Boeing (BA) Dreamliner Still Broken Along With Firm's Management

Boeing (NYSE:BA) said it had encountered another problem with the final assembly of its Dreamliner in a cryptic press release from the company. The issue was discovered in the area where the plane’s wing meets its body. The discovery may only push back the time table for flight testing of the 787 for a brief time, but it is still an example of the poor engineering oversight that Boeing has exercised in the design and manufacturing of the plane.

It is old news that the release of the Dreamliner to Boeing’s many customers has been delayed a number of times. These carriers are counting on the planes fuel-efficiency and size to help them financially. Each day that passes, those financial benefits are deferred.

The head of Boeing’s commercial aircraft division has already been pushed out of the company. That is not much solace for investors who have watched Boeing’s share price drop 45% in two years. Boeing CEO James McNerney has somehow been able to keep his job as the disaster with the Dreamliner has spread. His luck may run out if there are any more delays in the successful completion of the program to develop that airplane.

McNerney’s ability to hold the corner office is an example of why American investor are skeptical of the capacity or inclination of boards of directors to represent the interests of shareholders. Boeing’s board continues to countenance repeated failures in the development of the product that is considered central to the firm’s future.

The Boeing board may simply feel that McNerney is not directly responsible for the troubles with the 787. But, then the question becomes who is?

Douglas A. McIntyre