Boeing – Updated

In September 2023, I sent my paper, “What Is Wrong at Boeing?” to the C.E.O. of Boeing and also to the Chairman of the Board. Obviously, they didn’t read it.

The issues continue around their production and quality. It has been reported that they are in negotiations to purchase Spirit AeroSystems, a major sub-contractor, where apparently many of these issues are centered. It should be noted, again, that Spirit was, at one time, the Wichita Division of Boeing, before they sold in to a private equity firm in 2005. That firm eventually took Spirit public.

Every day, there is something unfavorable about Boeing in the news. A recent article called for the leadership to be changed. As I mentioned, in my previous paper, Boeing has lost its way. They have too many financial types on their Board, with no aircraft or manufacturing experience.

This situation reminded me of a similar issue that I experienced in the 1960’s.

Although I have a financial background, I had a great mentor at Fairchild in the 1960’s, Charley Blaney. I left public accounting and joined Fairchild’s, Hiller Aircraft Division, in 1966, as “Assistant to the Director of Finance.”

We were a Division of Fairchild and the Director of Finance was the Chief Financial Officer of the operation. In1967, we were merged into the Aircraft Division of Fairchild.

The Aircraft Division had 4,500 employees and operated in 1 million square feet of manufacturing space in Hagerstown, Md. We were producing FH-227 aircraft for the regional airlines,FH-1100 helicopters, Porter STOL ( Short Takeoff & Landing) aircraft, flaps, spoilers and ailerons for the Boeing 720 and 727 Aircraft and putting jet assist pods on C-130’s headed to Vietnam. We also had just opened a bonding facility, where we would be producing flaps, spoilers & ailerons for the Boeing 747 and Boeing’s SST (Supersonic Transport).

After the merger of the two divisions, I was made Controller of the Aircraft Division. One of the issues, that we were facing, was a shortage of parts on the assembly lines, and the ability to track work orders so that manufacturing would know where they were in the chain of events. This was also affecting finance’s ability to estimate cost to complete on the various programs, critical in a manufacturing environment. In addition, marketing had sold the first group of 100 FH-1100 helicopters. However, we were missing parts to complete them, and we were behind in deliveries. As a result, orders were being cancelled, and we had a growing inventory of helicopters, sitting on the tarmac, unable to fly.

The company’s leadership knew that changes were in order and a new General Manager was hired. Charles (Charley) Blaney was the Facility Manager at Martin Marietta’s Orlando, Fl. facility. He was known to most of the Corporation’s Senior Management, as they had previously worked for Martin. Charley was hired because of his production background. As soon as he arrived, he began a regimen of taking one to two hours each morning, and walk through the plant, talking to supervisors and workers. He insisted that I accompany him. From an education perspective, nothing could have been better. After a few weeks, he had seen enough to know what needed to change. This was called “Managing by Walking Around” in the 60’s. A number of books were written on the subject.

Recently, the new President of Sentara Health System announced that he had spent 3 months, and visited each of their operations, and had interacted with employees and supervisors alike, before assuming his new duties. The purpose of this was to understand the operation and what issues existed that needed to be tended to. What a “novel approach.”

One of the first changes was to create a system to track work orders so that everyone would know where they were, and where they should be, from a schedule standpoint. I was given the task, to work with production and IT (Information Technology), to develop a system and could benefit both production and finance.

I created a work group, consisting of production, IT, and finance individuals, to devise a system of tracking work orders. The work order packets already had IBM Computer cards attached but they weren’t being used. As a work order moved from one department to another, we determined that our time recording machines, already linked to our computer system, could be used to track a work order.

When a part, sub-assembly or assembly moved into a new department, an IBM card could be used to enter the fact that it was now in a specific department and the date that it entered. When the part left, that movement would also be recorded.

We would then produce a daily report, that indicated where every work order was located and where it should be from a schedule perspective. This report was then used by production to determine problems and what was necessary to solve them. Finance could use this report in estimating cost to complete. A win, win for both.

Another issue that Charley recognized, was the low morale among the workers. This was a result of being behind in production, and no one listening to their comments, as to the problems that existed. We had suggestion boxes all around the plant, but no one was taking them seriously.

Charley decided to have a company picnic for all employees and their families. However, before that day, he wanted to spruce up the manufacturing floor. There were designated walk ways through manufacturing but the outlines on the floor were worn. As a result, he brought the facility manager in, and told him that he wanted new lines painted on the floor, outlining these walk ways, and he wanted to paint the overhead pipes. He wanted steam pipes painted a different color then the electrical pipes, etc. He objected, and indicated that they didn’t have this in the budget, nor did he have the manpower. Charley said that he wanted this done immediately and he needed to move on it ASAP.

Somehow, this was all accomplished expeditiously, and the family picnic was held for the employees and their families. The employees were allowed to take their families to their work space in the factory. Music and entertainment was available and games were available for the children. It was a great affair for all.

Surprisingly, production and quality improved , morale improved, and the plant operated more efficiently. Work orders were now being completed on time. Sales also improved, as products were now available on a timely basis. A lesson in humanity!

Charley wasn’t college educated. He had grown up in the production of aerospace systems, but he understood what it took to get a successful product “out the door” on time, within cost and with no quality issues. He also understood “human nature.” What unique qualities!

Jess Sweely

Madison , Va.

March 19, 2024