Pontifications: Boeing’s exodus from Puget Sound

Jan. 11, 2021, © Leeham News: Last week appeared to be an ominous week for Washington State for aerospace.

By Scott Hamilton

On Monday, The Seattle Times reported that Amazon surpassed Boeing as Washington’s largest employer. The retailer now employs more than 80,000 in the state. Boeing, following COVID- and 737 MAX-grounding induced layoffs, employs just under 59,000 in Washington.

The Times reported Tuesday that Boeing’s research and development center at Boeing Field will be closed. At its peak, the center was to employ 900. The expansion began a mere 10 years ago.

Previously, Boeing announced Oct. 1 that it will close the Everett 787 production line and consolidate the final assembly at the Charleston (SC) plant.

The exodus by Boeing from Puget Sound and Washington State is underway. But was closing the R&D center as significant as it seemed?

Symbolic vs tangible?

Closing the R&D building may be more symbolic than another tangible step in the exodus already underway, says a retired SPEEA member. (SPEEA is Boeing’s engineer’s union.)

“It was an interesting but not unexpected event.  Remember, Boeing closed its Anacortes (WA) R&D facility with no fanfare a few years ago,” the SPEEA member said. “They spent $2bn in that warehouse.”

From the projected high of 900 employees assigned to the Boeing Field center, there were fewer than 30 there when the closing news emerged.

“Decommissioning the place is probably an acknowledgement that the point of vastly diminishing returns in composites processing was reached long ago,” the SPEEA engineer told me.

Amazon overtakes Boeing

The news that Amazon overtook Boeing as Washington’s largest employer shouldn’t come as a surprise. It probably was going to happen even without the COVID-induced crisis at Boeing. But that said, the state had its head in the sand about the long-term presence of Boeing in Washington irrespective of COVID.

Boeing’s product strategy needs a generational overhaul. The 777X’s future was bleak before COVID. Changing market conditions undermined the business case pre-COVID. The 777X was launched in 2013. Since then, the success of Boeing 787 and Airbus A350 in opening new routes fragmented the hub-focus needed by the 777-9 to fill its seats. Airbus launched the A330neo. While this model hasn’t sold well and its skyline was weak even pre-COVID, it nevertheless nibbled at the fragmentation.

The Boeing 737-8 can fly thin trans-Atlantic routes up to eight hours. The Airbus A321LR/XLR can fly up to 10 hours. These also further fragment routes.

Some orders for the 777X were canceled even pre-COVID. Post-COVID, more cancellations are likely.

The 737 product line is weaker than the competing Airbus A320 family. There are more than 1,000 MAX orders that were canceled or reclassified as iffy since the grounding. (Not all were directly due to the grounding; some were because of failing carriers.)

Boeing needs to replace the 737. Washington is probably not high on the list as the final assembly site when this comes.

Looking beyond Boeing

More than 10 years ago, consulting to the state Department of Commerce, I urged the state to prepare for this day. Washington, I told Commerce in a study, needed to look beyond Boeing. It needed to attract and create other aerospace jobs and industries. Washington needed to beef up training for engineers. The 20-year need for new pilots and mechanics worldwide needed new training sites.

The state needed to look beyond its infatuation with brick-and-mortar factories. Washington could establish an Embry-Riddle-style aerospace training center, expanding what was then an annex of Embry.

Aggressively pursuing expanding business for the supply chain was recommended. There has been some success in this area.

At the time, Boeing and EADS (the name of Airbus’ parent then) had cybersecurity units. I recommended that Washington promote a cybersecurity center, supporting the aerospace companies or serving them as well as governments. The electrical grid could someday become a target of cyberattacks.

Moses Lake could become an airliner recycling center.

Many of the recommendations were ignored. The state’s focus on brick-and-mortar continued unchecked.

The state did make some progress in training. As LNA’s Bryan Corliss pointed out, the state expanded touch-labor training. But it failed to focus on engineering training. The state continues to under fund its aerospace office.

Boeing’s exodus

After Boeing announced the 787 production would be consolidated in Charleston, Gov. Jay Inslee had a temper tantrum criticizing Boeing. Inslee declared Boeing couldn’t (not wouldn’t, but “couldn’t”) move 777 and 737 production out of state.

I wrote:

  • Nothing is stopping Boeing from moving engineering jobs out of state. It’s been doing that. It can continue to do so.
  • Boeing could relocate its facilities at Moses Lake out of state.
  • What’s to say Boeing doesn’t relocate Insitu, its UAV company in Bingen (WA), across the Columbia River to Oregon or elsewhere?
  • More to the point, who says the headquarters for Boeing Commercial Airplanes must remain in Renton at its huge Longacres campus? Administration and sales don’t have to be in Puget Sound.

Boeing has since announced it’s closing and selling the Longacres BCA headquarters. Don’t be so sure Boeing couldn’t move some 737 production out of state.

737 Production

Pre-MAX grounding, Boeing produced 52 737s a month at Renton on three lines. Today, only one line is active. Boeing hopes to build 31/mo by early 2022. If Boeing wanted to move one or two lines out of state, now’s the time to do so while these are inactive.

I hasten to note that I’ve heard nothing to suggest this is contemplated. There also would be massive union issues. There would be major moving and set-up costs. Operating two production locations has ongoing costs.

But knowing Boeing as I do, I do not doubt that this option has been studied. Such a move would be about the long-term production strategy. The need for short-term cost savings may well preclude a move.

Establishing a 737 line in another location (presumably, non-union) would enable Boeing to create an experienced workforce in advance of the next new airplane, assembled at the new site.

LNA predicted in August that the 737 Renton plant might close in 2033. Some speculated that after Boeing announced in October the Everett 787 line will close this year, Boeing could open a 737 line in the 787 bay. Although final assembly at Everett ends in March, the bay will be used to fix technical issues on the 787 that discovered late last year. Boeing Global Services also is pondering some use for the bay.

Washington needs to consider a future with Boeing at least having a much, much smaller footprint here. It also needs to consider what happens if Boeing picks up lock, stock and barrel.

Contingency plans must be in place. Handwringing, shock and dismay after the fact won’t be productive.

Neither will temper tantrums.

114 Comments on “Pontifications: Boeing’s exodus from Puget Sound

  1. Informative about Boeing’s future

    Would it be possible to contribute an analysis of the current financial situation and prospects, particularly with a view to one or two new plane programs you have said is required to ‘re-launch’ Boeing, even to secure it’s medium term survival

    • Off topic but of extreme important is the loss of a 737-500 in Indonesia.

      Wreak has been located ans supposedly black box pings heard.

      This is not a sky is falling 737 MAX story, a tragedy for the 62 aboard and family and waiting for information as to a cause.

        • I just saw on the news that, on the basis of the relative proximity of pieces of debris (confined debris field), experts don’t think that the plane disintegrated at altitude. But that doesn’t rule out a midair explosion, e.g of an engine.

        • A CNN latest said no scattered debris field indicating the plane was intact when it hit the water.

        • On wikipedia are curves for altitude and speed.
          First half of the fall speed decreased from 290 to 120 kts, then second half increased from 120 to 350 kts.

        • Oh dear oh dear. Can anyone come forward to explain the good, the bad of Wikipedia and the proper way to use it??

          • To use Wikipedia for more than just clues to a subject you have to be good at critical reading and checking other sources.

            Wikipedia has serious problems with political subjects, such as climate catastrophism. It finally blocked one scummy who kept reverting from corrected text to his agenda.

        • The flight data recorder was recovered and handed over to the Indonesian investigators. We should have more information soon, and a better idea of what may have happened.

          • AvHerald.com is a good source of real news on crashes, but Comments are cluttered with speculators about technical matters.

            (Yes Scott, worse than Leeham News.

  2. “Boeing needs to replace the 737. ”

    Agree, but it takes a very long time for many to accept the 737 isn’t going to hold up 2020-2030.

    A replacement, in my opinion, should be up to 10% more fuel efficient/seat/nm than the NEO’s today.

    For Washington to play a role here, developing a very flexible, savvy and lean production line could be the way ahead. The old taxcuts – job security model could be in the shredder.

    Not having co-production & assembly in Asia / Europe has become a very narrow band revisonst vision.

    I think looking ahead / blank sheet is the way forward. Not trying to restore the good old past, when competition was weak & DoD payed many bills.

    • Is getting 10% improvement over neo is even possible with the current generation of engines? I guess Boeing could go for all-composite construction and hope weight saving delivers the efficiency but this would come with a significant price tag for both Boeing (probably over $10 billion for a company with $60 billion in debt and negative equity) and for customers. Airbus could counter that with A320 rewing which would be worse, but not significantly so but much cheaper earlier, and part of A320 family.

      • No composites for composites sake. If advanced Alu alloys and production technology is better for some assemblies, it is. Specially if it’s cheaper and easier for operators.

        A 10% improvement could come out of focus: Reduced, speed, range, payload, but quiet, silent, fuel efficient, very high BPR, props?

        • That sounds more like requirements for a regional jet than 737 successor. It would allow A321LR/XLR free reign in the middle of market.
          Also ‘props’ and ‘silent’ in the same sentence? Very high BPR – everybody is doing it already, going even higher would again require a new engine generation.

        • OEW: 36t OEW,
          Range 2500NM,
          Stretched variant: 180 passengers.
          Max cruise: M .8
          Engines BPR: 14:1.
          -> 10% more fuel efficient than A320NEO.

          SWA, UA would order them from the drawing board, nobody cares if you prefer to call it a regional or can’t do transcon. Look where the bulk of flights is & there are bigger aircraft everywhere.

          • MAX-8 can do 2500nm with 189pax (47.09t OEW from ET302).
            Will be impossible to get better OEW than A220-300 with 37.08t, especially with bigger engines.

            Props would be the only chance to do some damage. Smaller Embraer would be there too and smaller Airbus with LH2 and fuel cells.
            Unbelievable Chinese and Russians didn’t choose props.

        • Sorry, no alu alloys, need to drill and fill Its time to move away from WWII technology (no more back to the future) Time to retire Rosie the riveter! (e.g. 737 fuselage has 450,000 drills and fills)

      • As regards “all composite”, it will be important to learn more about those recently discovered fuselage cracks in the Qatar A350: if that turns out to be an intrinsic materials/technology-related issue, then composite fuselages may run into big trouble…apart from the issues that they already have vis-à-vis lightning damage. Plus, I’ve never seen any long-term analyses of cosmic ray damage to composite fuselages.

    • Tesla open FAL in China and EU to produce complete cars. In aerospace P&W is pretty successful in setting up new partners for local production and MRO and might hit jackpot if their PW1135G engine evolves as expected for the A321LR/ULR with EU funded MTU parts.
      Boeing needs to hurry up and can comeback with a robotic built 787-type narrowbody powered by derivative of current engines with 2-4″ bigger fans. The riviting will greatly be reduced in Washington and Boeings touch labour force will shink to a new plateau with the FAL’s snapping together fully equipped modules/sections will be located were the major customers are.

      • You are right on the spot with your FAL snapping together especially if Boeing goes with new single aisle aircraft with thermoplastic fuselage and wing You don’t need to drill and fill 450,000 holes in 737 fuselage like Spirit Aero does.
        The single aisle aircraft program will have global approach with 20-30 year view. Several FAL sites, one in US, then more in China, Southeast Asia. Wings will be built in the FAL location Does this sound familiar? It should, Airbus already does this for the A 320 in China for market access

    • Government is not the way to be efficient – history proves that.

      Boeing, and some days the IAM, have done much to streamline production in Renton and Everett. Unfortunately the architects of changes in Renton left the company.

      One of the problems is people who only pitch a narrow view of life, like the IAM and many bureaucrats – and pontificators about developing new airplanes..

      • Caught in Dogma, are you?

        you forgot to mention the primary culprit : management with barely a 3 month horizon on how to move money to shareholders ( with a massive leak to their own pockets ).

        On average corporations are even less efficient in providing services than governments are. What corporations tend to be good at is moving public money into private coffers.
        ( health services privatization and integral loss of capabilities exposed by CoVid19 pandemic comes to mind.)

    • “it takes a very long time for many to accept the 737 isn’t going to hold up 2020-2030.”

      Perhaps you mean ‘beyond’, given that we are now into the year 2021 and 737MAX are returning to service.

      Yes, we’ll see how further orders come, but with the collateral damage of government action in the panicdemic the future is even more difficult to predict.

      Certainly Boeing should be using a few pennies to do parametric studies and work on technology. (And note Boeing took the production break in Renton to change some things for efficiency.)

      I do mutter at vague terms like ‘middle of the market’, which from one person in this thread seems to mean range whereas to others it means capacity (as in 757-200 and 767-200 and 787).

  3. Relocating a 737 line out of WA doesn’t, to me, make any sense. If relocate to somewhere with no prior on this type of manufacturing BCA woud simply be nuts. If it does have prior then all the new workforce would learn is BCA’s current (ie bad) company culture and the processes involved in getting fundamentally ancient design out the door. All while BCA management shoots itself in the foot with unnecessary distraction and management overhead.

    When the replacement does arrive though surely St Louis should be front runner, for the substantial existing talent, Boeing culture, together with knowledge from up to date production, union conditions Boeing like and so on. Unless BCA can establish some of the new processes on sub assemblies etc in WA in advance of the new model.

    • Open up Long Beach and hire well paid staff from Lookhed Skunk works, JPL and Northrop? Tesla gets ahead not by paying the lowest salaries..

      • Union state, expensive state and worst expensive place, not going to happen

        ps: Only he Gold Plated Management is allowed expensive.

      • Tesla is moving HQ to Texas and Musk has already personally moved. This was triggered by CA refusal to allow the Fremont production line to operate. No reasonable manager would put any kind of production in CA.

    • Greenfield plant locations worked for several car companies.

      Leadership is key.

      Indeed, both Sony and Toyota are on public record as saying quality is better in its US plants than Japanese plants (albeit not a lot I suppose given high quality there) One manufacturer of computer disk drives kept producing in the SW US, it gave an example of flexibility: when a change was made, employees were brought in for Saturday morning go-through, with a bonus of lunch, then Monday morning started producing the new way. If producing outside of North America it would take several weeks to change. For years Hutchison Technologies was producing small parts for disk drives, had good values as BBandT.com does. (It was so good that an east Asian drive maker bought HT.) And BTW, a few years ago Ford’s highest quality assembly was from Mexico, whereas some of Chrysler’s parts were unsafe (and its dealer here did not care).

  4. Boeing is not run by the kind of people you’d want to be in charge of what ought to be one of America’s foremost engineering and technology organizations. They can’t be trusted to make the right decisions.

    That said, the Seattle area is now an IT/high tech haven, and has become hellishly expensive. On that basis, even the best management team would be seeking to reduce Boeing exposure to Puget Sound. That is to say, sure, Boeing is run by not-great people, but that doesn’t mean that moving out of the Seattle area is the wrong decision.

    My guess, however, is they’ll botch the execution because, well, have you seen the quality of the decisions coming out of Boeing in the last decade or two?

    • While that is true, contrary to Scotts take, Western Washington is a fantastic place.

      Moses Lake would have been a great place to setup the 787 line. Lots of space (unlimited) used extensively for testing and other ops (Spacejet at one time) as well as training.

      Many surrounding comm unites per Ephrata, Spokane and the Peluse (sp?) Tri Citites.

      Unlimited place for people to live in whatever general type area that suited them. Fantastic power rates in the right districts.

      • Palouse is to the east of the Tri-Cities, contains Washington State University which feeds graduates into the Puget Sound area.

        Commuting from the places you mention, and Ellensberg which is a nice college town just off I-90 east of the passes, is a hike to Moses Lake in winter.

        Moses Lake has foreign airlines training regularly, though the SW US may be better for flight testing.

  5. Go back 40+ years and Washington State created an office to seek different businesses to change employment in the State from being so heavily dominated by Boeing. It took a while, but (thanks in large part to Boeing itself) it worked. Step One moving hq to Chicago.

  6. R&D is a big move, you keep fragmenting the very pieces that need to talk to each other.

    And they cold re-locate Renton to Everett and sell off Renton. That is a horribly crowed location and small airport to start with and I marvel they can get a plane out the end of and onto a runway. That includes all the surrounding office buildings and property.

    Easily done one line at a time now. Sell of Renton, that is some huge bucks in extremely valuable real estate.

    That they won’t do it tells you exactly where Boeing is going (someplace else)

    • Uh, TW, why move out of Renton when its current model in production has a relatively limited future and Boeing does not know what its new project will be?

      Savings of consolidation has been floated as a reason, if space is available in Everett.

      One factor not to overlook is the P-8 warplane line, albeit much lower production rate than it hopes to get back to for 737MAX. The P-8 is an armed surveillance airplane used by USN and foreign militaries, it has cousins purchased by militaries for other uses.

      The P-8 illustrates benefits of competition in the face of botches. USN got fed up with Lockheed’s work developing an advanced version of the P-3 (modified Electra airliner) so cancelled the contract and instead bought Boeing’s P-8).

      • As noted, that Renton property is worth huge bucks.

        Vast excess space at Everttt that is giving no return.

        So, sell off Renton, its nothing to move the assembly line itself, its just a building.

        Some of the build items ? That would be harder of course.

        I think its worth exploring. Charleston cost them what? 4 billion plus?

    • No, but Amazon’s HQ, mgmt, engineering and technical employees make beaucoup bucks and my guess is the Amazon Seattle-area payroll dwarfs that of the Boeing. And you could probably throw Boeing’s Chicago HQ people in as well and it would still be true.

    • In Seattle, Amazon occupies 40 buildings, with a headcount over 40,000 and fights with Starbucks, Google and Facebook to fill openings.
      Go figure.

    • Amazon’s packaging and shipment is mostly done elsewhere I believe, there is some in the PS area based on my experience with receiving goods. I predict Amazon packaging operations will increasingly be near shipping hubs, which for air include Wilmington OH where warehouses were increasingly being built close to ABX’ courier operation, but likely regional centres for ground operations. Denver is in the center of the US. (ABX, Fedex, and UPS all set up air operations in the OH-TN corridor because a huge proportion of the US population was there. Even though ABX was headquartered in the PS area. UPS was long established somewhere before it woke up to the air courier business that Fred Smith pioneered despite naysayers.)

      And note Amacrick’s server business facilities are probably located where land and power are cheap but with consideration of communication lines to user locations.

  7. I have a question regarding QC/FOD:
    Qatar Airways (along with others?) was so dissatisfied with the 787 quality issues in Charleston that it insisted on only taking airframes coming out of WA. With that option gone, what recourse does a customer have when it has this type of issue? Does it just keep on refusing an airframe during the customer acceptance inspection, eventually forcing its will upon Boeing? Or is there some sort of “reasonableness clause” involved that forces the customer to concede at a given juncture? For example, does there come a point where mediation kicks in?

    • I think Qatar only refused to take 787 from Charleston in the beginning, later Qatar took them but they checked every inch.

      Time will tell if Boeing can fix the 787 issues. I’m sure many airlines especially Qatar are sick of Boeing. Emirates might not even want to change to 787 anymore, they could wait it out.

    • “what recourse does a customer have when it has this type of issue? ”

      Buy from Airbus?
      None of the 4 FAL sites report issues.

      • Yes, that’s an obvious option 😏
        But a little late for someone who is already taking delivery of a Boeing from Charleston.

  8. Washington labor unions, and it’s governance is going to ensure the departure of Boeing, but it’s funny to read the IAM751-paid-for Aboulafia puff piece about how Boeing needs to build a future aircraft in WA. Also, lamentations by leeham that leftist WA politicians didn’t listen to them.

    Shocker, the flip on the need to keep the world closed is now in full swing after the ‘election’ so celebrated on these pages. A moral victory, sure, but let’s see what really happens to workers over the next couple of years as ‘normalcy’ in the order is restored.

    https://twitter.com/nygovcuomo/status/1348673192609591296?s=21

    • This is what happens when ‘freedom loving non unionists’ work on your 787s

      From 2014 on the fuselage sections arriving from Charleston
      “Coaxial and fiber optic cables used for radio communications and data transmission are missing from the mid-fuselage section, which is much less complete than the corresponding sections on the two prior 787-9 models”
      “It turned out that six wires in a bundle of about 50 in the mid-fuselage were not connected, even though the paperwork from Charleston showed the work complete.’
      ‘…..on a 787-8 destined for Aeromexico, an electronics unit was damaged and had to be replaced after installation in Everett because Charleston mechanics had inadvertently left the plastic caps on some connectors — an issue that on several previous occasions had been reported back to South Carolina”

      Bigger bonuses
      “Also last week, Boeing awarded a larger percentage annual bonus to the Charleston workforce than to the Puget Sound area workforce.[who have to fix the problems]

      “Several workers said that one plane on the line today has nearly 2,000 incomplete jobs — including wiring and hydraulics — that were supposed to have been done in the Charleston plant but were not.”

      The core of the problem
      “The Charleston engineer said management is scrambling to find 300 to 400 contractors in addition to its pipeline of local direct hires.
      He said hiring temporary contract labor from across the nation is necessary because there just isn’t enough skilled talent available locally in South Carolina.”
      Freedom to hire contract labour from wherever and pay bigger bonuses
      https://www.seattletimes.com/business/787-assembly-problems-in-charleston-drag-on-everett/

      Similar story up to this year , so 6 years meant it wasnt solved under the ‘contract hire’ employee method.
      Due to the 787-10 only possible to be built in Charleston, they are ‘rewarded’ with the entire 787 program FAL.

      • That list is depressing and alarming.
        I thought the Charleston issues were limited to FOD and some tolerance issues, but this defies belief. Unfathomable that all 787 manufacture is now being entrusted to apparent Neanderthals.

      • >CBC:
        Boeing staff falsified records for a 787 jet built for Air Canada which developed a fuel leak ten months into service in 2015.

        In a statement to CBC News, Boeing said it self-disclosed the problem to the U.S. Federal Aviation Administration after Air Canada notified them of the fuel leak.

        The records stated that manufacturing work had been completed when it had not.

        Boeing said an audit concluded it was an isolated event and “immediate corrective action was initiated for both the Boeing mechanic and the Boeing inspector involved.”

        >NYT:
        Claims of Shoddy Production Draw Scrutiny to a Second Boeing Jet

        Workers at a 787 Dreamliner plant in South Carolina have complained of defective manufacturing, debris left on planes and pressure to not report violations.

  9. This sure point’s out in glaring fashion how the past three decades’ Boeing CEOs knew how to make the stock go way-way up and way-way down. Wow. They got to name Business Schools after these fellows. They must have read the Shock Doctrine! I’m not going to go out of my way to fly in a plane designed by this leadership and built by scabs! I’d fly in a Max any day. Look at the new way they decided to go with the Dreamliner.

  10. “It was an interesting but not unexpected event. Remember, Boeing closed its Anacortes (WA) R&D facility with no fanfare a few years ago,” the SPEEA member said. “They spent $2bn in that warehouse.”

    How long was this facility open, how much staff, and what did they spend that much money on? All I ever heard were reports of an auto-riveting experiment.

    • It was a testbed for fuselage assembly techniques. possibly related to the 777X robotic assembly that didn’t pan out.

      Boeing bought the building (former marine storage warehouse) in 2013, and employed about 25 people there.

      The $2B, if it is true, must have been for the tooling, not for the facilities. Probably reused elsewhere at Being when the building closed.

      While building closures likely reflect some scaling back of programs, they result in relocation, not in the programs stopping altogether.

      • Lets see, it did not work out and they used the tooling elsewhere.

        Maybe Airbus bought it and used it on the A350!

        ironic fit right in with so much else that “has not worked out”

        • The other way round. Airbus designed and produced automated fuselage panel joins and barrel sections before the first A350 rollout back in 2013.
          The 777X wasnt announced till then and they reckoned they would have to compete on automated assembly , but not so easy for existing metal designs. The process worked but apparently the ‘rework’ was too high and couldnt be reduced that much.
          https://leehamnews.com/2019/11/18/pontifications-a-new-setback-for-boeing/
          “FAUB, or a system very similar, is used by Airbus and other aerospace companies. It works for them, says Jessica Kinman, a senior manager for Dassault Systemes.”

        • ” … it did not work out and they used the tooling elsewhere.”

          Sold for scrap and recycled somewhere?? 🙂

        • Point being that the facility was opened for a specific research purpose and program, and was closed when it ended. The program was estimated to take one or two years in 2013. So more or less an expected event for the building to close.

          And in response to the usual hatred and ridicule from TW and Pedro (Scott, if you’re working on this, please work faster), the tooling was moved to Everett and became part of the FAUB system, that was used for 3 or 4 years.

          As Duke noted, that system resulted in higher rates of rework than was possible with lesser automation. The robotic system was designed and built by KUKA in Germany, with the goal of being able to handle every size and shape of fastener that was needed as the 4 coordinated robots traversed the fuselage (2 inside, 2 outside). But in practice, precision was a function of the fastener.

          This is the same problem Tesla had with initial fully automated assembly of the Model 3. The solution there, as at Boeing, was to relegate some high-precision tasks to workers.

          The current fuselage assembly is still automated and innovative, and retains many elements of FAUB, but a different robot built by ElcctroImpact in Everett, now traverses the outside to drill, insert and seal, while workers now finish the fasteners from inside. Boeing noted there was no change in total workforce.

          The Airbus fuselage lines also use the ElecrtroImpact system, in addition to other robots at other stages of assembly. Boeing also uses different automated methods for those other stages.

          • Stop the spin.

            Seattle Times:
            What Boeing will certainly lose by parceling out the ADC work is a centralized location where the top machinists and engineers inside Commercial Airplanes work together on innovative hands-on technology.

            That’s what Boeing envisioned in 2010, when, after the outsourcing of 787 production work to partners across the globe had turned into a disaster, Boeing announced a course reversal: a plan to expand the Seattle ADC to employ up to 900 of its highest skilled workers and bolster its internal manufacturing capabilities. […]

            Boeing’s then-spokeswoman Cris McHugh called the plan “a reflection of Boeing’s long-term commitment to the Puget Sound region.”

            “We are investing in both our people and in our infrastructure and assets for the future,” she said.

          • Pedro, the ADC facility opened to develop and build composites for defense applications (B-2, X-32). It was then used for commercial applications of composite materials (787 and 777x). Now it will be used for defense/space applications again, although unspecified.

            The commercial composites work had been reduced to 30 people, as the development activity has been reduced and shifted elsewhere. There is not a compelling reason to sustain it at that facility at present.

            As other publications have noted, composites are now considered mainstream rather than exotic or developmental. Boeing has other facilities and suppliers that routinely produce composite materials and parts. They have capability and facilities elsewhere now to continue research and development.

          • “This is the same problem Tesla had with initial fully automated assembly of the Model 3. The solution there, as at Boeing, was to relegate some high-precision tasks to workers.”

            Look into Volkswagen Halle 54 robotic manufacture ( 1983).

            Boeing wants to replace workers.
            Other manufacturers go for assisting their workforce with robots. ( the lesson taken from that VW test balloon.)

        • You may be confusing various items of reusable equipment, and that some of the technology I being used in 777 assembly if I understand correctly, with the specific tool that did not work out. Boeing tried long, which does not fit some people’s narratives herein.

          • It actually does.

            They don’t change their mind wrong or right (and when was the last time they were right)

            Its called arrogance and refusal to admit you screwed up.

    • They spent like four years to mature the FAUB (or realize it’s a failure, to be exact), endless hours of testing, debug, production snafu, incomplete jobs and traveled work, an expensive lesson.

      • Pedro, they tried, which is what pontificators want them to do with the far larger investment of a new airplane design.

        Note that Boeing is using some related technology in production today.

  11. Maybe its time for Boeing to go private with Tesla founder Elon Musk leading a group investors With his vision he can save the company from itself Boeing is still trying to sell a 1965 Ford Mustang with a new engine (e.g. 737) instead of developing Telsa All Electric Car (e.g. single aisle thermoplastic fuselage and wing with hybrid engine)

    • I think Musk vision is a bit clouded (THC does that)

      As much as I love Space X and what they did the guy is a bit of a lunatic

    • Tesla/Musk has the money to be able to invest in new products.
      Boeing is technically insolvent.

      Apart from that, I agree with TW’s comment: Tesla’s success is 10% tangible achievement and 90% hype and hot air. Its stock valuation is due to blind investment by “yups” who don’t know what a balance sheet is, but instead “believe in the vision” of “guru Musk”. Apart from that, it’s just a regular electric car company that has the advantage of having a particular clique of loyal customers.
      In contrast, SpaceX is a magnificent contribution to space technology.

      I doubt Musk would be interested in aviation, because it would conflict with the hype of his hyperloop project (no pun intended). And yet, both aviation and the hyperloop seek to propel tubular vehicles at high speed through a low-pressure environment…but aviation has the advantage of not-requiring route-specific track infrastructure on the ground.

      • @Bryce

        I am bemused by all the discussions of new plane projects, composite this, new fabs and so on

        As you say: BA is broke

        Where is the money going to come from: barely will BA survive in current market, handouts from DoD maybe

        ?

        • Note that technology has to be kept separate.

          For the 787 Boeing redid some composite structures work from B-2 days, to make sure that export of technology rules would not be applied, even though it was by then old technology. Rules include EAR/ITAR rules which are a dog’s breakfast, so detailed that food mixing equipment is restricted because it could be used to mix rocket fuel. Administered by constipated bureaucrats IME.

        • I suspect that some form of government assistance will probably be provided…if necessary using the argument that Boeing is a heavyweight employer and/or too important strategically. Remember how Obama saved the US auto industry in 2009.
          Or (less likely) perhaps Boeing will try to issue (convertible) bonds with an attractive coupon rate
          Even less likely: if Musk (or Besos, who knows?) thought that there was a future in hydrogen aircraft, some sort of acquisition of BCA might still be possible.

          • Boeing does not want public money that rightfully has conditions.

            They are not going to get any public money that does not have conditions now and we have seen how they respond.

            note how Biden was involved in the auto company bail out and the government got its money back on that.

            Nope, Boeing is, We do it right because we do it twice!

          • “Boeing does not want public money that rightfully has conditions.”

            I guess Corp. Boeing would welcome public money with no strings attached.

          • @Bryce

            Public money to relaunch the DoD side of BA, granted

            But why should gvmt relaunch BCA? Motor industry they may have thought was too many workers, too long a national pride, besides it was an actual industry as opposed to the stunted remainder

            US gvmt can not organise to onshore (as far as I know) vital medical manufacturing, reclaim anything of all the industrial base they offloaded to first Japan, then Sth K, then China, then…

            Let alone build up solar 5G or any essential future manufacture

            BA is pretty much all that is left of commercial plane making, they, the money and the power people, let the rest of the industry go

            Why save a company tarred and feathered by deceit and death

          • @ Gerrard
            In this sort of situation, you often hear reference to terms such as “flagship brand”, “national symbol”, etc. Some companies are just considered to be part of “the national DNA” (whatever that is).
            I imagine that the Brits would feel similarly about RollsRoyce or British Airways, and the Germans about Siemens or Mercedes, for example. Under such circumstances, when rationale takes a back seat to sentiment, anything is possible.
            Plus, Boeing is a big employer, and used to be an export champion in the US. And the yanks would shudder at the thought of conceding passenger airliner manufacturing defeat to the Europeans and Chinese if BCA were just allowed to bite the dust.
            On the other hand, sometimes big brands are just allowed to go belly-up. Enron comes to mind.
            Who knows what Biden will do?

          • The public money debate is an invention of the commenters here. It’s held up as a straw man in order to criticize Boeing, but there is no actual discussion of this in reality.

            This follows the pattern of many similar criticisms here. Post something that is speculation, or otherwise untrue, and then criticize it as if it were true. I described those methods earlier, and what they represent.

          • @ Rob
            Scott instructed you on Jan. 8 to cease and desist from resorting to conspiracy theory rhetoric. You are flagrantly ignoring this directive. In view of recent displays of insubordination in the US, and the current tense situation there, it is highly inappropriate for you to be engaging in such recalcitrant behavior on a public forum. Please show restraint and proper decorum!

      • Bryce: “Tesla/Musk has the money to be able to invest in new products.”

        Mebbe if he could cash in his inflated stock value.

        How much does his car production depend on subsidies, whether direct or indirect? Is he using new investor funds to finance production instead of new development? What is his debt? Etc.

    • Musk is good at identifying and stepping into technologies that are primed for advancement, then pushing them into commercialization. Web commerce, electric cars, reusable launch vehicles, low-altitude / low-latency satellite Internet (although with huge numbers of satellites required).

      In aviation, the manufacturers are already exploiting the available technologies to a large degree. So there is not the same potential for him to step in and rapidly advance. Hence his lack of interest in aviation.

      • Rob: Musk does like subsidies from taxpayers.

        That’s the business plan of his car manufacturing.

        Hey! go for hydrogen, Controolor Inslee would fall over himself rushing to subsidize that.

        • Elton is good at the so called Public Private partnership

          Space X was launched on that. It worked. Why I don’t know, good management sans Elton at a guess.

          Doing it from scratch like Tesla (well sort of, state tax breaks aside) and not so good.

          One of these days he will bring down the SEC on himself.

          I have not issue with Pot, but smoking it on a public show? Nutty

          • did they ever check Congress and Senat rest rooms for cocaine?

  12. Keep in mind that politicians, and corporate PR types, like buildings because sucker voters can grasp what they are.

    Note that taxpayer funded buildings have to be more open, unless they do military work, whereas private companies can work in secret by their own choicer – Boeing in Anacortes and Cessna for example. (Existence of the Mustang VLJ project was only revealed when it had to be towed out of a hanger in order to taxi test it.)

    Hopefully you learned a lesson from [edited as a violation of Reader Comment rules] WA ignoring you.

    Do read the dismal history of project failures, which with private ownership just cost shareholders but with government cost taxpayers.

    [Edited as a violation of Reader Comment rules.]

    • [Edited as irrelevant now because post referred to has been edited as a violation of Reader Comment rules.]

    • Puzzles me why Scott didn’t like my informative comments. Unfortunately I did not keep a copy as I often do. Perhaps my blunt objective observation of Governor Inslee’s behaviour.

      Another problem is voters do not understand economics, despite performing it most days of their life. They don’t understand the very deep thinking that successful businesses undertake before risking their capital. They don’t understand various factors involved.

      As for the flash of buildings, a huge problem is that politicians want to be seen ‘doing things’, hence WA governor Inslee’s lockdowns.

      I could quote many cases of government-propped up businesses that failed, such as Skeena Cellulose despite the management expertise of Donald Watson who had been president of Pacific Western Airlines.

      And there is the phenomenon of government-subsidization attracting a lower quality of business people, some just floating ideas to get money. One business/pleasure airplane project based off of a fighter airplane bounced around among SK, AB, and at least one place in the US.

      And the phenomenon of some potential investors wanting government involvement, because:
      – so government does not turn to working against them.
      – government investment is foolishly viewed as indication government has validated the project.
      Communist China companies/government wanted investment by the Canadian government before they’d invest in David Black’s advanced oil refinery project in Kitimat BC. (Whose market for refined products would be east Asia.) To his credit Black was upfront about not having funds to build the plant, he would spend much of his modest fortune to get the plans through the environmental approval state.

  13. “I recommended that Washington promote a cybersecurity center, supporting the aerospace companies or serving them as well as governments.”

    Inslee could use that – his government was scammed bigtime by Nigeria-based operatives.

    https://krebsonsecurity.com/2020/05/u-s-secret-service-massive-fraud-against-state-unemployment-insurance-programs/

    Note that some media report that ‘red flags’ were ignored. (Reminds me of Target Stores employees..)
    https://www.seattletimes.com/seattle-news/times-watchdog/how-missed-red-flags-helped-nigerian-fraud-ring-scattered-canary-bilk-washingtons-unemployment-system-amid-coronavirus-chaos/

    • “Inslee could use that – his government was scammed bigtime by Nigeria-based operatives.”

      Good point.

      • Thanks.

        Leadership is key, obviously lacking in Target Stores. Some ‘experts’ quoted in media say that WA state did not have the extra checks some other states implemented. Perhaps in part a failure to recognize higher risk due attractiveness of the volume of opportunity for fraud. Otherwise lagging in ensuring quality, whereas one state – I want to say Michigan, overhauled its election system before 2020. (But some counties in another state introduced a new computer system, albeit ‘testing’ them live in other elections like ‘primary’ which didn’t leave much time for fixes before November. On the 787 project, a key problem was a new avionics parameter database tool that had executives shaking their head saying “We said during the 777 program that we would never again develop a tool at the same time as an airplane – yet here we are again.

        (Interesting back story on a key cause of Target failing in Canada.
        To accommodate currency exchange needs, it decided to develop new software. But that project was late/rushed, data entry was rushed and sloppy.
        So it had considerable difficulty restocking shelves. Some warehouse workers took to opening boxes of ten of a product and cannibalizing them to have the 12 in a box that the computer system wanted to have before putting on shelf. That probably confused ‘management’ looking at product ordered versus shelved.
        Employee motivation for quality was lacking, consistent with ignoring security flags elsewhere. (The security problem was not specific to Canada.)
        Read speeches by Target executives and an experienced person will see a bureaucracy that is focussed on the wrong things.)

        • A common factor in security lapses as in quality of work is rushing.

          That was the case with Target Stores expansion into Canada, and perhaps with WA states payment processing due to pressure to get cheques/deposits out.

          (And people being aware helps, one bank in the Midwest wondered why it now had so many customers from WA state. Common but not usually in volume.)

    • Half of all Boeing orders in 2020 came in December. 90 orders in one month is actually better than expected, or than we have seen in awhile. And the article did not include the Alaska Airlines restructuring deal.

      The MAX cancellations are more or less expected. We will probably see more as airlines struggle in the pandemic. But we will likely see some orders as well.

      • 75 of those 90 orders are Ryan Air: probably a year end sale enabled by further rebates. looks good in the books though.

  14. What’s important is about price, not sales.

    The lower the price Boeing offers, the better the sales.

    In the early days of 787, Boeing overestimated its ability to trim production cost by outsourcing (sound familiar?? 🙂 ). As a result, Boeing tried to squeeze AB and gain market share by giving out massive discounts. Well it blew up in its face (after BCA’s Mullaly jumped ship in late 2006, nice timing!) and the rest, as they say, is history:

    in 2007 Boeing debuted an “hollow shell”* (without letting the world know, reminisces Potemkin Village in modern time) on July 8, 2007 and its CEO promised first flight in two months (what a joke – reminds me its CEO’s “optimistic” RTS of Max in 2019). Deferred cost of 787 didn’t peak until the end of 2015 at $32.4 billion, more than four years after delivery started.

    * https://www.aljazeera.com/economy/2014/9/10/the-fake-boeing-787-rollout

    • @Pedro

      As per recent reports it is said that BA is now losing money on the 787 program

      Plus 737s sold at cost or under

      Please comment

      Some asset sales are planned, but no bond offerings likely

      Apart from DoD where can BA earn any positive income

    • Clarification:
      The interior of the first 787 rolled out was empty because it would be used for flight test – that’s normal.

      The incomplete work was not so visible, development work was way behind.

      Boeing Commercial Airplanes had done what Boeing Military had warned them about right in Boeing’s newsletter – fool themselves, despite fancy program reviews. (Boeing Military had a hard lesson when an official of the launch customer for a 737-based surveillance airplane publicly criticized it, right in the city of its main customer (Washington DC).

      Reminds me of some managers at Sundstrand Data Control/AlliedSignal/Honeywell in Redmond WA who cancelled a long-planned big progress meeting for a data gathering system just weeks before it was scheduled. An executive of the launch customer called an executive at SDC and asked in quiet Asian fashion “what is going on?”. Heads rolled, publicly announced in the company.
      But a year or so later I was asked by the manager of a related group with different product to lie to a customer.
      Some days you have to repeat and repeat before people get the message.

Leave a Reply

Your email address will not be published. Required fields are marked *