Randy Tinseth, VPO of Marketing for Boeing, is always fast with the quip–via Flight Global’s Twitter: “Market is about product, people and customers, not the address on your business card.”
Mobile Press-Register: general overview.
Reuters: Unions aren’t happy–but guess what, it’s US unions.
Chicago Tribune: Boeing’s home-town paper has this about Boeing losing a tactical edge–according to Airbus.
The Economist: Slaps Boeing and Airbus for their continued bickering over trade. Hear, hear.
According to what I learnt, in addition to Price and Promotion, market is about Product, People and Place. The address on your business card does matter.
In that were true, FF, how would you account for the more than 1000 Airbus airplanes flown by airlines in the US? Each and every one of those Airbus airplanes, pax and freighters were built in Europe, none were built in the US.
The address doesn’t matter.
But I agree this continuing ‘tit for tat’ bickering between Boeing and Airbus has got to stop.
The proportion of Airbus planes relative to Boeing ones is much lower in the US than elsewhere. I don’t think US airlines have unique requirements that only Boeing addresses. The difference is down to Boeing being incumbents and the home team.
Eurocopter saw its part of the US market grow rapidly after it set up a manufacturing facility in the US.
To be fair to Randy Tinseth, who has always struck me as a moderate and reasonable man, he was asked a direct question about his competitor in a public forum – see later Leeham posting. He decided to answer the question, rather than just saying “I am from Boeing so I mind my own business”. His response was a good one in the circumstances: questioning the decision but not trashing the competition.
Is that why you bring it up with every chance you get? Just yesterday, you wrote:
“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.”
To answer your question, according to the Montgomery Advertiser:
$158.6 Million in State/local incentives for “bond expenses, site preparation, road improvements, building expenses and worker training”. I haven’t seen any figures on the tax-breaks at this point.
However, in SC Boeing received $270 million in upfront money and $33 million for a state-funded training program. Plus $503.5 million in tax-breaks. That amounts to $806 million but the figure is estimated to top $1 Billion as: “elements that were difficult to value without more information — including a $1-per-year lease on the site owned by the local airport authority, a 30-year freeze on a portion of the property-tax assessment at 2008 levels, and sales-tax exemptions for building materials, computers and fuel — were left out.”
I think I do remember som “Buy American” arguments in congress back when EADS won hte KC-X… that argument is harder to make when they already have a physical, undeniable presence in the US Hinterland
Airbus market share in the US is only 20% to be compared with above 50% worldwide.
Talk about location…
I guess Boeings marketshare in the US is often historically grown. And we had exclusivity deals Boeing Gentlemen’s agreement with big airlines after Airbus started to make inroads
“Randy Tinseth, VPO of Marketing for Boeing, is always fast with the quip–via Flight Global’s Twitter: “Market is about product, people and customers, not the address on your business card.”
He’s right about that.
“His response was a good one in the circumstances: questioning the decision but not trashing the competition.”
He has no problem trashing the competition. I guess he noticed Boeing initial soar reaction only made things worse, so better not do that agian.
We’ve pointed out before that Randy is quick with the quip–as is John Leahy. John tends to be more biting, but we’ve been entertained for years by each of them.
And Everybody: be nice.
Airbus will always enjoy government backed access to RD financing whenever it deems vital to the company’s wellbeing. Launch aid of the past will be (or has been already ?) replaced with new schemes:
That’s the reason why Boeing should stop complaining. European governments will outsmart any WTO ruling.
Kosta, still living in denial on the massive NASA R&D, Space, Financing and DoD money pipelines? http://www.nytimes.com/2012/03/13/business/global/trade-group-upholds-ruling-on-boeing-subsidies.html, and those are not loans.. has Boeing written out a check already or are endlessly appealing & diversing attention?
Denial isn’t just a river in Egypt…
Will Airbus use the Exim bank of the Usa for sales from Alabama? Funny how that would feel, a governmental owned euro company getting help from american government.. Well as France seems to be the next Greece financially, this might be a good move of EADS. Get out before the new lefty government messes everything up.
France is not by far the next Greece… though California might be… same base problem actually: inability to raise enough funds through taxes to run the admin and basic society services (for different reasons admittedly, but same effect).
Qualifying for EXIM bank financing would be the kooh-i-noor in the tiara… I do not know the req’s, but doing so would be a brilliant move. I doubt Boeing saw that one coming (if it does). AirInsight has a good piece in this.
Re: Bickering over trade: If Airbus ignores Boeing’s prods, they lose the PR battle, if they respond in kind, they are chastised for participating in the nonsense. What should they then do?
Re Chicago Tribune article: “Analysts say the United States is not widely regarded as a market where national identity plays a big part…”
We are expected to take this without falling off our chairs. The country with the world’s biggest economy with placards, billboards, radio adverts and the television always encouraging one to, “BUY AMERICAN!!!!”
There was even an american government law created to that effect. Yes, airlines are a bit out of the scope of that law but the message is the same and leads to the mindset all non-Americans can so easily recognise.
Please. How can one take such statements seriously. I would like to know which analysts were consulted for that statement.
I wonder if the secondary supplier situation in Mobile will be as rosy as everybody portrays. If the sections come to Mobile pre-stuffed, then it will be largely a true final assembly facility, and not that large a one. At least at first.
Interesting that the IAM did not respond to this move and the engineering unions have. Right to work does not mean unions are not allowed. If the working conditions are as bad as the unions seem to wish to portray them, then I am certain that at some point in time, somebody will be able to get a union in there.
IMO Boeing is taking another punch here.
Having said that I wonder what different decisions they could have taken during the last decade to avoid this situation. Obviously the 787 going smooth,entering service Q2 2008 and since 2010 being produced in large numbers would have made a big difference. Financially anyway.
When we discussed the issue two yrs ago (before NEO launch) everybody seemed to agree a significant upgrade would be necessary to keep the 737 in business for the next 15 yrs.
Not Boeing, they said and believed a slight upgrade a 737NG “Plus” would do. http://www.737ngplus.com/, and come with an NSA around 2020 http://www.flightglobal.com/news/articles/boeing-boss-green-lights-all-new-next-generation-narrowbody-353056/ , while major customers SW and DL were already telling them it was not a good idea & they could not wait for (“maybe”) 2020..
It took until june 2011 for Boeing to come to their senses, when AA gave them 3 weeks to come up with a competitive offer.
The next 18 months were an onslaught. Airbus’ only problem was insufficient slots for key customers. Mobile gives breathing room, I expect production increases in Hamburg and Tianjin too if the economy recovers. 50 Aircraft per months when the NEO arrives is not impossible IMO.
Boeing shouldn’t listen to armchair CEO’s or panic at every Airbus move. What worries me is the seemingly inability to read what is written on the wall. I’m not a genius but specified the NEO 6 yrs ago. http://www.airliners.net/aviation-forums/general_aviation/read.main/2724857 Certainly specialized marketing professionals at Boeing must now and then have feet on the table sessions where everything can be thought / said? Or are too focused / self convinced and repeating each other / avoiding questions from bosses / loyal to their bosses /not getting distracted by wild ideas?
If I was Ray Conner, I would reorganize the strategy/marketing department and bring in a more international / less homegrown / more independent group of people. Focus and loyalty have become very damaging.
The problem is not at Ray Conner’s level. You have to go higher than Boeing Commercial Airplane. You have to look into The Boeing Company. That is where the decisions are made. BCA wants to make airplanes. Boeing wants to make money.
More that 25 years ago the customers were asking for the 747-400. The CEO said no. Today the customers are asking for the NSA. Again the CEO says no. Eventually the customers got their 747-400 like they will get their NSA. But the 747 had no competition at the time. Today the 737 has more competition than it needs. Therefore they wont be able to postpone the NSA that much longer.
Everyone seems to agree that the NSA is required. But not now they say. Not before another fifteen or twenty years. It’s too early, the technology is not there. But I believe it might actually be too late already. The ideal window of opportunity has now closed. The best possible time was right after the Dreamliner, but before the neo. Boeing was beaten to the post by Airbus. They were too busy extinguishing fires I guess.
At this stage of the game I now see the MAX as a necessary interim solution. The MAX could be a good airplane. But it will never be a great one. A few billions will have to be spent on the MAX just to protect the existing customer base. But the MAX will not bring the best to Boeing. It will only prevent the worst.
The way the situation will develop in the coming years might force Boeing to launch the NSA before the end of this decade. That means Boeing will never get back the money it will spend on the MAX. But by that time Airbus will probably have fallen asleep on its successes and if Boeing is quick on its feet it could find itself in the driver seat again.
Its never too late, if they wont get the sales they want more on the B board will wake up and smell the NSA coffee. The constant BS about the technology not being available is just that BS. There will not be anything revolutionary in 15 years time, in fact after the 787 aircraft developement will stagnate.
The MAX is a desperate try to wring more cash from that old cash cow, hey it worked for 40 years..But eventually sane people will make the right decisions. The 737 served us well for a long time but now is time to move into the future, I expect the first NSA model out 8 years after the MAX EIS. 8 years would give them plenty of time to make their minds up, they have been studying the NSA for very long.
Do the oval crossection 2-3-2 dense and 3-3 spacious for long haul, forget about winning back the market below the 737-800 model. Aim to own the 160-230 market instead. Long and thin NB style, their only competitor on the upper side would be 788. Do a 100-150 seat NB with Embraer. Make the NSA for 2 engine options as well.
I don’t think there will ever be a pressurised flat oval crossection around on a pax plane.
This would require accomodating compression loads into the floors. this collides with the “lightweight” requirements.
I guess an “oval” (slightly flattened) 2-3-2 would be 2-2-2 for long haul en 1-2-1 for premium. Issue for a 7 abreast machine that can carry 230 up to 4300NM is that it hard to compete against a much lighter 140-180 seats up to 1500NM aircraft. And thats were 90% of the market is. Difficult choices..
An Embraer-Boeing link up to cover below 150 seats/ fight the CSeries is a good idea IMO. I even pushed it 5 yrs ago. 5 abreast, GTF, up to 165 seats.
Can you explain the concept for us please. Why would you put the engines above the rear fuselage? I hope it’s not for the noise. The GTF is so quiet already.
I do think there are many fundamental questions that would make it tough to decide right now what the NSA should look like. Should it seat 6 or 7 across? Everybody hates the current 3-3 configurations but punching a bigger hole in the air significantly reduces the efficiency. Making a minor increase in width for widere seats improves comfort but loses efficency. Airlines (United or American?) have experimented with more legroom but ended up returning to standard pitch because they didn’t get more revenue.
Using 2-3-2 seating sounds good but you end up jumping the diameter from roughly 150″ (A320/737) to 200″ (767) effectively losing a row of seats for the second aisle and with a big weight and drag hit. Or as the recent NASA study suggests a side by side double lobe design?
Should it carry LD-3 containers? All twin-aisles handle them but the 767 and single aisles don’t. Another big question is how many wheels in the MLG? the A320 and 737 are pushing the limit that 4 wheels can handle (~200K lbs.). Jumping just a little say to 250K, about where a 757 falls, means 8 wheels, heavier MLG, bigger wheel wells and more fuselage space that doesn’t generate revenue. Perhaps 3 wheel trucks like SR-71 or C-17?
Should it be all-composite, Aluminum, Composite wing only, composite fuselage only? If CFRP then how monolithic should the structure be? Composites are still relatively new and designers are still a long way from taking full advantage of their properties and adjusting their long standing design philosophies for this fundamentally new material. Al-Li alloys are closing the gap somewhat between Al and CFRP.
What should the electrical system look like as well as ECS and Hydraulics? Optimized supercritical airfoils work great in cruise but on short range the majority of fuel is burned climbing to altitude. Rutan style canards? Blended wing hybrids? What does the design look like for $75/bbl oil vs. $150/bbl?
The A380, 787, and A350 introduced a lot of new technologies but which ones should be on the next design? It will take a few years to figure what worked well and what doesn’t. In the mean time, the Neo/Max can fill the need in the short term.