We’re at the IAM HQ in South Seattle for the vote on the historic IAM-Boeing contract. Seattle and Auburn votes being counted, and eye-balling the piles, it appears the contract is passing 2-1.
Results will be announced between 8-9 pm.
Follow us on Twitter @leehamnews for updates this evening.
7:30pm: It appears Yes votes gaining ground. Appears better than 2-1 now.
7:35pm: It’s subdued here at IAM HQ as votes are counted. One IAM official predicted at least a 75% yes vote, but others are more cautious out of innate conservatism.
8:00pm: IAM estimating announcing results around 8:30. Oregon and Kansas votes are in but no idea of the count.
While we are waiting for the IAM vote tonight, it looks like two more big wins for Boeing.
Bloomberg reports FedEx is about to order 30 767-300ER freighters.
The Wall Street Journal reports Southwest Airlines is about to commit to the 737 MAX.
Posted on Twitter a short time ago:
Airbus has repaid nearly 2bn Euros in launch aid associated with the findings of the WTO complaint filed in 2004 by the US Trade Representative, an amount far less than the American agency alleged as US$25bn in illegal aid, but this isn’t likely to be the last word by any stretch.
Airbus parent EADS in 2010 has already drawn down “reimburseable launch aid,” according to the 2010 EADS annual report. The A350 funding was not part of the original US complaint, and is the only commercial model Airbus has produced not covered by the final report of the 2004 complaint. The USTR has threatened to launch a new complaint over the A350 launch aid. Airbus previously said launch aid for the A350 would comply with the findings of the 2004 complaint.
Airbus said after the WTO case was over that the WTO did not find reimburseable launch aid was illegal, only that the terms and conditions provided in the A-Series programs had been. This opened the door, Airbus said, for allowing launch aid for the A350 provided the terms and conditions complied with WTO findings. Commercially-based terms and conditions were at the heart of the illegalities.
The EADS financial statesments do not disclose the terms and conditions.
A spokesman for Airbus told us that the aid for the A350 complies with the terms and conditions findings of the WTO ruling, though most likely Boeing and the USTR will argue differently. The Airbus spokesman did not know the amount of the launch aid and the EADS 2010 annual financial statements (Page 63) does not disclose it: “European Governments refundable advances (incl. A350 XWB) net of reimbursements have increased in 2010.” The financial statements (select “Financial Statements 2010”) show the 2010 liability to be 5.968bn Euros vs 4.882bn Euros at Dec. 31, 2009. It is not disclosed how much of this is associated with the A350 or how much is associated with other programs, such as the A400M. However, military programs are not subject to WTO rules. The A320neo program was subject to research and development costs in 2010, which have been ruled illegal under WTO findings, but the program wasn’t launched until December 2010 and while it is theoretically possible some launch aid could have been drawn for neo, we think it more likely the spike in liabilities is largely associated with the A350.
The nine month interim financial reports do not discuss launch aid.
AirInsight has these two podcasts about the grand labor deal announced Wednesday between Boeing and the IAM.
The chief executive officer of Boeing Commercial Airplanes Wednesday hinted at increasing production rates of the 787 beyond the committed 10 per month to 12 a month.
Jim Albaugh, speaking at the Credit Suisse Aerospace conference, reiterated plans to meet the oft-stated target of assembling 10 787s per month by the end of 2013.
“The 787 has been a tough program. Everybody knows that,” he said, citing the variety of difficulties the program has experienced. “All those were difficult tasks. We have more ahead of us. We have to get up to rate. [Plan] Z24 still has us going to 10 a month by the end of 2013. My view is that if we can get to 10 we can get to 11 [and] if we can get to 11 we can get to 12.”
The recently issued Z24 obtained by Flight Pro shows a sharp decline in planned production over Z23.
2012 | 2013 | 2014 | |
Z23 |
61 |
95 |
120 |
Z24 |
45 |
66 |
119 |
“We held the rate at two for quite a while and we had a couple of pauses as you know,” Albaugh told Flight Pro after his presentation. “Z24 does move some things to the right, but we still get to 10 a month at the same time, which is the end of 2013.”
Albaugh said the plan is to get to a production rate of five per month by the end of 2012. Rate bumps won’t happen before officials are convinced rates are stabilized.
The production rate does not reflect delivery rates, however. Boeing has more than two dozen aircraft produced but parked at its Everett (WA) assembly plant awaiting rework. Albaugh declined to specify the delivery rate for 2012, however.
“I know precisely [how many deliveries there will be] but I am not going to tell you. When we come out with our guidance for 2012 we give you some clarity on that,” he said.
Albaugh said Boeing’s Charleston facility “has demonstrated they can go beyond 2 ½ a month,” and he suggested the plant’s first 787 may be ready for delivery ahead of the planned June schedule.
Airbus A350: Aspire Aviation in Hong Kong has a lengthy look at the Airbus A350 program.
Airbus launch aid: Airbus says it has complied with the findings of the World Trade Organization and cured those elements found to be illegal. It calls on Boeing to do the same. (The case against Boeing is under appeal.) Update: and the war of words continues. Here is Boeing’s response.
Boeing and IAM 751: Reaction to the agreement reached between Boeing and IAM to extend a new contract to 2016, settle the NLRB complaint and put the 737 MAX assembly in Seattle is winning accolades from everybody except some Republicans who was pissed they won’t have an election campaign issue to talk about next year. Never mind what’s good for Boeing.
Plane Talking, the entertaining if somewhat cranky blog from Down Under, has this piece about Ryanair’s Michael O’Leary opining on this and that.
Speaking of Ryanair: Heard in the hallway at the Credit Suisse conference: O’Leary is already circling over the American Airlines bankruptcy, looking to pick up 737-800s cheap if American doesn’t keep payments up and any are repossesed.
We couldn’t be more delighted.
The agreement announced Nov. 30 between the IAM 751 local and Boeing is an outstanding development.
Who wins? Basically, everybody.
The Company gets:
The union gets:
Customers get:
Suppliers get:
Washington State gets:
Losers:
We’re delighted management and labor set aside the antagonism of the decade-and-a-half and all the testosterone that went with it and realized that a partnership is more beneficial than being in their corners ready to fight.
A note of interest: Boeing Commercial Airplanes CEO Jim Albaugh was asked at the Credit Suisse conference Wednesday morning about the prospect of labor negotiations next year. (This during the 8am hour, EST.) Albaugh, in his characteristic understated way merely opined he was optimistic a successful negotiation could be achieved.
Six hours later, the deal was announced.