machinist
strike. This one-month strike did not affect the company
significantly, but indicated that there may be difficulties
ahead in the relations between the two industries.
It was the Machinist strike that began in September
of 2008 that caused significant delays throughout the 787
Dreamliner supply chain. This 57-day strike caused the
shutdown of most of Boeing’s efforts in Washington,
where parts shipped from suppliers were being assembled.
Because of this shutdown, suppliers were asked to idle
their production. At some suppliers, this caused massive
layoffs, including Vought Aircraft in Charleston, South
Carolina.
“It feels like we are tearing apart our workforce,”
said Joy Romero, Vought’s vice-president for the 787
program. “Our employees were starting to get the
learning curve going.
We were starting to make
progress.”36
After this 2008 strike, it took more than a month to
get production back on track. Additional strikes have
been threatened, but none have affected production so
significantly as this one.
Competitor Communication
Initial Skepticism
In the story of the 787 Dreamliner, there is one character
that has maintained a unique perspective on the issue –
Airbus, the Boeing Company’s chief competitor. The
French company, as currently the leading company in the
commercial aviation market, stands to gain or lose
significant ground based on the success or failure of
development of the new aircraft.
Airbus, like Boeing, has its own experience with
significant delays in production of a new airplane through
the development of the A380. Early in the production of
the 787 Dreamliner, chief of global sales John Leahy
acknowledged that a great idea for an aircraft did not
necessarily indicate the success of the construction. “A
salesman’s dream and an engineer’s nightmare,” is what
he called the project, prophetically indicating the
problems that might arise. 37 Indeed, engineering the 787
Dreamliner through a network of six thousand engineers
across the globe has proven more difficult than Boeing
may have anticipated. Frequently parts do not fit as
Dominic Gates, “Impact of Boeing strike puts brakes on 787 production at
partner Vought,” The Seattle Times, November 11, 2008,
http://seattletimes.nwsource.com/html/businesstechnology/2008375414_vought11.
html, accessed September 2010.
37
M. Vinya Kumar, “The Making of Boeing’s 787 ‘Dreamliner’,” ICMR Center
for Management Research OPER/053 (Nagarjuna Hills, Hyderabad, India, ICMR,
2006), p. 8.
36
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expected, deliveries are not on time, and suppliers do not
complete the work of their project to specified standards.
Unveiling of the Dreamliner
Upon the unveiling of the 787 Dreamliner to the public in
2007, Airbus head Louis Gallois acknowledged the
success of the development to that point. In a letter to
Boeing chief executive Jim McNerney, Gallois stated that
it was a “great day in aviation history.”38
“Even if tomorrow Airbus will get back into the
business of competing vigorously,” stated Gallois, “today
is Boeing’s day to celebrate the 787.” 39
apprehension to Boeing.
Under the condition of
anonymity, some expressed concerns to reporters about
effects the delays were having on their companies.
Boeing’s repeated and unexpected delays were
“putting management in a difficult situation with the
bankers providing its financing,” one said.42
His
company was not getting any details from Boeing, and
had no way to anticipate the accuracy of Boeing’s
announced schedules. One echoed his feelings. “[The
Acknowledgement of Difficulty
As the 787 Dreamliner development has faced continued
delays, Airbus has recognized this opportunity to affirm
its relatively new place at the forefront of commercial
aviation. During July of 2010, Boeing invited the
executives of Airbus for a tour of the new 787
Dreamliner. The experience elicited comments from
Airbus indicating their view of Boeing’s situation. “It’ll
be a very good airplane,” said Airbus chief executive Tom
Enders. “Ours will be better,” referring to Airbus’s A350,
which is scheduled to be available in three years. 40
Airbus expressed contempt at the fact that Boeing did
not choose to do a flying display of the aircraft; the 787
Dreamliner sat still for tours. “They bring new planes and
park them,” said Enders. “We bring new planes and fly
them.” 41
Customer Communication
Ultimately, it would be the customers of Boeing who
would suffer the effects of the continuously changing and
often delayed project schedule of the 787 Dreamliner.
Throughout the duration of the project, however, it is this
group that has received perhaps the most inconsistent and
incomplete information from Boeing executives.
Early Delays
Customers indicated apprehension early in the production
process, though they did not want to indicate that
Dominic Gates, “Boeing unveils 787 Drealiner in worldwide production,” The
Seattle Times, July 8, 2007, http://seattletimes.nwsource.com/html/
businesstechnology/2003780379_787main09.html, accessed August 2010.
39
Ibid.
40
Dominic Gates, “Airbus execs tour the Dreamliner, offering compliments with a
little edge,” The Seattle Times, July 20, 2010,
http://seattletimes.nwsource.com/html/boeingliveeventcoverage/2012405042_airbu
s_execs_tour_the_dreamliner_at_farnborough_they_offer_compl.html, accessed
August 2010.
41
Ibid.
Figure 3: 787 Dreamliner orders peaked in 2007 and have declined
steadily since that time.
schedule] was always aggressive.
Now it’s not
achievable.” 43
A third, whose company had multiple 787s on order,
stated what many were already realizing. “There’s the
official position and then there’s the unofficial
position.” 44
Building Frustration
By mid-2009, the first flight of the 787 Dreamliner had
been delayed indefinitely. One analyst noted that he’d
never seen an airplane delayed this close to its first
scheduled flight. “Usually,” he said, “you get this stage,
and there are no showstoppers. That only increases the
feeling that there are so many uncertainties here.” 45
In an official statement, Japanese airline All Nippon
Airways all but pleaded for information about when its
airplanes would arrive. “We are disappointed that the
first flight of the 787 will be postponed, and urge Boeing
38
Dominic Gates, “Boeing’s customers expect more delivery delays for 787
Dreamliner,” The Seattle Times, March 12, 2008, http://seattletimes.nwsource.
com/html/boeingaerospace/2004276088_boeing21. html, accessed August 2010.
43
Ibid.
44
Ibid.
45
“Boeing again delays initial 787 Dreamliner flight,” The Seattle Times, June 24,
2009, http://seattletimes. nwsource.com/html/boeingaerospace/2009372399_web
787delay23.html, accessed August 2010.
42
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to specify the schedule for the program as a whole as
quickly as possible.” 46
A New Status Quo
Now, after years of delays, Boeing’s customers do not
demonstrate their earlier hesitation to comment on
development of the 787 Dreamliner. Instead, it has
become almost expected for the airlines to issue responses
to the Boeing announcements. It is these responses that
give insight into the communication that customers must
receive from Boeing. Indeed, a very recent delay elicited
varying responses from expectant customers:




Continental Airlines said that it was “disappointed,” and
that they had not yet received an updated time table
about the project.
Japan Airlines Corp. announced that they had received
no word of any postponement.
Delta Airlines acknowledged that they were in
discussions with Boeing over their eighteen-plane order,
but declined to comment on whether they were seeking
penalties.
United Airlines said that they expect their future
deliveries to be on track. 47
not necessarily have to be formally presented or based in
fact. Though Boeing can try to influence analyst
communication through its public statements, much of
this information is decidedly out of the company’s
control.
As this information is widely accessible,
however, it decidedly affects the perceptions of Boeing’s
efforts.
This can have implications for customer
perceptions, future passenger confidence, and shareholder
projections.
Initial Excitement
Boeing clearly recognized the influence of external and
market communications from the beginning of the 787
Dreamliner project. It was this recognition that would
give rise to the “Name Your Plane” competition, as well
as the emphasis on marketing the efficiency, innovation,
and affordability present in the 787 Dreamliner.
In this case, Boeing representatives declined to
comment beyond their brief initial statement.
Market Communication
Boeing has seen significant variance in its stock price
during the execution of the 787 Dreamliner project. The
company’s stock, which rose above $106.00 per share at
the height of the 787 Dreamliner orders, now rests at
around $62.00 per share. During this time, many external
factors have undoubtedly influenced the value of the
stock, including the 2008 stock market crash. However,
stock prices represent a telling look into investors’
perceptions of the company’s performance, future
opportunities, and ability to deliver returns to investors.
External “Authority”
Throughout the life of the project, communication from
individuals and organizations that analyze company
operations have provided an extremely significant volume
of information about the 787 Dreamliner project. Unlike
formal communications from the Boeing Company, this
communication can be virtually instantaneous and does
46
Ibid.
Ben Mutzabaugh, “Will Boeing pay for its latest Dreamliner delay?” USA
Today, August 27, 2010, http://travel.usatoday.com/flights/post/2010/08/boeingdreamliner-delay-penalty/110384/1, accessed August 2010.
47
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Figure 4: Boeing’s stock price has fluctuated significantly over the course of the 787 Dreamliner development
Initially, Boeing was very successful in using the
market at large to propagate excitement around the 787
Dreamliner. News outlets, investor analysts, and blog
authors alike praised the promise of the new plane and
helped to fuel the excitement and anticipation about its
coming availability.
Turning Tide of Opinion
However, as Boeing was quick to recognize the positive
buzz that could be generated by the market in general,
they have also learned how quickly market
communication can turn negative.
Increasingly,
alternative information outlets have bemoaned Boeing’s
handling of the 787 Dreamliner project and have
questioned the ability of the company to deliver on its
promises.
Alternative information sources include sites like
“FlightBlogger” and “All Things 787,” blogs that
disseminate information about the day-to-day happenings
of the 787 Dreamliner project. In addition to companyarticulated information, they provide links to analyst
commentary, videos, and other blogs.
They also
increasingly amplify the struggles of Boeing with the 787.
“You … might be wondering about the activity (or lack
thereof) of test flights on the 787 test fleet,” was the
recent topic of discussion in “All Things 787.”
Current Status
The first flight of the 787 Dreamliner was finally
achieved on December 15, 2009, almost two and a half
years after initially scheduled. However, this event
marked only one of numerous milestones that still remain
in the development of the plane. Five of the six 787
Dreamliner planes are currently engaged in flight tests,
while the sixth is still in production. Their flight tests
have been fraught by unforeseen problems and setbacks,
including ill-fitting parts, design flaws in a bracket to the
plane’s tail, and most recently problems with the plane’s
horizontal stabilizer. In light of the delays and technical
difficulties, 2010 orders for the new plane went negative
for the first time in August of 2010, as the company lost
15 commitments from customers. Furthermore, in late
August 2010 Boeing officially announced that the 787
Dreamliner will not be available for delivery until the
beginning of 2011. This time the company is citing the
unavailability of the engines for test flights.
Boeing’s stock, which rose above $106.00 per share
at the height of the 787 Dreamliner orders, now rests at
around $62.00 per share.
Now, Boeing faces not only the loss of business from
its customers, but also the penalties and fines associated
with late delivery on its contracts with customers. Even
before the latest delay, analysts were estimating that
Boeing’s penalty payments to 787 Dreamliner customers
could reach five billion dollars. Though it is likely that
they will use discounts, maintenance agreements, and
other options to reduce this figure, they will still face a
significant penalty.
The loss of business and penalty payments, though,
are only a small part of the picture that is coming into
focus. As the delays to the 787 Dreamliner program are
more frequent, more publicized, and only briefly
explained by Boeing, the company may face a rising tide
of negative end user opinion. That is, the delays and
Name Your Plane: Boeing’s 787 Dreamliner and Communication Management
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problems with construction of the plane may cause
potential passengers to be skeptical of the safety of the
aircraft.
Closing Remark
As Boeing seeks to conclude the long story of the 787
Dreamliner, the company will face many more
opportunities to communicate the status of the project to
its customers and the public in general. Because delays to
the 787 Dreamliner project represent potential loss of
Boeing’s customers, potential financial penalties, and
potential loss of confidence by plane passengers, it will be
important for Boeing to manage the communication about
its flagship project.
Larry Winters is the Project
Management Practice Leader
and Executive Vice President of
Solution Delivery for The
Persimmon Group. He is a
Project Management Institutecertified Project Management Professional (PMP) with research
interests in the areas of Business Strategy, Project Management,
Project Risk Management, Virtual Teaming and “Green”
Project Management. He is also a member of the American
Association of Cost Engineers (AACE) International as well as
the National Speakers Association (NSA).
Kim Saylor is an Associate for
The Persimmon Group.
She
provides consulting services to
clients and develops content for
TPG training courses and
national speaking engagements.
Her areas of specialization include project management,
strategic planning, and leadership development.
The Persimmon Group is a management consulting firm that
works with organizations, in both the public and private sector
that want a tailored approach to business growth and
improvement opportunities. Since 2004, TPG’s experienced
consultants have provided a wide range of expertise in many
industries and in numerous areas including business strategy,
project management, information technology, and leadership
development, among others.
Name Your Plane: Boeing’s 787 Dreamliner and Communication Management
© 2010 Larry Winters
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September 2010