Negotiating in the Media

Certain Members of Congress close to Boeing, and the Governor, told the Seattle papers Boeing essentially issued an ultimatum to the IAM: adopt a no-strike clause or we’ll set up 787 Line 2 in another state.

As you might expect, not only did the message not go down well, neither did the choice of messengers. The IAM issued this response late Wednesday (July 8):

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And now a word on the tanker

Let’s take a diversion from Boeing’s Soap Opera over the 787 Line 2 and will-they-stay-or-will-they-go.

CNBC has a long piece plus several video clips with Ralph Crosby, the CEO of EADS North America, on the KC-X tanker issue. It’s well worth reading.

Well, we’re almost diverting from the Soap Opera. The Mobile Press-Register has a piece on the irony of Boeing Commercial Airplanes maybe planning to build the 787 in Charleston on a business model that is pretty close to the one Northrop Grumman and EADS plan to use to build the KC-30 tanker.

Four sites considered for 787 Lines 2

Update, July 8: Dominic Gates is back from vacation and has this important insight about the “poker game” now underway between Boeing and the IAM. Gates also has this story about the purchase of the Vought facility with new information.

Andrea James of The Seattle PI has this piece about Washington State’s effort to keep Boeing.

Original Post:

We now have some additional color on the prospect of a Line 2 location.

According to a person with some knowledge of the situation, Boeing has yet to make a decision on the location (which is consistent with what we’ve been reporting, even as we think the odds currently favor Charleston). We are told Boeing is considering four sites: Everett (where the 787 is assembled now), Charleston, San Antonio and a fourth location our source did not know. Speculation is that it might be Long Beach, where the C-17 is made and there is a workforce already skilled in airplane assembly. The union there is the UAW, which has proved easier to work with than the IAM 751 local in Seattle. However, the California business climate is hardly any more friendly, and perhaps much less so, than that in Washington.

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Why Boeing needs a second 787 Line Sooner than Later

Boeing needs a second production line for the 787. Some say Boeing needs to get the airplane flying before worrying about a second line. While there certainly is some truth to this, the two decisions aren’t mutually exclusive.

Although the 787 seems to have become the poster child in some circles of how Boeing can’t walk and chew gum at the same time, let’s remember that the 737 and 777 lines are humming along nicely; so is the all-but-dead 767 line. The 747-8 is a challenged development, true, but as we’ve seen, Boeing is hardly alone with challenged airplane programs. Airbus still has issues with the A380 and the A400M is sidelined on the ramp for some time to come.

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Boeing buys Vought 787 facilities

Update, 9:10 AM PDT: Innovation Analysis Group has a podcast with Jon Ostrower, who broke the news last week, about the likely purchase of Vought, and us. We look at the prospect of where Line 2 will be and the political implications.

Update, 8:10 AM PDT: Gov. Gregoire issued this statement. More reaction continues to roll in, also in the story linked in this update.

Update, 6:20 AM PDT: See our new Post on more Line 2 information.

Update. 5:15 AM PDT: It’s official: Boeing announced at 5:15 AM PDT Tuesday it has purchased the Vought 787 facilities in South Carolina. Here is a link to the press release.

The repeated delays in the 787 program strained Vought’s financial resouces. Vought’s CEO, Elmer Doty, always acknowledged Vought was the riskiest industrial partner in the 787 program.

Vought continues to work on the 747-8, 737, 767, 777, C-17 and V-22 programs at other facilities.

Within minutes of the Boeing-issued press release, the Aerospace Futures Alliance issued its own press release:

Below, please find a copy of The Boeing Company News Release announcing the purchase of Vought Operations in South Carolina.  While this is not a final decision by The Boeing Co. regarding production of the 787 second line it should register a loud wake up call for all of us.

  • It is time for business, community leaders, labor and government to unite efforts to keep production of the 787 second line in Washington State.
  • It is time for all of us to pull together and create a competitive environment to promote and enhance Washington’s aerospace industry.

It will take all of us and we must act now!

Don’t underestimate the significance of the AFA’s swift action and its meaning. The AFA is primarily funded by Boeing and we think it’s no coincidence that the AFA was ready within minutes of the Boeing release with its own clarion call.

Boeing now has the fundamentals in place to select Charleston for a second 787 line. Those who think little more than Boeing posturing is going on don’t “get it.” For Puget Sound, this is a Big Deal.

Original Post:

KING 5 TV (NBC-Seattle) reported Monday afternoon that the expected puchase by Boeing of the Charleston, SC, Vought 787 facility will be announced Tuesday morning. (We understand the annoucement will be at 9 AM CDT.)

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Random Thoughts, July 6

Here is another in our occasional stream of random thoughts.

Bill Virgin and Manufacturing Alert

Bill Virgin, a former columnist with The Seattle PI, was zapped when the print edition shut down and it became a web-only publication. He’s launched his own newsletter, Manufacturing Alert, which covers a variety of industries and issues in Washington State. The modestly-priced subscription-only newsletter may be found here. His June 22 issue notes there are now at least five aerospace groups in Washington dedicated to keeping Boeing here and encouraging aerospace in the state. These are the following groups (with our additional comment describing the mission of each):

Too soon to draw conclusions for 2010 funding

Here’s an item we wrote last week for for Commercial Aviation Online:

Boeing Capital Corp. (BCC) isn’t worried about global customer funding availability in 2010, but a top official also says it’s too soon to be sanguine.

Kostya Zolotusky, managing director, said that at the mid-year point today, BCC has “better visibility” for 2010 but that the tight credit market means deals that are normally arranged six months in advance now get arranged in shorter periods.

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First report on AF447

This BBC story is a good one on the first French analysis of the crash of Air France 447. Most surprising is that the investigators believe the A330-200 was intact when it hit the water in what sounds like a more-or-less level position, on its belly. Earlier reports suggested the plane broke apart in the air.

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Customers to watch on production trends

Here is a piece we did for Commercial Aviation Online:

The debate continues whether production rates on the Airbus A320 and Boeing 737 families should be reduced.

Both manufacturers are in a tug-of-war with their supply chain over rates should be reduced in 2010 and aerospace analysts seem ignored by the Big Two airframers.

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Random Thoughts/Update, Good bye Line 2

Update, 9:20 AM: Flightblogger just posted this: Boeing to buy Vought, Line 2 to go there. This is step one in the allusion below to big news coming out of Boeing that affects Puget Sound.

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ANA and the 787

All Nippon Airways, launch customer of the much-delayed Boeing 787, upped its orders from 50 to 55. We can’t help but wonder if it’s going to pay anything at all for these five airplanes or whether these will be free for compensation.

Big news out of Boeing coming?

Here in the Puget Sound we are hearing a lot of buzz that there will be big news out of Boeing’s HQ in Chicago as early as Friday that will be of more than passing interest here. We’ve had three sources on this one.

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