Boeing fix-it exec has big job to get tanker and supply chain on track

EVERETT — Boeing is adding engineers, support staff and even an executive with a ‘fix-it’ reputation to its troubled KC-46 Pegasus aerial refueling tanker program to keep it moving along. The company is also working more closely with contractors to make sure parts are delivered on time and according to spec.

The development program suffered another setback last week when a corrosive chemical was improperly used in the tanker’s advanced fuel system during ground vibration testing, according to people familiar with the program.

The damage could further delay the flight test schedule.

The company is “currently determining a plan of action,” said Chick Ramey, a Boeing spokesman. “We are currently assessing the potential impact of this issue on scheduled program activities.”

The airplane is the first KC-46 tanker and the program’s second flight test plane. It had been slated to take its first flight in September.

A spokesman for the U.S. Air Force, which has ordered 179 tankers, said it won’t know if first flight has been delayed until after Boeing finishes evaluating the extent of the damage.

The program’s first test plane, an interim 767-2C model, resumed test flights in late July.

In mid-July, Boeing announced another $835 million in cost overruns on top of $425 million last year. That puts the total at $1.26 billion that Boeing has had to cover.

Earlier problems on the program included late deliveries from suppliers and problems with the tanker’s wiring, which had to be removed, re-designed and re-installed in all four test airplanes.

During fuel system tests, which started in May, the company found “a number of fuel system parts and components that did not meet specifications and needed to be redesigned,” Ramey said. The components included “certain pumps, valves, couplers and other parts.”

Bad welds in fuel tubes failed when the system was pressurized, according to people familiar with the program.

He said those issues have not affected the test flight schedule and “its impact on the cost of the program has been insignificant.”

The welded parts did not need to be redesigned, Ramey said. It “was a manufacturing quality standards issue that is being remedied.”

The welds were on supplier-provided parts, according to people familiar with the program.

The corrosive chemical was introduced to the fuel system by people who thought it was a petroleum-based fuel substitute. It was mislabeled by a vendor, according to sources.

Boeing is addressing supply chain oversight, Ramey said. “With regard to Boeing oversight, we continue to make significant progress with suppliers and are working with them closely to improve processes and ensure they meet our need dates,” he said. “Where it makes sense, we’ve sent Boeing people on site to help.”

Federal certification of the fuel system “is also proving to require additional engineering and support resources due to the overall complexity of the system,” he said.

The KC-46’s fuel system is a substantial upgrade from that on earlier 767-based tankers built for Japan and Italy. The KC-46 can carry 212,299 pounds of fuel. Its boom can transfer 1,200 gallons per minute to another aircraft. And it has four more internal fuel tanks.

Talking to investment analysts and reporters July 22, Boeing CEO and President Dennis Muilenburg said the tanker is “a good reminder to us” of the need to focus on executing development programs on time and budget.

Boeing is hustling to meet its Air Force contract deadline to deliver the first 18 combat-ready tankers by August 2017.

Earlier this week, Muilenburg tapped Scott Fancher, a vice president and head of Boeing Commercial Airplanes’ development programs, to get the tanker back on track.

The role is “an interim assignment,” according to an internal notice from top Boeing managers.

In 2008, Fancher took over the 787 program, which was already several years behind schedule. He is widely credited with getting the program back on track.

Bob Feldmann, who helps oversee all commercial airplane development programs, was also assigned an interim role as Fancher’s deputy on the tanker.

The tanker program manager, Tim Peters, is not being replaced, but will work with Fancher and Feldmann, the notice said.

The moves seem to show Muilenburg is taking quick action to address problems, said Scott Hamilton, an Issaquah-based aerospace analyst and owner of Leeham Co.

The program was already squeezed for time, and Boeing had to speed up the test flight program due to delays from earlier problems.

“The odds are against” Boeing meeting its deadline, he said.

It would not be surprising if Boeing didn’t have any tankers ready two years from now, he said.

“Developing a new airplane or a derivative is not an easy task,” he said.

The world’s biggest airplane makers have rarely delivered on time in recent years. Boeing’s 787 was three years late, and its 747-8 was two years behind. Airbus’ A380 was two years late, its A350 was 18 months late, and its A400 military transport was several years late as well. Smaller plane makers Bombardier and Embraer have seen similar delays in their development programs.

Given the industry’s track record, “why should (the tanker) be any different?” Hamilton said.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

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