Boeing Frontiers
September 2002 
Volume 01, Issue 05 
Top Stories Inside Quick Takes Site Tools
New and Notable

Boeing, U.S. Air Force sign $9.7 billion C-17 contract

C-17Boeing and the U.S. Air Force announced Aug. 15 the signing of a $9.7 billion follow-on procurement contract for 60 C-17 Globemaster III transport aircraft.

Since the first C-17 flight in 1991, Boeing has delivered 89 Globemasters to the Air Force. The fleet has logged more than 300,000 hours flying global airlift in support of both combat and humanitarian missions. Most recently the C-17 has been used to ferry troops, equipment, supplies and humanitarian aid into Afghanistan.


Qantas orders four Boeing 737-800s

antas 737-800Australian flag-carrier Qantas Airways has ordered four 737-800 airplanes to join its initial 737-800 fleet of 15. The four new twinjets, due for delivery between May and July of next year, are worth approximately $240 million at list prices.

Qantas introduced 15 winglet-equipped Next-Generation 737-800s on Australian domestic routes earlier this year, operating alongside its existing fleet of 38 earlier-model 737s.

The decision to purchase 737-800s was made following a comprehensive side-by-side comparison with its Airbus competitor, the A320, at Sydney Airport.

Qantas has flown Boeing jetliners for more than 43 years, and currently operates a Boeing fleet of 130 747s, 767s, 737s. Subsidiary QantasLink Airlines operates another 67 aircraft, including 12 Boeing 717s.

Qantas is also the launch customer for the new 747-400ER, which flew for the first time in late July.

Payroll/HR systems integrated to unite company data, procedures

It didn't take long following the merger of Boeing and McDonnell Douglas and the acquisition of Rockwell North American for the new Boeing to look like one company with its familiar Stratotype signs and trademarked logo.

Now, five years after the merger and acquisition, Boeing is operating as one company with a single, integrated Payroll and Human Resources system — considered to be one of the largest of its kind in the world. In the process, 47 separate systems used by the heritage companies that now make up Boeing have been retired.


747-400ER 'handles beautifully'

747-400ERThe newest member of the 747 family, the 747-400ER (extended range), took to the skies over Washington State July 31 on its first flight. Chief Pilot Joe MacDonald said the airplane "handled beautifully" during a flight that lasted almost three hours.

"It was a perfect day for a first flight," MacDonald said. "Qantas and our other customers are going to love this airplane."


MB-XX completes milestone test

Mitsubishi Heavy Industries Ltd. and the Rocketdyne Propulsion and Power unit of Boeing on Aug. 12 announced the successful completion of the preliminary full-scale Combustion Chamber/Injector Assembly test program for the new MB-XX liquid-fueled rocket engine. Flight-like hardware was tested at the MHI Tashiro Test Facility in Japan at full operating pressure and temperatures in multiple test series conducted over a two-year period. Key performance parameters, heat loads, combustion stability and hardware durability were verified.

The MHI-Boeing Rocketdyne team has been commercially developing the MB-XX since 1999 in response to future upper stage engine requirements. The MB-XX will provide improved reliability, operating margins and performance over existing upper stage engines.

Frederickson site celebrates 10th anniversary

Officials in Pierce County, Wash., declared Aug. 6 "Boeing Frederickson Day" in honor of the 10th anniversary of the Fabrication Division's Frederickson site. The facility's almost 1,000 employees celebrated the anniversary along with Boeing executives, union leaders, government officials, community dignitaries and retirees.

A noontime program featured Alan Mulally, president and CEO of Boeing Commercial Airplanes, as he praised the workforce for their skills, hard work, and dedication to fabricating wing kits and 777 empennages. Liz Otis, vice president and general manager of the Fabrication Division, echoed Mulally's praise.

"It is especially meaningful that, over the 10 years of operation, productivity has increased so substantially," Otis said. "By implementing Lean production techniques, our productivity — coupled with great quality and on-time delivery — greatly enhances our ability to compete in this very competitive global market."

Since operations began, some 43,750 wing kits have been fabricated for most models of Boeing commercial airplanes. Fabrication cycle times have improved by almost 90 percent, from 110 days of flow time to 14 days. Flow time for the fabrication and assembly of the 777 horizontal stabilizer and vertical fin has decreased by about 75 percent.

The Boeing Frederickson plant is the sixth-largest private employer in the county, ranking first in production manufacturing.



The country is currently plagued by a series of corporate scandals involving companies that not too long ago were considered top performers. Indeed, recent events at Enron, Tyco, Global Crossing and WorldCom have intensified calls for greater transparency and board oversight.

While much of the press coverage has focused on accounting irregularities and management improprieties, we believe the root cause of most of the recent failures has to do with each company's culture.

We haven't seen The Boeing Company in the headlines. At least not related to any corporate scandal or SEC investigation. Frankly, we're not surprised. While a company's culture is very complex and multidimensional, we believe there are three aspects — or pillars — that make for a healthy culture and company.

1. Manage for value by managing with values. The leadership of a company should be focused on building intrinsic value rather than managing day-to-day stock price performance.

2. Foster open, constructive debate. To build a winning culture, management must place a premium on open communication and information transparency.

3. Play to win, but pick your spots. It is important for an organization to be focused on "playing to win." At the same time, however, a company should be selective in terms of the games it chooses to play. Enron believed it could "add value to any transaction" whether it was trading electricity, national gas or even broadband. In turn, by rewarding only star performers, Enron subtly encouraged employees to "bend the rules" as necessary to stay on top.

It takes years, even decades, to build a great company. Without the firm underpinnings of these three pillars of corporate culture, it's amazing how fast it can all fall appart. Fortunately, The Boeing Company has great strength in all three that should keep the company healthy and growing for at least another 86 years.

Michael Mankins and Jim McTaggart are with Marakon Associates, an international management consulting firm. The authors have worked in the past for Boeing as advisers. Boeing did not pay them for this submission.


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