Tanker contest gearing up

The Department of Defense’s JROC (a joint requirement group) met to consider what to do about the next round of the KC-X tanker competition, and US Sen. John McCain threw cold water on the idea promoted by US Rep. John Murtha about a split buy between Northrop Grumman and Boeing.

Boeing delivered its third KC-767J to Japan last week while EADS, partner of Northrop, promoted a milestone for its KC-30A Australian MRTT tanker.

Boeing has yet to deliver its first KC-767I to the Italians.

Boeing reorganizes Wichita ahead of strike vote

Boeing internally announced a reorganization of its Wichita Integrated Defense System ahead of a strike vote by the engineers union, SPEEA, that has an April 2 strike date.

Renewed contract negotiations collapsed earlier this week without an agreement.

Boeing “announces changes to the Wichita Engineering team, to include Product Support. This organizational change is in alignment with previously stated objectives to; double the Global Services & Support business within five years, execute on current work to meet customer expectations and financial objectives, and focus on performance and productivity,” to company said in a communication to employees.

Although Wichita is an IDS facility, SPEEA engineers also work on the development of the 747-8. A strike would affect work on this already-delayed program, now 9-12 months late. But SPEEA engineers have been told to prepare a transfer of engineering on the 747-8 to Boeing’s Moscow Design Engineering unit, we’re told.

Update, 3:30 PM: We just received this word from SPEEA about the Irving, TX, BAE Systems operation:

“We received notice that they are laying-off more than 500 people (out of 1000) and outsourcing the work to Mexico.  This essentially wipes-out the SPEEA bargaining unit at the facility.”

BAE Systems is a supplier to Boeing and Airbus and, in 2008, ranked fifth as a contractor to the US Department of Defense. BAE Systems is a UK company.

(We can’t resist noting that for all those who complain about the prospect of Northrop Grumman/EADS/Airbus winning the tanker contract and shipping all those jobs “overseas,” noone seems to take any notice or care that BAE (#6 in 2007, now #5 in 2008) is a foreign company.)

China’s Western aviation recuitment alarming

The news that China’s AVIC is recruiting Western executive talent for its aerospace subsidiaries is alarming.

Long-time readers of this column and our main website know that we’re concerned about Western technology transfer by Airbus, Boeing, Bombardier and Embraer to China, Japan and Russia as the Big Four pursue outsourcing. We’ve seen each of these countries produce regional airliners and China and Japan announce plans for a 150-seat jet.

None of the regional airliners are likely to be commercial successes, but we think China’s ARJ-21 and Japan’s MRJ are probably proving grounds for the larger jets. Japan’s Heavy Industry that are industrial partners to Boeing’s 787 program openly said they are using 787 wing technology they developed for the MRJ and the planned 150-seat jet.

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Boeing supplier plans 32% decline in 737 rate by year end

Update, February 27: Just kidding—

Curtis-Wright tells us their officials [m]ucked up and there is nothing to support the statements reported below, as extracted from their year-end 2008 earnings call. CW has no information regarding a rate reduction by Boeing this year.

What is especially troubling here is that CW did not put out a public statement correcting their error. Although CW followed up with calls to the aerospace analysts, the common shareholders of CW, Boeing and  other suppliers relied on the earnings call and the transcript to make investment decisions. The failure of CW to make a public correction of this material error is highly irresponsible.

Original Post:

Boeing supplier Curtiss-Wright plans to provide Boeing with only 21.5 737 shipsets per month by the end of the year, from the current level of 31 a month.

The revelation was contained in the CW earnings call of February 18 and overlooked by the Boeing-focused media. (We were just returning from our submarine venture in the Atlantic and are only now catching up.)

Here is what CW said in its 2009 forecast:

In our commercial market, we expect to be flat. Commercial aerospace, we see flat shipments to Boeing year-over-year, because last year we shipped about 305 737s and we looked at commercial aerospace from a Boeing side, surely the 737 that drives our revenues and last year because of the strike, we shipped about 305. This year, we’re anticipating shipping around 315 and we expect the beginning of the year to be at 31 ship-sets a month for the first six months, and it then goes down to about 21.5 ship-sets for the last six months and we expect Airbus to be down.

The company added, in a response to a question:

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Trident subs pass milestone

I’m going to deviate from the usual editorial “we” and the usual Airbus and Boeing focus to share with readers my trip last week on a Trident nuclear submarine, referenced in this previous post.

Through my association as a columnist for Armed Forces Journal magazine, I was privileged to receive an invitation for a two day, two night embark on an SSBN sub in connection with the Navy’s recognition of the milestone 1,000th mission of the D-5 Trident missile.

The D-5 Trident missile serves as the submarine force’s principal nuclear deterrent. The SSBNs are one of three triads that protect this country against our adversaries. The land-based ICBM and the USAF represent the other legs of the triad, but the SSBNs today represent 54% of the deterrent force.

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Airbus adjusts production

Update, Feb. 20: Flight Global has this report with a dire prediction from the IATA General Director that Airbus and Boeing won’t be able to deliver half of the aircraft scheduled this year because of the credit crunch.

And we’re told that many in the Airbus supply chain have already made plans for lower production rates than announced yesterday by Airbus.

Original Post:

Market Watch had this report today:

Airbus said it’s reducing the production rate on its A320 single-aisle family of aircraft to 34 a month from 36. Additionally, it now plans to hold work on the wide-body A330/A340s at 8.5 a month, instead of increasing it further as previously planned.

We think this is just the tip of the iceberg. See our report from February 13. For now Airbus reaffirms its delivery target for 2009, with the production adjustments scheduled to take place from October. But Airbus’ CEO said in a statement that “I do not exclude further production cuts if the need arises.”

Dow Jones filed this report about France’s Safran, the parent of Snecma, which is the joint venture partner of CFM international, supplier of engines to the Boeing 737 and Airbus A320:

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Go ‘Bama

We’ll be off line for five days while we go for a ride:

USS Alabama, SSBN 731: Source Wikipedia

We write for Armed Forces Journal magazine and for the next few days we will be on a Trident nuclear submarine. Eight years ago we had the opportunity to have a short ride on the USS Alabama. It’s not Airbus or Boeing, but it’ll be more fun.

Update, February 18: We’re back from our trip on the USS Maryland into the Atlantic. We need a few days to catch up and then we’ll write a piece, probably during the weekend, about this embark.

USS Maryland, SSBN 738: Source-US Navy

Assessing production cuts

The big question being asked by just about everyone with an interest in aviation these days is what are Airbus and Boeing planning for production rates this year and next.

Jobs are at stake in an economic environment where, in the USA, the number of jobs lost since the start of the current recession is equal to or more than the population of Chicago. European labor laws make it more difficult to simply chop jobs, but even so this is a concern.

Suppliers are worried that Airbus and Boeing will cut production rates, hurting their businesses (and leading to more job reductions).

Here’s an encapsulating review of what’s going on.

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