New C-17 Woes Raising Red Flag at McDonnell : Aerospace: The Air Force has issued 34 deficiency reports on the program. This suggests that Douglas has a systemic problem with producing aircraft, an official said.
The Air Force has issued 34 contractor deficiency reports against the McDonnell Douglas C-17 cargo jet program, another in a series of indications that the company is struggling with major production problems in its military and commercial projects.
In addition, Air Force officials have written an undetermined number of even more serious “letters of concern” to senior executives of the firm’s Douglas Aircraft unit in Long Beach about lapses in the C-17 program.
One of the problems identified by Air Force officials involves the contamination of aircraft with foreign objects, such as stray parts and tools. A C-17 wing was found to contain 40 pounds of loose material during a recent inspection, a Douglas management official said.
Separately, it was learned that Douglas is preparing to relocate two additional military programs from its Long Beach facility, after an earlier decision to move out production of the T-45 Navy trainer jet and portions of commercial work.
The production of ejection seats for fighter aircraft is being moved to a McDonnell facility in Titusville, Fla., Douglas officials confirmed. They declined to comment on another move involving production of bomb racks, but internal documents obtained by The Times indicate that the bomb rack business will be moved to the McDonnell Douglas Helicopter Co. in Mesa, Ariz.
Douglas has struggled with losses and aircraft delivery problems since it undertook a massive corporate reorganization last year. The unit, which employs about 42,000 workers in Long Beach and Torrance, lost $84 million in the first quarter. Recent indications suggest that management is growing increasingly concerned that remedies aren’t working as planned.
The company is instituting massive overtime to offset the problems, but overtime pay is compounding the losses.
On March 28, Douglas managers notified MD-80 production, quality assurance and support employees that “Unfortunately, we are in a position that will not allow us to meet our quarterly and year-end delivery commitments unless we act now. . . . It will be necessary to make Saturdays a mandatory day for the entire MD-80 program,” according to an internal memo.
Last year, Douglas forfeited millions of dollars to commercial customers because of late deliveries.
Such problems and the extreme measures they prompt indicate that the cultural revolution undertaken at Douglas, known as the “total quality management” effort, may not be taking hold quite the way McDonnell Douglas Chairman John McDonnell had envisioned.
A memo written last month by deputy Douglas president John Capellupo, which was obtained by the Times, cites a problem with “people who appear to be idle” at the job.
Capellupo wrote that “some of our people at DAC (Douglas Aircraft Co.) appear to be in constant motion (a sea of people) all over the facility (walking, riding or driving), shopping or looking in the company store or at the credit union when they should be working.”
In his most telling remark, Capellupo said, “ . . . I conclude that we have a clear lack of discipline throughout our organization including all levels of management as well as our work force.” He went on to say that the “total quality management” program at Douglas, which encourages worker participation, had led to a “permissive” system.
Air Force officials readily agree. In an unusually frank article published in the Douglas employee newspaper, the senior Air Force plant representative at Douglas, Col. Kenneth Tollefson, said: “The lack of leadership, which includes the failure to recognize the difference between participative and permissive management, is the biggest problem facing Douglas Aircraft Co.”
Tollefson recounted an incident in which the governor of Virginia was visiting Douglas and encountered a large group of employees waiting at a time clock to punch out before the end of their shift.
“With the Air Force paying for massive overtime, do the employees understand how much wasted time there is at (Douglas) as opposed to the industry at large? Where is the leadership that allows that to happen,” he was quoted saying in the newspaper.
Even veteran hourly workers are growing concerned. “The company counted on some integrity in there with its work force, but it is not getting it from a lot of the people,” said one MD-80 worker, frustrated with the lack of dedication he sees.
Douglas is 10 months behind its original schedule for the first C-17 flight, which is now set to occur in June, 1991. It remains unclear whether the overall production program is that far behind schedule, Air Force officials acknowledged. Nor is it clear whether it is continuing to fall behind schedule.
Defense Secretary Dick Cheney last week recommended cutting the C-17 program back from the previously planned 210 aircraft to 120 aircraft, slicing $11.9 billion from the $41.8-billion program. The cutback would reduce the production rate from a peak of 29 planes per year to 24 planes per year. Some analysts believe that the cutback may provide Douglas with some future relief from the heavy pressures of increasing commercial aircraft production.
The C-17 did achieve an important milestone recently when the massive fuselage was joined to the wings. But that fuselage is dotted with red tags, an indication of deficiencies that will have to be corrected later.
A Douglas spokesman said the company is still proceeding on the assumption that it will produce the full 210 aircraft since Congress has not enacted Cheney’s proposed cutbacks. Senior Douglas executives were not available for interviews but company spokesmen were candid in acknowledging that the C-17 has its difficulties.
“Thirty-four (deficiency reports) is certainly more than we ever want to see, but they are there,” said Douglas spokesman Don Hanson. “If you look around, you find that most contractors have some outstanding contractor deficiency reports on any program at any given time. The objective is to have none, but since we are human there are some.”
The deficiency reports and the more serious letters of concern are issued by the Air Force when it finds a firm out of conformance with regulations or beset with any other serious problem that affects cost, schedule or product performance. Typically, the deficiency reports are not issued until after a firm has failed at least once to correct an identified problem.
Air Force officials said the Douglas deficiency reports are considered confidential and they declined to open the books on the firm. But one of the deficiency reports involved problems with an excessive amount of so-called foreign object debris, or FOD in defense jargon, which includes stray tools, parts and other garbage that has found its way into C-17 aircraft, according to a management source at Douglas. Such debris represents a potentially serious hazard to aircraft.
After Air Force officials discovered 40 pounds of foreign objects inside a C-17 wing during a recent inspection, the debris was reportedly bagged and sent by Air Force officials to senior Douglas executives, who instituted a program to clean up the production area. On at least one occasion, the C-17 line had to be shut down to clean up debris. Now, the production line is vacuumed at the end of each shift.
Hanson said he was unaware of the deficiency report regarding the debris, but he added, “if it got to the point that there was 40 pounds of FOD inside a C-17 wing, I am not surprised they would” issue a deficiency report.
The deficiency reports issued by Tollefson’s office are important not so much because of the large number involved but because collectively they suggest that Douglas has a systemic problem with producing aircraft, he said in an interview.
Tollefson asserted even though such problems are endemic in American industry, he worries that Douglas has not moved past a mind set of trying to inspect quality into its products rather than building in the quality on the production line.
Tollefson said the Air Force currently is withholding $13 million in contract payments from Douglas, an amount that he characterized as relatively small.
