Vought Aircraft, an affiliate of the politically connected Carlyle Group, encountered major problems, enough that Boeing will purchase their part of a joint venture business to get things functioning properly. The maze of contractors and subcontractors bit Boeing in the rear assembly in the production of its 787's. The Dallas Morning News article stated:
Boeing Co. said Friday that is buying Dallas-based Vought Aircraft Industries Inc.'s share of a joint venture that does some sub-assembly on Boeing's new 787 Dreamliner jet.
Vought has had trouble keeping up with Boeing's schedule for construction of the 787, and both firms said the new arrangement should ease those problems.
Recall Vought's shopping around for economic development funds in Texas and South Carolina not terribly long ago? In 2005 Vought had $52.2 million in proceeds from government grants. Another $17.4 million fell in their lap in 2006. Their financial statements show grant monies from South Carolina at $66.7 million and Texas donating $35 million.
Vought will continue to make the aft fuselage section of the plane, but will no longer handle integration of fuselage sections with other parts.
Vought spokeswoman Lynne Warne said “This was purely a financial transaction.”
I think not, Ms. Warne. Vought's major customer in effect fired the Carlyle affiliate for poor performance. A Seattle Times piece provided more information about the problems.
Vought had "been sort of a bottleneck on the production ramp-up and a poor performer in terms of managing to put those sections together at a fast pace," said Peter Arment, an analyst with Greenwich, Conn.-based American Technology Research. "This is part of the program that Boeing thought their suppliers would be able to handle. Their hand was more or less forced, given the performance with this joint venture."
But the first assembled Dreamliner fuselage arrived from South Carolina with much of its internal wiring system not completed, triggering a string of delays that have yet to be overcome.
"This was born of necessity rather than strategy," said aviation analyst Richard Aboulafia of the Teal Group in Fairfax, Virginia. "Boeing didn't do an adequate job of verifying their capabilities."
Vought, you're fired from the integration process! Of course, there's always the spin. This is from the company's president and chief executive officer Elmer Doty:
"This seamless transition of joint venture ownership will build upon the strong foundation already established within Global Aeronautica," he said. "Selling our interest has no impact on our adjacent facility, where the Vought 787 team remains focused on manufacturing composite fuselage sections for this incredible airplane.”
Boeing Co. said Friday that is buying Dallas-based Vought Aircraft Industries Inc.'s share of a joint venture that does some sub-assembly on Boeing's new 787 Dreamliner jet.
Vought has had trouble keeping up with Boeing's schedule for construction of the 787, and both firms said the new arrangement should ease those problems.
Recall Vought's shopping around for economic development funds in Texas and South Carolina not terribly long ago? In 2005 Vought had $52.2 million in proceeds from government grants. Another $17.4 million fell in their lap in 2006. Their financial statements show grant monies from South Carolina at $66.7 million and Texas donating $35 million.
Vought will continue to make the aft fuselage section of the plane, but will no longer handle integration of fuselage sections with other parts.
Vought spokeswoman Lynne Warne said “This was purely a financial transaction.”
I think not, Ms. Warne. Vought's major customer in effect fired the Carlyle affiliate for poor performance. A Seattle Times piece provided more information about the problems.
Vought had "been sort of a bottleneck on the production ramp-up and a poor performer in terms of managing to put those sections together at a fast pace," said Peter Arment, an analyst with Greenwich, Conn.-based American Technology Research. "This is part of the program that Boeing thought their suppliers would be able to handle. Their hand was more or less forced, given the performance with this joint venture."
But the first assembled Dreamliner fuselage arrived from South Carolina with much of its internal wiring system not completed, triggering a string of delays that have yet to be overcome.
"This was born of necessity rather than strategy," said aviation analyst Richard Aboulafia of the Teal Group in Fairfax, Virginia. "Boeing didn't do an adequate job of verifying their capabilities."
Vought, you're fired from the integration process! Of course, there's always the spin. This is from the company's president and chief executive officer Elmer Doty:
"This seamless transition of joint venture ownership will build upon the strong foundation already established within Global Aeronautica," he said. "Selling our interest has no impact on our adjacent facility, where the Vought 787 team remains focused on manufacturing composite fuselage sections for this incredible airplane.”
Mr. Doty previously sang a different tune on this project.
Last October, Doty acknowledged that Vought was the highest-risk supplier on the 787 industry team. At the time, Doty attributed Vought's struggles to an internal liquidity crisis in 2006 that prevented the company from ramping up investment in the 787 programme at a sufficient rate. Boeing had previously appointed vice-president Scott Strode to take over management responsibility for Vought's role in the 787 programme.
Carlyle just witnessed the failure of Carlyle Capital Corporation. Adding poor performance in one of its long time subsidiaries doesn't reflect well on the firms ability to run strong operations. That's from a quality, not a financial perspective.
But we've seen Carlyle spin the seemingly unspinnable before. After losing 24 patients in their LifeCare facility in New Orleans, attorneys blamed clinicians first. When that didn't work out, they shifted to pointing the legal finger at Uncle Sam. LifeCare claims their patients became wards of the federal government as soon as FEMA evacuation teams set up in New Orleans.
After failing patients in one of twenty one LifeCare facilities in a time of crisis, Carlyle spun a web of silence. One might expect something this significant to make President Bush's Lessons Learned report. Fran Townsend's tome provides not a word on LifeCare's patient deaths, the largest number of any hospital post Katrina.
The topic never arose last fall as the private equity underwriter (PEU) sought ManorCare with its 500 mostly nursing homes. One might expect past poor performance of a Carlyle health care affiliate to have some bearing on the planned purchase. Congressional hearings avoided the topic. Bush's FTC and Justice Department never got back to me on my concerns. Carlyle's Santa, also known as Uncle Sam, delivered ManorCare just before Christmas last year.
I can only conclude Carlyle is smooth operator but not a quality one. There's ample evidence of both. At least they get to keep that $2.1 million annual management fee from Vought.
Update 1-14-20: A Boeing Quality Manager recommends family not fly on the 787 due to safety concerns. He described Boeing's South Carolina operation: "Over time it got worse and worse. They began to ignore defective parts installed on the planes and basic issues related to aircraft safety."
Carlyle just witnessed the failure of Carlyle Capital Corporation. Adding poor performance in one of its long time subsidiaries doesn't reflect well on the firms ability to run strong operations. That's from a quality, not a financial perspective.
But we've seen Carlyle spin the seemingly unspinnable before. After losing 24 patients in their LifeCare facility in New Orleans, attorneys blamed clinicians first. When that didn't work out, they shifted to pointing the legal finger at Uncle Sam. LifeCare claims their patients became wards of the federal government as soon as FEMA evacuation teams set up in New Orleans.
After failing patients in one of twenty one LifeCare facilities in a time of crisis, Carlyle spun a web of silence. One might expect something this significant to make President Bush's Lessons Learned report. Fran Townsend's tome provides not a word on LifeCare's patient deaths, the largest number of any hospital post Katrina.
The topic never arose last fall as the private equity underwriter (PEU) sought ManorCare with its 500 mostly nursing homes. One might expect past poor performance of a Carlyle health care affiliate to have some bearing on the planned purchase. Congressional hearings avoided the topic. Bush's FTC and Justice Department never got back to me on my concerns. Carlyle's Santa, also known as Uncle Sam, delivered ManorCare just before Christmas last year.
I can only conclude Carlyle is smooth operator but not a quality one. There's ample evidence of both. At least they get to keep that $2.1 million annual management fee from Vought.
Update 1-14-20: A Boeing Quality Manager recommends family not fly on the 787 due to safety concerns. He described Boeing's South Carolina operation: "Over time it got worse and worse. They began to ignore defective parts installed on the planes and basic issues related to aircraft safety."
