Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
- SPEEA, Boeing at impasse over safety program, union says April 23, 2024
- Better transparency needed on Boeing’s 1Q earnings call April 22, 2024
- 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
Boeing, SPEEA in-fighting continues
Boeing yesterday said it would be cutting more engineer jobs. Boeing’s engineers’ union, SPEEA, was quick to fire back.
Boeing’s message:
The following message was sent today from Mike Delaney, VP of Engineering for Commercial Airplanes, to all engineering managers.
Employment actions being taken to meet the challenges ahead
My message today provides context and background on actions we are taking regarding the employment level in BCA Engineering.
As we move from a lengthy period of non-recurring development efforts, BCA Engineering will require fewer employees by year-end. Overall, we must reduce our Engineering employment level by 1,500 to 1,700 positions during 2013.
We have already taken action. During the past year, we significantly scaled back external hiring to maximize redeployment opportunities across the function. Since last fall, we also have steadily reduced use of contract employees. Almost 700 contract employees have left the payroll since October 2012, and we will continue that effort where appropriate. Additionally, attrition associated with retirements and other departures has reduced employment. That, too, will continue.
Unfortunately and unavoidably we must take additional actions that will impact some direct employees. Beginning tomorrow and through the rest of 2013 we will issue 60-day layoff notices to as many as 700 employees in our function. On Friday, approximately 100 individuals in the Manufacturing Engineering (ME) skill in the Puget Sound region will receive notices. Those employees are the first to receive layoff notices because they directly support the production system, which has been stabilizing in parts of our major development programs. You may recall that several hundred hourly employees in Manufacturing & Quality also received notices.
This has been a difficult decision. We know layoffs impact individuals and families.
We are taking these actions now for two reasons. First, completion of non-recurring development work on the 747-8, 787-9 and the KC-46 Tanker will result in lower overall Engineering employment requirements. But also, potential development programs for the 787-10X and 777X, which might have provided opportunities to avoid these layoffs, have not been formally approved and launched.
I realize this news may be surprising. Commercial Airplanes has been on an upswing for several years. We continue to ramp up production on our major programs, and the prospect for future development work is very positive. The challenge we are facing is that those yet-to-be-launched programs are too far out for us to maintain present levels of employment.
We hope to mitigate the number of layoffs through the reductions we are making in contract labor, by natural attrition and by not filling many open positions. As we have always done, Boeing will support employees with layoff benefits and career-transition services.
We regret the disruption this situation may cause for some employees and their families but the prudent actions we are taking now will position us to remain competitive and provide future opportunities.
As our management team, please make yourself available for questions and conversations with your team about this situation.
Thanks for all you do for Engineering and Boeing.
Mike
SPEEA’s response:
Boeing cuts 747-8 production
This is going to be a busy day for Boeing. We’re waiting for word from the FAA to lift the grounding order of the 787 once the Boeing fix is installed and this morning Boeing announced it’s cutting production rates of the 747-8.
EVERETT, Wash., April 19, 2013 /PRNewswire/ — Boeing (BA) announced that it will adjust the production rate for the 747-8 program from two airplanes to 1.75 airplanes per month because of lower market demand for large passenger and freighter airplanes.
Boeing will continue to monitor market conditions and their effect on production rates moving forward. The company expects long-term average growth in the air cargo market to resume in 2014, and forecasts a demand for 790 large airplanes (such as the 747-8 Intercontinental) to be delivered worldwide over the next 20 years.
The 747-8 family provides airlines with double-digit improvements in fuel burn, operating costs and emissions, while being 30 percent quieter and adding more capacity. To date, there are 110 orders for passenger and cargo versions of the 747-8, 46 of which have been delivered.
The first delivery of an airplane at the new production rate is expected in early 2014. The production rate change is not expected to have a significant financial impact.
FAA set to clear 787, Japan may require more: KING 5; production test flights resume
The Federal Aviation Administration appears ready to green-light the Boeing fix to its 787 fleet, but authorities in Japan may not–so reports KING 5 TV (NBC Seattle).
KING 5, The Wall Street Journal and others are reporting the FAA could clear the fix on Friday, April 19.
Meantime, Bloomberg reports Boeing has been authorized to resume test flights of production aircraft.
Odds and Ends: FAA 787 approval could come next week; Ode to an engineer
FAA 787 approval could come next week: Reuters reports that the Federal Aviation Administration could provide a key approval next week that will open the way to the final documentation required to lift the grounding of the Boeing 787. Meantime, and unrelated to the woes of the 787, the FAA has certified the latest performance improvement package for the 787’s GEnx engines.
Ode to a Boeing engineer: Brier Dudley of The Seattle Times has this tribute to a talented Boeing engineer. Then a day later this story of Ken Holtby, another key Boeing engineer, appeared.
NTSB Testimony to the US Senate on safety, 787; FAA reviewing ETOPS
The Chair of the National Transportation Safety Board testified today before the US Senate. The 11-page testimony is here.
Sen. Jay Rockefeller of the Commerce Committee had this to say. This news article contains this:
The testimony, however, comes amid growing frustration and concern expressed by some senior Boeing officials about what they contend is the FAA’s drawn-out decision-making process. Procedures for conducting ground and airborne tests of the redesigned batteries–as well as detailed criteria for determining their success–were agreed on by Boeing and the FAA before testing started.
We believe the FAA won’t approve anything until after the NTSB hearing April 23-24 on the Japan Air Lines incident, not based on anything we know but simply an assessment of the politics involved.
Testimony by FAA Administrator Michael Huerta has not as yet been posted on the FAA website.
Flight Global reports that the FAA testimony revealed the agency is reviewing the 787’s ETOPS, confirming a story Reuters had last month (and which Boeing dismissed as speculation).
Reuters has this story today on Huerta’s comments. It sounds like he meant to say 180 minutes will be OK, but nothing beyond that at this time.
Odds and Ends: Scrapping young aircraft; NTSB Battery hearing, Day 2
Aviation Week has a story about the scrapping of relatively young aircraft. There has been a long-running debate over whether the useful lives of aircraft have been shrinking. The focus has been on the Airbus A320 and Boeing 737NG families, though some attention has also been paid to twin-aisle aircraft.
Historically useful lives have been 25-35 years for operation by passenger aircraft before potential cargo conversion, if at all.
With the forthcoming re-engined single-aisles, there has been a lot of speculation that the useful lives will be sharply reduced, and there have been several examples of early scrapping of early-model A320s and some but not as many of 737NGs. Lessors are particularly sensitive to the prospect of shorter useful lives due to the depreciation curve assumptions. Irish lessor Avolon even held an international webcast on the topic. Boeing has published a white paper on it. Both companies argued there has been no change.
Thus, the Aviation Week story is of interest.
Separately, here are a couple of stories following Day 2 of the NTSB hearing on lithium batteries. The hearing on the Japan Air Lines Boeing 787 fire will be April 23-24.
The Seattle Times-a report from Day 2.
NTSB lithium battery forum, Day 1
Here are some links to stories. Day 2 continues today. Webcast at NTSB.gov.