Leeham News and Analysis
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Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Airbus exec outlines goals for Washington State supply chain effort
Washington State suppliers who want to do business with Airbus don’t have to open new shops in Alabama or elsewhere globally to support the European company, its top supply official in the US said last week.
We sat down with David L. Williams, vice president of procurement for Airbus Americas, following presentations of the first Airbus Suppliers Fair in this state, in a conversation in which he outlined Airbus’ goals to increase the State’s supplier business with Airbus. The fair was the culmination of more than three years of efforts by the Pacific Northwest Aerospace Alliance (PNAA), the Washington State Department of Commerce and this writer to arrange a fair.
This is part of a Beyond Boeing aerospace strategy we outlined in October 2009 before the Governor’s Aerospace Summit in Spokane (WA), a plan adopted by Gov. Christine Gregoire and the Commerce Department. Spurred by Boeing’s pending decision to put the second 787 assembly line in South Carolina and a clear strategy by Boeing to compete future airplane programs and supporting work outside Washington, it was obvious the State had to move Beyond Boeing in order to maintain a healthy and growing aerospace industry.
It’s been gratifying to see Commerce, Gregoire and her successor Gov. Jay Inslee ramp up efforts to broaden Washington’s aerospace reliance on Boeing to a more global view.
Washington is Airbus’ No. 2 US supplier by companies count and No. 6 by dollar volume, and it’s within a few hundred thousand dollars of becoming #5. Williams told us that Airbus uses around 25 Tier 1 suppliers in Washington and many more Tier 2 and 3 suppliers.
“Washington State is a huge aerospace hub, so for us as we look at the opportunities, as we look at the suppliers, the technologies of interest and the R&T (research and technology) office, clearly Washington State is going to be one of those strong focuses,” Williams told us. “We’ve come here every year, six or seven times, at the annual PNAA conference. We were at the Aerospace Defense and Suppliers Summit last year and we’re here today.
“I think I’ve been a bit more to Washington State than to any other part of the country.”
Airbus has a goal of doubling its US dollar-based cost structure to mitigate against the Euro-Dollar exchange rate.
“[We] have the plan to increase the spend to $20bn. When I first came here, it was $10bn,” Williams says. The creation of the A320 family final assembly line in Mobile (AL) is part of this plan, but it hardly stops there. And while Mobile will become an aerospace cluster supporting the FAL, suppliers don’t have to locate there.
“There is a need for certain supplier requirements around the FAL…but there isn’t a need for the machine shop to be 50 yards away, there isn’t a need for the composites to be on site. The vision is there will be an aerospace park providing the needs of the final assembly line, and if suppliers are looking to open up a shop in Alabama, it is an option but it certainly isn’t a necessity,” Williams told us. “We wouldn’t expect to, and we’re not telling suppliers, that if you want to do business with Airbus you have to be in Alabama. We’re looking for suppliers in Washington State who can support the business globally.”
What kind of suppliers is Airbus looking for on its sojourn to Washington?
“Areas of interest changes over time,” Williams says. “Areas of opportunities could be a whole new program, it could be a neo program, it could be the end of a contract, it could be the natural end of a contract or it could be brought to a halt because of poor performance. So far we have been focusing on machining very strongly. We can look at composite. We’ve been doing some work around super-plastic forming. More recently we’ve been looking at…aerostructures supplies. Maybe not the huge aerostructures assemblies like Spirit Aerosystems on the A350, but significant aerostructures suppliers who could add value to the supply chain. We looked for commodities.”
Dual sourcing—a topic of some sensitivity to Boeing’s labor unions and to Washington State, who want all the jobs and companies that go with production—is an emerging goal of Airbus.
“As the [production] rates go up, we’ve come to the realization that, No. 1, the single source policy we’ve had maybe needs to be re-thinked, particularly on the single-aisle, obviously. No. 2, the dollarization drive is still huge,” Williams says. “We’ve still got some room to go globally to get to where we want to be. No. 3 is a final assembly line that brings in the opportunity for more local suppliers to support that final assembly line. Why not, if they are going to support rate four into Alabama, or a rate four into China or 10 into Europe? You get your dual sourcing and there is a geographic logic to it as well. You take the risk out of it and you get the dollarization as well. You get the three legs of the strategy.”
Airbus Americas Chairman Allan McArtor raised the prospect of opening an engineering center in Washington State within 10 years. This is good news for Boeing engineers and IT personnel who have been laid off by Boeing as the Chicago-based company moves some of these jobs out of Washington to non-union locations. Airbus has taken advantage of Boeing’s similar actions in Wichita (KS), and has a growing engineer center there. But the bad news is, don’t expect an Airbus engineering center here any time in the immediate future.
“There aren’t any plans I’m aware of to move in sooner than later,” Williams said.
A380 struggles despite Doric order at Paris Air Show
The surprise MOU announced at the Paris Air Show by specialty firm Doric Leasing for 20 Airbus A380s does little to build confidence in the aircraft’s long-term sales prospects.
Doric finances A380s for the airlines already operating them, such as Emirates and Singapore. There are several other special purpose companies that have also financed the behemoth, but no legacy operating lessor has ordered the airplane since International Lease Finance Corp. was a launch customer-and ILFC swapped these in favor of the more marketable A320 family.
The backlog, through June, of firm orders looks like this:
| Emirates | 55 |
| British | 12 |
| Etihad | 10 |
| Hong Kong Airways | 10 |
| Qatar | 10 |
| Qantas | 8 |
| Lufthansa | 7 |
| Asiana | 6 |
| Skymark | 6 |
| Virgin Atlantic | 6 |
| Kingfisher | 5 |
| Singapore | 5 |
| Air France | 4 |
| Korean Air | 4 |
| Transaero | 4 |
| Air Austral | 2 |
| Thai | 2 |
| VIP | 1 |
| 157 |
Source: Airbus, June 30, 2013
Virgin Atlantic continues to push out its A380 order, with entry-into-service now scheduled for 2018, and according to the Bloomberg article even this future date seems iffy.
Kingfisher’s order, of course, is as good as gone. So, probably, is the Hong Kong Airways order unless the Chinese government for some reason steps in and reassigns them to other carriers within China mainland. The government, as Readers will recall, previously curbed HKA’s growth.
One could argue about the quality of a couple of the other customers as well.
Airbus seeks to increase Washington State supply business; aims for 13 A350s/mo
It was the first time that Airbus specifically participated in an event in Washington State exclusively designed to mate the fierce rival to Boeing with suppliers in a meeting intended to increase business opportunities in Boeing’s back yard.
More than three years in the making, Airbus sent top supply chain officials to a suppliers fair organized by the Pacific Northwest Aerospace Alliance and the State Department of Commerce.
Before the event even started, one of the main arterials leading to the meeting was closed during the peak rush hour due to police activity. Wags suggested Boeing arranged the traffic disruption.
In fact, Boeing officials previously have said they support the idea that Washington’s supply chain sell to Airbus and other original equipment manufacturers–though they also admit they like the common suppliers to favor Boeing first. The cross-selling makes from stronger suppliers, Boeing says.
Boeing also had two people at the event listening in.
Here is an article from the Puget Sound Business Journal. We sat down with Airbus’ head of Americas procurement for Airbus and parent EADS for an exclusive interview, and we’ll have this report next week.
But one key piece of information to come out of the meeting that is critical to rival Boeing (as well as the supply chain) is that Airbus plans to produce the A350 at a rate of at least 13 per month. This confirms a long-reported rumor we’ve heard but which Airbus would never acknowledge. The confirmation came from presenter ElectroImpact, which is headquartered in Everett and has a major facility in Broughton, Wales, where it makes wings for the A380 and A350. The A350 facility was built with a capacity for 13 A350s per month.
Airbus has only acknowledged its production plans call for 10 per month within four years of entry-into-service (2H2014). Consideration to creating a second A350-1000 production line is underway and has been publicly promoted by John Leahy, COO Customers. No timeline for the decision has been specifically set, though it may come by year end.
ELT was under own power at time of Ethiopian 787 incident
Here is some more information on the Honeywell Electronic Locator Transmitter and the installation/operation on the Boeing 787.
We asked Boeing about the prospect of interface between the ELT and the 787’s electrical system. Boeing told us:
In the event of an emergency, the ELT will be activated either automatically by means of an internal acceleration sensor—or manually by one of the flight crew via the flight deck ELT control panel.
At the time of the incident, there was no power to the airplane. The ELT was powering itself via its battery. When an airplane is in flight, the ELT still powers itself with no help from the airplane. It interfaces with the airplane via wires connected to the flight deck so that the pilot can activate the transmitter, if necessary. Turning on the transmitter doesn’t transfer any power to the unit. There is a co-ax cable from the unit that connects to the antenna (located on top of the fuselage).
As we noted in a prior post, Honeywell’s ELT in a different version was subject to an airworthiness directive from Canadian and European regulators. Reuters has this additional detail, including comment from Honeywell. The AD related to improper grounding, so an obvious question is whether there is a grounding issue with the 787 ELT that led to a short that prompted the fire. Investigations are still underway.
In any event, this appears to exonerate the 787. We still reserve final judgment pending a more complete investigation.
Boeing said that the ELT can be removed within one hour by the airline.
The New York Times has this update.
- If this news weren’t good enough for Boeing, last night it rolled out the first 787-9. The Seattle P-I has a number of photos.
Previous Honeywell ELTs subject to EASA, Canadian AD notes
Previous Electronic Locator Transmitters have been subject to Airworthiness Directives from the European EASA and Canadian regulators.
We have a query into Honeywell for comment.
Odds and Ends: 777-8 “Lite”; group backs WA 777X effort; Asiana crash photos; a new 787 theory
Note: This Reuters article has some good detail about how Boeing gets the 777-9X to its advertised 20% economic gains over 777-300ER.
777-8 “Lite:” Boeing’s plan to launch the 777X in two versions, the ultra-long range 8X at 9,500nm and the 407-seat 9X at 8,400nm, is well known. Launch is widely expected at the Dubai Air Show, where home-town airline Emirates is expected to be the launch customer for both versions, with perhaps as many as 100 airplanes.
We’ve reported previously there will be a third version, a reduced gross weight 777-8X, but other media haven’t followed our lead on this (nor have aerospace analysts). No, some have said, there will be just the two versions, the 8LX and the 9X.
Well, we have it on tape.
Mike Bair, vice president of marketing and business development for Boeing Commercial Airplanes, is responsible for strategy, planning and marketing of the company’s commercial product and services. At Boeing’s Paris Air Show briefing in May, we were part of a press gaggle and here’s how the conversation went.
Leeham News: The 8X is the same size as the A350-1000, but the 9,500 mile 8X will probably be quite a bit heavier. Do you see a reduced MTOW for the 8X that will be more directly competitive?
Bair: Absolutely. We’ll paper the weight, whatever we need to paper the weight.
That’s all it took: Bair confirmed the plan for the 8X “lite.” The press gaggle continued.
Leeham: Why does it take seven years now to do a derivative airplane?
Bair: It’s the engines. That’s the pacing item.
Guy Norris of Aviation Week asked about why the 777X wouldn’t be an electric airplane, as is the 787.
Bair: The all electric system on the 787 was driven by deicing the wing. It’s a very thin wing and we couldn’t figure out how to get the duct work into the wing for pneumatic deicing, so the big power draw is deicing. On a Triple 7X, while the wing will look very similar, because it is a bigger wing, there is plenty of space on it.
Bair was also asked where the 777X’s composite wing will be built, a topic of keen interest to the State of Washington.
Bair: We don’t know yet (where wing will be built). All we know is that a brand new composite wing will need a brand new composite wing factory somewhere.
To that end, the Pacific Northwest Aerospace Alliance has endorsed the designation of the 777X as a project of Statewide Significance. Here is the press release: PNAA_Supports_Statewide_Significance
Separately, Washington State’s director of the Governor’s Office of Aerospace says Boeing might build an assembly plant outside the US.
Asiana photos: A reader sent us a PDF of 33 photos of the Asiana Boeing 777 crash, many showing the interior. These are rather eye-opening and photos like these are rarely seen. We can’t tell from the photos how much of the interior damage, exclusive of the fire, was from impact that dislodged the interior walls and seats, but this falls into the Holy Smokes category. It makes you wonder how there were as few casualties as there were.No doubt these will be studied for further safety improvements.
Here are the Asiana crash photos.
Another Ethiopian 787 theory: See this piece from Christine Negroni, an aviation writer and an author of a book on the crash of TWA 800.
Honeywell says it will remove the Electronic Locator Transmitter from the 787 if asked by the Brits. The Wall Street Journal first reported the Air Accident Investigation Board might recommend this.
Latest on Ethiopian 787
The media frenzy over the cause of the fire of the Ethiopian Airlines Boeing 787 last Friday seems to be slowing.
The New York Times has this report from late last night that says Japan Air Lines and ANA conducted checks on their Boeing 787 fleet and found everything OK.
The NYT also has some new detail about what’s near the burned out area of the 787 and what’s not, and what else investigators are checking (some of which was previously reported by the Wall Street Journal).
Bloomberg has this report saying it doesn’t appear grounding the airplane is in the cards–and we believe it should not be. The first two battery incidents justified grounding but we don’t have the same concerns with this fire as we did with the JAL fire and the ANA near-fire.
Nothing we’ve yet read nor heard suggests anything systemic about the airplane that contributed to the fire. We still have to wait and see what investigators come up with.
Unlike the Asiana Airlines crash the previous week, there are no flight data recorders or cockpit voice recorders or witnesses to provide a near-instant conclusion. This investigation is a detective story that will take some time to reach answers.
As we know from the JAL fire, evidence is often destroyed in a fire and news reports indicate the Electronic Locator Transmitter was pretty well destroyed. The underlying question is whether the ELT was the origin of the fire or merely a victim itself that propagated the fire with its lithium battery. What other factors contributor to the fire?
It’s time to move on and let investigators do their work.
Update: via Twitter: Jon Ostrower @jonostrower
WSJ BREAKING: AAIB to issue interim 787 report in dys. Unclear if ELT started fire. May suggest ELT removal from 787s during probe –Source
Odds and Ends: Repairing the Ethiopian 787; the ELT theory
Repairing the 787: The prospect of repairing or writing off the 787 has gained fodder almost on the same level as speculation over the cause of the fire. There have been several articles, including this one yesterday in the Puget Sound Business Journal and this one today from a former NTSB member, writing in Forbes.
Throughout development of the 787, Boeing said repairing the composites was not something they were worried about. But most context related to ramp damage or other minor issues. Clearly, though, Boeing being Boeing, we are confident that engineering took a look at major fuselage damage potential.
In the extreme, Boeing can simply replace the entire aft end, which is depicted in this illustration.
Boeing famously replaced the nose section of a TWA 707 in 1969. The nose section of a BOAC 707 was undamaged and later grafted onto TWA 707-331 N776TW, which had been hijacked as flight 840. The nose was blown off in a Jordanian desert. The repaired aircraft flew for 10 years with TWA. The cost to repair was $4m, according to Wikipedia information (about $20m today).
Update, 9am PDT: Jon Proctor, in Reader Comments, says this BOAC angle is incorrect. He supplied the following photos that demonstrate the replacement nose was fresh from Boeing’s factory.
Jon Proctor photo.
Jon Proctor photo.
Qantas is famous for never having a hull loss, repairing damaged aircraft that others might scrap as beyond economical repair. The Airbus A380 involved in the high-profile QF34 engine explosion was out of service for a couple of years and cost something like $180m to fix, but it flies on today.
A Google search of damaged aircraft that have been repaired and returned to service shows a long list of aircraft that suffered what appears to be far greater damage than the Ethiopian aircraft. The difference, of course, is that the other aircraft were metal and this is composite.
The cost will go beyond the fuselage crown and related structure. The interior, with smoke damage, is toast. Who knows at this stage what damage has been done to systems, either from the fire, the fire-fighting or the knock-on effects.
ELT: Yesterday’s news that the Electronic Locator Transmitter is being looked at as a possible cause of the Heathrow Airport 787 fire predictably created a flurry of media activity over the implications of this prospect. The Wall Street Journal broke the news and a media frenzy ensued. WSJ posted an update late yesterday. We accessed through our subscription; Readers may try Google News to see if it is passed the pay-wall today.
The New York Times has this piece on the ELT and the potential role it may have had in the fire, either as a source or a propagator.
Flight Global has a piece that puts some good perspective on this prospect.
Washington on the move for new aerospace business
Washington State is showing signs of some real life in a slow ramp up to gain new aerospace business.
For years, nay, for decades, state politicians took Boeing for granted. Boeing officials complained and complained and complained about the need for better education, for smoother permitting processes, an onerous business climate and more. Officials warned over and over that they might move operations out of the state if things didn’t change.
When Boeing decided to move its corporate headquarters from Seattle to Chicago–with no notice to state officials it was even contemplating a move–politicians were shocked and called it a wake-up call.
Nothing happened. Officials hit the snooze button, turned over and went back to sleep.