Boeing in Puget Sound after the IAM 777X vote: bleak, unless something changes

With the rejection last week by the International Association of Machinists Local 751of the Boeing contract offer that would have located the 777X airplane assembly and wing production in Puget Sound (Seattle), the inevitable question arises: What is Boeing’s future here?

Seattle media and state elected officials are worried that if Boeing locates the 777X outside Washington State, and given the toxic relationship between the machinists and Boeing as well as within its own union, that this could be the start of an exodus from the state.

We agree, although we believe it will be a slow, downward spiral, not a rapid exodus–unless something dramatic changes with the current situation.

The chart illustrates our forecast of Boeing’s gradual departure from Puget Sound based on the current set of circumstances.

Click the chart to enlarge.

BoeingTimeline2

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The chart is based on backlogs, production rates, entry-into-service dates of the 737 MAX and the 777X, an assumed two year overlap of the 737 NG and the 777 Classic, potential order for USAF tankers based on the KC-46A and the 777, the anticipated program termination of the 747-8, Boeing statements and other factors.

Here’s a program-by-program rundown.

737NG, 737 MAX and 737RS

Boeing has targeted entry-into-service of the 737 MAX in July 2017. It has said there will be a two year overlap of the NG and MAX production times, meaning the 737 NG production ends in 2019.

We expect a clean-sheet replacement for the 737 family (called Y1 internally by Boeing and 737RS here) to enter service around 2028, somewhat ahead of the 2030 timeline commonly discussed by Airbus and Boeing for the next, new airplane to succeed the A320 and 737 families. A two-year overlap then suggests the 737 MAX is discontinued in 2030.

We expect the 737RS to be assembled outside of Washington State; none of our peers believes it will be built here.

757 Replacement

We have market intelligence that Boeing is considering a replacement for the 757 as early as 2025. This is not reflected in the chart, but our intelligence also tells us it could be from this design that the 737RS will flow. We don’t believe the 757RS would be assembled in Washington, either.

747-8 Program

We’ve previously written on many occasions that the 747-8I is essentially already a dead program. The official launch of the 777-9 seals the 748’s fate. But the USAF wants to replace the presidential fleet of 747-200s with another four-engine jet, and it won’t be the Airbus A380.  The public timeline is EIS in 2021, although it could be advanced. But going with the announced date, Boeing needs to keep the line alive until 2021, at which point it terminates. The 747-8F’s life depends on recovery of the global cargo market. Boeing expects recovery beginning next year. We’re not so sure.

767 Program

At October 31, there was one passenger 767-300ER remaining to be delivered and a shrinking backlog of the 767-300F. Our forecast of program termination is based on the existing -300F backlog. After that, the 767 line at Everett remains based on USAF KC-46A tanker orders. Although Boeing doesn’t actually have in backlog the 171 tankers in addition to the four flight test vehicles contracted, we assume these orders come through and forecast production accordingly.

The USAF plans to proceed with the second tranche of the KC-135 replacement (the KC-Y procurement) but the public timeline is beyond 2030. We hope this is advanced to provide seamless production between KC-X (the current, in-production program) and KC-Y. If not, production of the KC-46A tanker ends by 2022.

777 Program

With the launch of the 777X and a 2020 EIS (the 777-9), program termination of the 777 Classic now in production should end in 2022–unless extended by a freighter, which is entirely possible. The 777-8 is supposed to follow the 777-9 EIS by about a year, or 2021. The 777-8 is envisioned to become a freighter, but no timeline has been indicated. The 777-200LRF may remain in production until the 777-8F enters service.

The 777-200LRF could also get new life if the USAF proceeds with the KC-Z KC-10 recapitalization, but the public date for this is 2040, and we don’t expect the 777 Classic to survive anywhere close to this date. Thus, unless the USAF advances this timeline significantly (and assuming Boeing wins any competition), we see the 777 Classic program terminating as early as 2022 but possibly a few years later.

With the contract rejection by IAM, we believe 777X will be assembled outside Washington State.

787 Program

We see the 787 in production well into the 2030 decade, but if any production cutbacks are necessary (as they inevitably will be), we believe they will come at Everett, not Charleston. The 787-8 has probably already had its principal sales run, with airlines transitioning to the 787-9 and 787-10. Market intelligence tells us the 787-10 will be assembled exclusively at Charleston, which also will assemble 787-9s. Everett will assemble 787-8s and -9s; -8 production will  decline. Economic conditions will inevitably mandate production adjustments, and Everett will take the brunt, in our estimation.

Bleak picture

We paint a bleak picture for Puget Sound. We believe Boeing CEO Jim McNerney will continue his drive to diversify work from unionized Washington State into non-union or Right To Work states. Although he is approaching the Boeing retirement age of 65, we fully expect him to seek a waiver (he has already indicated interest in doing so). We expect him to stick around through 2016, Boeing’s 100th Anniversary.

Whether his successor–who will be the one to make the decision for the assembly site for the 757RS and 737RS–has a different view of unions and Washington State business climate, we don’t expect the path that has become so clear to change.

Note that our forecast is 10-15-20 years in the future. There is time to change for the better. There needs to be a will.

39 Comments on “Boeing in Puget Sound after the IAM 777X vote: bleak, unless something changes

  1. At the end of the day I think this is what all parties concerned about Puget Sound aerospace need to understand, what work is left here with Boeing.

    This is our last stand, for all the marbles.

    IAM 751 needs to find a way to convince Boeing to get back to the table.

    We need “The Fighting Machinists” to fight for all of Puget Sound

    If this doesn’t happen, I think Right to Work will at least get a vote in the Washington State Legislature.

    All politicians care about are two things: getting re-elected and money to get re-elected. If Boeing starts leaving a lot of people are going to be upset. No politician want to be the ones to “lose” Boeing. That is why the tax package got through so quickly.

    And for those who think Boeing will not leave, they can and will.

    I am from the Midwest and have seen too many padlocked factories.
    There are many stories, but if people are interested Google Motorola and Harvard IL. http://www.harvardmainline.com/node/4628

    I imagine we will be also be reading more articles about the Boeing Bust, could be a glimpse into the future.

    Thanks Scott, for always telling it like it is.

    I highly recommend for readers of this site to read this site’s archives and compare it to how events have unfolded.

    • The only way Right to Work gets considered is by a state initiative. Gov. Inslee and House Speaker Frank Chopp, both Democrats, will never allow a bill to come to the floor or law.

    • The race to the bottom of the heap continues. Hopefully there is light at the end of the tunnel, but I suspect corporate America will put all of us in the poor house with the dwindling middle class cheering them on….Boeing has already demonstrated that the are willing to spend billions of dollars to save a couple of bucks. That’s MBA math for you…16 billion dollars and counting….

  2. Great article. Perhaps a month or so too late but, regardless, at least an honest local appraisal. Meanwhile Airbus’ greenfield US site seems to be ramping up well. Bit of a different attitude over there;

    http://www.cnbc.com/id/100887295

    After an exhaustive evaluation process, Mobile emerged as the obvious choice.

    Sure, it met our technical requirements. But so did others. A differentiator for Alabama was the unity and supportive purpose shown by every entity in the state supporting Mobile. City, state and federal representatives (Republicans and Democrats alike) came together with one goal: Show the Airbus team that Alabama would be its partner for the long term.

    They spoke with one voice, which impressed our selection committees. And when the U.S. tanker project was lost, instead of hanging their heads and walking away, they said, “What else could we do?” It was indicative of the good relationship Airbus has with Mobile and Alabama—instead of giving up, we found another way to make it work. As a result, Alabama got an even better, larger-impact project.

    Source: Airbus
    Infrastructure was another key factor: The site was perfect, with an airport and ocean port, and adequate land at Brookley Aeroplex. Workforce was also vital. We were encouraged by the auto industry’s success in Alabama because its manufacturing aspect is a trained skill similar to that of aircraft assembly.

    http://blog.al.com/live/2012/11/airbus_americas_chief_mobile_s.html

    • Thanks for the links.
      “We were encouraged by the auto industry’s success in Alabama because its manufacturing aspect is a trained skill similar to that of aircraft assembly.”

      Tentatively and from experience here I would have assumed something in that vein
      but had to note the counterarguments provided for the US workplace.
      I regularly stumble over the seemingly vastly different path workers take towards qualification ( duration, scope, who does the qualifying )
      ( Same actually for occupational naming: mechanic, engineer,.. versus Facharbeiter,Techniker, Ingenieur )

  3. Could another aspect of moving away from WA be the military contractor mindset of spreading work across as many states as possible so that there are plenty of legislators who will shout loud and long for a given program? I’m thinking here more of any need for shouts in the never ending Airbus WTO tussle.

  4. You are probably correct Woody. I see it essentially as an import of the McD culture to BA. They ran their civil programs into the ground with a lack of investment, but did quite well their last 20 years playing the distributed mfg game with DoD. The first BA commercial effort to apply that mindset has been a resounding failure thus far tactically, but not a commercial or strategic (negotiating) one really (note the billion dollars worth of orders for 777x).

    And in a (commercial jet aircraft manufacturing) game with relatively few major moves made per year, it is in fashion today to say the Charleston site struggles ipso facto mean remoting any Boeing FAL outside IAM751 will be a failure in the future. Such analyses/guess-work/assumptions are pretty emotionally driven.

  5. Great analysis- I partially disagree only with the 777x series. Due to the high risk involved, I think there will be two lines for 777x. First few dozen built in everett on one of the( now) 747/767 line areas, second line to be perhaps in long beach or texas. ( parts shipped thru new panama canal for example). Lets not forget the possibility of a Bx bomber that BA and lockheed have been working/bidding on. Which means a facility of sufficient size and a workforce used to military. Which IMO means st louis, (fort worth) or long beach.

    • LRS-B probably won’t be built at Plant 5 in Fort Worth: the F-35 line is stationed there and will have its hands full with the program. I doubt it will be in Long Beach since that facility is/will be closed. St Louis is possible, however it really depends on a lot of factors: when LRS-B’s contract is let, how long the Boeing can keep producing F-15s, the cost to renovate the plant’s facilities (it only produces fighter aircraft), and build other supporting infrastructure. For a lot of these the answers seem to be trending negative. The second most likely place is Washington, however the only place I can see them locating it is in Renton. BA hasn’t built any bombers there since 1962, and I wouldn’t be surprise that the set-up costs would price it out of contention. One of the key reasons why LM is BA’s partner is because of its experience in producing and operationalizing low observable aircraft, so final assembly might actually occur in a LM facility rather than a Boeing one.

      With that in mind, the most likely possibility is Plant 42 in Palmdale (for whomever wins the competition). The B-2, F-117, Global Hawk and X-47 were/are built there, as are LM’s Skunk Works facility. It checks almost all of the boxes (skilled workforce, secure, co-located facilities). The only question is whether it is large enough to accommodate LRS-B production.

      • RE Plant 42- A good bet for FA on the LRS-B final assembly. But remember that major parts of the B-2 were built elsewhere- Boeing dev center and nearby factory, and flown out via military cargo from ‘ across the street ” Boeing field ( King County airport ) As to a trained available workforce – palmdale area is VERY cyclical going from ghost- town to suburbia every 10 years or so for a lot of the hands on labor.

        Its a good bet the Bomber will need large scale Autoclave facilities, of which there is not exactly a plethora.

        And while there are other methods of CFRP curing ( as in a bath of liquid ) etc, or microwave curing of spar chords – the same might also be said of major wing parts of the 777X. And the obvious problems with transport of 100 plus ‘ foot ‘ sections to a final assembly site. Boeing I think may not go the guppy dreamlifter game again, if costs eat up the so called labor savings.

        But the corner office types have not really shown other than we will save a dollr in non union labor no matter how much it costs- along with we will be long gone before the bill comes due mindset.

      • Hi Don… thanks for your reply.

        Well there is evidence that Plant 42 (or at least Skunkworks) can employ a number of different approaches to undertake large scale curing. There are suggestions that the RQ-177 Sentinel fuselage (the type that crashed in Iran) was likely created using an large autoclave. Moreover LM’s X-55 cargo aircraft demonstrator was constructed there using an out of Autoclave approach at Palmdale, which may be a model for some of the LRS-B’s composite assemblies. I agree with you though, most of the sub-components would be done in other facilities across the country, as is normal practice. LM and Boeing have a history of similar cooperation through the F-22 program: I believe the fuselage barrel was assembled in Seattle (or some other major component.)

        I would be a little less concerned about the transportation costs/issues. The competition dynamics are different than in civil aviation, where cost (both acquisition and operational) is the primary determinant of a contract award. With DoD, it is one of several criteria to be evaluated, like technical risk and performance. It still is very important, but having a geographically (or, cynically, a congressionally) diverse supplier base can be an advantage. That is particularly true if you can legitimately make a claim that sourcing a component or service from a specific supplier will demonstrably benefit the program. The Northrop Grumman team will face the same challenges as well. Moreover once a contract is signed, the prime enjoys a cost plus format for the first couple of years, which means transportation costs are somewhat irrelevant.

        In reality I don’t think costs (specifically labor ones) are going to be a major determining factor of where they produce the LRS-B. Washington’s congressional lobby is strong, and would be able to pull strings if that was a serious issue. Rather its going to be the clear advantages of Palmdale, which has such a deep reservoir of talent and capabilities that will likely sway the choice.

  6. I agree that both Boeing and the unions need to negotiate in good faith but so far, it seems the unions aren’t interested IMHO.

    • See my comments at

      http://leehamnews.wordpress.com/2013/11/10/special-to-leeham-news-a-compromise-on-pension-plan/

      re the 401K bit – BA does not have an exactly stellar record on that either

      The recent Boeing “push’ to convert to a 401k type plan remind me of a not well known locally case brought against Boeing in Illinois on the hidden fees paid.

      My point is that to foist such a game on employees- union or not either with no real explanation or in the case of the union a few days to evaluate is reprehensible

      True it is mentioned in the Annual report ( 10K )- but tracing it down is not trivial due to lack of names and confusing dates shown.

      The initial filing was on 9/28/2006 and of course the case like most is still wending its way thru the system.

      My summary of the case after getting the 40 pages of the complaint is the serious questions regarding hidden fees and decreased real returns

      Some financial gurus claim a 1% change in fees can decrease returns over 30 years by over 20 percent.

      One example of the several complaints in this case is extracted below to show just part of complaint.

      105. The Boeing Stock Fund is an investment option in the Plan.
      106. As the name suggests, The Boeing Company Stock Fund provides participants
      with the opportunity to use a portion of their retirement savings to purchase stock in the company for which they work.
      107. By its nature, The Boeing Company Stock Fund is undiversified and risky,
      especially when it represents a disproportionately high percentage of a participant’s retirement savings.
      108. While The Boeing Company Stock Fund benefits Boeing by providing a steady
      market for the Company’s stock and more than $3.3 billion dollars (as of 2004) in working capital from their employees’ salaries, the Fund causes participants to embrace the risks inherent in undiversified investing. . . .
      115. By its very nature, The Boeing Company Stock Fund forgoes such investment
      management and holds an undiversified portfolio containing employer stock. Thus, The Boeing Company Stock Fund should not assess investment management charges against participants’ accounts. . . .

      128. For example, if a non-Plan investor purchases 100 shares of Boeing stock at $100 per share, and the share value thereafter rises by 10%, he or she has reaped a $1,000 gain on the initial $10,000 investment.
      129. However, a Plan participant placing the same $10,000 in The Boeing Company
      Stock Fund does not receive 100 shares of Boeing stock. He or she receives The Boeing Company Stock Fund units representing an interest in the shares of employer stock held in the Fund and an interest in The Boeing Company Stock Fund’s cash.
      130. If The Boeing Company Stock Fund holds 3 percent cash and 97 percent stock,
      the 10 percent increase in the value of the employer stock will translate into a $970 gain for the participant, while the value of the cash remains static. . . .

      For those who want to chase down the facts and details so as to be prepared to ASK the right questions at the right time Below are my sources

      FROM Boeing 2012 ANNUAL REPORT ( 10K ) pages 103 and 104

      On October 13, 2006, we were named as a defendant in a lawsuit filed in the U.S. District Court for the Southern District of Illinois. Plaintiffs, seeking to represent a class of similarly situated participants and beneficiaries in The Boeing Company Voluntary Investment Plan (the VIP), alleged that fees and expenses incurred by the VIP were and are unreasonable and excessive, not incurred solely for the benefit of the VIP and its participants, and were undisclosed to participants.

      The plaintiffs further alleged that defendants breached their fiduciary duties in violation of §502(a)(2) of ERISA, and sought injunctive and equitable relief pursuant to §502(a)(3) of ERISA. During the first quarter of 2010, the Seventh Circuit Court of Appeals granted a stay of trial proceedings in the district court pending resolution of an appeal made by Boeing in 2008 to the case’s class certification order.

      On January 21, 2011, the Seventh Circuit reversed the district court’s class certification order and decertified the class. The Seventh Circuit remanded the case to the district court for further proceedings.

      On March 2, 2011, plaintiffs filed an amended motion for class certification and a supplemental motion on August 7, 2011. Boeing’s opposition to class certification was filed on September 6, 2011. Plaintiffs’ reply brief in support of class certification was filed on September 27, 2011. The court has stated its intent to issue rulings on the amended motion for class certification and the alternative motion to proceed as a direct action for breach of fiduciary duty and then stay the case until it is determined if an appeal of the class certification order is filed.

      As a result, on September 19, 2012 the district court issued an order denying Boeing’s motions for summary judgment as premature pending class determination. The Company cannot reasonably estimate the range of loss, if any, that may result from this matter given the current procedural status of the litigation.

      ++++

      For those who want still further information

      http://www.uselaws.com/search.php?query=BOEING&search=1&submit=Search

      http://dev.uselaws.com/uploaded/articles/Hidden_Fees.pdf

      CASE 06-743 9/28/2006

      Gary Spano ET AL V BOEING ( Regarding the 401K plan AKA VIP)

  7. The exodus from Washington state has already started: when it was decided to build the second 787 final assembly line in South Carolina.

  8. I completely agree that the future of current levels of employment in the Puget Sound region are bleak.

    But lest we all suffer from Chicken Little syndrome, let me highlight some of the reasons why Boeing probably won’t be fleeing for the exit doors and will likely approach work from a more distributed, a la Hamburg-Toulouse model rather than an out and out exodus.

    1) Innovative workforce that can transfer. For the engineers and some select few of the IAM, Boeing (should) know that they can leave at any time and find good paying jobs with suppliers, competitors, or even something completely different, even locally. I read once that a poll of engineers stated that ~30% would either quit or retire if Boeing picked up shop and left. Might throw a wrench into Delaney’s plan to move engineering where FAL is. Some of the more experienced and talented machinists would probably leave too, ones that knew CNC machining, maintenance of robots, and safety systems. The hand-touch guys are pretty screwed though (riveters, drillers, inventory, tool shop, etc). Not to mention the culture. Not everyone will jump at the chance to live in the Deep South Bible Belt. Witness the exodus that happened when Boeing moved to Oklahoma City.

    2) Competition poaching of workforce. You betcha Airbus, Bombardier, and even suppliers would poach the workforce. I know a dozen Boeing guys, a mix of engineers and machinists. All the engineers have already been scouted by Bombardier, Gulfstream, and one by Airbus. The good machinists regularly attend workshops where they meet folks from Electroimpact, and other places, that need machinists and are willing to train them. Rapid prototyping places also need folks, and 3D printing allows the engineers to compete with the big boys for rapid prototyping.

    3) Too many eggs in too few baskets. Hurricanes in the south. Earthquakes on the west coast. Tornadoes in the midwest. Terrorist attacks. Etc etc. Also, logistics of having ready access to a sea port and rail that makes the Puget Sound and California good locations. That’s not to say Boeing can’t build more rail or have the Dreamlifter-esque idea of airlifting parts. But the less ancillary money you have to spend, the better.

    4) When it comes right down to it, wages and benefits are just one of the small reasons Boeing is leaving. In a fractured political environment, it pays to have as many dogs (politicians) in your corner as possible. Having just one FAL point for all airplanes made sense when you were a local aerospace company competing against a dozen others and could rely on your supplier network to speak for you. Those days are long gone. So Boeing has no choice but to expand elsewhere. Wages are important to keep down yes, but at the end of the day, automation of future assembly lines will make high wages irrelevant. If you can make a 777 line like a BMW plant or a Caterpillar plant, you just eliminated 80% of your wage problems. And remember about that innovative work force bit I mentioned earlier? Apparently they wanted to do that in Puget Sound, not Charleston. Let’s face it, the intellectual well here is much, much deeper, and will likely be so for a very, very long time.

    5) This is actually smart business. When defense goes down, commercial goes up, and you utilize your smart guys and retool them. That way when they go back to defense, maybe they learned something. We all knew this makes sense, but the past 10 years have seen unprecedented levels of rising revenues in both commercial and defense. Now they will be able to test the theory. This implies that they will need to keep a contingent of folks here to maintain the commercial side of things and can transfer knowledge to defense when the time is right.

    I’m not sugarcoating things- WA needs to step up and the IAM needs to educate their membership of the realities of our business that we live in today. It’s not fair. It sucks really. But that’s life. Unless they WANT to move to the South … and I doubt 67% of the membership want to. I’m just higlighting that there’s many reasons Boeing will likely keep Puget Sound here, attrition down to say 30,000 or so, and raise other places up.

    • Well, I know my way around northern Germany.
      The FAL obviously is in a place with good infrastructure access and close enough to a big town ( Hamburg ) to have access to a qualified workforce ( manual as well as academic ) without monopolising the resource. ( contrast to Wolfsburg and the VW plant ).
      All the support industry is distributed across the country in smaller centers of excellence bringing work to people and not the other way round. Afaics Germany has a lot less employer centric qualification. Trade specific qualification is aquired in a combined public school and employer located education process. the qualification goals are more abstract. the final qualification thus of a more universal nature.

      • That works great in Germany. American companies and individuals alike will avoid paying taxes at all costs, sometimes at the risk of being penny wise pound foolish, ergo they don’t spend the money to retrain at the same levels that European companies do. While machinists can easily get retrained on new machines, processes, tools, etc., a lot of the work they are currently trained on is manual labor. Airbus’ lines are much more automated than Boeing’s. That and given the pathetic educational foundation of those not in engineering and the sciences in America, the same people doing manual labor are pretty well SOL if they lose their jobs. They’d have to take low paying menial jobs like in food service, janitorial, etc. types of jobs.

        At the same time, that’s not to say the machinists couldn’t find jobs elsewhere at smaller plants or companies. It’s just the compensation by and large will be inferior to what Boeing offers today and offered in the contract extension, and most people would take a job that doesn’t have nearly the physical demand (i.e. food service) that offers nearly the same compensation. The fact is, many of their jobs are being automated out of existence and the smart ones are learning new skills, and the rest will simply take a job that won’t put stresses on their body.

    • Johan,
      You make excellent points, and I agree it would be stupid for Boeing to “flee for the exit doors” with regard to the Puget Sound region. In summary, their investment in the region is much too valuable to just totally abandon.

      However, in my opinion it’s a mistake for the workforce in the Puget Sound region to underestimate the dedication, abilities, and especially the education of the workforce in the south. Statements like:
      “Let’s face it, the intellectual well here is much, much deeper, and will likely be so for a very, very long time”,
      or other less flattering statements about the culture of the south seem to embody an attitude that many in the NW share about the south. As someone who grew up in the NW and was educated in the NW, I distinctly remember hearing and sharing those attitudes.

      Living in Virginia and working with various organizations throughout the “deep” south over the years has disabused me of those attitudes. There are very good universities throughout the south churning out talented engineers year after year,and there are skilled technicians and craftsman who would love to stay closer to home for their jobs rather than move north. Make no mistake, Boeing will be able to find more than enough people who are educated, intelligent, and sufficiently driven to fill their FAL’s and engineering centers.

      Part of the IAM educating their membership, that you talk about in your last paragraph, should include the realization that there are very competent and intelligent people all over the US that are more than capable of competing for their jobs. The playing field is more level than people in the NW seem to realize, even before all the political maneuvering to attract business.

      • Mike, you and Johan seem to make the point that the seattle centric workforce really is a wellfed and overexpectant bunch?

        Which companies have established effective and productive manufacturing sites in the south?

        IMHO the union workforce in Seattle and current Boeing management are a kind siamese dinosaurs : they chaff on each other but separation would kill both ;-)

      • Uwe,
        I’m not sure if your second question is rhetorical or not, but off the top of my head, I would say various auto manufacturers, including Saturn (GM). Perhaps LCA’s present a much greater challenge in terms of the learning curve, but I still maintain that the south has enough people with the skills and the desire to get the job done. As an example, for a while in the late 90’s, Huntsville, AL would boast about having the most PhD’s per capita. Not surprising really considering the amount of military and space related work that goes on in the region (the Delta IV booster is assembled right down the road in Decatur). Perhaps this was the local chamber of commerce stretching the truth, but they could not have claimed such without a relatively high concentration of very educated people.

        As for whether or not the Puget Sound workforce is well fed and over expectant, I think they are to a limited extent. They cannot remain forever immune to what is happening all over the rest of the country, and life is pretty good in the great NW. However, they make excellent points about how their corporate leadership is compensated, and have legitimate gripes, in my opinion, about the lack of accountability for recent poor management performance (excluding stock price maintenance, of course). Boeing management also seems to have a rather dubious history of treating their workforce way too much like a commodity, and less so like a treasured asset. Ultimately, it’s the people (workers and management) both high and low, that make a company what it is.

        Your “Siamese dinosaurs” simile is a good one, but even dinosaurs can evolve, at least if they choose to in this case.

        • Not rhetoric at all.
          Who set up show in the south and what did each of those achieve.

          Dinosaurs: In the end they competed on traits that would in all finality not be conducive for their survival.
          Compare to the looters and takers environment in the US that competes by way of redistribution but lacks refinedness to be constructive/productive.
          Redistribution is lossy. More so when the fight goes back and forth.
          ( IMHO the basic definition of looting is to destroy significantly more value than is being taken. ) Forex GM looted Opel for essentially peanuts to improve their US results but destroyed a well working design and production entity of much higher value.)

      • “Not rhetoric at all.
        Who set up show in the south and what did each of those achieve.”

        The reason I wondered is because I had the impression from some of your previous comments on other threads that you already knew the answer to your question.

        • The only southern success stories I have seen are about non US car manufacturers setting up shop in the US. ( which probably is a keyhole view
          and linked to what crops up in the stuff I read and/or catches my eye.)
          From history VW has been very successfull setting up shop in a range of countries all over the world also the first ever foreign site in the US (Westmoreland, CKD assembly ). Though that seems to have not been a full success like the VW sites in SA, Mexico, Brasil and finally China

          • Subtle difference re Auto v Airplane

            1) 1 car per 2 minutes off the line- or 100 cars/hour ( conservative ) is the norm. Workers move very little from station to station depending on methods- and is achiev ed within a few months of production start

            2) 1 737 per day ( or slightly better ) is achieved decades after production start.

            3) If joe sixpac misses a few nuts or bolts, or forgets to tighten xx, or abrades a wire , or ,,,,you wind up on the side of the road or simply cannot start- and worst case a few ( carful ) people might cash in

            4) OTOH – if joe aeropac makes the same mistake- clouds do not make good parking places- and dozens of people might cash in. It takes YEARS to develop that day to day expertise …

            I recall a comment supposedly made to alan Mulaly when he went to Ford- he was reminded/told that cars had tens of thousands of parts which had to be precisely made and assembled for a car to work reliably. His response ( supposedly ) was that an airplane had millions of parts . . . .

          • I don’t know about US car manufacture or the setup at Boeing. ( Though if the PT cruiser is any indication .. )
            But neither the processes at VW in Wolfsburg nor those at Airbus in FXW fit your description. For VW forgetting to tighten some bolts on even a single car per day would be seen as completely unacceptable. In both places a significant amount of effort is spent on preparing production. The only major difference I currently see is that in the car industry customers don’t get to live with early still learning products
            sold for a lower price like in the airframer industry. When production starts full scale for a new type these things are mostly fixed.

      • “The only southern success stories I have seen are about non US car manufacturers setting up shop in the US.”

        I mentioned Saturn earlier as a success in the south. I had totally missed the fact that GM shut it down in 2009. After doing a bit of reading, it seems Saturn was on the road to success until both the GM management and the UAW killed it. It’s too bad really, because it seems like they were trying out some very good ideas with regard to labor/management relations.

        I notice your disdain for the PT Cruiser, well, I’m not particularly fond of that car either. However, you should know that at least among the circles of friends and acquaintances I keep, the general consensus seems to be neither VW’s nor Audi’s have a good reputation as far as maintenance and reliability are concerned. I do like the way they look, however.

        • Saturn: so the dinosaur twins killed the project ?

          PT Cruiser: caught my eye as it is one of the very few cars with US pedigree that got sales here. ( Mostly for a catching design ) enough to make it into the general statistics on quality and reliability. A regular occupant of the last few slots behind everyone else even those that are publicly known as abysmal.

          Looking at the Toyota bruhaha my impression is that US customers are unable to come to impartial assessment of foreign products. Local is “per definition” better and more durable.

      • “Looking at the Toyota bruhaha my impression is that US customers are unable to come to impartial assessment of foreign products. Local is “per definition” better and more durable.”

        Your impression of US customers seems to be heavily influenced by single events. The Toyota brouhaha, as you call it, was way over blown in the US media, primarily because it was a perceived safety issue, not a maintenance or reliability issue. Most people I know still have a very high opinion of Toyota and Japanese imports in general. They are thought to be very reliable, efficient, and affordable.

  9. Pingback: Analyst: Boeing production in Washington will diminish after 2021 | Seattle News

  10. I think IAM is saying they are fine with work leaving Puget Sound as long as pension and healthcare benefits stay largely the same. Bulk of voting members will be long gone before program sun-setting impacts senior headcount.

    777X is new work. Why give up my benefits so somebody else can get a new job?

    Contract rejection sounds like win/win.

    • Actually it’s the opposite. The senior members honestly believed they were protecting hard-fought gains in pension, healthcare, pay rates, and seniority structure that they got after decades of negotiations. Thus they honestly believed they were protecting future folks’ benefits and the company is bluffing and/or has no choice.

      You may take a cynical view of the vote outcome, but that doesn’t make it reality.

  11. Excellent reporting and comments indeed. I am very surprised that I haven’t eard anything yet on the radio waves. The Washington economy is on the Clift !

    • Puget Sound Business Journal, Q13Fox, KOMO TV, KING TV, KIRO Radio, KOMO Radio all have done some reporting, PSBJ the most extensive.

  12. Yo folks .. its not that the SC crew are incapable of learning, etc, its that it takes several YEARS of hands on practice along with experienced workers to become reasonably proficient in ALL of the tasks needed to assemble and certify and fly an airplane much more complex than the B-17. That includes desk jockeys, manufacturing engineers, tooling types, cal cert people, shop floor management, etc.

    Even with an experienced crew- aircraft assembly learning curves have in the past shown a typical ratio of 13 to 1 for the first 50 or 100 planes. That is to say the first of a new plane takes about 13 times as long as the 50th or 100th to produce. Cost learning curves are another matter more dependant on program accounting, etc.

    Which is why it is hard to believe that BA would risk a derivitive plane going thru the same baseline curve from scratch if built elsewhere

    “There’s no such thing as a simple derivative,” Albaugh said in the Sept. 27 interview. “There’s some things you just can’t model, and that’s why you do the test program.”
    “We, lemming-like, over the last 15 years extended our supply chains a little too far globally in the name of low cost,” said Jim McNerney, chief executive of world No. 2 planemaker Boeing. “We lost control in some cases over quality and service when we did that, we underestimated in some cases the value of our workers back here.”

    So what has changed ??

  13. The unfortunant bottom line for McNerny is that if he moves the 777X FAL anywhere else there’s no chance the program will deliver on time and budget, or anywhere near that. It’ll be the 787 program on steroids. Even those out-of-touch Chicago types must realize that Boeing cannot accept another public humiliation such as that it’s still got going on the Late-7. They must bit the bullet as much as they hate to, if they want a successful EIS. Built it elsewhere, that won’t happen.

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