Boeing Checks 787s’ Wings for Cracks on Mitsubishi Notice

Boeing Co. (BA) is checking for hairline
wing cracks on about 40 of its 787 Dreamliners after supplier
Mitsubishi Heavy Industries Ltd. (7011) alerted the planemaker about
possible risks to the aircraft.

A change in the wing-manufacturing process at Tokyo-based
Mitsubishi may have led to cracks in a section of a wing rib,
Marc Birtel, a Boeing spokesman, said yesterday by e-mail. All
the affected jets are still in production, and Boeing is taking
corrective steps, Birtel said, without elaborating.

New inspections add to Boeing’s struggles with its marquee
jet
, whose 2011 commercial debut came more than three years
late. After boosting monthly production to 10 Dreamliners from
seven at the end of 2013, Boeing has struggled to match
deliveries to the new assembly tempo, with only eight planes
handed over this year through February.

“This looks to be a one-off, but obviously it gets a lot
of attention given the history of this program,” Peter Arment,
a New York-based aerospace analyst with Sterne, Agee Leach
Inc., said by telephone after the wing cracking was disclosed.

Boeing fell 0.4 percent to $128 at 5:14 p.m. yesterday in
New York in extended trading. The stock closed at $128.54,
leaving the shares down 5.8 percent this year and trailing the
1.6 percent advance for the Standard Poor’s 500 Index.

Delivery Target

Arment said the price was little changed by news of the
inspections because Boeing said it still intends to deliver 110
Dreamliners this year, as expected, and revenue from customers
won’t decline. He rates Boeing as a buy.

No airlines got any planes that might have wing cracks,
according to Boeing and Mitsubishi Heavy, which didn’t detail
when the manufacturing changes occurred or what they entailed.
The Japanese company said by e-mail that it was investigating
“to determine the cause and implement countermeasures.”

Dreamliners are the first commercial jets built chiefly of
spun composite fibers instead of the traditional aluminum. The
composite wing is distinctive for its 190-foot (58-meter) span
and raked tips and, according to Boeing’s website, is about 20
percent lighter because of the new materials.

Mitsubishi Heavy is among the manufacturers that designed
and built larger, finished components for the 787 under a
production model Boeing created to cut development costs. Snarls
in the plane’s global supply chain and setbacks with its
groundbreaking technology, including materials and electronics,
contributed to the plane’s tardy debut.

Those delays prompted analysts to tag the plane with
sobriquets such as “7-Late-7” and “Lateliner.”

Two Factories

Boeing builds Dreamliners at its main wide-body plant, in
Everett, Washington, and at a newer facility in Charleston,
South Carolina.

At Charleston, Boeing produces 787 center fuselage
sections, with wiring and other components already installed for
the Everett operation, in addition to a separate final assembly
line where jet components from around the world are melded into
finished aircraft.

The South Carolina plant has added contract workers to end
a “bottleneck” in the so-called mid-body assembly that left
fuselage sections sent to Everett incomplete, with jobs not done
and parts to be installed later and out of sequence, according
to Chief Executive Officer Jim McNerney.

“This is what we do all the time, which is to find
bottlenecks and attack them and fix them,” McNerney said at a
Cowen Co. conference in New York on Feb. 5.

Two Versions

The assembly difficulties intensified because the mid-body
in the 787-8 model is the segment that is most different from
the larger -9 version, which Boeing is just now starting to
build, McNerney said.

“This is not about a development program struggling,”
McNerney said at the conference. “We’ve had those struggles,
now we’re into production.”

Deliveries of the 787 totaled 122 to 17 airlines through
February, according to Boeing’s website. With its lightweight
construction, upgraded engines and other technological advances,
the plane is more fuel efficient than comparable twin-aisle
models, according to Boeing.

In 2013, regulators grounded the global fleet for three
months after lithium-ion batteries melted down on two 787s, and
Boeing had to redesign the case for the cells before the jets
won clearance to resume flying. In the U.S., the Federal
Aviation Administration
’s directive to park the plane was the
first of its kind since 1979.

To contact the reporter on this story:
Julie Johnsson in Chicago at
jjohnsson@bloomberg.net

To contact the editors responsible for this story:
Ed Dufner at
edufner@bloomberg.net
James Callan

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