Changes at Boeing | Page 9 | FerrariChat

Changes at Boeing

Discussion in 'Aviation Chat' started by Bob Parks, Oct 11, 2019.

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  1. Texas Forever

    Texas Forever Seven Time F1 World Champ
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    If Boeing is nimble enough to pivot, they should do well. However, experience shows mega-large companies have a difficult time pivoting. Like many companies, Exxon, Microsoft, Apple, and so on, Boeing would do well to breakup while they still can. As evidenced by this thread, Boeing's real IP is experienced-based knowledge. There are some things you can't learn in a book, nor can you program into AI.
     
  2. Jeff Kennedy

    Jeff Kennedy F1 Veteran
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    If your idea of nimble means development of new aircraft then the corresponding timeline is counted in years. Even to shorten or lengthen of an existing airframe is going to take several years. The process of any new aircraft certification is a time consuming process, especially with the aftermath of the MAX.

    Boeing has already announced that they will not be doing the wide body approach to the Mid Market aircraft. Whatever they do will be a narrow body to more closely match the A321XLR.

    Where Boeing has been looking instead of break up is how to change the support side services so that the life cycle revenue stream can give more flexibility on the initial aircraft pricing.
     
  3. Texas Forever

    Texas Forever Seven Time F1 World Champ
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    The hallmark of American companies used to be innovation. We were 10 steps ahead of the rest of the world. Then financial engineering took over. Numbers guys, and I’m one, wouldn’t know innovation if it bit them in the ass.

    Boeing has a deep reservoir of acquired knowledge. This is the type of IP that can’t be stolen. But it only has value on the shop floor. You’re not going to find it in HR. You’re not going to find it in the C-Suite. You’re certainly not going to find it in the boardroom. Boeing needs to get lean and mean. It needs to fight for its survival. If you hand them a few billion, it will be over. They’ll last a few years, but it will be the end.


    Sent from my iPhone using FerrariChat
     
  4. albkid

    albkid Formula Junior

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    IP is certainly valuable, and the loss of the company destroys a continuity in advanced aircraft development. Such an event would leave the US vulnerable to similar development of not so friendly trading partners.

    The investigation of the Challenger loss revealed that O-ring erosion started with the first flight of the space shuttle, but NASA managers ignored the data because they wanted to prove the promise of a cost effective, reusable vehicle for military and commercial purposes. Likewise, the country lost Columbia for a similar intentional oversight, external tank foam breaking off and damaging the airfoil. When I read an IEEE article that documented the O-ring erosion on every shuttle flight prior to the Challenger loss, I was furious. Later, when I learned that NASA had overlooked prior instances of external tank foam loss during various shuttle launches, I was done with NASA. It remains for them to prove to me that they can go back to the moon, safely.

    Boeing's financial issues have been exacerbated by a health crisis. I do not know what anyone at Boeing could have done to prepare for a pandemic. NASA remains in business. Does Boeing deserve to die?
     
  5. Texas Forever

    Texas Forever Seven Time F1 World Champ
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    Isn't that a decision for the market place?
     
  6. Bob Parks

    Bob Parks F1 Veteran
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    Boeing ain't going anywhere. The people that I know can fight. Now if they can be supported by a competent board of directors and keep an effective CEO in place.
     
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  7. BMW.SauberF1Team

    BMW.SauberF1Team F1 World Champ

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    Decision for the Fed...the market place is no longer making these decisions.
     
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  8. Gatorrari

    Gatorrari F1 World Champ
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    Airbus really blew it when they designed the A380 to be largely unsuited to cargo usage. The passenger 747s will still have a future as freighter conversions (especially if they can be modified with the lift-nose), while all the A380s will wind up as aluminum ingots, probably sooner rather than later.
     
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  9. Bob Parks

    Bob Parks F1 Veteran
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    I stated this in 2000 when I was at Boeing as a contractor. It was a flawed concept. Airliners are not cruise ships. And some of you say that I'm not an expert but I have fun at trying to be.
     
  10. albkid

    albkid Formula Junior

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    I'm a patriot. The answer is clearly no.
     
  11. Jeff Kennedy

    Jeff Kennedy F1 Veteran
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    Bob, Since you were an insider during some of that time what was the internal discussion on the A380? For the press Boeing was saying that they had considered/studied a similar capacity aircraft (as had McDonnell-Douglas with the MD-12 before that) but instead claimed that they were under the belief that the market was moving to more frequency with smaller aircraft and/or to secondary cities that would not need the massive passenger capacity.

    Maybe someone can figure out how to make an aftermarket freighter conversion for the A380.
     
  12. Jeff Kennedy

    Jeff Kennedy F1 Veteran
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    More on the Boeing shutdown for the virus:

    In a bid to slow the spread of the coronavirus Boeing is temporarily suspending production across its Puget Sound sites for 14 days starting Mar. 25.

    The production halt comes as other suppliers slow or halt manufacturing and furlough workers in response to the COVID-19 pandemic which has already begun to impact Boeing employees. The company says plans to begin reducing production activity will begin Mar.ch 23 and will be followed by “additional deep cleaning activities at impacted sites and establishing rigorous criteria for return to work.”

    Boeing, which earlier this month instituted a policy requesting Puget Sound area-based employees work remotely, adds that those who cannot do so “will receive paid leave for the initial 10 working days of the suspension—double the company policy—which will provide coverage for the 14 calendar day suspension period.” The action comes amid reports in the Seattle Times that a Boeing employee from the Everett site has died from the disease and that, as of Mar. 21, there were 29 confirmed cases company-wide of which 24 are in the Puget Sound region.

    The shut-down will primarily effect production of the 767, 777-300ER, 777X and 787 widebody lines in Everett. Manufacturing of the 737 MAX at the company’s Renton site near Seattle is already suspended, having been shut down in January as part of the recertification and recovery effort for the troubled narrowbody program. The production halt also comes just days after Boeing suspended its share dividend policy and announced an indefinite halt to share repurchasing.

    Boeing CEO Dave Calhoun, who announced on Mar. 20 he will forgo all pay through the rest of the year, says the company “regrets the difficulty this (production halt) will cause them, as well as our employees, but it’s vital to maintain health and safety for all those who support our products and services, and to assist in the national effort to combat the spread of COVID-19.”

    The company adds that critical parts distribution to airline, government and maintenance, repair and overhaul operators will continue and that it will work with defense and space program officials to “develop plans that ensure customers are supported throughout this period.”
     
  13. jcurry

    jcurry Two Time F1 World Champ
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    There will be no more 747 conversions.
     
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  14. Tcar

    Tcar F1 Rookie

    Is the -8F still in production?
     
  15. jcurry

    jcurry Two Time F1 World Champ
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    Website says there are 17 unfilled orders.
     
  16. Jeff Kennedy

    Jeff Kennedy F1 Veteran
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    Conversions and -8F are two different items. -8F is new build as only a freighter. Conversion take airliners and convert them to freighters. There are multiple independent facilities that have developed conversions and perform them for an assortment of different aircraft models. Boeing has tried to do conversions in house but their cost structure tends to make them over priced to the independents.

    Boeing has kept the 747 production line open at a minimal rate based upon what they have kept expecting to be a pick up in demand for the -8F. Maybe the current situation will have Boeing give up that hope.
     
  17. jcurry

    jcurry Two Time F1 World Champ
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    I never said they were not.

    Given there were only a handful of -8i's made, there will not be any conversion of those to -8BCF. They would never recoup development costs.

    no ****

    I know. I have been intimately involved in several of those.

    Boeing designed conversions for the 767, 747-400, and 737-800, i.e. 767-300BCF, 747-400BCF, 737-800BCF. They are sold by Boeing but the actual touch labor is in China.

    Would not be surprising to see some of the existing orders cancelled. However there has been some concern by a few of the major freight haulers that the loss of out-size capability is going to hurt in a few yrs.
     
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  18. tazandjan

    tazandjan Three Time F1 World Champ
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    Boeing had 747 based competitors for the A380, the 747-500X, 600X, and 700X, but wisely never put them into production. Boeing did a study with Airbus on super-large airliners, and took completely different lessons from the results compared to Airbus. Probably both already covered earlier in this thread.
     
  19. F1tommy

    F1tommy F1 World Champ
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    As many 8F's as I see in and out of ORD it would not surprise me if they did keep the freighter version in production for 5 more years or more. They are in the air all day almost everyday on the around the world routes. Right now the 747 freighters are working harder than ever before. I wish I owned a air cargo airline!!!
     
  20. Bob Parks

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    As I remember it, the thoughts were as you mentioned. Opinion was that the public did not want to go from point A to point B on an A380 and then from point B to point C on a smaller plane and then possibly to point D on something else. Boeing did look at a double deck 747 but there were more problems than solutions . The FAA was concerned about emergency egress for one. I worked on the problem of deployed second level slides in a wheels up landing when one or more engines were running and it wasn't pretty for the pax. There were other scenarios involving second deck slides that were unacceptable. Then there were the problems of service equipment , ramp space and ramp strength , the damage of which the A380 was the most guilty. Passenger processing with a fully loaded A 380 weren't very pretty. We studied the 747-400X, 500X, and 600X, none of which were double deck. The 600X was 10 feet shorter than a football field and had a wing span that went from sideline to sideline. There was even a customer very interested in it. All studies didn't fly, however, too big and too many problems at the time. Like reciprocating engines, there is a point where too big is simply unworkable. The A380 had no after market value as a freighter or anything else. No nose loading, and unusable volume unless it was used as a combi carrying a load of ping pong balls. Long time ago for this stuff and I had to do some mental digging.
     
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  21. Gatorrari

    Gatorrari F1 World Champ
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    Boeing stock closed today at 158+, not bad for a stock that was under 100 just a week or so ago!
     
  22. F1tommy

    F1tommy F1 World Champ
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    I see the cargo only carriers are getting 4 billion in aid even with their record revenues(yes they will be). Expect some new 747 8F orders soon :)
     
  23. westextifosi

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    $95.00 on Monday. Wish I had bought more.
     
  24. Jeff Kennedy

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    Today's Aviation Week Network.


    Yes, Go Ahead And 'Nationalize' Boeing With A Bailout
    Michael Bruno March 26, 2020
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    Up until the start of March, new Boeing CEO and President David Calhoun’s biggest challenge was getting the 737 MAX back in the air. Since then, the narrowbody’s grounding and production halt has become quaint as Wall Street and others subtly but increasingly wonder whether Boeing can survive the post-COVID-19 world.

    Boeing triggered the new skepticism March 17 when it formally asked Washington for a $60 billion-plus bailout of the U.S. aerospace manufacturing sector, ostensibly to flow through the Chicago-based OEM. So dramatic was the turn of events that Nikki Haley, a former official in the administration of President Donald Trump, quit Boeing’s board in protest, asserting that companies should not receive federal handouts.

    In response, Boeing thanked her for almost a year of directorship and removed her chair from the boardroom. Whether Haley has ulterior motives is a debate for another day, but it is clear why the manufacturer is seeking money. According to Jefferies analysts, Boeing Commercial Airplanes alone was burning through about $4.3 billion a month to fund its operations and support suppliers before the novel coronavirus outbreak.

    Boeing has $15 billion in liquidity, Calhoun said March 24. But it ended 2019 with more than $27 billion in debt. By mid-March, it had fully drawn down a new credit line totaling nearly $14 billion. And by the time Calhoun spoke, Boeing had closed Puget Sound widebody manufacturing for health reasons, frozen hiring, suspended dividend payments—which on top of already frozen share buybacks is a doomsday for investors—and said Calhoun will forgo pay through 2020. Both S&P Global Ratings and Fitch Ratings have downgraded their rankings of Boeing’s debt worthiness.

    But as fellow Chicagoan and former Chicago Mayor Rahm Emanuel once said, you never let a good crisis go to waste. If there was ever a time to socialize the risks facing Boeing, this pandemic is the hook. The question for U.S. leaders then becomes: Is it worth taking Boeing up on its bailout bid?

    The answer likely is “yes,” but maybe not for obvious reasons—and probably not the way Boeing wants. Protecting Boeing’s workforce of more than 150,000 employees and tens of thousands of suppliers is statistically significant as Washington tries to fend off a prolonged recession, but maintaining Boeing’s payroll and supply chain could be accomplished other ways, such as direct payments to those employees or grants to suppliers.

    Boeing will surely have to swallow some once-inconceivable conditions, starting with an ongoing lack of dividends and share buybacks. UBS analysts say there also likely will be executive pay regulation and incremental board governance oversight, including potential stress tests, minimum employment levels and/or labor controls. In turn, they say, Boeing’s stock will trade at a discount.

    While these conditions are the most prominent “strings attached” being discussed for Boeing, they may not be the last—nor should they be. As one Wall Street icon said recently about government bailouts, it is time for a better return on investment for the country.

    Mohamed El-Erian, Allianz chief economic advisor and the former CEO of fixed-income investing company Pimco, says: “The notion of governments in different companies, that’s going to be the case because a lot of companies are going to have to be bailed out. [It is] best to start with the technocratic approach, which is to define your objectives. Protecting jobs is one example; protecting national security is another. Then go through what it mean for who you bail out and how you bail out, and importantly, how you get incentive alignment coming out of the bailouts.”

    What do such incentive alignments with Boeing look like? It should go way beyond maintaining employment figures and shelving shareholder returns. Washington is desperate for U.S. aerospace and defense providers to innovate, but independent research and development (IRAD) spending has been emaciated over the last decade as public companies raced to reward shareholders. Getting Boeing to double or triple IRAD could be a good start.

    At the same time, the Pentagon, NASA and Congress are exhausted with poor contractor performance on its major defense acquisition and space programs. Does anyone remember the Future Combat Systems or the recent Starliner failure? As government auditors have documented in countless reports, weapon programs are years late and often double-digit percentages over budget—assuming they ultimately deliver. With that in mind, Boeing could be “incentivized” to dramatically improve its results across the board.

    Finally, there has been a lot of talk in the U.S. in recent years about a crisis of not producing enough science, technology, engineering and math (STEM) graduates. But as Aviation Week workforce studies have shown, industry acts as a poor pull on the demand for such graduates, with relatively few hired out of schools each year. Instead, companies have long preferred to poach talent from each other when needed. So make Boeing either more directly fund STEM education or hire an industry-leading ratio of cohorts each year.

    There are likely many more ways to better align Boeing with U.S. interests, and they should be considered. After all, U.S. taxpayers already are being promised more bang for the buck—so let us get more Buck Rogers.
     
  25. Texas Forever

    Texas Forever Seven Time F1 World Champ
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