Odds and Ends: MAX EIS dates; McNerney on business climate; A320 Tianjin plant only breaks even

MAX EIS dates: Aviation Week has this story that lists the planned MAX EIS dates: 737-8, 2017 (we previously reported 4Q2017); 737-9 in 2018 and 737-7 in 2019. AvWeek also reported the bypass ratio for the LEAP-1B is 8.5:1.

Eulogy for the 747-400: Bloomberg has this interesting piece about the current status of the Boeing 747-400.

McNerney on US business climate: Boeing CEO Jim McNerney has these comments on the US business climate.

Airbus Tianjin plant only breaks even: so says this report in Aviation Week.

US Air’s 1549 A320 now in museum: It’s a tribute to the flight crew and to aviation safety.

41 Comments on “Odds and Ends: MAX EIS dates; McNerney on business climate; A320 Tianjin plant only breaks even

  1. Scott,

    You have an interesting olio. McNerney complaining about regulation, and the 1549 Charlotte article praising regulation.

    • Yeah more socialism is always good for you, regulators always know better than engineers. I love to pay taxes, dont you?

      • {cite McNerney} He said regulators often take a hostile approach to business and that the prevailing attitude is companies “are guilty until proven innocent.” {/cite}

        A position established from historic fact.

        Commercial entities will even take down the tree they are sitting
        on for that little bit of more profit and then start blabbing for bailout.
        You can’t let capitalists out of the well supervised market sandbox.

        “more socialism”
        Established forms of communism/socialism actually were
        rather “capitalist” about their environment.
        i.e. ideology wise going full hog either way leads to a countries downfall. balance. Watch out for balance.

      • Agreed Uwe, moderation in all things is the best course.
        The problem in the US is that the current administration with its inclusion of all wacky causes has installed regulators who have far outstripped the rules of the rest of the world. This results in an uncompetitive position. This is what McNerney is talking about.
        Historical fact would prove that the vast majority of businesses are upstanding and fair minded and follow reasonable rules. Only a few cut corners and need to have corrective action imposed. Those few bad apples have become the excuse for the imposition of onerous multiple new regulations.

        • You will find that legal frameworks in Europe are much more restraining.
          Even China gains regulation faster than the US.

          The US is loosing competitiveness due to:
          excessive expectations on profits
          a widely held feeling of entitlement and a general perception
          missmatch that is commonly subsumed under “Jingoism”.*
          A tendency to coerce and not compete ( add in overblown military spending )
          too much income for nonproductive jobs like management, banking, lending
          and lawyers.
          The productive middle class is loosing out fast.

          The basic tenet of “true” capitalism is that there is no moral but profits.
          The US variety of capitalism has narrowed that down to fast profits
          which tend to be drawn from converting assets and not from productivity.

          * This is why Boeings fall is perceived as such a strong loss.

      • Uwe, You have been reading too many liberal european newspapers who love to place Capitalism in as bad a light as possible. You opinion is obviously molded by a lifetime in a Democratic Socialist governmental economic system. The government makes the decisions and takes care of the sheeple from womb to tomb just send in your taxes. That system isn’t working too well for you right now. It seems some in the EU want to be a little more equal than others while spending what they don’t have.

        As for the capitalists, the vast majority of banks and businesses are operated very well, make reasonable profits and live within the law. A very few do not.

        On the subject of jingoism, better prepared than not. As I recall the EU countries had to borrow/buy enough bombs, refueling capability and fuel just to use against a third rate dictator in Lybia. The EU couldn’t defend itself if it had to.

        “This is why Boeings fall is perceived as such a strong loss.” For the life of me I am still trying to figure this comment out.
        You need to read the S & P evaluation rating on Boeing. They and Oppenheimer seem to have a different thought about Boeing than you do.

  2. If you look at Tim Hepher’s article on Tianjin from June 13th, Barron said they will (future tense) break even this year, not that they ARE currently. Tim’s article also gives some very interesting data points on wage growth at the Airbus factory. Seems they’ve been able to keep it to just 8%, which is astronomical by western standards, but pretty good compared to the average 13.3% in that sector. Pretty startling when one looks at it.

    • He means business regulations, not safety regulations, obviously.

  3. dopydem :
    Only a few cut corners and need to have corrective action imposed. Those few bad apples have become the excuse for the imposition of onerous multiple new regulations.

    Those “few” brought the world economy to a standstill in 2008. We have not recovered yet from the Great Recession and it looks like it’s not going to get any better for a very long time. Wild capitalism will destroy the world if left unchecked.

    • Unfortunately trying to point out such facts is akin to trying to spit into the wind. It will just get blown back into your face.

      Never mind that most, if not all, of this “overregulation” stems directly from the actions by the “those few bad apples” leading to the situation in 2008.

      Mr. McNerney (Airplane Jim?) seems to forget that his own company (Boeing) has been caught numerous times with their fingers in the proverbial cookie jar.

  4. Why do europeans always think more government is the answer? Why are we such lovers of regulation, taxes and socialism? In this cut throt global world, why make it even harder for our corporations to make it? Sheer stupidity imo! I hope not the same persons complain when their jobs get outsourced..

    • You are aware that the nonsocialist and unregulated business US has lost much more jobs to outsourcing. Additionally it has more unproductive lawyers than Europe has regulatory personel. The noncutthroat atmosphere here has lead to things like Airbus planes and other very competitive products.
      Lastly see Normand’s comment : Capitalism will eat itself. ( after traficking in kids and human meat first )

    • I know socialism has a self made evil sound in the US. The rest of the world has more moderate perceptions I guess. Socialist parties are elected / beaten in elections, take part in democracies for decades just like liberal, left en right wing parties. Examples : Blair, Schroder and the current french PM.

      The benefits of less government are promoted, we have also seen the damage less government can cause. (2008 crises, US healthcare, poor education, lack of innovation). If the government deregulates, also bad guys tend to come in, taking advantage, screwing society for their own benefit. Who has to prevent that ? ..

      The 787 financing, R&D, NASA space programs, stealth programs, universities, enviromental programs, all government.

      Shockingly the most successful dynamic economy, lending us money, is a more hardline socialist country. Maybe the hardline free market, capitalism guys are up for an identity crises.. Perceptions are changing, e.g. in US the people want Obama/government to fix, fight, take care of things (= tax, regulations).

      • “e.g. in US the people want Obama/government to fix, fight, take care of things”

        This is all getting a bit off topic but I think I should point out it is not as straightforward as you make it out to be, as President Obama is now also aware.

      • All these EU bits sound like a bad case of penis envy to me.
        You are aware, one hopes, that all the maladies you heap at the foot of the US are much worse in Europe.
        Talk about a “sense of entitlement”! Look at 45 days vacation. For God’s sake, look at Greece.
        What hypocrisy!
        The nice thing about Capitalism is that it is self-correcting.
        Not so, Socuialism, which runs until it runs out of other peoples’ money, to paraphrase Mrs. Thatcher.
        Where the US went wrong was in education of the voters, or rather restriction of the privilege of voting to the educated.
        Our elections are beauty contests, not decided by the issues.
        But we have recently learned a little there.
        We’ve had our dalliance with socialism.
        Keep your socialism over there if it suits you.
        In fact we can send you Obama; we’re through with him.
        Like the Italian rifle, he’s hardly used, never fired and only dropped once.
        You can put him in that central asylum in Brussels where you keep all the other inmates with delusions of running a government.
        Socialism has weakened Europe; Islam will destroy it.
        Thanks, I’ll take the US, even with all its faults.

        • This is getting a bit far afield. We suggest all return to the issues, please. This means Europeans and Americans. This is not intended to be a political forum.

  5. Mr Brégier, previously Airbus’ chief operating officer, is keen to reject Boeing’s accusations that Airbus has unleashed a price war in the narrow-body market with the A320 Neo.

    Ahead of the Farnborough air show next month, where Boeing is expected to secure orders for its revamped 737 single aisle aircraft with more fuel efficient engines, Mr Brégier says: “Who is desperate to catch-up? Who is desperate to make announcements in Farnborough? Me? No.”


  6. I had chuckle at all the people writing comments who were offended by the 747-400 article. They seemed to take it as an advertisement for the A380, even though the 777, the 747-8 and the 787 were all mentioned as well.

  7. Norman Hamel: I agree with your statement “Those “few” brought the world
    economy to a standstill in 2008.”
    If we only look next door at Canada, where they sailed thru the financial crisis
    without being affected anywhere near as much as we did, BECAUSE they have
    far better banking regulations protecting the interest of investors, than we have!

  8. Fred Bearden :
    The nice thing about Capitalism is that it is self-correcting.

    Capitalism is indeed self-correcting. But wild Capitalism is not. Wild Capitalism is self-breeding, not self-correcting.

    Capitalism = Freedom.
    Wild Capitalism = Slavery.

  9. Rudy Hillinga :
    If we only look next door at Canada, where they sailed thru the financial crisis without being affected anywhere near as much as we did, BECAUSE they have far better banking regulations protecting the interest of investors, than we have!

    This has to be one of the smartest statement I have read so far in this particular thread!

    Thank you Rudy.

    • Really?
      All this economic malaise in the US was caused by poor banking regulations?

      And all this time I thought it was caused by our government spending more than its revenues, mostly on big government stimulus spending, over-regulation and overly generous entitlements for underachievers.

      • Former Treasury Secretary Henry Paulson requested the government to bailout the banks in 2008. When Congress asked him why it was necessary to do so, his answer was “because if you don’t there wont be an economy next Monday”.

        And Paulson was not talking about a mere US economy meltdown. He was talking about a world economy meltdown. Economic Armageddon if you want. That’s why I said that “Wild Capitalism will destroy the world if left unchecked.”

  10. The government is going to cut its spending (not good for Boeing).
    The government is going to raise taxes (not good for Boeing).

    The question is why does the government have to cut spending and raise taxes?
    Because the Wall-Street cowboys used de-regulation to scavenge the economy.

    If McNerney doesn’t like Government’s intervention, why then was he so happy when the Government intervened to salvage the Tanker contract Boeing had lost to a competitor?

  11. Normand Hamel:
    Not only did “the US Government intervened to salvage the Tanker contract Boeing
    had lost to a competitor,” Boeing dropped the price/unit to such low levels, in sup-
    port to what the government was doing, that they reportedly are going to loose on
    every unit delivered to the US Airforce, under this fixed-price contract!
    Does anyone remember how we (Boeing and MDD) complained about Airbus sub-
    sidies and still do, while the US subsidizes many key industries like farming and
    even our very profitable oil industry and now tanker/transports?

  12. The cost and complexity to develop new aircraft can in some parts be blamed on regulation, governmenatal regulation. Not all regulators care if a corporation goes down, these small dictators just have to enforce their will.

    I agree with that statement, the western world needs less governmental regulations if we want to have a future in this globalized world. Its not that A or B would dare to cut corners on safety with less regulators at the helm. Its the other useless stuff they bring on corporations.

    Maybe I am alone in EU thinking less government and less regulation would be good?

    • The UK had an extraordinary aircraft industry until the government decided to pull out. I find this situation very sad. 🙁

      I am sure China would love to have the expertise the British had developed until then. But it looks like it was the US that benefited from the British engineers exodus that ensued. Apparently it was a real bonanza for Lockheed and Boeing. 🙂

    • Shorts is one of only two survivors of the once glorious British aircraft industry. Margaret Thatcher wanted to get rid of Shorts and offered it to an international consortium that would have dismantled it and sell it piece by piece in order to make maximum profits. But her minister responsible for Shorts was the future Prime Minister John Major. He favoured Bombardier because they had a plan to restructure the company. He threatened to resign if overruled.

      The whole adventure cost dearly to the UK government. But look at the results today. Bombardier is the largest employer in Northern Ireland. And they recently made the biggest private investment in the history of Northern Ireland, by building a brand new factory for the CSeries wing.

      • I said one of only two survivors, but it is actually three survivors. I forgot Roll-Royce which went bankrupt in 1971. But thanks to the government, they are still alive and kicking.

    • Sorry, but I am must way too cynical about the way companies work, especially these days. We see more and more evidence that businesses will cut corners or outright cheat if it will get them extra profit. Leaving them to regulate themselves would not be a good decision.

      I don’t believe in less or more regulation. What I wish for is wise and responsible government and regulation. Unfortunately many here would see that as a pipe dream, and are probably right.

      The other issue is how to agree on what is wise and responsible? I note that the free capitalists and the socialists seem to see things from totally different sides.

      Black is white, up is down, right is left!!

  13. dopydem :
    You opinion is obviously molded by a lifetime in a Democratic Socialist governmental economic system. The government makes the decisions and takes care of the sheeple from womb to tomb just send in your taxes. That system isn’t working too well for you right now.

    Germany has one of the strongest economy in the world right now. People over there are working hard and are extremely competent.

    The problems in the EU originate from United States. It all started with the 2007 mortgage crisis. The so-called subprime mortgage crisis. It had repercussions around the world. The Euro is one of the casualties. The Euro is only ten years old. When they created it they never expected to have a financial crisis of this nature. We could say they were short sighted.

    They should have created the Euro within the boundaries of a common fiscal policy. But that would probably have excluded countries like Greece; because for cultural reasons they would be unable to maintain the necessary fiscal discipline. So a lot of readjustments are still needed to save the young Euro.

    But think about it, ten years is not a very long period of time for the Old Continent. If the Euro has survived for ten years it can survive a hundred years. Or until it is replaced by a unique world currency.

    There is enough brain power and wisdom in Europe for them to adopt the appropriate measures that will save their common wealth.

    • In the initial join up phase of the EURO Greece went with an offer from US Banks to fix their
      finances in a way that would let the books appear to be conforming to the stability criteria set up. ( Sell out /lease back arrangements ). They never could leave that slippery slope after that. ( Actually Greece and the US are not that much different. No exports, too much military some other points. The difference is in having a reserve currency or not. Thus the US can print money against _the whole world economy_ while greece ( or the EU ) can’t.

      • I wouldn’t compare the US to Greece overall. US debt is still far lower than Greece. Of the current $16 trillion in debt the Federal Government owns $6.2 trillion of it (Social Security trust fund, civil service retirement accounts, federal reserve and other accounts). So total external US debt is basically $10 trillion/ $16 trillion or about 63%. Debt external to the government is what all governments aside from the US measure so this is the correct measure to use when making a comparison between countries. Germany’s total debt is over 80% of its GDP so the US still has a lower debt ratio than Germany and most EU countries. We hit Greece’s debt load at the end of the decade if nothing changes.

        I would agree that the US in the name of free trade has allowed far to much of its manufacturing base to be offshored and due to this and our appetite for imported oil (a little over half of our deficit) we have an unacceptably high trade deficit. And we are like Greece in another way in that we don’t like to pay taxes sufficient to cover the government our legislature votes for. In 2009 the OECD estimated the US had lower effective total taxes at 24%, than any member states aside from Mexico and Chile. Running the world’s most capable military and the most expensive health care system while having a tax base the size of Mexico and Chile pretty much guarantees high deficits. By comparison Germany collects about 40% of its GDP in taxes.

  14. Uwe, please follow my logic I am counting only debt that is external to government (e.g. not owed to itself) which I lay out clearly how it is calculated. In the US the government collects about a hundred billion in extra social security taxes each year. It then buys US debt from treasure with this money. The bonds are therefore owned by the US Government which totaled $6.2 trillion as of last year. Greece, Germany and other countries do not count debt owed internally to the government as they do not use the same government accounting procedures as the US does (Germany comes in at an 82% debt level according to wiki).

    My numbers are fine it’s the logic that is different. All I am saying is that you need to compare apples to apples and remove the internal government debt to make an equal comparison. What you are doing is the common Boeing Airbus mistake of saying my plane is more efficient at 2000 nm and therefore more efficient overall than yours and the other guy comes back and says mine is more efficient at 5000 nm so therefore I have the advantage. All I did is take the numbers to a common reference point. You are free to disagree with what I did, but what you owe me is an explanation of why Internal US Federal Debt should be included in the US debt level when comparing numbers across countries, not a link to Wikipedia which doesn’t answer the question.

    • Sorry. from my viewpoint the government acts as fiduciary to the public here.
      They have control but is is not a “circular” operation as you seem to suggest.
      Just the usual financial fib we see so often in this context.
      ( The reason the OECD study does not follow your argument ?. )

  15. Uwe, FWI here are the 10 largest holders of US debt not aviation related so I don’t plan anymore posts on the topic. But as you see yes more than $6.2 trillion of US debt is internal.

    1. Federal Reserve and Intragovernmental Holdings $6.328 trillion
    2. China $1.132 trillion
    3. Other Investors/Savings Bonds (US) $1.038 trillion
    4. Japan $1.038 trillion
    5. Pension Funds (US) $842.2 billion
    6. Mutual Funds (US) $653.5 billion
    7. State and Local Government (US) $484.4 billion
    8. The United Kingdom  $429.4 billion
    9. Banks (US) $284.5 billion
    8. Insurance Companies $250.1 billion

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