Travel Tips

Boeing Hopes to Buy Its Way to Greater Efficiency by Purchasing Troubled Supplier

Locations in this article:  Dallas, TX

787 ConstructionIn an effort to speed up production of its much-delayed Dreamliner, Boeing agreed to buy problematic parts supplier Vought Aircraft today for about $580 million.

Boeing’s much-anticipated 787 Dreamliner was originally supposed to debut almost two years ago, but technical glitches and supply-chain failures have beset the company and led to at least five delays.

Vought’s South Carolina plant, which makes sections of the airplane’s composite rear fuselage, is one of Boeing’s many sub-contractors around the world that make parts for the 787.

The parts are shipped to Everett, Washington, where they are assembled at Boeing’s main facility.

Read about the Boeing 787 Dreamliner Delays.

Boeing decided to buy the Dallas-based Vought after the firm’s recent financial troubles began affecting its ability to supply parts to Boeing in a timely manner.

Boeing factorySome of Boeing’s other suppliers have also had difficulty meeting deadlines, but Vought was a key supplier whose impact was felt more acutely than the others.

Boeing CEO Scott Carson says that the acquisition of Vought will increase productivity and efficiency, and will allow the company to exert greater control over 787 production. However it will also drain Boeing’s cash and could signal trouble at the company, according to some analysts.The deal is expected to close in the third quarter of 2009. As part of the deal Boeing will forgive over $422 million in payments already made to Vought in the last year.

Get an inside view of the production process with From the Boeing Factory to the Sky.

The Dreamliner is was expected to make its first test flights last month, but this was postponed after engineers uncovered structural flaws in the plane’s wing-fuselage joints. There is no word yet on when test flights will resume or when the planes will be delivered.

Over 580 Dreamliners have been ordered by airlines around the world. It is the first airplane whose body is made mostly from lighter-then-metal composite materials, which helps conserve fuel.

By Karen Elowitt for

Related links: Bloomberg, Marketwatch, Biz Journals, Associated Press, Wall Street Journal