Airbus-Mobile press conference

Fabrice Bregier, CEO: Customers were asking, why don’t you come closer to us? Currently more than 200 aircraft a year for US, Canada. Capacity for more than 400. Expect to build A320neo to at least 2030.

Christian Scherer, head of strategy: An assembly line is not just an assembly line but a whole compound. 116 acres of industrial complex. Seven buildings. Shipped to deep sea port of Mobile and trucked to the facility. From shipment to roll-out, about 2 1/2 months. Expansion beyond 116 acres possible. It is pretty much a carbon copy of Europe. Reducing industrial risk by copying it.

Q&A

Scherer: This is limited to A320. We have negotiated option for land expansion, but no plans for that now. Could have support facilities.

Bregier: This is a strategy move first. We considered that despite procuring $12bn from suppliers in US, we needed to be visible. There is a wave of replacement aircraft needed, and we have the right product in A320neo and producing this in America will be an advantage. Our lines in Europe are competitive [but are costed in Euros]. We avoid transporting suppliers, engines to Europe for reimport to US; these will go directly to Mobile.

Scherer: Proximity to a very, very large market and international footprint for the company are strategic drivers. It is as simple as that.

Airbus official: More than half the value of A320 already comes from America (driven mostly by engines).

Alan McArtor, Chairman Airbus Americas: Typically there is a halo affect that will attract suppliers to the region.

Bregier: Right now struggling to achieve rate 42 in October this year due to supply chain. We need to first stabilize supply chain. First deliveries here in 2016. We know that if we could deliver much more than 42 NEOs a month from 2016, there is a huge potential. It’s premature to say we’ll ramp up beyond 42 a month but with NEO there is huge potential.

Bregier: Already have 220 Airbus engineers in Mobile.

Scherer: Incentives in excess of $100m.

Bregier: Euro-dollar exchange rate not a consideration to a long-term investment. Unions: every9one prefers to have investments in-country but we have invested $14bn Euros in Europe, so it’s time to invest in the US.

McArtor: Having an industrial citizenship in the US can’t hurt for future DOD contracts. It’s not the reason we’re doing it right now but the answer to the potential is yes.

Scherer: There are no plans to convert passenger-to-cargo planes here. If and when [our other facilities] have exhausted their capacity, then it would make sense to consider here.

Separate from the press conference, we asked about CEO and NEO production: CEO will be assembled first at Mobile.

 

87 Comments on “Airbus-Mobile press conference

  1. Every new private sector job in this country is good news.
    However the ultimate goal of Airbus is to kill, kill, kill US aircraft industry
    or at least relegate it to obscurity.
    So, let’s keep praising Airbus for making one more step towards the ultimate goal !!!

      • While hyperbolic in style, I don’t think Kosta’s comment is far off the mark. It is every corporation’s goal to dominate their market(s). I think it would be naive to believe Airbus prefers a 50-50 market share split to a 70-30 or 80-20 one. Airbus claims otherwise, but being able to construct as many frames as possible outside the Eurozone is a net positive for their bottom line, and will be able to further pressure Boeing on price.

      • In essence, Kosta is “real….”

        In truly unregulated free-markets one tries to totally dominate another leaving nothing for others. The term, “to the victor belong the spoils,” is an age old description. One key to success is to get those inside on your side. Here, EADS is one more step towards that goal, and it is more than just A320’s.

        One EADS goal to extract more revenue from global markets is to tap military establishments. Even under tight strings, the Pentagon is the largest of them all. Assembling A320’s makes them seem just a bit more “American.” They lost the USAF aerial re-fueling tanker contest that would have allowed Pentagon funds to build their foot hold in Mobile. Yet, they haven’t given up.

        They may just assemble A400M’s from parts barged in from Spain to make them seem “Made in USA.” Yes, their strategy is quite, “real….” and they are not our friends.

      • Kosta, you’re right on!
        The “Oh, get real…” comment is quite naive!

      • As someone working for the kill-kill-kill-kompany I find it truly bizarre that so many very vocal opinions from across the Atlantic hold “the competitor” in such incredibly low regard.

        I can assure you that it’s really not an all out war from our point of view. I have great respect for and interest in all the other manufacturers, and I’m sure all my colleagues do as well.

        Of course it feels nice if “our side” makes a good choice or has a large order, but it’s not at all about beating everyone else into oblivion. Personally I’m rooting for Sukhoi and Bombardier to have some success with their programmes, for example.

        Enjoy comparing products and engineering solutions. Appreciate a variety of aircraft flying the skies.

        “Why can’t we all just get along?” 😉

        • Thank you to “this gentleman in Toulouse” for expressing, better that I ever could myself, the way I feel about this business.

  2. Kosta, nOthing prevents Boeing from taking the right decisions and selling the right products everywhere, regaining market suppremacy. Contrary, they are massively supported as the US #1 exporter. They pretty much moved everyone out of business, in ethical and less ehical ways, with all jobs associated, except 1 they kept underestimating, dismissing. Now is an opportunity to fight back, innovate and succeed in a free market environment.

    • There is no free market environment in the industry because of the massive government support on both sides across the pond, though the mechanisms of such a support apparently are different.
      Boeing’s virtual monopoly existing 30 years ago was not beneficial to the airlines and travelers in the long run.
      Ascendance of Airbus in one way or another is inevitable taking into account history of European expertise in aircraft design and manufacturing.
      Airbus’s cornering the market (god forbid!) would be equally bad for this country and consumers overall.

  3. “Expect to build A320neo to at least 2030.”

    ROTFLMAO!!!!

    Have they forgotten about Boeing still has plans for the NSA sometime in the 2020s? The NSA could very well kill off both the A-320NEO and the B-737MAX.

    • Yeah, that’s a bit optimistic. If both Airbus and Boeing are building the same narrowbody in 2030 then something is wrong with the world.

      • WCOG :
        If both Airbus and Boeing are building the same narrowbody in 2030 then something is wrong with the world.

        They probably would if Bombardier had not upset the neat two-row apple cart.

    • How long is Boeing now building the 737?
      since the advent of aviation there is a gradual but continuing trend to longer life cycles – possibly due to the law of diminishing returns. They may not be building 320’s to the same drawing package in 18 years – where Airbus is now doing to the 320 what Boeing did tothe 737 with the NG program, they may well respond to the Boeing NSA with their version of a MAX program…

  4. Other articles have said A319, A320, and A321… you are reporting just A320. Which is the case? Or should your quote be A320 family?

    Loved the comment about re-importation… too bad it’s complete junk. The stuff shipped from the US is largely incorporated into subassemblies in Europe, and can’t be just “left off” until it gets to Mobile. There are some items that get installed at FAL, but for the most part this line about not re-importing is just hand waiving.

    • It’s the entire family. We generally just short-hand “A320” in the same way we short-hand “737” for all the sub-types.

    • Howard, if you take the engines, Honeywell APU, Interiors and avionics those are mostly linefitted.

      • Yes, but not all of that comes from the USA. Interiors are mostly European, as are the Avionics. A few LRUs come from the US, but Thales has far greater market share. A great deal of items Airbus buys from the US are in structure, and those can’t be left off.

  5. Kosta
    Where have you been and have you ever heard about the enormously beneficial
    and extensive increase in international trade of all kinds and in both directions?
    The ITO may not be perfect, but stating that “the ultimate goal of Airbus is to kill,
    kill, kill US aircraft industry or at least relegate it to obscurity,” is not only extreme-
    ly unrealistic and it cannot and will NOT happen, because wages and benefits are
    much higher in Europe than they are in the US!
    That and the fact that all aircraft prices are in $US, are the real and necessary
    reasons for Airbus to start assembling in the US, as they already have in China!
    China may eventually become a real challenge to both Airbus AND Boeing, but
    that’s driven by the lower wages in China and NOT to kill either Boeing or Airbus!

  6. KC135TopBoom :
    “Expect to build A320neo to at least 2030.”
    ROTFLMAO!!!!
    Have they forgotten about Boeing still has plans for the NSA sometime in the 2020s? The NSA could very well kill off both the A-320NEO and the B-737MAX.

    KC135TopBoom :
    “Expect to build A320neo to at least 2030.”
    ROTFLMAO!!!!
    Have they forgotten about Boeing still has plans for the NSA sometime in the 2020s? The NSA could very well kill off both the A-320NEO and the B-737MAX.

    Who has been calling the shots in the narrowbody market mr. Boom? Airbus has shown it’s firmly in the drivers seat.

  7. Randy says: “The 737 MAX will have the lowest operating costs in the single-aisle segment, with a 7 percent advantage per seat over the competition in the future,”

    Lufthansa has said the MAX will be 2% more efficient then the NEO.

    McNerney said the so-called Airbus A-320neo will merely catch up to the 737, which is already more efficient than the A320.

    There are more then 1000 orders and commitments for the MAX and if the figure we’re hearing proves correct, the neo and MAX should have parity.

    I encouraged doubters not just take Boeings word for it, but to ask appraisers, financiers and leasing companies which airplane they value more in the market today. They’ll find that the 737 has higher lease rates, higher “fair market” values and higher residual values. The 737 MAX will build on this value and maintain our 8 percent per-seat operating cost advantage

    The 737 MAX is consistent with Boeings demonstrated performance on delivering increasing value to our customers, on time, throughout the life of the 737 program.

    …..

    I continue to be amazed by all this self confidence and the outright denial we have seen in recent years. It sometimes seems Boeing refuses to really listen to the market. I think Albaugh is a victim of this latest Mobile wake up call. I’m not sure about a Farnborough MAX party, I have a feeling there might be a double whammy..

    • Wait… so now you are saying Albaugh was sacked because Airbus’ Mobile FAL announcement?

      • I recall the panic surrounding the American Airlines order last summer. I can just imagine what it was like this time around. They must have felt like it was a reverse Normandy Invasion! They probably all went ballistic in Chicago.

        Even from the outside the tension is palpable. The official Boeing press release speaks for itself. And it even came out before the actual announcement was made!

        So what does it all have to do with Albaugh’s departure? I don’t really know. But the timing is odd.

      • Howard, I think the 737 is the most sold, leanest more stable product line of Boeing. Putting that at risk, clearly following a track that unfeasible and doing so while everybody is warning you, was probably at the base of his early retirement

      • Last week he was saying it was because of American Airlines’ A320 buy and the embarrassing picture afterwards or something like that. Make up your mind, man.

      • WCOG :
        Last week he was saying it was because of American Airlines’ A320 buy and the embarrassing picture afterwards or something like that. Make up your mind, man.

        WCOG, do you think the NEO, NSA, Mobile, MAX and Jim’s early retirement are all unrelated?

        Airbus is taking a risk,, moving jobs to the US instead of outsourcing, investing a local community. Confusing for some here, but putting bread on the table for lots of families.

        Th net effect for US based airlines is that they can now order US build A321 NEO’s with an option of two US build engines, for delivery starting 2016. Pretty hard to ignore for United/ Continental for their caribbean and transcon flights. The 737-9 MAX doesn’t look fantastic.

  8. RH Hastings :
    Yes, their strategy is quite, “real….” and they are not our friends.

    Airbus’s foray in Alabama is not quite the same as the Japanese raiding Pearl Harbour.

    • It is not the morning shock as Pearl Harbour was, but virtually a European Trojan horse planting raid in slow motion aided and abetted by desperate Americans on the EADS payroll.

      It is not a benevolent A320 jobs program to benefit locals and the airlines, but a long term investment in an attempt to make EADS more “American” and for other minor reasons. Unlike their partnership with the Chinese in Tianjin, America won’t learn from this experience, no technology nor assembly techniques to glean. But, it is the opening blast in a raid for more American defense dollars lead by local pawns.

      • RH Hastings :It is not a benevolent A320 jobs program to benefit locals and the airlines, (…)

        And Boeing does “benevolent programs to benefit locals and airlines?” Wake up and smell the coffee, companies are at this to benefit their shareholders first and foremost. For example, US companies don’t have a problem moving jobs and business abroad if it benefits them. Witness that fruit company in California for one.

      • RH Hastings :
        It is not the morning shock as Pearl Harbour was, but virtually a European Trojan horse planting raid in slow motion aided and abetted by desperate Americans on the EADS payroll.

        Right…
        So what exactly were the Europeans supposed to say about all the car manufacturing plants US companies like GM and Ford either established or bought up (Opel, Vauxhall, Saab) in Europe starting in the 1920s? (Not to mention the Japanese manufacturers that followed some decades later.) Did they also just do that to do nothing more than destroy European car manufacturing?

        As you can see, that didn’t quite work.
        Goes to show that things aren’t quite as simplistic as you and Kosta are trying to paint them.

      • @thysi
        You’re right. Businesses make decisions for their own benefit… to meet their strategy short or long yielding profits. Surely others do the same be it coffee or A320’s. “It is -not- a benevolent A320 jobs program to benefit the locals…”

      • @anfromme

        If EADS/Airbus used, “US companies like GM and Ford … (Opel, Vauxhall, Saab),” in Europe as a justifying examples for this Mobile FAL, surely they’d be stupid, for, “As you can see, that didn’t quite work.”

        The commentary is really to highlight the ultimate EADS ultimate strategy; the A320 FAL is really a sideshow… for better or worst… And EADS even declares this ultimate goal.

        The US Military have a number of foreign suppliers (the Beretta 9mm pistol is an easy example). Some items or parts are just not made in the US anymore, and some, based on their criteria, are better then domestic supply. Yet, it’s sad the latter two applies. Will our national security become dependent on foreign suppliers?

        Will France, as an example, tell the USAF not to use our new fleet of A400M’s and withhold spare parts because they disagree with some military operation? Surely. It’s their nature.

        Slightly dated, but informative,
        http://query.nytimes.com/gst/fullpage.html?res=9C0DE2D71530F934A1575AC0A9639C8B63&pagewanted=all

  9. Normand Hamel :

    Even from the outside the tension is palpable. The official Boeing press release speaks for itself. And it even came out before the actual announcement was made!
    So what does it all have to do with Albaugh’s departure? I don’t really know. But the timing is odd.

    Yes the timing is odd
    Looks like airbus steal the show on this one
    Might be a draw on orders between MAX and NEO at Farn… considering that airbus as also some “commitments”

  10. Kosta :
    Ascendance of Airbus in one way or another is inevitable taking into account history of European expertise in aircraft design and manufacturing.

    This is such a smart remark that I don’t think I have anything to add. Except maybe to say that for your previous comment above you must have used a more primitive part of your brain.

  11. So no plans for pax-to-freighter conversions in Mobile,
    but maybe tanker conversions of freighter conversions?
    -Eddie Maddox

  12. I live near Seattle and generally root for Boeing, but I think this FAL is a good thing for the US Aerospace Industry. Yes, it is a shot across the bow to Boeing, but it is very much like the auto industry moving production here. That worked because the transplants have kept a tight reign on both costs and quality. I remember a time when US made cars were considered poor quality. Boeing will need to get more efficient.

  13. KC135TopBoom :
    Have they forgotten about Boeing still has plans for the NSA sometime in the 2020s? The NSA could very well kill off both the A-320NEO and the B-737MAX.

    For once I agree with you KC. But I am afraid 2020 might be too late for Boeing. The NSA should already be underway. And the Mobile plant only makes it more obvious.

  14. This announcement gives the initial KC-46 IFR program a new impetus of realising promises on performance, delivery & pricing, the latter being already unacheivable the others highly suspect & costly.

    Boeing on the run, perhaps, a wake up call certainly.

    • Phil, you know this how? The KC-46 program is slightly ahead of schedule, and Boeing knows it will take a loss on the 4 SDD tankers.

      How about we get back on topic instead of general anti-Boeing comments? This story is about Airbus.

      I would like to know what kind of tax deals and other incentives Airbus, Alabama, EADS-NA, and Mobile have made. These are the same type of deals Airbus complained to the WTO as an advantage for Boeing.

      The Airbus FAL in China only makes 48 A-320s per year, supposedly just for the Chinese market. But China has the dispute with the EU over the ETS, and is not accepting airliners from Airbus because of it.

      • KC135TopBoom :
        I would like to know what kind of tax deals and other incentives Airbus, Alabama, EADS-NA, and Mobile have made.

        Me too. Let us know how it compares to SC’s estimated $1+ Billion package.

      • KC135TopBoom :
        How about we get back on topic instead of general anti-Boeing comments? This story is about Airbus.

        Being the king of anti-Airbus comments, I would like both sides to stick to the facts.

        KC135TopBoom :
        I would like to know what kind of tax deals and other incentives Airbus, Alabama, EADS-NA, and Mobile have made. These are the same type of deals Airbus complained to the WTO as an advantage for Boeing.

        These tax deals do not affect an Airbus FAL being located in the US. Currencies, customers and supply chain determine that. The only thing these tax deals affect is which state the FAL is going to be located in.

        In this case, it is not a US against Europe fight, it is a US state vs US state battle.

        About 5 years ago we were setting up a facility in the US and we had offers of 48 states (all except Alaska and Hawaii) and each state had a different incentive package. The fact that we were going to set up in the US had been determined before the very first feelers had been put out to determine a location. The location was in the end determined by a combination of local incentives, available labour supply, available knowledge, local costs of living, ability to attract staff from other states and a whole lot more.

        In this cases, the tax deals and incentives might make a difference between the FAL being located in Mobile or Wichita, but it has no impact at all on being located in the US.

  15. Phil :
    Boeing on the run, perhaps, a wake up call certainly.

    Yes, and this wake-up call could be beneficial for Boeing over the long term. It is certainly a good incentive for the board to start shopping for a new CEO.

  16. Airbus will be singing stuck inside of Mobile with the NEO blues again, not sweet home Alabama. The contest is between the quality of the aircraft, and the MAX will rule. All Mobile will do is drain production from Europe. Net gain for the U.S, nuetral gain for Boeing.

    • The answer, my friend, is blowing in the wind tunnel 😉

  17. Certainly this is good business strategy for Airbus. At the very least it is putting the cat amongst the pigeons in Seattle and Chicago. But there must be a few heads being scratched in China too, since the US FAL effectively announces to the Chinese that the plug could be pulled on the China FAL without decreasing A320 Family production rate. This is a much better negotating position.

    • true, Airbus Tianjin contract is until 2016. ETS negotaitions also play a role.

      • For what I saw, it seems the Chinese separate long haul twin aisle orders, from local MC development , ETS War speaking !
        And ETS “Sanctions” do not apply directly to the Tianjin round !
        At least, its what Airbus and Chinese people comment from Tianjin !

    • Exact Davenport ! A very good timing vs the always complicated Chinese negotiations !
      And everybody have seen that the Mobile plant could easily upgrade production from 1 to 2 A/C a week, just duplicating the termination hall (Present in the blue-print) !
      The true capacity of this plant will be 100 A/C per year !

    • I don’t think Airbus want to cancel the Tianjin plant. What they want is for the Chinese government to start authorizing sales again. That depends on finding a facesaving way of dealing with the Emissions Trading System. Perhaps they will decouple A320 purchases from ETS.

      Incidentally, I see that the consensus is that the International Civil Aviation Organization should work out the replacement for ETS. But they have to wait because the ICAO only meets every three years. Talk about leisurely!

      • Leahy told Innovation Days media he expects ~100 A320 orders from China this year as they are separate from the ETS issue.

  18. ikkeman :
    hear hear!

    Sorry, meant to indicate my support for Leehamnet’s comment – not Kosta’s

  19. Rensim :
    For what I saw, it seems the Chinese separate long haul twin aisle orders, from local MC development , ETS War speaking !
    And ETS “Sanctions” do not apply directly to the Tianjin round !
    At least, its what Airbus and Chinese people comment from Tianjin !

    The Chinese did not separate ETS for their airlines from accepting ordered aircraft in the first place. Now they are building their C919 to compete with the jets produced in Tianjin..

  20. I think the comments at the top of the thread are illuminating. There are two ways of looking at this move by Airbus: 1) a Trojan Horse 2) a vote of confidence in the American aerospace industry.

    While there’s obviously an element of politics in the decision, I am sure one of the motivations is to tap into the massive expertise that exists in the US. It’s a bit sad that some Americans reject the addition of good quality jobs in the country. Especially when so many jobs have gone abroad in recent years.

    • Actually, you bring up a really good point. This is fantastic that Airbus will be exporting good jobs from France to the USA. I’m personally happy that they will be putting Americans to work (while putting Frenchies out of work). Sure they’ll make big noises about jobs in France, but FAL is a finite thing. They can only build as much as the supply chain allows, and so if they build more in Mobile, that means they have to build less in Toulouse… or Hamburg. It seems the German government is on board, so they must expect it to come out of Toulouse. Well, too bad for them. Good for Alabama.

      • I’m not French but really don’t see the need for your derogatory “Frenchies” remark which, based on the context of your comment, is exactly what it was meant to be.
        Further, I don’t quite follow how you arrive at France’s “exporting” of jobs. The Mobile FAL provides additional output. As such, if anything this will result in additional European jobs as the European components are shipped to Alabama. How you manage to arrive at Airbus’ monthly A320 output as remaining constant despite the Mobile FAL is beyond me.

  21. It might be a trojan horse to get in on the military action, a FAL with 4 A320 a month seems like a waste of effort, there must be other ulterior motives behind this expense.

    But were would EADS have a better product than Boeing, LM or Northrop Grumman? They are getting into a very hard competition and old political connections.

    EU is way behind in the latest military tech, the pacifist european culture has shaped the european defence business. Without US in NATO it would collapse, there is no real interest in defence for EU.

    • en590swe :
      EU is way behind in the latest military tech, the pacifist european culture has shaped the european defence business. Without US in NATO it would collapse, there is no real interest in defence for EU.

      I’m actually a big fan of the “pacifist European culture”, but especially from that perspective I have to say that your statements are quite off the mark with regard to what European defence companies are capable of. Defence export numbers also disagree with your implications. After the US and Russia, the biggest defence exporters are (in this order) Germany, France and the UK (as of 2010).

    • I would say the Alabama plant is cost neutral for Airbus. It won’t save any money compared with expanding existing plants, but they will make sure it doesn’t cost them either.

      The main wins are: 1) diversification – the same reason that Boeing set up shop in Charleston;. 2) being close to the customer – US airlines buy Boeing proportionally more than in other regions, in part because of the excellent relations between employees of Boeing and the airlines. If you are in Toulouse you won’t get those close relationships; 3) related to this: develop the local market just by being there.

      Political cover is useful. An ulterior motive, if you will, but not the only or main one.

    • Traditions of militairy pride, militairy culture and enthousiame are mostly gone in Europe. Destructive wars down the street tend to have that effect. Also fighting wars all over the world has become something of the past for the old colonial powers. Populations have different priorities. You are not seen as unpatriotic when you support further defense cuts. The militairy industrial complex isn’t as large, smart and embedded as in the US. Politcians trying to spread fear for new enemy (base for high defense budgets) are largely ignored.

      Personally I’m amazed by how many amreicans are willing to spend on defense. What if they would not?

      • Europe has only been able to become that way because of the protective umbrella of the USA. You may be amazed by what we spend on defense, but keep in mind it’s protecting YOUR butt too. A little fact that FAR too many Europeans forget.

  22. Reply to Kosa #1, SAcott #2, Litter4me # and FF #448:

    A couple of months ago, a B rep, I think Mike Bear, said B would destroy A’s wide body business. This is no idle threat because A has diminished presence in the 200-80 pax segment, which get greater if B is in fact now ready to deliver the 788/9/10 in ever increasing numbers, and is absent above 350 pax. Addressing these very serious gaps is A’s primary strategic goal. They could do the A330neo, build a new plane family or, both for the200-280 segment. They could, as OV 99 has suggested elsewhere, create a family of planes between the 400 pax 779X and the 456 pax 748 I. All this will cost loads of money, at a time when A’s income from the 330 may decline and there is uncertainty when they will start delivering lots of A350s. Thus A, must maximize its 320 income, and keep it in production until 2030.

    B knew this, and that was the main point of the NS A, to force A to build an A320 replacement in the early 2020s so they would be less able to compete in the widebody mkt. A knew it too, hence the A320neo and Leahy’s brilliant gambit (how he did this is the subject of another comment). The main point was to destroy the NSA, so that A could continue to sell the 320 in large numbers up to 2030 to help pay for its new wide body products. A’s need for this revenue is so great, that they needed to break out of traditional 50/50 share with B, and get a much bigger share. Hence Mobile in the largest narrow body mkt in the world.

    I suspect that A also used the A350-1000 to pressure B into abandoning the NSA. They did this by deliberately obfuscating the -1000’s performance stats and claiming for years that it was a -300ER replacement even tho they knew it was not. The point I speculate was to get B to think that they would need to spend lots to PIP the -300ER or build a new replacement; that is, to get B into a position where they would perceive that they had to choose between the NSA and their -300ER cash cow. When B abandoned theNSA, they quickly went to the 7810and 778/9X.

    • Dont forget the NSA is still alive, it might be drowned in all the MAX hoo haa right now. But I think Boeing knows well enough what its options are, somehow people here believe there are only idiots in charge at Boeing. I would not be surpriced to hear more of the NSA even before the MAX is in service, it will be a different product from the 737, a gateway upwards in the NB market, the 737 will live for a long time covering the low ground and the NSA will cover upwards. If you look at trends, even the 737-700 is selling bad, size of the NB is growing for A and B, there are hungry competitors aiming for the 100-150 seat market.

      Will Boeing cede the market below 737-800 with the NSA? Would it be economical to have 737 and NSA produced at the same time?

  23. I love the way most of you like to kick these good old boys in Alabama. Well as one who has worked for Boeing in Alabama and have been to Wichita, Seattle and Plants in California you may want to back off that. Huntsville Alabama developed and engineered most of the Saturn V Program and went to the Moon. Huntsville also had a large hand in the Shuttle and its Boosters, They also wrote most of the operating software for both. Birmingham has been moding Air Force aircraft for over twenty years and Mobile builds worlds class High-speed Trimarans and Catamarans made of aluminum for the US Navy, don’t sell us short gentlemen. At Brookley ST Aerospace mods aircraft into freighters and Continental Motors overhauls jet engines. I think we can find some talent for an Airbus FAL.

    • Actually, since you are in Huntsville, you of all people should realize that Boeing will still employ more than twice as many people in Alabama as Airbus… even if Airbus gets to their mythical number of 1000.

      • Hello Howard, quick update for you Sir, Boeing has laid off over half of its staff and the outlook is not to good for Huntsville currently. Also yes I lived and worked in Huntsville for forty plus years but not now. As I said before you people need to get out more.

  24. Hello folks
    @Christopher Dye aka CubJ3
    Very interesting in fact
    Who’s playing catch up ? It might depend on the subject, but let’s summarize some facts and ask some question. There is a very clever audience here, so it will be very interesting to read the responses
    Check out past 10 years Airbus and Boeing new programs

    Sorry if it forget something

    Boeing :
    – 777-300ER/LR and F : derivatives form of existing airframes. Very successful
    – 747-8 : extensive rebuild of existing airframe. Launch 11/2005, on track with initial promises 2014…
    – KC46 : derivative of existing airframe. Underpriced. Not so easy task
    – P8 : derivative of existing airframe. I didn’ follow it so ? what ?
    – 787 : a new aircraft (possibly a family of 3), launched 2003, in service 10/2011. Very innovative. At least five more years of work for derivatives, performance and production recovery
    – 737-900ER tweaked from 737-900
    – 737 MAX

    Airbus
    – A320 : sharklets (might be catch up on blended winglets)
    – A320NEO
    – A330 weight variant
    – A330MRTT
    – A340-500 and -600 derivative of existing airframe, challenging for airbus but not successful vs competing boeing airframe
    – A350MK1 and A350XWB…
    – A400M completely new airframe and new market. Launched 2003, Delivered 2013. Painful, but in the end, on spec
    – A380 launched 12/2000, delivered 10/2007. New airframe. More thantwice as big as the biggest airbus flying at the time… lot to say…

    So :
    Boeing : 1 new airframe : 787, very innovative but on a well know market (for boeing)
    Airbus : 2 new airframe, innovative on two new markets for Airbus

    Looks like Airbus is eager to take risks than Boeing
    Looks like after building a range of airplane that can compete against almost all boeing airplanes, Airbus has now more time to fine tune short and long term strategy

    So could we assume that Boeing played catch up on 747-8, and on MAX ?
    Might also play catch up on 777X i think against the A350-1000 !
    And Airbus not playing catch up with the 787 because airplane really pitched against the 787-8 ?

    What do you think ?

  25. May be, it is time to move away from the fanboy angle -A vs B and look at A’s FAL at Mobile from the union angle. It is clearly a shot across the bow of unionised labor.The Seattle based Union obstructed B’s opening SC plant . Now they see competition moving into a right to work state , something , the unions hate.
    It all starts like this,only additional production moves to non union shops et al ; but when the crunch comes, economics will trump.
    It is clearly another step in employers wanting more degrees of freedom in dealing with workers without the unions -for a more collaborative and customer focused culture.I would suppose, folks at Boeing would be envying Airbus – for the non union shop and its plusses -in Alabama, though not happy with A in their backyard.

  26. KC135TopBoom :I would like to know what kind of tax deals and other incentives Airbus, Alabama, EADS-NA, and Mobile have made. These are the same type of deals Airbus complained to the WTO as an advantage for Boeing.

    What would you have, the US launch a WTO case on behalf of Boeing against the US for handing out illegal aid to Airbus?!
    I would love to see that!!

    KC135TopBoom :The Airbus FAL in China only makes 48 A-320s per year, supposedly just for the Chinese market. But China has the dispute with the EU over the ETS, and is not accepting airliners from Airbus because of it.

    Despite your continuous posts alleging the European Government’s and Airbus working hand in hand on everything, the situation has changed rather drastically over the past 6 years. Airbus have shown a new independence from the Governments of France and Germany that has changed the realationship between them. The opening of this facility in Mobile is more proof of that change.

    It may be that AIrbus is hoping for some sort of potential benefit vis a vis the China/EU ETS dispute. I do not think it is so as most people are slowly learning that the Chinese see things and react to things, much differently than we in the west would. I would suspect that Airbus is still going ahead with this and desperately hoping that China does not see this as a way of putting pressure on them.

    Although I thought the Chinese actions we limited to not ordering more aircraft at this point and that AIrbus accepted that they would have to wait until a political solution was found before they would get there orders.

  27. RH Hastings :
    It is not the morning shock as Pearl Harbour was, but virtually a European Trojan horse planting raid in slow motion aided and abetted by desperate Americans on the EADS payroll.
    It is not a benevolent A320 jobs program to benefit locals and the airlines, but a long term investment in an attempt to make EADS more “American” and for other minor reasons. Unlike their partnership with the Chinese in Tianjin, America won’t learn from this experience, no technology nor assembly techniques to glean. But, it is the opening blast in a raid for more American defense dollars lead by local pawns.

    Are you the [edited as violation of Reader Comment rules] younger brother of KC135TopBoom?

  28. en590swe :
    Somehow people here believe there are only idiots in charge at Boeing.

    There are plenty of extremely competent people at Boeing at every level, except perhaps at the very top where a succession of more or less ignominious leaders have transformed Boeing, which was second to none before they came on board, into a comfortable number 2.

    What Boeing needs most at the moment is a bold leader with vision. Someone who will inspire his engineers to develop state of the art products. But what we have instead is a tarmac filled with the cumbersome carcasses of a large number of Mareliner waiting for a promising second life. An elegant Mumbo Jet with unfortunately not much of a future. And a sexy granny who believes she will be able to conquer the skies again with bigger boobs and a nose job. If it was not for the Triple Ace they hold in their hand they would have lost the game already.

    Make no mistakes. I am a great admirer of Boeing and have a lot of respect for its people and numerous past accomplishments. But I sometime feel disgusted by what I have been witnessing since the mid-nineties. This Great American Icon was used for the personnel benefit of a few magnates to the detriment of its customers and under the nose of an incredulous workforce waiting for the irreparable to be fixed.

    I will conclude by saying that Boeing needs a winner at the helm. Not a whiner.

    PS: I apologize to whoever might have been offended by my use of a kind of hyperbolic language that only wants to convey the sentiments of a silent majority of Boeing fans .

  29. Howard :
    Europe has only been able to become that way because of the protective umbrella of the USA. You may be amazed by what we spend on defense, but keep in mind it’s protecting YOUR butt too. A little fact that FAR too many Europeans forget.

    Oh please, not the “we won the war for you” BS mentality! That is just so naive and annoying…

    • “History tends to repeat itself,” but some never know it as it’s, “just so naive and annoying…”

  30. Howard :Europe has only been able to become that way because of the protective umbrella of the USA. You may be amazed by what we spend on defense, but keep in mind it’s protecting YOUR butt too. A little fact that FAR too many Europeans forget.

    Europe needed to protect itself from the USSR, especially since the US was largely responsible for giving away so much of eastern Europe to the USSR.
    Then the Allies had to change their mind about how to treat postwar Germany. The first plan was to make it a purely agrarian country. No industry. Then they changed their minds when they realised two things: 1. They needed Germany’s help to stem the “commie tide”. 2. They needed Germany’s industry to have an economically healthy Europe.

    Who does Europe need protect itself from now?

    • FDR was ailing during Yalta and died just a couple of months after. So, some say Churchill was just as responsible for Russia’s command over Eastern Europe. He distrusted Stalin, but accepted their promise to hold elections in Poland, “elections.” And, the West needed Russia to open a front against Japan. Yet, he had supported the Morgenthau plan concepts, but it appears it was severely diluted by public opinion including from former President Hoover and others.

      Europe needs to worry about Iran and the spread of Islamic influence on western democracies to say nothing of their nukes. It needs to worry about it’s dependance on Russia for natural gas.

      • Sorry, but Churchill was totally against giving so much territory to the USSR. Britain went to war against Germany over their invasion of Poland.

        He was constantly trying to warn Roosevelt about Stalin’s trustworthiness as far as postwar actions were concerned but FDR thought he had Uncle Jo’s number.

        Churchill knew very well that the USSR would make Poland a puppet of the USSR but was powerless in the face of American war weariness to do anything about it

  31. Reply to Sethuraman, #68

    “I would suppose, folks at Boeing would be envying Airbus – for the non union shop and its plusses -in Alabama, though not happy with A in their backyard.”

    Exactly what B has in SC.

    On this July 4, we Americans (and the Europeans) might reflect on what our country, created in 1789 when the Constitution was ratified by the original 13 former colonies, has become. Today, we consist of 50 separate governing entities, and also Puerto Rico, with whom we have an odd, a so-called Commonwealth relationship, and Guam, which is sovereign territory, stretching for 1000s of miles east and west with a population of more than 300m, which, unlike most European countries, has a high enough birth rate/immigration rate to re-new itself. One major economic advantage of this immense, chaotic, cultural and political diversity, is that our states can seriously compete with each other economically by offering different economic models to prospective employers, and also experiment on a local basis with changes before they become ensconced nationwide. The fact is, that in today’s highly competitive world economy, we here must reduce our national overhead to compete. This need is reflected in the the union v right-to-work dispute, the contest over the size of the Federal government, and even Obamacare, one point of which is to eliminate health care costs as a business expense. There are lots of ways to skin that cat, including eliminating unions, or reforming relationships between employers and unions without destroying the unions, as Albaugh achieved with B’s unions. The point is that this huge diversity offers lots of choices to accomplish this goal.

    Re A in Mobile, IMHO the real acid test of A’s intentions is whether they start building the parts of the A320 in this country.

  32. keesje
    July 2, 2012 at 11:58 am | #21 Reply | Quote
    Randy says: “The 737 MAX will have the lowest operating costs in the single-aisle segment, with a 7 percent advantage per seat over the competition in the future,”
    Lufthansa has said the MAX will be 2% more efficient then the NEO.
    McNerney said the so-called Airbus A-320neo will merely catch up to the 737, which is already more efficient than the A320.
    There are more then 1000 orders and commitments for the MAX and if the figure we’re hearing proves correct, the neo and MAX should have parity.
    I encouraged doubters not just take Boeings word for it, but to ask appraisers, financiers and leasing companies which airplane they value more in the market today. They’ll find that the 737 has higher lease rates, higher “fair market” values and higher residual values. The 737 MAX will build on this value and maintain our 8 percent per-seat operating cost advantage
    The 737 MAX is consistent with Boeings demonstrated performance on delivering increasing value to our customers, on time, throughout the life of the 737 program.
    …..
    I continue to be amazed by all this self confidence and the outright denial we have seen in recent years. It sometimes seems Boeing refuses to really listen to the market. I think Albaugh is a victim of this latest Mobile wake up call. I’m not sure about a Farnborough MAX party, I have a feeling there might be a double whammy..

  33. Keesje, July 2,2012:
    I did not intend to repeat your whole story, but reading it again, I must say
    that you are absolutely right about Randy says, Mc.Nerney says etc. and
    must ad one more LOULOU from James Mc.Nerney on the day the first
    787 was rolled out on 07/08/”07, for pure publicity but very bad reasons!
    Quote: This beautiful airplane we just rolled out of the factory, will make it’s
    first flight in September (’09) and go into service next spring (’10) unquote!

    He must have known at that time and if did not, its even worse, that the a/p
    in front of top officials from the worldwide aviation industry and Governments,
    that the a/p was just an empty shell, standing on a 757 landing gear, flaps
    made of plywood and all held together by over 5,000 temporary fasteners,
    some of which could not be found afterwords, all painted over by the beaut-
    iful blue and white paintsceme for which the a/p became known during it’s
    3 YEAR delayed flight-test program.
    Famous last words and why is the man still in charge of the Boeing Co.,
    cashing huge salaries and bonuses every year since!

  34. RH Hastings :
    Will France, as an example, tell the USAF not to use our new fleet of A400M’s and withhold spare parts because they disagree with some military operation? Surely. It’s their nature.

    With your comment you supply a link that you say is informative. I am not sure if you read that article yourself, but I did. What I found in there is the answer to your question:

    ”Despite very public opposition of some of the firm’s host nations to U.S. actions during operations in Afghanistan or Iraq,” a Pentagon report said, ”at no time did the foreign suppliers, including 20 German and 2 French suppliers, restrict the provision or sale of these components to the department because of U.S. military operations.”

    To withhold spare parts required by other nations is almost standard practice for the US Government when they need to put pressure on a foreign government. Not so common practice for France. But if the US can sell military hardware to France I don’t see why France would not be able to do the same. Unless you think that United States is morally superior to France.

    But tell me Mr. Hastings, when was the last time France invaded a country to get a grip on its oil supply? Maybe you did not understand France’s posture at the time but that is what they were actually protesting against. They did not follow the US in that misguided endeavour, but they never cut their supplies either. They never have in the past, and you can rest assured that they never will in the future.

    Happy 4th of July celebrations to all the American people. May your actions on the world scene bring more peace to your country and all nations on earth. 🙂

    • Thanks for your comment.

      From this perspective, some European countries hold their industries closer than in other countries like the USA. In particular, France still practice “economic patriotism,” holding long term controlling interest in what they consider strategic businesses. This is not unusual in developing and emerging markets, but surely France is not among them, yet they continue the practice (Germany too, but they prefer privatization). Among their holdings is EADS sharing controlling interest directly or via proxy equal to Germany.

      Since WWII, Europeans purchased USA made arms; there was little to no choice. Equally, the USA provided a huge backstop against the USSR during the cold war. Fortunately, now European’s feel they can depend on themselves, but considering the difficulty covering their costs (not to mention social entitlement costs) foreign sales are are a necessity rather than a desire.

      Is it not ironic no European air forces purchased their EADS/Airbus A330MRTT aerial refueling tanker while European politicians called the USA “protectionist” upon loosing the USAF contest? (The UK comes close by leasing them from the manufacturers. No doubt they would loose more Airbus wing production upon selection of an American version.)
      Isn’t it ironic the European OCARR nations built the A400M airlifter without a thought of open bids from experienced manufacturers? And with narcissistic characteristics, will they once again call the USA “protectionists” for not buying the A400M’s as, no less, they do build the best? Foreign sales are a necessity.

      Is the, “United States is morally superior to France?” No, Mr. Normand Hamel maybe not, but there’s a sense of frustration in benevolence. Frustration friends make demands they cannot keep for themselves.

      We can recall France (and other nations) denied the USAF overflight from the UK on their way to bomb Libya’s Gaddafi after the downing of PanAm 103. Yet, recently the French virtually lead the bombing campaign to oust him… just last year. That, “was the last time France invaded a country to get a grip on its oil supply.” See, Alain Juppé, the French foreign minister, said, in part, “it would be ‘fair and logical’ for France’s companies to benefit,” from Libya’s oil. There was even an allegation of quid pro quo… bombing for oil, between France and Libya’s freedom fighters.

      In another transaction, France sold Russia Mistral warships. A Russian Admiral boasted, with these French warships he could, “have been able to defeat Georgia in 40 minutes, not 26 hours.” Yet, the better transaction was more an exchange for Russian natural gas.

      So no, we cannot, “rest assured that they never will in the future.”

      Best regards…

  35. RH Hastings :
    Some European countries hold their industries closer than in other countries like the USA. In particular, France still practice “economic patriotism,” holding long term controlling interest in what they consider strategic businesses.

    You make interesting comments in your post mister Hastings. It clearly demonstrates for me that among various nations the political, military and economic patriotisms are very complex issues. And one country cannot always judge the actions of the other by its own standards.

    But I still find it irritating that for many Americans France is often perceived as a friendly enemy. For me your comments clearly show this. In your previous post you wrote the following:

    “Will France, as an example, tell the USAF not to use our new fleet of A400M’s and withhold spare parts because they disagree with some military operation? Surely. It’s their nature.” When you wrote “Surely it’s their nature”, you probably meant “Surely. It’s their habit of standing up to us”.

    The way I understood your intention when you wrote “It’s their nature” illustrates how I perceive the immense frustration many Americans still have towards France because they have said no a couple of times in the past. I understand that is what you had in mind when you mentioned Libya and Iraq.

    But when France says no to the United States it is because they have a different agenda. Not because they are against United States. I strongly believe that this is where the whole misunderstanding comes from. Because most French have a profound admiration for the Americans, even though they don’t always share their values.

    United States and France are like two family members who don’t always get along. But they are still brothers. Brothers can also be rivals. And since Airbus is headquartered in France and Boeing in the United States, we often have debates on this blog about these two great nations.

    But I much prefer when we discuss the technical merits of the various aircraft, or the business decisions taken by the OEMs. Because after all, commercial aircraft business is what this blog is all about. 🙂

    • “Surely. It’s their nature” verses, “Surely. It’s their habit of standing up to us”.

      There’s a behavior, a reaction, as a once powerful proud nations decline. For France, it’s about a hundred years (maybe not for it’s ability but for its size an attitude), whilst for the Americans, it’s been just about a decade. So, that “standing up,” is quite a natural reaction. Thank goodness Germany sustains itself.

      But tell me Mr. Hamel, when was the last time France invaded a country to get a grip on its oil supply?

      I much prefer when we discuss the technical merits of the various aircraft, or the business decisions taken by the OEMs. Because after all, commercial aircraft business is what this blog is all about.

      • Yes RH, you have a valid point. I never looked at it this way. Your reply brought me to reconsider my position after looking at the issue from your own perspective.

        For me this admission was already made implicit in the first paragraph of my initial reply when I said “that among various nations the political, military and economic patriotisms are very complex issues. And one country cannot always judge the actions of the other by its own standards”. But it was probably to vague to be understood for what it meant.

        I also opened my prior reply with the following words: “You make interesting comments in your post”. I meant it and that is why your viewpoint is well received.

        And since you already know my first name you can call me Normand. If I knew yours I wouldn’t have to call you mister Hastings, which probably made me sound more provocative than I intended to.

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