Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- GE testing of giant GE9X engine aims for maturity at entry into service June 30, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 28. June 27, 2025
- Parent agency, FAA often at odds as politics outweighs safety June 26, 2025
- Electric Flight and the Ugly Duckling June 25, 2025
- Engine makers tout “Plan A” but have “Plan B” backups in R&D June 23, 2025
US appeal of Airbus WTO ruling aimed at A350, future of A320
There is been some perplexed reaction to the appeal by the US Trade Representative to the World Trade Organization that the USTR and Boeing claimed only a few months ago were sweeping victories in the complaint that Europe had illegally subsidized Airbus over four decades.
There shouldn’t be any confusion; the answer is simple. Say “A350” and “A320.”
To be sure, the US won most of the important points it challenged but as Airbus, its parent EADS and the European Union pointed out at the time—and which we reported—the US failed to prevail on the all-important point that launch aid, per se, was illegal.
The US appealed this finding, as well as findings that certain financial aid provided by France for the A380 development was not illegal export subsidies. The US also has appealed this finding.
Here’s what Airbus said Friday in response to the US appeals:
RR speaks out on NEO vs new airplanes
Rolls-Royce speaks out on its views of Airbus and Boeing going with a new engine option for their A320-737 class airplanes in this long Wall Street Journal article.
We’ll make two observations:
Boeing’s Albaugh talks about labor
This is the third segment of our interview with Jim Albaugh, CEO of Boeing Commercial Airplanes, during the Farnborough Air Show.
Union issues remain contentious. The rhetoric between the International Association of Machinists, both at its Washington headquarters and at the Puget Sound Local 751, and Boeing’s CEO Jim McNerney, is already testy. Messages are also sometimes conflicting, even within Boeing. While Boeing Commercial CEO Jim Albaugh seems predisposed toward keeping work in Puget Sound if a long-term union agreement can be reached, McNerney takes the clearly more chest-thumping approach that unions here must “earn” the work—despite the facts that labor is pumping out 737s at record rates and may be asked to boost production by 50%; that Boeing relies on labor’s support for the KC-X tanker competition; and labor is fixing all the problems on the 787 originating at overseas and non-union shops.
At the same time, the 2008 strike by IAM 751 cost the company billions of dollars. The 58 day strike disrupted production and deliveries, causing some customers—notably Richard Branson—to throw public fits over the strike. IAM 751 struck in 2005 and nearly did so in 2002. Management is tired of having these strikes every three years (or, potentially, in 2012 with a four year contract this time).
When Boeing decided to create a second assembly line for the 787, management demanded a long-term contract from 751. In what to this day remains hotly disputed and diametrically opposing views over what happened, Boeing decided to put the second line in the plant at Charleston (SC), where quality control continues to be an issue. At the same time, a “surge” line will be established in Everett to assure deliveries while Charleston becomes efficient, a process that will take years. So while management grouses about 751, it is also relying on 751 to save its bacon, so-to-speak.
Here is our interview with Jim Albaugh about labor.
More 787 problems; 2Q delivery delay coming?
The news that Boeing has yet more industrial partner problems with the 787 doesn’t come as a surprise.
Pre-Farnborough Air Show, the company revealed that there were shim issues from its Italian partner, Alenia. Two weeks ago we learned that there were additional issues with the Alenia-produced horizontal stabilizers, where additional gaps were discovered and the need for more shims to be manufactured to fill additional gaps.
While we were trying to confirm this with Boeing, Boeing Commercial CEO Jim Albaugh generally revealed the issue at an investors’ conference, noting that additional inspections were necessary. Albaugh didn’t go into detail.
US Aerospace’s AN-112KC
When a small company called US Aerospace announced it teamed with Ukraine’s Antonov to offer an aerial refueling tanker called the AN-112KC, observers from all over the industry scratched their heads in puzzlement.
First, few had heard of US Aerospace. It turns out that this is a “Pink Sheet” publicly traded company that is in financial difficulty. A “Pink Sheet” company is a mechanism in which stock of companies that typically cannot qualify for the major exchanges can be traded, or stock that is called “Penny Stock” is trade. Penny Stock is stock that sells for, well, pennies. Bankrupt companies are also often traded on the Pink Sheets.
US Aerospace is in default of significant debt and it has owed back taxes to the US government. It latest quarter report indicated around a half-million dollars in cash.
O’Keefe, son survive Alaska plane crash
Update, August 11: Full details of the survivors and dead may be found in this Anchorage Daily News article. This article also has a description of events leading to the crash and rescue.
The Mobile Press-Register spoke with hospital officials Tuesday night, who reported Sean O’Keefe in critical condition with a broken pelvis and other injuries. His son, Kevin, had a broken leg and other injuries and is reported in serious condition. This story is here.
Original Post:
ARLINGTON, Va. – Aug. 10, 2010 – EADS North America has been informed that
company Chief Executive Officer Sean O’Keefe survived the Alaska aircraft accident
that tragically took the lives of five individuals. Chairman Ralph D. Crosby, Jr. issued
the following statement:
“It was with a great sense of relief and gratitude that we learned that Sean, and his son,
Kevin, survived the aircraft crash in Alaska. We extend our deepest sympathy to the
families of those less fortunate in this terrible accident.
“We owe a debt of gratitude for the heroic efforts of the members of the rescue crew
and others who rushed to the scene. We look forward to Sean’s full recovery and his
rapid return to EADS North America.”
Personal Note:
We have, in the course of our work, met and interviewed Sean O’Keefe on several occasions. He is one of the nicest guys in this business and we are relieved at this good news. We have not heard about the extent of his injuries, or those of his son. We hope that these are limited, as with the other two survivors. It is a tragedy that five people did not survive.
O’Keefe fate unknown; assessing impact on tanker competition
The fate of Sean O’Keefe, CEO of EADS North America, who was among those on the de Havilland DHC-3 Otter than crashed and killed five of the nine people on board, remains unknown. Former Alaska Sen. Ted Stevens, for whom O’Keefe once worked, was killed, according to NBC and CBS news.
O’Keefe reportedly was traveling with his son. The elder O’Keefe often accompanied Stevens on fishing trips.
EADS NA is in a controversial and bitter competition with The Boeing Co. to win the contract for the KC-X USAF aerial tanker. Whether O’Keefe was among those killed or serious injuries require a long recovery period, his absence from the EADS leadership is unlikely to affect the company’s effort to win the contract.
Stevens long-time friend to Boeing
Ted Stevens, the irascible former Senator from Alaska, died Monday in a small plane crash in the state while en route to a fishing trip some 300 miles southwest of Anchorage.
Stevens, though from Alaska, was a long-time ally of The Boeing Co., and was instrumental in beginning the KC-767 tanker lease deal in 2001 that later became a scandal that sent an Air Force procurement office and the chief financial officer of Boeing to jail.
Stevens could be counted on strong support for Boeing commercial and defense programs until he was defeated for reelection in 2008 in the wake of a federal conviction for improprieties. A court later overturned the conviction because of prosecutorial misconduct on the part of the Bush 43 Justice Department. The Obama administration declined to retry Stevens.