Changes at Boeing

I say absolutely not on his MAX prediction.

The FAA needs to stop proving their ingrained fear of their own shadow and recertify the MAX. As for EASA, this is giving their egos a polishing that they are using to hide their inferiority complex.

 

A lot of so-called "prominent Street speculators have come and gone. Who is this dude?

 

There will be no need for them to file for chapter 11. The Fed is buying every company's bonds whether it be through an ETF, secondary bond market, or primary bond market.

 

It is not possible to certify MAX unless it's grandfathered on 737 Classic. If that is not possible, it's bye-bye 737 MAX.

 

Amended Type Certificates are, and have been a long standing practice that every manufacturer uses. Airbus is no different - see how every variant of the 320 series (318, 319 321, neo, etc.) is based from the original certification. There is nothing at all wrong with this.

The only reason that the Max has not been recertified by now is the "afraid of their own shadow" FAA playing a "cover your as*" political game.

 

True

True

But .. (and this is offered just as an explanatory note) .. No subsequent airplane in a series is truly grandfathered to the original. Each new iteration requires a review of every paragraph in the FAR's to establish which amendment level of each paragraph the cert will be based on. For the MAX the number of regs that are grandfathered to the original are a very small percentage and usually only for paragraphs that are very basic requirements. For the most part the MAX is certified to 1990 or newer standards. While even that might seem outdated, that fact is that for the most part the regs have not changed a whole lot over the years. What has changed is the means of compliance, which is what created the MAX issue.

 

Reports today that the cert flights for the Max start tomorrow (Monday). One reports is saying 3 days of flights with re-cert by/in September.

About damn time!

 

Opinion: A Five-Part Strategy For Boeing CEO Dave Calhoun
Kevin Michaels July 16, 2020
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Boeing CEO Dave Calhoun
Credit: Boeing
What a difference a year makes. In March 2019, Boeing was on top of the world, boasting an eight-year order backlog and a market capitalization of $240 billion. Today, it is at a structural disadvantage versus Airbus, with its share price diminished as it grapples with the worst crisis of the jetliner era. Some observers are beginning to doubt that it can hold up its end of the airliner production duopoly.

CEO Dave Calhoun is just 21 months from his mandated retirement age, and his honeymoon as a new leader is running out. Will he be a transitional leader, or take risks to reposition the company for long-term success? I believe he can be a transformational leader by pursuing a bold five-part strategy.

(1) Launch a moonshot. Boeing’s product positioning issues are well-known and need to be addressed sooner rather than later despite the COVID-19 crisis. The company’s top priority is, of course, recertification of the 737 MAX. Shortly thereafter, it must launch a white-sheet program to address its competitiveness issue versus the Airbus A321neo. This will boost the morale of Boeing stakeholders—employees, customers, and suppliers—and signal that it wants to move past the 737 MAX disaster, regain industry leadership and invest in promising new digital design and production technologies.

(2) Recalibrate the vertical integration strategy. Boeing went too far in outsourcing on the 787, and now it looks like it is taking on too much insourcing. Some vertical integration initiatives do make sense, including interiors, composite wings and avionics, but several others are marginal. Can Boeing, for example, really create lasting customer value in auxiliary power units through its joint venture with Safran? The timing of this move is ironic given the fact that this could be the last generation of jetliners using APUs. It is on a path to convert variable costs into fixed costs, which does not bode well in a prolonged industry downturn.

Airbus acknowledged this reality by recently abandoning its vertical integration initiative on nacelles for the A320neo and awarding the package to Collins Aerospace. Funds used for misguided vertical integration moves would be better deployed pursuing the next commercial moonshot or, on the military side, a sixth-generation fighter.

(3) Kill the Partnering for Success (PFS) program, one of the company’s biggest mistakes of the last decade. PFS is not only a silly name, it puts its suppliers—responsible for 65-70% of its cost structure—in the untenable position of earning inadequate profit margins, which reduces their ability to invest in the future. This does not mean that Boeing abandons its pressure on suppliers to improve productivity, delivery and quality; nor does it mean that it should not seek to grow aftermarket royalties.

By ending PFS, Boeing could change its supplier payment terms from 90 days to 60 days to inject needed working capital and improve supplier viability in the COVID-19 crisis. It could also revise its draconian termination for convenience clauses and intellectual property ownership demands. Nothing would do more to restore supplier confidence than Boeing burying PFS. The timing is perfect.

(4) Jettison the unrealistic goal of $50 billion in services revenue. It is an arbitrary target, and there is not enough maintenance, repair and overhaul white space for the goal to be tenable, given Boeing’s current services revenue of $18.4 billion. It contributes to supplier mistrust and distracts from the core mission of developing, producing and supporting great aircraft.

Boeing should still pursue services growth, but in a measured manner and in areas where it creates genuine customer value—including parts distribution, training, digital services, military sustainment and modifications. Otherwise, it is destined to make major mistakes—including bad acquisitions or launching unprofitable services—in the pursuit of a quixotic goal.

(5) Continue to restructure the board of directors. Most of the current board members approved decisions that led to Boeing’s decline and pursuit of financial engineering in lieu of long-term competitiveness. The 737 MAX crisis demonstrates that the board was heavy on political influence and light on technical expertise.

Boeing has begun to address some of these shortcomings with the appointment of three new directors since 2019. It would do well to continue the housecleaning to create a credible counterbalance to the CEO and the wisdom to guide it back to jetliner parity.

This five-part strategy will likely receive blowback from Wall Street. But that is precisely the point. For far too long, Boeing took its eye off the ball to chase share-price inflation. Dave Calhoun has a golden opportunity to reboot and revitalize Boeing in his remaining 21 months and create a legacy as one of its most consequential leaders.

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Kevin Michaels
Contributing columnist Kevin Michaels is managing director of AeroDynamic Advisory in Ann Arbor, Michigan.

 

Sounds like quality issues with the 787 built in SC are cropping up.

https://www.wsj.com/articles/production-problems-prompt-broad-faa-review-of-boeing-dreamliner-lapses-11599498118?mod=hp_lead_pos1

https://www.cnn.com/2020/08/28/business/boeing-787-dreamliner-problem/index.html

Boeing needs to slow the **** down. Too many quality issues because they are moving too fast and not focusing on their product.

-F

 

All Eyes Are On Boeing After Report That 787 Will Move From Everett
Sean Broderick September 30, 2020
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Credit: Sean Broderick / AWST
The aviation industry and thousands of workers in Washington State and South Carolina are primed to hear from Boeing about the future of 787 production following a report that the company has decided to consolidate the work at its North Charleston, South Carolina facility.

The Wall Street Journal reported late on Sept. 29 that Boeing is set to announce that 787 production will stop in Everett, north of Seattle, leaving South Carolina as the widebody jetliner’s only final assembly facility. Boeing announced in July that it would study the issue as part of larger streamlining efforts in light of lower demand for new aircraft linked to the COVID-19 pandemic.

Boeing said Sept. 30 that it has no additional comment beyond an August statement acknowledging the study is taking place and is examining multiple scenarios, including a single site.

“We are engaging with our stakeholders, including the unions, as we conduct this study,” the statement said. “We will take into account a number of factors and keep an eye on future requirements as we think through the long-term health of our production system.”

SPEEA, the union that represents thousands of Boeing workers, said on Twitter Sept. 30 that it has not heard from the company about a final decision.

“We’re waiting for clarification from Boeing as to whether this [story] is true, and if so, how many people will be impacted and on what schedule,” the union said.

While production is split between Everett and North Charleston, Boeing assembles the largest family variant—the 787-10—exclusively in South Carolina because of the length of the mid-body fuselage section, which is also fabricated there and cannot be economically transported across the country. The 787-10 accounts for about 30% of the 787 backlog, or 146 of the 516 aircraft on order, Aviation Week Intelligence Network Fleet Data shows.

This supply chain issue is one of several factors that seem to favor South Carolina in a single-site scenario.

Boeing maintained 787 production at 14 per month before demand dictated a slowdown. The medium-term ramifications of the pandemic have prompted the manufacturer to trim planned production to a total of six per month starting in 2022—less than what each 787 facility was producing at their peaks.

It is not clear what would happen to the Everett line if all 787 production moved to South Carolina. It could be shuttered, or simply paused in anticipation of a ramp-up in demand that would once again make two sites feasible. It is not clear how high monthly production can go at the South Carolina site in its current configuration.

U.S. Rep. Rick Larsen, who represents the district that houses much of Boeing’s Seattle-area operation including the Everett plant, responded to the Wall Street Journal report by calling Boeing’s apparent decision “shortsighted and misplaced.”

“As the economy comes back and air travel returns, I will fight to bring 787 production back to Everett,” Larsen added.

 

SPEEA is the union representing the engineering staff at Boeing. Reason enough to move all 787, engineering included to SC. Maybe then those 'represented' would vote to de-certify this POS organization.

 

Just to clarify that its only the engineers in Washington that are in SPEEA, tens of thousands of engineers in California, Philly, St. Louis, Huntsville, Charleston, and all the other sites aren't in SPEEA. The SPEEA contract with Boeing is forcing them to layoff lots of very good engineers while crappy engineers with more years of service are retained.

 

This brings back painful memories. I went to work at Boeing in 1950 as a mechanic on the B-50 mod program and the B-52 in Plant Number Two, next to the art deco administration building in Seattle. From there I went to the Renton plant as an illustrator working the KC-135 and 707 in the old 1941 "'saw-tooth" main assembly plant and adjacent ad buildings. Then in 1960, as a new- hire engineering training instructor ,I worked in the new 727 complex east of the old building. Then it was back to Seattle in the Development Center teaching Pert/Cost to employees and contractors for the SST. Then it was to the new Everett facility to work on the 747, 767, & 777 as an instructor and eventually as a technical designer in PD. I retired in 2002 and since then Plant Two and adjacent buildings have been torn down. All of the 727 Renton complex has been torn down and that included a wide spread of engineering buildings, assy buildings, mock up shop, and final assy. Now, it's tough to believe that the decline in the 747, 767, and the 777 production will essentially empty the largest building in the world in Everett when the 787 line is moved to South Carolina. Seventy years and current bad management has taken its toll.

 

Back in 1999 or 2000 while I was overseeing a BBJ at Goodrich (ex-Tramco) at Everett, there was SPEEA turmoil. One of the Goodrich managers described how when he would talk with some these well educated folks they were sounding like old style Teamsters.

 

Bob/Jeff- I was Boeing Huntington Beach, and as I have written before, we couldn’t understand just when commercial aircraft had Air Bus up against the ropes and were taken orders away from them, SPEEA decided to strike a long with the workers on the floor. My research found that one of the political factions in Seattle took credit for organizing the Boeing engineers.

 

Ultimately SPEEA got its comeuppance - Boeing has officially announced that all 787 production will be consolidated in South Carolina. But, will they get the message or just whine about how unfair it is?

It raises a question on what Boeing might do for production sites with other new programs.

 

The folks I know in SPEEA are all pretty unhappy with the union right now. Alot of good people got let go, and alot of terrible people kept their jobs. I rather doubt it will lead to any change though. I suspect this will play out just like alot of other old American manufacturing businesses (like American auto and steel) where the company starts a slow spiral of decline and moving production and engineering away from Seattle.

 

Standard operating procedure

 

WTH is wrong? I know the media never gets it right, but still. Has Boeing forgotten how to make planes?

https://www.foxbusiness.com/industrials/boeing-widens-787-dreamliner-inspections-after-finding-more-assembly-line-defects

 

Pretty much, but they're really good at bean counting from Chicago!

 

Boeing's fundamental problem is hiring good people and retaining them, and not hiring crappy people, and not getting rid of them if they do. Boeing was never great at the hiring process but it really went to crap after some of the lawsuits. They stopped doing in person interviews, and now only conduct a single short phone interview. The interviewers are required to ask a predefined set of questions which frequently aren't very meaningful. This makes it very difficult to hire top tier talent and is only getting worse as they focus more on hiring 'diverse' talent. Once someone does get hired if they are not competent Boeing has no way of getting rid of them. Layoffs are very rare and when they do occur they frequently will focus on years of service, rather than skill. They certainly never fire someone just for being incompetent.

They also do very little to reward top talent as well. The difference in raises between being the top and the bottom performers is very little. Boeing just announced that this year they are giving no raises, instead giving the promise of a stock award in 3 years. However this award is purely based on the employees level, with zero regard to merit. This drives the top talent away while retaining the leeches.

That is all ignoring the unions that go to extreme efforts to prevent poor employees from being let go, and also ensures that all raises are based on years of service rather than merit.

This has been pervasive throughout the company from engineering to finance and is a self propagating problem. The only way for it to get better will be for some of the executives to realize that changes need to be made to the hiring, promotion, performance review and layoff processes.

 

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https://www.seattletimes.com/business/boeing-aerospace/boeing-suffered-a-massive-11-9-billion-loss-in-2020-the-largest-in-its-history/

 

I have mentioned this before. When I worked there we all were to have personal accountability and that was from the top down to the most basic mechanic. The company was respected world wide for its integrity and the excellence of its product. The customer was treated with respect and HONESTY in everything. Glitches were promptly addressed and corrected. When I was traveling for the company in the 60's the word "Boeing" opened doors and we got special attention. The airplane -on -ground , AOG crew, performed miracles in getting damaged airplanes back in service. To sum it up, a manager in Final Assembly named Jim Blue was responsible for getting the first 747 out the door and he had an extortion printed in large letters on the wall of his "War Room" that exemplified the attitude of the "Incredibles" then. YOU'RE GONNA BE BRIGHT. YOU'RE GONNA BE RIGHT. OR YOU'RE GONNA BE GONE.
He became a VP eventually.

 

It sounds like Boeing in the 2020s is like Gm in the 70's.
Formerly great companies that represented america fallen due to poor management and unions.

If Arbus which is a company run in socialst europe can do it well so can boeing.

As for engineers being smart. yes they're smart at engineering, like doctors many think they're smart at everyhting. Usualy they're not and suffer from excess hubirs. They can still be excellent engineers and crap at being smart unions.

American unions have a habbit of killing the host company. Throw in MBA managers and its disasters.

By anlogy How many ticks can a cow support before it witehrs and dies.

 

CORRECTION. Jim didn't post an extortion ! He posted an exhortation. Late night word glitch.