Labor at Boeing and Airbus

The Everett Herald has a series of stories today about labor relations at Boeing and Airbus. The links are below. Note: The Herald’s website is one of the clunkiest in CyberUniverse, so don’t be surprised if it is frustratingly slow.

Boeing and its unions already in negotiating stance. Be sure to watch the video on this link, and then click the link within the story for the second video.

Unions at Boeing and Airbus have much in common.

Machinists and rocky and rich history.

Washington State still ranks high in union strength.

Separately, there is this report:

Boeing pays well among firms getting tax breaks.

Boeing’s 737 ramp up shows confidence in economy, ‘skyline’ and the unions

The announcement last week that Boeing once again is planning to ramp up production of its venerable 737 line show confidence on a number of levels:

  • The global economy continues to recover;
  • The strength of the backlog, aka “skyline,’ is strong;
  • The efficiency of the Lean production line only gets better; and
  • The confidence in the labor unions (notably IAM 751) appears to be gaining strength compared with the depths of anger following the 2008 57-day strike and the October 2009 decision to put the second assembly line for the 787 in Charleston (SC).

Continue reading

KC-767 cost advantage over KC-45

Boeing has released the results of a study it commissioned on the life-cycle cost advantage of the KC-767 vs. the KC-45, this time using a firm we’ve actually heard of and greatly respect: AeroStrategy.

AeroStrategy analyzed 10 scenarios, fuel price escalation, maintenance, and a variety of other factors to conclude that over the life of the program, the KC-767 will cost $11bn-$36bn less than a fleet of KC-45s.

Continue reading

Boeing signs US composites tooling deal

Boeing has signed a $53m deal with Aerospace Composites & Transparencies, the California-based division of Britain’s Hampson Industries.

Aerospace Composites, which also has plants in Texas and Michigan, builds tooling for composites work. Although Hampson would not directly confirm the contract is with Boeing, a spokesperson acknowledged that several aerospace analyst reports that it is are not wrong.

The contract is believed likely connected with Boeing’s plan to expand its US-based production on the 787-9 and future airplane programs.

And speaking of advanced materials, this story discusses a variety of them. It is from the magazine Metal Miner.

787 stands down suppliers third time

Boeing has implemented its third, 30-day stand-down for its supply chain on the 787 program. Says Boeing:

As we have previously indicated, when opportunities arise we distribute flow in our production system to make the most efficient use of resources by ourselves and our global partners. We periodically align our production plans to meet adjusted customer needs, taking advantage of this flexibility in the market to further strengthen the 787 production system. This technique of balancing deliveries to most efficiently manage flow and customer requests within the production system is a common practice for our airplane programs.

Odds and Ends

A350: Development is running 6-8 months late, says a key supplier. This supplier believes there is still a chance Airbus will deliver the A350 in 2013, as promised, but it will be close.

Continue reading

Tanker update

It’s been a while since we’ve talked about the KC-X tanker competition, which is coming to the forefront again with the issuance of the Interim Report on Boeing subsidies by the WTO.

  • Flight International has this story citing Ralph Crosby, chairman of EADS North America, talking about costs and process in the competition.
  • The Telegraph of the UK has this story about the boondoggle lease deal of A330 MRTTs for the Royal Air Force. A reminder of how lease deals such as that proposed by Boeing in 2001 for the USAF (and killed because of the pricing and improprieties) can be way too costly, the UK MRTT deal is also an example of how dopey specifications can ruin a good idea. The UK DOD didn’t require combat-ready specifications (note to critics: this wasn’t an Airbus failing but a Department of Defence failing) for the MRTT. The UK situation also is indicative of old tanker-transports in need of replacement, just like the US KC-135. Most notably of the parallels is this statement in The Telegraph’s story: But in an era of budget shrinkage, how we buy equipment is as important as what we buy. The AirTanker deal is only the most obvious example of a procurement process that takes too long, costs too much and, even then, doesn’t always give us what we’re supposed to get.

Continue reading

Boeing WTO report due today

Update, 6:45pm PDT: Dominic Gates of The Seattle Times updated his 12:45pm snippet eight minutes ago with far more detail, and as of this moment represents the most detailed news report we’ve seen.

As before, both sides are in major spin control, and as before, we will continue to withhold our judgment until the Final Report is issued months from now. But we will note that in the Airbus case when the Interim Report was issued, it turned out the USTR/Boeing spin was (in our judgment) more on target overall than was the EU/Airbus spin.

Update, 4:30pm PDT: Boeing issued a follow-up statement, reproduced after the jump following their advance statement.

Update, 3:00pm PDT: As we did when the US complaint against Airbus came out, we are largely withholding our commentary because we don’t have access to the Interim Report and neither do the Airbus and Boeing spin machines, nor the politicians.

We urge caution in drawing conclusions. The various updates below show the wide variations of what is contained in the reports and we are skeptical of what any vested interest has to say.

We will withhold any of our definitive opinions for what will amount to months, when the Final Report comes out next year.

Update, 10:15 AM PDT: The first actual detail of the WTO Interim Report has leaked, with the BBC providing this report. Boeing got $20bn in illegal aid, says BBC.

BBC reports that $4bn in Washington State tax breaks are part of these.

10:30 AM PDT: As with the Airbus case, both sides are claiming a win.

Update, 12:45 PM: The Seattle Times reports Reuters (and, apparently, the BBC) had the amounts of the illegal subsidies provided Boeing as vastly overstated, and closer to $3bn instead of the $20bn initially cited by Reuters and BBC. If this set of leaks is accurate, this would be a clear victory for the US and not Europe, giving the US essentially two major victories. This could also be a big relief for the State of Washington. Although Gates’ story doesn’t detail precisely what was found illegal, the amounts cited cast doubt on just how much–if any–of the State tax breaks were illegal.

Update, 2:45 PM: The Financial Times of London has a story (free registration required) that paints a very different picture than The Seattle Times and US Boeing partisans. The Financial Times puts specific numbers on the findings, including a reported $5.7bn of illegal subsidies on the Boeing 787 alone. This is more than The Seattle Times is quoting for the entire Interim Report, based on the information it received.

The specificity of the numbers in The Financial Times is important vs. the generalities of some of the other report and statements, including those of the USTR.

Original Post:

The long-awaited and thrice-delayed WTO Interim Report on the alleged illegal subsidies provided Boeing is due to be issued to the EU and US governments today.

The Interim Report is confidential, but leaks are expects, just as they were when the WTO issued the Airbus report. It will be months before the final, public report is issued.

Boeing has already issued a statement in advance of the report (see after the jump). We’ll follow this throughout the day.

For Washington State, the $3.2bn in tax breaks (over 20 years) provided Boeing for the 787 are expected to be a major part of the case.

Here are a couple of selected stories in advance of today’s events:

KIRO-TV (Seattle): Boeing rejects negotiations.

Wall Street Journal: Boeing likely to lose WTO ruling.

AFP (France): Titantic battle goes to the wire.

Reuters: EU Win unlikely to dampen US push over Airbus.

Continue reading

777-300ER, 737-800 top Airfinance Journal poll; A330, A320 close behind

Boeing’s 777-300ER once again topped the poll by aviation financial trade magazine Airfinance Journal, which has been doing the polling for as long as we can remember.

On a scale of 0-5, the 777 ranked 4.2, followed closely (but under 4.0) by the Airbus A330-200 and A330-300.

AFJ polls investors who finance or buy airplanes for their preferences.

Gary Liebowitz of Wells Fargo Securities published the rankings in his latest Liebo’s Leasing Letter.

Continue reading