Emirates Airlines has urged Boeing to build the 777X and its components in the US to avoid the issues that bedeviled the 787, according to The Wall Street Journal. (Subscription required.)
“Tim Clark, president of Emirates, said Boeing should assemble the 777X family in its own facilities to better manage the process and deliver the aircraft on time in 2020,” The WSJ wrote.
“‘All we said to [Boeing] was, ‘Please don’t do to 777X what you did to the ,'” Mr. Clark said in an interview on the sidelines of the Dubai Air Show, adding that outsourcing the manufacture-and-build process to companies in Asia or Europe might mean Boeing loses quality and control of assembly. “Don’t do that to us,” he said,” The WSJ wrote.
“Qatar Airways Chief Executive Akbar Al Akbar similarly expressed a desire that Boeing assemble the 777X at a single U.S. facility. “Frankly, we would rather everything was built in one place, and I think Boeing from the 787 experience have learnt a lesson,” he said in an interview Tuesday,” reported The Journal.
There is broad consensus that Boeing’s Everett plant is the best place to build the 777X, given its experienced workforce, a mature factory and the continuing challenges of the Charleston 787 plant. But Boeing CEO Jim McNerney’s antipathy toward the IAM specifically and the Washington State business climate generally are “wild cards,” a source familiar with the dynamics tells us.
Boeing is entertaining business offers from other states, and is widely reported to be considering locations at its facilities in Utah, California, Texas and Alabama. The Charleston plant is said not to be on the list due to the plant challenges with the 787, but Boeing hasn’t confirmed any of these possibilities.
Build it in Dubai. Lower costs on delivery flight.
Build it in Texas, not Washington.
This isn’t the IAM, but is a little tid-bit about union greed in the US.
For some unions, it is never enough.
Faux News as a source?
That’s pretty funny!
Apropos Texas and slightly OT:
Ever read Fritz Leibers : A Specter is Haunting Texas ?
“never enough” Geez, you say that like it is a bad thing. It’s the miracle driving force behind capitalism. The Puritans are old news. Universally everyone is adopting the CEO work ethic, enough is never enough for the job I’m doing.
Says someone who isn’t in the union. You’re telling me someone who just made $27.5 million and has a pension that went up another $6 million at a company that made $80 billion dollars isn’t greedy but the employees that work for him trying to make $50k a year are? ….[Edited as violation of Reader Comment rules].
Oh sure there’s no doubt there’s some greed in the unions. No dispute on that. But you have to also look at the large corporations like Boeing. Boeing is such a different company than when I hired in during the late 80’s. Since all the old corporate execs have left or been replaced, the company is being run by a new breed of execs that are only worried about lining their pockets. They continually get enormous raises. This is a quote from the “Seattle Times” (Nov 20, 2013)
“Speaking of expanding, that’s what keeps happening to the pension of Boeing’s CEO. According to the company’s recent annual reports, McNerney’s pension holdings soared by $6.3 million just in the past year.
If McNerney retires now he will get $265,575 a month. That’s not a misprint: The man presiding over a drive to slash retirement for his own workers, and for stiffs in the rest of America, stands to glide out on a company pension that pays a quarter-million dollars per month.”
And they want to cut the wages and pension benefits of the workers on the floor? If the company wants to look for places to save some cash, all they have to do is go look in the mirror. Oh and by the way… He’s working to cut the retirement benefits of everyone in the country, not just Boeing workers.
I was expecting for this statement from both Emirate Airlines and Qatar Airways. Now I will not be surprise to hear similar ones from current 777 & futur 777x operatorx.
I think it is a good time to open negociations on a fair contract with unions (all of them) ensuring 777x success from Everett and Boeing bright future (I did not say “reopen” as nothing was negociated, at least fairly) 🙂
We can imagine these airlines’ desired goal is to improve delivery timeliness and quality and not outsourcing per se. But, it would help if Boeing could tone down their outsourcing and/or improve their outsourcing methodology (like investment risk sharing, etc).
Their B787 program just might have avoided many issues had they designed proper quality assurance processes at each step, but overall at Boeing it seems QA isn’t really a priority and one relegated to almost an administrative overhead cost ripe for cutting (and what engineer or technician thinks their work should be monitored?).
You could also say that Boeing’s original plan for and subsequent handling of the 787 project reeks of a disdain for engineers and those that actually build the plane. You’d think they learned their lesson, but the fact that we’re even still talking about the 777X FAL location thanks largely to McNerney’s antipathy to unions to me means that the lesson hasn’t really settled in.
Cant say I disagree re treatment of troops. But IMO there is also a strong possibility that the whole ‘shopping’ for a FAL is a kubuki dance for which ONLY a few top dogs at BA are aware- having been told where to put the FAL. So doing their duty, management is trying to get the very best deal from troops and Wash state they can. For those who do NOT believe the FASL decision has already been made- I’ve got this new EDSEL deal for you.
And where do you think the FAL will be?
IMHO- when the smoke and BS clears and after Jan 2015- the ‘decision’ will be to start the 777x FAL in Everett,- making the first few dozen and then in 2019 ( after negotiations ) by another line ” to meet rate ” in Texas or Calif- depending on conditions at that time or to allow everett line to focus on 777x+1 variation as ‘ ratge line’ comes up to speed.
IOW there will be TWO FAL by 2021-22.
Just my opinion – no insider info.
perhaps scott might want to start a ‘ survey ” orm “poll” running till xmas before unveiling results. Winner gets a coupon good for a latte at starbucks or an free ticket to the boeing everett factory tour
re ..”Tim Clark, president of Emirates, said Boeing should assemble the 777X family in its own facilities to better manage the process and deliver the aircraft on time in 2020,” The WSJ wrote…..
What was that old cliche – the customer is always right ? or the customer may not always be right, but he IS always the customer .
Wonder if McNerney got the beans out of his ears ??
Its what I have been saying, the Airlines are not going to stand for another Chicago screwup.
Per the Airlines insistence on the 737 ( build it in Renton and we don’t care how you work it out), the 777X build location is in Everett and you know its part of the penalties and compensation for screw up (the headlines look great but the fine print hurts like hell)
Also note it should be BUILT IN ONE PLACE! That means the wing as well.
No doubt that is mild, I suspect Al Bakar put it in stronger terms in person (i.e. get over it and make it happen the way you did the 737, if you can’t suck it up leave it to Boeing Seattle to work it out like they did on the 737 and you stamp the ok). Clarke may have been a bit nicer behind the scenes (he did not get burned on the 787 like Al Bakar did, so he can be a bit more detached, but you know he is twisting arms because he is speaking for himself and Al Bakar on the 777X as he knows he could be in the same position)
Let Boeing commercial handle it, they will come up with a reasonable deal and a successful 777X.
Because Al Bakar is wholly inexperienced in industrial manufacturing this should be taken with the usual grain of salt. Actually, almost all of his public statements on any subject should be taken that way. Hahahaha.
I suspect they both wanted the best price, period. Again there are few similarities to 787. And he sure didn’t say “you should build the wings and plane in WA.” The real consensus would be, I believe, that the Boeing facility with the most capacity to ramp up on a new model with existing wide body manufacturing experience is in Long Beach. We’ll know one way or the other in 2-3 months.
I wonder why the Washington state business climate is an issue? Hmmm….
And for the Golden state- multiply all those washington state items by a factor of 2, the environmental concerns by perhaps 3, throw in an income tax for the grunts and corporations, and then try to cut wages and benefits on top of that.
Even so a lot of aerospace suppliers are still around in the Golden state.
I’m a gen u wine native of california by the way- great grandparents settled in 1852, grandfather , mother and myself born there.
Off topic – MY grandparents ranchhouse- built late 1800.s and not used for decades was deliberately blown up in the 7O’s for an episode of Little House- here is a non audio clip
Technical data major studs were cut- motors- a tube with powder and a post at an angle from floor to ceiling were used on back sice away from camera to blow out back wall. pipes/hose laid inside and at the right time, bucu butane/propane injected and set off. ENJOY
Scott, the folks at the Tax Foundation say that Washington is one of the most business friendly states in the country. http://taxfoundation.org/article/2014-state-business-tax-climate-index Forbes had said the same thing just a few years ago. Boeing has drummed up this business-unfriendly story for a couple of decades. I can’t imagine that any other state can be as generous to Boeing as Washington already is. I have said and continue to say that I would like to remove all Boeing subsidies and spread the wealth to the other businesses that are actually creating jobs and wealth. Boeing hasn’t created a new job in Washington since July of 1969.
It’s not just taxes, but as noted, environmental and permitting issues, too. When the WA Dept of Ecology went off the deep end and proposed regulations of such onerous impact to protect salmon that Boeing would basically have to close Renton and cut back Everett; and when it takes 18 mos for permits (when in SC Boeing built a plant in 18 mo), these are business climate issues, too.
I dare say that the way Boeing approached the 787 was eventually not the most cost effective by a mile. So the excuse “you wanted a low price, that’s why we f*cked up” doesn’t quite cut it. Also remember that Boeing initially showed a list price for the 787 that was below the 767’s list price. I.e. they were selling these birds very, very aggressively – and got a lot of people to take the bait.
As for the 777X – between the two of them, Qatar and Emirates are buying 200 of them. Even with the discount per frame this got them, you’d be delusional to think that this doesn’t also buy them a lot of clout with regard to the programme, not just in terms of contractual penalties in case of late delivery, quality issues, etc.
I said it before, I’ll say it again – the fact that we’re even talking about this reeks of McNerney’s course of business regarding 777X production largely being influenced by ideology (transformed into personal antipathy).
Given McNerney’s antipathy for unions, and love of cheap labor, it’s no surprise that he’s intent on moving Boeing from the Puget Sound area to the swamps of the Right to Work states of the old Confederacy. Even without competition from Airbus, McNerney’s prejudices would pull him toward the places with the least respect for labor. But it’s a wrongheaded way of doing business. If Boeing needs to cut costs, it should start with his exorbitant salary.
Considering that IAM751 are the highest paid assembly line workers in the world, they went on strike 50+ days for a lot more money during the biggest recession since the 1930’s, Richard Branson told Boeing that he would not be buying any further aircraft if a strike happened again, Washington’s cost of doing business is very high, just what is the ideology that McNerney is using regarding the 777x FAL? Could it be that he can’t afford another strike or buyers will go to the competition, the cost of labor in Washington makes Boeing non-competative with the competition, there are many states that are more business friendly than Washington? That isn’t ideologey, it is plane common sense to go elsewhere.
Jack …U said ..”Considering that IAM751 are the highest paid assembly line workers in the world,…..
Can you support that statement with credible source- or are you comparing cell phone assembly line workers, auto assembly line workers, etc with an airplane assembly line ? have you ever seen or been around an large aircraft assembly line-? do you know how many different jobs are done by the ‘ machinists?” not all are the old time line lathe and metal bending and rivet operators- In fact there arfe relatively few ‘ lathe’ and ‘drill press operators” Nor is it like an Auto assembly line.
With .030-.040 thick aluminum between you and 30 k feet below, riveted by a ex auto assembly line worker who was trained to raise his hand if he had to pee…
or who spent his lunch hour spaced out ( dee-troit style ) would youi still feel comfy ?
Your reply/characterization of the dissimilarities is not shared, curiously, by Airbus. I would trust Boeing and Airbus to make accurate labor determinations before a union partisan.
Remember Jack, you’re talking about a polis/electorate pretty closely related to the folks who just elected a socialist city council member, who feel like James does that this is a proxy fight vs. the old south (slave holders). That’s not just hyperbolic rhetoric, but an accurate summary of a world view that sees Boeing management and the south through the lense of good vs. evil (good being IAM 751 and defined benefit pensions).
The irony, to me, is that, ahem, some folks want to then blame Republican lawmakers in washington state for the regulatory environment/problems.
One last time though, the 787 program turned out the way it did largely because of how it was run/changed halfway through, while management was shifting from the Mulally era. I don’t have any love for McNerney either. But the program was a leap both technologically and as a business process for Boeing. The first was driven by an engineering analysis, and the second from a business analysis as a consequence of the strike. I feel the blame for failure can be placed on many parties, but mainly falls on the implementation of the strategies, not how sound they really were.
The 777X production will not be run in a similar manner. And, oh by the way, assembling (the FAL) the majority of 787’s in Washington hasn’t exactly proven to be a perfect “solution.”
Boeing has certainly had very detailed discussions with customers as to lessons learned, challenges etc. from the 787 program. I doubt the IAM751 position re: 787, if there is one, has been similarly so presented/received.
I’ll tell you why I think the 787 Program is in big trouble – and possibly doomed. It’s not the Unions. It’s not the state of Washington and it’s elected officials. It’s not Washington’s regulations or tax policies.
It’s the way the 787 Program was set up…as a “Partnership”.
What many many people refer to as Boeing’s “Suppliers” on the 787 program are not suppliers at all – they are partners. They are “Partners” because Boeing thought they could save some money up front in development costs by enticing these partners design and develop 787 parts with their own cash. As a result, Boeing is not the sole owner of the 787. In addition to Boeing, there are now “Partners” who own the Intellectual Property Rights and Tooling associated with the part of the 787 that they developed and built with their own money – and these partners can not be dumped if Boeing doesn’t like them.
For example, a while back Boeing thought it was going to get “Uppity” and build the empenage for the 787-9 in the USA in order to save money, and because they were not happy with Alenia’s performance in building the empenage for the 787-8. Alenia promptly informed Boeing that they did not have permission to build the 787-9 empenage unless Alenia gave them permission. Alenia did not give them permission. Ant that was that. Alenia owns the 787 empenage. Alenia is not some Washington-state supplier Boeing can squeeze at will.
And you can bet these “Partners” are going to make sure that their investment in the 787 program is paid off as soon as possible – that’s how “Profit Centers” work! And what do the Partners care if Boeing makes money, or not? I mean, I figure that the Partners feel since Boeing is on contract to deliver nearly 1000 aircraft, Boeing had better deliver or they are finished as an aircraft company. And if Boeing has a problem with profit delivering all these aircraft, then that’s Boeing’s problem – not theirs. Nope…the Partner’s primary responsibility is to his shareholders – not Boeing’s shareholders – and if this means maximizing Partner profit at Boeing’s expense, then that’s just too bad for Boeing’s shareholders.
It all reminds me of that Aesop fable, “The Goose That Laid the Golden Eggs”.
Am I wrong?
I posted a while ago that those partners are also probably entitled to half the 787 margin, in effect Boeings 15-20 billion investment will be recovered at the same rate as a 30-40 billion one.
I don’t agree with your view. In reality many if not most of the world’s largest manufacturing firms use subcontractors. (The only exception might be the Korean Chaebols, and that’s a guess on my part.) The 777 and 737 had heavy Japanese contractor support: many cite their assistance as key enablers for those programs’ successes. A globally diverse supply chain IS the norm. Resourcing is incredibly difficult and often does not produce the anticipated savings.
Where I think the Emirates comments are completely off the mark by trying to invoke the 787 example to call for more production autarky. It completely ignores the fact that the biggest delay in the 787 program came from critical stringers made by one of the most well respected aviation firms in American History; Vought. Boeing then went and purchased the line from them to improve the situation. Certainly foreign firms ran into problems too: Alenia’s tail was a major one. But simply blaming them for all of the dreamliners’ problems is a simplistic answer to a really hard question. I wonder how Mr Clark would respond if he was given a choice of a 2 year delay or paying a 10~20% premium for 100% made in the USA stamped 777X? My guess is he accepts the delay.
“Am I wrong?”
Well, there is the small detail of what is actually written in the contracts between Boeing and their risk sharing partners that pertains to when and how much the partners get paid. I think it is highly unlikely that the risk sharing partners can charge Boeing whatever they want, whenever they want. Obviously I’m not privy to how the contracts are written, but I would venture to guess that Boeing offered the partners IP like you say, and a big boy share of the profits, in return for the partners anteing up their own money for development and capital costs to share the risk. I would also venture to guess that the profit sharing is tightly regulated in the contracts.
http://www.corrieredelgiorno.com/2013/09/19/alenia-accelera-i-ritmi-produttivi-la-nuova-versione-del-boeing-787/ ( push through google translate )
Alenia Aermacchi is the only manufacturer for the horizontal stabilizers for the 787-8 while the production of stabilizers for the 787-9 is split between Boeing and Alenia Aermacchi.
Where is the “split” ?
The third 787-9, powered by GEnx-1B PIP2’s, has entered the flight test program. Also, the first 787 to be built at 10/month started assembly in Everett a couple days ago. Things are really ramping up with the 787 program, at least in Puget Sound.
rer texl1649-… I would trust Boeing and Airbus to make accurate labor determinations before a union partisan…
Of course- but that assumes a certain amount of logic- common sense-.
Lets not forget that in the case of the 7 late 7, Boeing wanted to do it on the cheap- and had the various subs/suppliers put up most of the funds to design and build and transport parts to a FAL. Due to design fubars and PR rollouts of empty tube to meet PR date, everyone took a major hit in the pocketbook. And then the SC thi9ng came about for several reasons- BA had to buy out a vendor/facilites who could/did get up to speed for many reasons, including learning how to produce, assemble and stuff one section. And despite building a FAL based on everett experience re tooling, design, and assembly, SC is still not up to speed.
Hopefully, with a few billion up front- BA will not make the same mistakes, and take on a much bigger percentage of ‘ development” costs. ( not nearly as much cost sharing )- and let the other vendors ‘ bid’ on costs for delievered assemblies, etc, while maintaining design control. Assuming Chicago types do more than a few self serving power point ranger presentations to the Board.
As I’ve said before – labor costs are a relatively smaller part of the whole picture- and the customers will not tolerate another 7 late 7 scene just to save a ‘ few bucks ” and jump ship for other than the first few dozen planes ASAP
Just my.02-.05 worth .
All very baffling: I could understand the US business plunge for cheapest labour if they were building shirts – but modern aviation? I note that other high-end product manufacturers are very, very careful regarding local management (yes, you have to have locals as well as the acquired lead from Chicago) and labour quality availability (quantity is never an issue). Just study high end auto makers, from Audi to Infiniti – Mercedes tried to do a Boeing, using cheaper labour from Eastern Europe and then had to do a quick reverse – and of course Airbus.
Where management not on some self-created crusade I would imagine they would consider this – but as it is only reduced quality and purchaser complaints would change matters.
About the BA Board and aerospace or manufacturing expertise
edward m liddy
Director Since 2010
…At Allstate, Mr. Liddy also served as Chief Executive Officer from January 1999 to December 2006 and as President and Chief Operating Officer from August 1994 to December 1998. Before joining Allstate, Mr. Liddy held a number of financial and operating positions at Sears, Roebuck and Co. before being named Chief Financial Officer in 1992. Mr. Liddy also serves on the boards of 3M Company, Abbott Laboratories and AbbVie Inc…
And the success of SEARS on outsourcing ??
And who else was at 3M before Boeing- hint he was also at GE . .
Does anyone really think Boeing’s response to “please don’t do what you did to the 787” was anything but ‘there is no way we are doing this like that.’
HB Pencil…u said …But simply blaming them for all of the dreamliners’ problems is a simplistic answer to a really hard question…
They were not ALL of the problems- but were major contributors. It was known before rollout of the empty tube that Alenia was in deep doo doo, keeping in mind they were using theirn own money for design, facilitate, and build of their parts. Ditto for vought who on ther own decided to put a facility in SC.
Major fubars started with the chepo funding method, so called dispersing risk, and subverting everything and everyone to put out an empty tube on 7 8 7 strrictly for PR, and inferring that first flight would be in months. Workers knew it was phony- but dared not speak out. Wiring was a mess and incomplete, systems were not installed except to keep the gear down and not fold, etc
And as the problems came to light in the public, the censorship was in full force, and those who tried to speak up were muzzled as to ‘ we need to test . . . .’ etc.
In all of its hstory- BA had never missed a flight date by so much. When it did fly- there was a rain in the plane issue not thought of, etc.
Phony data re dispatch of the first in service planes, etc also contributed to the multi-billion costs. So my point is its not just one company-sub contractor to blame.
Its called the corner office in chicago- and an inept BOD
And to try to blame the strike is simply absurd.
Very little has changed..
I can see the correspondence now –
“Dear Tim and Akhbar – we hear you.
Instead of outsourcing pieces we will outsource the entire program but all to one place. We will build the 777X in a new factory staffed with new-hire assembly workers and new-hire engineers who will have low salaries and minimal benefits.
We’re not going to build it in Everett just to spite the IAM because they rejected our ultimatum. It doesn’t matter that those union workers can build 777’s better faster and cheaper than anyone else . Our new factory and its new employees will be far far away from all of Boeing-Everett’s core competencies and institutional knowledge.
Won’t that be nice?
I knew you’d understand”
love and xxxx
and then the reply:
Have you lost your ____ minds?”
Tim and Akhbar”
but probably not
A different version – July-Aug 2013 in a out of the way room
Tim– Well Jim our combine has decided to give you 10 pct down on a 100 billion order for your 777x since you agreed to our hot temp takeoff loads, range, fuel savings, etc.
Jim -WOW ! Great ! now about the . . .( tim breaks in )
Tim – However, before we sign on the dotted line, we need to talk a bit ..
Jim -RIIIGHT – WHAT ABOUT ?
Tim We have decided that we cannot tolerate another cluster **** like on the 7 late 7, and the poor dispatch reliabilty and the amount mof rework needed on the first 2 dozen . .. SO….
JIM .. Uh… what do you mean .???
Tim -what assurance can you give us ???
Jim- well I’ve decided to get a new crew of impressive young whiz bang power point rangers to review how to prevent the over the hill union engineers and hafrd nose IAM who are going to lose most of the old timers, and gather together the best designers from all over the world ( non union of course ) and . .
Tim… JIm- want to rethink that a bit ?
Jim.. Uh…but my hero jack welch used a similar technique and it worked- sort of- on the new post it notes and sandpaper empire i used to run . .
Tim — try again jim…..
Jim- dont know what you are driving at ??
Tim and buddies – well the Airbus people are coming in tomorrow and they dont have union issues and . .
Jim- OH – OH – Aaaaaaaaa
Tim-looking at watch … we’ve got three minutes ……
Jim.. well I’ll pick up the late fees for the room . .
Tim- let me be frank .. here is the deal
YOU WILL DESIGN AND BUILD IT WITH YOUR MOST EXPERIENCED PEOPLE IN AN EXISTING FACILITY IN WASHINGTON STATE OR NO DEAL !
JIM…but but …
Tim – and about the Butt .. ( as Tim bends over )
Jim– Oh yes YES SIR, WHERE ? NOW ?
SCENE FADES TO BLACK …
well said Don!
Boeing-Everett, home of the Next Gen Incredibles
Should have started this with “Once up on a time”! Price drives orders and customers not a facility with Unions trying to drive the company. Keep in mind again that this is not that new of technology aircraft other than the folding wings.
….and the engines, and the new tail surfaces….
Engines are not built by Boeing and the tail surfaces will probably be sourced out being composite structure. Some suppliers are just better at it then Boeing.
Keep this one thing in mind when considering capabilities for the location of a new Boeing facility for the 777x, St. Louis needs work and they will likely be the ones who will engineer the new 777x wings with the folding tips. Now that being said it is possible to ship large wings by barge to Huntsville at a very low cost. Also just a stone’s throw away from the Boeing facility in Huntsville is an Intermodal/International terminal with rail, interstate and air freight terminals. No question Alabama will build any additional facilities needed if the vacant ones in and around the Jetplex are not large enough for support facilities. This could be a Win-Win for the State of Alabama and surrounding states like Tennessee. The wings for Gulfstream were built in Nashville and shipped by rail to Savannah.
jerry re folding wings ” Keep in mind again that this is not that new of technology aircraft other than the folding wings.”
About 1992 or so when I transferred from B-2 to 777 program, one of the first discussions I became aware of was whether or not to put folding wing tips on a 777 variant. Preliminary design was such that a 3D printer had made a ( full ? ) large size several foot long model of the hinge. It was of course dropped. lets not forget that folding wing tips/wings have been around on high performance aircraft for the navy for decades, and then there is the F-18 still being built. If used on 777x- it *might* be the first time used on commercial passenger aircraft.
There is one (power) point I always stumble about with folding wingtips: reliability?
The F/A-18 operates from an aircraft carrier with maintenance personal, spare aircraft and spares right on or beneath the deck. What will Jim Clark tell Boeing then 777-9Xs with full wingspan are occupying gate space thought for A380?
By all means, have them built by people who think that Ally Oop rode a dinosaur, the day after the world was created, 6000 years ago. Go ahead and build them in S. Carolina. Pastor Billy Bob will bless them, and if they don’t fly, Faith Healer Bobby Jo will cast out the unclean spirits that keep them from taking off.