Boeing CEO Calhoun vows commitment to innovation as 747 flies into the sunset

By Bryan Corliss 

Jan. 31, 2022, (c) Leeham News — Standing in the chilly hangar where 1,574 747s were built, Boeing CEO Dave Calhoun committed the company to continued innovation in commercial aircraft.

“Our commitment as a leadership team at Boeing is to maintain this leadership culture forever,” he said.  “We’re committed to it and we will be forever.”

Boeing “continues to have visions just like this one,” the CEO said, gesturing to the last 747. “The hangars are full of innovation.”

Calhoun also thanked everyone who’s been involved with the 747 program in recent years.

“If a company ever needed to stand tall on a legacy it was the Boeing Co.,” he acknowledged. “For the past three or four years it has been tumultuous.” 

‘Even when you understand the science…there’s also magic’

Calhoun spoke at a delivery ceremony for the final 747, a freighter going to Atlas Air. The plane will leave Everett’s Paine Field Wednesday.

The ceremony attracted several thousand current and retired Boeing workers, customers, suppliers and even a celebrity: actor John Travolta, who is certified as a pilot on 747-400s.

“I had to be here in person. As a pilot, I know how great this airplane is to fly,” Travolta said. “Even when you understand the science of flight, there’s nothing like seeing a 747 take flight to understand there’s also magic here.” 

For 90 minutes, speakers ranging from retired Boeing CEO Phil Condit to Atlas Air CEO John Dietrich talked about what the 747 had meant to Boeing, the aviation industry and to themselves personally. Several current and retired Boeing executives said that their first commercial aircraft flight had been on a 747.

Condit: Founders had ‘amazing’ vision

Condit was a young engineer working on the 747 program at Boeing’s Plant 2 near Seattle. He recalled driving up to the Everett factory, which was still under construction, for the first time. Like many people since then, the immense scale of the building plays tricks on one’s sense of proportion. (Boeing claims the Everett factory building is the largest in the world, by volume, and says that its footprint is bigger than Disneyland, with room for parking.)

Entering the hangar for the first time, he said, “I was amazed that the airplane wasn’t very big. Then we started walking toward it. We walked and we walked and we walked and we walked and the airplane kept getting bigger and bigger.”

Boeing cleared 789 acres of forest alongside Paine Field to make room for the factory, and moved 4 million cubic yards of dirt to level the site. 

Condit recounted how legendary Pan American Airlines CEO Juan Tripp and Boeing CEO Bill Allen came to terms on the 747’s launch order: “Juan Trip said to Bill Allen, ‘If you build it, I’ll buy it.’ And Bill Allen said ‘If you buy it, I’ll build it.’”

That “handshake by giants” started an airplane program that literally changed the world, Condit said.

“It is amazing to me,” he said, “to think about the vision that Juan Trippe and Bill Allen had to create an airplane that has lasted more than half a century.”

Tripp’s grandson, Charles Trippe, was recognized during the ceremony, carrying in a Pan Am flag and leading a parade that honored all the airlines that have operated 747s over the past 53 years.

Queen of Skies is ‘so damned good-looking’

The 747 played a huge role in the development of many airlines, speakers at the ceremony said. Japan Airlines, for example, became a global carrier because the 747’s range allowed it to fly previously impossible routes, noted retired Boeing senior vice president Carolyn Corvi.

In Europe, when Lufthansa took delivery of its first 747s and became the continent’s first operator of the jet, it signified that Lufthansa had become “a grown-up airline” rising from the tumult of World War II, CEO Carsten Spohr said.

Lufthansa “fell in love with the Boeing design very easily,” he said.

“I love the airplane. Our crews love the airplane. Even our controllers love the airplane,” Spohr continued. “The 747 has a very special place, not just in my heart but in the heart of everyone with Lufthansa.” 

Plane-spotters especially love the 747-8, he joked, “because it is so damned good-looking.”

Lufthansa now operates eight 747-400s and 19 747-8I passenger jets. The airline plans to upgrade them so it can “fly this amazing airplane well into the next decade,” Spohr said.

Customers laud 747: ‘No greater freighter’

Even today, 53 years after its launch, the 747 is the “biggest, baddest commercial aircraft flying out there,” Atlas Air CEO CEO John Dietrich said. He said his company has flown everything from “race cars to race horses” on 747s, as well as American weapons for Ukraine.

UPS has flown live 40-foot whale sharks on its 747s, and it has delivered more than a billion doses of Covid-19 vaccine carried by 747s, said Bill Moore, the delivery company’s vice president of aircraft maintenance and engineering. 

“There is no greater freighter,” Deitrich said.

Others praised the vision and skill of legendary Boeing design engineer, the late Joe Sutter, who was the father of the 747. Atlas Air unveiled the “Joe Sutter: Forever Incredible” sticker it has placed on its final 747, and UPS announced that it will place a Joe Sutter commemorative sticker on all the 747s in its fleet.


Calhoun: ‘Think about the future’

Yet the cargo executives and several others echoed Calhoun in talking about the future. Both air cargo executives said they expect to be flying 747 freights for decades to come.

Calhoun singled out Boeing’s 777 as the jet that is muscling the 747 out of the sky: capable of flying missions flown by the original 747s, but with two engines, instead of four.

“We haven’t even introduced the best version of it yet,” the CEO said.

“We have airplanes that will displace the 747 in the sky and compete with it for 50 more years,” Calhoun continued. “Think about the future … because of you and the incredible legacy you built, we’re gonna be doing these product legacy stories forever.”

Boeing Commercial Airplanes CEO Stan Deal got the last word: “We do not close this book,” he said. “It’s just a chapter”

258 Comments on “Boeing CEO Calhoun vows commitment to innovation as 747 flies into the sunset

  1. Yep – continuing innovation to financial engineering to enrich the board.

    • They pioneered aviation industry stock-buyback technology to the tune of $43B over a decade.

  2. Talk (Mister Calhoun’s) is cheap. How many times did he say “leadership” there, anyway? They *are* one of the leaders in the financialization that has hollowed out the US’s industrial base, though; I’ll give Boeing that, and maybe that’s what he meant.

  3. I love the BS talk from Calhoun, highly hypocritical (I mean professional) 😉

    This guy needs to go, as well as the board.

  4. Vincent has a good point. Yeah, this moment was retrospective, but I would like to have seen someone, Calhoun for instance, speak in the future tense rather than conditional past tense,

    “If a company ever needed to stand tall on a legacy it was the Boeing Co.,” he acknowledged. “For the past three or four years it has been tumultuous.”

    Y’know, maybe like, ….. “if ever Boeing leaders need to project forward that legacy of innovation [and project management, and risk management, and system integration, and technical excellence], it is now.”

    I’ll just say, I heard of lot of engineering leaders inspire me and my co-workers with direct decisive language, cutting right to the heart of an issue. Calhoun’s style is quite different.

  5. “leadership culture”? what, the gut the company and ride it down? that is the most ludicrous flex I have heard from a CEO who has shown no leadership and perpetuated a culture of corporate suicide.

    calhoun and his McDonnell predecessors are the worst thing that ever happened to Boeing.

  6. Tell me what you are doing in 2028, and that is a plan.
    Tell me what you are thinking about doing in 2035 (maybe), and that is an idea.

  7. Wow, somewhat like the US Declaring they won the First Battle of Salvo Island (4 Cruisers on the Allied side sunk to no Japanese losses)

    Someone needs to force him to read the Av Week Article on the 787 Shim issues.

    Or Remember the MAX!

    Sadly there are no words that are allowed to be printed here to describe the gross stupidity of the man.

    • I don’t think Boeing CEO Calhoun is stupid. The explanation for the Boeing C-suite’s behavior- as with so many others- is likely darker than that.

      • With enough media power and influence your projections create reality. ( some ChickenHawk in the Reagan entourage, still active in the domain of being massively destructive for small gains or just staying in power)

  8. Well the good news of Everett being 2/3 empty is they have lots of room to put in 737 Lines! The progression is

    1. We need a 4th line to meet demand and we have room (true)
    2. Ok, Renton is just two crowded with 3 lines and we have room in Everett so we are moving a 2nd line here (partially true)
    3. Well, Renton is not needed and we have room in Everett, so we are moving all the lines to Everett (self fulfilling)

    I mean really, sooner or latter that finest of Calhoun.

    Oh we can’t build a new aircraft because we don’t have the room.

    • More like realising the previous plans ( once the production was back to 2018 numbers) to speed up to an even faster pace at the 3 Renton lines was going to comprise quality.
      So it was add another line at Everett ( to use the space) and use the workforce there ( existing skills)

  9. I was there. It was held in the 4021 bay which used to house the 747 wing and part of the structures tooling, including the critical build-up of section 41, the nose of the plane. All of that tooling was gone. That means that the option of building a nose-door freighter using that tooling for the 777 is now a lot more expensive than it used to be. Also, that part of the plane was fully digitized during the -8 program, so generating the needed drawings would not have been that hard, and a bunch of them were already complete.

    The thing about having a bunch of perhaps well meaning, but totally clueless finance guys run the company, is that they wouldn’t understand how to staff a leadership team to do innovation if their lives depended on it. The only two people who were on the stage today who might be able to do that were Carolyn Corvi and Elizabeth Lund. The rest were either honored customer guests or Boeing no-ops.

    • Corvi and Lund are koolaide drinkers collecting the big paychecks and won’t rock the boat. No need to rearrange the chairs on the Titanic.

  10. The best part of this story is Carston Spour of Lufthansa, they rescued what was the 747-8I. An amazing airline that recognizes the value of this beautiful 4 engine jet.
    The other part was mentioning the great Joe Sutter.

    But I’m not sure why Boeing had to stink this up bringing in Phil Condit? He’s the basis of why Boeing is where it’s at today.
    Why is he all over the place these days? Is he short on cash or what?

    David Calhoun…. He just needs to go away. Empty suit. No leadership.

  11. This is two replies to other comments:

    First, I’ll go to the mat to defend Corvi. She and Mulally were the only execs to stand-up to the GE idiots, and they both got pushed out for doing so. Anybody that says otherwise doesn’t know her or what happened. Lund is ok – not as good as the other two, but she knew how to drive manufacturing process change – not a visionary, but a good person. I suspect that anyone who would say otherwise has some stupid gender bias issues. Most of the super dumb execs responsible for the fall of Boeing have been guys, although Hopkins (her RONA nonsense) and Hammonds (her “I’m not here to cut anything” lie) were just as bad.

    Condit was there because he has been sucking up hard to get some visibility. His nose is totally brown with Calhoun’s crap.

  12. The thing I find about Calhoun is, he has a tough job, that doesn’t come with a playbook.

    I really don’t know what anybody would’ve done different post max to what Boeing has done so far. I also don’t really know what people actually want the man to do. Other than what Boeing has been doing.

    Yes things took a little longer than expected but the regulatory environment has changed so there was a lot of learning AND unlearning to do. As well as bringing in new employees as well, so Boeing is going through a transition. And I don’t think any other CEO on this planet would’ve caused there to be a different outcome in how events played out post mulinberg.

    What did you want? A new plane? Okay you launch a new plane by 2024, EIS by 2030 AT BEST. And then as you enter your new plane is old tech. And it’s not even a complete family of planes. It just sits awkwardly squashed by what’s at the bottom and what’s at the top and you’ve just spent 30 billion for nothing.

    New tech does not guarantee success and that’s what people fail to understand.

    Look at the a350-1000. It’s about as efficient and as new tech as new tech can get. And airbus can’t even sell up to 150 units, meanwhile it’s 20% more efficient than the 300ER. One of the reasons? The capital cost is too high and in a market where airlines want planes cheaper and cheaper. They’ll fly the old ones till their dead and look for next cheapest albeit efficient aircraft which is why the 777-9 sells better.

    I’m not saying Calhoun is perfect or even great but I think it’s easy for everybody to have an opinion when you’re not there to turn a company of 150,000 people around, change the culture and the reality is all of us here have never done it in our lives and will never do it because you can’t and you also don’t practically know what it takes.

    Bear in mind, on the new plane, the market for that jet would’ve been lukewarm. Do you know how long Boeing has tried to get MOM of the ground? It was a lukewarm response. But people say oh the old Boeing would’ve just launched it anyway. Well in the days of the old Boeing it didn’t cost 20 billion dollars to launch an aircraft which is why a 747 can have 18 different versions. Also you didn’t have strong competition at the time. You have to think about things like that. Of course you can launch anything you want when you’re by far the biggest player. People will buy it regardless what choice do they have. But you can’t behave like that anymore.

    Many of you run businesses if you have a lukewarm business case will you spend 15 billion it?

    Airbus doesn’t even have a real MOM the 321 is still a lot smaller than the 757

    So I think Calhouns plan is right.

    Focus on righting your ship, deliver on your commitments, pay down debt and THEN launch (when it makes sense)

    Everybody points to the past but the market has significantly changed. The last plane to launch that was dead on arrival was the a380. Because it actually ended up coming into the market with outdated engines for starters amongst its other problems.

    • “Airbus doesn’t even have a real MOM the 321 is still a lot smaller than the 757”

      Markets don’t really follow existing types.
      ( 757 slid into its final use position from “paid surplus” displaced by the lighter nimbler NB types. thus demanding a 757 clone is an oxymoron.IMHO)

      A321 seems to cover quite a bit of current/future market demand ( higher capacity, range)
      Early on the A321 lived well on being a subtype of a “scale of numbers” product. Today it starts to cross the 50% of deliveries line.
      Wasn’t there an airline comment recently that the MAX10 lags the industries move to higher capacity as offered by the A321?

      • The Max 10 is essentially the same cabin capacity as the A321. That itself is unusual as the two companies havent previously matched each other so closely in passenger size before for the single aisle.

        Now out of subscribers only reading
        ‘The 737 MAX holds three seats (a half row) fewer than the A321neo. Both cabins have four lavatories and 13 meal trolleys.’

        ‘Both aircraft have about the same range when sensibly equipped. The A320 series wing holds about an ACT’s (Auxiliary Center Tank)-worth of less fuel. So Boeing justly equipped the A321neo with two ACTs and the MAX 10 with one. This means both aircraft are just passing 3,200nm without becoming limited by the fuel amount.’

        Its takeoff performance isnt so good but not an issue for most airports.

        Also remember as the Max 9 is closest to larger Airbus model A321 it should be combined with Max 10 orders etc.
        After all the A320 is normally compared to the larger Max 8

        • The efficiency of the plane in flight is only a part, and sometimes a small part, of the overall operating efficiency of a carrier. Another huge factor is terminal efficiency. How long does it take to turn around a plane at the gate? The answer to this controls how many flights can be handled per gate and ground employee. Long single aisle planes are horribly inefficient at the gate. This is not so much of a problem with gates that are dedicated to long haul flights, but then very few of those gates are optimized around single aisle planes.

          • 190 to 210 passengers in single aisle is same issue wither its B757 or Max 10
            Delta as from around 170 to 199 seats in its 757-200s and 192 in A321
            The longer haul tend to be less as more leg room and maybe more premium seats.
            The very fast turn arounds from 40 years back dont happen anymore.
            Theres more congestion everywhere including loading and unloading bags and the flight planning process one they know who is on board is more complicated which takes time

            the reality is even short haul flys more rotations per day than they used to even as the number pass per plane has increased

        • That’s before Airbus updated the interior layout with tiny lav (which was quickly adopted by Boeing as well). Read what ALC chairman said about the MAX 10 in previous thread. The market has spoken which both BA’s mgmt and you refuse to admit. Sad.

          • Who said I’ve refused to admit the marker reality. Did I say airbus has not dominated that market or that the max 10 is blowing or are you referring to the poster above?

          • Yes. NNanto is right.
            One type is much more popular doesnt mean that the Max 10 – in service nearly 8 years later than A321neo – isnt equivalent

          • Why the MAX 9 is not selling and why the MAX 10 is coming so late to the market prove BA missed the boat and clearly show limitations of the six decade old design. You are trying to put lipstick on a pig. 😂

        • “Its takeoff performance isnt so good but not an issue for most airports.”

          Haha. What’s your suggestion of aircraft for those airports that demand better takeoff performance? An Airbus like what UA ordered??

    • Well said. Reading all of the above and hearing the same old same old mgmt bashing, one would almost forget that this was about an airplane and how it came to be and, how it affected the aviation world, and the people who built it.
      Take a step back and enjoy the last of a long line.
      Bashing and finger pointing can resume tomorrow.

    • @Nnaeto

      Well said,

      And none of us here are privy to what the airlines stated they want and willing to pay for.

      Stabilize the company before spending big money on new projects. And it better be a product that have a 40 year or more shelf life.

    • In the last 6 or 8 years before the Max fiasco Boeing spent $62 billion on dividends and share buybacks. They were spending over 100% of Free cash flow on this, essentially taking on debt to boost the stock price in the short term. All the while they were cutting spending on R&D and cutting heads. Calhoun was one of the prime architects of this from his seat on the board.
      Based on your supportive comments on Calhoun, I can’t help wondering how many shares you own?

      • Ya, I get that that Boeing isn’t in a financial position to launch a new aircraft now, but in 2017 they had the seed money for the future to launch something. It’s not like the CS/A220 is a giant cash cow, but it is a stake in the future, which is what Boeing needed in 2017 and instead took the money and run.

      • I actually don’t own any stock at Boeing. And you’re right to call that out. But Calhouns role as chairman of the board is different to a role as CEO of the company.

        Let’s even park MOM for a minute. The board was actually privy to what management showed them/told them at board meetings.

        And let’s even look back to 2017 and 2018, the max had entered service it was flying of the shelves, it was Boeings best selling aircraft, the 777X was coming along, the 787-10 was about to service and there was A LOT OF CASH. Should they have done share buybacks? In my opinion no because clearly it was just really a pipe about to burst. That cash could’ve been used to deal with 787 issues, production quality issues and making sure no gaps were missed with the 737 max but again these are culture issues. I think Calhoun has some blame for that but most of the blame lies with management and im not as much defending him im just giving everybody a reality of what the CEO role of Boeing is at the minute and what it means to run the company at this time.

        Moreover, MOMs business case was still lukewarm then, airlines thought it was too expensive, secondly, what is MOM? Some wanted single aisle some wanted twin aisle, some wanted cargo focus some wanted passenger focus. So it’s just a soft part of the market.

        The beauty about the 321neo is that it will give you MOM capabilities at a very good price because it’s part of a family of aircraft that will builds 7000-8000 units. It was a simple re-engine of the existing a321 (which actually sold worse than fhe 320). So it’s a great aircraft but it has had very very on spot timing. And maybe a re-engined and lighter version of the 757 would’ve done a good job but again the 321neo has cockpit commonality with the 320neo family. I mean it has about 90% commonality so, there’s a lot of places where costs are saved to give customers the price point which they’re willing to pay for it. Boeing could not match that with s different family to the 737

        What Boeing SHOULD have done IMO is launch the MAX (properly with the proper due diligence of the airworthiness of the frame of course) but they should’ve binned the max 9 and just done the max 7, max 8 and max 10

        • Small point of correction: Calhoun is the CEO, not the COB. The COB is Kellner. They have both said and done things that provide ample proof that they do not understand how air vehicles are developed nor efficiently manufactured. And for whatever reason, they have tended to promote glad handing cheerleader types to the next two tiers down in the c-suite positions. Deal is perhaps the most pompous example of this.

          • I know he is. But I’m talking about when he was chairman of the board.

          • I hear Elizabeth Lund is very good at her job. Do you think she’ll be good to lead BCA? I don’t see deal staying long as I also don’t think he has ambitions for the top job. Calhoun will soon retire. His job is to bring stability and Boeing is heading there. After that he will leave. But I think up next will probably be Colbert but I haven’t heard bad things about him so he can’t be that bad. Seems to be making a lot of changes at defense

          • “But I’m talking about when he was chairman of the board.”

            When? Have you checked??

        • “It was a simple re-engine of the existing a321 (which actually sold worse than fhe 320).”

          At a certain time the A319 sold more than the A320 ( just like the A332 vs A333 🙂
          “magic range” ! With increased intrinsic range (sfc, MTOW) of the type gravity of the sales moved up.
          Big jump via the re-engine. next jump XL,XLR mods.
          A320 family is a good example of a product range that can leverage upcoming tech improvements synergetically based on the conceptual design.

        • The McD/GE financialist cabal that took over the executive management has refused to invest in the narrow body product line to remain competitive with Airbus. Airbus essentially check-mated Boeing with the 321-XLR. How could Boeing not see this coming? Perhaps they did see it coming and didn’t care. Maybe they didn’t see it coming cause there is no long term strategy for product development. Many of their decisions are reasonable when considered in isolation, but when considered together, they are a prescription for a glide slope to irrelevance.
          These people at the top of the Boeing power pyramid are an existential threat to the US commercial aviation industry.
          Don’t mean to be too negative, but can’t help feeling that some of the discussion here amounts to arranging the deck chairs on the Titanic. The captain sees the iceberg in the distance but refuses to change course.
          Perhaps the pilot of the Titanic was focused on the shareholder value derived from a Transatlantic speed record.

          • “The captain sees the iceberg in the distance but refuses to change course.”

            Nothing to see, the collision was at ~23:30 ships time.
            noteworthy is that everybody on board was busy with nonessentials. ( socializing, or staying ahead of the timetable for some ribbon or other.)

        • I bet if we could talk to Muilenberg about share buybacks he would say that he was just doing what the board wanted. To put it another way, it was the first of his performance management metrics. Who was leading the board that established these priorities: Dave “Cash Flow” Calhoun.
          But this goes beyond Calhoun, he is just a figurehead for the financialist virus that infected management from the McD/GE merger.

        • Was it around 2017 and 2018 when cash from the MAX is gushing in that BA decided to enter into those fixed price money-losing contracts knowingly to lose a billion here and a billion there? How much it lost on those contracts upto now?? Won’t it cover a substantial amount of developing a clean sheet new aircraft?

    • @Nnaeto

      Some very good points, well said….. regardless of how many shares of Boeing stock you may or may not own.

      • I own Boeing stock in my 401K funds, call me evil, who cares. Some of you geniuses would have Boeing spend 20 Billion on an aircraft with today’s tech when in a decade cockpit rules and certifications will be different in the future. Saving money and righting the ship is not sexy, but I am ok with it.

        The 737 MAX must be stupid cheap to make.

        • williams:

          If you read the comments, you will find that many feel Boeing failed to come out with a 737 replacement when they should have.

          Now? The MAX fills in fine, its got no future unlike the A320 you can put a composite wing on and created a serious upgrade.

          Pissing away your future in stock buy back (yea that worked) and Dividends and no research or product, that is monumentally stupid.

          MAX grounding, 787 no delivery for two years, 777X failing to even get to where the FAA will fly it?

          55 Billion in debt? All good.

          Evil no. The stock market seems to think there is some more pillaging to be done at Boeing. But all that debt buy back and your stock is so far down? Yea that works.

          • Boeing has had horrible execution of projects, that has nothing to with stock buybacks. Execute the 787 correctly and Boeing’s portfolio looks different and guess what, still returning money to its owners.

            And lets not think for a second that Airbus is not doing the same trying to streamline its production, turn a 7 year back log into cash as soon as possible, and lowering costs of its various production facility to return money to its investors who as has been stated been waiting along time

          • “Boeing has had horrible execution of projects, that has nothing to do with stock buybacks. Execute the projects correctly …”

            (Large) stock buy backs and proper execution ( which takes skill _and_ money ) are to a ?large? part mutually exclusive.

            Airbus actually spends quite a bit of money and time on production and product improvements.

            I do wonder what killed the “777 fuselage upright assembly” project? bad idea and/or bad execution.

          • @Uwe The stock buy-backs had everything to do with the execution failures, especially on 787, 737, shuttle, KC-46, Starliner, and more. The talent was gutted in every one of these cases. 787 was the worst. The program plan called for an army of several hundred engineers to be embedded with the suppliers to transform the way design work was done in the industry. None of those positions were filled. Supplier management was permitted exactly two engineers until 2011, when the third one was hired. There were similar, but less extreme issues on the other programs. The funding that was supposed to go into the program was literally thrown away. On top of that, the program was managed by budget, not schedule and quality performance. Everyone was told they had to make their numbers, so everyone started lying about schedule performance. Budgets were met but every issue was hidden, exactly as Stonecipher and McNerney incentivized.

            The problem with the FAUB was primarily with the alignment of the two robotic components. Rivets need to be supported from the backside as they are flattened on the hammering or impact side. Success required virtually 100% perfect alignments because each miss entails a bunch of slow and expensive manual labor, and the signaling and sensor system couldn’t go both fast enough and make the deliver the accuracy. It worked if it was slowed down enough, but that wasn’t useful. It had to go fast enough to make rate and it couldn’t without making a mess of things. Scale is always a challenge. That said, the tooling reworked for manual riveting is still an improvement over the old methods, and the new tooling location enabled a much needed improvement to the assembly line layout. So it wasn’t a complete failure.

        • My negativity on the future of Boeing commercial is partly due to the incentives given to any CEO of the company. Launching a clean sheet plane requires investing about $15 billion. A new program will have a negative impact on cash flow (and stock price) for about 8-10 years. (This includes time to design, build, certify, and the first couple years of production.)
          So why would any CEO ever launch anything like this when he knows it will depress the stock AND his own compensation for the next 8 years?
          That is why I think Boeing commercial is basically a dead man walking, a zombie….one of the industrial Walking Dead.

          • …, the Sears, K-Mart, or JC Penny of commercial aviation…

          • We work in a dying industry, cause the people running it can make more money now letting it die a slow death than by doing what’s necessary to keep it alive.

          • Parasitoid wasps, Darwin Wasp.
            ( well any host infesting for reproduction species.)
            The attack is internal and early.
            Invisible for most of the time.

            ( vultures are active post mortem )

    • “Look at the a350-1000. It’s about as efficient and as new tech as new tech can get. And airbus can’t even sell up to 150 units”

      Well, they just added another 23 today!

      • Thats because Boeing flooded the market in last 12 years or so with 777-300ER when it was producing 10 per month.

        Once the oil price dropped through the floor around 2014 the 777-300ER still stacked up

        • It’s also because of two things.

          The capital cost is too high. This comes from ALC chairman himself.

          Also the engines have a poor on wing time compared to what was promised.

          It doesn’t sell great but it’s next competitor the 777-9 sells better and it’s just as efficient at best. It may be a little less efficient but when you put the offering of Boeing/GE next to Airbus/RR the Boeing/GE contract is of better value and actually has a better NPV overall,

          Moreover, it’s easier for Boeing to cut down the 777-9 prices because it doesn’t have to make an accounting profit. It just has to make a cash profit. It’s practically the only member of its family. Boeing won’t build the -8 just -8F IMO

          • I’m not sure that this is a correction to these comments, but the tone of the discussion sounds like there may be some data and understanding missing when it comes to engines.

            Prior to the first 777 upgrade program (-300ER, -200ER, and -200LR) each of the three engine manufacturers required their own strut and systems interface designs. This made if much more difficult for the leasing companies to find new homes for planes coming off of lease. At their request, Boeing decided to force the issue by doing a deal with GE to make their engines standard on the updated 777s, with the other two being invited to find a way to adapt.

            But, other than that, on the wide bodies, Boeing has tried hard to avoid choosing one supplier over another. The 737 is different. At the time of the -300 program, a deal was made with the joint venture between Safran and GE (CFM) to use their engines exclusively. Neither Pratt nor RR had anything deemed suitable at the time.

            The airframe manufactures typically do the engine integration, including the nacelle, thrust reverser, and strut. Boeing used to call that part of the company Power Pack and Strut.

    • Calhoun is going to magically “pull the rabbit out of the hat and introduce a new airplane” disregard threat of brain drain, loss of instructional memory etc.
      Trust him. *Saying* is believing. 🤭

  13. A person in the job Calhoun has must understand what it takes to develop a new plane, or for that matter, build one profitably. Clearly, he doesn’t understand either. But, since there is no money to build a new one, let’s narrow the focus on building the current models such that the time from roll-out to delivery is less than 30 days, and that the planes never have to sit waiting for years, which is the current situation.

    Three things are required. One is to understand the nature of any problems holding things up. The second is to be honest enough to admit what those problems are. And the third is to fix them.

    The seven deadly sins do a great job of describing his failures, starting with pride, greed, and sloth. You have to get your ego out of it in order to see a problem for what it is and then admit that it is a problem. Failure to do either leads to wallowing in the problem. That’s sloth. He checks all three boxes.

    Let’s start with BCA and the MAX. We’ve known since the early 1990s that managing the integration of complex systems was rapidly becoming a bigger challenge. Aside from the fact that those big engines should have never been put on a plane with that short landing gear, the computers in the flight control system combine too many functions in single pieces of hardware, making it impossible for a segmented fail safe process to occur. That’s pretty straight forward, but it does take superior systems engineering ability to keep it straight, and that falls on management.

    Here’s the human problem with engineering teams, which was pretty well highlighted in the film Jurassic Park. Engineers live to solve problems. If you ask the typical engineer if something can be done, they start digging into it. This means that if it is something that should not be done, the engineering leadership has to be able clearly recognize when the question should not be asked. His team can’t do that, and he doesn’t have the knowledge and experience to detect when they screw-up on this most basic and critical aspect of engineering leadership. So you get the MCAS and alert system cacophony issues that plague both the MAX and the 777.

    Next, he doesn’t understand the most fundamental thing about running a manufacturing process. If a process is producing something that is bad, you have to stop it dead in its tracks and fix it. Otherwise, you are producing rework and you lose the ability to control costs. It always costs less to do it right the first time. To do this, you cannot, you must not manage to a budget. Rather, you must manage to the schedule and the deliverable quality. It’s not the burn rate you have to worry about, it’s the quality of what your burn rate is producing. By managing to the budget, which is what the entire current management team has been trained to do, problems get hidden instead of fixed. There is no way to ever make a buck doing that. And he clearly doesn’t know enough about production processes to realize that.

    There should never be even one plane that comes off the line that needs rework after it is turned over to flight test and delivery. And the current processes are doing that to every plane that comes off the lines. He is allowing the entire company to wallow in sloppy work. That’s sloth.

    Like I said, he has check all three of those boxes. Fix those and we can start talking about what it takes to design and produce a new plane.

    • A lot of what you say he’s actually done. If you follow Boeing closely.

      When the MAX had a production issue in November they stopped the production line for 3 weeks but that was brief

      With the 787, the reality of the situation was that at the point when this issue was discovered there were already so many frames that needed rework at that point. And let’s not forget. They had to go deep into the supply chain to uproot issues, stopping production at that time especially for how LONG it took, the delay to customers would’ve been significantly worse than it is now. Again, we say these things but there’s a lot to balance here. There’s customer expectations are still there. What is the fastest way to get it done? The reality is now customers can take the frames that are ready straight from the factory whilst they wait for the ones that need to be reworked to be reworked rather than holding up the whole process for 12 months and nothing moves.

      Even with the 737 max when they had engine shortages they did not build gliders.

      Secondly, the issues that plague the MAX and 777X are pre Calhoun just by the way. That has nothing to do with Calhoun. Since Calhoun has come what has Boeing done? Taken a step back, followed due processs and try and learn to navigate the new regulatory environment. I really wonder what difference you think any other CEO can make. People have been fired, promoted, hired, replaced and that continues to get the best people working at boeing.

      With the 777X some of the issues have been fixed, others are in the process of being fixed as boeing concludes discussions with EASA.

      What you’ve done here is just say things that actually in a vacuum of little no external forces make sense but practically carrying it out will probably fall to pieces. Everybody has something to say about running boeing but most haven’t even run a company half it’s size, with anywhere near the issues it’s going through.

      When has Calhoun not been honest with what issues are at Boeing? He’s spoken about culture issues, he’s spoken about bringing engineering to the forefront. He’s changed how engineering reporting works, he’s given them the space to work without pressure and employee surveys show things are turning around. There’s an emphasis on first time quality and you can see it with 787 deliveries before the half a 787 can have up to 6 customer flights before the customer takes it because so many things were not passing quality checks. Now the most I’ve seen is 3 since deliveries resumed. That’s real life first time quality.

      The reality is, Boeing will go through what it has to go through, and no engineer can change the reality of what they have to go through.

      The last engineering CEO Boeing had was mulinberg and he was a disaster

      Remember condit? He was an engineer, he sold Boeing to MCD

      Calhoun has replaced the board with engineers, pilots

      So much complaining for a job that most people can’t even do

      • Also. I don’t expect Calhoun to be the one charged with building a new plane at Boeing. He will be gone by then

        • @RetiredTechFellow & @Nnaeto,

          You both make some excellent comments and points here. I think everyone bashing Boeing at this point should take a step back and say “what would I do if I were in Calhoun’s shoes right now, to right the Boeing ship?” That is a hefty question, and the answers don’t come easy, when you have 150k employees, multiple production facilities in multiple states, both commercial and military divisions, and multiple programs coming out of both of those divisions. It is a very complex challenge that requires true leadership, and some definite outside-the-box thinking. The next 2-3 years will really define Calhoun, and Boeing itself. In that time, Boeing is likely to give up some market share to Airbus – that is a given. But, how do they respond to that? Do they get their engineering roots growing again? How do they position themselves in the marketplace to compete again Airbus and other manufacturers for the next 100 years of their existence? All huge questions to be answered!

          IMHO, the only way Boeing can ‘right the ship’ at this point is to take a few steps back (which, by all accounts, they are in the process of doing now), identify and solve all present issues, and put plans of action in place to fix those issues. The current issues are: MAX & 777 certification; 787 build / quality issues; and supply chain issues across the entire production line – 4 primary issues. I can appreciate that each one of these 4 issues would take its own leadership group and action plan, and so you have a huge amount of resources dedicated now to solving those issues. Not to mention that Boeing is trying to ramp up production of the only 2 ‘in production’ airframes that is has on the line right now – the MAX & the 787. These programs are going to have to deliver big-time over the next 2.5-3 years – until the new 777s start rolling off the production line and into customer hands.

          The fact that Boeing is looking to add a 4th MAX production line in Everett is a bit of future planning from that team. They may even need to add a 5th production line down the road, once they get things stabilized, and determine a future monthly production rate. This plane has to be the short-term focus in terms of delivering cash to the company, so that it can fund future development. Long term, it will have the 787s & 777s to help deliver cash flow, but the volume of those frames will never be as great as the MAX.

          In full transparency, I own 0 shares of Boeing stock.

          • Quick points said before:
            The 737 line in Everett is the first step in what will be a multi-year effort to consolidate Renton into Everett, and redevelop the property to generate cash. This was understood to be an eventuality back as far as 2000.

            The one thing that needs to be done most urgently in leadership at Boeing is to stop the culture of lying that was created by switching to management by budget numbers. To survive and get things under control they have to go back to managing by schedule and quality. Committed deliverables need to once again become sacrosanct, and pitching a watermelon chart needs to become a firing offense. The only way to get there is to require all status charts to be submitted to a new internal auditing group setup to validate them. Anyone caught pitching a watermelon chart needs to be summarily marched off the property. That should also apply to Calhoun and and other presenters on the earnings calls. And on that topic, it’s way way past time to drop the charade of program accounting on the 787 program. It’s not enough to provide both GAAP and non-GAAP earnings presentations. Get rid of the non-GAAP until the right to use program accounting can be earned back by actually producing a new plane that lives within a 400 plane accounting block.

          • Retired techfellow , Boeing in its full year report has put unit accounting numbers alongside program accounting for at least the last decade
            They dont have them in the quarterly numbers but the separate annual report does

          • “Boeing in its full year report has put unit accounting numbers alongside program accounting …”

            No absolutely not. Neither in its annual report nor 10k filing.

          • I think some here see Calhoun as having arrived at Boeing the day he became CEO. I see him as a longtime board member who is a part of the ex-GE financialist clique whose business philosophy is to always choose short term financial gain over other considerations.
            1. Disastrously complex global supply chain in 787 development program. Supposed to save $ billions and years in development, wound up costing both.
            2. 2005 Aviation reform bill that Boeing wrote. Created the ODA structure giving management control over company DERs.
            3. Outsourcing thousands of engineering jobs to Russia, India, etc
            4. Moving 787 line front Everett to SC in the midst of a production crisis when SC was known to have more quality issues
            5. Clearing the decks of most experienced employees via Golden handshakes and layoffs

            What is the unifying thread? Choosing whatever is cheapest NOW….even though it proves more costly in the end.
            Boeing executive motto: “Cheaper is better, and cheapest is best!”

        • What new plane? Boeing is upgrading the Renton 737 wing riveters themselves (old Gemcor from 60′ and 70’s) and updated the wing track system This along with additional Electroimpact wing riveters (panel assembly line) in 2016 to increase rate ( And a possible new 737 wing panel riveters (Electroimpact), Boeing probably can reach 80 737 a month by 2025. That said, with this major investment along with 4th 737 FAL in Everett. Boeing will ride this 737 model for at least another 10 years…

          • Nnaeto:

            You can spin things how you want, but yea, Calhoun was there every step of the way. He was on the board and he was paid to know what was going on.

            What did he say?

            I didn’t know what was going on.

            He still does not.

            At this point I am not going to say Boeing needs to come out with X aircraft. The people that have a handle on the market and who will pay for what and how much work at Boeing (or Airbus)

            What we can say is Boeing has been mis-managed (or worse) for a long time and Calhoun is the last in a long line of bean counters.

            If you want beans counted, you keep them around, but you don’t let them run a company.

          • @Dukeofurl Yes, that is true, but it’s still non-GAAP. There are some significant differences between GAAP and International accounting standards due to the somewhat oversimplified reality that GAAP tends to be rules based, much like the tax systems, and International tends to be more principles based. But, one thing on which they agree is that R&D costs should be written off in the period incurred. There may be some minor assets that accumulate for reusable tools and equipment, but that’s it. Both of those figures are non-GAAP, and will be until the R&D costs for the 787 are written off.

            As for @David Pritchard ‘s point about the 737, yes but … There is a bet inherent in the tooling upgrades for the 737 tooling that it will remain a viable product for another decade. That is a somewhat dubious proposition.

            @williams – your comment is a classic example of why finance guys should never be allowed so much as a vote in running a company like Boeing. Developing a new air vehicle is an incredibly challenging task involving a large number of complex systems integration tasks. It takes decades for the leadership and engineering cultures to evolve to a point where they can do it at all. We saw this in the commitment the Europeans made to get into the business. They poured huge amounts of government subsidies into the project over at least three decades before they started to produce a fairly decent product. China has been pouring huge amounts into their project for an equally long period of time, and they are not there yet. The only way to be able to do this kind of work is to constantly do it. Your attitude would have the United States simply lose the ability to do this sort of thing. Greed will destroy anything it touches.

          • The wing assembly change was bought in for the Max models – except one old vertical jig was retained for the P-8 wings which are still the old model and of course it has its own final assembly next door in the 4-42 building.

            Im wondering if the Everett 737 line will have some further automation and it may be the last line left when the 737 winds down in the next decade and Renton is closed ?

          • For Renton 737 Gemcor WRS (wing riveting systems) and track upgrade a good ROM $50m for mechanical and electrical upgrades (including upper and lower heads) The upgrades can make the systems go for 10-15 years before any updates are needed

          • “They poured huge amounts of government subsidies into the project over at least three decades before they started to produce a fairly decent product.”

            Airbus had decent and innovative products from day one ( actually more like day 2 :-).
            What took extended effort was increasing market share in view of unrelated to the product hurdles.

          • The very best teacher of any topic I’ve had in my life was a guy named Dave Boyd, who taught at Western Michigan for two stints many years ago before becoming a CFO for two private colleges. Dave had a series of talks that he framed as “The Accountants Versus the Lawyers.” The basic theme was that the job of the lawyers was to obfuscate and that of the accountants was to clarify. I’m sure the budding lawyers taking his classes didn’t like the sound of that.

            Aside from the boundary of the firm issue, most of the limitations of accounting are about things that end up falling within areas where judgement is required. What’s the inventory worth? There are multiple ways of coming up with a number, and each implies different ideas about what the inventory is. Is it a long term asset that will always be there, so it is better thought of as something in the background (LIFO), or is it something that is always subject to being fully depleted (FIFO), or is it a bunch of stuff that is, or might as well be, serialized and treated as a composite of specific individual items (LCM)? Each of these approaches provides a different number, and those numbers can vary hugely.

            The right answer is to apply the accountant’s judgement and select the method that most accurately reflects the reality of a given situation. The wrong answer is to figure out what you want the number to be and then select the method that gets you closest. That’s but one of many examples of what is euphemistically called “financial engineering.” Financial engineering is lying on the financials, pure and simple. Calhoun has done this on every last earnings call in which he has participated.

            You know, it’s kind of funny. I was trained as an auditor and then went to work for Boeing specializing in helping the company better communicate with itself. The goal was to try to resolve our age old internal joke that “if Boeing only knew what Boeing knew.” In my work I got to see virtually the entire company up close. But it was a bit like being the White House butler. People just ignore the fact that you are there. That’s kind of a dangerous practice around a trained auditor whose job it is to learn as much about the company and its business as is possible so they can better knit the place together. In my case, I already knew quite a bit about aviation, since my dad was a Naval Aviator before becoming a pilot for United Tech.

          • Are you also following the criminal court trial under way in Paris
            now against Airbus and Air france for manslaughter ?

            A plaintiff claim, not a decision of the court, according to your link

            Not sure if this is exact case but it was a Union pension fund saying what you allege. Lost in District court but revived by appeals court

            Another court case against directors was settled for $230 mill ( paid by insurance company when its against directors).
            Doesnt seem to be the same as earlier case

          • Yes, I have.

            The industry worked incredibly hard over many decades to win the trust of the public with the idea that air transportation could be safe to the point of being boring. But, it is an incredibly dangerous thing to stuff people into a pressurized can and shoot them through the air at Mach .85 or better. The downside of it having been made to appear to be quite safe is that a lot of people who don’t take it seriously have become involved in the industry. These lawsuits are fine and proper, but something structural needs to be done to prevent people who do not have the proper frame of mind from getting into positions of decision making authority.

            Maybe the scope of professional licensing needs to be expanded a bit, such that certain classes of corporate leaders are included. It’s just not enough to be well meaning but unqualified. I would grant Calhoun that much of a fig leaf. But, guys like Stonecipher and McNerney should not be able to get away with the things they have so far.

      • “Calhoun has replaced the board with engineers, pilots.”
        My recollect is that he has one engineer from telecom or some other industry. Pilots? Really, you sure about that. When he was leading the board it’s members included Carolyn Kennedy and Nikki Haley…
        Several months after he took over as CEO I read an interview where he was asked about putting an engineer on the board. His answer:” I don’t think we need to fill the board with them….”

        • Show me the interview please.

          And how about you look at the board members before you just wrote anything you like

          Stayce Harris is literally a former 747 pilot for United airlines that sits on the board.

          So many of you come here and just say anything you like without any consideration that it can be checked

          Being lead independent director does not mean you can change board members. Moreover, you people act like Calhoun was the one that told management how funds are to be handled or to reduce engineering budget and conduct share buybacks and the fact that a lot of you think like that shows you have no idea what sitting on a board looks like in a large corporation

          • I have searched the internet diligently for that interview but since it was back in the spring or summer of 2020, I have been unable to find it. That does not mean it didn’t happen.
            Let me ask you this, have you read Calhoun’s bio? His history at GE as an acolyte of Jack Welch? How has GE stock done the last 20 years? Do you know that when Calhoun led the board of Boeing they spent more than 100% of Free cash flow on dividends and stock buybacks?
            I think if you knew more of Calhoun’s background and the actions of his board you would be less optimistic that he is the right man for the job of fixing what has aimed Boeing commercial.

          • @John I forget if I posted this observation here before or not, but I think not. Calhoun’s performance can be judged differently using at least two quite radically different yardsticks, and thus coming up with polar opposite conclusions.

            Prior to the take-over of Boeing by the GE folks in the guise of a merger with MD, and just after the acquisition of North American from Rockwell, the basic business approach of the company can be summarized by the phrase: “We build the best air vehicles we know how, and charge a fair price for them.” It was an approach that let the market decide whether or not they wanted to pay a little more and get top quality in return. The attitude toward the shareholders, which varied between roughly 65 and 75% institutionally held, was to be boring. We would keep a minimum of 25% of the earnings going straight back into product development and strategic acquisitions (companies, technologies, resources). The company had accumulated what can only be described as fabulous wealth with that approach.

            The GE team had something else in mind. It was their goal to stop that nonsense and harvest the accumulated wealth. Rather than describe their approach using their words, it is best to go by what they did, and ignore what they said, as those were two radically different things. They immediately reversed course and started a program of rapidly liquidating the company’s wealth, even to the point of not making funds available for committed product investments (e.g. the 787’s supplier management embedded engineering team).

            They shoveled money at the shareholders as fast as they could, while using their control of the proxy votes (i.e. the compensation committee of the board) to increase the top tier pay packages for themselves to the tune of roughly 10x.

            Since the days of the 707/717 program (the Boeing model number for the KC-135 was the 717) Boeing had always used a non-GAAP accounting method on the commercial side which booked R&D costs for a new plane as an asset to be written off over the first 400 planes. This is a big no-no in GAAP, but because it worked consistently through the 1990’s, the SEC did not object. I should point out that the 777 went over budget quite a bit due to the expansion of facilities at the Everett site. For that program, the R&D costs were written off over the first 600 planes delivered.

            On the 787 program, it’s a little hard to say just exactly how the R&D costs are shown on the books. The accounting block was raised to 1600 planes, but if you look at what has been expensed versus not expensed, it looks like instead of writing those off over the first 1600 planes delivered, that actually airplane one of the accounting block has not yet been delivered. That view would be assuming that the R&D costs that have been written off are those associated with a LIFO approach to them, and writing off the cost of the derivatives first.

            Another accounting peculiarity in Boeing’s approach is the way buildings are treated. Historically, because a factory is quite difficult to adapt to alternate uses that would value it anywhere near its cost, production buildings are treated as tools, and thus part of the accumulated R&D costs (aka accounting block).

            OK, so if one measure’s Calhoun’s and Kellner’s performance by the GE yardstick, (i.e. continuing to harvest the company as fast as possible and avoiding any investments not required for window dressing), then it is difficult to fault a single thing he has done.

            But, if one were to judge his performance by what Condit and Stonecipher claimed quite publicly was to be the existential purpose of the merged company (i.e. “one company working together for aerospace leadership”) then he get’s the same failing grade that his four predecessors earned. So this debate about how well he has done is really folks talking past each other because they are using different evaluation criteria. It’s like arguing back and forth between someone saying that the sky is blue, versus someone else insisting no it is made of air. It’s all rather silliness and just so much noise, unless one states one’s criteria with each assertion of a specific performance evaluation. Social media noise is really quite wasteful.

          • As I recalled, Boeing eventually charged off the first three 787s to R&D.

          • It was the first six Scott. But of course, they were partially added to the deferred development cost balance. I don’t recall the exact disposition of all six, but there was an effort made to donate some of them to museums. If any of those transactions went through, then there would have been a valuation assigned to them, a percentage taken as a tax deduction, and the rest should have been taken off the books in the same period. That said, this level of accounting detail is very tightly held. I did a lot of work for the BCA VP of finance and there is no way he would have shared that level of detail with me. It was just too sensitive.

            Then there is the issue of planes 6 through about 22, not so affectionately referred to as “the terrible teens.” ANA quite rightly refused to take any of them. That said, I think they did take one is some sort of a sweetheart deal for the publicity purposes, but the plane had a huge number of repairs and patches on day one.

            The supplier management organization was truly a joke due to lack of funding. About the only structures suppliers that seemed to do OK were Spirit and Mitsubishi although they were both horribly late due to a lack of specifications from Boeing. Mitsubishi did well thanks to their experience building composite wings for Embraer. That’s something to keep an eye on. JAI is at least as well positioned as Airbus to develop a next gen commercial airplane in any size that struck their fancy.

            There’s another book for you by the way. Embraer came really close to failure due to quality issues on the 170 that were every bit as bad as the stuff coming out of North Charleston. I got an AA captain to give me a walk through the plane one time at CMH. They had a plane break open on them at the forward major body join after a hard landing shortly after taking delivery of their first couple planes. It was hushed up, and a massive rework and inspection process transformation had to be done. It was almost certainly funded by the Brazilian taxpayers.

          • FT 2019:
            -> “New CEO is a confident public performer who has been director since 2009”

            At the bottom of the article where usu. the good stuff are:
            -> ‘ After so long on its board, however, some analysts question whether Mr Calhoun can bring substantive change. “It’s very doubtful that we could expect things to improve just like that,” said one veteran aerospace analyst who asked to remain anonymous. “We are going to have a fresh face. Whether we have a completely fresh approach remains to be seen.”

          • -> ” … in a telling coda, Boeing paid $92.5 million to shareholders who accused the company of using accounting tricks to hide the damage prior to the crucial merger with McDonnell Douglas (BW — May 20, 2002)

            Link to 2002 article

            -> ” … sheds light on the little-known “program-accounting” method used in aerospace to this day. A controversial system that many analysts criticize for its lack of transparency, it continues to give Boeing broad leeway to goose earnings–and to make it one of the toughest companies in America to evaluate.

            -> ” … indicate that Boeing did more than simply fail to tell investors about its production disaster. It also engaged in a wide variety of aggressive accounting techniques that papered over the mess.

            -> ” … that Boeing took advantage of the unusual flexibility provided by program accounting–a system that allows the huge upfront expense of building a plane to be spread out over several years–to cover up cost overruns and to book savings from efficiency initiatives that *never panned out*.

            -> “The aerospace giant was a widely held blue chip that had a huge short-term incentive to prop up its stock price. Taking advantage of an investment community willing to tolerate the company’s opaque reporting system, executives managed to conceal fundamental operational problems for nearly a year.

            -> “At a time when investors are asking themselves how far Corporate America can be trusted, the Boeing saga provides rich new evidence that companies have much greater leeway to manipulate their numbers than most people suspect.

            -> “As a result, Boeing’s financial reporting in early 1997 bore little relationship to its business reality.

            -> ” … the company allegedly started to shift monetary reserves from healthier aircraft programs to keep the 777 on budget, according to the complaint and two former high-ranking executives. These are funds that would accumulate when Boeing overestimated the costs for some plane lines. Officers established “management reserves” to pay for, as current corporate Controller James M. Bell put it, “unknown unknowns”–unexpected expenses that historically arise because of the complexity of airplane construction.
            While the establishment of these management reserves is perfectly legal, it is a violation of GAAP to shift money from one program to another. Nevertheless, a handwritten note from a Boeing employee dating from May or June, 1997, said the company had borrowed from other divisions to boost the 777. “Much of the reserve balance used to cover performance was generated by other divisions and spent on the 777 division,” it ran. Specifically, the company drew on reserves from the profitable 767 line after the reserve established for the 777 “was overrun” in early 1997, says one former Boeing manager.

            -> “Another method Boeing allegedly used to stave off a 777 write-off was exaggerating the effectiveness of some of the cost-savings initiatives it had launched in the mid-1990s. Under the flexible rules of program accounting, plane makers are permitted to make projections about efficiency efforts and start tabulating the benefits immediately–even if, as a practical matter, the initiative isn’t yet working.

            [Is there any indication that BA is trying to pull off the same gimmick??]

  14. I always liked the 747 SP with the single slatted flaps and no flap canoes on the wings. Another interesting 747 was the 747-100B SR SUD.

  15. Calling a Muhlenberg an engineer is a bit like calling a crypto aficionado a financial expert.

    • He was an engineer in his earlier Boeing career, but I think his last top level engineering job was as ‘chief engineer’ for the Boeing X-32 program, so he came up from the defence/space side ( before the McDonnell merger)

    • Clearly Qatar Airways couldnt provide the crucial documents from Qatar regulator about its grounding decision and when even the judge said ‘show me the money’ and a deadline it was all over… and quickly resolved a settlement that may have been underway for a few weeks

      • Now how toes Qatar sort out the MAX-10 and 777-9 orders?

        Of do they agree to let the A320 slots go ?

        A350-1000? Hmmm

        Airbus works out the A350 issues with the Qatar regulators.

        All interesting.

        • Theres lots a way to make an ‘order’ thats not a legally binding purchase, commitments , options letters of intent and so on.
          Just make sure you drop the’ order’ before a deposit is due, or its swapped to another type of plane .

  16. I have been trying to figure out the wording for someone who stands on the shoulders of Giants but is Jello and claims to be a Giant.

    • Starts with “A”, ends with “n”

      In the Culture: Projecting without much contact to reality.

  17. I think the apt turn of phrase is that the leadership of the company as feet of clay.

  18. @Dukeofurl Agreed on your comment about Renton and the 737 line in Everett being the last one standing eventually, although I think your timeline is much too generous. This will happen as fast as the logistics processes to support 737 in Everett will allow. There is an element of discovery in that, and the rail line may be an issue at some point. But, I would expect the behavior of the corporate team of the past two decades to remain unchanged. That would strongly suggest that they want to redevelop the land in Renton ASAP so as to get the cash out of it. If they have shown a talent for anything, it is spinning off the real estate. The pre-Condit Boeing that was always on the hunt for strategic industrial real estate is as dead and gone as hula-hoops and 8 track cartridge tape players.

    • You can always move the 737 wing from Renton to Everett on the Dreamlifter…”a short flight” but costly move That said, does anyone the information on how wide the 737 wing is at the root (section that attaches to center wing box)
      “As to headroom, clearances above rail top are normally 4.16m (13 feet 8 inches) increased to 4.77m (15ft 8 inches) where there is overhead electrification. Road level would be 300mm (1ft) below rail top. Hence, without altering tunnels and bridges, the clearances available are 4.46m up to 5.07m.”

      • This all true. But, it will be the 40-8x buildings that go first for redevelopment.

        • There is already a spur rail line up to the Everett plant, it leaves the main line near the ferry terminal. 767 sections from japan still use it when they unload from the main port area.
          if the fuselages can travel from Kansas they will surely be able to continue to other side of Seattle by rail.

          • After it was determined that the Wilburton trestle needed to be replaced, it was decided to abandon the eastside rail line and rebuild the spur that parallels what is left of the old Cedar River outlet of Lake Washington, including a new bridge across Shattuck Ave. S. (too low for the Google street view cam to go under).
            So actually, the 737 fuses from Wichita have a much shorter path to the Everett site once they come into Washington State from Sand Point, ID.

            The longer term issue for rail access to the Everett site is sea level rise, which is impossible to forecast (it’s a non-linear problem with insufficient data). Climate change driven issues are not nearly as great for the Everett site as they are for North Charleston or Boeing Field, but they are not negligible either. Back in 2003 Boeing actually paid me for about six months to research the potential impacts to the company. I worked on it with another tech fellow, and we made a couple of presentations on our findings, which were promptly ignored because a couple of the findings were at odds with what McNerney wanted to hear.

            Oh, and an interesting thing about the Wilburton trestle, bridge and tunnel system is that they are now being rebuilt, albeit to much lighter duty standards, so they can be used as recreational trails.

          • Yes RTF.
            “….. Although some trains travel via Colorado, the most common
            routing is Wichita to Kansas City via Newton before heading across Nebraska from Lincoln to Alliance. The train then travels to Gillette, in Wyoming before passing the Idaho cities of Laurel, Missoula and Sandpoint. From here the 737s travel into Washington, usually reaching Renton via Spokane, Everett and Seattle. ”

            So they are already arriving in Greater Seattle via Everett. Problem solved when they detour into Paine Field spur line

    • The DPA has been rejected/cancelled by the judge , thats why Boeing is now indicted. Back to square one
      The families cant have it both ways

      So many car boot lawyers dont even understand the basics

        • Not exactly. This case is going to go on for a while. I seriously doubt that those who are truly responsible will ever be held accountable for what they did.

          The DPA is still in place. But, by pleading not guilty a few days ago, the substance of the plea agreement becomes justiciable. Oddly, the prosecutors in the case have taken the curious stance that the admission of guilt in the DPA does not require an admission of guilt in the actual case. This is unlikely to fly with the judge, who seems to agree with the position of the plaintiffs. But, even if criminal liability is established, what would that mean?

          Since there is no constitutional basis for business law when it comes to the rights of corporations in the U.S., it really is anybody’s guess as to how this will turn out. Is a corporation a person with full rights to the Bill of Rights, or is there some clearly defined limitation to that? What sort of a legal entity is a corporation under federal law?

          Let’s say that the judge finds that the corporation is not a person, and sets aside the corporate veil. Which individuals will then be exposed as defendants? What’s the basis for making such a decision? Or let’s say that the absurd position taken in the 1886 Santa Clara County v Southern Pacific us relied upon as it was in Citizens United, and the court decides that the person named The Boeing Company has to go to jail. How does that work?

          Then there is the fact that even under non-GAAP accounting by which the financials have been reported, since 2018 the company has been bankrupt, so its status of being a person is moot since it is dead. Does the AG of the State of Delaware have to go into court and defend the validity of their charter that created the existence of the company more than a century ago? The only corporate legal mess I can think of that even comes close to this one is the one Monsanto was in a couple decades ago.

          Right now, this will progress with whatever the lawyers can convince a judge and/or jury to believe and act upon, and that can vary wildly from one case to another. So any predictions on how this is going to turn out is just guesswork. About the only thing we can say for sure (maybe), is that because it is a federal case and a criminal proceeding, not a tort, there probably is also not a statute of limitations. This mess could go on for decades. Meanwhile, the execs responsible for the horrifically awful systems engineering decisions, including the decision to simply not do the Failure Mode Analysis work on the system, are going to live out their lives, our of jail, and with the outrageous pay packages they got for doing the deed remaining untouched.

          I think the execs and company lawyers involved are perfectly happy to have big arguments like this surface periodically in the case. It gives the lawyers more billable hours, and burns the clock. Selling off ever more company assets to pay the legal bills suits them just fine.

  19. One of the first things I did after the merger with MD was to go to Long Beach and see how things were going, and find out if there was anything I needed to do for them. Three things about their facilities were quite striking. The engineering offices were very nice new buildings. The factory where the MD-95 was being assembled (now completely rehabbed as a Mercedes facility) was so pathetic. It looked as though it hadn’t even had a paint job or cleaning in at least 30 years. The only life in two of the three bays were the pigeons, and there was was enough guano from them to restart the orange groves. The C-17 plant (now totally rehabbed as Relativity Space) was relatively new and clean, and had a very clever S&I tooling design. But, someone had made a major blunder the the design of the actual building, and staggered the roof such that the cranes were all prisoners of the bays in which they were installed. All Boeing factories built since 1935 had cranes that could wander from bay to bay, creating aerial transportation pathways. In short, the place was more like a decrepit museum or remnant similar to what I had grown up experiencing in the rust belt back in Ohio, Indiana, Illinois, and Michigan. It was no wonder they were sick in terms of their product lines. I found a couple people I could work with in the C-17 plant and that was it.

    If Calhoun and company think they can still sell a plane with 200 seats or less that has aluminum wings 15 years from now, and get a price that recovers the cost to produce them, they are smoking the funny weed. The folks in Renton will keep their buildings clean and neat, unlike what I saw in the old DC factory in Long Beach, but that will not be enough to keep the product line alive. In fact, I doubt very seriously that they will be able to afford to train the highly skilled people that are required at the skin and spar milling plant at the Frederickson site. Producing those panels, even with computer controlled tooling, is as much or more an art than it is anything else – especially the shot peening process. ANA could attest to that if we let them, but we cut a deal so they wouldn’t say anything about a certain batch of planes that have thin skins on their wings. I think the last of them is now retired from service.

    • Which is why TTBW is being tested to replace that said product. They do not. Boeing for the first time in years has given us an insight into what the future of fheir narrowbody portfolio looks like

      • @Nnaeto not the case. As someone who worked on that concept for a decade, I can tell you that the TTBW is just a curiosity of So Cal amateur hour, and nothing more. The entire premise of a high-wing airplane (with or without a strut) can no longer be certified under FAR 25, even in the pre-MAX climate. It cannot pass any of the requirements for crash landing (wing + fuel above passengers) or ditching & stability in water (e.g. the Hudson landing). Never mind the horrendous weight penalty for landing gear pods and extra drag from the landing gear pods and the separate wing to body fairing. Surely it can fly as an experiment, but it wont be certifiable as a commercial product (with or without truss-bracing) and even if it was, it won’t be economically competitive with a lower tech low wing airplane by the time the reality comes home. At present, the SoCal folks have decided they would like to try something, although they have the detailed numbers and opinion papers telling them its not really a viable technology or product. Ever wondered why literally all commercial jet transports certified since the late 70s have low wings? I assure you, its not due to a lack of imagination.

        • This is exactly right. And, there are more issues yet. As I pointed out in the discussion about the need for a baby twin aisle, the plane and its potential performance in the air is only one of a fairly long list of considerations for making it into a viable product. It’s performance at the gate, it’s ability to fit up to existing gates, use existing ground equipment, be able to be serviced in existing maintenance and paint hangars, and it working will on the existing runways are all huge issues if you want to do something that forces one or more of them to change. The last time we tried to force such a change was with the 777 main gear. We got away with the added weight per square inch because it worked with just enough existing runways where customers wanted to use it, that we could nudge the others to adapt. Significantly increasing the wingspan on a product for the single aisle market is asking way too many other things to change to make it work, unless you can fold and unfold them reliably from the flight deck while taxiing. And those hinges and controls for them would add significant weight and maintenance costs. We have yet to see how well the folding tips work out on the new 777.

          • How much improvement can be made on a 36m wing? Maybe the next wing will look a lot like the A320/737 wing except be CFRP cooked in Everett.
            I think the next incremental step is a small twin aisle 2-2-2 or 2-3-2 at 90t to 100t, with a single axle, 50m long x 36m wing.
            The efficiency will not be gained by aspect ratio, but by moving 15% more people through a gate than an A321 at the same cost.

          • Next wing…thermoplastic or metallic The number of autoclaves CFRP would be too expensive (and take up factory space) for a rate of 80-100 shipsets a month
            That said, if metallic new design and assembly processes are needed to eliminate the number fasteners from 50,000 per wing set

  20. @ UWE Sorry, that just isn’t so. The predecessor to Airbus, the Concorde was never economically viable. It was more of a program to intertwine the economies to help convert the ECC to the EU. Coming out of it was the launch of EADS and Airbus, and their first two attempts at a product were woefully substandard (the A300 and the improved version of it, the A310). They finally started getting it right with the A320 family and the second revamp of their wide body, which was the semi-combined programs that produced the A330 and A340, both of which were quite good.

    • We were talking Airbus.
      ( Concorde was a UK FR coop, not panEU )

      In a fair assessment you’d have to concede that
      doing the A330/A340 combo same frame, 2 or 4 engines
      for the cost of 1.2 types was brilliant.

    • Airbus didnt start from scratch.
      Aircraft companies in Europe were building airliners the same time as Boeing was from the 1920s.
      Airbus was initially an alliance of existing aircraft companies

      The A300 was a fine product from the beginning. They were in fact well ahead in composite usage . The A310 introduced major changes for it and the A300 sister plane with first plane with composite fin and rear bulkhead. ( Boeing didnt really use it much till the 777 came along in the 90s)
      eg ‘The A310 introduced a two-crew glass cockpit, later adopted for the A300-600 with a common type rating.’
      A310 was designed as a direct competitor to the B767 which entered service 6 months before

      • both projects started at the same time ( Summer of ’78 )

        The A310 with a significantly improved super critical wing.

        • Apparently to a significant part caused by friendly US worker sabotage. ( standard technique: sabotage the product and then attribute it to “low quality foreign stuff” )

    • I don’t think Fedex with 65 A300-600RF and UPS with 52 A300-600RF still flying think that they are substandard.

      • They made a decent freighter for sure but they are also being retired in favor of the 767s.

        • A330.
          not 767. ( beyond the gifted away 767 freighters.)
          even the 767-400 didn’t have a significant impact.

        • The A310F versions out of service for Fedex, natural that they would be replaced by new build 767F. They had 69 converted airliner versions.

          The A300F are still with UPS and Fedex ( give or take a few )

  21. @David Pritchard Actually, the new composite wing plant at the Everett site was sized to be able to build wings for production in all six potential final assembly bays. Also, while the use of an autoclave is still the least cost way to cure composite structures in most cases, it is not the only way, and in some cases is not the most efficient. Much depends on the structure being cured and the line rate. An accurate discussion on this topic is way beyond the scope of this kind of a site.

    • But does the cure composite structure weight work for single aisle aircraft? (heavier than metallic) At certain point, you can’t make the composite structure thinner and lighter as metallic. As a reference a 787-8 weighs more than same size 767 (seating)
      But that said, Boeing comes out with cure composite wing and Airbus will come out with thermoplastic wing which is lighter and needs less capital investment and has faster build rate
      I guess will have to wait until the 2030’s to find out!

  22. @ Ted Actually, quite a bit of improvement can be made in wings by using advanced structures, and remain within the dimensional confines of existing ground facilities. Shot peening an aluminum skin into a fixed shape, and then modifying its flight characteristics with tabs and automated spoilers has done a lot. But there is more that can be done by using composites to achieve more complex and flexible shapes. Also, quite a bit of research has been done in skin flexing, which can do more. That is not yet a mature technology, but it definitely looks promising.

    Even more can be done by breaking the current size constraints and going to longer wingspans, but that gets into folding wings versus new terminal layouts and more. On the original 777 program we took a hard look at folding even more of the wing, and even did a mock-up and offered it for sale, but there weren’t any takers. The added cost didn’t pencil out. But things like that may still happen at some point.

  23. @Uwe Actually, the 767-400 (the “Stretch 2000” program) had a very significant impact. The technologies developed on that program went straight into the 777-300 ER and -200 LR, and the 787. Also, the original tanker prototype (the one sunk by the Sears/Druyan scandal) had the -400 wing, and would have been a significantly superior plane for the Air Force and package freighter customers. Now that it is relatively easy to do the FBJ on the 767 in one of the front bays, the -300 and -200 variants should be quickly recerted with the -400 wing, and all new production should use it. In fact, a hard look should be taken at offering a rewing program for the existing fleet, especially the tankers, assuming of course we ever get past the stupidity of the RVS and rework them into the KC-767 configuration, with respect to the boom operator’s station.

    • 767-400 is a dog. and sales show it.
      MTOW + 17t
      OEW +14t
      Payload +2t
      less range
      much longer takeoff run.
      where do you see game changer features?

      for a reference look at the A330 OEW gains vs MTOW gains over time.

  24. Here is current Boeing-GE business philosophy in a nutshell:
    1. Only thing that matters is the share price, not market share
    2. Share price is determined by earning per share
    3. Boosting this by increasing earnings is hard and slow. Boosting it by stock buybacks collapsing the number of shares is quick and easy
    4. Following this to logical conclusion….someday we coild build only 10 planes per year, but if there are only 100 shares outstanding, each one will be worth $1 million! Total success!!!

  25. I’ve said what I would do on multiple occasions, on more than one forum. It starts by taking a look at the nature of corporate charters and how they came to be what they currently are in the U.S. It helps to keep in mind that there is no real basis in the U.S. Constitution for business law when it comes to non-human entities. In 1886, Chief Justice Morrison Waite and his buddy Bancroft Davis tried to put in place a very underhanded remedy to the situation by writing a head note to a tax case involving Santa Clara County, CA and the Southern Pacific Railroad. The arguments and opinions in the case contain none of what Waite and Davis put in the head note. But, they made a bet that lazy clerks working for future justices wouldn’t bother to read the opinions, and would rely on the head notes for their case research, and it worked. In essence, they hijacked the 14th amendment which was all about guaranteeing full personhood and equal protection to all men (not women), regardless of race, etc.. But, most SCOTUS opinions since then that reference the 14th amendment have been about business law and the rights of corporations, and not about people. This creates a serious dilemma when you have a situation like the one Boeing is in.

    The shareholders of Boeing have hand zero ownership interest in the company, using the non-GAAP financials, since 2018. If we were to go back and restate to GAAP starting in about 2010, the shareholders would probably have been zeroed out sometime around 2013, or perhaps a tad earlier. So with that in mind, here is what I think needs to happen – GM 2009. Stop this nonsense of selling off the company’s wealth to generate cash to keep the thing on ventilation.

    First, the board, shareholders, and entire membership of EXCO need to be given a chance to seek other opportunities. Then, Congress needs to decide whether or not they want the country to have a commercial aircraft company in this country. There needs to be a debate and a vote. Put everything on the table and let the public through their representatives decide. If the answer is no, then quit the slow death spiral, shut it down, and see if the investors in Relativity, SpaceX or someone else wants to buy any of the pieces. If the answer is yes, then that’s another story.

    We need to start designing new products again, and do so on a continuing basis. The simple fact is that currently, there is not a single person on the Boeing payroll who has ever worked in either a managerial or technical leadership position on a Boeing program that was successful. Think about that for a moment.

    Success has a very simple three part definition. The program finished within a couple months of the original committed schedule date. On day one the new air vehicle met the kick-off customers’ mission requirements. And, it immediately started making money for the company. That’s a very simple test, and again, there is not a single person on the payroll who has leadership experience of any kind in making that happen.

    Next, follow the basic lead, follow, or get out of the way approach. And in my world, the only one of those options that leads to a sustainable outcome is to lead. So everyone who remains or who is hired needs to recommit to Bill Boeing’s admonition way back in 1929: “We are embarked as pioneers upon a new science and industry in which our problems are so new and so unusual that it behooves no one to dismiss any novel idea with the statement that ‘it can’t be done!'” He then went further: “To keep everlastingly at research and experiment, to adapt our laboratories to production as soon as practicable, to let no new improvement in flying and flying equipment pass us by.”

    Contained in that is a structural necessity of the company if it is to be successful. Design engineering and manufacturing engineering must work exceedingly closely together. The must be co-located on large sites. At this point, I would retrench and start building again from the Everett site out, for the commercial airplane side of the company. For the defense side, since we aren’t going to be the lead producer of the kinds of products that Lockheed is so dramatically far ahead of us on, I would forget that and focus on things that leverage the commercial platforms. That would start by consolidating the MMA and tanker programs, and fire the next person who so much as breathes a single word defending the failed RVS. If they want to keep a single test bed with that crap installed and keep flogging it, fine, but start converting the fleet to a configuration that works. Calhoun rattle on and on the other day about the importance of the voice of the customer, but when it comes to crews trying to refuel planes in flight he has been ignoring them for a couple decades now. The lying about the tanker has to stop. Deliver a product that works, damn it.

    As for the MMA, it’s ok. I can’t talk about that stuff as it is seriously classified. I know more about it than I’m supposed to already from my days when I was on the P-3 Update IV program and had a secret clearance. The product is just fine, and should not be debated.

    That would be a good start.

  26. This is getting old – fast. The -400 was mostly a wing improvement program, which could be applied to other 767 sub-models as well as other programs, which it was. I said that, and so the rattling on continues about the overall -400, which in and of itself was just a stop gap until the 787 (aka airplane #1 of the overall 20xx program) would be ready.

    There seems to be a wide range or reading and technical aptitude here. I dropped in to try and help folks understand a few things that I think should be known by a wider audience, but I’m beginning to wonder about the value.

    • @RTF

      This comment is section is pro Airbus. If you were RetiredAirbusFellow you would be lauded. You make good technical points and bring up valid criticisms of Boeing and its management. You know your stuff, and have not read it off twitter or a blog. So expect whataboutisms posts to the facts you state.

      My question for you is could the 1980s 7J7 accepted regular turbofans instead of the Unducted fan? How close was the first GTF engine, the SuperFan close to being ready for the 7J7?

      It was then Boeing made the decision (to my dismay and chagrin) to have a stretched 737 replace the 727 workhorse.

      • “This comment is section is pro Airbus”
        This comment is section is pro facts, which may often look better for Airbus 🙂

        “SuperFan” died in the arms of Airbus on behalf of the initial A340 concept ~1986. 25 years later …

        757 did not carry the advantages from grandfathering the 737 prospered on.
        Shrinking (vs growing) capabilities is complex and/or depresses efficiency.

        IMU 757 was designed as “RunWayRocket” to do the milk runs on rurral shortish runways with fuel for the day in the US.
        Later use as longish ranged frame was secondary use, wasn’t it?

        • Superfan was intended mainly for NBs, that is where the money was. Boeing was looking at it for the 7J7 and ironically Airbus for the then upcoming stretch A320 series.

          • “But 7J7 was more or less a fantasy product.”

            No it was not.

          • Unducted fans on the 727, reducing it to two engines (i.e. the 7J7) and on the DC-9 were definitely serious offerings. They were both authorized to be offered for sale. But, the noise revolt started by Orange County, and which quickly spread to other cities, put an end to that engine concept. It then became obvious that going with larger diameter underwing engines which require a taller landing gear was the way to go, hence the 757. Of course, I already explained that previously. There seems to be a lot of uninformed noise mixed with the serious commentators on this forum. It was a HUGE mistake to kill of that plane in favor of a longer 757.

            Finance only guys seem to get it wrong with a fair degree of frequency, regardless of industry. I guess when viewed from that perspective, all companies are alike, in that all companies are at risk of poor product decisions forced by the short term thinking that grows out of the blind and uninformed stupidity of greed. But then of course, that is one of the points that Kahneman makes in his book “Thinking, Fast and Slow,” although he is much too polite to put it so bluntly. But given the amount of damage that has been caused by such short term thinking, it strikes me that a little bluntness is long over due.

      • How come there’re so many comments touting whatever BA did/does is always right?? Haha.

        • Who is saying Boeing is always right . Major major strategic mistakes in last 20 years. ( plus the malaise era when the build quality went south)
          Dropping the 737 replacement which was to come after the 787

          Doing the 747-8, as they like Airbus predicted a market of 900-1000 ‘ large quads’ ( Airbus had 20% higher prediction , but both wrong)

          And then when they did the 737 max didnt recognise right away they needed a plane matched in capacity for A321- which had been in service 20 years or more.

          • Hindsight is … eh 20/20. But you believe the MAX 10 is going to single-handedly claw back marketshare lost and there’s no need for any clean sheet new aircraft for the next 10 years or so??

          • I didnt say the Max 10 will claw back market share.

            However the Max 9 and 10 twins *together* will be competitive, thats all that you can expect.
            The A321 has had one hell of a head start- I couldnt believe it and said so back when Boeing dismissed the neo program with some jargon about how they didnt need to re-engine. Until they did

    • @RTF
      We appreciate and enjoy your comments. Your comments are the most informative, sincere, relevant, and accurate commentary I have seen anywhere on the topic of Boeing, its problems, and what should be done about it.

      • Thanks. I appreciate that. I started out in my 20’s on a CPA career path with a specialty in computer systems (we called them EDP in those days). But, due to a scheduling conflict with some volunteer teaching I was doing, in 1983 I had to quit my job. I happened to be having lunch with a Boeing friend that day and he offered me a job on the spot to work on some cutting edge computer and network stuff on the ICBM program. I thought I might stay two years and then go back to accounting work. But the place got under my skin and I literally fell in love with it. The culture was not like anything I had ever experienced growing up around the auto companies in Detroit. The talent quality, the commitment to quality, and the deep respect that people had for each other while actually thriving on the self imposed pressure of making things happen on schedule was very exhilarating. The company could do things others could only dream about. It’s very hard to see it deliberately destroyed by the harvesting of its wealth and deliberately driving out the talent just to save a buck and throw it at the greed machine.

        If it can be stopped and the company saved (highly unlikely at this point), then helping others to understand how it worked when it worked is, I think, the best hope of making that happen. The only way to even have a chance of revitalizing it is to throw out the current leadership and get rid of the whole nonsense of management by budget numbers. It has to be management by schedule and quality performance, which amazingly enough, actually reduces costs and increases profits. The best people working together effectively and quickly, even though they cost twice as much, produce so much more, and get to first revenue so much faster, that they end up making huge profits compared to the slow and cheap approach.

        • Totally agree with you, and, unfortunately, agree that it’s not going to happen, ie, a complete purge of the Cash Flow cult that has taken over the highest level of the company is the only hope, but appears impossible. Those people have ensconced themselves in the C-suites more securely than occupants of the Hitler bunker in April 1945. Seems that they must have support of the largest shareholders. Hard to imagine anything that could dislodge them when the Max disaster did not.
          Boeing traded masters of the same mold, Calhoun for Muilenberg.
          It’s like they fired Darth Vader and replaced him with the Emperor!

  27. So I was on the defense side of the company at that time, mostly in the Ballistic Systems Division and later in Navy Systems, so I have to rely on what I was told more than direct observation. I think the place to start is with understanding why early jets at short landing gears and the smaller ones had built-in air stairs.

    First, in the DC-8/707/Comet/Convair 880 era, the engines did not require a taller gear and even the larger terminals did not have jetways initially. When the 727, DC-9, and later the 737 were being designed, the whole point was to tie smaller cities into the larger hubs, and they were not going get jetways for a long time, if at all. So looking ahead to what was then just a theoretical concept for higher bypass ratio engines with much larger nacelle diameters didn’t seem necessary. Also, the idea that a single model plane would have a life of more than a decade was way beyond what anyone was thinking. So many ground facilities started to be built around those early plane sizes. Paint and maintenance hangars are big investments, so straying far from what will fit in them would not be done lightly.

    All of that said, in early test flights of the 727 it was quickly discovered that at an angle of attack that is not that far from the target for take-offs and landings, the engines get deprived of air and stall. American had a near catastrophic accident at Havana with what I thing was line number 4, or maybe it was a later plane and repaired by cutting up L/N 4. Whatever, Douglas was immediately notified of the issue, but even so, flying them took more than average skill.

    Ok, now roll forward to 1980 and the unducted fan proposals, then think Orange County, a super popular destination for those planes. While not the issue that it is everywhere today, noise was already a HUGE issue at SNA back then. So those planes were not going to be allowed to fly in there. That sort of got things rolling politically across the country as other communities took note and the resistance steamrolled. In essence, the concept was DOA. So the big nacelle cowling designs started being developed. Also, about 5% of the passengers on a DC-9 instantly hated the plane and vowed to either never fly on one again, or at least not sit in those last few rows, which were pure torture from the high noise levels.

    So those things all combined started the march toward higher bypass ratio small engines, which weren’t all that different conceptually from what was being done on the large engine designs. Then there is the Condit/Mulally dynamic, which is weird to say the least. Alan, at least publicly, still calls Phil his friend. With friends like that he sure didn’t need any enemies.

    Condit has this reputation as having been a great engineer, and that might be true, but it might not be. His behavior from about 1985 on is pretty widely understood, so what he was doing earlier becomes highly suspect. In his later career he became notorious for taking credit for other people’s work, especially Mulally’s. He went way way out of his way to keep Alan out of T’s sight. Almost certainly, the conceptual parts of the whole transformation of the 727 replacement program into being an underwing twinjet with a flight deck that was super similar to that of the 767’s was Alan’s doing, pretty much alone. It was a brilliancy of the first order. The number of issues it addressed was fantastic. The smart thing would have been to have done a baby version of it (the still-born 757-100) and gotten rid of the 737 instead of doing the 737-300 program. But the customer pull, especially from Southwest was tremendous. Whatever, we ended up killing off the wrong plane. As the saying goes, if you don’t eat your own children when it comes to products, someone else will do it for you.

    • Good points. The 757 was the designated replacement for the 727 but what killed it was over design, in that its wing was great for takeoff and fuel tank capacity and a wide span for long range cruise ( 38m span , 185m2 area) but after the 737NG could do a lot of the same with 35m span and 125m2 area.
      The smaller gate size than the bigger 757 must have been a huge advantage

      The lower plane weight , the ZFW of 64 tonnes ( -800) and the lighter/lower thrust engines were a winner all the way and the airlines knew it

      Baby versions of the 757 were out of the question and it was killed after the big decline in orders after 9/11. The sub contractors werent long term , the fuselage initially was made by North American who pulled out when they got the B-1 bomber so it went to Renton
      Some suppliers got contracts on the basis they also supplied engineers to Boeing who worked on other programs ( according to this story)

      Good story which also covers the actual Boeing machinists at a place like Auburn

      • While it’s true the 737-900ER can do a lot of what the 757 at the time (ie, before winglets) could do for $20m less in capital costs, what killed the 757 was 9/11. Operators were predominately US airlines and they were the ones hurt the most by 9/11 and orders dried up.

        Also: Boeing spent a lot of time, money and effort modernizing the 737 production but not the 757. The 757 was built mostly by hand (so-to-speak) and by 2002, it cost more to build than airlines paid for it.

        • 900(ER),MAX9, MAX10 never got the (continuously increasing) interest the A321(NEO,xl,xlr) could garner.

          with 1000 assigned orders the MAX 10 actually has made a significant step vs the 900(ER) and MAX9

          But today and in comparison A321NEO orders exceed A320NEO orders by some margin.
          market interest has moved ( beyond the MAX10 already? 🙂

        • And putting the 757 cockpit on the 737 would have meant a new certification process. I wasn’t thrilled with the 737 being the 727 replacement but it made sense financially.

          Funny, the 757 was ahead of its time capacity wise. When it came out L1011s and DC10s were still flying domestic routes. Now everyone wants 757 capacity in a narrowbody

    • One plane ( A321 neo) announced in 2010, while the Max 10 was announced in 2017.
      So it was getting a head start in orders orders for 7 years .
      Since there is only 12 seats difference I would bunch the Max 9 orders with the 10 as there is no Airbus equivalent- A320 is way back, a bit smaller than max 8- but Boeing doesnt break out the different types.

      The presence of the 757 meant that the first 737-900 was deliberately limited in range , and had few orders. The end of the 757 line meant the 737-900ER
      model quickly replaced the unloved 900.

      Maybe in 25 years time , the only 737 max assembly line left will be at Everett, pushing them out for Southwest and Ryanair- who dont want to change a thing , including the price!

      • (Only because) For years, BA tried to sell the MAX 9 but failed.

        Told you BA missed the boat badly. Now repeat after me.

        But you wouldn’t admit BA has made any bad move. Haha.

        • Pedro

          “…Told you BA missed the boat badly. Now repeat after me.

          But you wouldn’t admit BA has made any bad move. Haha….”


          Is this a serious comment? Ah ah!?..
          What are they supposed to understand people here? “Boeing is doing a bad move.”

          It is true that Airbus has succeeded in all its aircraft such as the A340-200/-300/-500/-600, A380 and A350-1000 are also
          “bad move of Airbus”.

          Stop trolling, what are you trying to prove it to us?
          The 737MAX9/-900NG/-ER do not have a real growth compared to the MAX8/-800NG. This is the reason for its low sales..

          • Wue

            …”900(ER),MAX9, MAX10 never got the (continuously increasing) interest the A321(NEO,xl,xlr) could garner.
            with 1000 assigned orders the MAX 10 actually has made a significant step vs the 900(ER) and MAX9
            But today and in comparison A321NEO orders exceed A320NEO orders by some margin.
            market interest has moved ( beyond the MAX10 already? 🙂…”

            The market share between the A320neo and A321neo is currently +/- 50%.
            The 737MAX10 will allow Boeing to increase its market share to reach 45% in 2029/2030 in the narrowbody market.

            The MAX10 sells very well as a complement to the MAX8. In fact, the 737MAX family will be the best-selling version of any previous generation of engines.

            People thought a few weeks ago that everything was over for the 737MAX,
            The trauma for them is that Boeing will now open a 4th assembly line.

            We remember that in December 2022, the 737MAX10 suddenly obtained a waiver for its upcoming certification. Things have evolved very quickly and well…

          • I don’t have to tell you why the MAX 9 failed. Ask ex-Boeing workers/executives in the know, or, if you know a couple, ask BA’s customers. BA reluctantly got on the MAX 10 more than proves my point.

            BTW according to BA’s 10K the backlog of MAX 10 is far short of 1,000. 😂 Stop mixing wishful thinking with reality.

  28. > The 737MAX10 will allow Boeing to increase its market share to reach 45% in 2029/2030 in the narrowbody market… <

    Mmm, we'll see how all that goes, as well as the bit about a fourth
    737MAX™ assembly line. Talk is cheap, and it's one area where Boeing and its media partners™ excel.

    • I wonder on what basis that projection comes from?

      Wishful thinking?? (Reminds me of the wing-join wunder 🤭)

      • Pedro,

        …”I wonder on what basis that projection comes from?

        Wishful thinking?? (Reminds me of the wing-join wunder…”

        Just based on the fact that there will be a 4th assembly line.
        You produce and reduce your backlog, right? You sell a little more and that’s the goal.
        What’s annoying?

        The wishful thinking has no basis me I have one but it seems that the 4th assembly line annoys you or the certification of the MAX10?
        Unless it’s both?…

        It’s easy to make a projection. What Boeing is not allowed to sell a little more but Airbus, yes?

        You have no foundation, and see you are in wishful thinking…🤫

  29. “Boeing is doing a bad move.”
    Who said that? Checklist’s fiction writing??

    • Pedro

      And that what is it ?

      …”But you wouldn’t admit BA has made any bad move. Haha….”

      Memory problem?

  30. In November, “Boeing Is Hoping Biden-Xi Talks Lead to a China Reopening”.
    Four days ago, Calhoun “hopes that an upcoming visit to China by U.S. Secretary of State Antony Blinken would lead eventually to ‘robust’ plane orders.”

    Fool me once … fool me twice ….

  31. Pedro,

    “In November, “Boeing Is Hoping Biden-Xi Talks Lead to a China Reopening”.
    Four days ago, Calhoun “hopes that an upcoming visit to China by U.S. Secretary of State Antony Blinken would lead eventually to ‘robust’ plane orders.”

    Fool me once … fool me twice…”

    What’s your problem with that? Does that go against your wishful thinking?

    Is it a potential order from China that annoys you too?
    Ok …

  32. Williams,

    “…Not happening, have you been watching the news? Would not expect a Boeing order for a LOOOOOOOOOOOOOOOOONG time…”

    The very example of a real pious old man… Is it Boeing’s fault that China is spying?

    What world do you live in?
    I don’t think this will affect Boeing orders.

    • Its solely US officials and media that are in hysterics.
      ( and those aren’t really known for telling the truth in any way. Usually stuff is invented from whole cloth as it fits the fictional narrative.)

      Note balloons follow air currents. No course control.

      MPS project:
      there is a range of similar projects around.

    • @Checklist

      Going back to Leeham’s article about GeoPolitics getting in way of Boeing’s China order. Its not hard to see, China sends messages through large aircraft orders, they have always done it in the past and will in the future. The US shooting down a balloon belonging to China does not exactly help the simmering trade issue. When China decides its in their best interests to show a fig leaf there will be a large Boeing order…………Looking at the current climate, I just do not see it in the near future.

      And when it happens it will have nothing to do with the safety of the MAX, it it will be GeoPolitics.

      • In your mind, what “GeoPolitics” seismic event(s) happened that led to the MAX rts in China?? 🙄

        • @Pedro

          Go reread Leeham’s article on the subject, you are commenting on their comment section.

          • “Go reread Leeham’s article on the subject”

            When did I say there’s a connection between “GeoPolitics” and the rts in China?? Lol
            I’m asking for yours. Bad deflection. 🙄
            I think it’s your responsibility to at least substantiate your post, but apparently you *can’t*. 🤣

          • @Pedro

            My bad, I am referring to future orders. Its their plane, it up to them if you they will let a paid for asset sit on the ground or not.

          • Who knows how much compensation BA has to dole out. 🤔

      • So on the political situation in China – politics is not my specialty, but I know a little bit about Boeing. I don’t thing the Boeing/China situation is as bad as the geo-political China situation. I think the Chinese are unlikely to make the kind horrific miscalculation that Putin and the oligarchs did, with their attempt to get out from under the Ukrainian transit fees associated with the pipelines. The Chinese are smarter than that, which provides some small but useful room for negotiations.

        Xi is caught between two very powerful forces. On one side he has the Chinese Red Army, which unlike the situation in most countries, is a super powerful and independent political force. He has to keep them happy and they have a grandiose expansionary vision. That does not favor improving commercial relations with China for any western company.

        Pushing back in the other direction are the roughly 921 million people who live in the urbanized portions of the country, and who exert tremendous normal market forces. Ease and freedom of travel is one of those forces.

        Xi will try to find a way to keep both of these forces from becoming excessively unhappy. One way or another, he needs to keep the Chinese airlines supplied with equipment.

      • No disclaimer allowed:
        Past performance guarantees future results.
        I’m not kidding. 😁

  33. Sorry. Re-read the thread in case you forget, I’m not the guy who brought in politics, I wrote specifically about BA/Calhoun. Barking at the wrong tree. 🤭 BTW, even before the “balloon”, anyone who knows a thing or two can see thru what’s happening and Calhoun/BA’s wishful thinking.

    • Pedro,

      Are you sure you’re okay?

      Can you explain to us what is the relationship between a Chinese spy balloon on a territory other than China and a Boeing ceo?

      Just hilarious…
      (!) Specify your thought so that it relates to the topic.
      Thanks !

  34. ‘ … even before the “balloon”, anyone who knows a thing or two can see thru what’s happening and Calhoun/BA’s wishful thinking.’

    Self-explanatory. @Checklist, do you have any comprehension problem?? 🙄

    • Pedro

      A month ago nobody knew the 737MAX would fly again in China
      Who told you that’s Calhoun’s wishful thinking?

      IIs it forbidden to make a projection? Your exacerbated hatred towards Boeing prevents you from seeing things clearly.

      The resumption of 7373MAX flights in China, the certification of the 737MAX10 extended, the sale of 100+100 787s, the opening of a 4th assembly line
      seems like a traumatic experience to you. So what ?

      Hoping for an order from China is
      a wishful thinking right now ?
      So what else?…

    • The sub- standard gearboxes came from Renk AG in Germany

      The Marinette Marine shipyard isnt owned or operated by Lockheed, its an italian company since 2008 ( apart from minority share)

      The Judgement of the Pentagon ? Thats too funny, you really should so standup

        • RENK is a major and reputable supplier of marine gearboxes.
          Why they had problems is likely no one else has built this type of ship that can go 40kts and uses pump jets instead of propellers.

          The Pentagon was doing its ship and F-35 programs using something called concurrency where production would sort out the expected issues

          • The problem with so-called “concurrency” is that it- despite being forced on the taxpayers with claims
            of saving money- does not work; never has worked (except for further enriching the MIC here in the
            Exceptional Nation). Check out the Ford-class Aircraft
            Carrier for a recent example. The “B-21” program
            should be another real hoot..

          • The US Navy is cannibalizing more ships for parts.


      • What did they buy from Renk and did it fit the use case?

        I’ve seen that couple of times from US companies:
        order/use the wrong stuff and attribute the failure on the supplier.

  35. Pedro

    Who told you that’s Calhoun’s wishful thinking?
    A month ago nobody knew the 737MAX would fly again in China

    Is it forbidden to make a projection? Your exacerbated hatred towards Boeing prevents you from seeing things clearly.

    The resumption of 7373MAX flights in China, the certification of the 737MAX10 extended, the sale of 100+100 787s, the opening of a 4th assembly line seems to be traumatic experience for you.

    So what ? Hoping for an order from China isn’t wishful thinking right now? So what else?…
    The resumption of 7373MAX flights in China, the certification of the 737MAX10 extended, the sale of 100+100 787s, the opening of a 4th assembly line seems to be traumatic for you. So what ?

    Hoping for an order from China is a wishful thinking right now?
    It’s normal
    So what else?…

    • ” Your exacerbated hatred towards Boeing prevents you from seeing things clearly. ”

      This is not about quality of personal religious faith.

      counters here are afaics driven by exasperation.
      Your allegation is uncalled for.

  36. John,

    (!) R. Aboulafia must blacken his paper and read what naive people want to see

    It’s just wrong about CEO D. Calhoun. Since 2020, he has hired many
    of engineers, introduced safety culture, worked with the FAA and other global regulators, introduced quality during aircraft assembly, got the 737MAX back to the skies, and worked to keep the 737MAX10 in the portfolio.

    Today it is normal that after the effort, any company needs cash flow return. CEO D. Calhoun was the man for the job…

  37. Remind me how many BA had fired/pushed out under his watch! 🤭 (It was an “existential” crisis, he claimed. Somebody had to be sacrificed on the altar, at least he made sure it’s not him!)

    • Unfortunately yes, the former CEO D. Muillenberg was sacrificed. Not on the altar whose image you wrongly illustrated. He left with a golden parachute.
      This also reminds me of the same situation at Airbus in 2006 when the former CEO N. Forgeard left with his own (Power8 plan).

      This does not take anything away from the lessons learned.

      D. Calhoun, and the so-called “Suite C” could have questioned itself on past negligence and greed.
      What I wrote above is true. Things are not rosy, I have nothing against your opinion, however, I have doubts about your objectivity when we know that what Boeing is going through is not a surprising thing, given the rules of Wall Street, and the errors due to bean counters.

      Beacause when it comes to scandal with Airbus, you’re not there, and I can’t take any credit for that…

    • Oct 28, 2020 Seattle Times:
      -> “Boeing on Wednesday announced it will shrink its workforce further, saying that by the end of next year it will employ 31,000 fewer people …”

      • News flash (repeat)
        Boeing confirms it will outsource more jobs to Indian contractors

        Jobs jobs where have they gone??

        • Yes and so ?
          Are you an American worker advocate?

          Airbus has assembly lines in China and the USA.
          See where these jobs have gone !

          How come you’re not shocked? What happens to jobs in Europe?

          See how YOU have the selective memory. We give you NO credit until you are objective,

          I already warned you didn’t I?

          • What’s the definition of “outsourcing”? Any idea?? 🤭

            At least AB has the foresight and had no need to halt production, that resulted in massive layoffs.

          • Comprehension/reading problem hits again, it’s endemic here. 😂

          • Sparse knowledge combined with not thinking about it.

            Guess where the sections for those FALs are created. Most of the foreign FAL jobs are complemented by supply work at home. win:win
            ( and in scope of qualified workers we seem to have “Vollbeschäftigung”. )

            Outsourcing: moving jobs abroad. lose:win
            ( unsurpising in a society that is redistributive for feeding the rich)

          • AB steadied NB production at 40; OTOH BA *halted* its production by Dec 2019. That’s the difference. @DoU

          • Airbus still halted production, as the reliable sources confirm, from the coronavirus and of course airlines didnt want to touch any new deliveries ( main reason)

            Thats why they are at 40 , because the restart was harder than they thought. Of course it wasnt halted for as long as Boeing

          • “… the reliable source …”
            Fiction writing is fiction writing. Who’s re-writing history here?? 🙄

            Per AB 2020 result:
            it delivered almost 600 aircraft, almost 500 A320/321 family.

            Yeah production halted because “airlines didnt[sic] want to touch any new deliveries”. 😂

            Shocking! How detached from reality are you?

          • AB’s customers had no problem to take delivery:
            -> “India’s IndiGo took 44 aircraft throughout the year, giving it the top spot. Delta came second with 30, while China Southern came third, taking delivery of 22 aircraft.”

          • “because the restart was harder than they (Airbus) thought.”

            The restart obviously was not easy. supply chain issues are abundant on a global scale covering all industries.
            But I don’t think that Airbus went into this from a naive “fire some powerpoints to fix” perspective.

            On the other hand Boeing has for a long time countered Airbus less on a technical than on a PR/Strategic Communications path. (this strategy cost dearly over the long run, today Boeing has squandered alls its potential down to Zero.)

            Airbus in their counter to the fully fantastic plastic Dreamliner understood this rather late.
            ( solution: let the A330 slog on, attack the 777 with a stealthy product.)
            doing the NEO, ignoring the Boeing instigated PR storm counter continued that lesson.

          • @DoU

            From your link:
            The aircraft manufacturer […] said it would reduce that to 40. It will also cut A330 output to two a month and A350s to a rate of six.

            That’s it. Not any “reliable sources” confirmation mentioned. 🙄

  38. Source of 2020?
    During “Corona Circus”?

    Airbus is on the same planet. During this period there is no doubt that Toulouse has adapted to this rhythm. Of course there is no European Dominic Gates to talk about it…

    This does not prevent Boeing from recruiting engineers.
    It’s a balance, to watch and you make sure you have what you need at the right time and in the right place. No doubt there should be a surge of people in the design offices in the more distant future at Boeing and then after at Airbus…

    • I’m not sure that this back and forth about jobs, trade policies, and Boeing vs. AB is productive, but there is one thing that I think that could come out of it that would be worthwhile, if as I suspect, we would all agree and suggest it into the political process. It really isn’t a right or left, red or blue thing. It’s just common sense.

      When Douglas MacArthur was the dai ichi in Japan (effectively, the occupational dictator for the start of the rebuilding effort), one of the things he had his team do was setup what would become MITI, their Ministry of International Trade and Industry. Their job was to coordinate all governmental policies to maximize employment so as to prevent starvation, and make sure that they didn’t replicated that nonsensical free-for-all that we have inside what would become our beltway. It worked tremendously well for the Japanese. They still have big internal political differences about a lot of things, but they are pretty well aligned on the things that improve the overall economic well being of their country.

      We have the data to be able to do this here. Between the departments of Labor and Commerce, the U.S. government has all of the data that it needs to craft good industrial support policies. Imagine what things would be like if our tax incentive policies were crafted with that sort of strategic intent, as opposed to which trade group had the most effective graft disbursement team on K Street.

      It would take a new kind of annual report produced by the two key departments (or three if we included the Pentagon and their interests). And the customer for the annual report would the the entire voting public.
      Imagine crafting policy based on public support for an overall strategic trade and industrial development policy. It would be a lot more rational than the nonsense approach we have at the moment.

      • Interesting ( and correct ) observation.
        There are parallels elsewhere.
        Look into German “Soziale Marktwirtschaft” as established by Ludwig Ehrhardt, foundation for the post WWII Wirtschaftswunder” in Germany.

        Most of those measures have been “nulled” in the last 2..3 decades to feed “neoliberal” greed.

  39. There was a comment here earlier about the hiring of engineers, and that might help, depending on how they are used. The bigger problem is the program management culture. It cannot be stressed enough what the two big challenges are in that space, in terms of rebuilding the company. Addressing Boeing’s two biggest problems would require a dramatic change in the leadership team. That’s probably most easily changed by swapping out the people, but hey, anyone can reform if they aren’t too far gone. Even Dave Calhoun could become a decent leader if he would insist on fixing the two big problems. He still might not be the needed CEO, which takes vision leadership as well, but he could get things started if he were to change his ways.

    Problem one is how to manage a program such that it succeeds. To succeed, three boxes need to be checked. It has to come in on schedule. On day one, it has to meet the mission requirements of the kick-off customer(s), and it has to make money. The only way to do that is to make schedule and quality performance the two most critical things- basic PERT charts stuff. If you try to manage by adherence to a budget forecast you will fail and costs will skyrocket out of sight.

    The other problem is leadership integrity – there isn’t any. Boeing is swimming in a sea of watermelon charts. Producing or pitching one needs to be made a firing offense, as in anyone pitching one needs to be promptly marched off the property and have their badge take away. You can’t manage what you don’t know about, and all watermelon charts do is prevent second level and higher managers from being able to do their jobs. To fix this, there needs to be an internal status reporting audit team setup, and any status chart that is presented must be immediately taken from the presenter and submitted for audit. The current culture is so accustomed to lying about everything, even trivial small stuff, that they simply don’t have the ability to even know what is going on.

    Fix those two things, and maybe the company has a chance at a comeback. Without them there is no chance at all. They can have the greatest product plans in the world, but if they can’t execute, those plans aren’t worth the paper and data center storage resources they are stored on.

    • Exactly right.
      I would describe the situation at Boeing as a culture of deception at every level and about everything. Very similar to the banking and finance culture of IBG-YBG (I’ll be gone, you’ll be gone). The watermelon chart and PM to budget culture are just a manifestation of an environment that is indifferent to lying: they create an oversimplification of reality and an environment that is susceptible to deception by anyone. So long as they can’t cope with truth and reality, they can’t admit they have problems. If they can’t admit they have problems (at levels where it really matters, i.e. 2nd level management and above), they sure can’t/won’t fix issues until the ship capsizes. How do you fix issues that don’t exist?

      • @ A Jones Exactly right. Mulally was fun guy to be around, but if you wanted to see him get rad faced angry, just let someone get caught hiding real status.

        One of his favorite quips was: “You can’t manage a secret.” According to Bryce Hoffman, in a fundamental way, that was really the only thing he changed in the culture at Ford. He started rewarding truth telling no matter how awful things were. At first he was quite gentle about it, and simply praised folks for providing good visibility. Of course, as time went on, that all changed. Lying simply stopped being tolerated.

        Once you get past that hurdle, then you have to start listening to the customer. This can be hard, especially if the customer’s representatives are somewhat in the dark about their business, which sadly is often the case. You need to get through to the folks actually using your product on a daily basis. I particularly liked the story about him taking some engineers to visit a customer who was trying out the second generation prototype. When the started to defend their liftgate design, he expected that behavior and had come prepared with some engineering notebooks. Right in front of the customer he passed out the notebooks and told them to stop talking and take notes. That led to their inventing the adjustable height liftgate. The way too prideful and non-listening folks working on the tanker should think about that one very carefully. Pride is truly the root of the other six deadly sins which lead us into failure. Making money is not about managing costs. Costs will take care of themselves if you get schedule and quality performance right.

  40. The future of BA is bright and shiny. Guaranteed. 😏

    -> “Boeing is requiring that managers preparing 2022 annual performance reviews must classify 10% of their staff as failing to meet all expectations”

    More jobs are moving to lower cost countries like India and Brazil.

    BA was opening new engineering offices in Europe and Brazil, expanding the one in India to over four thousand strong last year.

    Neutron Jack is alive and kicking, inside BA. Let’s see what happened to GE over last two decades.

  41. Pedro,

    “…AB a stabilisé la production du N.-B. à 40; OTOH BA * a interrompu * sa production en décembre 2019. C’est la différence. @DoU…”
    This is just ridiculous.

    Boeing stopped production but they had the opportunity that it was during the “Corona Circus” pandemic, so at Airbus deliveries were slow. This made it possible to absorb the grounding of the 737MAX.

    On the other hand, Boeing has managed better than Airbus in terms of program longevity and aircraft production.

    Airbus prematurely discontinued the A340-200/-300/-500/-600 and A380. I don’t know what you are trying to prove but one thing is certain is that

    Historicaly, Airbus doesn’t have things under control either…

    • Pedro

      “…Neutron Jack is alive and kicking, inside BA. Let’s see what happened to GE over last two decades….”
      Yeah, then look what happened to Rolls Royce…😉

  42. @Checklist

    I’m going to take a stab in the dark, you never check GE’s stockchart. Per Bloomberg, the market cap. of GE peaked at $594 billion in 2000. Now it sits at less than one-sixth. Hard for RR to beat! 🤭

  43. If anyone is interested in the fall of GE, the book “Lights Out, Pride Delusion and The Fall of General Electric” by Thomas Gryta and Ted Mann provides a pretty good rendering of it.

    The folks who took over Boeing at the time of the merger came out of GE, and used some creative twists on the same things that Welch did, and which Immelt perhaps did not fully grasp until after he was in charge. Having fake assets on the books is a big similarity.

    In the case of GE, one of their favorites under Welch was to build powerplant turbines and generators in advance of orders, and then book book a present value calculation of the future income from maintenance contracts on them, even though it was pretty clear that much of this advance production had no market and would never be sold.

    This is not all that different from the deferred expense phony asset on Boeing’s books for the 787 program. Obviously, if one were to adjust Boeing’s books for that, the negative numbers in the equity section of the balance sheet would be significantly larger, and that is on top of the over $30B in real debt.

    Exactly what it is that the shareholders own, nor why it is that American business law allows what are effectively equity debtors to have active proxy votes is a mystery to me. The nonsense that goes on in Russia with respect to the “ownership” of their oil and gas companies isn’t any more of an outrage than what we have going right here at home.

  44. Pedro,

    I mean, GE has robust and popular engines/products such as the GE90, the GEnX, and the Safran joint venture ex-CFM, then Leap-56.

    Historicaly, RR has always been on the verge of bankruptcy…

    • The GE9X is not (yet) popular enough.

      You can’t compare the popular GE vs RR engines…
      Just like the Trent 500s that power the unpopular A340-500/-600…

      The very popular CF6, GE90, GEnX, CFM56, Leap-56 joint venture with Safran ex CFM International seriously darken the picture of RR engines.

      Only the RB211 “series” which was designed with great financial difficulties in the 70s with a bankruptcy already announced at the time and which was the cause of the bad commercial fate of the Lockheed Martin’s L-1011 “Tri-Star” , while its nearest competitor had chosen GE’s CF6 Series for its DC10s.

      The CF6s were present everywhere, also on the A300, the 747, the 767.

      The Trent 1000 engine loses market share against the popular GEnX, and the Trent-XWB engine does not have the same commercial performance as the GE90…

      Even the Trent 700 on the popular A330 has GE’s popular CF6.

      GE is everywhere in the market…

      • “GE is everywhere in the market…”

        … where GE Aviation did the financing. 🙂

        “Trent-XWB engine does not have the same commercial performance as the GE90… ”

        does this have deeper meaning?

        quite a lot of things are less dependent on real engineering performance ( as regularly attributed by fanish posters ) than on insidious side channel competition tactics.

  45. I don’t want to wade into arguments about deliveries. One should never argue facts. If someone challenges the data you think you have, then recheck your data source and ask to compare with the other source. It is often the case that different sources are being used, and that counting has been done differently for each. That said, I might add a wee bit that could provide a useful insight. As one tries to sort things out and say something meaningful about how the two competitors are doing relative to each other.

    Not all deliveries are created equal, even for products that are sufficiently similar to be direct competitors, with indifferent customers (seldom the case).

    First you have the production rate and how many assembly lines, and how many planes are on those lines after the final body join station. In a good moving line setup, there should be about three planes after FBJ, and it should take about three days to make it out the doors and be delivered to the flight test and delivery organization.

    Once FT&D has the plane, including getting it painted, and performing enough flights to identify the squaks, and fix them to satisfy the FAA and the customer, it should take two flights, and no more than 30 days. 20 days is better.

    If you can hit those numbers, then there should be a pretty good profit on each plane delivered. If not, well then there are issues, and issues cost and often come with the double burden of requiring a discounted sales price, with some variance for the current market conditions.

    So with that in mind, the next question is all about how many planes are outside your assembly factory, and are the in the possession of the flight test and delivery organization, and matched to a waiting customer? For every unit that can’t check that box, an asterisk should be added, because at that point you are just going through the motions and not making any money on a delivery if it is an asterisk airplane. In fact, you might not be recovering your costs to produce it.

    What this means is that one needs to be a little careful when comparing delivery totals for competing models between two airframe manufacturers. There is more to it than just the raw numbers if you are trying to say something about how well one is doing versus the other. And even when similar production and flight test and delivery efficiencies are in place for both teams, there may be some other factors which might make the direct comparison a bit coarse.

  46. Uwe,

    “… where GE Aviation did the financing. 🙂…”

    Guess or simple fact? If I’m an airline and GE does it, then that’s a good thing regarding the reliability of the GE vs RR engines… See GEnX vs Trent 1000…

  47. I might have mentioned this already, but the GE engine business (still actually owned by GE) got a significant advantage when it got the nod to be the sole producer for the 777-300ER and -200LR. That is not quite an accurate statement, but it is the way most histories of the 777 program tell it.

    What actually happened was that the leasing companies were experiencing some costly delays in placing planes coming off of leases. This situation became much worse after deregulation as consolidation set in and some older carriers winked out of existence. Placing a used plane with a new customer is a lot easier if the engines are ones the carrier is already using, and changing engine types on a plane was prohibitively expensive. Pratt, RR, and GE all had different interfaces with the systems in the strut, which would require replacing the strut – not a simple mod.

    So the plan for the extended range variants of the 777 that was approved in March of 1997 (right in the middle of the merger talks) was to force the issue, select one initial engine supplier, and invite the other two to revise their designs to be able to use the new standard interface.

    There is actually nothing preventing Pratt and RR from developing engines that would fit on so-called GE-only planes. All they have to do is find the customers willing to make a deal with them that pencils out. Of course, that would include getting a plane and going through the certification process. So it would be a very expensive thing to do, but there is nothing technical in the way of a barrier – just money. Both Boeing and AB could be forced to go along with such a move if a big enough order were hanging in the balance.

    There is a lesson in this about the value of standardized interfaces in any industry, and the long term risks for not working toward them through some sort of industry standards organization. There are some obvious parallels in big tech at the moment.

Leave a Reply

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