787 delays, economic downturn impact carbon fiber supply/demand

Unofficial news of another 6-month delay in delivery of the first 787 Dreamliner throws carbon fiber supply and demand into question.

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For the carbon fiber industry, which has seen strong growth and expansion over the last four years, continuing delays and recent work slowdowns on major aircraft programs had analysts in jitters as 2009 approached. The Boeing Co. (Seattle, Wash.) announced on Dec. 11, 2008, an updated schedule for its composites-intensive 787, which pushed back the first flight of its 787 Dreamliner until the second quarter of 2009 and delayed first delivery until first quarter 2010. The new schedule reflects the impact of disruption caused by the recent machinists’ strike along with the requirement to replace certain fasteners in early production airplanes, says the company. It also has been widely reported that Boeing has experienced unanticipated difficulties with assembly of components received from numerous outsourced suppliers. Meanwhile, a slower-than-expected build rate for Airbus’ (Toulouse, France) A380 — in 2005, Airbus anticipated turning out four A380 aircraft per month in 2008 — has contributed to dampened spirits in the composites industry, which has ramped up capacity to produce materials and parts for both aircraft. In particular, carbon fiber supply will likely increase in the short term, which could lead to some price destabilization, say industry experts who attended CompositesWorld’s recent Carbon Fiber 2008 conference in Charleston, S.C. (see HPC’s CF Conference report on p. 15). Neither fiber manufacturers nor downstream material suppliers want a repeat of past cycles of capacity growth followed by declining demand and falling prices, although price drops within the next few months appear to be a foregone conclusion as stockpiles increase. Some observers fear that it may be, as one supplier put it, “déjà vu all over again.” Several conference attendees, while acknowledging the present aerospace slowdown, voiced the belief that this cycle will be different because of the growth in nonaerospace applications over the past four years, which have created a more robust carbon-fiber market. Several presenters at the conference reiterated strong growth in several application areas, including wind energy (rotor blades), pressure vessels for natural gas and energy regulation flywheels.

For its part, Boeing took steps to assure its supply chain and customers that there will be an end to the delays. “Our industry team has made progress with structural testing, systems hardware qualification, and production, but we must adjust our schedule for these two unexpected disruptions,” says Boeing Commercial Airplanes president and CEO Scott Carson. Further, the company also announced a series of executive changes and a restructuring within Boeing Commercial Airplanes to better align resources across its development and production programs and strengthen oversight of its global supply chain. Several groups, including Commercial Airplanes Supplier Management, Fabrication, Propulsion Systems and the Manufacturing and Quality functional organization, are now part of a new organization called Supply Chain Management and Operations, led by Ray Conner, previously VP of sales for Boeing Commercial Airplanes.