Pontifications: Why I’d fly the MAX; lessons learned and still to come

Nov. 23, 2020, © Leeham News: I’m okay with flying on board the Boeing 737 MAX.

Yes, it’s gone through the wringer in the 20 months since it was grounded.

Yes, Boeing and the US Federal Aviation Administration screwed up royally.

And yes, there’s solid reason to distrust the company and the agency, wondering if they got it right this time.

Which is why for me the tipping point is the involvement of Transport Canada and Europe’s EASA are the reasons to trust getting back on the MAX.

LNA addresses the safety in our new podcast feature, 10 Minutes About. The inaugural podcast, 10 Minutes About the Boeing 737 MAX recertification may be heard here.

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Boeing, unions need reset: analysis

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By the Leeham News Team

Analysis

Introduction

Nov. 16, 2020, © Leeham News: Boeing is at a defining moment, says John Holden, the president of IAM 751. This is the labor union that assembles Boeing’s airplanes in Washington State.

The Seattle Times wrote that “Boeing must realign for better days“.

Neither said anything that hasn’t been said before, some of them repeatedly.

There is a new twist to it this time.  Boeing is seriously bleeding money.  It is making changes for survival and paying a horrible price as it loses talent that takes years to develop.  There are many losers here:  Boeing, Washington State, Snohomish, King and Pierce counties, Everett, Renton and all the communities in the Washington Aerospace heartland.  There are no winners.

But for all the points identified, few offer solutions. What should a realignment include?  What could it look like?

Over a series of articles, LNA will examine some possible solutions.

The first is Labor, starting with the IAM 751.

Summary
  • Long, tortured relationship.
  • Strong union state.
  • “Expensive labor.”
  • Is there a “value” premium?

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Gov. Inslee misses the point in his pique over Boeing 787 production decision

By Scott Hamilton

Analysis

Oct. 5, 2020, © Leeham News: The contrast in tones couldn’t be sharper.

With the announcement last Thursday by Boeing it will consolidate 787 production from Everett into Charleston, local political leaders were disappointed but understanding and even sympathetic.

Gov. Jay Inslee

Snohomish County Executive Dave Somers and Everett Mayor Cassie Franklin likened Boeing to a family member who was in crisis. Hard decisions by Boeing were made, but in a crisis, you must. Support your family. Understand the situation. Figure out how to make the best of it to move forward.

On the other hand, Gov. Jay Inslee vowed to review the state’s relationship with Boeing and tax breaks granted to the company. Inslee claimed understanding but his tone was hostile, defiant and angry.


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Retrospective-4, 11/1/09: 787 Line 2 Postmortem

DownloadOct. 1, 2020, (c) Leeham News: This is the fourth in a series of Retrospectives about Boeing’s decision to locate the second 787 Final Assembly Line in Charleston (SC).

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Retrospective-3, 10/20/09: Dueling Messages: Boeing vs IAM

DownloadOct. 1, 2020, (c) Leeham News: This is the third of a Retrospective look at the 2009 decision by Boeing to place the second 787 Final Assembly Line in Charleston (SC).
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Retrospective-2, 10/29/09: 787 Line 2 aftermath

DownloadRetrospective-2, Oct. 1, 2020, (c) Leeham News.
This is the second in a series of Retrospective looks at the 2009 decision by Boeing to locate 787 Line 2 in Charleston (SC).

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Retrospective-1, 10/28/09: Boeing to Charleston for 787 FAL #2

DownloadOct. 1, 2Oct. 1, 2020, (c) Leeham News: 10 years, 11 months and 27 days ago, Boeing announced it selected its production plant in Charleston (SC) for the site of its second 787 assembly line.
The decision came after an intense battle with its touch labor union, IAM 751, over concessions demanded by Boeing and offers made by the union.
Boeing told Washington State there were no incentives that could be offered to persuade Boeing to locate Line 2 in Everett (WA). The issue, Boeing said, was entirely about the union. However, it was later learned South Carolina state and local governments provided Boeing with nearly $1bn in tax breaks and other incentives to locate Line 2 there. State and local Washington officials felt flimflammed by Boeing officials.
Last month, Gov. Jay Inslee of Washington asked Boeing if there was anything the state could do to persuade Boeing do keep Line 1 in Everett.
The company is meeting today to decide whether to consolidate the two lines into one to save money because of the COVID-19 crisis. When CEO David Calhoun announced a study during the 2Q2020 earnings call July 29, it was considered a foregone conclusion that Charleston would be selected for the site.
LNA provided extensive coverage in 2009 about the decision. We’re publishing several articles in a Retrospective look about the decision then to locate Line 2 in Charleston.

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With 787 FAL closing and 747 production ending, what does Boeing do with massive space in Everett?

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By Scott Hamilton and Bryan Corliss

Introduction

Oct. 1, 2020, © Leeham News: Boeing is expected to announce as early as today that it will consolidate the 787 final assembly lines into one at its Charleston (SC) plant.

Footprint of Boeing Everett final assembly building. This map is somewhat outdated but a current one is not available. Source: Seattle Times.

Reuters reported last week the decision to consolidate production in Charleston was made. The Wall Street Journal Tuesday night also reported this decision, saying the decision could be announced this week.

The Everett (WA) line is expected to close as production of the 787 falls below seven a month. Boeing previously announced the rate will fall from a peak of 14/mo to 6/mo by 2022.

With the closure of the 747 line in Everett slated for 2022, this will open huge bays in Everett. Nearly half the world’s largest building by volume will be empty. Given lower production rates because of the COVID-19 pandemic, the 777 lines will be woefully underutilized.

Overhead costs probably can’t be absorbed by the remaining low-rate production 767/KC-46A and 777 lines. Boeing warned in its 2Q2020 10Q SEC filing that the 787 and 777 lines face a forward loss depending on production rates of other lines.

With no New Midmarket Airplane (NMA) being contemplated to fill the empty bays, what can Boeing do to utilize these massive spaces and retain profitability of Everett?

A radical solution is moving the 737 line from Renton to Everett. This means Renton would close well before the 2033 date LNA predicts and selling off the property for commercial development.


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Pontifications: Boeing SC makes its case for 787 production consolidation—and it favors Everett

By Scott Hamilton

Sept. 14, 2020, © Leeham News:  Boeing’s South Carolina 787 final assembly plant has made its case whether to consolidate production in one location, or not.

The conclusion favors retaining dual assembly lines, retaining one in Everett.

This click-bait lead doesn’t mean Boeing SC management favors retaining dual assembly lines. Far from it.

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Pontifications: WA State frets about Boeing brain drain, but it’s already happening

By Scott Hamilton

Aug. 31, 2020, © Leeham News: Elected officials and others in Washington State worry about the “brain drain” as Boeing considers whether to consolidate 787 production from Everett to Charleston.

These people are asleep at the switch and have been for some time. The brain drain is already just around the corner.

Nearly half of the membership of SPEEA, the engineers and technicians union at Boeing, are 50 years or older right now.

Almost two thirds of these are within 55-64 years old. In other words, ready for retirement right now or soon to be.

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