Leeham News and Analysis
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Leeham News and Analysis
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- Boeing CEO promises company is turning around…again April 24, 2024
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
Leadership changes required at Boeing, say conference delegates
By Scott Hamilton
Analysis
Special Coverage of the Boeing Crisis
Jan. 26, 2024, © Leeham News: At the first commercial aviation conference following the Alaska Airlines Flight 1282 Boeing 737-9 accident on Jan. 5, much of the conversation was about the fallout to Boeing. Spirit AeroSystems was a topic of less conversation, even though the problem with 1282’s door plug appears to have originated with Spirit.
Aviation Week’s supplier conference was supposed to begin with a fireside chat with Boeing’s Ihssane Mounir, the head of Boeing’s commercial supply chain. Unsurprisingly, Mounir canceled the week before as the Alaska accident—in which there were no fatalities and only a few minor injuries—expanded into a full-blown crisis for Boeing.
News that the Federal Aviation Administration dropped the hammer on Boeing by freezing current 737 production rates and killing, for now, expansion of the airplane’s final assembly to the “North Line” in Everett (WA) brought disbelief that Boeing has fallen so far from what was once considered the Gold Standard of American engineering.
And, with contract negotiations beginning in March with its touch-labor union, the IAM 751, aerospace analyst Ron Epstein of Bank of America predicted that 751 has more leverage now than in recent years and Boeing will be in the weaker bargaining position.
David Calhoun, CEO of The Boeing Co.
Other than consultant Richard Aboulafia, a vociferous critic of Boeing CEO David Calhoun, speakers were willing to definitively call for changes in Boeing’s leadership. But in sideline talk, consensus was clear: “leadership” at Boeing headquarters and in Seattle with Commercial Airplanes has to go.
But there was no agreement, or even suggestions, about who should replace Calhoun and Stan Deal, the CEO of Commercial Airplanes.
Deep shake up needed
Consensus is that Boeing’s decline has been decades in the making—and has its roots in the 1997 merger with McDonnell Douglas Corp. nearly 27 years ago. The shift from engineering and quality to shareholder value began with this merger and continued with CEOs and members of the Board of Directors with antecedents to GE Corp. and the Jack Welch emphasis on stock buybacks and dividends.
Boeing’s two leading unions, SPEEA (engineers and technicians) and the IAM 751, warned repeatedly that safety was being compromised. Although management repeatedly denied the claims, evidence over the years in the form of quality control issues on the production lines and before delivery to customers suggested otherwise. The multiple investigations into the Lion Air and Ethiopian Airlines MAX crashes in October 2018 and March 2019 revealed alarming safety shortcuts and miscalculations that led to these crashes.
A deep shake up at Boeing is needed, people at the conference said on the sidelines. And this has to go deeper than Calhoun and Deal. Changes need to be made to those overseeing safety and program managers.
First Safety Committee named
In September 2019, then-CEO Dennis Muilenburg appointed a Board-level committee to review safety processes. The objectives:
– Create a Product and Services Safety organization: The board recommends that a new Product and Services Safety organization be created and report directly to senior company leadership and the board’s Aerospace Safety Committee. The organization’s responsibilities would include reviewing all aspects of product safety, including investigating cases of undue pressure and anonymous product and service safety concerns raised by employees. The organization also would maintain oversight of the company’s Accident Investigation Team and the company’s safety review boards. The committee believes the work of this organization should increase awareness and reporting of, and accountability for, safety issues within the company, further improving enterprise-wide product and services safety.
It is recommended that the enterprise Organization Designation Authorization, the company’s engineering and technical experts who represent the Federal Aviation Administration in airplane certification activities, report to the Product and Services Safety organization and vice president for Product and Services Safety.
The board further recommends that the Accident Investigation Team as well as the teams responsible for military aircraft certification and mission assurance for space and launch systems report to the vice president for Product and Services Safety.
— Realign the Engineering function: The board recommends that engineers throughout Boeing, including the new Product and Services Safety organization, report directly to the chief engineer, who in turn reports directly to the company’s chief executive officer. The company’s chief engineer should focus his or her attention primarily on the Engineering function and the related needs of the company, supported by a senior leader who is responsible for developing, implementing and integrating new technology, tools, processes and digital systems. The board believes the recommended realignment would strengthen the company’s Engineering function, promote continued companywide focus on customer, business unit and operational priorities, and result in an even greater emphasis on safety.
— Establish a Design Requirements Program: The board recommends that the realigned Engineering function create a formal Design Requirements Program that would incorporate historical design materials, data and information, best practices, lessons learned and detailed after-action reports. The board believes this will reinforce Boeing’s commitment to continuous improvement and a culture of learning and innovation.
— Enhance the Continued Operation Safety Program: The board recommends that the company amend its Continued Operation Safety Program to require all safety and potential safety reports be provided to the chief engineer for his or her review. This requirement would increase transparency and ensure safety reports from all levels of the company are reviewed by senior management.
— Re-examine flight deck design and operation: The board recommends that Boeing partner with its airline customers and others in the industry to re-examine assumptions around flight deck design and operation. Design assumptions have evolved over time, and the company should ensure flight deck designs continue to anticipate the needs of the changing demographics and future pilot populations. Additionally, the company should work with all aviation stakeholders to advise and recommend general pilot training, methods and curricula – where warranted, above and beyond those recommended in a traditional training program – for all commercial aircraft manufactured by the company.
— Expand the role and reach of the Safety Promotion Center: The board recommends that the Safety Promotion Center’s role and reach be extended beyond Boeing’s engineering and manufacturing communities to the company’s global network of employees, factories, facilities and offices. This expansion would serve to reinforce Boeing’s longstanding safety culture and remind employees and the flying public of the company’s unyielding commitment to safety, quality and integrity.
Boeing never publicly revealed the success of this initiative (as far as LNA knows). In light of the current MAX crisis, it appears that Boeing fell short of a shift in its safety culture.
Second Safety Committee Named
On Jan. 16, Calhoun appointed yet another committee to review safety. The committee members have not been identified.
- A team of outside experts will conduct a thorough assessment of Boeing’s quality management system for commercial airplanes, including quality programs and practices in Boeing manufacturing facilities and its oversight of commercial supplier quality. His recommendations will be provided to Calhoun and to the Aerospace Safety Committee of Boeing’s Board of Directors.
The FAA on Jan. 5, 2023—exactly one year before Alaska 1282 occurred—appointed a committee to review Boeing’s safety. The committee included MIT, airlines and other outside experts. The draft of this report is due in a few weeks. LNA has been told it will not be favorable to Boeing.
Safety Stand Down
Yesterday, Boeing had a one-day safety stand down at its 737 plant to review and emphasize safety procedures. Boeing issued a statement yesterday. Given the importance of the issues at hand, the substance of the press release is reprinted in its entirety.
Overview
- On a normal work day, our factory teams meet at the start of every 8-hour shift to discuss work plans and raise and resolve questions. By contrast, Boeing holds a “stand down” periodically to address serious issues. FYI a stand down is a common practice in heavy manufacturing.
- This was the first time the company has paused airplane production for an entire day with a stand down to focus on quality. Boeing has held stand downs previously focused on worker safety.
Today’s Quality Stand Down in the 737 factory on Thursday, January 25
- The entire factory paused 737 production for 15 hours through the first and second shifts. A total of more than 10,000 employees took part.
- The first shift stand down started at 6:30 AM PT; the second shift stand down started at 2:30 PM PT. The third shift, which is overnight, plans a stand down next week.
- In each shift, the quality stand down opened with production leaders reflecting on recent 737-9 issues and asking teammates to speak up about any concerns. In addition, leaders asked employees to identify ways to improve safety, compliance and first-time quality.
- Next, employees across the 737 program – including mechanics, quality inspectors, engineers and others – gathered in small teams and visually inspected work areas to identify improvements. They discussed how they could work as a team to improve first-time quality, safety and compliance. Each team is creating an improvement and action plan.
- In coming weeks, other Commercial Airplane factories and fabrication sites (Boeing factories that produce airplane parts and assemblies) will hold quality stand downs, including at our widebody factories in Everett, Wash., and North Charleston, South Carolina.
Who should lead Boeing going forward, and try to save the company? This is a tough question. Everyone that would have been on my short list that came up through the company has aged out. I can think of one or two outsiders that would be impossible to sell everyone on. But, we need a CoB who will do the right thing and take the company into receivership and revert totally to GAAP until a run of successful programs justifies a return to program accounting. And we need a CEO who understands the business. And, that person needs to be a straight shooter, even when the message is painful. The reality is that finding two people to take on either of those jobs would be incredibly difficult.
How about combining them and asking Scott Hamilton to take it on?
That Bjorn guy might be a good addition to the team, as well. Maybe a couple of others in here, could be coaxed out of retirement.
I would volunteer as a memeber of a group of technical advisors.
No I am not arrogant and think I could sort it out, but while technical I also come from a touch labor perspective (I worked with my hands on tech stuff) and a diverse view is good.
I don’t think for a mili second I could select a manager nor do I know the various players who might be candidates.
I am always suspicious of people that call a crew “team”. A team pulled wagons and a guy on a bench had the whip.
Anyone who isn’t on the board of Boeing.Even Donald Trump managed to identify the need to ground the MAX for MCAS before them.
Yes, it was “The Donald” not the FAA grounding the MAX. He did run an Airline “Trump shuttle” and might got some feeling for aviation like Al Capone for machine guns.
Nope. Muilenburg called Trump to frontrun the FAA.
WaPo: “First, amid a global uproar, Muilenburg called President Trump and asked him not to ground the planes. A day later, after a call with his board, Muilenburg called Trump to urge reversing course and recommend a grounding order, as Boeing tried to get ahead of a likely directive from the Federal Aviation Administration”
Pedro:
Well done! If Boeing had given the former president a bribe then he would have tired to stop the grounding (I refuse to type the name and the ref I use is not suitable for Leeham)
The thin bench is interesting to think about.
An observation I made going back 25 years was the consistency with which internal candidates for top positions were purged after outsiders obtained those positions. One can pick any point in time post merger and pick any business unit or primary support function.
Historically, purging has been an effective strategy for pillaging governments and businesses to ruin.
As an aside, it is also interesting to observe those who survive the purge, and then advance.
In the current situation I’m thinking of 2 Exec Council members whose track record while employed at Boeing, at best, lacks any achievement (absent survival) and at worst is peppered with costly repeated failures.
Culture, indeed.
Thanks for this comment.
RTF:
You clearly outline the issue.
I do have one aspect I will disagree on. CEO does not have to be an aircraft guy.
Someone who has worked in technical industry preferred but Boeing was started by a lumber guy and went on for many years with a lawyer.
What is needed is a leader who understands management chains and can start at his end and start whacking. Lockwood in WWII (Pacific Sub Co9mmand) comes to mind. He was not a technical whiz but he got good people around him, he just had to know there was a problem and assign the right person to it.
Patton also comes to mind. Not for the Blood and Glory part, if you look at what his STAFF did, it was incredible. Twice it was a totally different plan in a totally different direction and they managed it with amazing speed. Paton was an emotional jerk, but he did understand good people and he did that from an entry officer up to command of the 3rd Army (Its not a given at all a Captain makes a good major a good major makes a good Colonel or a good Colonel makes a good general let alone Corp or command of an Army (two or more Corps)
With support at the top a new President at BAC could begin to make progress.
The issue always is, if you don’t have support the dead wood kicks and screams and impedes any efforts, because they know they are dead wood and its their only chance to not get booted.
But like a new team coach, you can’t turn things around over night (Green Bay was an exception). It takes a minimum of 3 years and more like 4-5.
You have to give up the profits are the only thing and the goal is to fix this so we can make profits at some point.
I would certainly hire Leeham in a heartbeat for advisory role. I don’t know that Scott has the desire to be BAC President.
Yes, the CEO needs to be able to build a great team. Elon Musk is a modern example of a not fully educated engineer with economics and physics degree from U Penn + 2 days at Stanford running very technical businesses with great engineering departments. But it is the board of directors selecting the CEO to perform their ideas of how to run the company. It is not illegal to empty the company by the shareholders thus not having money for development and eventually closing shop.
“Only when the tide goes out do you learn who has been swimming naked.”
Pedro:
That assumes they just sand there.
Proverb exposed (sorry about the pun but really not)
Thank you for the laugh and great visual if used with the right population.
How come no one is talking about the other vulnerability AS1282 showed: the dang cockpit door blew open during a decompression ? How is this not being addressed BEFORE the grounding is lifted?
And how many other unknown and unpublished vulnerabilties//quality escapes exist on the MAX -9, -7 and -10?
This is by design.
Pressure in the cockpit would be too high otherwise
“This is by design.”
No. Not previously.
The design as used on the NG is a door panel that allows “air passage without bullet passage”.
This was omitted on the MAX and apparently replaced with an overwhelmable door lock.
Door panels works at the only direction.
Uwe:
You are completely wrong on that assertion.
The door does have blow out panels.
For reasons not listed yet, during a massive decompression, the latches release, its part of the certification but it no in the flying manual.
There have been cases of this happening before.
Frankly its not a big deal. The Steps the Pilots take during a sudden loss of pressure.
1. If in Auto, leave the aircraft in Auto Pilot as long as the aircraft is not doing wild things.
2. PF keeps focused on the panel while the PM gets his mask on.
2. Once the PM has his mask on, he becomes PF and the PF prior, gets his mask on.
3. They determine what the condition of the aircraft is (alamrs) and as long as no other apparent issues, they begin decent. You will not the Alaska Air MAX-9 kept climbing during the mask donning process per the Automatic Pilot.
4. Once at 10k, the pilots begin emergency procedures, squak an emergency and contact ATC. Due to the nature of maks and the noise in this case, clear com with ATC is hard.
ATC will clear the air around the aircraft and assume a return and clear the runway(s). If comes are bad ATC monitors the Aircraft and its Squawk and can see what they are doing and clear the airspace as needed.
Should pilots be informed that the door releases? Yes. Any info they have may prevent a distraction, pilots are human no matter how well trained.
The affect of the door going open is zero, blowoff panels would go anyway, stuff would fly and even EICAS is not going to save anything.
Sorry Transworld! Blow-out panels are acceptable and expected by pilots since they allow for pressure equalization without allowing entry to the flight deck.
Having the door blow wide open is a completely different animal – especially when you do not know to expect it!
Career pilots were not told about MCAS and we lost 2 airplanes.
Career pilots were not told about flight deck doors blowing open.
What else have career pilots not been told about on the MAX?
Open Cockpit.
Perhaps you need a better understanding of the door panels. Door blow out panels are sized for the largest foreseeable decomp event, which on the 737 is loss of a passenger window. The overwhelming decomp forces in this event opened the cockpit door as these loads were unanticipated. You dont seem to understand the flow rates and mass involved. Passenger seats were bent, seat tracks deformed and the captains headset was moved off her head.
ALSO. MCAS was not hidden from the crews. MCAS did not have a crew intervention path. It is always on, or failed. It is not crew addressable. If the crew cannot intervene, you have nothing to train about. The 2 maxes were lost with the initiating event being a spurious non accurate pitch vane value being fed to the FCU. The problem wasnt MCAS in that it worked as programmed. The real issue was the allowance of a single channel pitch reference source being given a command function within speed trim. Try to get the stories straight.
“ALSO. MCAS was not hidden from the crews. MCAS did not have a crew intervention path. It is always on, or failed. It is not crew addressable. If the crew cannot intervene, you have nothing to train about. ”
Just stop it!
MCAS was hidden.
The intervention path was “switch off electric trim”.
Lifesaving would have been the information that MCAS’s
“limited” intervention restarts on manual trimming.
there were so many holes introduced into this “cheesy” thing
that you could hold it in whichever way and a bunch of holes aligned.
I’ll second that! Scott?
Reach out to former V/P Alan Mulally He is the right person for the job making the correct CHANGES NEEDED.
Even at 78 he would be like having Einstein vs Edi Amin.
And his brief would be to have a good CEO candidate to show him until the ship is stabilized and then replace him while Mulaly becomes the shadow that is in the room at all times for as long as Mulaly is willing to do so (no more than 2 years).
https://aviationweek.com/aerospace/manufacturing-supply-chain/opinion-can-boeings-misguided-leaders-be-stopped
For now I’ll stick with my provisional contention that the Boing “self-immolation” is intentional, and *is* part of an industrial policy- though I cannot say whose.
Where are the countervailing signs of righting the ship?
Adding: I expect many, many more hand-wringing
articles like Aboulafia’s (well-intentioned)
one here to be written, as *Boing steadily, inevitably turns into its ghost*, like virtually
all the rest of the US’s industrial might over the last forty or so years- its war-making machinery possibly excepted.
We’ll see how it goes.
Boeing might have already had a great organisational structure before.
New specialities needs to be added for computerized systems. But having a chief engineer with a chief engineers office is a good start, then project engineers as chief engineers for each product line with departments for each system having a similar parallel project organization keeping track of money, time and certification. A bit like Douglas Long Beach around WWII.
Claeis:
In the 20 years I worked around FedEx (and with Honeywell for 4 years) I was lucky in one respect. No one ever pushed me to do shoddy work.
That said, others were allowed to without any consequences and there was more than one heads up that was slothed under. I kept my emails and or had reliable witnesses so I was covered when the nasty stuff hit the jet engine (and it did)
You cannot reform a company at mid manager levels, it has to start at the top. As soon as you run into one of the clowns, they will sabotage you and in some case (I had it hyappen to me) concoct stories and try to get you fire (it succeeded once but the next manager brought me back as things were rapidly going downhill that had never been a problems for them)
I doubt you need changes in the structure, its the personal in the structure and you have to get a CEO who is hell bent on reform and supported by the board to do so0.
The best mid level manager in the world can’t fix a problem with another manager unless he knows he can bring it to attention and then its a higher up that fixes it, not the guy who saw it.
I could not do other than good work on my part, I could not get anyone to do good work nor could I get them canned when they should have been. It does Boeing no good for a single worker to be a center of excellence when they only can do their specific job while the rest goes into the can around them.
Get true support, then yes, people can speak up and failures will get looked into and people will adhere or get fired.
Right now the workers at Boeing are laughing their butts off, speak up, what kind of dope are you on? I am not going to put a target on my back, nope.
You have to see real change and then see it tested before you get an open work force that knows it can bring a problem including a failure to the management attention and not become a target.
Boeing is too big just to change some “often guys” to “D-check” the company, I claim the way the company works has a major impact. Like if the 737MAX low speed non-linear yoke forces in certian manuvers had trigged the “by the book” response of redoing analyses and testing no matter how late and over budget you are in the project, but it did not happen. You think that early computer analysis tools should have caught it like a full Ansys multiphysics analysis (CFD+Adams+controls) of each cerification flight case with sensor faults. Hence even if you change the head of engineering and the reporting system does not work he/she as head of engineering/project/CEO will never know what shortcuts the organisation below takes. Hope Honeywell has the skills to deliver Advanced Air Mobility systems so the different manufacturers just has to design the shell and paint scheme the rest is certified Honeywell products 63% of AAM’s select.
I am unfamiliar with this dialect of (?) English.
Sloppy writing and sloppy thinking go hand in hand.
It seems to me that Boeing has been limping from crisis to crisis, starting with the 787 decisions back in the day. They just seem to be coming with increased frequency now. The older, well run programs – like the NG and 777 Classic are done and the replacements are a mess.
BA is huge entity and turning the ship is a gargantuan task. It took years for those ill fated decisions to take effect and it’ll take years to solve them.
– Weak commercial product line up that is not being produced well (save the 787, a market success – but that program has cost them tens of billions)
– Defense programs that are all in the red and underbid
– A balance sheet so ugly with so many squirreled away expenses that it will take years to clean up. Maybe a decade, if it is made a priority. (The math just doesn’t work.)
There’s no magic bullet solution. There’s no engineering miracle aircraft that will corner the market, revolutionize air travel and revamp the company.
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This is a killer:
Interest and debt expense
2020 (2,156)
2021 (2,682)
2022 (2,533)
2023 (1,859) – 9 months
$9.23 billion. Call it $10 billion by the end of the year, with some $53 billion still owed. Four years.
At a 10% margin, that’s $100 billion in sales…just to go to the lenders. Extend that out another 5 years (assuming some debt reduction) and another $10 billion in debt payments.
(Note: BA is not making a 10% margin, not since 2018)
They need help.
It will come, or is already happening & in various intransparent ways. Just don’t name it. TBTF.
“Weak commercial product line up that is not being produced well (save the 787, a market success – but that program has cost them tens of billions)”
Even the 787 is a mixed bag at best. Sales have been strong, but there are important caveats. First, as you noted, it was years late and billions over budget. Second, there have been (and likely continue to be) serious quality issues on that program as well. Finally, some of the 787’s sales success is likely due to Airbus’s foolish (in hindsight) decision to sole-source the Trent XWB/7000 as the A350/A330neo engines.
No doubt Boeing is making money off the program now on a forward-looking basis, but I wouldn’t view it as any endorsement of Boeing’s engineering or manufacturing prowess.
I will argue that both the 787 and the MAX are a success.
They both have been failed miserably by stupid management and the 787 was out of hock at one point then the shim issue that was spread from one end of the aircraft to the other was FOUND.
So why do I think the MAX is a success? Its sold well, it does the mission on equal footing including economics with the more modern but increasing dated A320 series.
The -10 is not a bad aircraft, it competes with the A321 unless you use that aft tank and then you give up passengers for range.
Just pull 50 seats out of a -10, spread out the ones left and ………. I am also thinking drop tanks but maybe like permanent, conformal fuel tanks?
Yes Boeing needs a new aircraft but all they have to do is FIX the 3 current programs and while they will be Number 2 (maybe forever) its a really strong Number 2 if it delivers.
People forget what Iacoca did with Chrysler. He fixed what they had an made it reliable and delivered in numbers. He had no new magic car in hand (the Mini Van concept was built on a existing chassis)
Then when the critics said, oh, its only a 4 cylinder engine, its going to crash off the chart unless it has a V-6 and they can’t put a V-6 in that chassis.
You know what? They engineered a V-6 into that chassis.
I was sent down to pick up an early Mini Van (for courier and maint service) as my company knew I was a car nut and wanted my opinion.
I was impressed. It drove well, it handled well, engine was good (even with a 4 cylinder) auto trany worked well. I told them, this thing is going to be a huge success, buy as many as you need. They did, it was.
‘No doubt Boeing is making money off the program now on a forward-looking basis, ‘
I have my doubts. This is from their most recent financials (Q3, until the EOY comes out)
https://s2.q4cdn.com/661678649/files/doc_financials/2023/q3/fd2a8c99-afc6-4472-ae18-4f1ee024a274.pdf
pg 33
Loss from Operations
The following table summarizes Loss from operations:
(Dollars in millions)
Nine months ended September 30
………………………………….2023 2022
Commercial Airplanes ($1,676) ($1,738)
Defense, Space & Security (1,663) (3,656)
Global Services 2,487 2,093
Segment operating loss (852) (3,301)
Further down on pg 38:
“Abnormal production costs for the nine months ended September 30, 2023 were $1,379 million, including $937 million related to the 787 program and $442 million related to the 777X program. Abnormal production costs for the nine months ended September 30, 2022 were $1,326 million, including $925 million related to the 787 program, $213 million related to the 777X program and $188 million related to the 737 program.”
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Doesn’t sound like the 787 program is very profitable.
Frank P:
We have beat this one to death.
Of course the 787 is not saving Boeing profit wise. How many 787s are still sitting there getting their shims fixed? 80-90? All the materials and labor paid for and not delivered.
And no it won’t save Boeing by itself nor will the 80 or so. But they will return money to Boeing. The 787 is still 20 billion or so in the hole. That may never be recovered (and that ignores the Shim Debacle costs).
Of course you have losses still, you just went down to zero and two a month and still ramping up along with aircraft not delivered.
But at some point, the 787s will get delivered with money returned to Boeing though its going to have to retire the debt.
No further losses would be a victory. Getting the debt paid off would win the war.
And then Boeing can look at the future.
Of course they have to start fixing the problem.
‘We have beat this one to death.’
Yes. Yet here you are, giving us an alternative fact version of events.
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‘No further losses would be a victory.’
You might want to check out the BA financials:
‘Cumulative abnormal costs recorded through September 30, 2023 totaled $2.6 billion and our estimate of total abnormal costs increased from $2.8 billion to $3.0 billion in the third quarter of 2023 primarily due to supply chain disruption. We do not expect abnormal costs related to abnormally low production rates to continue beyond September 30, 2023, and we expect the remaining abnormal costs related to inspections and rework to be incurred by the end of 2024.’
—————————————-
So $3 billion in costs so far, with more to come until the end of 2024.
(IIRC you quoted a profit margin of $10 million an airframe. That would be 300 aircraft delivered to cover this one debacle alone…and counting)
Frank P:
To be clear, your contention is Boeing should stop making aircraft?
All I see is posting the same thing over and over without anything to say, do you have a solution?
Sorry to break this to you, just say Boeing is doomed – your endless posting of data is worthless unless its part of a fix.
We know how much trouble Boeing is in, known it since before you ever posted in fact.
And yea, if Boeing stopped the losses that is better than more and more losses. Think of it as Guadalcanal. We lost a lot of men, planes and ships but it was the start of the stopping Japanese expansion.
What part about finance 010 do you not get?
Standard SOP. Stabilize the situation, work on fixing it.
You contend it should destabilize further and don’t fix it (granted that is my interpretation because you never say)
Feel free to tell us what you are saying.
Boeing has further losses? Wow, film at 11.
Yah sure. You’re arguing that the 787 (along with the Max) is a success. You say so, right here:
‘I will argue that both the 787 and the MAX are a success.’
Tell me, if they’re such a success, why is a solution needed? Solutions are needed for problems, not successes. What does a problem look like, in your world?
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But here you are again, jumping in with both feet, not offering any insight, facts or proof, with such gems as:
‘Think of it as Guadalcanal. ‘
Yah, sure – I’m certain that the solution to Boeing’s woes is to consider it exactly like that. Lol…
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‘What part about finance 010 do you not get?’
If you mean Finance 101, then the part where you say that there is money left over to pay down debt, when they are selling something for 90 cents, that cost them a dollar to build.
Not that you would know anything about what is talked about in a Finance course, but hey – fake it until you make it, right?
————————————–
‘All I see is posting the same thing over and over without anything to say, ‘
I wasn’t posting it to you, Sparky. I was answering Mike A before you decided to enlighten us with your version of events.
———————————-
do you have a solution?
Yah – and it’s not as simplistic as ‘just pay down the debt and don’t have any more losses’. How’s that been working out for them, the past 5 years? If it were that easy, you could be CEO and sit around the office all day, telling everyone stories about cars, Fedex and the island hopping campaign in the Pacific;
“Oh Trans. You’re so smart and knowledgeable – pay down the debt and don’t make any more losses. Why didn’t we think of that?”
——————————————
‘granted that is my interpretation because you never say’
Could it be that your interpretation is incorrect? Perhaps because you lack the financial acumen and understanding of just how deep a hole it is, that Boeing is in and what is required to get out of it?
——————————————-
I never say?
Now you’re just trolling. Or perhaps you’ve had a little too much of a nip at the bottle (to keep warm from the cold, no doubt) and have forgotten;
It all starts with raising some $40 billion with an equity sale and slapping the entire amount down on debt. Another $10 billion would be good and that money would be used to bring everything back to the NW, including headquarters, the 787, buy Spirit back and a favorite of our residential engineer Scott C; buy the Embraer program and get access to a pool of young engineering talent. Get some engineers back in charge of the company.
——————————–
My contention is, as I posted to Mike in the opening:
‘BA is huge entity and turning the ship is a gargantuan task. It took years for those ill fated decisions to take effect and it’ll take years to solve them.’
But you know better. “We’ve got Guadalcanal – we’re onto the Northern Solomon’s!”
Not for nothing, but you do realize that the US won the war in the Pacific (December 1941 to August 1945, just under 4 years) in less time than Boeing has had a profitable year (2019 to 2023). I wouldn’t bet that this will change in 2024.
——————————-
I have a WW2 reference for you, too;
You’re arguments remind me of BuOrd and the Mark 14 torpedo. How those guys stuck their heads in the sand, refusing to believe that there was anything wrong with them. Cost the lives of many a submariner, all the while running down the skippers who were claiming that the torp, in fact, was flawed;
“They’re just not using it right.”
Well done Admiral Trans World. Well done.
Well for the first time you lay out your plan. And yea, I know far more about Mk14 Torpoedo than you ever will. Lockwood took it on and got it fixed, not in one step as there were layers to the Mk14 onion, but as they fixed one they found the next and fixed it too.
Your problem is you think its a single aspect and its not, it starts with one but its far more complicated to peel the onion. I have peeled a lot of tech onions.
“It all starts with raising some $40 billion with an equity sale and slapping the entire amount down on debt. Another $10 billion would be good and that money would be used to bring everything back to the NW, including headquarters, the 787, buy Spirit back and a favorite of our residential engineer Scott C; buy the Embraer program and get access to a pool of young engineering talent. Get some engineers back in charge of the company. ”
I can start poking holes in your plan as of course its why you did not post it.
What is the current interest on the 50 billion?
What would the interest be in current borrowed money?
No one is going to move all of Boeing back to the N.W. You can plan for long term of getting the important engineering back and to Everett. A lot of the office space if not all of it has been sold off so there is no place to put everyone.
Boeing is not going to move out of the DC area HQ wise. Boeing defense is too big for BCA to wag the dog.
What do you mean by Equity Sale? That is either stocks or the company. A sale is a permanent move, MuLaly mortgaged Ford but he did not sell it. If he paid the money back it was Fords again (and he did).
If you execute your programs correctly you can pay off debt.
Unfortunately you meet that with a diversion. Boeing under the last 3 CEOs has execture horribly (arguably since 98)
If you leave Calhoun and his ilk at the top, you just see your equity blow away as well.
The problem is not debt, its Managerial and it starts getting fixed at Managerial and executing good programs correctly.
Spending all your money on stock buy backs when you need to save for a new aircraft is the issue and the CEOs have spent like drunken sailors (yes its a thing, I have seen it)
It is time to consider nationalisation of Boeing and designation of proper managment.
privatize profits
and
socialize losses.
not a new concept
and it will not fix the systemic issues either.
This won’t happen until after the election (if it does). It would be painted as more ‘evil socialism’ by one side and ‘corporate welfare’ after buybacks/dividends, by the other.
Lose/lose. Doesn’t matter what’s good for the country.
If you notice when the US took over a company it was with management from the industry.
Boeing does not need to be nationalized though I think its a great threat, it just needs a CEO (and a board) that is focus on getting it fixed first.
Mullaly fixed Ford but he had the full backing of Clay Ford (equal to the board)
CEO does not have to be perfect, they just need to be mostly right and correct it when they are wrong.
“Those who do not learn history are doomed to repeat it.”
-Santayana
Boeing top executives have been running with the GE playbook for the last twenty five years (Stonecipher, McNerney, Calhoun & Brian West).
Bring in competent management team that does not subscribe to the GE playbook and there is a good chance a lot of problems would go away.
Calhoun will just keep doubling down on stupid.
CBL:
Oh, what wonderful idea ……. so the new Boeing.gov can be “managed” just like the USPS and so many other .gov agencies ???
The out of control spending by .gov “management” would fix Boeing’s problems?
Please share with us what flavor of Kool – Aid you are consuming 🙂 🙂
RTF:
Let alone it is not happening short of a total US economy collapse and then its done by a guy with a gun.
Congress nationalizing something? Bwa hah.
Scott, does this feel to you like the inflexion point among Boeing stakeholders that has been so clearly coming (and needed) for many years?
I have my fingers crossed.
It depends who the stakeholders are and when did they get in.
No one wants to turn to it’s investors, after buying in at $300 and saying “We’re taking a haircut, sorry” – but sometimes you have to. Buffet and American come to mind.
On the other side, there are those who bought in at $90 when it hit bottom and are hoping it’ll go back up to it’s $450 range. Some have already taken their profits and moved on.
God help BA if both decide it’s time to sell at the same time ; cut losses & take profits.
Frank P:
So people sell the stock, at some point others will look at it and its, hey, this has upside and buy it back.
All it takes is the drop and the board will begin to react and Boeing can come back.
If you get the stock back up to $250, you can do a stock offering.
Either a new board or the current one looking at hard reality and can Calhoun and the entire upper and the first directive is get a new BCA guy (Stan goes before this happens anyway) and you have a start.
And give the President of BCA an office for crying out loud, actually two, one in Seattle and one in Charleston.
‘If you get the stock back up to $250, you can do a stock offering.’
The stock was recently at $260 and they offered no equity sale. Doing so would dilute the shares, which would drive down the price, which is something the C-suite boys are loathe to do.
Frank P:
Good catch. I don’t follow Boeing stock other than its going up or down in general.
You miss the point.
BCA has two good programs and a possible third. They need a different CEO with the chops and support to fix Boeing.
I have seen Chrysler come back from the brink at least 3x. It can be done.
Its now a matter of pressure and will the board do what it needs to do?
FAA now has its thumbs back on all three of the current Boeing programs and its not going to let off until its fixed. That does get to the C suite guys.
‘BCA has two good programs and a possible third.’
Which 2 good programs would that be? As well – please define what you mean by ‘good’.
Thanks
I’m hoping that obscure claim will be supported by its colorful and prolific author, too- though I would not at all count on it.
The MAX and 787 are good aircraft, I will argue that the 787 is a very good aircraft.
You guys don’t get technical and I get that, not all do.
You do know the MAX is NOT GROUNDED?
You know that the MAX -9 has returned to service.
You know a MAX-8 was delivered to China
You know they are making 787s? – and the 787 continues to sell well?
So yea, you have two sound aircraft programs (we have to see about the 777X and if this has an affect on it.
All Boeing has to do is build those aircraft to spec and they are sound aircraft and programs and safe.
What you can’t do clearly is tell is the difference between design issues and execution issues.
How about that C-919 that will make 6 this year? Oh, and we are coming out with a new version when we can’t make the original one in any numbers? Now 6 a year, that is truly a successful program.
Only rivaled by the MC-21 that will make no deliveries this year.
Or the A220 that is STILL loosing money? And Airbus was given that program.
Maybe this is harder than you guys think? Oh no, say it ain’t so.
“‘BCA has two good programs and a possible third.’
Makes me wonder how come BA/BCA is in a pickle? Why BCA is losing (not winning!) market share in NB? So puzzling. The MAX 7 has to be given a safety exempt in order to be certified. What BA/BCA was doing last five years? Playing in the sandbox?
“Or the A220 that is STILL loosing money?”
Oh Lord, don’t get me started. Tell me on what earth you are living on, is the MAX and 787 making any money for BA/BCA? Prove it!!
“What you can’t do clearly is tell is the difference between design issues and execution issues.”
The fact of the matter is, as currently designed, both the MAX 7 /MAX 10 won’t be certified without getting safety exempt! No need for your alternate universe here, we can see it clearly with our eyes.
@Trans World
‘All Boeing has to do is build those aircraft to spec and they are sound aircraft and programs and safe. What you can’t do clearly is tell is the difference between design issues and execution issues.’
Just a couple of three things wrong with those statements.
1) Part of the design process IS designing it for safe, efficient, repeatable, scalable and profitable production. You need a planning engineer like Scott C to pull it all together and create a way to make all that fit. Ask him yourself – it’s what he did on the 767.
2) So all of a sudden, Boeing forgot how to build aircraft to Spec, huh? Once again, I refer you to Scott, who didn’t want anything to do with the Tupperware Jet and declined to move over to it. Maybe, having actually worked there – he knows something you don’t.
3) Did you ever consider the possibility that the designers tried to put 10 lbs of potatoes in a 5 lb bag? The pushed the envelope so far and asked for so much to be done, with so little resources – that things gave way and broke? Remember the meeting when 787 designers were told how much money they were getting and not what it would actually cost?
4) I guess in your hazy memory you forgot about MCAS, huh? Once again, I refer you to our resident engineer who will tell you, in no uncertain terms “MCAS worked EXACTLY as designed.” But the designers had no airplane guys to say “Hey – what happens if the AoA sensor goes wacko?”
Unless you’re trying to tell us that the Max crashes were a production issue.
———————————————-
‘You know they are making 787s? – and the 787 continues to sell well?’
Yup. Seems to be a great deal for airlines. Pay 90 cents to Boeing, for every dollar that BA spends to make the darn thing.
If that’s how you term successes, I’d hate to see what you call a failure.
Stakeholders, not stockholders.
https://www.investopedia.com/terms/s/stakeholder.asp
What Is a Stakeholder?
A stakeholder is a party that has an interest in a company and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees, customers, and suppliers.
———————————-
Employees aren’t going to effect change. Employees get laid off.
Customers just want safe, cheap aircraft. Besides – what are they going to do now, if they’re not in line to get planes from Airbus?
Suppliers? Partnering For Poverty, comes to mind.
The government’s hands are kind of tied, here. Election year. Resources for oversight. Too Big To Fail.
That’s leaves….
That is steakholders
Nice platter that holds, well a steak (which is a presidium slice off a 4 footed animal reg erred to as a Beef.
>Employees aren’t going to effect change. Employees get laid off.
Quite so. The best employees probably left when they saw which way the wind was blowing… All employees can realistically do is down tools and stop working, but that’s a very severe thing to have to do when one’s got family / mortgage / bills to pay.
>Customers just want safe, cheap aircraft. Besides – what are they going to do now, if they’re not in line to get planes from Airbus?
Probably getting in line to get planes from Airbus. The line is long, but no sense joining it last. Besides, if enough give strong indications of interest, Airbus may well find it easier to take a “120 per month?” proposition to suppliers who may well respond positively, if they think their Boeing work could dry up.
>Suppliers? Partnering For Poverty, comes to mind.
Indeed, and it not being mentioned would seem to be a big omission. “Never beggar one’s suppliers” is a maxim I’ve stuck to and it’s paid dividends so far. Toyota don’t mess around with suppliers either, indeed they show that a high quality relationship with a supplier is key to that supplier delivering high quality parts.
>The government’s hands are kind of tied, here. Election year. Resources for oversight. Too Big To Fail.
I think it’s getting to be more significant that just how much oversight the federal gov lays on. Extend the current form of BCA forward a few years, couple more crashes maybe, customers fleeing in droves; the strategic impact of a Boeing implosion is immense (there’s all those military programs that really do matter, strategically). Continued as is, the federal government may find itself forced into doing something radical.
I don’t know if there is room in US politics for certain senior politicians from both sides to get together privately, out of the limelight and sort out things that hurt them all, that they’d all prefer to avoid. If so, now is probably a good time. They can’t really risk presiding over an FAA that is not adequately resourced in case further crashes happen inside the USA. At some point, there really would be hell to pay.
“…room in US politics for certain senior politicians from both sides to get together”
I think some are busy mobilizing the State Guard for a political fight. May be they can meet at the battlefield.
What happend to Buffets dog that should have been well trained to bite him as soon the thought of buying airline stock?
He was at the vet
I think the industry needs a strong US manufacturer, e.g. Boeing. To secure defense projects, competition, innovation, local supply chain, supporting countless family incomes.
The market mechanisms, target setting, rewarding of executives, has prioritized short term profit above anything else during the last 15 years.
Draining the company, stock owners, stake holders cheering stupidly by the side line, ignoring red flags. People have cashed, now it’s payback time.
Time to reconsider longer term strategic goals & reset the system. From the top.
Agreed
The most likely change to top management is none at all. Experience has shown that Boeing CEO’s and boards are not dislodged by incompetence and failure to execute. (Muilennberg was ousted for fumbling the post-Max fallout, not for the crashes themselves) Top management can be ousted for diddling the secretary, but I have seen no reports of this.
So the fallout will be a lot of contrite words and no changes at the top. The absolute most that could happen is Calhoun and the board throw Stan Deal under the bus as a sacrifice to placate the calls for action.
Ultimately nothing will change. Shareholder value is what these people know and what these people do. No profound changes will happen.
Sad to say it, but for the long term benefit of Boeing and the industry it might have been better if a few passengers had been sucked out of that Alaska Max9.
There is an alternative path.
Beyond shareholders, who together with management, controls the Board, the FAA is a powerful stakeholder which can legally force accountability.
For example, the Production Certificates can be pulled for all of BCA absent desired accountable change.
Won’t happen this year. 2024 is an election year and any bad news in that regard is not wanted.
Sad to say, but like the whole Max grounding/China delivery halt, politics do play a part.
The GOP will make hay out of a yanked certificate /shutdown and while the reality may be that it is better for the public to do so – it won’t happen.
As well, BA is a large part of the economy, along with the airlines and suppliers. The last admin focused on how well the economy was doing, pointing to the stock market as a barometer.
You mess with BA, you can expect a significant drop in the market.
Can’t afford it…until Dec 2024.
What does Kodak and Boeing have in common? They were both industry leaders for a long period but didn’t embrace new technology. As a example, Kodak actually had some of early digital photography patents but didn’t want to cannibalize their film product lines, so they didn’t and someone else did…now they are gone. Same is true for the Boeing 737, could have launched a clean sheet commercial aircraft in 2011, they chose shareholder dividends and stock buyback….the same result will be for Boeing as happen to Kodak. RA said back in 2015 60% single aisle market share for Airbus, wonder what his prediction for 2030 for market share? United, Southwest Alaska and Ryanair live by the sword, die by the sword, its a matter of time for a mix fleet
I don’t find the Kodak/Boeing comparison useful in that Kodak’s competence and technology was completely superseded by something demonstrably superior and not difficult to duplicate. This is not the case with Boeing at all. I agree they whiffed on the opportunity to offer a clean sheet design to compete with Airbus. The old Boeing was willing and able to “bet the farm” on every new airplane program because that was what was required to bring revolutionary technology to market, you had to be “all in”. With shareholders calling the shots there doesn’t exist the kind of appetite or patience that gamble takes to pay off.
David’s comparison is apt. Both Boeing and Kodak decided their industry was “mature” which is a term of art meaning low innovation, and diverting resources to shareholders.
I can argue differences over particulars, but companies who harvest resources to benefit shareholders are always vulnerable to formidable competitors and changing market conditions.
No doubt there is a political needle to be threaded, but kicking the can down the road is a political risk too, and, more importantly, there is no longer a political constituency for half measures.
The Biden Admin should view heavy regulation as a political opportunity, because it is.
“The Biden Admin should view heavy regulation as a political opportunity, because it is.”
Biden admin is in “save your asses mode”.
11 month to go and done.
this is a prediction on my side. not a wish as the replacement will bring no issue solving changes.
The FAA is happening and it the board has to live with it.
This crisis is the equal of the MAX crashes. It happened in the US, its got legs for a story (sad truth a story needs legs) and congress is not going to believe a thing Calhoun has to say, even as a fig leaf.
Boeing is not Kodiak. It has one cutting edge product and it has a successful main product (yea nothing wrong with the MAX, its the execution of program that is failing)
Its a matter of the board taking effective long term action or trying to slough off another Calhoun into the position.
The FAA has proven once it takes action, it does not take is hand on the operation off unless its doing things the way it should.
I agree. They lost the plot when they overlooked Mulally in favor of McNerney. It’s been all downhill from there. Alan of course went on to resurrect Ford and win many accolades for turning around a failing automotive dynasty.
In hindsight the failure to select Alan as CEO is obvious.
The decade long purge of his proteges and “Working Together” culture has had the effect his supporters predicted.
It was obvious at the time
The 777 development was over budget and the McAir people did not like it once they “took over”. So Mulally went east and Boeing changed.
I think you are very likely right: Mister Calhoun- WS’s lapdog- is not going anywhere. Probably not even if
there is yet another MaxCrash.
“we own all you little people..” though they like to break it to us slowly.
I think there’s a typo: shouldn’t the article read “..the speakers were unwilling..” rather than “willing”?
“The board recommends that Boeing partner with its airline customers and others in the industry to re-examine assumptions around flight deck design and operation.”
Actions speak louder than words. Where is the evidence that BCA has taken any action regarding the MAX?
Goodbye the MAX 7, at least for now?
https://twitter.com/dominicgates/status/1750710623116411238
-> Without the exemption, the MAX 7 cannot be certified to fly passengers. It had previously been expected to achieve FAA certification as early as this month and to enter service with Southwest Airlines by the spring. […]
“Simply put, FAA has certified two MAX variants to date — and both variants ended up grounded,” Duckworth told Whitaker. “Boeing and FAA are 0 for 2 in the design and certification of 737 MAX variants free of potentially deadly safety flaws.” She urged Whitaker to improve the FAA’s “inconsistent record” of enforcing safety standards and to hold Boeing accountable. […]
This week, Pierson sent a new letter to the FAA renewing the objection and noting that in reviewing the federal database that logs reports of in-flight incidents, the foundation found multiple failures of the engine anti-ice valve that regulates the system’s heated airflow.
His letter cites two such failures on United MAXs this month that resulted in unscheduled landings. Another Jan. 16 report describes “a bubble-shaped defect and cracks on the outer side of the #1 engine inlet cowl on a Southwest MAX.”
“Dammit! I knew we should have given more consideration to the A220!”
– overheard in the SWA boardroom
Yep, I said it at the time.
Now the A220 has its engine issues and a number of software issues but those are getting worked out.
Boeing will drop the -7, only SW wanted it and they will take -8 instead.
The -10 is another matter but the latitude for a waiver is no longer there.
I had no issue with the waiver, its purely an opinion as to what is better and as Boeing moved to more current systems (FBW) and computers, they did the same thing.
Now they shot themselves in the foot and congress may drag its feet until after the election and then turn them down.
At that point Boeing has to ponder a split alarm system and two fleets (NG and MAX vs -10) or drop it.
The board is not going to be happy! The polite version is their parade just got rained on and in fantastic fortune, we did not have a plane load of dead victims.
Westjet up here has the Max 7 on order.
‘Boeing will drop the -7’
This…
Can you imagine the fallout? BA is unable to get an aircraft certified by it’s own regulator?
Can you imagine the fallout, the MAX looses a door and suddenly they are under even more scrutiny?
Giving up on the -7 is worse how?
South West and the Uber World Spanning Westjet will move on, probably to -8s.
Or they could buy A220s.
Or they could buy some nice lightly used C-919s.
Lol. The MAX 7 is crucial for WN’s future. Anyone who insists otherwise is poorly informed.
To that point:
How many Max 7’s are sitting in Renton, waiting for delivery?
How many are fuselages are sitting in Wichita waiting to be shipped, or are in their production line?
You just gonna scrap all of them? Take them over to another hanger, pull out everything that can be used elsewhere and send the rest to the shredder?
Think of the logistics nightmare. Interiors that are too small to fit a Max 8. Not enough seats. Wiring is too short.
Get an exemption for a flight to the desert chop shop and sell them to a scrapper?
What a mess.
https://www.planespotters.net/aircraft/production/boeing-737-max-7
Here’s the production list.
I make about 30, all with tail registrations.
Frank P:
First you insist Boeing should not make aircraft and now you insist they need to make an obscure money loosing aircraft? Really?
The only reason to certify the -7 was the new systems, well and a sop to South West who wants a heavy for the mission aircraft.
Now? You tell me. If the alert system waiver goes away?
South West had moved to more -8 size than ever, you going to tell me it will kill SW if they go all -8?
No one is getting any -7s anytime soon. So, what is the difference if they sit there or they sit there?
South West can buy A220 if that -7 mission is so important to them. They will even come with good engines!
And I thought the logic (illogic) was Boeing is supposed to build airplane and not deliver them. The -7 should fulfill that wonderfully.
@Frank P
At this point, it’s more about the damage to the reputation than to the bottom line. Imagine what happens if the cancellation of the MAX 7/10 is announced after UA places a major order with AB and the firm up of A350/ plus additional order of A350 …
P.S. Yup. I’m tying the offer of A321 with the A350s.
P.S.2 I applaud the wisdom and foresight of AF/KLM, Qantas, the Chinese guys who picked up the A320neo family over its competitor.
@Pedro
You can add Delta to that list. Guaranteed they either have plans to:
1) Extend the life of what they currently have using Tech Ops, if their order for 100 Max 10’s is delayed
2) Have options past the 107 – A321Neo’s they have on order or exercise the options they have on the A220-300 and move around their fleet a bit.
Goddess Fortuna has locks to grip at the front.
Her heads rear is shaven, oiled. 🙂
Try to bring John Leahy from retirement! Then empower engineers!
Leahy had his day, but he is a sales guy and he outlived what worked for him, Airbus went mainstream and became the dominant mfg and his style of aggression was not needed, the aircraft sold.
Leahy made his share of mistakes. Those were mostly corrected because the people above him had a better take.
As much as he helped Airbus in the end the operation changes and he did not change with it as well as being an outsider. He was not CEO material.
Gone are the days when a Manager actually did the job! Managers and Engineers only have textbook experience. Personally I worked at Boeing on C-17 weld assemblies, The welding Engineer had never welded in his life! During lay offs I worked at the off load contractors where they didn’t purge their titanium welds, Any knowledgeable inspector would know you don’t wire brush or sand blast a weld!
A manager just has to have actually managed.
I worked with a former Journeyman Electrician. He had a brain. I could explain a totally no electrical issue to him and he got enough to assess the situation.
I knew of one house builder who went onto become an Architect, he still made mistakes, funny to hear him say, yea I always complained about those and stupid architects. It was our job as an expert crew to catch the problem, alert him and we got a change, often one we came up with.
I know an HVAC mechanic who went onto become a mechanical engineer. Yep we still had mistakes, but given my management ok, I could talk to him.
The equipment he had worked on no longer was offered, he had to learn a whole new setup, but he did it.
Its how managers are selected and their attitude. A good one doesn’t have to know all the nitty gritty, he just has to know who lies, who does not, how to get rid of the slackers.
I was reviewed one time by a group who took over the operation (long story, not worth telling). Upshot was when I went in, the guy looked at me and said, this is just a formality. I have heard from good people and bad people and they all say you know your stuff.
When bad people say you know your stuff, you know your stuff.
Manga gin is a skill unto itself and a good manager figures out how to manages not be an exp0ert on each and every tech detail he is responsible for.
Engineers have to learn, but if you have a good structure and retain your older engineers who pass it onto the new ones, you have a success , operation are hugely more healthy with a mix than a bunch of old farts (being an old fart I can say that)
Managers and Engineers don’t have a chance to work and get the needed degree. You have to train them mostly, but with a good structure you can do that.
With a bad one, it does not matter because you are sabotaged form the top.
Oops! More temper tantrums are coming?
-> Airbus “has inquired with jet leasing firms and airlines, proposing to buy back slots for [its] popular A321neo … where it can over coming years” in order to sell more planes to United.
https://twitter.com/ByERussell/status/1750981282123620745
“Airbus SE is seeking to persuade customers to return some aircraft delivery slots that it could then hand over to United Airlines Holdings Inc., going all out for the rare chance to snatch a marquee order away from embattled rival Boeing Co.”
Most interesting! Thanks.
Is Kirby serious or more fireworks?
-> “Kirby has vented his frustrations with Boeing’s management to colleagues and voiced concerns over the handling of the grounding, now in its third week, Bloomberg has reported.”
https://www.bnnbloomberg.ca/united-ceo-blames-boeing-for-max-9-missteps-wants-faster-fix-1.2025399#:~:text=Kirby%20has%20vented%20his%20frustrations,remains%20critical%20of%20Boeing's%20leaders.
https://www.bnnbloomberg.ca/boeing-faces-more-pressure-as-united-ceo-vents-frustrations-1.2025046
Not really, its to be expected.
Airbus would have to pay a premium to get those slots back and they won’t get a lot of them.
As Leeham has noted, China needs Boeing and the Airline industry needs Boeing. Airbus can’t produce 120 single aisle aircraft a month, not even on (5?) production lines.
Alaska is taking delivery of a -9 this week. There will be no more ramp up until Boeing is corrected and while the MAX is not grounded, delivery is slowed down hugely.
FedEx once had the same thing come up when UPS was going to or did strike at Xmas.
While I was not in the chain I saw a copy of the email. Basicaly:
To All Employees:
This is not going to be a windfall for us. We are over 100% tasked for the Holidays (which for FedEx start 3 months BEFORE xmas)
We are not going to drop or impact our customers to pick up new ones, and that is beside the penalties in our contract if we even thought about it.
What I need all employees to do is their best as we are saturated already and we don’t want a meltdown.
Bottom line is if you are at max rate and you have not only sold your slots but oversold them, you ain’t getting new customers.
You may be able to deliver 1 or 2 extra to United or whoever every quarter, but you are not going to replace Boeing.
United may well take MAX-9 (ironic) as that is the best they can get for another year or two.
Boeing may well now have to change the Alert System as keeping that waiver is now fraught with political though not realistic peril.
FAA is allowing deliveries but expect those to slow down a lot for at least 6 months.
Crystal ball firmly engaged.
It’s all going to come down to money. United already have the A321Neo on order, so they have their baseline pricing.
Airbus A321neo 3 127 – Deliveries until 2032.[28]
Airbus A321XLR — 50 TBA Deliveries start in 2024.[29]
Airbus A350-900 — 45[ Delivery deferred to 2030, at the earliest.[31]
————————————
Depending on which aircraft United planned to replace with the Max 10’s – there is a number that someone has calculated, on what it costs to keep the older aircraft through their next heavy maintenance check PLUS the added fuel expense that it would cost. It’s probably a range, based on how oil prices go.
United will be forced to pay any lessor/airline to give up their slots.
An amount less than that number and they’ll buy the slot. Over it and it’s cheaper to keep the older jets flying. (Capex is also part of the equation).
———————————
I can imagine the conversation if THIS call is made:
“Give up our slots? No, I’m sorry, that won’t be possible. As a matter of fact we were just discussing exercising our purchase rights to INCREASE our order. How’s the A220-500 plans coming along, BTW?”
– Ed Bastian
Frank P:
It always comes down to money!
You did correctly list the factors.
You did miss, can we excersize our options and how many A321 can we get and how soon?
And how many MAX -9 can we shift into what slots and how many -8s do we shift the buy to. United has lots of options.
The A350 is a whole different story. They could have split that fleet if they wanted to.
How happy are they with the 787s? The delay was nice as they did not have to finance them (now they want them, sooner is better)
As Throwaway said, Charleston has a different system and they have a wild plethora of major parts from Italy, Japan and (ironic ) Wichita.
‘You did miss, can we excersize our options and how many A321 can we get and how soon?’
If you’re referring to the Delta conversation, it’s in their best interests to make it as difficult as possible (read: expensive) for United to get delivery slots. The terms of the options and what was negotiated – I have no idea.
—————————————
‘And how many MAX -9 can we shift into what slots and how many -8s do we shift the buy to. United has lots of options.’
I seem to remember the FAA limiting the number of Max’s that BA can produce. You hear something about this? Who then, in the Boeing order book, is willing to give up THEIR slots so United can move into them?
As far as United’s options go…this means that while Delta and American fly their A321Neo’s & A321XLR’s, having ungauged their fleets and gotten new aircraft to replace their 757’s…United will be down sizing. If they can buy Boeing slots.
Options, indeed.
Frank P:
You have done it again!
So options are worthless?
Ok, got it.
I have to wonder why airlines get them and why the contracts state they can shift from one type to another?
Where do available MAX 8 slots come from?? 😂
You guys keep saying people are going to Airbus and if they do, then Boeing has slots!
Airbus going to 120 a month! Oh pull the other one. They can’t even limp the A220 to 10 a month.
In 10 years with NO competition, yeas they could do it.
So an Airlines waits for 10 years or buys the MAX 8 or 9 as they come off the line?
Yep, you guessed it, they buy Boeing while trying to get Boeing management changed.
BA/BCA plans to “ramp up” its 737 MAX production this year and next to reach 50 per month. No More!! (That’s why UA regrets putting many of its eggs in the wrong basket.) Didn’t you hear the news? Where have you been last couple of days? Busy posting “your” opinion and your past? 🙄
United has 61 B757 that i have to believe are first in line for retirement
Yep, it was a great aircraft that lived in the days of lower cost fuel.
It was not low cost to build and its extremely heavy for an A320/-8 or -9 missions. Its heavy for most of its missions now.
So, new engines, a new wing, a new fuselage and call it a 757!
UAL can run more 787’s domestic if lacking 737MAX’s. Not optimal but an option and they did with 767’s.
OTOH
-> Small Boeing suppliers lament new turmoil around 737 planes
https://twitter.com/Jamie_Freed/status/1750977667510440321
You must like twitter a lot, all your information comes from there.
They are supposed to be X now are they not? Or is that Facebash?
How about just listing the source so people don’t have to deal with that web site?
Do you know why both Jon Ostrower and Edward Russell stay on Twitter/X even though they tried to pull away from it?
For those less informed, it is still the quickest and best social media sharing info during the JL516 incident. Haha.
Did you ask Scott why he’s on Twitter/X? 🙂
https://twitter.com/LeehamNews/status/1750674217929199794
-> ‘Hobart is one of many suppliers that dot Boeing’s home turf around Puget Sound in Washington state, and the Bresters had planned to double their four-person workforce to meet Boeing’s ambitions for increased production of its best-selling 737 jets. Hobart supplies parts to larger companies that sell directly to Boeing.
Those plans are now up in the air after U.S. regulators curbed Boeing’s production following a mid-air jet panel blowout, and the Bresters are not alone. The incident risks further erosion of trust and financial strain on the planemaker’s most vulnerable suppliers, some of whom could close if Boeing’s problems drag on, Rosemary Brester said. […]
“It is going to have a negative ripple effect on the whole Boeing supply chain, which was already struggling to ramp up,” said Eric Bernardini, a top aerospace specialist at consultancy AlixPartners.
Back to the Future…1996 NY Times article
“Mr. Demisch said the only problem he foresaw for the merged company, which would have combined 1997 revenues of about $48 billion and very little debt, was where it would invest all the billions of free cash it is expected to generate in profits in coming years. Still, ”it is a high-class problem to have,” Mr. Demisch said.”
No one is too big to fail
“In 1996-Kodak commands over two-thirds of global market share. Revenues reach nearly $16 billion, its stock exceeds $90, and the company is worth over $31 billion. The Kodak brand is the fifth most valuable brand in the world.”
I am back to teaching level 080 economics class.
Too big to fail is a Euphemism. It does not apply regardless.
Its too important to fail, not too big.
Chevron can fail, Shell, BP, Exon pick up their empire and it all goes on per before. Them thar assets are liquid gold.
Boeing is not too big to fail, its too important to let if get sold off in pieces. Both jobs wise and the economy and the defense side.
Frank P might be able to tell us when or if they can declare bankruptcy.
As Boeing falls into that important class, actually key/critial class, then it would be taken over and ran until it could be restored.
My company went into bankruptcy. They got all the money they needed to borrow. Because all their debts were wiped out or pennies on the dollar.
Kodak has got itself into a dead end and there was boo coo companies that could pick up the slack.
Anything Kodak had that was worth anything someone snapped up.
Boeing is too close a parallel to Leeman Brothers.
Yep, they let it fail and the world economy shook (the Depression of 2008 by the way in case you missed it)
After that they saved em all as well as GM and Chrysler (the last two because of jobs and the knock on affect to the economy)
ok Professor Transworld what was the market cap for Boeing 1998?
Professor Transworld…what your take on 2040 market share for single aisle…say 1,500 year
Airbus 70% 1,050 87 a month….(ps is already on track to achieve this number by 2030 or before
Boeing 20% 300 25 a month
Comac 10% 150 12 a month…(China will not need Boeing at this point)
Based on Boeing will still only have 737 (vintage date 1965) to sell and no new commercial aircraft launch…from 30,000 ft. view why is Boeing investing over $100 million into replacing 1960’s wing riveters at Renton if they were only going to use them for less than 10 years after BOD…the tell…its Calhoun 100 program strategy
David P:
I keep telling you I am not a financial guy.
I see the big picture, I don’t do the numbers. I managed our money and had an accountant deal with the IRS, she is really good at what she does.
I paid off a house. I quit work. So yea I can manage an enterprise without getting into the weeds. If you manage things the money takes care of itself. If you don’t, all the money in the world will not do anything because its all gone down a drain.
You save as much as you can, you don’t spend frivolously and manage assets (or in our case sold one off to finish paying off the house).
I took Social Security early knowing I had a bit of a knock on affect but the money also went to paying off the house.
The average house is 400k. Our is not but its a fair chunk of that.
To rent an apartment coast $1500 a month. Not bad return on call it 300k though its not that either.
I could not care less what 98 Boeing Market cap was.
What I do know is they have screwed up and got themselves 50 billion in debt. When I got the mortgage on the house it was an investment, you gotta live someplace and the investment has paid off then, we had a less than apartment roof over our heads and its paying off now.
You can either have money coming in or you can avoid money going out. I avoided money going out.
Its not that complicated.
Boeing has all it needs in place, not ideal but it has 4000 some odd MAX sales, 1500+ 787 sales, a good chunk of 777X sales.
If they can execute on those programs they can retire the debt and look to the future.
Its no different than if you chain smoke cigarettes and go drink at the local bar every night and buy you dinner out, yep you can be earning 150K a month and watch it all go away.
Remember how LTCM almost brought down Western financial markets? Guess not. 😂
It’s not about known knowns, or known unknowns, but unknown unknowns (for you).
I have another one for back to the future series:
https://www.washingtonpost.com/archive/business/1998/01/18/boeings-big-stall/8ac4e59d-29cf-4c0b-9885-53d86a734ca2/
Good link. Thanks.
yes…to continue the future series….good old “Hatchet Harry” ….just more ethical lapses…guess he didn’t learn from Phil C bad conduct
https://www.nytimes.com/2005/03/08/business/boeing-chief-is-ousted-after-admitting-affair.html
-> ” …Texas-based American has 20 MAX planes on order for deliveries this year. Chief Financial Officer Devon May told Reuters that the FAA’s order may have a “modest” impact on those deliveries.
American is looking to place a new order for planes for deliveries in 2027 and beyond. May said the company is talking to Boeing, Airbus and Embraer for the new order, but is mindful of Boeing’s ongoing issues. […]
United Airlines, for example, has 100 MAX deliveries scheduled for this year, according to a regulatory filing in October.
https://www.reuters.com/business/aerospace-defense/faa-halt-boeing-max-production-expansion-hit-airlines-suppliers-2024-01-25/
Pedro:
Be sure to let those guys know not to take any options.
I hope American is not counting on Airbus, they are sold out till 2030 (well unless you can pay a wild premium for them)
I see who is in distress. 😁
Pedro:
I have long stated that I think Airbus is far better run than Boeing.
This is simply a factual aspect of what Scott and Leeham published, Boeing can’t be replaced as no one can build the numbers needed, not in China, not in the world.
If Boeing just stopped right now, it would take Airbus 10 years to ramp up to existing levels Boeing is putting out.
That is just the reality.
I believe AAL is shopping for the MAX 7/E195/A220. I heard our poster here said BA should drop the MAX 7. I see it’s only a campaign between Airbus and Embraer now. 🤭
-> ” …Interestingly, in their 4th quarter reporting, United mentioned that the A321neo has the highest satisfaction ratings of any aircraft in their fleet. […]
Aircraft purchase agreements typically have contractual provisions that are difficult to break, but in this case, with initial MAX 10 orders scheduled to be delivered in 2020 and now not expected until 2025 at the earliest, United has ample grounds to break the contract with Boeing. The quality issues at Boeing have caused the FAA to take unprecedented actions, including slowing the planned production ramp-ups at Boeing until the quality issues are fully solved. […]
As the MAX is the only currently produced airliner without an Engine Indicator and Crew Alerting System, there is no way to alert pilots on the MAX that engine anti-ice systems may have inadvertently been left on and presenting a potential danger. This could increase pilot workload and presents a potential single point of failure on the aircraft, something that should be avoided. […]
Clearly, over the last five years, the mantle of industry leadership has shifted from Boeing to Airbus. The current industry dynamics, and Boeing’s downfall, could further shift the balance of power in the industry in the direction of Toulouse. […]
https://airinsight.com/can-airbus-wrest-united-away-from-boeing/
Thanks for these quotes and the provided link, Pedro.
Bryce would be enjoying this a little. 😉
Oh no he is not. He is screaming and throwing a hissy fit!
PS: You can program in an alert for a de-ice system left on for X minutes.
You don’t need EICAS and you should look up the confusion the Airbus system causes.
Its like the new improved life vest will save you.
Hmm, right. You guys do know that if its not programed into EICAS then it did not occur?
Watch this one and then tell me how perfect the system is? Ever hear of a simple non linked computer system getting reset into insanity?
Yep, Space to Earthlings. If someone can do something stupid (endless resets) they will find a way to do it and then, oh my, you didn’t tell us.
https://www.youtube.com/watch?v=04M63B1sv_Y
Or you can have a pilot who thinks, well that is not right and we should land and get it fixed.
Nothing and no one is perfect, its why we have layers of safety and pay people to think (well should think)
👍
Remember Uwe’s choice words?
“With a little help from your friends
you can pre-align all the holes in your cheese.”
I remember how strongly our poster here defend why the MAX doesn’t need a modern EICAS? Are those words coming back to bite the backside?
BA thought that it had scored a victory with the EICAS exemption, but we’re now seeing that all it achieved was postponement of the inevitable.
Without EICAS, there’s no way that the overheating engine duct issue can be satisfactorily mitigated.
The EASA is unlikely to be willing to grant an exemption here.
😆😆 ohh really .
Highest satisfaction rating ?
I’m sure United execs are very pleased,The engine failed on a 2 week old A321 !
Very satisfying indeed..
https://simpleflying.com/united-airlines-airbus-a321neo-returns-chicago-engine-failure/
I came up with two names for folks that would be great in two positions. Mike Callaghan would be great as a head of quality for the whole company. He is still with Boeing working out of the Everett site. Steve Venema is easily the smartest engineer I’ve ever met – period. He was in AR&T while I was there and we did a bunch of projects together. He would make a great CTO. He is currently at ForgeRock.
RTF:
Thank you. Good to see some names floated.
I am happy to admit I do not know the players.
I would like to see names for CEO.
Its said with no dis-respect, but you can’t reform bottom or mid level down.
It has to be top down and then good people can thrive.
This here DarpaNet is an oddly opaque medium.
I’m positive- 100% certain- that that was unintentional.
“Relax- everything’s fine.”
I’ve been sitting on the sidelines on this one….. BUT there’s another thing to think about besides replacing top leadership. There is no path at Boeing to capture factory worker skills as they age. Case in point. At MacDac, the production planner was the highest paid hourly worker at the UAW. This provided a career path for older highly skilled assembly workers to take their knowledge and it made the product better. Because of this, when the merger happened, DAC Manufacturing Planners, vastly outnumbered by the BA ones, ended up with a disproportionate number of lead positions. They were just more experienced at actually building stuff. Most of them were Airplane Guys and understood how to employ the magic finger owners to get complicated stuff made. Boeing Manufacturing planners were hired without really needing any aerospace background, and it shows today. There is NOPATH from the shop floor to a Manufacturing Planner position today. Skilled assembly people leave the BA workforce when their bodies cant take it anymore because BA isn’t smart enough to capture this institutional knowledge to improve its assembly processes. I was a career Manufacturing Planner, and I shook my head when my first level BA supervisor told me I was failing because I wasn’t moving to a new job family every 2 to 3 years. I was there, doing what I loved, and told it was wrong because they had no concept of the value of skilled people in the right places. My boss thought career advancement was first, at the expense of most everything else. He didn’t see my job as a career because he never understood the skills we held and how vital we are. THAT is at the crux of so much of Boeing’s problems today. The skilled people without 4 year ABET accredited Degrees are second class minds to Boeing. The US Air Force Academy is not recognized as being worthy using this standard. It makes you wonder.
‘My boss thought career advancement was first, at the expense of most everything else. ‘
This ^^^^^^^^^
The first priority should be making quality airplanes. It speaks volumes of the mentality.
If career advancement is the focus, what is the main driver of why they are there?
To get ahead.
Accept responsibility for how things are done and when mistakes occur? Nope.
Ensure that your dept is doing things properly? Nope.
Making sure that you are under budget? Yep.
Pushing everyone to make targets, no matter how it’s done? Yep.
Telling those above you that everything is fine, when it’s a mess? Yep.
Covering your butt, deflecting to another party and trying to make the person who’s job you covet look as bad as possible? Oh yah.
Kiss the bosses butt, don’t rock the boat and be a ‘team’ player, especially in ‘important’ meetings? Most certainly.
That’s how you climb the ladder. Get yours, while you can…
Scott C:
You are well founded in the statement.
But to get the whole thing to work you need someone at the top that supports the employees.
Until you get that, like other, good concepts proven to work very well, but its all undermined by the grind of the system if not outright fired.
I could tell you every fault (and a few pluses) of the whole crew. But we had two good workers and the rest were allowed to just be slackers.
It was not the bad people that was the problem, it was the management and that went right to the top of the company.
The company had been started by an indivual and you could call him and discuss issues with him as well as negotiate. He sold it off, clowns bought it out and took it into bankruptcy and then another clown bought it out and let the clowns continue.
Like Boeing, it was aided and abbedded by the client who was willing to see failures (up to a point). It limped along from one disaster to another.
The most worthless employee was a buddy to the manager and he got the last good raise. One of the guys who did work quit because he got no raises and a complete slacker did.
How did it work? Well when good people quit, they hired outside contractors to do the work. No I don’t get it as that was what my company was paid to do but then you get what you paid for.
I just happened to be a remnant of former times and had gotten to a good enough salary before the raises quit, entirely. I was truly hated by our manager. Now its all his (or maybe was) I have never check back with anyone.
I could do my own work to my standards, no one else was held to any and it showed but then you get into the wisdom one former manager imparted to me, true all the way around.
Sometimes you have to let it fail to get it fixed.
I see many comments/articles calling for the (partial) ousting of the BA board. Curiously, in that regard, the entire aviation industry appears to have overlooked a critical ruling by the 5th Circuit Appeal Court last month, which opens a route to have the DPA between BA and the DOJ quashed. In essence, the Appeal court has “ordered” the district court in Texas (which earlier arraigned BA for conspiracy to defraud the United States) to uphold the rights of the victims of the MAX crashes in the event that the DOJ doesn’t voluntarily rescind the DPA.
The link below goes into great detail: since it’s written for legal professionals, it should be read carefully so as to avoid misinterpretation by laypersons. Of key importance is the following passage:
“The emphasis we note, therefore, is that in both circumstances—full dismissal of charges to resolve a criminal prosecution or partial dismissal of charges to resolve a prosecution by guilty plea—courts retain adjudicatory responsibility, including an obligation to apply the CVRA. Public perception and confidence in the criminal justice system assume that when criminal charges are submitted for judicial resolution, the courts vigilantly will enforce the public interest, including Congress’ command that crime victims are heard and protected.
“…[I]n both cases—an accepted/rejected Rule 11 guilty plea or a granted/denied Rule 48(a) dismissal—the public interest, especially that of crime victims, rests crucially on court-approval. In short, the judicial role stays present and constant throughout, and courts must validate the public interest, above all, including rights that Congress has given to crime victims.
“The Fifth Circuit found that its earlier ruling in In re Dean (5th Cir. 2008) provided a helpful analogy for resolving this case. In Dean, the Government and a corporate defendant secretly negotiated a plea deal in violation of crime victims’ rights—and the Fifth Circuit instructed that the district court should carefully protect the victims’ rights in subsequent proceedings. The same concern is present in this (the Boeing) case”
https://reason.com/volokh/2023/12/18/fifth-circuit-rules-that-victims-families-challenge-to-the-boeing-deferred-prosecution-agreement-is-premature/
***
Summarizing: there’s a trial — and potentially a heavy sentence — hanging over the head(s) of one or more BA board members.
The phrase “Sleepless in Seattle” comes to mind
p.s. Aussie here, with background in engineering and law, and family in the aviation industry
Welcome Counsellor. Looking forward to you following this story and providing updates and analysis.
Cricket fan? Or Aussie Rules?
Tennis, actually.
You won’t need me to keep you informed: once the fireworks start, the mainstream press will provide lots of coverage.
The Biden admin. is already considering ordering the DOJ to rescind the DPA…but, even if that doesn’t happen, the DPA will be nixed by the Texas court, per the 5th Circuit ruling. The agreement is effectively dead — even if it hasn’t been buried yet.
https://jacobin.com/2024/01/biden-boeing-trump-dpa-doj/
Too much grunting and fist pumping after every point, for me.
Nice to see Texas, that hotbed of Boeing activity, involved in this.
sarcasm_font
One really has to admire Judge O’Connor in Texas for sticking out his head on this one…he’s a beacon of hope for the crash victim families.
Seems like a man of sound morals, and not afraid to shake big trees.
Jannik Sinner for the AO win Down Under!
I like that kid’s even demeanor and no-hype approach.
Bondi:
Its what happens when it gets to the US Supreme court that counts.
They ruled Microsoft did not have a monopoly amongst other things of equally bizarre nature (or upheld it)
Justice and the law are not the same thing. The law is enacted by our betters to ensure the system is stable so they can pillage it.
I have no faith in it.
bring the ageingAlan Mulalay as non executive Chairman of the board; and a top notch production leader to run BCA ;no share buy backs for another 15 years if not more; streamline quality in production, move Corporate back to Everett , spin off defence , bet on a new narrow body also covering mid market.
it looks like a sound plan!
Except for the ‘spin off defense’ bit, IMO. It’s a governmental gravy train.
An equity offering to pay down debt, would also be a good move…
Frank P:
You may have answered that above but finding it is not easy.
What is an equity offering per a lay person definition?
Anyone putting up money is going to want a return.
How does that compare to Boeings current debt rate? (all in one average if its split up enough to make a difference)
I think airlines would order a new Boeing NB from the drawing board in large numbers, it wouldn’t have to be a moonshot.
Just engine choice, AKH option, slightly wider, quieter, modern, assembled in Europe, US and China.
10% better than NEO’s around 150 seats < 2-3hr flights.
Just to support long term choice & competition. Airbus is selling 10 years out without discounts, unhealthy.
Sound good… In the next 20 years 40% of commercial aircraft deliveries will be in Southeast Asia As a reminder, the US only has 5% of world population Might skip the EU FAL and put it into India (e.g. Tata)
Looks like Pratt isn’t out of the woods yet.
Brand new United A321 suffers engine failure at takeoff out of Chicago.
OUCH !
Any bets on how long the grounding will last?
Airbus memo to United;
We will do whatever it takes to free up some A321 delivery slots for you.
Reply;
Does that include a warehouse full of spare engines to keep them airworthy?😆😆
With the alleged interest expressed
United will probably pander a more balanced view on A321 availability ( buying, using ) . 🙂
you won’t help Boeing even a tiny bit.
Actually the gist of your quip is at the core of Boeing’s troubles.
Badmouthing the competitor and other destructive activities are cheaper ( and often unpleasantly effective and _adictive_ ) than actually producing a real, hard properties competing product.
It’s called taking a play right out of Pedro’s playbook Uwe!!
Badmouthing a competitor hurts when it’s the other way around, doesn’t it !!
May be our poster here is unfamiliar with Airbus A321neo, it has dual engine suppliers, until Boeing’s MAX! The airline customers pick whichever they like.
Oh BTW in case you missed that: it’s reported that “United… is also exploring how it could potentially get out of its agreement with Boeing for hundreds of the long-delayed 737 Max 10 aircraft”. May be it would help to relieve BA/BCA’s pressure.
This is a bit concerning.
This particular Pratt engine was built much later than the ones with the grounding..
Perhaps a one-off, perhaps not
Either way ,other than the Simple flying report, not much is being said.
Flight radar not showing any of Uniteds’ 4 321’s currently flying.
@Robert
Airbus memo to United;
We will do whatever it takes to free up some A321 delivery slots for you.
Reply;
Does that include a warehouse full of spare engines to keep them airworthy?
Airbus Reply: No. Engines are your choice. If you aren’t comfortable with P&W, there is another selection for you. But you already know that, United. Why are you sending us a memo about engines that you get from a 3rd party? Did you suddenly forget how aircraft are built and who the engine supplier is?
Who is this, United? Did you leave your email open again and your 10 year old child is sending this???? Please put your parent back on the computer and go play on your Ipad.
– fixed it for ya
😂 😂
1) Where does BA come up with the $15-20 billion needed?
2) Is 10% enough of a savings for airlines, in order to pay more to Boeing to cover the Capex cost they have to charge airlines, in order to make the business case?
3) That’s a 7-10 years out solution. Airlines want aircraft now, otherwise they could wait 7-10 years for an Airbus plane.
4) The 150 seat market is now in the minority, the meat of it has shifted to the A321Neo size plane.
5) All Airbus have to do is drop the price on a fully amortized program to make a new Boeing jet less financially attractive, than an Airbus one.
6) Given the financial condition of Boeing, any new commercial program is a moonshot/betting the company.
7) This is not in the current C-Suites DNA. It requires huge investment with a long term horizon for an ROI. These people want to pull cash out of the company, not put it in.
8) The certification teams already have their work cut out for them. Max 7 is now 2025. Max 10 is beyond that. 777X is next in line. There’s only so many resources to go around.
9) How many Max customers, who have late model NG’s in their fleet, decide to defer/cancel their Max orders, hang onto their older aircraft and wait until the next, less ‘unlucky’ plane arrives?
10) Who’s to say that the next aircraft will be any less trouble than the current programs? All of them – the 787, the 737 Max, the 777X…all are a mess. Groundings, delays, cert problems, production issues.
They’re going to make this one ‘right’?
Thanks for this comment.
upfront:
Boeing has voided any promise they made to customers in the last 2+ decades.
This makes announcing anything new that is said to be “superior” a difficult proposition.
But who does one even replace Calhoun and Deal?
At some point Elizabeth Lund was floating around as a name to replace deal but I’m not sure at this point
I have the same question and no answers as I do not have a handle on the industry for names like that, or a different industry, it does not have to be Aviation.
Mulaly took over Ford no problem. He was a tech guy and building auto’s is a tech operation.
I am open to any candidate. I would have put up some of the Diesel mfg names but there is an emissions cheating scandal currently against Cummins Engine and as the guy said, if Cummins has to cheat are the others not? (that is in Pickup Trucks primarily in the US, Ford and GM the other two big players in that market)
I suspect that we’re at the beginning of a wave of MAX cancellations. The idea that one has to wait until 2030 for Airbus jets is moot, because 2030 is a lot sooner than “never” in the case of the MAX, isn’t it?
Even if the MAX7/10 are certified any time soon by the FAA — via an exemption for the highly controversial engine duct overheating issue — I suspect that foreign certification (by the EASA, Transport Canada, CAAC, etc.) will not be so forthcoming.
As the AA/UA CEOs have pointed out, it’s only a matter of time (due to delivery delays) before orders can be cancelled without penalty — and the deposits on those orders then have to be repaid by BA, even though it has already spent that money.
Might as well get in the queue for competitor aircraft now rather than endlessly clinging to a fantasy.
‘and the deposits on those orders then have to be repaid by BA, even though it has already spent that money.’
This sounds like a person who has followed the financial happenings over at BA:
Advances and progress billings 55,924
$56 billion in Unearned Revenue.
(Add in some $53 billion in debt from lenders and that’s $109 billion to be repaid in either cash or product)
Those are some scary figures…
what about adding unamortized launch cost for the 787 and 777X…. the real debt exposer number
You raise a good point David, but if I’m not off the mark, this is where the money comes from:
Research and Development
Research and development expense, net is summarized in the following table:
(Dollars in millions)
Nine months ended
September 30
……………………………….2023
Commercial Airplanes $1,538
Defense, Space & Security 652
Global Services 84
Other 222
Total $2,496
‘Research and development expense increased by $438 million and $231 million during the nine and three months ended September 30, 2023 compared to the same period in 2022, primarily due to higher research and development expenditures on the 777X program as well as other BCA and enterprise investments in product development.’
—————————————————
So Boeing allocates money each year to spend on R&D. For the 9 months of 2022 it was:
Commercial Airplanes $1,102 $623
Defense, Space & Security 706
Global Services 89
Other 161
Total $2,058
————————————————
This get’s expensed during the period and falls onto the Income Statement.
What doesn’t get expensed, are the monies in the DPB – deferred production balance. They sit in Inventory (inflating that value artificially) until BA either writes them off or expenses them out as planes are delivered.
Who knows how much of those amounts are actual increases in production costs or R&D.
————————————–
Before all the drama at BA, this was the R&D spend:
Years ended December 31, 2018 2017 2016
Commercial Airplanes $2,188 $2,247 $3,706
Defense, Space & Security 788 834 816
Global Services 161 140 152
Other 132 (42) (48)
Total $3,269 $3,179 $4,626
For 3 years, from 2016-18, BCA got some $8 billion in R&D money. I wonder what they spent it on…
Well Boeing is still making aircraft.
Its even possible they won’t make the -7/-10 but go ahead and get in line, nothing wrong with that.
But no aircraft vs some?
Flip is the board is asking itself, what can we do to make this pain go away.
So stay tuned, Super Tankers don’t turn on a dime and its going to be weeks if not months while this plays out.
A good question is do you want to kill Boeing off and not get not just MAX but no 787s?
Airlines need to replace aircraft now not 6 years from now.
What the Airlines want is Boeing working right.
Does anyone say with a straight face that if Boeing is gone that Airlines would be happy?
No competition even if its bad?
And no, none of this is an excuse for Boeing, I have clearly stated its another huge failure.
Its what can be done in the face of that and there is a lot that can be done.
Will it? Odds say no but then those odds have just shifted.
Green Bay was given no chance this year and they went to the Quarter (or semi) finals.
People said they were done without Rodgers.
I said they were done BECAUSE of Rodgers.
Get rid of Rodgers and they played like a team and found they have a good QB replacement.
If it ain’t my old pal, our resident financial genius, better known as the man with a thousand excuses; “FRANK P”.
The man who can calculate the value of any Boeing order, yet struggles mightily to do the same for an Airbus one. Yeah,that Frank!
What’s a matter Frankie,you had to replace the incumbent Bryce, as the new sheriff in town, jumping in and policing my comments..
Are you going to throw another tantrum, because I stated another PRATT ENGINE has failed,and only a few weeks old at that.
Rest assured, Airbus thought all those Pratt issues were behind them..
Thankyou AB for assuring customers all is well now with the beloved Geared Turbofan.
Hey United;
I can’t promise you when your 321 will be returning to service, but I can guarantee you some sweet delivery slots for more of the same..
Just remember to order CFM’s next time,as we have lost faith in the PRATT program, as I am sure you have as well.
All the best;
AB….
Robert! More Blessings from the Pope!
How nice to see you again, after all the dust has settled from the most recent Boeing crisis. Come out of hiding, have you?
‘The man who can calculate the value of any Boeing order,’
Please do me a favour and post any proof to that effect, of what you have said here.
—————————————————-
‘jumping in and policing my comments’
Only when they’re factually incorrect.
@Robert L
It will be interesting to see how long of a wait for a spare engine for United.
I would think Airbus would do whatever it takes to find a replacement ASAP to save the embarrassment of losing an engine on a brand new aircraft .
probably much faster and with less hassle
than loosing a door plug and getting to grips with the resulting fall out from exposed workmanship and supervision failures. 🙂
And this is the union that wants to demand huge pay and benefit increases later this year. Pretty ironic.
Slightly off topic, this is a problem that management (??) failed the late great Boeing. Let’s not forget they sort of cleaned house several years ago with buy outs for senior engineers and line professionals who understood what Boeing stood for prior to the regime change when McD took over.
There is nothing in between “black” and “white” for you!?
What I miss with a range of posters here:
a balanced objective approach do building ones opinion and then expressing it.
@Uwe
Are you familiar with the English expression the pot calling the kettle black?
Like the MAX issues one snap shot is not the program and P&W engine failure is not going to stop the show long term.
Yea its a huge issue for a new engine to fail. But is it a one off or is it a major problem?
Airbus selected the engine mfgs, engines are a complete separate line and unlike Spirit, they are not just suppliers, they are certified separately as stand alone from the hull of the aircraft (and all the stuff that goes into the hull sans the APU)
Airlines are not going to try to ensure Boeing survives, but they know its in their interest it does, even if they are an all Airbus airline.
Otherwise they pay more for the aircraft and life is harder for them and easier for Airbus.
Airbus would be happy to drive Boeing into the dirt but its also not in their interest to see that happen, without competition you atrophy.
I want Boeing viable, its good for the US and the US economy.
While I have issues with the system Airbus was formed under, in the long term, it also means there was a competitor to Boeing. Douglas, MD nor Lockheed was ever was a full spectrum offering in aircraft.
MD was sort of, but they went the 3 engine route and that was a dead end.
There is a balance even if it shifts back and forth. Its far better it not shift all the way.
Frank P brings perspective to the discussion. Unless I knew what my money status was, I could not make decisions as to how I was doing, be it positive or negative. What he looses sight of, its not all about numbers. We need the numbers as a benchmark, but his ideas are not going to fly as far as solution goes.
I for sure don’t have the answers.
My goal in my work was not to bring negative reports, it was to assess the situation and offer solutions. Well thought out and researched solutions. Those solutions were all equipment related and tech based.
The company had to figure out if they would, could and how to pay for them. That was not my job. My job was to bring as cost effective solution to the problem as I could find.
Sometimes it was, you need to dump this piece of machinery, it can’t ever be made to work, its inherently flawed. You can live with it, repairs will be costly on a regular basis and you need at least one spare on hand.
And yea, this piece of equipment claims it uses no air, but it does, its just a lot less than the other does. So while you are at it, allocated 5 hp worth of compressor capacity to it even though they say you don’t have to do any.
The Company job was to make enough money to pay for it all. Mine was to be as efficient as I could be in keeping what they had running or specification of its replacement.
I can see Boeing big picture issue and in broad terms what they need to do to fix it. I don’t have the expertise in financial and costs to determine what the financial end looks like.
I can tell you Boeing worst issue is not to get everything back to Seattle. Long term the goal should be to get the required groups back. HQ can stay in DC, that is not the problem. The problem is a philosophy of gutting the company at the expense of its future. As long as you get your golden parachute, then its the last guy who goes down with the ship.
I do know Boeing can be corrected. I don’t know it will be.
A stand down on the factory floor strikes me as a great idea.
I would propose Boeing also have an all day stand down in the executive suite.
After all, these individuals are presumably the ones who make decisions regarding whether or not the workforce is ready to start increasing production rates.
This looks like the right group for the event . . .
https://www.boeing.com/company/bios
“Can we stand down from home? I’m asking for a friend.”
– Dave
Clearly what we have in the Executive suite is a permanent stand down from running the company correctly.
Standing down the workers is a horribly sad joke.
While the whole world is discussing the recent Alaska door loss — which assured BA of a blowout quarter (pun intended) — one shouldn’t forget that there was/is also an issue with loose bolts in the MAX rudder assembly:
“The Directorate General of Civil Aviation (DGCA) on Tuesday said that a missing part, a washer has been found in the Aft Rudder Quadrant on one Indian Boeing 737MAX airplane during the inspection of the aircraft fleet, and an action for rectifying it is in process.”
https://www.hindustantimes.com/india-news/boeing-recommends-one-time-inspection-of-all-737-max-aircraft-in-india-101704789427330.html
Lawyers just love BA: it provides them with a constant stream of work.
If you have followed the diffusion you can see some of realize that and its not the Exit Blank blowout that is the issue.
Its a quality control fialure that extends to bad brake’s in the tail, pressure bulkhead drilling, grounding issues with a production change to process that was stupid as well as MCAS.
MCAS was not just a design failure, it was a deliberation cherry picking of data to prove it was wonderful.
Equally how the Hand Trim for the Stab got corrupted in the Flight Simulator such it no longer reflected what really happened and no one caught it or said anything.
We are in a post AF447 world where they finally realized that yea, you need to do unusual failures in the Simulators not take off and landings.
But that is the US and Europe, that training is not a world wide standard.
This is all Big News at this point. But the Alaska and United -9s are already back in the air. The -900er’s don’t seem to have the door problem. The CEO may or may not be replaced. The FAA will finish up shortly. Then Boeing will move ahead on increasing 737 production, and on certifying the -7 & -10. Keep in mind, the FAA was/is known as The Tombstone Agency. Nobody was severely injured or died in this event. Things may be back to a “Boeing Normal” by March 1, 2024…
But the corner-cutting, lack of QC, unmotivated/underqualified personnel, general manufacturing chaos and disillusioned customers still remain — thus setting the stage for the next incident.
Oh, and in the next few months, we’ll be treated to all the gorey details coming from the various lawsuits filed by Alaska passengers — a PR nightmare.
Going from bad to worse.
Nothing to see here! Full speed ahead to 50 MAXs per month and a return to 10 billion free cash flow per year.
I think there is a future for you as a Boeing senior executive.
Who’s to say he isn’t already?
Here and elsewhere I came across a poster
that seemed to have a “backoffice” for talkback
and the near identical prissy style of rhetoric
you got from Randy Tinseth on his “official” Bblog.
same PR group? just a guess 🙂
Sam W:
The FAA will not be done shortly nor will the NTSB.
The -9s are back in the air because the issue is not the -9s, it was a quality control failure that could have been any aspect of production.
Knock on is -7 cert is delayed, likely for some time as the de-ice issue now will have to be fixed before it is (and its nutty because the -8 and -9 have the same issue and will continue flying.
And the EICAS deferral may get cancelled or the delay pushes the -10 into needing an extension and I doubt that gets by congress now either.
If you think this is over its not, its just beginning
Let’s go outside the box here, for a minute;
To fill the role of CEO, someone who is involved in the industry, has vast experience with unions, understands the MRO operation, has used both BA & AB products, understands logistics and operations, has the leading company amongst his peers, has a good grip on what airlines want in an aircraft and is well liked by those who work for him…
Ed Bastian
Delta Airlines
Maye the top executives have been suffering ‘out- of -officitis’ and relying on Zoom/ MSTeams
Private Jets and Pop-Up Workspaces: Boeing Eases Return to Office for Top Brass
“Company flight patterns suggest CEO Calhoun travels infrequently to headquarters from two distant homes [one is in Maine], while CFO West occupies a new office five minutes from his Connecticut doorstep”
Sept 2023
https://www.wsj.com/business/airlines/boeing-ceo-private-jets-return-to-office-9bee2035 $
Thanks Duke, that brings some interesting perspective to you get what you pay for!
The more you pay the less you get.
“First flight data from @cirium fleet data evidences that Boeing were nowhere near their planned 38 per month at end of 2023 and it looked unlikely they’d get anywhere near 42 in February anyway, with the pause perhaps they can focus on delivering from inventory instead?
https://twitter.com/HertsRoyal/status/1750425697389068456
Pedro:
Really? Who knew.
slow delivery from inventory as planned and announced has a reason.
* obvious bad workmanship.
* add the assumption that they show the same hidden Q issues too.
* keep in mind that those are not new anymore.
there are some funnies in long storage.
Assume a thing/system that is designed to expose a single error
but not designed to expose double errors.
Assume that MTBF / fault probability is less dependent on use than on time passed.
Store for longer than the probability of a double fault coming up
and you no longer can just switch it on as a fault may now be obscured.
Experienced IAM represented employees had been telling you since 1998. Hamilton and pretty much the rest of the aviation and non aviation press ignored us. Along with the company, the politicians and the FAA.
Now we are all, or nearly all gone, either bought out, forced out or simply aged out.
Boeing now is what it it, and what it will remain. It took 25 or so years to tear it down. It’s doesn’t have 25, or ten, perhaps not even 5 years left to turn it around.
It doesn’t have enough of the right people at any level to do it. So it’s over. Get used to the idea. Next up will be successive government bailouts and more failure.
Meanwhile the press, the analysts, the financiers and the shareholders will take a giant dump on the IAM, demanding they give up, give in and roll over to “help save the company”. Well they can’t save it and there is no reason for them to take another horrible contract in a series that began in 2002.
They would be well within their moral rights to tell you all to buzz off. And they would be completely justified in getting what they can today, because there aren’t many tomorrows for Boeing left.
Put THAT in your “shareholder value” pipe and smoke it.
And they want a 25% or higher percent pay raise next contract.
They have been on massive long term contacts with only meager gross wage increases plus COLA, formulated the same way as that of social security recipients, meaning it dose not keep up with actual inflation.
So yeah. 25% GWI, front loaded in the first 3 years sounds about right.
Pilots got like what? A 40% increase?
January 22, 2024
Today, the Southwest Airlines Pilots Association (SWAPA) announced that members have voted to approve a new contract with Southwest Airlines. With a strong voter turnout of 98.8% voting on the new contract, the pilots accepted the new agreement with 92.73% voting in favor and 7.27% against. Read some of the latest headlines.
AP News: Pilots at Southwest ratify a contract that will boost their pay raises by nearly 50% by 2028
Steve R:
I guess we should throw up our hand and shoot oursevles now?
I was never a quitter, knock me down and I got up again and limped on.
I don’t know Scotts history back to 1998, I do know he has been even handed in his assessment of Boeing since I found his blog.
And to his credit, Boeing blackballed him. I don’t think he suddenly converted to being even, and I have found him even in his assessments of Boeing.
You seem to think that the IAM is going to get blamed and its clear to everyone its not an IAM problem nor was it ever.
Calhoun can’t dump it on the IAM nor is he going to sell the board its an IAM problem.
Now what the board does or does not do is a complete unknown, but the Rubicon has been crossed and the right people are getting the blame.
Boeing isn’t worth anyone’s life.
Not understanding that is exactly why it’s where it’s at.
Don’t get started on the Board.
Unfortunately our poster never worked for BA I guess.
Transworld is the Zelig of aerospace 🙂
ref: https://en.wikipedia.org/wiki/Zelig
Thanks for this comment, Steve R.
Boeing seems to have boxed themselves in nicely.
Steve R…some interesting threads to consider in the post
Could Boeing as a IAM contract negotiating tool use South Carolina site for their expanded 737 FAL instead of Everett? (e.g. 787 rev 2)
The Perfect “Subsidy” Storm………say 2030…Boeing needs US government “bailout money” it would be a perfect time for Airbus to launch their next commercial aircraft with EU launch aid……….how can the US (Boeing) legitimately file a case with WTO when Boeing is receiving government assistance.
Sure they could. But why should it matter given what took place with 787?
Not only did Boeing smear egg on the faces of the IAM, they did so to the governor and state legislature, and all the local politicians that took their side against the IAM.
Any threat to move now is one only taken seriously by the gullible. Any deal made with Boeing to keep work here is garbage. If they want to go they will, and no contract, and no deal with the state is going to stop them.
Of course it would pile-drive program profitability, but that won’t stop them if that’s what they want. The IAM accepted bad contracts since 2002. To what end? What did they gain?
Nothing.
The Everett 737 line, when all is said and done, is not about rate increases, but the end of the program in the 2030’s, with Renton production wound down years prior, the plant closed and the land sold for lakefront condos.
The wing line MAY be the only piece that remains, but if they start building wings in Everett, that means Renton’s days are numbered for certain. It wouldn’t be difficult.
And as is the case with any major manufacturer, when it divests of land and facilities, the end is only a matter of time.
Interestingly, Scott H has just put out an article today on exactly that subject and the comparison between the two OEM’s.
David P:
This is really getting into never never land.
Boeing has all it can do to assemble the number of 787s at Charleston. If you follow any of this, you know there is no excess space at Charleston.
Somehow you get the notion that the 737 FAL is up for grabs?
Downright weird. Everett has spare capacity and Boeing is not going to use that? Oh by the way they started preliminary work to do so and they shipped a fuselage there to test it.
You really think they can turn around and ship 737 fuselages across the US the other way that easily? The route they are on is unique. You think they can do it down the crowded East Coast corridor?
You do know Boeing is 50 billion in debt and money for a building in Charleston is not happening?
Uhhh we are going to make a bad problem worse by assembling 737s in Charleston by people that don’t do aluminum aircraft? Or have any spare people to do so?
You do know the wings are made in Renton?
It provably didn’t make sense to build anything in South Carolina in the first place.
Therefore 737,in it’s entirety moved to Everett, is a small creek to hop in their minds.
It was McNerney’s hatred of the IAM that clouded his already poor judgement and devotion the “The GE Way” that drove him to make the worst possible decision for everyone, in every way.
Understand you are not dealing with mere businessmen. You are dealing with anti labor ideologues who are grossly overconfident in themselves, incapable of learning, and for whom common sense is elusive. They think they can will a given result with no help, based only on their personal gravitas.
Stonecipher opened the wound. McNerney wedged it open. Muilenberg let it bleed. Now Calhoun applies band-aids and admirals, with the countenance of a serious housewife who should just dial 911 and get out of the way.
I’m very much enjoying your refreshingly candid, unsalted, detailed and insightful postings.
The end really is nigh for that company: no longer a question of “if”, but merely of “when” and “how”. When arterial bleeding is sufficiently severe and/or prolonged, it becomes unsurvivable.
Full comment Seconded.
GE also moved some work from Evendale to Durham, still they also opened shop in Indiana as well as expanding at its Peebles site.
it helps to look a bit left and right.
Does Airbus have quality issues in Mobile?
Do any of the foreign companies producing in US right to work states have quality issues?
Afaics Those “union organized professionals” may be overvalued.
‘Does Airbus have quality issues in Mobile?’
Let’s just say that the desire to go above and beyond, like what they do in Mirabel, is lacking…slightly. It’ll take a while, but they’ll get there.
Yes…wings no problem, instead replacing the 737 wing riveters (1960 vintage) in Renton on the existing track and pit lift cylinder system, just use the stand alone style wing riveter system (like the ones in Renton) and put new wing riveters in a new building in Charleston (Boeing SC permit request hints at bigger plans for 787 plant Dec 2023)
Mr. Calhoun won’t like this — and neither will Wall Street:
“United CEO kickstarts Airbus talks amid Boeing delays”
DUBLIN/CHICAGO, Jan 28 (Reuters) – United Airlines UAL.O has approached Airbus about buying more A321neo jets to fill a potential void left by the delayed Boeing 737 MAX 10, in a trade-off likely to ease deadlock over a long-delayed separate order for larger jets, industry sources said.
“United CEO Scott Kirby flew to Toulouse recently to sound out the planemaker on a potential quid-quo-pro deal after a mid-air emergency on an Alaska Airlines 737 MAX 9 raised new doubts over certification of the already delayed MAX 10, they said.”
https://www.nasdaq.com/articles/united-ceo-kickstarts-airbus-talks-amid-boeing-delays-sources
‘potential quid-quo-pro deal ‘
Read: Send us those A-350’s, we’ll take them. Just get us some more A321Neo’s, please.
Side note:
Lessors make up some 50% of the world’s fleet. There must be some of them in the production queue who would love to sign leasing terms with United, no?
‘On 3 December 2019, United Airlines announced an order to purchase 50 new Airbus A321XLR aircraft, with deliveries beginning in 2024, to replace their Boeing 757–200 fleet.[57] Valued at $7.1 billion before discounts ($142M each), United plans to use these aircraft for additional destinations in Europe from its East Coast hubs in Washington and Newark, New Jersey.[58] ‘
So United is going to start to get XLR’s and already has A321Neo’s coming in. I guess they want a bunch more…
That’s what I find amazing, the headers United might switch over from 737MAX to A321NEO.
While they already twice ordered A321NEO’s on top of the A321XLR’s. They switched over last year. I guess everybody was blinded by the huge 787 order..
https://simpleflying.com/united-airlines-order-more-boeing-787-airbus-a321neo/
I think it was a case of 2 things:
1) Not wanting to be beholden to one OEM for it’s NB fleet.
2) They probably got some good prices for those aircraft. Mind you – you get what you pay for and what they got, is an uncertified aircraft with delays upon delays.
Quick – Good – Cheap
Pick any two
Well, United has 100 options on 787s — which it needn’t exercise.
That leaves room to take lots of A350s.
A very nice bargaining carrot to motivate Airbus to somehow find more A321 slots.
Forbes is throwing Calhoun under the bus
https://www.forbes.com/sites/brianfoley1/2024/01/28/why-boeings-ceo-may-not-survive-this-latest-setback/?sh=3e1c8c7b177d
Why Boeing’s CEO May Not Survive This Latest Setback
Boeing’s supportive board has not yet publicly signaled impatience, but instead raised the mandatory retirement age for Mr. Calhoun from 65 to 70 years old in 2021, and less than a year ago voted to give him a $5.3M incentive to stay through the recovery – which has yet to materialize.
However, with all the recent scrutiny and further reputational damage the company has received it’s possible that once the dust settles from this latest embarrassment more drastic actions will be considered other than feel good initiatives such as the recent “Quality Safety Stand Down” employee training sessions.
It’s also a moment for the board to consider appointing a new leader with an engineering background instead of yet another bean counter, which would go a long way to demonstrate its commitment to the future quality and safety of its products over disbursement of future profits. This would be a return towards Boeing’s original, successful hallmark.
FG: Lessor Avolon predicts aircraft undersupply through to end of decade
That should make them happy.
IIRC awhile back they were complaining about over-production, driving their bargaining power down.
“Industry sources said both sides provisionally agree any deal for A321neo jets would revisit the 45 A350s United has on order and at least include a firmer timeline for deliveries after several deferrals by the Chicago-based airline.
United’s Chief Financial Officer Michael Leskinen said last week it was looking to start taking the deliveries of A350s in the early part of the next decade to replace old Boeing 777s.”
https://www.reuters.com/business/aerospace-defense/united-ceo-kickstarts-airbus-talks-amid-boeing-delays-sources-2024-01-28/
I think Airbus is perfectly ok with United further delaying A350’s. United’s competitors around the world will take the slots, A350 rates will increase to 9 / month late 2025.
United needs to replace their aging 777-200(ER)’s on many long heavy flights, e.g. across the Pacific. Boeing 787-10’s and 777-8 will do great in that role, sure enough.. and they can use 777-300ER’s.
MOL knows better than Kirby?
-> O’Leary is also confident — overly so? — that Boeing will certify the Max 10 by the fourth quarter.
“We expect the Gamechanger the Max 10s to be certified [by] Boeing, I believe, in the Q4 of 2024.”
https://twitter.com/ByERussell/status/1751982204232556762
That seems quite unlikely, esp given recent events.
It’s to hold BA’s feet to the fire, and Ryanair has time on its side, delivery won’t start in a couple of years.
See my post below 😈
At the right price! 😁
Reuters:
‘ Ryanair has told Boeing that if any U.S. customers refuse to take delivery of 737 MAX 10 aircraft, that it would buy them “at the right price”
On the subject of available Airbus A321 slots for a potential UA/AA defection, one should also consider the slots at CFM.
Since BA is now blocked by the FAA from going to higher 737 rates — and seeing as it already wasn’t able to actually attain the rates that it had planned last year — that means that there are CFM slots that were reserved for BA which can now potentially be shifted to Airbus. So, if Airbus can make more aircraft, CFM can provide them with more engines.
An Airbus FAL in India might be closer than we realize…
You are right about Airbus FAL in India Airbus and Tata just finalized a helicopter FAL…just another building block to FAL for commercial aircraft
Yes, the helicopter FAL news came out last week.
And the C295 is also being (partially) built in India.
It makes sense to also open an A320/321 FAL there, in view of Airbus’ big Indian customers.
It’s probably being planned as we speak.
https://www.bnnbloomberg.ca/boeing-ceo-faces-investor-grilling-after-blowout-crisis-1.2027804
-> ‘ “I could see this taking a couple years before Boeing gets their legs beneath them and say ‘we can ramp up,’” said Cliff Collier, a former executive with Vought Aircraft Industries, now a principal with Charles Edwards Management Consulting.
Boeing will “have to take a look at everything. It’s going to spill over into the 787” and other aircraft programs, he predicted.
-> AlaskaAir launches fare sale as it resumes full schedule with the Boeing 737 Max 9 back in service
https://twitter.com/ByERussell/status/1752053977384923504
May be BCA can accelerate it?
Boeing withdraws exemption request for 737 Max 7 inlet de-icing system
Maybe an article is in order regarding Boing MAX-7 and MAX-10 possible certifications, and possible EIS dates.
It would be irresponsible not to speculate.
‘Despite the public support for Boeing’s leadership at the Dublin conference, several delegates and industry officials said privately that questions remained over the future of Boeing’s management.
“Behind the scenes everyone is livid,” a person familiar with lessor discussions with Boeing said.
https://money.usnews.com/investing/news/articles/2024-01-29/boeing-under-a-microscope-for-safety-issues-as-it-reports-results
“Behind the scenes everyone is livid,” a person familiar with lessor discussions with Boeing said.”
OK. Will anything be changing at Boing- or those words just more theatre? I’d love to get Bryce’s thoughts on the matter, but he was oddly, apparently permanently banned from here. What’s funny, though, is that *he predicted
most all of this*.. “so shoot the messenger!”.
Maybe I’ll ask WingJoin / Zelig, instead.
I hope you’re well, Bryce.
So Airbus, Embraer, COMAC, and maybe a touch of Irkut?
“We’d prefer to break it to The Proles slowly.”
“ALSO. MCAS was not hidden from the crews..”
I sure hope the author can support that claim.
“..ALSO. MCAS was not hidden from the crews. MCAS did not have a crew intervention path. It is always on, or failed. It is not crew addressable. If the crew cannot intervene, you have nothing to train about. The 2 maxes were lost with the initiating event being a spurious non accurate pitch vane value being fed to the FCU. The problem wasnt MCAS in that it worked as programmed. The real issue was the allowance of a single channel pitch reference source being given a command function within speed trim. Try to get the stories straight.”
“Oh. ” Another attempt at revisionism, in another curiously obscure dialect.
“..the 2 maxes were lost..”
I guess them li’l ol’ maxes jus’ lost themselves.. [agency obfuscated, or eliminated]
poor thangs..
I sure hope that sweet DPA that Boing negotiated, post double-MAXCrash, gets revisited- but the chances for that are very, very small.
Something I’ve noticed over time is that engineers-in-general can seldom put thoughts or requirements
*clearly* into words- look at some of the comments from engineers here, as one example. Massively sloppy..
I do not work in that domain, but it seems like a lot would be “lost in translation” via such sloppiness- some of it being possibly, or even critically, important.
Learn to write, to learn to think.
In the majority of cases I’ve seen it is a recipient issue.
Domain Language ROM not inserted.
I read about CULTURE issues at Boeing, which I consider UTTER nonsense and TOTAL waste of time, just Beating around the Bush.
The central issue is Almighty Vice called GREED (all pervasive in any field, including that of Boeing), taking over all aspects of human behaviour, to the point that WE, the humans, homo sapiens sapiens, will do (or can be made to do) anything for MONEY.
Those familiar or exposed to the writing of Hindu Scriptures may recall a list in them in “Arishadvargas”called “ShadaRipu” – the SIX VICES, enemies of the mind, which belittles Humans, namely,
(this is an Ordered List, the worst enemy is at the top and the lower ones are in decreasing order of their effects)
1. “Kama” – Lust, Sexual, I don’t have to elaborate, all adults know.
2. “Krodha” – Anger.
3. “Lobha” – Greed. I refer to this
4. “Moha” – Attachment
5. “Mada” – Ego
6. “Matsarya” – Envy/Jealousy
According to Hindu Philosophy, Greed is the THIRD WORST.
I think since year 2000, or to be more specific, 2010-14, this WORLD is TAKEN OVER by Financiers / Money Lenders (Banks, Private Equities, Venture Capitals), other Rich people.
They now DIRECTLY sit in the POLITICAL POWER SEATS,
NOT Content with Only OWNING businesses and making only money, they want DIRECT POWER over rest of the Human Population.
Deciding HOW to RUN each and every Country in this World.
Obviously this IMPLIES an absolute and TOTAL control over each countries/world economy.
Boeing is, of course, owned by Financiers, but HAD TO FOLLOW rules and regulations, LAWS of the countries (mainly the USA)
But the great USA Govt Regulator called FAA soon became a Puppet of Boeing, and ALL RULES AND LAWS WERE BYPASSED — in the name of Business First, Safety Last (so also rules and regulations).
These Monied people or class is COMPLETELY Certain that they can DO ANYTHING, but WILL NOT FACE PUNISHMENT!!
That is DO CRIME —->>> NO PUNISHMENT
No Checks and Balances for them.
Boeing, apparently, has itself, Stage Managed a Criminal Petition/case against itself, in the State of TEXAS, using dummy Public Prosecutors (now Confirmed as Boeing Secret Agents). The verdict is not a dismissal of the Petition but a permanent POSTPONEMENT of any Punishment, suspended Verdict forever.
So now under USA LEGAL system, no other PETITION will be entertained against Boeing for Criminal Actions, forever!!
(Remember, the coronavirus Vaccine Giant Pfizer, not disclosing the side effect study report till 2078!!)
All under the famous USA Legal system. I wonder at the profound nakedness of ACTIONS and PROVISIONS of NOT PUNISHING Criminals in USA.
BUT Boeing is JUST UNLUCKY.
The NATURE, the REALITY of it has struck
Boeing is simply is a victim of REALITY BITES.
Because one can not CORRUPT REALITY by using GREED offering Money.
AirBus is NO GOOD either. One Indian Airliner went BANKRUPT because of its large fleet of Bad AirBus A320Neo with Bad Engines and AirBus DID NOTHING to help.
A380 IS SHELVED, no body discusses this horrible fact. Is AirBus a good company? This also had ill designed bad and failing Engines.
We, humans, will never learn to correct ourselves.
It will be in the form of Nature’s Revenge, REALITY BITES.
ALL top class officials, experts, concerned with Climate Change are only adding more GHG to the atmosphere by having huge gatherings for their pleasure. What about COP-28??
Manab:
You perhaps could have made a good impression with your analysis of the Boeing mess but …. the over use of CAPS really detracts from your message.