Can This Plane Save Boeing?

"Oh

h, you can hear me talk. I don't like that," says Mary Dowell, her voice reverberating as she walks through the world's largest manufacturing building. The quiet is not good. The 98-acre factory at Boeing's Everett, Wash., facility turns out only three large planes a month, compared with a monthly high of 16 just four years ago. Dowell, a 25-year Boeing veteran whose job it is to reshape the way the company builds its flagship plane, the 777, knows Boeing needs to revive the constant rat-a-tat-tat of riveting. "We've been humbled in the past couple of years," says Dowell. "We need to be more efficient. We get it."

Boeing might not have much time to prove it. The world's most prolific aircraft builder's commercial division is struggling in the worst aviation downturn in history and has laid off 35,560 of its 93,000 workers since Sept. 11, 2001. And although the division has remained profitable (it earned $2 billion on sales of $28 billion in 2002; Boeing had $54 billion in total revenues), this year it is expected to account for less than half the company's overall sales. Boeing makes six aircraft models, but airlines these days buy only two of them — the short-range 737 and the long-haul 777. Worse yet, this will probably be the first year that European rival Airbus delivers more airplanes than Boeing. The order book doesn't look much better: Airbus has won an estimated $26 billion worth of orders this year, in contrast to Boeing's $10 billion.

LATEST COVER STORY Mind & Body Happiness Jan. 17, 2004 Past Issues Tsunami Jan. 10, 2004 ----------------- Person of the Year Jan. 3, 2004 ----------------- Secrets of the Nativity Dec. 13, 2004 ----------------- The Stealth Killer Dec. 6, 2004 ----------------- Coolest Inventions Nov. 29, 2004 ----------------- Battle for Fallujah Nov. 22, 2004 ----------------- Four More Years Nov. 15, 2004 ----------------- The Joy Of Sox Nov. 8, 2004 ----------------- The Morning After Nov. 1, 2004 ----------------- The God Gene Oct. 25, 2004 ----------------- The Vote Battle Oct. 18, 2004 ----------------- Visions of Tomorrow Oct. 11, 2004 ----------------- The Tragedy of Sudan Oct. 4, 2004 ----------------- CBS Controversy Sept. 27, 2004 ----------------- America's Border Sept. 20, 2004 ----------------- Struggle Within Islam Sept. 13, 2004 ----------------- World of George Bush Sept. 6, 2004 -----------------   SPECIAL REPORTS  Coolest Video Games 2004  Coolest Inventions  Wireless Society  Cool Tech 2004 PHOTOS AND GRAPHICS  At The Epicenter  Paths to Pleasure  Quotes of the Week  This Week's Gadget  Cartoons of the Week More graphics >> More photos >> MORE STORIES Advisor: Rove Warrior The Bushes: Family Dynasty Klein: Benneton Ad Presidency More Stories >> CNN.com: Latest News

Boeing faces a fundamental question: Should it keep making commercial airplanes? And does the 87-year-old company even know what kind of plane to make? Years ago, Boeing decided not to build small regional jets — now the fastest-growing segment of the industry. The 757 production line will be closed down soon. And Boeing's aging 767 has been selling so poorly that the company is trying to persuade the Department of Defense to spend $22.4 billion to lease 100 767s and convert them to military tankers. That plan has stalled before a skeptical Congress.

Recapturing Boeing's glory, not to mention its global market share (in 1999 it held 67%; now, less than 50%), will be difficult. But the company says it has a plane design that airlines will buy, passengers will like and bean counters will love. It's a subsonic fuel-efficient jet the company rather inelegantly calls the 7E7. The 7E7, a midsize, 200-seat aircraft that is designed to fly so-called point-to-point routes nonstop, stands in stark contrast to the massive, 555-seat double-decker Airbus A380 that will probably keep to traditional hub-and-spoke networks when it starts flying commercially in 2006.

Designing a plane and building it are two very different things. Boeing's decision could make or break its business. "If Boeing does not launch the 7E7, it is putting the world on notice that it will probably never again develop a new jetliner," says Richard Aboulafia, an aerospace analyst at the Teal Group. "Even debating the issue casts doubts on its commitment to its current airplanes." Boeing's board hasn't officially given the go-ahead for the jet, which would start flying in 2008. But gung-ho Boeing executives have outlined to TIME their plans to launch the 7E7 and to build it in a revolutionary way. Rather than send parts to the final assembly site by truck and train for piecemeal manufacturing, Boeing's contractors will build complete component systems (a fully wired wing, say) to be snapped together at final assembly. To speed the process, Boeing will build three 747s to haul the components. "Instead of huge sections of the 7E7 bobbing around the ocean for a month, we can get them to the final assembly site in a day," says Mike Bair, the head of the plane's development program. "It's far more efficient and will save up to 40% in transportation and inventory costs."

The 7E7 looks fairly traditional on the outside, but it will be dramatically different on the inside. The twin-engine, twin-aisle plane will be the first commercial aircraft with large sections such as the fuselage made of composite materials like plastic and fiber glass, not aluminum. Composites, which are widely used in military planes, are lighter (a vital consideration in any commercial plane) and not vulnerable to dangerous corrosion or cracking. Boeing claims the plane will be 20% more fuel efficient than comparable current models like the Airbus 330-200 or Boeing's 20-year-old 767--a bottom-line factor that drives nearly every airline's purchasing decisions. The plane will also have more cargo space than its rivals, no small advantage given that on some flights, the cargo hold is where the only profit is. Airbus spokesman Clay McConnell counters that there already is such an economical plane flying. "By launching the 7E7, Boeing is acknowledging just how good our 330-200 plane really is," he says.

Boeing says the plane will make passengers breathe easier — literally. Because the 7E7 will mainly be flying long 7,600-mile routes (say, New York to Tokyo), Boeing intends for the 7E7 to be the first airliner with cabin pressure equal to that at 6,000 ft. instead of the current 8,000 ft. That will lessen the dehydration and fatigue many travelers experience.