Leeham News and Analysis
There's more to real news than a news release.
Odds and Ends: Boeing’s bonus to Charleston workers; E-Jet E2 EIS; IAM and Airbus; Fending off A330neo
Boeing’s bonus to Charleston workers: We’ve ignored the continuing workmanship stories of Boeing’s Charleston plant on the 787 for the past months as Norwegian Air Shuttle, LOT and Air India continue to have problems with the airplane. We figured there has been more than enough written about the program difficulties, so we moved on.
But the stories that Boeing is offering bonuses to Charleston workers to get the job right is something we feel compelled to comment on. The Seattle Times has this story.
It’s a bit of wonderment that Boeing finds it necessary to incentivize workers to do their jobs correctly, providing a bonus that is greater than those given to the Everett workers who have to fix the poor workmanship of Charleston. Typically, bonuses are given to workers for going above-and-beyond, not for merely doing what they are supposed to do in the first place.
The continuing issues with Charleston are waved away as “things are going according to plan,” and “traveled work is expected.” If this is “according to plan,” then the planner should be canned. Of course, we know this is merely corporate rhetoric dodging the question and strains credibility.
And back at Everett, those early 787s, known as the “Terrible Teens,” are still problem children, according to this report on public radio station KUOW.
EMB E2 timeline: Embraer has clarified its entry-into-service for the E-Jet E2. Flight Global reports that an official said the E-195 E2’s EIS will be the first half of 2018 (which was previously specified) and the E-190 E2 and E-175 E2 will follow in the first half of 2019 and 2020 respectively. Previously, EMB hadn’t been this specific about the EIS of the sibling models, saying only EIS would be in 2019 and 2020.
Union attempt at Airbus: To absolutely no surprise, the International Association of Machinists will attempt to unionize the new Airbus Mobile (AL) plant, reports The Street. IAM will also attempt to re-organize Boeing’s Charleston plant, which was once an IAM shop but de-certified in advance of the second 787 assembly line being located there. The Charleston Post and Courier has this story about the union plans there.
Conspiracy theorists in the IAM 751 suggested a quid-pro-quo between the International IAM: Boeing neutrality of re-organizing Charleston in exchange for the 777X contract vote.
Fending off A330neo: Aspire Aviation has a long piece about the prospective Airbus A330neo and how Boeing can fend off this potential competition.
Icing Up: This isn’t aviation (unless you consider this a satellite photo), but we are just fascinated by this picture of the Great Lakes in the US Midwest. The Great Lakes are 80% iced over.
Odds and Ends: Airbus neos; 757RS/A320RS; charity efforts
Airbus neos: The conversation continues, with Tom Williams, EVP of programmes, giving an interview to Flight Global about the A330neo and the A380neo. Plane Talking has another version of the Williams interview. Notable in Plane Talking’s report is the indication Williams said it will be a year before a decision is made on the A330neo. Our information is that a decision, whether yes or no, is due this year. PT also reports Williams indicated an A380neo would be a 2020s product. This suggests the prospect of a new engine from Rolls-Royce, which is under development, or conceivably a Big Engine Pratt & Whitney GTF could be considered.
757RS/A320RS: Aerotubropower, whose expertise is engines, discusses the implications of the planned improvements in fuel burn on the Pratt & Whitney Geared Turbo Fan and what this means for the replacement of the Boeing 757, 737 and Airbus A320 families.
Charity efforts: IAM 751, the touch-labor union for Boeing, is often portrayed as a bunch greedy members who feel a sense of entitlement. One can certainly debate this point, but what isn’t debatable is 751’s efforts at charity throughout the year. Every once in a while, we pop over to 751’s blog. Today (Feb. 19) the first four items are about philanthropic efforts in Pierce and King counties.
Just as 751 members are often cast as greedy, so is Boeing, so it is only proper in this context to point out that Boeing also engages in philanthropic endeavors throughout the US (we don’t know about abroad). Here’s a link to some of Boeing’s efforts.
Boeing’s Partnering for Success strains supplier relationship
Boeing officials reaffirmed the company’s drive for Partnership for Success, or PFS, during two appearances at conferences this month, adding that its supply chain was mostly on board, though some companies are now on a “no-fly list.”
.CEO James McNerney spoke at a Cowen Co. conference and in subsequent interviews, noting that some suppliers have greater margins than Boeing, which he termed “out of kilter.”
.Stan Deal, VP and GM for Supply Chain Management and Operations for Boeing Commercial Airplanes, told the Pacific Northwest Aerospace Alliance conference in Seattle last week that PFS is proceeding well, with cooperation of most suppliers.
Odds and Ends: A350 EIS; A330neo; more on 757RS
A350 EIS: Bloomberg reports that the first Airbus A350 XWB could be delivered to launch customer Qatar Airways “before the December deadline.” According to the Ascend data base, the first delivery had been planned for July and then slipped to September and then October. Airbus later said November or December. Based on this movement and market intelligence, we had slipped EIS to early 2015. In the end, we’ll see where the date lands.
A330neo: Aspire Aviation reports that Hawaiian Airlines could be an early customer for the A330neo. The prospect makes sense: HA is a hold-out for converting its A350-800 order to the larger A350-900, preferring the capacity of the smaller airplane.
757 Replacement: News out of the Singapore Air Show about the prospect of a 757 replacement continues to pick up steam. This story in the Puget Sound Business Journal is as complete as any (besides which, it also quotes us and our stories).
Competing in Asia: CNN has a profile of the competition between Airbus and Boeing in Asia for the low cost carriers.
Guest column: envisioning the next round of airplanes
By James N. Krebs
Leeham News recently forecast that the next all new Boeing airplane will be a 757 successor with an entry-into-service around 2025, followed by a smaller NSA (New Small Airplane), a 737 MAX/A320 neo successor, in maybe 2027. I believe it will be clear in the next few years that the technology is and can be available here to build a reasonable-risk NSA with 20% fuel savings over the MAXes/ neos (at same seats) for initial service by 2025 (which will demand perhaps 40 more than 162 seats for even better economics). Its production would ramp up over ~5 years or so.
I hope this would be mainly a “Made in the USA” Boeing NSA: American engineering, American manufacturing, American jobs and American competitive edge. If that takes some helpful brainpower and/or investments from NASA, Northrop Grumman, Lockheed Martin, etc, good.
Boeing and Airbus might love to build a combined 100/mo. MAXes and neos “forever,” but technology and market forces aren’t likely to permit this. The companies won’t want to whet any appetites soon but I hope Boeing’s advanced design people are already at work–I’d be disappointed if they aren’t.
Airbus could certainly put an A320neo successor in service 10 years after their 2015 neo. A reengined A330 and a possible A350-1100 aren’t the only new projects they are capable of in the next decade. The market response to their A320neo family completely surprised Boeing a couple years ago. What’s next?