Boeing – Page 2 – The OM Blog by Heizer, Render, & Munson

OM in the News: Boeing 737s Piling Up at the Factory

Boeing is facing a problem as it races to meet demand for single-aisle, fuel-efficient jets: where to store unfinished 737s piling up at a factory near Seattle, reports The Wall Street Journal (Sept. 4, 2018). One answer is the taxiway of the small airport in Renton, Wash., next to its Boeing factory there. “Boeing is running out of space,” said a Renton administrator. “They have encountered an emergency production challenge that threatens to interfere with their ability to keep their airplane production lines running.” Boeing said the request for parking space was part of a “recovery plan” to get deliveries to match production rates.

Boeing delivered just 29 of the 737s in July, though more than 50 mostly-finished jets roll off the production line each month. The 737 is Boeing’s most popular commercial aircraft and a top moneymaker. The delays are due largely to two suppliers: engine maker CFM International and fuselage manufacturer Spirit AeroSystems. Both companies have said some of their own small suppliers are struggling to meet demand.

The engine shortage is “severely hampering production needs as we now have aircrafts ready to go but no engines,” a Renton airport official wrote to Federal Aviation Administration recently. The airport has about 35 spaces for 737s. The FAA in late July approved a plan under which large planes taking off from and landing at the Renton airport provide 2 hours’ notice to give Boeing time to move planes on the taxiway. It is also tucking planes between airport buildings and parking them on employee parking lots at its factory– and it is outfitting some 737s with temporary engines so pilots can fly them to nearby King County Airport. The temporary engines are removed there and trucked back to Renton to fly more 737s to King County.

Classroom discussion questions:

What, if anything, can Boeing do to solve this problem?
Why is it critical to get these planes finished and delivered?

OM in the News: Jet Makers’ Supply Chains Under Strain

A plane engine made by CFM remains behind schedule, forcing Airbus to postpone aircraft deliveries

Boeing and Airbus, swamped with orders for new jets, are struggling to deliver them all on time—in some cases angering customers and delaying payments, reports The Wall Street Journal (July 16, 2018). Airbus has missed a number of delivery deadlines, forcing airline customers to find alternatives, change routes or cancel flights. It has delivered fewer planes than it did by this time last year, despite promising 80 more this year. The missed deliveries mean delayed payments because most cash changes hands only upon delivery.

Boeing is straining with the same supplier shortfalls as Airbus. The company has made investments to help manage its suppliers, including in technology to help monitor their performance. Those efforts are crucial, with Boeing poised to deliver more than 800 planes for the first time this year and more than 900 annually by 2020.

For years, booming demand for new aircraft has made it more challenging for jet makers to deliver planes on time to airline customers. A supply-line crunch for items including engines and wing components is now magnifying the strain. The result: Some airlines have been left waiting for months for new planes, angering executives.

Suppliers to Boeing and Airbus have struggled to keep up with the surging demand. Engine-production delays have been among the most painful. At one point this year, Airbus had more than 100 nearly finished planes waiting on the tarmac for their engines. In the first 6 months, the company delivered 303 jets against a full-year target of 800 deliveries, mostly because of late engines. Airbus considered slowing production of planes while the engine makers recovered, but it feared that could disrupt other parts makers, causing further delays.

“The job today is not just about running a factory but running the entire supply chain,” said the head of a major supplier to both manufacturers.

Classroom discussion questions:

What is causing the strain on both firms’ supply chains?
What can the manufacturers do to alleviate supply chain issues such as these? What parts will always be an issue?

OM in the News: Is Boeing “Partnering for Success” or “Pilfering from Suppliers”?

“So much goes into the development of a commercial aircraft—billions of dollars, millions of work hours, rivers of sweat,” writes Businessweek (Feb. 19, 2018). At Boeing’s rollout of the 777 in 1994, the phrase “working together” was an organizing principle because, said Boeing, “we realized that only by working together as a team—with our customers and suppliers, would we build a truly great airplane.” Boeing extended its embrace of globalism with its next airplane, the 787, introduced in 2011, relying on a far-flung network of suppliers that not only built but also designed many of the parts.

But togetherness goes only so far under new CEO Dennis Muilenburg. Boeing has turned hard-nosed amid the greatest sales boom in aviation history, and he’s insisting suppliers cut prices. This cost initiative is called Partnering for Success; some of its targets call it Pilfering from Suppliers. The initiative demands additional price cuts of about 10%. Says Muilenburg, “it is making our supply chain better, and 90% of our supply chain sees that.”

The company just spent $1 billion to erect the Composite Wing Center. But the first time Boeing developed a composite wing, it hired Mitsubishi to do the engineering and manufacturing in Japan, part of an effort to spread the enormous development costs of the 787 to multiple partners. Work on the fuselage went to Italy and the passenger doors to France.

Boeing had never handed off responsibility to its suppliers on this scale—and it was a disaster. The first plane out of the factory in 2007 was an empty shell, lacking plumbing, wiring, and electronics. Early models were built and rebuilt. An engine exploded, the carbon fiber frame had to be reinforced to support the wings, and an electrical blaze knocked out pilot control panels during a flight test. Battery fires grounded the global fleet soon after the plane was finally delivered, 3 years late. Boeing lost money on the first 500 787s it delivered and vowed to control its suppliers much more closely.

Classroom discussion questions:

Is the supplier cost cutting strategy a good one?
Why is Boeing insourcing more parts?

OM in the News: Airbus Outgrows its European Supply Chain

Since it was cobbled together from a passel of national aerospace groups a half-century ago, Airbus has spread its operations across Europe in a delicate effort aimed at maximizing political expediency without sacrificing too much economic efficiency. There’s little industrial logic, after all, in shuttling airplane parts among 14 factories in a half-dozen countries, with some wing components crossing the English Channel 9 times before being mounted on planes.

The company’s airliner business employs more than 53,000 people across Europe, reports Businessweek (Feb. 12, 2018). And of the 11,000 passenger jets Airbus has built since it was founded in 1970, all but 400 have come out of the region’s factories. Europe, however, accounts for fewer than 1 in 5 planes in Airbus’s order book, and China, the U.S., and other countries are clamoring for a bigger share of production. A decade ago Airbus opened a plant in China, that’s expected to make 6 planes monthly by 2020, up from 4 now. Production is also ramping up at a factory in Alabama that’s been building Airbus single-aisle planes since 2015.

Airbus already has a global network of suppliers, ranging from Kansas-based Spirit AeroSystems, which produces the central fuselage of the A350, to a Korean Air Group that makes wingtip devices for the A330 widebody, to China’s Xi’an Aircraft, which manufactures wings for planes assembled at the Chinese plant. All told, Airbus has some 12,000 subcontractors in more than 40 countries from Finland to Sri Lanka.

As we note in the Global Company Profile that opens Chapter 2, Boeing also relies on vendors around the globe. The 787 Dreamliner, the first all-composite aircraft, uses components from such far-flung places as Japan and Italy, part of a plan to spread the manufacturing risk among partners.

Classroom discussion questions:

Why is the aerospace supply chain so complex?
What are the advantages and disadvantages of this approach?

OM in the News: Pain in Boeing and Airbus’ Supply Chains

Boeing and Airbus both built more jets last year than ever (763 and 718, respectively), but not enough to ease supply line strain as orders boom. The delivery frenzy has been a boon to both plane makers, lifting profit and share prices. “But it also has strained manufacturing and supply lines around the world,” writes The Wall Street Journal (Jan. 16, 2018).

Airbus and Boeing have already struggled at times to get planes out the door because of a lack of seats, toilet doors, and even engines. Airbus fell short of its target of building at least 200 A320neo planes last year because of lingering engine supply issues. The A320neo is the latest version of Airbus’ best-selling narrowbody jet. It and Boeing’s latest 737s have become the workhorses of both legacy and budget carriers because of their size, fuel savings and versatility. Airbus had 30 planes waiting for engines at year-end, and won’t commit to higher output of the plane until it has monitored supplier reliability for several more months.

Boeing and Airbus ended the year with a combined backlog of 13,129 planes, or 9 years of production at current output levels. To cope, both firms have promised to build even more planes this year—further stretching factories around the world that are already running at full tilt.

Supply chain tightness has spurred supplier consolidation to gain scale and become more financially resilient to afford the investments in production capacity Airbus and Boeing require. United Technologies last year agreed to acquire aircraft equipment maker Rockwell Collins. Rockwell in April closed a $6 billion acquisition of cabin interior specialist B/E Aerospace. French supplier Safran SA is expected to soon close its purchase of seat maker Zodiac Aerospace SA.

Classroom discussion questions:
1. What can Airbus and Boeing do, if anything, to exert better control over suppliers?

2. What do they need to do to reduce the backlog?

OM in the News: Boeing Tries to Streamline its Supply Chain

“Boeing has begun a push to streamline its supply chain, reducing overlap between existing divisions and cutting layers of management and bureaucracy,” writes the Seattle Times (Nov. 10, 2017). The firm’s enormous global supply chain delivers more than a billion parts to its assembly plants every year, everything from buckets full of fasteners to entire wings for its 787 Dreamliner. The management of that global network is the focus of Boeing’s plan.

One tool it has turned to is increasing its use of modern information technology and digital analytics to track supplies and identify blockages in the pipeline. Boeing’s current supply chain has grown organically over many decades with multiple internal divisions all using separate tracking systems. The extended study, currently under way, will also help Boeing better determine which suppliers are working well and which are underperforming — so that it can allocate contracts accordingly, and in some cases take work in-house.

Boeing expects the first organizational pieces of the streamlining initiative — bringing together supplier management, raw-material management and elements of engine systems supply — to be in place by year end.

Classroom discussion questions:

Why is Boeing struggling to control its supply chain?
Why is a large percent of the supply chain outsourced, and why to many different countries (refer to the Global Profile that opens Chapter 2)?

OM in the News: Boeing and Airbus Change the “Make or Buy” Formula

A Boeing employee working on a vertical fin assembly for a 787 in Salt Lake City. Boeing will start to manufacture some parts for its planes to tap into the lucrative aircraft components market.

“The world’s largest plane makers are testing a seemingly simple formula to smooth production, cut costs and fatten profits: Make more of the parts that go into their jets themselves,” reports The Wall Street Journal (Sept. 8, 2017). Worried about getting squeezed by parts company consolidations (like United Technologies proposed $23 billion takeover of Rockwell), Boeing and Airbus have moved to protect themselves by building more of their parts in-house. This month, Boeing started construction of a new plant in England that will make the motors that help move a wing’s flaps. The wings for a revamped version of Boeing’s 777 jetliner also will be built at a new plant near Seattle rather bought from a supplier.

Airbus, meanwhile, is planning to build its own nacelles, the metal casings that house a plane’s engines. “We are constantly revisiting our ‘make or buy’ decisions,” said Airbus’ COO. “The opportunity ahead of us, in terms of transforming how we design and build, how we manufacture, is even greater than some of the product innovation that we’re going to bring to the table,” added Boeing’s CEO.

Boeing and Airbus are slated to deliver new planes worth more than $100 billion this year. Under pressure to deliver all those planes, they have pressed their suppliers for cost savings and deadline commitments. Parts represent more than half the value of each of those planes and are mostly made by dozens of suppliers such as United Technologies, Spirit AeroSystems, and GE. Profit margins for plane makers have averaged 9% over the past 2 years, compared with 14% for “tier one” suppliers such as United Technologies and Rockwell, which make finished parts directly. Margins come in at 17% for tier 2 suppliers, which provide smaller components for those parts.

Classroom discussion questions:

What are the plusses and minuses of changing from “buy” to “make?”
What other reasons are there for Boeing to make its own parts?

OM in the News: Global Sourcing Creates a Giant Backlog at Boeing and Airbus

“The aviation industry is bulging with orders for new planes,” writes The Wall Street Journal (Feb.24, 2017). If only it can get them made. There were so many almost-finished jetliners, missing their engines, piled up at an Airbus factory last May that executives joked they were in the glider business. It ceased to be funny when a frustrated Qatar Airways canceled orders for 4 planes that were months overdue.

Airbus and Boeing must build 30% more planes annually than they do now to meet existing orders, in one of the industry’s steepest production increases since World War II. The scale of the ramp-up is putting companies to the test.

Suppliers of seats, toilets and engine parts are stretched to the limit and sometimes falling short. In one of the worst holdups, Pratt & Whitney informed Airbus in September it would ship only 75% as many engines in 2016 as planned. P&W struggled with making the engine fan blades, which initially took twice as long as expected. French aviation-parts supplier Zodiac Aerospace was late delivering business-class seats, which cost about $100,000 each, for new Boeing 787s headed to American Airlines. Zodiac also was late delivering seats and lavatory doors to Airbus for its A350 long-range jet, at a time when Airbus was sharply raising production of that plane in 2015.

Both Boeing and Airbus are making adjustments to cope, retooling factories and tightening oversight of their globe-spanning supply lines. Airbus may dedicate more resources to “supporting and understanding proactively possible hiccups with suppliers in the future,” said its CEO.

Classroom discussion questions:

Why are the supply chains so hard to manage?
Can Airbus and Boeing bring more manufacturing in-house?

OM in the News: Boeing and Airbus Shift to Automated Assembly

A Boeing 777 assembly line at the company’s Everett, Wash., production facility

The world’s biggest plane makers are digging deep into the technology toolbox to deliver what they have promised will be an unprecedented boost in airliner production. Boeing and Airbus have racked up record orders over the past several years, thanks to booming demand from global airlines. “Now,” writes The Wall Street Journal (July 9-10, 2016), “they have to deliver all those planes.” To meet the challenge, they are increasingly relying on robots, drones and human workers who wear powered exoskeletons to help them ramp up production in what industry executives say is the aerospace industry’s largest-ever peacetime expansion.

The same march toward automation is sweeping across the manufacturing sector. But for Boeing and Airbus, the sense of urgency is heightened by years of promises made to new customers. The two intend to build 33% more each year by 2020, or around 1,800 planes. Until recently both companies made jetliners largely by hand; but they are learning from the high-volume automotive industry. New production technologies that plane makers are putting in place will help accelerate productivity gains.

Boeing’s new 1.3 million-square-foot Washington facility hosts high-speed robots that lay carbon-fiber tape and automated vehicles that ferry wing components around the factory. Airbus is putting a more automated assembly line in place as it seeks to raise production of its A-320 model to 60 a month in 2019 from the current 45 planes Their facility features automated moving platforms to carry the planes through the assembly process, laser measuring tools to better align components, and adjustable-height robots to drill more than 2,000 holes. Where manual labor is still required, Airbus has started using drones for external inspections of planes, and it has devised a mechanical exoskeleton to boost the strength of workers who bore holes so they can more easily lift the 12-kilogram drill required for the job. The device can also help retain aging but skilled employees.

Classroom discussion questions:

Why is the airplane industry now looking to the auto industry for change?
Why were planes largely made by hand to this point?

OM in the News: Redesigning the Overhead Baggage Bin

Frustrated at having his own carry-on bag taken from him when overhead bins filled, Boeing engineer Brent Walton asked the question many travelers ask: “Why don’t planes have enough bin space for all passengers?” Then he figured out a solution—make bins tall enough so you can turn bags on their side, like standing up books on a shelf rather than laying them flat.

Boeing’s new Space Bin increases the number of bags a typical plane can carry by nearly 50%, reports The Wall Street Journal (Oct.15, 2015). A single-aisle Boeing 737-900 with 181 seats has room for 57 more bags, or a total of 174 rollaboard bags. That’s enough to accommodate a planeload of passengers with room for their coats. The space bins are big enough so you can actually stack two bags on top of each other or push two in sideways together. Alaska Airlines took delivery of the first Space Bin 737 on Friday and will put it into service this week. The new design can be retrofitted into most 737s, the most common plane in airline fleets, and it doesn’t add any weight to the airplane. Alaska has decided to retrofit its 737s and install big bins on new planes.

Passenger surveys show the lack of overhead space is one of the biggest gripes about airline travel today. Boarding a plane has dramatically changed because of the carry-on crunch. Gate agents wrest bags from passengers in late boarding groups to tag them for checking. Some airlines have baggage tag printers at gates for all the bags that don’t fit in overhead bins. And flights get delayed when too many passengers can’t find room for their bags.

Classroom discussion questions:

Why is this new product design (or redesign) so important to airline operations managers?
How will the new layout impact the boarding process/time?

OM in the News: The Boeing 787 Lithium Battery Explosions

The damaged battery case from a Japan Airlines 787

“Flaws in manufacturing, insufficient testing and a poor understanding of an innovative battery all contributed to the grounding of Boeing’s 787 fleet last year,” according to a new report by the National Transportation Safety Board (see The New York Times, Dec. 1, 2014). The report assigned in the starkest terms yet the blame for the 787’s battery problems.

The first battery episode occurred after a Japan Airlines flight landed at Boston’s Airport on Jan. 7, 2013 and was traced to one of its 2 lithium-ion batteries. The following week, a smoking battery forced an emergency landing in Japan, and prompted regulators to ban the jets’ flights until the problem could be resolved.

The NTSB found a wide range of failings among manufacturers and regulators. The battery’s maker, GS Yuasa of Japan, used manufacturing methods that could introduce potential defects but whose inspection methods failed to detect the problem. Boeing’s engineers failed to consider and test the worst-case assumptions linked to possible battery failures. The FAA failed to recognize the potential hazard and did not require proper tests as part of its certification process. The planes were allowed to fly again after Boeing instituted new safety features which added internal components to reduce the chance of overheating.

This was the first time large lithium-ion batteries were used aboard a commercial jet. But the NTSB investigation found that the manufacturing process allowed defects that could lead to internal short circuiting. GS Yuasa, the report said, “did not test the battery under the most severe conditions possible in service, and the test battery was different than the final battery design certified for installation on the airplane.” Boeing had initially determined that a battery cell might fail in 1 out of 10 million flight hours. Instead, by the time the two episodes happened, the 787 fleet in service had logged fewer than 52,000 hours. Both Boeing and GS Yuasa also underestimated the risks of a catastrophic failure. They relied on a single test, known as a nail penetration test, to simulate a short circuit to find out under what circumstances the battery might ignite.

Classroom discussion questions:

1. Why was Boeing’s reliability estimate so inaccurate?

2. How is this an OM issue?

OM in the News: Designing the Perfect Airline Seat–To Maximize Revenue

Yesterday’s New York Times (Sept. 9, 2014) featured not 1, not 2, but 3 articles on how airlines are addressing the issue of cramped seats! In the 1st, we find that the European budget carrier Ryanair just announced an agreement to purchase up to 200 new Boeing 737s (a $22 billion deal), each of which will allow that airline to squeeze an additional 8 seats into the single-aisle airframe. Ryanair will fit the planes with a whopping 197 seats, stripping out the front and rear galleys to help the redesign.

The 2nd article, titled “In Flight Rage,” confirms that cramped conditions in the back of a plane can severely test passenger equanimity. We have seen this in recent episodes in which pilots have made emergency landings when a few passengers have fought over seat-reclining. One prof, comparing people to livestock, finds that international regulations on flying animals specify the “need space to travel comfortably and on a long journey, the animal must be able to stretch, turn round, drink and groom itself.” Sounds better than a coach seat!

The 3rd piece gets to the heart of the matter–ergonomics, and ties in perfectly to Chapter 10. The real issue, says Prof. Kathleen Robinette at Oklahoma State U., is that airline seats are not designed to fully accommodate the human body in its various shapes and sizes. “We are fighting each other, but the seats are not designed right,” she says. Her study of 4,431 people found that seats are designed for a man in the 95th percentile of measurements. This means 1 in 20 men will be using seats that are too small for them. “That’s about 10 people on every plane, as well as all the people sitting next to them,” she adds. A big flaw in seat design, however, is that men in the 95th percentile are not necessarily larger than women. For about 1 in 4 women, the seat will be too small at the hips. Of even greater concern is the risk of blood clots, including a potentially deadly condition called deep vein thrombosis, which can occur when sitting in a way so you can’t move for about a 1/2 hour.

Classroom discussion questions:

1. What are the OM tradeoffs here?

2. Why is ergonomics an important issue on planes?

OM in the News: Boeing’s Latest Supply Chain Challenge

It’s not every day that we see Boeing 737 fuselages partially submerged in a river, but as the photo shows, the aircraft were severely damaged when a freight train derailed in Montana on the way to the company’s plants in Washington state. “The derailment threatened to throw a wrench in the tightly choreographed, far-flung aerospace supply chain, which depends on just-in-time deliveries of giant parts by train, plane and boat to meet record demand for jetliners,” writes The Wall Street Journal (July 7, 2014).

The train, which derailed near Rivulet, Mont., was carrying components including complete fuselages of 6 single-aisle 737s, fuselage panels for a long-range 777 and wing parts for a 747 jumbo jet. Most of the damaged parts were manufactured by Spirit Aerospace, in Wichita, Kan., where the shipment originated. They were destined for Boeing’s Renton and Everett assembly lines, which piece together the majority of the company’s commercial aircraft.

Three 737 fuselages tumbled down an embankment, two of which were partly submerged in the Clark Fork River below the tracks. A fourth 737 fuselage was torn apart during the derailment and was resting next to the tracks. Boeing’s jetliner supply chain has been disrupted before. Two years ago a tornado struck Spirit’s Wichita factory, shutting down operations for a week. In 2011, a BNSF train traveling through Nebraska derailed when a tornado knocked cars from the track, damaging a 737 fuselage on board.

Major aircraft makers such as Boeing and Airbus spread their jetliner factories across regions and countries, requiring a finely tuned logistics network to move aircraft components around the world. Both also use cargo ships and specially modified cargo jets to speed the delivery of body, wing and tail sections to assembly lines in sites as far flung as China and Charleston, S.C.

Classroom discussion questions:

1. Why is Boeing shipping fuselages across the country by train?

2. Why doesn’t Boeing make the fuselages itself?

OM in the News: Japan Ascends From Parts Supplier to Plane Maker

Japan’s golden era of aviation, with its feared Mitsubishi Zero fighter planes, ended in 1946 when American occupiers allowed that nation to manufacture only parts for American military jets. But this year, reports The New York Times (April 10, 2013), Mitsubishi plans the first flight of its Regional Jet, a sleek, 90-seat commercial plane that is Japan’s bid to break into the industry’s big leagues after almost 70 years. Mitsubishi’s comeback was abetted in large part by Boeing’s outsourcing more of its aircraft manufacture to overseas suppliers. As Boeing came to rely on foreign contractors, Japanese manufacturers moved in, designing and supplying some of the jet’s most vital sections.

Over a third of Boeing’s new 787 Dreamliner is supplied by Japanese manufacturers, including Mitsubishi, which makes the jet’s carbon-fiber composite main wings. Japanese suppliers have played an increasingly bigger role in building Boeing aircraft, supplying 15% of the older 767 jet and 21% of the 777. The Japanese government is one of the largest financial backers of these parts projects, handing out billions of yen (about $1.6 billion) in subsidies to help Japanese suppliers develop technology and win lucrative contracts from Boeing. These Boeing contracts have kept tens of thousands of Japanese workers busy for years, and still account for about 40% of jobs in the industry. And in a cozy quid pro quo, Japan’s biggest airlines have for years bought their planes almost exclusively from Boeing — an unusual practice among global carriers.

Mitsubishi has 165 firm orders for the $42 million jet, and it aims to secure as many as 5,000 orders over the next two decades — a goal some experts dismiss as unrealistic. It faces well-established rivals like Bombardier (Canada) and Embraer (Brazil), while the Russians and Chinese are also making jet inroads.

Discussion questions:

1. Did Boeing make a mistake in outsourcing so much of its planes to a future competitor?

2. Why did Boeing outsource over a third of the 787 to Japanese firms?

OM in the News: Dreamliner Woes Test Boeing’s Corporate Ties in Japan

In the Global Company Profile that opens Chapter 2, we note the important and growing role Japan suppliers have played in Boeing’s 787. But the well-discussed woes of the Dreamliner (see The Wall Street Journal, Jan.29, 2013) are beginning to strain one of the aviation world’s coziest relationships: that between Boeing and its customers in Japan. All Nippon Airways, the first and largest operator of Boeing’s new 787, cancelled 459 flights through Jan. 31 after battery fires on two Dreamliners prompted regulators to ground the planes over two weeks ago. Rival Japan Airlines, which flies 7 Dreamliners and suffered a fire, has also been hit by the plane’s stoppage. “As an airline person, it’s exasperating to think that we’ve got 17 cutting-edge planes sitting here that can’t fly,” says ANA’s VP.

It’s not just the airlines that are affected. More than a third of each 787 is built by Japanese manufacturers before being sent to the U.S. for assembly. Roughly 43% of Japanese aerospace employment is linked to Boeing projects. In other markets, the Dreamliner’s delays and problems might prompt customer defections. But Japanese companies do so much business with Boeing that their fortunes are closely linked.

ANA and Japan Airlines flaunt their allegiance to Boeing. ANA, deeply involved in the design of the jet, boasts that its “passion persuaded Boeing” to use a durable Japan-made paint on the 787 and that the Dreamliner’s composition is “Japan 35%; Boeing 35%; Others 30%.” When the Dreamliner faced big delays between 2007 and 2010, Japanese aviation exports plummeted 25%.

The ties go back to U.S. support for Japanese reconstruction after World War II. In the 1970s and 1980s, Japanese airlines became big buyers of U.S. planes, partly to help offset a huge trade imbalance. “Ever since the war, Japan’s aviation industry has been basically America,” says one trade official.

Discussion questions:

1. Why did Boeing outsource such a large percent of its jets to Japanese suppliers?

2. Why have JAL and ANA remained loyal customers?