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:
- Production stability through most of 2016 without the pain and agony of protracted negotiations and all the uncertainty associated with this process;
- No-strike through most of 2016;
- The NLRB case goes away., by all indications. How this specifically relates to Charleston and the Surge Line remains to be seen;
- A contented workforce; and
- Stability for ramping up production of all the 7-Series, most particularly the 737.
The union gets:
- The 737 MAX;
- More work on the KC-46A tanker if Boeing Wichita closes;
- An economic package with no apparent “take-aways;” and
- No stress over contract negotiations or a strike.
- No strike;
- No interruption of deliveries; and
- Certainty over deliveries.
- Pretty much the same thing as customers.
Washington State gets:
- The 737 MAX and all the jobs and supply chain benefits there from.
- Everybody else who salivated over the prospect of winning the 737 MAX, but more or less you don’t miss what you don’t have; and
- Airbus: it can ‘t play on the uncertainty of a Boeing strike and delivery reliability.
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.
American Airlines’ bankruptcy filing may at long last prompt a bid by US Airways to make a bid for the carrier.
Doug Parker, CEO of US Airways, has a long history of bidding for Chapter 11 carriers. He was successful when, as America West Airlines, he bid for US Airways. He was unsuccessful as US Airways in bidding for United Airlines and Delta Air Lines. He is on record as saying a bid for American made no sense without a bankruptcy by the Ft. Worth (TX)-based carrier.
We won’t be surprised in the slightest if Parker makes a bid
IAM press conference 11am PST. Live video KIROTV.com.
China’s emerging commercial aerospace industry won’t be a viable competitor to Airbus and Boeing for 20 years, predicts John Leahy, COO Customers of Airbus.
Speaking at the Credit Suisse Aerospace conference in New York, Leahy noted the challenges COMAC has with the ARJ21 regional jet; and the development of the C919 mainline aircraft, neither will commercially be an effective aircraft compared with today’s aircraft from Western companies.
Boeing’s Jim Albaugh, CEO of Commercial Airplanes, speaking separately at the same event, agreed. He also said Boeing has erected “high walls” around its technology, and will maintain its lead over China by building “tomorrow’s airplane” while China is building “today’s airplane.”
Albaugh acknowledged there is some technology transfer of today’s generation.
Boeing is considering how to make the already-lean 737 production line even more efficient with an eye toward increasing rates beyond 42 per month, the commercial airplane division CEO said today.
Jim Albaugh, speaking at the annual Credit Suisse Aerospace conference, said the demand is here for a higher rate.
“We went into this year wanting to reduce the backlog and we failed miserably,” he said, referring to record orders and commitments for the 737NG and 737 MAX.
The challenge of going higher is that the Renton 737 plant is nearing capacity. A solution may be to further increase efficiency of the facility.
“If you go back two years with the 777 program, the maximum rate we had was seven per month in the factory. With lean manufacturing and engineering, we were able to take that up to 8.3 per month with very insignificant investment. It is my hope that as we continue to lean-out the 737 program, we could be in a similar position where we can go even higher than 42 if we chose to,” Albaugh said.
“We don’t have to make a decision on going higher than 42 for a while. We’re going to go to 42 in 2013. We’ll look at the market, we’ll look at the demand…and probably in late 2012, late 2013, if we can go higher we’ll make that decision.
“The other thing that we have to do is really think about how we transition from the 737NG to the 737 MAX. Regardless as to where we are going to build the 737 MAX, you don’t want to get into a situation where we aren’t delivering narrowbodies. We have to build a bridge to the 737 MAX.”
The 42 rate is sustainable, Albaugh said. “As we look at the skyline, the demand is there. We’re basically sold out through 2015. We can sustain them.”
Where will MAX be built?
“We are looking at quite a number of things. We’re taking a long-term view of what makes sense. How complicated can we be. The business climate. The environment. The assurity of delivery. We’ll make a decision when we have the facts.”