Boeing’s future in Puget Sound, Washington–maybe Airbus, too

Yesterday we opined that the Boeing “exodus” from Washington State is a tad overblown so far. Here’s why we think so.

  • As long as the airplane programs are derivatives of in-production aircraft, Puget Sound’s place in aerospace is solid. We don’t think the 777X will be assembled anywhere but here, just as MAX–a derivative of the 737 NG–was certain to be assembled here (and it was). The debate, such as it was, over where to assemble the MAX was in our view nothing more than making the airplane a pawn in the labor dispute with IAM 751 and the NLRB lawsuit over the second 787 assembly line. IAM dropped the suit in exchange for the MAX. Or so it appeared.
  • So what if the 787-10 is assembled in South Carolina? Boeing has to take production to 14 a month, in our view, in order to accommodate the 787-10 and to open up delivery slots for the 787-9 and 787-8. We think this means seven 787s a month at Everett and seven at Charleston.
  • Demand for the 737NG and 737 MAX is such that Boeing has to take production rates higher. The Renton factory has the capacity for 63/mo.
  • Demand for the KC-46A tanker may boost rates on the 767 line. Also, as we previously reported, Market Intelligence tells us FedEx is preparing to order the civilian freighter version of the KC-46A, the 767-2C. This also means higher rates.
  • In fact, our Market Intelligence tells us Boeing is already reaching out to the supply chain to plan on production boosts for the 737, 767 and 787 lines.

Production Rates

Source: Leeham Co. Market Intelligence. 777 and 747 rates not included.

Will Boeing continue to shift jobs from unionized Washington to non-union states? You betcha. But if these production rates come to pass (and the supply chain will have to gear up to meet these rates), not only will Boeing be adding jobs but so will the suppliers.

Airbus is talking to suppliers about similar rate hikes. For Washington, this means more jobs, to0, because our state is the No. 2 US supplier to Airbus by company count.

The Seattle Times reports that Airbus may consider opening an engineering center in Washington.

Note the comment about the USAF tanker in the story. We asked Gov. Jay Inslee about his relationship with Airbus during a conference call Wednesday, the final one held by the State to recap its daily activities at the Paris Air Show. Inslee bowed out of the trip to deal with Washington’s lack of a budget.

When he was in Congress, Inslee was one of the most vociferous opponents of the Airbus/EADS bid for the USAF tanker in competition with the Boeing KC-767. Inslee introduced legislation to require the Air Force to take into account WTO findings that Airbus received illegal subsidies for the A330, the plane on which its tanker design was based. Even the US Trade Representative’s office said such legislation violated WTO rules and the effort went nowhere.

Inslee’s efforts at the time offended Airbus officials, who were considering holding a suppliers fair in Washington, which is the No. 2 US supplier to Airbus. Because of the vitriolic opposition by Inslee and other members of the Washington delegation, Airbus shelved consideration of the fair.

We asked Inslee Wednesday how he might mend fences now that he is governor, seeking to expand our supply chain business with Airbus. Inslee was beginning to answer when US Rep. Rick Larson, who was leading the State’s Paris Air Show delegation in Inslee’s absence, interrupted to say he had talked with McArtor, who said the tanker wars were over.

Airbus has a suppliers event scheduled here next month.

29 comments on “Boeing’s future in Puget Sound, Washington–maybe Airbus, too

  1. The city of Hamburg and its metropolitan region houses a large proportion of the German footprint of Airbus (not EADS). There are similar issues, while the differences between German states (Bundesländer) are less than they are between US states. The competition rather happens between the 4 countires of Airbus, and keeping workshare is a constant issue. This not only applies to the direct Airbus engagement, but the subcontracted work, too.

    I would assume that the future (20-30 years) will see a raise in transatlantic cooperations for engineering services and component delivery. Due to the low number of development projects at Airbus and Boeing, neither can employ a permanent development organisation.

  2. Wonder if EADS left thrust reversers off their A330 proposal?
    Its a funny world, Airbus originally did not plan to offer thrust reversers on th A380, and were forced to add them by regualators. They compromised and fitted them to the inboard engines only.
    Perhaps we will see braking chutes on the KC46?
    Truly surprised to see suggestions that the KC46 is overweight!

    • Word to the wise, never accept a competitors view of a product (any product) as golden. Would it surprise you to learn that none of the KC-135s currently in service have TRs? See what I mean about taking a competitors view of a product.

  3. Not providing the KC-46A with thrust reversers is far from an indication of a weight problem. Boeing is right, the thrust reversers were not part of the specs put out by the USAF in the RFP. None of the KC-135R/Ts have thrust reversers, nor do the RC-135s with the F-108 engines (the KC-135A/Q also did not have thrust reversers). The A-380 does not have thrust reversers on the outboard engines (eliminated because of FOD concerns because these engines are beyond the shoulders of many runways and taxiways). The benefit of no thrust reversers on a tanker means it can carry a little more fuel for inflight transfer.

    The comment about an airplane not having thrust reversers is like having a car with no brakes is disingenuous at best. Thrust reversers, when used to their full capability, only reduce the landing roll-out by about 15%. In the airline business, this generally means less time on the runway and a faster time to the gate. A tanker on landing roll-out is not in as much of a hurray to get to its parking slot. Also, for the USAF, not having thrust reversers means less maintenance on the tanker. The USAF does benefit from a lower cost for each tanker without thrust reversers. If the USAF decides they want thrust reversers, or even a different engine, they can order it as the KC-46B, or a different MDS.

    I see no where, right now, that the KC-46A is overweight.

    If FedEx were to order a freight version of the base B-767-2C, it will be up to them to decide if the want thrust reversers, or not. FedEx may even choose a different engine for the B-767-2C over the PW-4062 engine of the KC-46A.

      • Some airplanes can do that. Some airlines do that as a matter of routine, such as AA does it with the MD-80s and did it when they had B-727s.

        The C-130 can do it too, and I’m sure many other airplanes can. But there is a fuel cost for using the reversers to back up an airplane, it is cheaper, fuel wise, to use a push back tug.

      • Most modern aircraft have thrust reversers that can be used to back up. But most modern aircraft also have low-hanging engines under the wings. When such an aircraft uses T/R to back-up from the gate it can throw a lot of flying debris towards the gate. And it poses an additional hazard to nearby ground personnel who can be sucked inside an engine running at high power. With an aircraft that has its engines in the back, and further up, it is less of a problem.

      • They can if they are DESIGNED to. The stresses on the components in doing that are very high. Most current airliners can not.

      • I think it is forbidden by the manufacturers because engines ingests its own exhaust. Most flight manuals deny the use of thrust revers below 70kts. Fact is, you can pull back with the reversers. Fact is also, you must not do it.

    • McArtor’s comments were BS. It is in NO way shape or form “like a car with no brakes”. It just shows that McArtor doesn’t know his potential customer, nor paid any attention to the RFP that was issued for the Tanker. Of course Dominic Gates was probably pretty gleeful to publish that, he never misses a chance to bash Boeing.

    • KC-X was supposed to have LAIRCM so the aircraft could carry cargo to a threatened environment like Bagram. A KC-135 needs a long runway to get up in the air with full fuel load. It may be useful to have thrust reversers operating KC-X as freighter to a 7,000 foot runway on a rainy day. Still just 15 % then? Maybe useful to get the next exit and clear runway quicker for next operation. Did Ryanair ordered 737 without thrust reversers because maintenance is cheaper or is it more important to get the cargo/soldiers quick out of the aircraft? Isn’t such a feature also useful for cargo operations to airfields with few or none tugs available?

      RAF and RAAF tankers both have thrust reversers:

      http://www.youtube.com/watch?v=fwqrZCkrcnU

      How expensive (certification) will it be to Boeing offering different versions of engines? Why does KC-10 got thrust reversers?

      • The KC-10 has thrust reversers because it is primarily a cargo jet that also is used as a tanker. The cost to the USAF to engineer out the TRs on the KC-10A’s CF-6-50 engines was very high and MD did not want to do it. The ‘expense’ to Boeing to certify the KC-46A without TRs is exactly zero. The USAF said they will foot all of the certification costs.

        The Italian KC-767A and Japanese KC-767J have thrust reversers because those governments wanted them. These two tankers also fly with GE CF-6-80C2 engines. The USAF version will fly with P&W PW-4062s

      • The KC-46A will have LAIRCM, but not so it can fly cargo into a base near the FEBA. LAIRCM is for the air refueling and orbit over enemy territory and to protect against MANPADs. The KC-135R needs just 8500′ of runway (sea level, standard day) to take-off at MTOW.

        • Not true, KC-135R/T needs about 12-13000 ft to take-off at 322,500MTOW, sea level, standard day. More when it gets warmer. If the -135 fleet had the 707/720 wing, it would have much better short field capability

      • Just read the public available part of KC-X contest. KC-X was and is thought to release the C-5/C-17 fleet from moving bulk cargo or soldiers. So that these other aircraft can concentrate on the outsized cargo they are made for.

        Also MANPADs can’t reach the normal heights were refueling takes place. A tanker in range of a infrared missile fired from a fighter is within seconds also in range of the gun.

        8,500´ runway at sea level. on a standard day. Can you translate that to 5,000 ft above sea level and a hot dry day? Runway of Bagram air field was extended from 9,500´ to 11,800´

    • “And using a model 737 MAX, he savored the chance to talk about the aerodynamics of the new split winglets. His explanation included a digression to explain why geese fly in a V formation and how that relates to Boeing’s winglet.” – How would be interesting but it is not mentioned there.

      >>”Deploying U.S. Department of Transportation data, he dismissed the Airbus claim of parity on fuel burn. “No way that is so,” said Ozimek. “The data will set you free.”<<
      We already had that discussion: http://leehamnews.wordpress.com/2013/06/18/the-debate-over-using-dot-form-41in-comparing-a320-and-737-costs/

      "Ozimek pitched the 737 MAX to journalists, entertainingly making the case that the 737 MAX will retain an 8 percent fuel-burn advantage over the rival Airbus A320." – For sure a nearly empty B737 will burn less fuel than a full A320. Maybe Max7 against A321NEO. Mission accomplished – fuel saved!

  4. I liked Joe Ozmek’s presentation ( winglet /geese et al) ;it was good , much better from the usual running the other guy down . Refreshing change .I read that he was even more freeshelling in his presentation to the journalists earlier.

  5. Howard :
    Of course Dominic Gates was probably pretty gleeful to publish that, he never misses a chance to bash Boeing.

    The fact that Dominic Gates does not fall easily for the Boeing propaganda does not necessarily mean he is “bashing” Boeing. I think we need more independent reporters like him. I much prefer a journalist who leans on the alarmist side over one who leans on the complacent side.

    • Interesting, so when journalists swallow and regurgitate Airbus press releases they are falling for Airbus’ propaganda? Or does that rule only apply to Boeing?

      • In my book the rule applies to both Airbus and Boeing. Dominic Gates and Scott Hamilton are based in the Seattle area, and because of that would have good reason to be complacent with Boeing. But they are not. They chose to offer a balanced viewpoint. Like I suggested earlier, DG might fall in the “alarmist” category; but that is part of mainstream journalism and is perfectly acceptable when carried out with honesty, rigor and professionalism.

  6. All I know is, looks like the WA aerospace delegation got a lot of visitors from companies who understand the ability to have skilled and qualified workers doing good work and giving them the respect they deserve. Contrast this with Boeing, who wants to leave WA as quickly as possible. I know quite a few young Boeing workers who would jump at the chance of working for both Boeing and Airbus in their career, or possibly with a supplier. Good for business, good for WA, and perhaps will enlighten the Boeing execs.

    Not holding my breath for that last one honestly.

  7. non union state does stop any one fron joining a union
    Boeing has union plant in right to states
    Lockheed ft worth tx union
    Boeing south carloine was IAM union un still the union was fire

Leave a Reply: Note Reader Comment Rules

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s