Manufacturers Of Seats, Galleys Can't Keep Up With Demand
Both
Boeing and Airbus face complications in ramping up production of
their most popular -- and profitable -- airliners due to supply
shortages, according to the Wall Street Journal.
If that sounds familiar, that's because Boeing has suffered
well-documented supplier woes with its upcoming 787 Dreamliner.
This time, however,
advanced fasteners for composite fuselage
barrels have nothing to do with it... but rather a
shortage of more mundane items, including passenger seats, toilets
and galleys.
The WSJ says the problems stem from smaller suppliers, which did
not ramp up production in time to meet higher demand. Both
manufacturers are building off record order backlogs, but some
companies haven't been able to keep up.
The specialized nature of some airline requests have also played
a role. Customized galleys, including such niceties as rice cookers
and espresso machines, take longer for suppliers to produce.
Though far from the only culprit, one company taking the brunt
of complaints is Germany's Sell GmbH, which manufactures galleys
for Boeing.
The end result of these shortages have already had an impact.
Boeing was unable to deliver three 777s to Emirates in the second
quarter, due to unfinished interiors. The company missed having
those planes on its sales ledger, as the planemaker missed its Q2
earnings projections... but Emirates says it fared worst of all, as
it's had to stall its expansion to the west coast of the US.
"We have launched firm dates three times only to have to defer
because of Sell's late galleys," said Emirates CEO Tim Clark,
adding travel agents and passengers alike "no longer believe the
dates we give them."
Airbus is also feeling the pressure. Roughly 8 percent of the
company's widebody deliveries so far in 2008 have been affected by
supplier problems, according to an executive with the European
manufacturer.
Tom Williams, Airbus executive vice-president for programs, says
the planemaker hasn't incurred any cancellations from the delays...
but it's come close. "It's also cost a ton of money," he added.
"We've done some horrendous somersaults... The issue can even
escalate to the point that I have to go and ask, 'What the hell's
going on?'"
"You have a huge asset that's not moving, waiting on a galley,"
said Steve Schaffer, Boeing's vice president and general manager
for supplier management. "It does disrupt our factory."
Paul Carter is CEO of Britain's Premier Aviation Interiors
Group, of which Sell is a subsidiary. He acknowledges his company
failed to ramp up in time... but adds the company has close to
doubled its workforce this year, and has invested millions of euros
in new tools and equipment. "We are now getting to the level of
capacity we need going forward," Carter said.
Both planemakers have also adopted dedicated teams to combat the
supplier issues, a tactic Boeing employed to address its Dreamliner
issues.
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