Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
- SPEEA, Boeing at impasse over safety program, union says April 23, 2024
- Better transparency needed on Boeing’s 1Q earnings call April 22, 2024
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
Pontifications: From Just in Time to Just in Case
By Scott Hamilton
June 6, 2022, © Leeham News: Delivery delays by Airbus and Boeing are well-known in today’s recovering environment. The reasons vary from supply chain challenges affecting both companies to Boeing’s suspended deliveries of the 787 and slower-than-expected deliveries of the 737 MAX.
Airbus Canada delivered only five A220s in May vs 10 that were planned. Ten deliveries are planned this month but hitting this target (and 70 for the year) may be problematic. LNA previously detailed the delays for the A220. Airplanes are coming off the final assembly lines without completed cockpits. Embraer is affected by a shortage of seats. CFM’s delivery of LEAP engines for the A320neo and 737 MAX is delayed.
It’s not just the big-ticket items that are hurting the Big Three airframe manufacturers. It’s the little stuff. The supply chain is only as strong as its weakest link. Some smaller suppliers can’t get the products they need from their suppliers. And some, already facing workforce shortages before the COVID-19 pandemic, are short of workers today.
These issues are causing a shift in what used to be the mantra of Just in Time product deliveries.
Boeing is trying to help its supply chain on a number of levels, said Mike Nieman, Regional Director of Globalization & Supplier Development, during the I-90 Corridor Conference last week in Coeur D’Alene (ID). The group represents the aerospace industry from Spokane (WA) through Idaho and into Montana along the Interstate 90 highway corridor.
Supporting the chain
“Pre-COVID, there wasn’t a lot of inventory,” Nieman said. “It was managed inventory for Just in Time. That doesn’t work right now. You’ve got logistical problems and you’ve got supply chain problems. Now you’ve got to start thinking about keeping more inventories throughout all the tiers of our supply chains.”
But carrying a lot of inventory has its costs, he said. The costs of the inventories must go into the products for the changing business model. “How fast it’s changing is what we have to manage,” he said.
“We are focusing on managing raw materials, parts shortages, and talent shortages. This is a common problem with every company right now. We are paying close attention to our suppliers’ financial health at the individual company level. We are also working on providing them with resources if they need help.”
Nieman said that anything coming out of Asia right now is facing very profound logistical challenges. The problems go down into the sub-tiers. Boeing works with smaller suppliers that do not have a global supply chain strategy team.
“Toyota transitioned from Just in Time to Just in Case,” said Dan Janka, president of Mazak North America, another I-90 Corridor speaker.
Longer lead times
One supplier, which did not want to be named, said that it used to place orders with a company for plastics one month, counting on delivery the next. Now, there is a six-month wait. This supplier also has a workforce shortage of about 20. This company shifted to automation for much of its work long before COVID because of manpower shortages. The pandemic exacerbated the shortage. Boeing was able to backfill about half the jobs with workers from the 787 line, on which production crawled to a virtual halt during delivery suspension that began in October 2020.
But in a classic case of good news, bad news, these workers have been recalled to the 787 line in Charleston. It’s a good sign for restarting production and going forward with rework on an inventory of 115 aircraft. But it’s bad news for the supplier, which now faces an additional workforce crunch.
China’s impact
The on-again, off-again China policy of locking down entire cities if there is a COVID diagnosis—no matter how few people may have been infected—hurts the supply chain, Nieman said. China’s contributions to the global supply chain, while reasonably small in the world’s context, nevertheless hurts when Beijing shuts down the industry. Reliability also is shot with the erratic lockdowns.
(Beijing’s erratic policies also suppress airline recovery. Although CAAC, China’s regulator, recertified the 737 MAX last year, none of the 140 MAXes destined for China that are part of the legacy storage following the MAX grounding in 2019 has been delivered. These airplanes make up more than half of the legacy inventory.)
The parts shortages caused Boeing to pause production of the MAX for a short time this spring, the Wall Street Journal reported. It’s also delaying production ramp-up to a reliable 31 aircraft a month. This was supposed to be achieved “early” this year. By the end of this year, the rate was targeted for in the 40s per month. Now this goal is uncertain.
“We’re trying to drive complexity out of our supply chain right now,” Nieman said.
Good luck with that, a sentiment Airbus and Embraer can also appreciate.
Another contributing factor is port delays, which cause gluts in the worldwide shipping system.
Delays at Long Beach, CA, are STILL up to 3 weeks.
https://www.hillebrand.com/port-updates
How can Boeing recover if they can’t deliver new metal? It is like the bag of bad news is always fuller then expected…
JoneNL:
The short answer is going forward Boeing becomes a distant Number 2 in single aisle (competing against both the A220 and A320 series)
The 787 is a better than equal competitor in its segment. Boeing just needs to do a F variant there.
777X is really a wait and see, partly is there the market for a 747 class aircraft pax carry wise and what is the world economy doing?
The other big part of Boeing is defense and that is a mixed bag (a lot to do with the USAF herk and jerk on what aircraft they want). The KC-46A will get extended so that is some good news. The F-15EX is on the chopping block after being the way forward (sheese louise). The Apache days may be done due to lessons of Ukraine. Lift like Chinook have their place (not anywhere near a SAM area)
More “musical chairs” at BA:
“Boeing CCO departs: Ed Dandridge, senior vice-president and chief communications officer at Boeing, has left the aerospace manufacturer after less than two years”
https://www.prweek.com/article/1756650/boeing-cco-departs
Were any BA communications in the past 2 years in any way accurate?
Interesting to see the Boeing Comms guy leaving so quickly. Wonder if there’s a backstory.
Bill7:
Of course not. Nothing to see here, keep moving on. Calhoun will come out with a wonder non moonshot future aircraft that is better than sliced bread, any day now.
Speaking of just in time. NASA gives up on Boeing Starliner and awards 5 NEW contracts for SpaceX …
https://youtu.be/8TygWqyHd4M
Starliner was 3 years late with two serious failures prior to the launch last week.
SpaceX delivers on time and performs as designed
And Leeham thinks Boeing is ready to build a new clean sheet. I don’t think so.
Boeing messed up the Starliner big time.
That said the idea was to have a backup (to what is worth a good question as why do we need the Capsules if there is not space station?)
Maybe the Chinese will let us join up! (pun intended)
Going in we had no idea Space X would succeed though anything Boeing touches these days is a major question.
Boeing has a lot of potential but it has bad management and you can’t unlock the potential until the like of Calhoun are gone (another Calhoun corrects nothing)
-> “Airbus Canada delivered only five A220s in May vs 10 that were planned.”
Doubtful. I remember AB plans to raise production to six a month only by early 2022.
Boeing is going to build a NBA. THEY have to. And it will be a moonshot. The wait for the best New technology is exciting. Could be a open rotor, blended Wing. Something as innovative as the 707. Major parts of that went into 3 additional airframes: The 727, 737 and 757. I just hope they push the envelope enough and don’t cut any corners especially by outsourcing major components to India…
Boeing won’t be doing any new projects unless it starts generating sufficient income to cover its costs and pay off its crippling debt.
> Boeing is going to build a NBA. THEY have to. And it will be a moonshot. The wait for the best New technology is exciting. <
Mmm, I guess. Will the competition be sitting
still during all that time?
Absolutely not. Airbus will match them as they see fit. As far as funding it: from sales of the MAX, Dreamliner and Defense. Other funds could come from putting some of those bought back shares on the market, corporate bonds.,… When the NBA? It could be later than two years. I’m guessing the move of the corporate office to DC is related to influence over the FAA, and of course that has a direct bearing on the -7, -10, the 787 and Defense contracts; hence money coming into the company. It’s a Duopoly. China and Russian planes are not going to generate big numbers in sales. Especially, Russian with the Ukraine sanctions. We all like to take well deserved shots at Boeing’s last couple of decades’ blunders, but would Delta Airlines order a bunch of Max-10s if they didn’t think they could make money with them?
Make no mistake: DL, like FR, is bottom fishing only. 🙂
@ Pedro
Exactly — that’s why DL is is no hurry to seal a deal…it will just sit and wait until it gets the bargain of the century…on which BA will make little to no margin.
@ SamW
– BA can’t issue new bonds, as that would precipitate a credit rating downgrade to junk — which, in turn, would trigger supplemental interest payments on existing bonds.
– BA can’t issue new stock at the present price because it would cause excessive dilution of equity, with a major further decrease in the (already low) stock price. Scott highlighted this point just a few days ago.
– In the past few weeks, @Frank showed that — in its best year ever — defense only contributed 17% to BA’s income. It’s nowhere near that level at present, and BA’s defense division is beset with its own problems and costs.
– A low monthly production rate of 737s erodes margins — which are already very low on recently sold units.
– If/when 787 deliveries resume, one can question what margin will be made on them: the current inventory has to be re-worked at BA’s expense, and several customers have canceled orders and re-bought at lower prices.
– For both the 737 and 787: high inflation erodes the present-day margin on sales made years ago.
Any other miracle solutions?
-> “Other funds could come from putting some of those bought back shares on the market …”
Buy high … sell low??
How is it different from an equity raise (which Calhoun wowed not to do)?
> Absolutely not. Airbus will match them as they see fit. <
Airbus is several steps ahead of Boeing, and has negligible debt; and, I'm guessing,
substantially better relations with their
employees and suppliers.
Yes, it does not look good for Boeing. As far as DAL and Southwest trying to get equipment for nothing, that’s complicated. Would they go so far for a deal as to put a major suppliers on the financial ropes? Well, sure, but not all the time.,…
SamW:
I too would like to see Boeing succeed. But Calhoun is just the last in a long line of managers riding the horse into the ground.
Boeing needs to do a new aircraft, but I don’t believe Calhoun. He just wants to get his ill gotten millions and bail.
With the situation as it is, Calhoun might have missed his turn at the trough. The majority shareholders need to find the right people to put at the helm if they wish to save their investment. This company affects millions of people.
While BA is stuck in neutral, full steam ahead for AB.
-> Airbus recently unveiled an automated fuselage assembly line in Hamburg, Germany, that uses a variety of robots.
SamW:
Calhoun got his bonus for doing his job already.
And when was the last time you saw a CEO not get 10s of millions of dollars when they were sinking a company? As I recall Muilenburg walked away with 25 million
Sadly I don’t see anything that says this won’t be different. Note how Calhoun blames it all on others despite his being on the board or a lead player for the entire debacle.
Will they pick the next CEO in the same mold?
The whole board has to go
https://financialpost.com/pmn/business-pmn/air-lease-boss-sees-risk-to-boeing-777x-project-from-delays
It might be that the competition is in automation and cost not payload-range with a new generation structures, engines, cockpit… Hence a new electric Toyota Corolla vs. VW e-Golf and not the new Mercedes S-klasse with super everything doing the same mission of hauling you to work, shopping and minor leauge baseball.
Just a reminder that ‘moonshot’ means a project that has a high risk of failing completely. Where would it leave Boeing?
Yah I agree, https://www.abcdlist.nl/cseries/cseries.html shows 5 aircraft flight testing. Historically they are in that status 2-3 weeks implying 5 to be delivered this month. That is only 1, max 2 below the announced ramp.
@jbeeko, my man – they have 6 flight testing. There’s an A220-100 (ACJ TwoTwenty) LN 50066 testing, as well as 5 of the -300’s (2 for AC and one each for DAL, JetBlue & Breeze)
Side note: They have a bunch of -300’s coming up for ALC (starting with LN 55168) that were supposed to go to Azimuth in Russia. I wonder what’s going to happen to them? Lessor going to have to take them as white tails?
Right you are. I missed that -100.
I bet they can place those surplus -300’s no problem. Air Baltic was bragging they could lease their entire fleet if they were so inclined.
You know, I would tend to agree with you. I’m a big fan of the jet and know people up there working on it.
However, if you take a look at Peter’s list:
https://www.abcdlist.nl/cseries/cseries.html
Look at LN’s 55056, 57, 65, 66, 72 & 73. They all went to State Leasing, a Russian company, who was getting them on behalf of Redwings, a Russian Airline who didn’t take them, in 2019.
With the exception of one jet to Air Manas, they have stored the rest. All this time.
I know, they could be asking an arm and a leg – and it could be just that they are a$$holes over there at STLC.
I look at that and wonder why…
The LNA Twitter feed contains a reference to this illuminating article on the ongoing “trainwreck” KC-46A:
“KC-46 Tanker’s Recent “97 Percent” Milestone Isn’t The Whole Story
The Air Force says its KC-46s are getting closer to being fully operational, but that’s still years off and the jets have major limitations. ”
https://www.thedrive.com/the-war-zone/kc-46s-recent-97-percent-milestone-isnt-the-whole-story
You do realise thats normal in defence projects. It doesnt follow the commercial path at all ( and they are getting longer too)
The F35 was in development phases long after military service ( and is now starting a new development phase called Block 4)
The carrier USS Ford is still doing trails even after being delivered to Navy in 2017. Many many other examples.
If it’s “normal”, then why did the USAF call the KC-46A a lemon?
US DoD “normal” is not normal in any real-world
sense, whether it’s the Littoral Class Ship (useless dog), Zumwalt-Class “Destroyer” (same), Ford-Class Carrier (same), F-35 “fighter” (same).. shall I go on?
almost like it’s intentional: “we’ll fix it in Block 74, on the Twelth of Never..”; meanwhile, the money flows continually upward to the Very Few..
The F 35 has been called worse, the LCS ships are unfixable lemons, many projects are cancelled when they are late , over budget or worse don’t work. Some are all 3 and yet go into service.
https://www.nbcnews.com/think/amp/ncna1259781
The Air Force admits the F-35 fighter jet costs too much. So it wants to spend even more.
-> “With an estimated lifetime cost of $1.6 trillion, the F-35 Lightning II, conceived as a versatile, super stealthy next-generation fighter plane, is the most expensive weapon system ever built. When the program began way back in 1992, the F-35 *was supposed to be an affordable one-size-fits-all solution for the Air Force, Marine Corps and Navy*. It took until this February for the Air Force to publicly admit that the F-16 replacement *failed the affordability test*.
On Friday, Rep. Adam Smith of Washington state, the top Democrat on the House Armed Services Committee, verbalized the long-simmering frustration with the massive program’s costs and persistent technical problems when he said he wanted to “stop throwing money down that particular rathole. … Is there a way to not keep *spending that much money for such a low capability*?”
@ Pedro
Throwing good money after bad, in order to save face: there’s no plan B, and a plethora of inflated egos impedes an outright admission that the project is an utter failure.
The US aviation industry (commercial and defense) really is in an interesting state.
Not a good example. Lol.
Years late and billions more
https://www.dailypress.com/business/shipyards/dp-nw-ford-20210523-zegucgjzcjbenk2frqsurw46e4-story.html
The Covid lockdown policies were the greatest political blunder in history.
Someone in China commented “I’ve been locked down for 2 weeks in the last 2 years. The rest of the times, its “Virus, what virus?”
And then there is the US forecasting 100 million cases this fall, with about 20% of them turning to Long Covid.
China leaves this mess with a fully intact workforce.
China (together with India) is also benefitting from increasing purchases of discounted Russian oil, thanks to backfired western sanctions.
Talk about a windfall.
Hope springs eternal …
I fully expect some would try positive spinning, nonetheless.
-> Q: “Lots of 737-7 rolling out of final assembly now @jonostrower, do you think certification is that far out now that they seem to be ramping up production of them?
A: ‘Nope. I think certification on the Max 7 is extremely uncertain still and *Boeing has been throttling back it’s plans for -7 production for the remainder of the year. Southwest in a recent filing acknowledged the uncertainty of delivery timing*.”
https://mobile.twitter.com/jonostrower/status/1534031298695614464?cxt=HHwWgMCqkdXV_MkqAAAA
Interesting.
But I know what some on Capitol Hill would do to avoid BA from belly-up. 😒
https://mobile.twitter.com/dominicgates/status/1534169831343153153?cxt=HHwWgoCj5anVu8oqAAAA
Here’s the full Seattle Times article on this matter:
“As Boeing pushes for exemption for MAX 10, report to FAA critiques 737 crew-alerting system”
https://www.seattletimes.com/business/boeing-aerospace/as-boeing-pushes-for-exemption-for-max-10-report-to-faa-critiques-737-crew-alerting-system/
The referenced MITRE report identifies *5* 737 crashes in which it implicates the sub-standard 737 crew-alerting system.
It will be difficult for Congress to ignore that!
Excerpt from that excellent Dominic Gates article,
dated today:
“..The independent report from the MITRE Corp., a federally funded research organization, concludes that exemption from the crew-alerting standard contributed to the two MAX crashes that killed 346 people, and also influenced Boeing to suppress information about the new flight control software on the MAX — known as the Maneuvering Characteristics Augmentation System, or MCAS — that was the main cause of the crashes.
“The exception granted by the FAA for pilot alerting on the 737 MAX was a critical link not only in the chain of events that led to the accidents, but also in Boeing’s decision to limit the disclosure of MCAS,” the report states..”
A commenter here asked for evidence the other day on this topic. Here it is.. the onus is on Boeing to show the MAX’s safety; expecially
the insane, über-kludge MAX-10.
Bill7:
That gets into a complex issue that is not simply a crew alerting system.
And yes I fully agree Boeing hid the MCAS. But it also has to do with South West penalty clause on 1 million per aircraft subtractor if Boeing did not make it seamless.
Crew Alert adds more kludge on top of an old steam gauge system.
Better to make it a clean sweep aka the KC-46A and put in the 787 system. Note that the 767 F continues with the old steam gauge setup.
As we have seen with the A320 series, you still have crashes with bad piloting (which while not the main cause was a contributing cause to the MAX crashes).
If the goal is a modern functioning cockpit then the MAX should have been specified to do that.
So we let the MAX 7/8/9 go but insist on a different -10?
What really counts is teaching people to fly the plane and system they have. That includes an experienced First officer and serious upset training in unexpected circumstances as we saw with AF447 (granted the circumstances were not that unusual )
How about we address side sticks? Two people can input into the Airbus FBW and no indicators that is occurring (A220 is different still).
Or specify how an Auto Throttle works as a standard? Boeing is allowed to have a setup that has the FLCH Trap in it. I like Airbus setup.
So why are mfgs allowed to pick and choose those systems that are no different than the old systems were?
Things like throttle forward was power increase instead of some pulled and some pushed. Instrument layout was standardized for a scan that worked and was consistent.
Now your backup instruments are a small module between the pilots that are hard to see.
How about if your pitot tubes all ice up in cruise the aircraft puts out an alert rather than just dump the automation?
There is a lot nuts about the system and we are talking focus on individual trees vs dealing with the forest.
The US and the EU have made changes for upset training. Its not spread through the world.
What I saw with AF447 screamed stall all the way and how could 3 experience pilots ignore that? For a pilot that should be as basic as breathing.
The captain on AF447 is on the CVR saying that he only got one hour’s sleep the night before…might that have been a contributing factor?
Further: do you have to keep going back 13 years to find an AB crash to go on about? We certainly don’t have to go back that far to find multiple BA crashes to talk about. The MAX crashes alone killed 50% more people than AF447…
Bryce:
Airbus has not changed its system since the AF447 crash. The only change was when they acquired the A220 and that only applies to the A220. Unlike the MAX, Airbus still does not have synthetic third system that is fully independent of the freeze up prone pitot or the AOA (the 787 was the first to have it)
Unless Airbus changes their system, AF447 still applies and we continue to see crashes that no alert system changes. Pilots still have to know how to fly.
A significant part of a Private and Commercial pilots training involved stalls and unusual attitudes.
If you failed those you failed getting either one of those certificates.
I don’t see many pilots commenting. It brings reality to the discussion.
@TW
1445 A330s have been delivered…on average, one of them takes off or lands every 20 seconds.
Have they been dropping from the sky like stones in the 13 years since AF447?
No, they haven’t.
In contrast, the MITRE report cites five 737 crashes in which the inadequate 737 CAS played a role.
Notice a difference?
Transworld its basic rule of pilot task sharing , only ONE is flying the plane at a time. Should never have both with hands on side sticks at once. Any guidance is supposed to be verbal
It does seem to happen though and Airbus has a solution
‘To avoid both signals being added by the system,
a priority P/B is provided on each stick. By pressing
this button, a pilot may cancel the inputs of the
other pilot. ‘
Covered in more depth
https://safetyfirst.airbus.com/app/themes/mh_newsdesk/documents/archives/dual-side-stick-inputs.pdf
@TW
-> Unlike the MAX, Airbus still does not have synthetic third system that is fully independent of the freeze up prone pitot or the AOA
What?? When did BA add the “synthetic third system” to the MAX?
Back from the future in a DeLorean??
‘Once in the storm, the plane’s pitot tube, a critical piece of equipment that tells the pilot the aircraft’s air speed, failed, likely from ice crystals forming on it, according to BEA officials who inspected the wreckage. When the pitot tube fails, the Airbus’s automatic pilot system disengages, shifting control back to the pilot.’
So what say those who insist that 3 separate sensors for AOA or airpseed are required for safety in all modern airliners
https://abcnews.go.com/International/air-france-flight-447-investigation-pilots-properly-trained/story?id=16503005
@ DoU
Check out the difference between possibility and probability.
Every sensor added reduces the (cumulative) probability of a “false vote”; the possibility is still there, but it becomes more remote.
It wasn’t a false vote was it.
The result of an error just disconnected the autopilot but the pilots were in the dark as they didn’t what was happening.
Ahhhh, modern safe planes with 3 choices of sensors and those digital alphanumeric error displays
It’s always a vote when a processor consults multiple sensors.
A defective sensor produces a different value to a properly functioning sensor, and the processor has to decide how to deal with that discrepancy.
When there are only 2 sensors, there’s a hung vote and the processor can’t proceed — that’s what currently happens in MCAS.
Using 3, 5 or 7 sensors circumvents this problem.
I see ‘probablities of faults was raised in a comment.
Someone on Aviation Stack exchange did some probability calculations
Let’s have a look at probability calculation, and assume the fault probability of one sensor to be p = 0.1 % (per flight, or whatever you like to choose). The probability of the same sensor to work as expected is q = 1 − p = 99.9 %.
Two Sensors
The probability for
no fault: q2 ≈ 99.8 %
a discrepancy (1 fault): 2 p q ≈ 0.2 %
an undetected double fault: p2 = 10-6
Three Sensors
The probability for
no fault: q3 ≈ 99.7 %
1 recovered fault: 3 p q2 ≈ 0.3 %
undetected faults: 1 − q3 − 3 p q2 ≈ 3 · 10-6
The fault probability was assumed to be 0.1% which seems quite high but even for say 0.01% the results comparing the choices between 2 or 3 sensors doesnt make much difference as the magnitudes are still fairly similar
And of course putting in more sensors raises the probability of faults when the actual fault is undetected
The 737 Max doesnt uses its sensors in the same way compared to A320 where a vote discards the only incorrect one AND THEN CARRIES ON
Not sure why you needed “someone on Aviation Exchange stack” to do basic math for you.
Probabilities stack multiplicatively: if the probability of a sensor failing is 1/n, then the probability of two sensors being concurrently in a failed state is 1/n x 1/n = 1/n², etc. If n = 1000 (to use the example that you cite), the the probability of 2-sensor failure is one in a million, whereas the probability of three-sensor failure is one in a billion.
So the magnitudes certainly are not “fairly similar”.
@Bryce
It’s more like a distraction thrown up by our usual suspects:
1) MCAS should never be allowed to rely on a single sensor;
2) a faulty sensor was installed on the Lion Air 737 MAX before it crashed and FAA revoked the shop’s license after an investigation.
I suspect there is a lot more China production in the aerospace supply chains than we want to know. If Boeing buys ovens from a Seattle based, French owned OE, using parts from an established California manufacturer, that doesn’t mean its’ not a factory in China that is actually producing the parts.
Keesje:
All it takes is missing one item and you have a useless part.
As we are seeing with Chips, the US creates the software and equipment, but the Chips are made elsewhere including China.
We are all seeing basic stuff disappear from stores for a while. And that is US made groceries I follow as I am the main shopper.
The “software and equipment” also come from outside the US…
Remember the Apple II? How much it cost??
How many can afford an iPhone if it’s made in America only??
Assembly cost in China is just a fraction of the sale price of iphone in US. They are more expensive than most other phones anyway.
Theres the main chips from a fab plant plus lesser more mundane chips
The software and its development is not from China
Apples marketing costs are substantial as well
My newish dual Sim Nokia is maybe 1/4 the price of a higher spec iphone , yet the assembly cost is similar and it too is made in China of course
Apple just makes ridiculous high profits based on quality and volume
Same goes for airliners, not a lot of savings when you have the bare shell of say a fuselage section made in China ( now likely to include ‘stuffing’ again simple parts)
Lol. Once bitten, twice shy.
Those who know the least speak the loudest …
NYT: A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in USA’
https://www.nytimes.com/2019/01/28/technology/iphones-apple-china-made.html
Apple Computers Used to Be Built in the U.S. It Was a Mess.
Steve Jobs tried to create a manufacturing culture in Silicon Valley. As one former Apple engineer put it, “It wasn’t great for business.”
-> “We don’t have a manufacturing culture,” Mr. Gassée said of the nation’s high-technology heartland, “meaning the substrate, the schooling, the apprentices, the subcontractors.”
It took Mr. Jobs a bit longer to grasp that idea, however. In 1990, just a mile and half from where he had built the original Mac factory, he created another $10 million one to manufacture his Next Inc. personal workstation. Like the early Macintosh, however, he was never able to make flashy jet-black Next machines in quantities to support a Silicon Valley-based assembly operation.
That failure taught Mr. Jobs the lesson. He returned to Apple in 1997, and the next year, he hired Tim Cook as Apple’s senior vice president for worldwide operations. Mr. Cook had mastered the art of global manufacturing supply chains, first in IBM’s personal computer business and then at Compaq Computer.
https://www.nytimes.com/2018/12/15/business/apple-california-manufacturing-history.html
-> Not long after Silicon Valley emerged in the 1970s, labor-intensive assembly, such as the process of packaging semiconductor chips, was moved to Asia, to countries with progressively lower labor costs. That trend only accelerated as the company grew.
-> “When I started my career, all my flights were to Japan,” said Tony Fadell, one of the hardware designers of the iPod and iPhone at Apple. “Then all my flights went Korea, then Taiwan, then China.”
I, too, would like to know about this “synthetic third system.. on the MAX” that commenter
TransWorld has mentioned above.
It’s mandated by EASA and Transport Canada (because 3 sensor inputs is an international norm — except for the archaic MAX), but BA have been struggling to actually get it done. Why else do you think that certification of the MAX 10 is dragging on?
> ..but BA have been struggling to actually get it done. Why else do you think that certification of the MAX 10 is dragging on? <
Because they 1) haven't been trying (political "pull", pehaps), or 2) it can't readily be done on such a stone-age craft.
I'll assert again that Boeing won't be doing themselves or us any favors by
inroducing a "MAX-10", and will come
to regret it.
The three sensors are required because the FBW system is constantly comparing the 3 and the majority wins.
( Except in one crash where 2 were wrong and it ignored the correct one)
737 Max isnt FBW and the AOA arent primary sensors. The pilots are the ‘brains of the flight deck’
Should there be a 3rd pilot to check on decisions of only 2 ?
It’s standard practice in control theory not to rely on even sensor numbers, so as to avoid tiebreaks.
BA evidently missed out on that lesson.
The AOA isn’t a primary flight instrument on the 737 while it is so on a A320.
Did you read what happened on A330 and A320 flights when a single sensor iced up? Well they crashed of course, so how’s your theories?
“The AOA isn’t a primary flight instrument on the 737”
Sure it is…that’s why it crashed 2 MAXs, thanks to the infinite overriding authority of MCAS.
-> 737 Max isnt FBW and the AOA arent primary sensors.
Haha. Dr Spin???
What happened when MCAS took over because of a single faulty AOA?
Almost 400 were killed.
The MCAS was its own horror story of incompetence in development and certification.
Still doesnt make the AOA a primary flight sensor for 737 Max ( fixed MCAS) or NG before it
MCAS – even in the new version – takes autonomous pitch control action based on AOA input.
By definition, that makes the AOA a primary flight sensor.
Not in the sense you are thinking or the sensors used in a FBW plane where it can control the plane continuously
as Boeing puts it:
Measurements from two Angle of Attack (AOA) sensors will be compared.
Each sensor will submit its own data to the airplane’s flight control computer.
MCAS will only be activated if both sensors agree.
MCAS will only be activated once.
MCAS will never override the pilot’s ability to control the airplane using the control column alone.”
Compared to this flight that ended up in the drink:
‘But he said that faulty sensors essential for the plane’s computerised flying system might also be partly to blame for the crash.
Two of the three sensors were not workingand thus the excessive pitching “could not be corrected by the electronic brain of the aircraft,” he said.”
Doesnt seem the alphanumeric warning displays were a great saviour either
( link wasnt https so not included)
Ah…so you’re finally admitting that the AOA is a primary flight sensor on the 737.
That was a long process!
The MCAS is only for a very small set of circumstances and is an augmentation system not primary flight and technically just a part of the speed trim system
As was described by LNA it just gives a stable ‘control handling’ in unusual circumstances
https://leehamnews.com/2019/11/01/a-basic-mcas-system-was-installed-in-the-boeing-707-in-the-1960s/
But of course you have your own opinions, but as usual unsupported by any expert view
MCAS performs *autonomous* actions based on AoA input — irrespective of how “limited” those actions are supposed to be.
The AoA is therefore a primary flight instrument, since the aircraft uses its input to perform *autonomous* control actions, without pre-consulting the pilot.
No “expert views” necessary: this is a simple matter of definitions and basic control theory.
If its so basic how come theres no expert explanation
provided thats backing you for every day readers like me or even those users called ‘pilots’.
The reason for 3 sensors as used in the A320 is so the flight controls continue to operate through the fault.
For the revised MCAS system in 737 max , if there’s a fault it just doesnt operate at all.
The A350 has 4 AOA sensors, so surely the ‘outdated and known causes of crashes’ in the 3 sensor A320 should be changed to make it ‘modern’ as of course they play a far bigger role than the very limited instances of the 737 max
Seeing as MCAS was presumably put in for an actual reason — rather than just for decoration — its failure to do anything in the event of a sensor disagree contradicts its presumed necessity. EASA and Transport Canada seemingly find this contradiction to be unacceptable.
Not very good at logic, are you?
Ask the FAA on why MCAS was required as it was their certification rules Boeing was supposed to follow. ( Not that they did it responsibly)
EASA and Canada have re certified the MAx , but maybe you can explain that
https://www.canada.ca/en/transport-canada/news/2021/01/government-of-canada-introduces-additional-requirements-to-allow-for-the-return-to-service-of-the-boeing-737-max.html
Sigh.
EASA and Transport Canada have *conditionally* re-certified the MAX 8 and 9, but require them to be *retrofitted* with a third (synthetic) AoA sensor. The MAX-10 has to have this third sensor ab initio.
The FAA may be happy with “the pilot being the third sensor”, but other regulators — thankfully — are not. Perhaps those other regulators realize that the pilot isn’t always available to act as a third sensor, e.g. when a goose has just come through the front wind shield.
Sigh.
Wow. Pure alternate reality.
-> “Ask the FAA on why MCAS was required as it was their certification rules Boeing was supposed to follow.”
Did FAA require BA to add MCAS for certification?
Absolutely NOT.
Where is your evidence to the contrary??
What is widely reported:
“During MAX flight tests, Boeing discovered that the position and larger size of the engines tended to push the nose up during certain maneuvers. Engineers decided to use MCAS to counter that tendency, since major structural redesign would have been prohibitively expensive and time-consuming. Boeing’s goal was to have the MAX certified as another 737 version, which would appeal to airlines for the reduced cost of pilot training.”
To be clear: As far as I know, and in contradiction to the one claim above, there is no “synthetic third system” on extant Boeing 737MAXs.
Evidence to the contrary is welcome.
Business Insider: Breeze will fly its A220 on 17 transcontinental routes this summer
The A220 has proved an unlikely popular choice with airlines across the world. Boasting a range of 3,600 NM with a passenger capacity of up to 160, the jet has found itself implemented on several low-density, medium-haul routes, typically operated by its slightly larger A320 siblings, including airBaltic’s Riga to Dubai service (six hours and 45 minutes), Air Austral’s Chennai to Reunion (six hours and 10 minutes), and JetBlue’s New York to San Jose (six hours and 40 minutes) planned for launch in September.
https://simpleflying.com/airbaltic-welcomes-36th-airbus-a220-300-to-its-fleet/
Also this from AirBaltic’s CEO Martin Gauss:
“There’s a very significant demand for A220 aircraft, especially the -300 version. So I guess if we would try, we could lease out the whole of our fleet this year,” noted CEO Martin Gauss in a recent interview with Simple Flying. “The demand is not only coming from Europe. We have global demand for the aircraft, and [we are] working now on some of the winter leads in different continents.”
Being able to lease out aircraft during the slower winter months must give AirBaltic a nice the tail-wind.
Its the war not slower winter months! Tourist traffic to adjacent countries probably has gone through the floor and its cut of their routes to Belarus, Ukraine and Russia.
This is why they are thinking of leasing whole fleet for a year
Well over 80% of AirBaltic routes can be flown without going anywhere near Russia or Ukraine.
So it’s not “the war”.
https://www.airbaltic.com/en/destinations
And the tourists going into the region of conflict?
They share borders with Russia , as any schoolboy can tell you
https://eng.lsm.lv/article/economy/transport/airbaltic-sees-a-drop-in-flight-bookings-due-to-ukraine-war.a446897/
Sigh
You think tourists are afraid to go into the Baltic countries because they “share borders with Russia”?
And you think that residents of the Baltics are — for some reason — afraid to fly for a sun vacation to Spain or Italy?
Here are today’s departures from Riga airport. See…lots of activity:
https://www.airportia.com/latvia/riga-international-airport/departures/
More stunning logic!
Today begins week #2 of June. I’m guessing that those who called the first week of June for the resumption of 787 deliveries were a tad bit optimistic.
“Boeing Increasingly Confident With 787 Delivery Resumption”
https://simpleflying.com/boeing-confident-with-787-delivery-resumption/
Maybe Scott will start an online wager on this subject? 😉
One could start with simple a binary split: for example, those who think that deliveries will resume some time in 2022, and those who don’t.
Wagers should be based on *prognosis*…not just “optimism” as expressed by Calhoun.
Over/under of Oct 1, 2022.
Then odds on sometime in June. July. August. Sept. Oct. Nov. Dec.
Odd on sometime in 2023.
Odds on a restart in 2022 and a further stoppage in 2023.
Odds on when they get the inventory down to single digits. 2022 (huge longshot). 2023. 2024.
Call the bookies! Call the punters!
Frank:
I still have hopes. I think they are getting closer and some of the FAA verbiage is following the MAX curve as it were. IE not a complete turn down per the last submital but a clarification and maybe some detail missing.
I do think its more late July though.
Ha I’m more a contrarian especially when some possess nothing but wishful thinking. The bottom will come only if they capitulate.
Cried wolf the third time no one would believe your words. How many times we heard next month, next quarter blah blah blah? How much longer we have to take those words seriously??
“Boeing Increasingly Confident”, eh?
At a certain point one, begins to feel strung along by that moribund entity and its PR..
#showme
That word-salad from Boeing CEO Calhoun in
your link is sure cause for wonder- worth looking
at for the vacuousness, if nothing else.
Love the idea of placing bets on when Boeing 787
deliveries will resume, myself..
WizzAir continues to upsize A320 orders to larger A321 variants:
“Wizz Air has converted 21 Airbus A320neo commitments to the A321neo, a further shift of its single-aisle backlog towards the higher-capacity variant.”
https://www.flightglobal.com/airlines/wizz-continues-to-switch-airbus-commitments-to-a321neo/148916.article
Poor Michael O’Leary just has to stand and look on while his main competitors (WizzAir and Easyjet) avail of larger aircraft.
He can always get on the phone and scream at Boeing. I’m sure that they have a special WATTS line set up exclusively for him, that transfers him to a psychologist with an aerospace background, who can talk him off the ledge.
Mostly.
Mike: Why the f-cken hell won’t you meet my price!?
Psych: You’d like the sales team to offer you a good deal, wouldn’t you?
M: Yes! When will the Ten be certified??
P: You want the Max 10 certified for service in your fleet, don’t you?
M: Exactly! Look at Wizz, they’re getting bigger aircraft!!
P: You’d like to upguage your fleet, to meet the competition, right?
M: Precisely. We’re flying full aircraft now and I can sell more seats!!
P: You feel like your losing market share due to capacity constraints, yes?
M: Correct. Bigger planes allow us to fly more pax with less staff!!
P: Right – it’s a simple equation of doing the most with the least, isn’t it?
M: Finally, someone who understands! You should be CEO!!
P: Awwww, you’re too kind. But I’m going to make a call, as soon as I put down the phone with you and see if I can raise some hell.
M: Thank you. It’s a relief to talk to someone who understands.
P: It’s my pleasure
(click)
*Psychologist notes the call in her log book and presses the play button on the TV program that she’s been binge watching for the past week*
Very amusing 🙂
However, this is causing a headache for O’Leary: Easyjet/WizzAir can get 20% more passengers into an A321 than Ryanair can get into a 737.
And WizzAir’s planned AbuDhabi operations to central Asia are also something that Ryanair can’t compete with.
If when the MAX-10 gets axed, O’Leary will have to go on his knees to AB.
Wizz Air is getting 47 – A321NeoXLR’s.
“The A321XLR is the most cost efficient aircraft of its type and represents a significant opportunity for Wizz Air to further expand its network and connect points on the WIZZ map that are currently out of reach, given the enhanced range capability of the aircraft. Today, we are flying a number of 5-6 hour routes with great satisfaction to our customers, so the XLR will extend our outstanding value and service proposition on routes of 7-8 hours of flying.” – said József Váradi, Wizz Air’s Chief Executive Officer. “The inherent aircraft economics of the Airbus A321XLR will widen our competitive advantage for stimulating demand for air travel in Central and Eastern Europe and beyond while minimizing our environmental footprint. The A320neo family aircraft are game-changing aircraft that enhance Wizz Air’s low fare model and undisputed cost leadership in Europe.”
https://ir.q4europe.com/Solutions/WizzAir/2372/newsArticle.aspx?storyid=14351955
You don’t need an XLR to fly from London to Budapest. That’s overkill.
NYC is some 8 and a half hours away. They’re not thinking…
…are they?
Wizz might start to offer transatlantic services, but those routes already have heavy competition.
It might make more sense for them to fly Europe-Asia — where they wouldn’t have any other LCC competitors. They do, after all, have a new hub in Abu Dhabi…
@Bryce
Yah, I was just doing some reading;
Through their subs, Wizz Abu Dhabi and Wizz UK (based in Luton). They could make it a shorter hop across the pond from there. From Abu Dhabi they could reach Beijing and Shanghai…
Luton is cheaper to operate from, as well…
Very surprised that Boeing’s supply chain issues are surfacing only now!
Here below what i wrole in Leeham news more than one year ago:
“Supply chain problems will cost some cash to keep suppliers alive, and bring some trouble on assembly lines, with costly losses of efficiency. ”
More and more minor suppliers have been in survival mode for quite some time…
Yes, I remember that comment from you, flying frog, having agreed with it at the time.
Breaking News 2022: “Boeing notices Suppliers, and its dependency on Them!”
yeesh..
https://www.bostonglobe.com/2022/06/07/business/raytheon-move-its-global-headquarters-waltham-arlington-va/
“Boeing Can’t Find Enough Workers to Build the New Air Force One”
“Boeing is having trouble hiring qualified aircraft mechanics to build the new Air Force One as it competes in an ultra-competitive labor market, according to a new government report.
“It’s the latest setback for the planemaker as it tries to get the high-profile presidential plane effort back on track following other problems that have delayed the project at least two years.”
https://www.defenseone.com/business/2022/06/boeing-cant-find-enough-workers-build-new-air-force-one/367947/
The planes themselves have already been ‘built’!
They were white tails when bought by the USAF for updating and alterations by Boeing as lead contractor
Any way they are apparently 11 workers short according to article ….hehehe.
That will really hurt them !
Sigh: the AF1 planes are heavily modified versions of the standard 747-8…
Thats what I said.
‘ for updating and alterations by Boeing’
The airframes were built in 2016 and were flyable to the current location.
Anything after that is ‘modification’ not ‘built’
A dozen workers short as mentioned is laughable ‘problem’
“laughable ‘problem’ ”
The USAF won’t be laughing when the planes are delayed even further.
Nor will investors.
-> Any way they are apparently 11 workers short according to article ….hehehe.
How come last quarter BA announced they are losing over one billion for the AF1??
Can you explain???
“Hope” spins eternal.
In the world of alternate reality, losing over a billion and a delay of at least two years are just laughable problems!!!
-> “In 2018, Boeing (NYSE:BA) Co received a $3.9 billion contract to build two 747-8 aircraft for use as Air Force One by the U.S. president, due to be delivered by December 2024.
The Pentagon said this year that the planes are not likely to be delivered until 2026.”
A few yrs delay won’t hurt to much.
It’s not like the current ones are running out of hours/ cycles.
AF1 is captive, Boeing knows & priories resources..
Every delay makes it cost more to complete. A million here, a million there quickly adds up.
https://www.google.com/amp/s/ca.finance.yahoo.com/amphtml/news/labor-shortage-security-may-delay-231349012.html
Another Boeing/Bell MV-22 Osprey has gone down — this time in California, with 10 deaths.
It’s the second crash of this aircraft model in 2022, and the 8th since 2007.
https://www.aerotime.aero/articles/31253-mv-22-osprey-crashes-southern-california
Sad. It seems it’s been treated as if it happens all the time.
Bryce said: “..The AoA is therefore a primary flight instrument, since the aircraft uses its input to perform *autonomous* control actions, without pre-consulting the pilot..”
“It’s difficult to get a man to understand something when his salary depends on his not understanding it.”
-Upton Sinclair
😉
Some very interesting info from Spirit AeroSystems in this article:
“Spirit’s MAX inventory grows as Boeing suffers hiccups”
“CEO Tom Gentile told the UBS Global Industrials and Transportation Conference on June 8 that he has currently 85 to 90 completed frames in inventory at the Wichita plant as Spirit adjusts deliveries to Renton.”
“Deliveries of A320neo wing leading and trailing edge shipsets to Airbus continue at an unabated pace. Although the OEM is delivering fewer completed aircraft, Spirit still produces at high rates. “Airbus is building up its own buffer. They know they are heading toward a difficult time, they want to go to rate 75 in 2024. They are taking up the opportunity now to take up some of their buffers. They are puling from us, but they are all storing them at their sites.””
“Spirit will not produce more than twenty 787 units this year, Gentile said, with a return to pre-Covid levels of fourteen per month unlikely for the foreseeable future.”
https://airinsight.com/spirits-max-inventory-grows-as-boeing-suffers-hiccups/
More from that link (thanks):
“..Gentile revealed a few new details on the production quality issues with the 787. It’s known that there has been a problem with shimming in which shims between aft fuselage sections were of an incorrect size. “They discovered in some cases that too much pull-up force was used to join structures. Instead of using pull-up force, they should have used shims to close the gap. In the meantime, what happened is that non-conformances existed in how the plane was compared to the engineering specifications.”
In the nose Section 41 produced by Spirit, there are three or four areas that need rework before the aircraft can be delivered. Gentile said they are halfway through this rework now. The analyses of the production problem have been done and turned over to the FAA for review, but the agency is taking time to do this.'”
This is even more eye-opening:
“Growing the inventory doesn’t worry Gentile, especially as Boeing pays for it.”
So Spirit is making them, getting paid for them, but BA is not taking them.
“Boeing subsequently came ahead and said they wouldn’t go above 31, so we revised our forecast down to 315 for this year”, Gentile said”
Boeing is having a hard time getting Max’s delivered…
Yes, good points.
Boeing seems to be in an “interesting” situation, and maybe that explains their recent PR blitz. Contrast their lot with the facts reported for AB in the same article..
@ Frank
It will be the same if/when 787 deliveries resume — slower than slow.
No wonder BA can’t *afford* to increase production rate further.
Hedge fund bets against U.S. and European corp. bonds …
I wonder which co. are included?? 🤔
@Pedro & Bryce
There are so many strings to the delivery bow, it’s tough sometimes to determine what the hold up is:
1) Covid causing staffing issues (both at BA & at airlines). If I’m an airline and I don’t have pilots to fly the darned things…
2) Parts shortages
3) Market downturn.
4) Russian invasion
5) Political issues (China and the Max)
6) Fixes to the aircraft themselves. BA has hinted at this, so you know it’s a thing. How much of a thing, IMO – might be hidden.
7) Certification issues. Is BA really going to count on lawmakers changing their position, to give them a break?
8) Finances. Q2 is going to be another crappy quarter for BA. How much cash did they need to burn again?
Airbus is slipping a little in it’s yearly delivery target, but the good news for them is that May brought no cancellations to the backlog, just orders. We’ll see what happens at Farnborough.
BA stock declined another 4.14% on Wall Street today, closing at just $133.73.
It was the largest decliner in the Dow30 index.
The decline continued in after-hours trading.
https://www.marketwatch.com/investing/stock/ba
Down another 5% today — current stock price is $127.
Currently at $127, down over 50% from recent high reached in 2021 and down more than 70% from (all-time?) high reached in 2019.
Looks to me like Boeing is doing a big PR push at the moment: “We’re Back! And Better than Ever!”
Yawn / Show me, don’t tell me
Breeze seems to be thriving:
“Breeze begins Las Vegas service, adds 11th city from Reid Airport”
“The airline plans to more than double its fleet this year, from 13 Embraer 190 and 195 twin-engine jets to 30 aircraft, including 14 A220s and three additional Embraer E-jets. Breeze has ordered 80 new Airbus A220-300 jets that will be delivered one per month over the next six years with options for 40 more.”
https://www.reviewjournal.com/business/tourism/breeze-begins-las-vegas-service-adds-11th-city-from-reid-airport-2589850/
Neeleman (like Ryanair and WizzAir in Europe) is successfully offering direct flights to secondary cities that the bigger carriers tend to ignore.
First flight of the A321XLR is now scheduled to occur next week, on June 15:
https://www.flightglobal.com/air-transport/airbus-set-to-fly-a321xlr-in-mid-june/148950.article
If Airbus hit their targets on the A321XLR it’s going to be one well-positioned plane.
Well, BA will probably do everything it can to frustrate the US certification process, because it knows that the plane will be a market changer.
The recently announced move to DC will help that.
Yes, well, they can slow down the 321XLR certification (they already have, IME) but they
can’t stop it; and meanwhile, what do they have to compete with- the MAX™-10 ?
heh.
Note also Raytheon and others’ move to DC. They know where the action is.. 😉
Yah – just wait until European carriers get theirs and start flying them across the pond. US carriers will be screaming…
-> “The FAA is adopting a new airworthiness directive (AD) for certain Boeing 787-8, 787-9, and 787-10 airplanes. This AD was prompted by reports of a missing shim at a joint common to the main torque box (MTB) skin panel and rear spar root fitting…”
https://mobile.twitter.com/WandrMe/status/1531988585246871561?cxt=HHwWksC–Yvg28IqAAAA
“This condition, if not addressed, could result in a reduction in fatigue performance of the MTB skin panel and rear spar root fittings, which could affect the structural integrity of the airplane.”
https://www.federalregister.gov/documents/2022/06/02/2022-11806/airworthiness-directives-the-boeing-company-airplanes
The Boeing 797/NMA Is Still Decades Away: CEO Says Engines won’t Even Be Ready For At Least 10 Years
https://www.youtube.com/watch?v=oUatBMu1YUA
Tell us something we didn’t already know…
Next question: will BA even be around in 10 years (or in 2 years)?
Yes. Too big to fail.
Question is; will the shareholders be around?
@ Frank
The “too big to fail” argument traditionally applies to companies that are considered to have some form of essential value.
Although BA is a defense company, the US also has other defense companies. Moreover, BA’s recent defense projects haven’t particularly delighted the Pentagon.
@Bryce
While I don’t follow defence as closely, my impression is that BA has far too many programs (be the DoD happy or not) that they are involved in, to just be let go. Also, BA at one time, used to be the largest exporter in the US. Their tentacles in the military are everywhere;
T-7 trainer, AF1, F-15, F-18 (both good because the military isn’t happy with the F-35), tanker, Wedgetail, Osprey, Apache, Chinook, Drone, Harpoon, SLS
and they have a huge presence in Congress in California & Texas, the two biggest states.
Ch 11 could happen. Not Ch 7? No way.
On a side note: The US keeps funding 2 Navy shipyards to keep building boats, Electric Boat and Newport News – even though it is said they could make do with just one.
They do so….just in case, even when it costs more to do so.
BA IMO is kind of in the same boat. (No pun intended)
@ Frank
As long as you’re allowing Ch 11, with a breakup and (partial) third-party acquisition / nationalization, then we’re on the same page…but, technically, that wouldn’t really still be BA, would it?
@Bryce
There has been a lot of clamouring for the removal and replacement of the current BoD and officers – to be replaced by engineering types.
In Ch 11, it’ll be the debtors who decide what happens.
If you’re the guy/team trying to decide what to do, how would you handle it?
Defense is profitable, but not very big. Commercial generates the majority of revenues (let’s use 2018 as the benchmark, which is where you’d like to get back to – with total rev of $101 billion, BCA is 60% of that, and $8 of the $12 billion in profit).
You spin off Defense and lose a small piece, which is making you money now and gives you political leverage, or do you spin off commercial and let go of big sales in the future, to have a smaller company left?
What would they get for BCA now?
What would they get for Defense and Space now?
Peanuts.
It’ll only be worth something when it’s healthy. When it’s healthy, it’s better to keep it as BA together can be a real cash cow.
My $.02
@Bryce
After further reflection;
Let’s say you broke up and spun of Defense. Here’s where they would sit, up against everyone else:
LMT 2021 Revenues: $67 Billion
Raytheon: $64 Billion
Northrup Grumman: $36 Billion
General Dynamics: $38 billion
Boeing Defense: $27 billion
In 5th place.
Hardly anything to write home about…
@ Frank
Precisely — 5th place. Can easily be split off and acquired by one of the peers above it.
Space: maybe Musk or Bezos would be interested, thought doubtful. Or perhaps Raytheon
Commercial: LM might be persuaded to buy it, seeing as Lockheed made commercial airliners in the past.
One way another, as things currently stand, the company is already technically insolvent, and there appears to be no meaningful reprieve in sight. In the current environment with record inflation and jet fuel pricing, the post-CoViD travel surge may fizzle out pretty quickly, and we’ll be back to order cancellations and deferrals. Not a nice situation to be in when you have $62B in debt.
@ Bryce
OK – lemme put it this way.
Let’s say that you are I are the creditors for BA. We hold all the notes. BA goes Ch 11, shareholders are wiped and it’s ours. What do we do?
Do we chop it up into a few pieces and try to salvage what we can? How much of our $60 billion would we recoup? How much of a haircut would we have to take?
Or…
Do we take a long, hard look at the thing and come to the conclusion (that many seem to have reached) that:
1) It’s still a duopoly with Airbus.
2) A few years ago, sales were $101 billion.
3) Greedy mgmt fcuked it up.
Maybe, just maybe – if we get the right people in there, move HQ back to Wash, get a few concessions from gov’t and unions, this thing is better off turned around with a 5 – 10 year horizon…
…instead of trying to get what we can, now.
It is, after all, still Boeing.
https://www.reddit.com/r/boeing/comments/t85icj/what_can_boeing_do_to_improve_talent_retention/
Easy: hold “job days” on which applicants are offered jobs on the spot — Scott wrote an article about it.
Sounds like a cattle mart, of course, so one can question whether the quality of the new hires in any matches the quality of those who are leaving.
Not recent, but relevant.
https://www.flightglobal.com/airframers/analysts-warn-of-boeing-talent-drain-question-companys-long-term-strategy/140358.article
From that fine 9/2020 link:
“..Teal Group aerospace analyst Richard Aboulafia suspects skilled technical and engineering staffers are among the 170 outgoing staff.
“And that would be a real problem”, he says, because a talent drain could give “Airbus and other US defence primes a big opportunity”.
Aboulafia notes Boeing already faces “serious… technical execution” issues. The company has faced scrutiny for its 737 Max design and production issues with other models, including the 787 and KC-46 military tanker.
“If the departures are heavily-weighted to the technical side of the house, it makes things that much worse,” Aboulafia says..”
I find it very useful to read “older” stuff like this, and compare it to what I thought
might happen at the time. Honing one’s predictions, as it were.
‘Spirit AeroSystem’s A320 Activity Points To Growing Airbus ‘Buffer’’:
” A ramp-up in A320 program content shipments from aerostructures supplier Spirit AeroSystems to Airbus that exceeds current delivery rates signals that the European manufacturer is building up needed buffer for its ongoing single-aisle production rate increase..” [paywalled]
https://aviationweek.com/air-transport/aircraft-propulsion/spirit-aerosystems-a320-activity-points-growing-airbus-buffer
Contrast w/ the other guys..
Airbus Believes The A220 Is Perfect For Boosting Air Traffic In Africa
https://mobile.twitter.com/simple_flying/status/1534545914181914624
And transcontinental A220 flights in the States:
https://www.msn.com/en-us/travel/news/i-flew-on-breezes-brand-new-airbus-a220-from-richmond-to-san-francisco-in-first-class-and-it-completely-exceeded-my-expectations/ss-AAYn6ws
In ‘Air Wars’ Boeing’s Conner (I think) stated that the A220 “didn’t fit with their lineup”, or somesuch. No further comment necessary. 😉
Airbus, Kansai Airports partner to study use of hydrogen in Japan
https://www.aerotime.aero/articles/31276-airbus-kansai-airport-partner-to-study-hydrogen-use-in-japan
This is an interesting older Seattle Times article on Boeing 737 rudder PCU and yaw-damper issues:
https://archive.seattletimes.com/archive/?date=19950115&slug=2099571