Leeham News and Analysis
There's more to real news than a news release.
787, A350 “way over-ordered,” says UBS
In an analysis that might create heartburn for any number of people at any number of levels, David Strauss and his aerospace team at UBS Securities issued a report Tuesday (April 27) that concludes the next-generation of airplanes–the Boeing 787 and Airbus A350–are “way” over-ordered.
The “good” news (tongue-in-cheek, for those who don’t pick up on our odd humor) doesn’t stop there. UBS concludes that the Boeing 777, Airbus A330 and Airbus A320 are also over-ordered.
The Boeing 737 is under-ordered, in the UBS view, but this doesn’t relieve the concerns about this order-book, either, according to UBS.
KC-X: price dumping and assessing risk
Now that EADS said it will bid after all for the KC-X contract, questions have been raised about the possibility EADS will offer pricing that is below its costs (or “price-dumping”) to win the contract. Boeing supporters, and Boeing itself, have raised this concern.
On the other side, EADS is focusing on the fact its KC-45 is in production and in flight tests while Boeing’s proposed KC-767 NewGen is a conceptual airplane that is a riskier prospect.
How are these two particular concerns dealt with?
Boeing’s 1Q2010 results
Boeing released its first quarter results today.
Here is the 12 page PDF financial presentation.
Earnings call begins:
EADS to bid on tanker
Reuters just moved this story that EADS is preparing to bid the contract alone. L-3 Communications appears to be definitely out of partnering with EADS and “for now” EADS is prepared to go it alone, Reuters says.
Sen. Jeff Sessions (R-EADS/AL) blasted US Rep. Norm Dicks (D-Boeing/WA) for what Sessions termed attempts to intimidate potential EADS partners. Here is this report.
From strictly a taxpayers’ point of view, the EADS competition should result in better pricing for the Pentagon whoever wins. The past competition has already seen the price driven down compared with the original Boeing lease deal from 2002-2004 and an improved airplane offering from Boeing.
US favors negotiating trade dispute
Crain’s Chicago Business reported yesterday (April 6) that US Trade Rep. Ron Kirk wants to negotiate an end to the EU-US trade dispute over Airbus and Boeing subsidies.
We only just spotted this–there hadn’t been any pick-up by the media that we saw.
The link to the story is here.
But Boeing still says launch aid has to end, a position Airbus continues to resist.
Boeing seeks cybersecurity recruits
Boeing’s Defense unit created a cybersecurity division a few years ago as the company recognized the growing threat to national security and the need to diversify from traditional weaponry with changing defense needs.
Here is a story today about Boeing’s effort to find new recruits for cybersecurity from Bloomberg.
777 production spotlighted
The latest issue of Boeing Frontiers, the company magazine, spotlights the Lean Production line for the 777. This follows the years-long conversion for the 737 line.
We have always felt these Lean Production methods are one of the secrets to Boeing’s success since implementation following the production debacle in 1997. Boeing is going to adopt a Lean Production Line for the 767, which will enable the company to offer the Pentagon better pricing for the KC-X tanker bid. We wrote about this in a previous post.
DOD is within its rights to extend tanker deadline
It was predictable that Boeing supporters would become apoplectic when the Defense Department said it will extend the May 10 deadline 60 days to July 9 should EADS decide to submit a bid for the KC-X program, but legally DOD is within its rights.
We talked with two people yesterday who have no skin in this game and both told us that at this stage, ie, before bids have been submitted, DOD has the full discretion to set the deadlines any time it wants. Or DOD has the discretion to cancel the competition altogether, to be extreme about it.