Top of the News: Boeing Co. Chairman and Chief Executive Jim McNerney used the “once in a lifetime” line to reassure shareholders Monday about the uniqueness of the downturn and the company’s ability to survive it. This phrase is getting a bit shopworn, and allows top executives and economists to claim that all this was just an act of God.
Actually, create an economy based on over-consolidation, deindustrialization, historic income inequality and debt, and public policy tilted to encourage the “innovations”/swindles of an unregulated financial industry — and this could be an event repeated quite often (until there was no economy left).
But I digress. Even though the Boeing CEO was speaking in Chicago, the welfare of the company he leads is most on the minds of the Puget Sound region. Business leaders here are frantic about keeping Boeing. Labor unions feel unfairly targeted. The more information the better. So comes Portfolio magazine’s article on the Dreamliner.
The article is a much more tough-minded take on the troubled 787 program than Boeing shareholders were given Monday.
“The fiasco has become an object lesson for manufacturers in how not to do global outsourcing and has eroded Boeing’s reputation for efficiency and innovation,” writes reporter Jeffrey Rothfeder. “The Dreamliner debacle would be bad news in good times, but it is a nightmare for Boeing in this global economic crisis…” It goes on:
If the plane passes the rigorous yearlong series of flight tests that begin this spring, it could lead Boeing out of the financial crisis. But if the Dreamliner fails, Boeing could become the General Motors of the skies, with enormous repercussions for the U.S. economy and the U.S. manufacturing base.
…the plane fell victim to infighting between Boeing’s bean counters and engineers, who had to gamble on a low-cost–but unrealistic–manufacturing strategy. “We may have gone a little too far, too fast” with the technology and materials and in outsourcing production, Boeing chief executive James McNerney told Conde Nast Portfolio. “The program was more than we could handle.”
The Back Story: Want pictures? Flowing Data has compiled some fascinating graphics on the downturn — visualize where the money went.
Today’s Econ Haiku:
Flu targets the weak
Among the vulnerable