June 24, 2018, © Leeham News: We’re a week away from the partnership between Airbus and the Bombardier C Series program becoming effective.
Beginning tomorrow, Leeham Co. and Airfinance Journal hold the Inaugural Southeast Aerospace & Defence Conference in Mobile (AL), where Bombardier will be a C Series Final Assembly Line.
The US Southeast will also be a competitor for the site selection of the FAL for the New Midmarket Aircraft (NMA) should Boeing decide, probably next year, to proceed with this new airplane.
North Charleston (SC), the site of the second Boeing 787 assembly line, probably will figure in some way in the NMA site selection. Alabama and perhaps other states in the Southeast will be interested in pursuing the NMA if Boeing launches the program.
Washington State, of course, wants the airplane to be built at its Everett (WA) factory, where 787 Line 1, the 747, 767 and 777 are assembled.
|Est Ramp Up||12||36||48||48||48|
Kansas, Texas and Missouri may also serious contenders for the NMA assembly site. Other states will also weigh in, but these are less likely to be top contenders.
Mobile is the newest emerging aerospace cluster in the US. The A320 FAL is only a few years old. The initial production plan was 4/mo and a maximum capacity of 8/mo. The low-rate initial production (LRIP, to use jargon), of course, began at about 2/mo.
The FAL will go to 6/mo this year and likely be bumped up to 8/mo within a year or two after that.
The new C Series plant will have a capacity of 4/mo, a Bombardier official told me during a telephone press conference announcing regulatory clearance and July 1 effective date of the Airbus-C Series partnership. (I’ve been told the plant will have a capacity of 10/mo, but BBD denied this.)
Construction of the plant begins next year and production in 2020.
For sake of argument, let’s assume production begins mid-year. This gives the potential of 12 USA-built C Series in 2020. I conservatively ramp-up production estimates 1/mo more in 2021 and the final 1/mo the following year.
Delta Air Lines ordered 75 CS100s in 2016. During the trade complaint hearings filed by Boeing a year later, and following announcement of the Mobile FAL, Delta said it prefers and wants to take delivery of Mobile-produced airplanes.
A new carrier, Moxy Airlines, secured delivery positions beginning in 2020. Suggestions that Moxy’s 60 orders combined with Delta’s will fill the production line for 26 months is uninformed, un-researched clap-trap.
LNC has seen the delivery stream proposed. Combining with Delta, I see the latter airline taking perhaps five CS100s from the Airbus Canada (ex-Bombardier) Montreal plant and 10 from Mobile. Moxy would take seven CS300s from Mobile in 2020, under these assumptions.
As production ramps up in 2021 and beyond, the combined Delta and Moxy deliveries leave open slots for other US carriers.
JetBlue, Spirit Airlines and even United Airlines have been publicly identified as sales targets for the C Series. If Airbus strikes gold and scores wins with even two of these three carriers, the Mobile plant will be full within a few years.
If Boeing proceeds next year with the NMA, everyone expects the company to launch a competition for the FAL.
Washington State, as LNC reported last week, is already engaged in a campaign to win the FAL for Everett. Also as reported last week, the International Association of Machinists may be playing with fire in a parallel effort to unionize Charleston. Boeing is contesting this effort.
Setting aside the union effort, which I believe could muck up Washington’s campaign to win the NMA FAL, here’s how I see the NMA playing out at Charleston.
Scenario 1: Charleston puts in a bid for the NMA. There’s plenty of space to grow and create an NMA FAL.
Scenario 2: Boeing decides it wants to put the NMA in Everett, but space needs to be freed to make room. One option (but not the only one) would be to move the Everett 787 Line 1 to Charleston. As noted, Charleston has the room. Boeing would give up 787-specific tax breaks in Washington to do this, but these were declared illegal by the World Trade Organization anyway. A decision on an appeal is due by year end. If the appeal is denied, losing the tax breaks may become moot.
I think the 787 will eventually consolidate in Charleston anyway. As demand inevitably declines and it comes time to cut production, Everett has more airplane programs to cover the overhead of the facility. Charleston is a one-horse game right now. Moving Line 1 to Charleston makes sense, absent any union issues, and even with them.
The Southeast Aerospace & Defence Conference tomorrow and Wednesday will talk about these and other topics. I’ll be there reporting from the conference.
If the robotization of the 797 is sucessful, I assume another step from the latest A320 FAL in HAM it will not require that many blue collar workers. Maybe 1/2 to 1/3 of the 787 line. Still lots of positions worth fighting for. Boeing should ask the top automation supplier Electroimpact where they want the FAL to be as they will decide the productivity and hence profit/loss of the program, not the hourly pay of machinist that will be fewer and fewer as automation takes over.
By the same logic, putting the NMA in Charleston ensures its more than a one plane facility.
Airlines will tolerate all sorts of issues with start up so if it goes poorly not a problem.
They won’t tolerate in production muck ups. So leaving the legacy planes in Everett goes with that thought process.
WA may not be winning anything and giving up a lot.
If IAM 751 is not going to fight for jobs they might as well fold the tent.
Automation of manufacturing (generally) is nearly always justified (the investment cost is recovered) by improvement in first-pass yield (elimination of rework and/or scrap), safety (reduced manual involvement with repetitive tasks in injury-prone places), uniformity (same result from each cycle of a task), and throughput (reduced cycle time). The direct labor content of the task(s) will be replaced by higher-skilled (and paid) labor to “run” and maintain and upgrade the automated operations.
Getting automation perfectly right is no simple task, hence being close to the automation suppliers is an advantage especailly when they have to start fixing hunderds of small and not-so-small problems on line after line making/inspecting and assembly the mix of metal and Composite parts. Boeing can of cause build hundreds of bugalows next to a golf corse in Charleston for the Washiongton state programmers getting a 797 FAL running in S. Carolina, still feels like crossing the river to collect water..
Boeing needs to get on with replacing the 737, even if only at the edges.The huge leap thats going to be needed and associated risk is making me nervous.
Boeing would be smart to size the bottom of the 797 line to overlap the 737-10, with a stretch and double stretch like the 787. That would ensure volume and begin the process of replacing the venerable 737. Like the 787-8, the smallest member of the family would still be very competitive with a new technology carbon fiber structure. The 737-10 would still sell for 7 years until the 797 is ready, so will easily make back its development cost.