Alabama plant goes ahead regardless of outcome in trade case, says Bombardier

Dec. 19, 2017, © Leeham Co.: Bombardier will build a C Series final assembly line (FAL) regardless of the ruling from the US International Trade Commission on whether Boeing was harmed by the order from Delta Air Lines for 75 CS100s and options for 50 more.

This is what Bombardier officials told the ITC, under sworn testimony, in the “harm” hearing Monday, according to a transcript.

Boeing officials argued that the plans for a US FAL at Mobile was a feint and that the line wouldn’t be built, claiming it doesn’t make economic sense.

Delta, for its part, said it’s negotiating a contract revision with Bombardier to accept deliveries assembled only from the Mobile plant.

Analogy to auto industry

Bombardier drew an analogy to the auto industry, which decades ago began manufacturing cars in the US, principally in the South (including Alabama). At one time, Japanese auto makers were accused of dumping minivans in the US. Building manufacturing plants negated allegations of countervailing duties and anti-dumping tariffs, the airframer said.

The proposed plant is no different, BBD said. The C Series produced there become a US-made product under US law, it says.

Boeing claims the plans for a plant are merely a ruse to avoid tariffs and should be nailed for “circumvention,” if any credence is given to the plans.

But because there is no definitive agreement between Airbus and Bombardier, of which the FAL is a part, and no definitive agreements for the plant itself, the entire deal is “legally irrelevant,” Boeing’s lawyer argued.

Bombardier replied there are no definitive agreements yet because the Airbus-BBD transaction must receive multiple anti-trust clearances. The progress is contained in a confidential filing, but LNC has been told the US already has cleared the deal.

US content

Bolstering its arguments, Bombardier says the Mobile FAL will increase the US content of the C Series, which currently stands at 52%. The ITC panel asked what the increase will be; BBD said this is in a confidential filing.

But final assembly generally is not a significant part of the US value content. During one of its many skirmishes with Boeing, its touch-labor union, the IAM 751 District, said the value of assembling the 787 or 777X amounts to only about 5% of the value of the wide-body aircraft.

No harm, no foul

The hearing Tuesday before the ITC is whether Boeing was harmed by the Delta order, which Boeing claims was at $19.6m—a figure Delta and BBD dispute. Boeing also claims its was harmed by a near-win by BBD with United Airlines. Boeing made a last-minute deal to sell 65 737-700s to United (at the time, the reported price was about $24m). This and the Delta deal dragged down pricing on the 737-800, 737-7 and 737-8, Boeing claims—“harming” Boeing.

Bombardier claimed Boeing made its last-minute United deal solely to block the sale of the C Series, based on statements made later by then-Boeing Commercial Airplanes CEO Ray Conner. Delta and Bombardier argued Boeing was never a factor in the Delta order, having no airplane in the 109-seat size Delta wanted.

If the ITC finds there was no harm to Boeing, then the Department of Commerce case goes away and with it, the 300% tariffs the DOC preliminarily decided to levy. A final decision by the DOC is due any day. A decision by ITC is due next month.

39 Comments on “Alabama plant goes ahead regardless of outcome in trade case, says Bombardier

  1. Maybe Boeing management/legal team know more than I do however IMHO Boeing is making the wrong decision going after Bombardier.

    I guess with their (Boeing) stock at all time valuation and the general stock market going up-up and away, Boeing feel they can pull something like this and get away with it. Also, when IMHO this comes back to “bite them in the bums” in a few years, current management won’t be around to deal with the after effects.

    What’s Boeing afraid of?

    • Their own shadow?

      The Boeing board can be said to have fouled up strategically speaking in this sector over the past 25 years, and that’s not a good image. What they’re afraid of is losing their own jobs.

      What’s going to happen is that the 737 will continue to sink into oblivion as other manufacturers’ own capacity for better designs increases. Boeing are OK for now, there’s quite a lot of orders for the MAX. They’re going to launch a new design at some point, which will sell reasonably well, and Boeing get away with it.

      However, with Airbus having teamed up with Bombardier, that’s merely set the bar a lot higher for Boeing to grow or maintain their share of that market. So the risk to Boeing is now higher than it needed to be.

      What won’t happen is for their to be a reckoning of the orders Boeing didn’t win over several decades because of sticking with 737. So I’ll do that now.

      The A32x went into service sometime around about 1992. Say Boeing had started on a fresh design right then, and had it operational by (being generous) 2000. And say that new design had been better than the A32x. Had that been the case, you’d have expected Boeing to have taken a bigger slice of the market since then than they actually have.

      That’s a lot of aircraft Boeing haven’t sold in the last 17 years. Looked at this way one could argue that Boeing have significantly under performed. Yes, many would judge their sales performance in that period to have been OK, but it’s no where near as good as it could have been.

      There’s a similar argument to be made with Google, and Android. Google give Android away for free, and as a result Baidu and a whole load of other companies now own the mobile market in China. That’s a billion+ potential users who are using Android but aren’t using Google services, seeing Google ads, providing Google analytics with data. That’s all going to Baidu, etc.

      No one has really noticed – Google’s profits are immense (and they could buy Boeing for change in their pocket). But there’s a strong reason to suspect that had Google actually thought about their strategy up front they’d be a major player in China. The same thing is happening in India, and will happen in Africa (China is moving in there big time, bringing it’s version of Internet services with it), and if the EU gets even more stroppy about the behaviour of US tech companies in Europe it could happen there too. The danger is that the conditions in the EU will make it impossible for the US themed services to operate as they currently do, leaving the field wide open for European service providers to get going. That’s a large number of users to miss out on.

      Some Google shareholders recognise this and have taken Google to court over their poor strategy, which as already cost shareholders quite a lot in lost profit (fines).

      • shareholders determine the board which determines strategy.
        thus and IMHO shareholders can’t litigate against legal activity of the management. lost profit is a bit of an oxymoron. How does the damaged party prove that different behavior would have increased profits and not foundered the company?

        another twig in this is that there is too much illicit NSA snooping piggybacked on US commercial, ngo and government activity.

        • Google’s situation is interesting, because most of the shares you can actually buy are non-voting. Thus if you own shares in Google you do not have any right to control strategy, board membership, etc. You are dependent on them acting in your best interests. The “special” shares that do have voting rights are not traded AFAIK, apparently being held mostly by the original founders / investors.

          That’s basically what some of Google’s shareholders were / are suing over; that they’re the ones who risk paying the price for the company strategy, and that the board and company isn’t necessarily acting in their best interests and denies them the right to vote to change the company strategy.

          One might say Caveat Emptor. Be careful what you buy. But to have so many non-voting shares in a major company is, arguably, unhealthy for an economy. It distorts normal market activity.

          Boeing’s constitution is more normal, but with short term share price effectively being the only measure of the health of the company that distorts what the company will do. They’re reluctant to invest to replace designs that are profitable today. However, as Richard Feynman said, nature cannot be fooled. Eventually the inadequacies of an out of date design will overwhelm them, and sales will drop off a cliff. Develop, or Die.

          The same is true for national economies. Stagnation will kill your economy. Artificial restraints on trade (e.g. tariffs) are a bad thing, ultimately. Some other country wants to take over your position of supremacy in a particular industry, and will use government subsidy to do so? Fine, either do the same thing and accept what that means, or encourage the industry to invest in being far smarter / more advanced so as to leave them for dust.

          Far better to change purposefully than to have change forced by circumstance. Boeing are seemingly experiencing the latter…

          I fail to see how the activities of the NSA has anything to do with Boeing’s commercial performance.

  2. “…737 MAX 7 has … been suffering through a
    drought of significant airline orders since the time when, according to Mr. Enders, the C Series “emerged as a serious rival.””

    With this comment, Boeing admits that the reason the MAX 7 was not selling is because the C Series is a better airplane for its market segment, and not because of its selling price. Airlines were attracted to it by its features and economics. Boeing claims to be harmed by subsidies and an artificially low price, but by their own admission, they were actually harmed by the quality of the plane.

  3. “But final assembly generally is not a significant part of the US value content. During one of its many skirmishes with Boeing, its touch-labor union, the IAM 751 District, said the value of assembling the 787 or 777X amounts to only about 5% of the value of the wide-body aircraft.”

    Well, the IAM 751 District has something of a vested interest in saying that no? They are trying to maximize the harm to their members from having work done elsewhere

    • That sounds about right, its something like 2 weeks in the final assembly line and a lot of sections come ‘pre-stuffed’ now

      • You have to add the capital cost of these pre-stuffed sections waiting to be snapped together, just imagine Airbus cost of having flight ready A380’s in HAM for 4-9 months putting cabin bits inside and paint on the outside.

  4. So the original premise is now being tested, ie was harm done. Does this mean that any lack of cooperation on behalf of BBD could be swept under the carpet if the ITC throw out the underlying case?

  5. Sometimes I wonder:

    Did Boeing take-over McDonnell Douglas?

    …or did McDonnell Douglas take-over Boeing?

    Sure seems like leaving Seattle for Chicago for Boeing’s HQ was as much a change in distance in terms of geography and time zones away from Boeing’s roots, as it been in terms of corporate cultures and management “personalities” and philosophies…

    …with the legacy Boeing of Seattle being more ambitious, and more of an innovator…

    …and the current “Boeing” of Chicago in so many ways beginning to act as if it’s more McDonnell Douglas than Boeing…

    Firstly, because it’s overreaction to Bombardier smacks of desperation from a past trauma…as in Airbus killing off McDonnell Douglas when, of course, McDonnell Douglas was relying on the “winning” strategy to rest on its laurels and prolong the life of its DC-9s way beyond their time…

    …or the DC-10s…MD-11s…

    …gee, just like the “New” McDonnell Douglas….err Boeing…is doing with its antiquated 737s, or even, what a shock!!! (NOT) possibly relaunching a…wait for it…

    …a discontinued line, the 767, passenger version, featuring 1970s/80s vintage designs and engines…

    …instead of the full-steam ahead towards a NMA, be it single aisle, twin, or both, at nearly the same time, like the Boeing of old did when the 707 amd 727 outlived their days, and were replaced by new, clean sheet designs to capture the best possible technological advancements for engines, aerodynamics, and materials available at that time…

    …and the line being considered for resurrection isn’t even the line airlines have all but begged to have an updated version for, the 757, even though Airbus is killing Boeing in that segment by how much…oh, right, not even close…not even a landslide…but more like a slaughter with its hot selling A321neo/neoLR line that Boeing keeps trying to cram an inferior 737 down airlines” throats instead of stepping up with something new, and better, on its own like it used to do in its Seattle days when it had real ambition and cajones instead of always seeking to play things safe to keep Wall St happy like it’s doing now…

    …oh, and one last thing about this thing the new, wimpy, McDonnell Douglas infected Boeing keeps saying in its attempt to kill off Bombardier, and its much better (and modern) single aisle C-Series plane that Boeing does NOT even offer a competing product against at all…

    …ummmm…it was NOT Boeing that was “harmed” by Airbus when that company was emerging with copious amounts of government French Francs, Deutsche Marks, Pounds Sterling, or other European governments’ state funding…

    …in fact, if anything, Boeing emerged just fine with its then innovative products like the 737 (of, and for that era…NOT now, that is), the majestic 747, 757, 767 and later 777s from the days when “Moonshots” was something to be proud of instead of a dirty word…

    …and yep, that’s right, McDonnell Douglas (and before them Lockheed for its passenger aircraft) that ended up getting crushed by Airbus in the making of passenger planes…

    Just sayin’…😉

    • Concur. I worked at McAir at the time of the merger. A lot of this falls on the Boeing Board of Directors. They passed over an aerospace man like Mulally; hire a Jack Welsh disciple GE guy who repeatedly after outsourcing as much of the triple-cost over-ran B787 announces “No, we’re going to build nothing but derivative designs.” Where’s GE stock today? This falls on the Board.

      • GE and PWA does great business with skilled gouverment supported engine parts makers like MTU, Snecma, Fiat Avio, Volvo Aero, IHI, KHI etc. that pay a good fee (gouverment soft loans) to be suppliers that are of a different breed and experience compared to some of the suppliers Boeing and James McNerney allowed onto the 787.

  6. Two decisions, one by Boeing and the other by the DOC stand out. The Boeing decision has had enough comment and the consensus is that it is bone-headed. The DOC decision for a 300% penalty on non-US value is the stand-out shocker. A real small-town mindset.
    This is very similar to the Apple/Samsung court case where the Californian judged ruled that Apple was good and Samsung not. (Read ; one was American and the other not). 4 years later, Galaxy phones outsell iPhones 2:1.

    • Yes, but Apple (for better or worse) makes almost all the profit in the mobile phone market.

  7. Bombardier designed the C-series as the engineers wanted them without much cost control, Boeing designed the 737-10 as the accountants wanted it for min cost of production and min cost/seat for airline operation. Soon it is up to Airbus to take the cost out of the C-series most likely by swapping out Components and computer boxes to Airbus standard units just as fast it can be done without a new Type Certificate.

    • Unlikely. Airbus’s involvement potentially puts the C Series on a high level of production, and Airbus can drive the component prices down. Everyone will be happy with a lower component price if they’re going to end up selling a whole lot more of them than previously imagined.

      As Airbus have already emphasised, their attraction to the C Series predates the trade dispute between Boeing and Bombardier. They want it, and want to open up another assembly line in Mobile, because they want to make loads of them and sell to the world.

      From what Leeham have previously said about the C-Series’ fly by wire systems it’ll be Airbus looking to adopt them in their own designs.

  8. Lots of AB fans here. One or more, please tell me why it really isn’t in AB’s best interest to just “slow walk” the CSeries into oblivion? After all, you’ve got a huge 60% market share to protect with the A320/321 neos. And, also, that’s A LOT of French and German jobs! P.S. How about you give BA some credit. They’ve learned after letting Airbus grow into a full size (maybe oversized) competitor, you “strangle the baby” in its crib! LOL

    • Because the C Series is a fantastically good aircraft and Airbus have got it “for free”? They don’t have to pay to develop a new design themselves, they can simply share in the profit from making this one? That’s a tremendous deal.

      Airbus can now upscale the A32x to be the “bigger” small aircraft. So plenty of work for France and Germany.

      Could have been Boeings, but they didn’t want it. Now look where that’s got them.

    • The cultural gulf between the US and the rest of the nations on this globe is vast.
      The US mindset is formed by a continent of vast resources where after unmitigateable errors you just move to the next valley full of at the moment undepleted resources.

      • Or, of course, when things go wrong, go hat in hand to Congress (to peeps they already bought and paid for) seeking taxpayer funded subsidies (as nearly every of our remaining major airlines did after 9/11), bailouts (as several of our remaining, or the predecessor merged into, airlines also did after 9/11), “tax preferences” (carry loss forwards that extend back/forward for decades or more from bankruptcies filed last decade, etc., and again, as several of our remaining airlines have done, and still do) or if that fails, bankruptcy protection where the highest tier/mezzanine creditors get the best and most, lessor creditors get the leftovers once the big shots cherry pick their loot from the carcass, and the already looted and underfunded pensions get fobbed off to the taxpayer funded PBGC (so many times over it would be pointless to list here)…

        …not to mention seeking lucrative, easy to overcharge/pad the bills, government contracts, defense or otherwise when business is bad…or even if it’s not…

        …but hey, our airlines, and/or many other industries like defense or aircraft manufacturing are “NOT subsidized” like our foreign competitors are…doesn’t everyone know that?

        Hehehe…just kidding! 😉

    • MontanaOsprey,
      The CSeries plugs a gap in the portfolio of both Airbus and Boeing. Killing off the Cseries will be extremely counter productive.
      To Airbus, this jet provides an opportunity to present to customers a broad range of aircraft, from 110 seats through above 550. To Bombardier, the sales muscle and customer access provided by Airbus provides a heaven sent opportunity for sales.
      Bombardier specifically planned the size of their jet to avoid any potential conflict with the big boys.

    • Because an A320 is worth less than an 8 MAX, and a much more efficient CS500 would be worth a lot more, but given that the CS line is said to be highly automated will probably end up costing the same to build. There will be more money to be made from the CS. Lose $10 (slow walking the C series) to make $5 makes no sense. Also AB can take the A320 out of medium NB sector and make it an optimized large NB, capitalizing on the current situation and eating the bottom half of BA’s NMA market.

    • Also air quality and noise standards could very likely come into play in the near future.

  9. @Montana,

    Neither “pro” nor “con” Airbus or Boeing, and NOT a stockholder either company!

    I just feel strongly that there is a far greater harm of starting a trade war, especially with two countries that are (soon to be were?) among our closest political and military allies, and our best trading partners.

    And for what?

    So Boeing, and its shareholders, can also exploit the “Useful Idiot” in the White House the same way the extreme right wing fringe and other Luddites, Rupert Murdoch/Faux News, the Koch Bros., Sheldon Adelson, the (im/a)moral majority crowd, much of the GOP, Wall St., and of course former KGB member, Vladimir Putin, have for their own, narrow agendas instead of the country at large?

    As I have noted elsewhere on LNC comments, or other boards where my comments may be found, history has proven many times over how dangerous and destructive trade wars are.

    So, this trade war instigated by Boeing, which NEVER would’ve even happened if a real Republican (or you-know-who whom actually won the popular vote by millions more than President Small Hands) was in the White House, to fulfill its own narrow agenda to prolong the life of a long ago obsolete plane that is being pushed even further beyond its optimal design envelope than it already was for the prior, or NG series, especially for the largest and smallest capacity versions, the -9, -10 and -7 (the -600 of yore died a long time ago, and a -6 wasn’t even contemplated…) is just so ill-conceived and ill-advised, that the fact is, and just like the Buffoon in the White House, it really NEVER should’ve happened…

    …but it did…

    …NOTHING was done to stop it (even if most rational minds and cooler heads know EVERYTHING POSSIBLE should be done to stop it)…

    …and the consequences, in the future, for failing to stop the madness now, will be exceptionally great…

    …worse still, and freakin’ unbelievable, instead of stopping bad policies, trade or otherwise, that in the future will be proven to be every bit as unwise as history has many times over shown policies like those being advanced or implemented now, the people and companies sponsoring such destructive and for sure, costly in the future to undo, repair and replace, parochial policies and agendas, we’re REWARDING the miscreants despite what nearly EVERYONE knows (and in saner times AGREES without exception) is exceptionally BAD BEHAVIORS (political or corporate) and LONGER TERM DESTRUCTIVE ACTIONS!

    Like I said, freakin’ UNBELIEVABLE…

    It’s as if we’re rewarding children for lying, cheating, or gettimg straight “F’s” on a report card by buying them the very best gadgets, expensive cars, or teaching them there are NO consequences for bad decisions in life!


    Just like Boeing’s, or really, is it more McDonnell Douglas’, decision to exploit a political neophyte (no, didn’t say “neo…” oh, nevermind, even if he’s that, too) for its own selfish, greedy interest to squeeze out another 15 or so years out of the Flying Pigs that are the stone age (in aviation years, of course) 737s instead of coming up with something of its own that’s even better than Bombardier’s C-Series, and certainly Airbus’s A320-family, which itself is now getting long, but just not AS LONG as Boeing’s 737, in the tooth with that line’s 1980s vintage designs for its OG platform.

    But hey, if Boeing wants to throw away its storied legacy as being the innovative risk taker that successfully launched the commercial jet age with its 707, and the built on that foundation with its best selling of its era 727, the twin engine 737 (perfect for the era and beyond it was designed for that ended at least five years ago, that is), Her Majesty the Queen 747, 757, 767 and 777, with the 747 being special in and of itself, and the 757/767 dual launch an extraordinary and visionary achievement as well given the scale and scope to accomplish something like that in an industry like this…

    …if Boeing wants to throw away that legacy in favor of adopting the corporate culture and philosophies of the failed competitor it supposedly vanquished, and then acquired its military and space divisions as the spoils for having beaten the inferior-managed company, or McDonnell Douglas, that is…

    …then so be it…

    But it’s hard to imagine the Boeing of old, when it was headquartered in Seattle, following the same business strategy of its failed competitor to prolong the life of aged aircraft models as McDonnell Douglas did for its DC-9, MD-80, MD-90, MD-95…err Boeing 717 lines…

    …or the DC-10…MD-11s…

    The approach at McDonnell Douglas to milk ancient models designed back in the day failed once already…

    …and just as bat crap insanity without thinking about the consequences sure to come is all the rage these days…

    …so, too, applies, that age old, and many times proven to be true cliche:

    “…insanity is doing the same thing over and again and expecting different results”…

    …the McDonnell Douglas approach/strategy to milk the cows long beyond their best milk producing days, as that company did for the passenger division that produced the MD-whatever they used to be when they were “DC models” with lower numbers, which died long before the last iterations came along more than two decades ago, is a strategy that FAILED ALREADY for McDonnell Douglas…

    …meanwhile, “Moonshots” at Boeing (before the 787 debacle which sought to use a decidedly different approach to launch a new model with outsourcing and “risk sharing” partners than in years past), that brought us the groundbreaking 707; the best selling in its time 727; the best selling of all time, but clearly well past its time and it’s time to put out to pasture anyway, 737; the incomparable 747; the dual launched 757/767 lines, and the Mightiest of Twin Engine Jumbos 777 (even if I hate the densified ones) more often than not paid off (other than the mismanaged 787 and 747-8 program launches of the post McDonnell Douglas era, that is)…

    So, why is Boeing acting as if it’s become McDonnell Douglas by prolonging the 737…or who knows? …maybe even the 767-300 if that discontinued line is brought back from the dead…

    …instead of being, balls to the wall, Moonshot’s are us, and we do ‘em better than anyone else, Boeing?

    Please, it’s McDonnell Douglas that was “harmed” by Airbus, and it was that company which failed…

    …whereas Boeing, when it did as it used to do and actually innovate instead of renovate (like MCD did), did just fine, thank you very much even after Airbus came along…

    …and in fact, before the Airbus A320 narrow body family was introduced, Boeing was slaughtering Airbus in the then far more profitable widebody segment…

    …which, btw, it’s STILL doing very well at vs Airbus…maybe NOT quite slaughtering, but still holding its own very, very well…

    Boeing was NOT “harmed” by Airbus…that claim is so specious, it doesn’t even pass the laugh test…

    …on the other hand, McDonnell Douglas had its…tailpipe kicked into oblivion…literally…by Airbus…

    So, as asked earlier in a separate post, sometimes I wonder…

    Did Boeing acquire McDonnell Douglas…

    …or did its failed and vanquished competitor acquire Boeing?

    More and more it’s hard to tell the difference.

    • Howard,
      A family member of mine was part of an evaluation team to select a single aisle jet to replace some 737-200’s. He told me of his experience of dealing with Airbus and Boeing sales reps.
      One example, the airline he represents has to pay additional luggage handling charges for the 737. The local union also wanted to place limits on overweight suitcases fetched from the bowels of the hold. The airline, being sympathetic to the potential for injuries, placed a heavy weighting on luggage compartimentalisation. The Boeing rep was insenced as US unions did not feel the same way. His attitude was that as US unions did not mind manual luggage stacking, why should the locals have an issue. He saw that one issue as an unfair Airbus bias.
      For this aspect, amongst others, the A320 got the nod. Pricing, as far as I was told, was not all that different between the two airframers.

      • Layman (or others),

        Just to clarify, despite what I believe is earned/deserved “criticism” for Boeing for some products like prolonging the 737 well past its prime, or a Lazarus/Phoenix-like resurrection of the passenger 767 instead of bringing forward the launch of families for both to serve future generations with current, or even more future oriented emgineering and design concepts that are cutting edge now but will be commonplace soon, I’m NEITHER pro Airbus, NOR anti-Boeing!

        Let’s be clear on that.

        And while I clearly am NOT a fan of the McDonnell Douglas strategy to RENOVATE and “life extend” waaayy past prime deep into old age aircraft models, as that FAILED COMPANY did, instead of INNOVATE and BET THE COMPANY TO BUILD THE COMPANY as Boeing did so well prior to its own failed attempt to reinvent the wheel with the disasterous 787 program launch (that spilled over and contaminated an already fragile 747-8 launch, too), as the “New” McDonnell Douglas…err Boeing of now, that is, is seeking to do with the 737 (and 767?)…

        …and in fact, hello, as the 747-8 itself has also now shown is a failed strategy, too, or RENOVATE INSTEAD OF INNOVATE, that is, as it did with that aircraft, too…come to think of it…

        …the fact is, old or not, past their prime (and they suuuuurreeee arrre!), be they blasts from the past such as the 737 (or even back from the dead 767s!), or state of the art 787s…

        …or Bombardier’s C-Series…

        I’ll never overlook, discount, or triffle with the absolute gift, and miracle of flight that allows humanity to criss cross continents and oceans with a degree of ease, comfort, and safety that our ancestors on 65 years ago could only dream of!

        Yes, those “brand new” 737-8 Maxes now entering service are in many ways old as the hills, but old or not, they still manage to make the until recently impossible, not just possible, but so ordinary and banal, most people outside of aviation think of it as practically being “God given” when those of us closer to the industry know it’s anything but.

        I just think the lessons are clear, and McDonnell Douglas’ failed strategy to prolong aircraft into oblivion instead of kicking butt, taking no prisoners, and doing Moonshots as Boeing did so well in the past, is the problem.

        Indeed, Boeing’s own flailing 747-8 one life extension too long because newer, and better technology came along with Big Twins that can do ETOPS, should also prove instructive…

        …the future, NOT the past is now…

        Trade wars are dangerous, stupid and destructive, too…

        And it’s time to get back to basics and do it better than anyone else did…

        Just as Boeing did with Airbus all along, that McDonnell Douglas did not – and itself paid the price for, as it surely deserved for its failed business strategy that Boeing should run from now, instead of embracing…

    • @Howard Miller

      Great comment.

      However, as for McDonnel Douglas supposedly being harmed by Airbus, you seem to ignore the fact that the company never invested in a new wing after the DC-10. The MD-80s, MD-90s, MD-95s and MD-11s were all flying around with wings designed in the 1960s — wings that were designed a decade before the OEMs started to design super critical airfoils. In fact, the MD-80s, MD-90s, MD-95s and MD-11s were all just derivative aircraft. In short, it was the failure on the part of McDonnell Douglas to invest in new aircraft that finally sank the company as a credible LCA OEM. Furthermore, it didn’t help that the poorly designed DC-10 was in an economic war of attrition with the L-1011. Both aircraft were so similar that it was easy for airlines to play one manufacturer off another, with devastating financial consequences for both McDonnell Douglas and Lockheed.

      • Thanks, for the shout out, @OV-099!

        …and thanks for following up with additional 411 re the engineering/ aerodynamics side of the equation…

        …my background is more oriented towards finance and business reporting from work done in the past at a very large, prominent in its day, investment firm, tax/management consulting with an industry attorney, or approx five years (c.1999-2004) as a frequent contributor to an industry newsletter that’s geared towards investors, Wall St analysts, and others who wear “green eye shades” so to speak instead of PhD’s in engineering, physics and aerospace, etc.

        So your excellent follow up/reply to my post is much appreciated, and I enjoyed learning even more on this subject!

  10. “Boeing officials argued that
    the plans for a US FAL at Mobile
    was a feint and that the line
    wouldn’t be built, claiming it
    doesn’t make economic sense.”
    Metastasized Dishonesty as
    Strategic Professional Culture.
    Another example: Flat Earth.

    • “You are so well researched.
      I always learn something from you.”,
      a Medical Social Worker and Program Director

      “Alabama plant goes ahead regardless of
      outcome in trade case, says Bombardier”,
      Dec. 19, 2017, Copyright Leeham Co.

      Eddie Maddox
      December 20, 2017

      “Boeing officials argued that
      the plans for a US FAL at Mobile
      was a feint and that the line
      wouldn’t be built, claiming it
      doesn’t make economic sense.”
      Metastasized Dishonesty as
      Strategic Professional Culture.
      Another example: Flat Earth.


  11. The fact of the matter is that Boeing’s “shoot-from-the-hip” approach to business strategy and game theory is not a viable method in the long-run for their Large Commercial Airliner (LCA) business. In fact, I’d guess that an honest LCA SWOT analyses on the part of Boeing — which examine strengths, weaknesses, opportunities and threats — would recognise that their strengths are primarily their present performance and not how they’ll perform a decade hence ; that their product strategy is sown in weakness; that opportunities are increasingly far and few between; and that the greatest threat facing the company, just might be that the leaders of the Boeing company has succumbed to hubris and strayed from the disciplined creativity that led them to greatness in the first place.

    IMJ, Boeing’s top management have for too long discounted negative data, amplified positive data, and put a positive spin on ambiguous data, while blaming external factors for setbacks rather than accepting responsibility for a faltering strategy. The longer the company remains in this sorry state, repeatedly grasping for silver bullets, the more likely it will continue to spiral downward. Any company can look strong on the outside but already be sick on the inside, dangerously on the cusp of a precipitous fall.

    Perhaps, that’s the real story here — that Boeing’s ill-advised trade lawsuit tells more about the state of affairs at Boeing, than anything else. In short, Boeing would very likely not have resorted to such a pathetic kangaroo court litigation if they were coming from a position of strength.

  12. Just a comment:
    Originally the “engineering” companies were run by the engineers with all the consequences.
    As of now they start to be run by the “bankers” and I would just the whole picture here we get is the result.

    Boeing is a typical one – run by the bankers. It is more important (and a thing they DO understand) to buyback their own shares than to make better product. And they do spent similar amount of money on the one or the other.

    There was a nice film on the topics with Richard Gere and Julia Roberts few years back.

    But we might find many more similar cases around i.e. “banker” x “engineers”

  13. sorry – missed editing

    ….and the whole picture here we get is the result….

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