March 28, 2019, © Leeham News: The World Trade Organization appeals panel today upheld European claims that Boeing received billions of dollars in illegal tax breaks and subsidies from the US Department of Defense, Washington State, Kansas and South Carolina.
From a previous set of rulings, the WTO also agreed that the US and Boeing failed to cure illegal tax breaks used under a federal program called Foreign Sales Corporations of FSC (pronounced fisk) dating to before 2006.
The adverse decision comes at a time when Boeing is on the defensive over two fatal accidents of its 737 MAX program and criticism over the development and approval of the MCAS stall recovery system believed by some to be at the heart of two crashes.
March 25, 2019, © Leeham News: Boeing last week announced the executive leadership for the joint venture with Embraer, the as-yet unnamed company that is generically called NewCo.
Separately, Embraer announced the departure at the end of next month of Embraer’s parent CEO, Paulo Cesar, a move that was expected.
Cesar was with Embraer for 22 years in various positions. We was president and CEO of EMB’s Commercial Aviation division and launched the E2 program in 2013.
March 20, 2019, © Leeham News: With nearly 400 Boeing 737 MAXes grounded across the globe, few will remember that Boeing didn’t really want to do the MAX.
Officials in 2010-2011 engineered the MAX as a fallback airplane in case its hand was forced by Airbus as it first pondered and then launched the A320neo.
The president of Boeing Commercial Airplanes at the time, Jim Albaugh, and the head of the 737 program then, Mike Bair, talked down the thought of re-engining the 737 even as it was developed. Albaugh wanted a new, clean sheet airplane to replace the 737.
When Airbus was about to land American Airlines with a huge order for the A320 family, both the ceo and neo, Boeing’s hand was forced. Within 48 hours, Jim McNerney, Albaugh’s boss, made the decision to go forward with what would become the MAX.
LNA dug into its archives for recorded interviews, transcripts and events with Albaugh and Bair. What follows paints the picture of Boeing’s view at the time about the 737 re-engining. LNA also spoke last year with a former Boeing engineer who worked on the MAX program. This interview was before the Lion Air crash in October.
March 20, 2019, © Leeham Co: I’ve been covering or employed in commercial aviation since 1979. I’m an aviation historian buff.
I’ve read all about the groundings of the Douglas DC-6, Lockheed Constellation, Martin 202 and de Havilland Comet. I read about how the Federal Aviation Administration didn’t ground the Lockheed Electra, choosing operating restrictions instead.
I lived through the grounding of the McDonnell Douglas DC-10 and Boeing 787. As a reporter, I walked through the debris of the American Airlines DC-10 crash that led to the grounding. I went to the crash scene of the Delta Air Lines Boeing 727 at D/FW Airport and I’ve covered many, many crashes through reporting and as a commentator.
I’ve never seen anything evolve in air accidents as has evolved in the Boeing 737 MAX investigations.
March 14, 2019, © Leeham News: Airbus’ effort to slash supply costs for A220 production is “an ongoing exercise at this point,” Joe Marcheschi, Airbus’ head of procurement in North America, told LNA in an interview last month.
“There are no specific, let’s say, achievements yet,” he said. “We are working closely with our supply chain.”
It takes time to squeeze cost out of the supply chain, he said. “We only took over July 1. That’s when we got full knowledge of the existing contracts.”
In January, Philippe Balducchi, head of the Airbus-led venture overseeing production, told journalists that the aerospace giant aims to realize “significant double-digit” percentage cost reduction. He indicated that most of the savings likely would come from the supply chain, according to news reports.
“Look, the airplane is absolutely fantastic—it just costs a lot of money,” Marcheschi said. “Now, we have to find a way to reduce the cost.”
March 11, 2019, © Leeham News: It’s late. There have been creeping delays. There’s been design creep. There were unknown unknowns. It’s way over budget.
No, it’s not a new airplane program, though the parallels are quite apparent.
It’s our new house.
After a three year process, including changing builders, going through the city twice, hitting expensive unknowns and facing rising costs, today is finally, finally, moving day.
It’s been a horrible experience I wouldn’t wish on anyone.
This will sound familiar to Airbus, Boeing, Bombardier, Mitsubishi, Rolls-Royce, Pratt & Whitney and, to a lesser extent, GE and CFM. Only Embraer can say it finished on time and on budget.
By Bjorn Fehrm
March 07, 2019, © Leeham News: In our analysis series about the Boeing 777X, it’s time to look at the performance of the 777-9 and 777-8 and compared them to their main competitor, the Airbus A350-1000.
March 4, 2019, © Leeham News: Another week, another NMA story.
For an airplane that doesn’t exist, the prospective Boeing NMA continues to dominate much of the aerospace news.
Last week’s announcement by Rolls-Royce that it withdrew—in December, as it turns out—from the competition to power the NMA prompted a flurry of stories in aerospace media, including LNA.
Some stories suggested RR’s withdrawal meant Boeing was getting closer to launching the airplane.
Boeing, in January, said Authority to Offer might come this year and program launch had moved from 2019 to 2020.
Two prominent consultants predicted at the Pacific Northwest Aerospace Alliance conference last month the odds were 60-40 or 65-35 Boeing would proceed.
Maybe, but I have to tell you that conversations I had last week in the wake of the Rolls announcement are not encouraging.
Feb. 28, 2019, © Leeham News: The announcement today by Rolls-Royce that it has withdrawn from the competition to provide an engine for the Boeing New Midmarket Airplane came as a surprise.
This leaves CFM and Pratt & Whitney as the remaining competitors.
RR’s withdrawal wasn’t the only surprise.
CEO Warren East revealed Boeing had been notified shortly before the end of 2018.
Feb. 28, 2019, © Leeham News: Embraer’s shareholders this week approved the joint venture between their company and Boeing, moving another step closer to completion expected by the end of this year.
Boeing will own 80% of the new company and have governance control; Embraer will own 20%.
The shareholders’ action comes after a Brazilian court for the fourth or fifth time enjoined the companies from proceeding with negotiations. Higher courts overturned each previous injunction and will likely do so again.
Global regulatory anti-trust reviews are the step. All decisions are expected by year end.
John Slattery, CEO of Embraer Commercial Aviation, gave this take on the pending joint venture in his column on LinkedIn.