Odds and Ends: Coming soon–new Leeham News; Boeing v SPEEA; 86-seat Q400; Boeing 326; Budapest Air Show

Coming soon: We will be rolling out changes this month to Leeham News and Comment.  We will expand our News and Analysis, providing the most insightful commentary of aviation issues of any on-line publication. Most on-line news resources either collate into one portal news from around the world, or report news without analysis, or offer superficial analysis. We’re famous (or infamous, depending on your viewpoint) for providing insight in a no-BS manner.

We often report the news before anyone else, and we spot market trends long before others.

For example:

  • We concluded in December 2013 that Airbus had to launch the A330neo program, at a time when other on-line publications were still muddling along and even Airbus hadn’t reached its conclusion.
  • We were the first to report that Airbus revamped its A350-1000, ahead of the company’s own announcement and before any other media tumbled to the development.
  • We’ve been the leading publication to focus on LOPA (Layout Of Passenger Accommodations) and IAC (Integrated Airplane Configuration) when comparing Airbus and Boeing airplanes at a time when other publications didn’t even know the terms.
  • Our aircraft economic analysis has the advantage of aerospace engineering background to take into account detailed understanding of aerodynamic improvements, down to the last percentage point.

These changes include transformation into a combination paid and free content site. We’ll have paid content several times a week in addition to our free content.

Changes are coming to Leeham News and Comment this month. Watch this space for details.

Changes are coming to Leeham News and Comment this month. Watch this space for details.

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Early IAM vote results back incumbents, reformers to protest

Update, 10:30am PDT: IAM International posted this press release about the election results, claiming the incumbents won by a 2-1 margin.

Original post:

Just posted on IAM Reform’s Facebook Account:

IAM REFORM TO DISPUTE ELECTION RESULTS, WILL FILE PROTEST WITH U.S. DEPARTMENT OF LABOR
Preliminary IAM Election results reveal Tom Buffenbarger and the nine other incumbent executive officers won enough votes to retain their positions. But IAM Reform candidates, buoyed by the support and votes of IAM members internationally, plan to immediately dispute the election results and file a protest with the U.S. Department of Labor, following federal election rules.

Throughout the April election, IAM Reform documented illegal activity by the incumbents’ campaign including:
1. The incumbents’ team illegally threatening union leaders to campaign and vote for the incumbents or lose their jobs and control over their lodges via trusteeship
2. The incumbents’ team illegally using union funds to campaign
2. Evidence of significant anomalies in the voting results to raise serious concerns about the legitimacy of thousands of votes for the incumbents.

“On behalf of every supporter of IAM Reform, we intend to ask the Department of Labor to investigate these serious violations, through every avenue available to us,” said Jay Cronk, Reform candidate for International President running against Tom Buffenbarger. “Unseating a corrupt and entrenched bureaucracy will require our continued strength and focus. With the support shown for our Reform goals and platform, our conviction to achieve these goals on behalf of our membership has been reinforced.”

Per election rules, candidates may file a protest and ask the Department of Labor to investigate violations.

Odds and Ends: Snookered by Boeing; Superman; Me2Al; Odyssey Airlines

Snookered by Boeing: That’s how one legislator in Washington State put it in the outcry aftermath of Boeing moving engineering jobs out of state despite an $8.7bn set of tax breaks to land the 777X wing production and assembly site here. She went on to say she wouldn’t have voted for the breaks had she known, and she’s so tired of Boeing.

Sound similar to what legislators said after voting for the $3.7bn in tax breaks in 2003 to land the 787 assembly line. Six years later Boeing put 787 Line 2 in Charleston, revealing that the State had failed to add strings to that set of tax breaks to assure all 787 assembly would be done here.

Snookered then and snookered now. What strikes us is that any legislator thought anything different would happen.

Boeing’s job strategy has been very, very clear for years: move engineering, IT and other non-touch labor jobs out of Washington as fast as it can. Move component work out of Washington. And for the 777X assembly work: can you say “robotics”?

IAM 751, the touch-labor union, claimed all along Boeing was snookering membership and the State of Washington and was going to assemble the 777X here anyway, regardless of the contract vote and state incentives (we disagreed, but only McNerney knows for sure).

Washington needs to get used to Boeing moving jobs (hence, our continued refrain of look Beyond Boeing). Aside from Chicago’s long-obvious job transfer plan, robotics and automation will, over time, take an increasingly prominent role in building airplanes. Boeing has been introducing robotics on the 777 Classic line, so expanding this use should be expected.

Superman: This video shows a Boeing 737 being pushed sideways at the gate by strong winds and an icing ramp. The most amazing part of this amazing video is the ramp worker who is trying to stop the airplane. It seems the rampie thinks he can bench press 150,000 lbs.

Me2Al: He’s widely known as U-Turn Al for his propensity to do 180 degrees multiple times on his opinions about airplanes, engines and orders, but now Akbar Al-Baker is becoming Me2Al as well. Long envious of Tim Clark, the president of Emirates Airlines, Al-Baker hooked his wagon to Clark on the 777X last year at the Dubai Air Show, claiming the two carriers negotiated similar specifications at the same time to get a better deal from Boeing.

Now he’s followed Clark’s lead once again, this time jumping on the prospect of the Airbus A380neo.

Odyssey reveals some details: Odyssey Airlines, the business-class start-up carrier that is building its business plan around the Bombardier CSeries, revealed a little bit of its plans in this article. It will have 40 lie-flat seats on the CS100, operate from London City Airport (previously known) and its funding is partially revealed.

Great B-17 Photos: See The Seattle Times montage here.

Odds and Ends: No to 757 MAX; Fallout from Boeing job transfer; 8,000th 737; Fire sale pricing on 777LR

No to 757 MAX: Steve Wilhelm of the Puget Sound Business Journal writes that Boeing has no plans to build a 757 MAX. This refutes the Motley Fool article we linked Tuesday. Then yesterday a different Fool write wrote why Boeing won’t build a 757 MAX. That may be, but as we wrote we had heard rumblings that Boeing was at least talking to the market about the prospect of such an airplane. But this could be nothing more than what we term, “Boeing being Boeing” exploring everything.

Fallout on engineer shift: The Seattle Times wrote that the fallout over Boeing’s plan to shift another 1,000 engineering jobs out of the Puget Sound area is pretty bad among the local work force. The morale at Boeing, The Times writes, is bad among its white collar engineers and technicians. We’re also told the IAM 751 membership continues to have poor morale in the wake of the Jan. 3 contract vote related to the 777X, with a major retirement expected among workers just in advance of the 2016 switchover to the 401(k) style pension plan. There seems to be a growing belief Boeing may face a workforce shortage just at a time when it’s ramping up production the following year on the 737NG, preparing production for the 737 MAX, in the early stages of production for the 777X and ramping up production again for the 787 as it prepares to introduce the 787-10 in 2018–as well as the KC-46A production ramp up and perhaps on the P-8A Poseidon.

And then there is the continued overhang of the potential NLRB action related to the 751 vote. Although a long shot, what happens if the NLRB requires a new vote and this time it fails? Boeing is already committed to building the 777X in Seattle: ground has been broken and the timeline too late to go elsewhere. Bonuses have been paid out. This could become a real mess.

8,000th 737: On the plus side, Boeing delivered its 8,000th 737, to United Airlines this week. It’s quite the accomplishment.

Fire sale pricing on 777-200LR: Air India, a financial basket case, plans to sell three more Boeing 777-200LRs, apparently for whatever it can get, in order to raise cash. It previously sold five 5-year old -200LRs for $335m–an average of a mere $67m each. According to the appraisal firm Collateral Verifications, a five year old -200LR should have a current market value of about $98m.

Inmarsat to offer free tracking: Inmarsat, the satellite company that proved key to tracking Malaysian Airlines flight MH370, will offer free tracking service, The Wall Street Journal writes.

Odds and End: ExIm fight, again; A350 interior; C-17 production ending early; 787’s longest routes; That’s no bull; MH370

ExIm fight, again: Republicans and the conservative Heritage Foundation are once again attempting to kill the US ExIm Bank, which providing financing support for Boeing airplanes.

This isn’t a sexy topic for our readers, but it’s an important issue we’ve written about many times. While the Republicans and Heritage call this corporate welfare (of which we’re generally disdainful), we disagree in this instance. It’s a matter of competitiveness.

Loren Thompson, with whom we’ve often disagreed, and whose institute is partly funded by Boeing, takes on the effort to kill ExIm in this column. His underlying facts are valid, though his tiresome shot at Airbus subsidies and Boeing’s innocence is laughable once more. The WTO found Boeing received illegal subsidies, too, and of course we just witnessed Boeing getting the largest subsidy in corporate history from Washington (State, that is)–all of which Thompson ignores.

But this National Review magazine (a conservative one) fails in its taking Thompson to task to even mention Airbus, the principal thrust of Thompson’s piece. This is as silly as Thompson’s continued Airbus bashing.

The reason we support ExIm’s continued existence has nothing to do with who gets what subsidies; it has everything to do with the fact that Europe’s export credit agencies fund Airbus airplanes and Boeing needs to have ExIm to compete. (We’d be less harsh about Thompson if he would stick to this topic rather than beating the subsidy drum with highly selective facts on an issue for which he was paid by Boeing to issue a study during the WTO dispute.)

National Review’s critique of Thompson totally ignores the Airbus export credit support challenge. There may be merit to many practices about ExIm to criticize, but these critics need to focus on the ECA competitive advantage for Airbus should ExIm go away. Boeing’s right on this one.

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Odds and Ends: Airbus, Boeing square off on tankers; IAM election; Russian titanium; MH370 hunt and hell

Airbus, Boeing square off on tankers: The Big Two OEMs are bidding for a sale to South Korea on airborne refueling tankers. If we remember correctly, this will be the first head-to-head competition since the USAF from 2004-2009.

IAM election: Voting begins this week, through the month, for officers of IAM International. This is the first contested election in decades, driven in no small part by the bitter vote at Boeing’s IAM 751 district in November and January over the 777X contract. The Street.com takes a look.

Russian titanium: With selective embargoes going on against Russia over Ukraine, we remarked at the time the prospect of an adverse affect on aerospace because titanium is a major resource from Russia and a major component in aerospace. Thus, a headline caught our eye about a Russian who attempted to do a deal with Boeing to sell the company the precious metal. Only this story was a bit more sordid; it makes for an interesting read.

MH370 hunt and hell: Officials vow to hunt for Malaysian Airlines Flight MH370 until hell freezes over. Mean while, more focus on CNN’s 24/7 MH370 coverage and its affect on its own ratings. We did note, however, that the shooting at Ft. Hood actually pushed MH370 off the front page of its website.

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.

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.

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Odds and Ends: A350 state loan; Bridging 777 Classic sales; Embraer nabs E2 order; IAM chief speaks out

A350 Loan: The Wall Street Journal reports that Airbus and Germany ended talks about a state loan for the A350 program. Good. Airbus doesn’t need the loan and “divorcing” from state aid frees Airbus to make decisions for the production based on commercial considerations and not politically-driven jobs requirements.

Airbus is considering a second A350 production line to open up slots for the -1000 model. Germany made no secret that this line had to be in Hamburg in exchange for the loan. Our Market Intelligence indicates Airbus may want to locate the line outside Germany and perhaps outside Europe. Ridding itself of continue German meddling is a good thing for Airbus; now it “only” has the unions to deal with.

  • In a Guest Column in Aviation Week, Richard Aboulafia continues his A380-bashing, but what he has to say about challenges facing Airbus in the twin-aisle, heart-of-the-market sector bears reading.

Bridging 777s: Jon Ostrower at The Wall Street Journal published this story today about Boeing’s plans to support the 777 Classic sales in advance of the 777X. He reports that Boeing will try to pair 777 Classic orders with the 777X (something we forecast months ago). Boeing is also going to launch a 777 P2F program, persuading airlines to sell their older 777s to cargo carriers and replace them with new 777 Classic orders. This is a challenge because of the continuing softness in the cargo market and plenty of 747-400s available for conversion and 747-400Fs parked in the desert. Such a plan will make it increasingly difficult to support sales of the new-build 747-8F as well.

Although Boeing said it won’t shave the price on the 777 Classic to stimulate sales, we think it will (as it has on the 737 NG).

Embraer nabs E2 customer: Embraer today announced it won an order from an Indian airline for 50 E190 E2s and 50 E195 E2s with options for 50 each. The airline, Air Costa, is a current E1 customer. This is the first E2 order since the launch of the program at the Paris Air Show last June.

Reuters has an article from the Singapore Air Show quoting the Air Costa CEO. The article takes a look at the “small” aircraft market.

IAM chief speaks out: The president of the International Association of Machinists, Tom Buffenbarger, called the Puget Sound Business Journal to talk about the controversial Boeing 777X contract vote.

Why would Buffenbarger do this? He’s facing his first contested election since 1961 and his opponent is from IAM District 751 right here in Seattle. The article makes fascinating reading.

MC-21 profile: A Russian newspaper provides a profile of the Irkut MC-21 (or MS-21 or Yak-242). Talk about confused branding.

Odds and Ends: A330neo; The 12th Man; Boeing’s earnings

Clearing the air on the A330neo, again: Bloomberg News has an extensive story on the prospective development of the A330neo. Following a report from Reuters, these two news articles basically confirm everything we reported in December.

The 12th Man: The Seattle Seahawks, which plays in the Super Bowl Sunday against the Denver Broncos, is well known within the National Football League for its “12th Man.” This is the fan base which has set records for being the loudest fans in football, at a record 137db. They’ve also been recorded on the Richter Scale for their stomping at the Seahawks’ Century Link Field (that’s a local phone company, and the name is routinely shortened to “the Clink”).

Boeing is a corp0rate sponsor of the Seahawks and rolled out its 747-8F house test plane in a new Seahawks livery.

Boeing’s earnings: Boeing reported its 2013 earnings and while they were a record profit, the forecast disappointed and the stock took a major hit Wednesday. The Seattle Times has the recap.