(FORTUNE Magazine) – TRAVELING by commercial jet is about as thrilling as riding a rush-hour bus. Creating that jet, on the other hand, rings of grand adventure. It is today's equivalent of building the Panama Canal or the transcontinental railroad -- a glamorous and romantic task that is so costly, so risky, so technically demanding, that only a handful of companies in the world dare to do it. The corporation that tries to make a genuinely new model of a large commercial aircraft can expect to spend about $5 billion over five years or so before getting anything back. If the project is a success, the company will have created a marvelous, beautiful machine that will circle the earth ceaselessly, safely, and profitably for decades to come. But if the effort fails, the company will be crippled, if not broken. In its bid to build a plane for the 21st century, Boeing Co. has taken on all these perils and then added an extra level of risk by designing it in a radically new way. The Boeing 777, a twin-engine, medium- to long-range wide- body scheduled to go into service in May 1995, will be the company's first plane designed entirely on computers. Boeing's three-dimensional digital design system comes with its own computer-generated human model who crawls into the images on the screen to show how difficult it would be for a real person to reach the problem area and make a repair. The system enables Boeing to skip the usual paper drawings and full-scale mock-up, going straight from computer images to building the real thing. In the past, planes sprang straight from the brains of Boeing's renowned design engineers. This time the design process reflects the views of the airlines that will fly the plane, the mechanics who will maintain it, and the many others who will help build it, price it, and market it. Some 235 ''design/ build'' teams, whose members are drawn from all these groups, are creating the detailed plans for the plane. More than ever before, Boeing is relying on Japanese partners to help manufacture the plane. The company has also made a controversial bid to get early approval from the Federal Aviation Administration to fly a twin jet on long over-water routes. Despite the extraordinary reliability of modern jet engines, aviators prefer four engines when they are a long way from an airport. ''The 777 causes me to sit bolt upright in bed periodically,'' admits Dean Thornton, president of Boeing's Commercial Airplane Group. He looks like a relaxed, self-confident man who normally doesn't lose much sleep. ''It's a hell of a gamble,'' he continues. ''There's a big risk in doing things totally differently. It's not going to fail, but the degree of success is uncertain. It depends on the market.'' The market isn't promising right now. Eastern, Midway, and Pan American folded last year; America West, Continental, and TWA are in Chapter 11. But Boeing's economists foresee passenger miles more than doubling worldwide by 2005. They estimate that between replacing old planes and adding new ones, the world's airlines will need about 8,500 new jets in the next 14 years. Even so, why should Boeing have taken such a jumbo risk? It's not as if it were in trouble and had to resort to desperate gambles. On a scale virtually unmatched by any other U.S. corporation, it dominates its world market and is the nation's largest exporter. Although Boeing is losing military business, the commercial backlog stands at 1,605 aircraft, and the four current models -- the 737, 747, 757, and 767 -- all sell profitably. The 777 will fill the niche between the 218-passenger 767 and the 419-passenger 747. What Boeing hopes to secure with the 777 is the future. ''This is an offensive, not a defensive, strategy,'' says Phil Condit, the executive vice president who runs the 777 program. Japan patiently strengthens its aerospace capability by supplying more and more parts to foreign manufacturers, getting ready for the day when it could become a major competitor. Airbus Industrie, the four-nation European consortium, keeps building market share with advanced new aircraft. The remaining participant in the big jet stakes, McDonnell Douglas, could soon have entree to the rich Pacific market through an alliance with Taiwan Aerospace Corp. < When it faces these rivals as a designer, Boeing is preeminent, but as a manufacturer it is just average. With each succeeding jet, more of the actual building gets farmed out. ''Is this the beginning of the hollowing out of Boeing?'' asks John Ettlie, director of manufacturing management research at the University of Michigan's business school. ''I have great respect for them, but they have a long way to go in manufacturing.'' Therefore, to stay on top, Boeing must find ways of building planes better. If Boeing's new approach to design works -- and so far, as engineers complete the designs and turn to preparations for manufacturing, it is doing well -- the 777 will be an efficient, economic plane with a lot fewer bugs than new planes usually have. As a result, Boeing could save the millions it usually spends in fixing design problems during production and after the plane has been delivered to the airlines. To be fair, as risks go, the 777 isn't quite in the same class as the 747 or the 767. Boeing bet the company on both those planes, but this time around, it has a healthy $3 billion in cash. Still, should the 777 flop, business historians a generation from now might point to it as the beginning of the end for the company. Perhaps what makes the people of Boeing take these risks is the sheer size of the challenge. The 777 spills superlatives. Its digital design uses the largest cluster of mainframe computers in the world, eight IBM 3090-600Js. The finished plane will roll out through doors almost as big as football fields. The plant itself, at Everett, Washington, which builds the 747 and the 767, already covers as much land as 45 football fields, and will swell to the size of 76 to accommodate the 777 assembly line. The plane will be Boeing's first fly-by-wire aircraft, which means that the pilot's commands will be transmitted electrically rather than mechanically to the rudder and flaps. Its twin engines will be the largest and most powerful ever built, with the girth of a 737's fuselage and a thrust, or propulsive power, of between 71,000 and 85,000 pounds, compared with about 57,000 pounds of the latest 747 engine. The cockpit will be crammed with new electronics and also liquid-crystal displays that will lead the pilot through his checklists and carry written messages to and from the airport controllers when the voice channels get too crowded around rush hour.

Aircraft makers say it is time to stop designing and to start building when the weight of the paper exceeds the weight of the plane. That rule of thumb won't work for the 777 because all the designs are inside the memory of the project's eight IBM mainframes. Paper drawings are run off for the use of senior executives who don't have terminals in their offices, but 100% of the design will be created digitally. Boeing has used computer-aided design before but has never relied so totally on the computer, skipping not only the paperwork but also the full-size metal- and-wood mock-up that designers have always built to test their drawings. Being three-dimensional and capable of displaying solid objects, the digital system shows how all the pieces fit together. If two parts clash -- say a tube can't get around a spar -- the problem shows up on the screen. THE DIGITAL SYSTEM -- called Catia (for computer-aided, three-dimensional, interactive application) -- came from Dassault Aviation in France, where it was used to help build French fighter planes. IBM and Boeing enhanced the software to detect clashes, Boeing's term for parts that either do not fit or cannot work with each other the way they are supposed to. In the process, they created Catia-man, a computer-simulated human who can climb inside the three- dimensional images and play the role of the mechanic. Catia-man recently discovered that a human mechanic would not be able to reach the red navigation light on the roof of the plane to change the bulb. Without the limber model, says Condit, ''we might not have found out about the bulb until we built a mock-up, or until final assembly, or even until some airline called to say we've got a plane grounded in Chicago because we can't change a light bulb.'' The design teams and the computers are not meant to speed delivery of the 777 -- the time from first contract to first arrival of the plane will be about 55 months, compared with 50 months for the 767. But they are meant to make a better plane from the outset. Typically, engineers are still designing when manufacturing begins, and they keep making changes as problems show up in the factories and on the flight lines. Tools and dies and maintenance manuals have to be reworked and unusable parts scrapped. When the 747-400 started flying passengers three years ago, Boeing had to assign an extra 300 engineers to the plane to get rid of bugs that hadn't been spotted earlier. The 777 teams and computers are supposed to find these bugs before they show up at the plant, much less in the air. With all the engineers looking at the same up-to-date data on their screens, they can see and work out conflicts. They can call up the name and phone number of the engineer responsible for a particular piece and deal with him directly to solve clashes. By putting in effort and money up front, Boeing hopes to make a plane that is really ready for service when it's delivered. Like other proud, successful engineering companies, Boeing used to figure it knew what was best for the customer. When in the mid-1980s it began thinking about producing a new plane, it tried at first to sell the airlines on a bigger, better 767. But, says Alan Mulally, vice president of engineering for the 777, ''the airlines kept telling us, 'No, Boeing, you're not listening.' '' Phil Condit outlines Boeing's response: ''We did what I call aggressive listening. We really tried to understand what the customers were telling us.'' In the jargon of the day, the 777 is a consumer-driven product. Starting in 1986, dozens of Condit's people traveled extensively, visiting airports and airlines, talking to pilots, passengers, and mechanics, and soaking up ideas. What they heard was that the gap between a 767-300 configured for 218 passengers and a 747-400 with seats for 419 is too big to fill by stretching the 767. Airlines need to fine-tune their fleets to fit their routes fairly closely. A route with too many passengers for a 767 might not provide enough for a 747 to operate profitably, but a plane with 300-plus seats could be just the right size. As it happens, that slot is partially filled now by old McDonnell Douglas DC-10s and Lockheed L-1011s that will begin retiring in the mid-1990s, just as the 777 comes into service. The competition is aware of this gap in the market too. McDonnell Douglas got in the slot first with the three-engine MD-11, which has been flying passengers for a year. There are 136 firm orders and 157 options for the MD- 11, a derivative of the DC-10. Airbus Industrie, which Boeing regards as its most serious competitor, has 258 orders for its two entries in this class, the twin-engine A330 and the four-engine A340. The A340 will go into service early in 1993, and the A330 will follow in about a year. Coming late to market hasn't hurt Boeing in the past because the company profited by the mistakes of others and arrived with advanced technology. Boeing learned from its clients that they wanted not just one 777 but an eventual family of planes built around the basic model. Since all the members of the family can share maintenance, parts, training, and operating procedures, an airline can save money while serving different markets. The first 777 that appears in 1995 will be a basic version of the three-class, medium-range plane that can carry 328 passengers 5,000 nautical miles. The long-range version (6,400 nautical miles) will follow in 1996 and seat a maximum of 328 passengers in three classes as well. These two could lead to stretch versions carrying 20% more passengers. By October 1990, Boeing had configured the basic plane, and United Airlines put the 777 program in business by placing the first order for 34 of the aircraft. It has an option to buy 34 more at a price between $106 million and $129 million apiece. Each will have Pratt & Whitney engines. Other customers can order engines from other manufacturers. With United's order in hand, the Boeing board approved the 777, and the engineers at project headquarters in Renton, near Seattle, began fine-tuning their designs early in 1991. In the past United would have placed its order and then sat back for four years awaiting delivery. This time United is right in there with Boeing and its engineers, along with the representatives of the suppliers and other airlines. ''We have definitely influenced the design of the aircraft,'' says United's 777 program manager, Gordon McKinzie, who works out of a Boeing office in Renton. For example, Boeing usually installed one very long panel under the leading edge of the wing to allow access to the slat mechanisms. (Slats perform a similar function to flaps, increasing lift on take-offs and landings.) ''It was a nightmare for our mechanics,'' says McKinzie. ''They had to remove scores of screws just to check out one problem.'' The solution was easy: several small panels instead of one big one. In the cabin, United and a potential customer, American Airlines, persuaded Boeing to redesign the cover plates for reading lamps. Now a flight attendant, informed by a central panel that a bulb has burned out, will simply stick in a new one. The repair doesn't have to wait for a mechanic. Besides United's legions, many more people have become intimately involved in creating the 777: Representatives from other airline customers, engine manufacturers, pilots, mechanics, and scores of suppliers, from the Japanese manufacturers of fuselage parts to the British suppliers of flight computers -- all found their way to Renton. So have Boeing people who would not normally have much say about design -- manufacturing engineers, plant representatives, and finance and marketing experts. Many of them sit on the design/build teams. FOR THE FIRST TIME, this Boeing project has a chief mechanic, Jack Hessburg, representing the people who will maintain the plane, forgotten players in the past. Hessburg has a mechanical engineering degree, but just to make clear whom he represents, he has shown up at meetings in Renton with a big red mechanic's towel hanging out of his rear pants pocket. ''The gate mechanic touches a plane more than anyone,'' he says, and the ones he brought in both from Boeing and from the airlines told the design engineers things they never knew. For example, a Japanese mechanic politely expressed his frustration at working in the most congested part of previous Boeings, the electronics and electrical bay under the cockpit. The door to the panel he was working on would swing shut, and his head would block the light. You can't do your best, he said, while holding a flashlight between your teeth and bracing the panel door open with your backside. Solution: Put a latch on the door to prop it open and move the light. The biggest group of outsiders at Renton come from Japan. They are the emissaries of a consortium made up of Fuji Heavy Industries, Kawasaki Heavy Industries, and Mitsubishi Heavy Industries that has worked with Boeing since the early days of the 747 and that plays a bigger role with each new wide-body model. The consortium builds 15% of the 767's fuselage and will be making 20% of the 777's. Shin-ichi Nakagawa of Mitsubishi, who heads the group of 250 Japanese engineers working in the U.S. on the 777, was among the first Japanese sent to Seattle 19 years ago for the 747. After working alongside Americans at their terminals in Renton a year or more, most of Nakagawa's engineers are heading back to Japan to shift to production design. They will be linked directly into the digital design system in Renton. The fuselage will be built in sections in Japan and shipped to that immense plant in Everett. The Japanese are familiar with teams of design and production engineers, says Nakagawa, but they haven't experienced Boeing's all-embracing teams that include customers, suppliers, and support people. They are grouped into sections for each of the main pieces of the plane. Section 41, for instance, is responsible for the nose of the aircraft and is divided into ten teams of up to 50 people each, for the roof, the floor, the flight deck, and so forth. Each team determines its own mix of insiders and outsiders. All this sharing-with-outsiders stuff doesn't come naturally to the straight arrows bred in the Boeing culture. A visit to headquarters leaves an impression of a top management made up mostly of men with British last names, mixed with a few teeth-crunching Germanic ones. They have a proud corporate history and the can-do, tight-lipped attitude of military elite. Says Neil Standal, who manages the 777 subcontractors: ''At first, people were reluctant to ask questions in team meetings, but now you have to shut them up.'' To let everyone know that the 777 project is different and that it is okay to step outside the box of Boeing tradition, the company issued team members teal golf shirts with white 777 logos and encouraged employees to wear them to work -- but only on Fridays. This is Boeing, after all. The man at the center of the new culture is Phil Condit, 50, who has the wide, mobile grin and the jug ears of a Dwight Eisenhower. He stands a good chance of becoming president of the commercial aircraft division, Boeing's largest, and eventually chairman of the whole company, if he can successfully guide all the complexities of the 777 program. In any earlier project, he says, most of his time would have been spent solving technical and contracting problems. ''Now,'' he adds, ''I spend 70% to 80% of my time on people issues. It is phenomenally important to tell everyone what is going on, and I use every device I can get my hands on.'' These include orientation sessions, question-and-answer sessions, information sheets, and just a lot of meetings with everyone from customers to production workers. Condit has a tremendous advantage personally in that he can explain esoteric matters in clear, forceful language, and with some passion when he talks about the 777. Boeing wants early permission from the FAA to fly long over-water routes, like California to Hawaii, from the day it delivers the first plane to United in three years. That flight takes planes more than two hours' flying time away from any airport, an exceptionally long distance. What makes the goal of early approval controversial is that the 777 has only two engines. Normally, the FAA would first certify a twin-engine plane for flights not more than one hour from an airport, then two hours, and finally, after a couple of years' service, a full three hours so the plane could fly anywhere in the world. What Boeing wants is three-hour certification -- what aviators call Etops for extended-range twin-engine operations -- immediately. And it has developed an elaborate test program to get it. CONDIT ARGUES that the reliability of jet engines has reached the point where the ''engine count'' is no longer a safety issue. In-flight jet engine failures have become so rare they don't even figure statistically. Kenneth Waldrip, a Northwest 747 captain who heads the new aircraft evaluation committee for the Air Line Pilots Association, thinks Boeing should get high marks for the new plane but has reservations about early Etops. Says he: ''Every time we get a new engine, we always get a surprise.'' He sees two engines as the wave of the future because they are more fuel efficient and cost less to maintain, but for extra security he prefers four. Says Waldrip: ''If you've got four engines and one quits, its no big deal, but if one quits on a twin-engine plane, things get dicey.'' The FAA won't certify the 777 for any service unless it is convinced that the plane can take off and fly on one engine. Says Anthony Broderick, associate FAA administrator for regulation and certification: ''This will be the most thoroughly tested and proven plane ever on the day the first passenger steps aboard, but we have not guaranteed early Etops.'' That is one more risk Boeing must take.

Despite the pressures on him, Condit retains his man's-gotta-do-what-a-man's- gotta-do attitude. ''My strong feeling is that you retain your competitive position by continuously improving what you do,'' he says. ''Our job is to make sure we keep turning out the best planes in the world.'' The 777 will be the best test so far of Boeing's ability to do that.

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