Boeing CEO Jim McNerney is cited in the Puget Sound Business Journal on labor unions, China and other stuff from his appearance at an aerospace summit.
In the article, McNerney tries to take a moderate stance on unions. But just this week Boeing announced it is moving SPEEA and other union jobs out of Puget Sound, here and here. The moves resulted in a blast from Seattle Times columnist Jon Talton here, and our response here.
Production is booming in Seattle’s Puget Sound, but it’s clear to us that Boeing is engaged in a long-term strategy to build up Charleston as a major, second production plant–not just a 787 production line. We see Charleston-as-to-Seattle as Hamburg-is-to-Toulouse some day. We don’t see Everett shutting down (at least not in our lifetime) because there is too much there. We think Renton is more at risk, once there is a New Small Airplane finally designed to replace the 737–but this is well into the next decade.
The question over where the 777X will be be built is, to us, a little more vexing. Logic says build it here, given the similarities between the baseline 777 and the derivative 777X. This is no different in principal than the 737NG and the 737 MAX–it would have been silly to build it elsewhere.
But McNerney’s comments about labor in the Business Journal notwithstanding, the anti-union sentiment at Boeing Corporate is obvious for all to see.
The future of the 747-8 is in jeopardy. Boeing said as much in its 2012 10K:
Cathay cancels 777F order: Cathay Pacific Airways canceled an order for eight Boeing 777Fs. CX will instead acquire three 747-8Fs, trading in four 747-400Fs to Boeing. The cargo market remains soft and Boeing is struggling to sell 747-8Fs. One person close to the program says Boeing is faced with building several white tails this year and a recent aerial photo of Paine Field at Everett did show at least two 747-8Fs with no airline markings on the flight line.
We’re concerned about the continuing soft cargo market–it’s usually a leading indicator about the direction of the passenger market. Boeing forecasts recovery in 2014 but we’re not so sure.
Speaking of 777s, Air Lease Corp picked up an order for 10 777-300ERs.
787 update: Aviation Week has an updated report on the Boeing plans to begin flight tests for the 787. There seems to be a consensus building that the earliest the aircraft might return to revenue service is late April or in May–the latter a day we forecast earlier.
Odds and Ends: Bernstein: no 777X before 2020; Alaska, Frontier and Competition; A380 repair costs; Boeing labor challenges
No 777X before 2020: Bernstein Research, in a note issued today, says it doesn’t see delivery of the Boeing 777X before 2020. Also: on a recently completed trip to Asia, Bernstein wrote this:
There’s clearly huge demand for the 787. There was a lot of excitement about it, but Boeing was heavily promoting the 747-8, for which the company is certainly seeking more orders, with few orders for the passenger version and the air freight market being very weak. To date, the majority of orders for that airplane have been freighter orders. This is a relatively small program, but we think it is the most difficult within Boeing’s portfolio right now. …[Y]ou’re probably not going to see the growth that Boeing had once hoped for there. That’s certainly how we have been making assumptions, as well.
Alaska, Frontier and Competition: The Centre for Asia Pacific Aviation has this analysis about Alaska and Frontier airlines, which aside from being a little geographically-challenged, is one of CAPA’s usual well-researched and thought-0ut looks at airlines. (In fairness, CAPA often strays from the Asia-Pacific, but we couldn’t resist the quip.) CAPA now actually calls itself Centre for Aviation.
A380 Repair Costs: Aviation Week has this article detailing the costs to Emirates Airlines for repairs to the Airbus A380 wing bracket cracks.
Boeing Labor Challenges: Boeing seems headed for war again with labor unions. Here’s an article from The Everett Herald with several links within it; one from MyNorthwest.com about SPEEA; and one from The Seattle Times about SPEEA.
Cargolux and Qatar: We posted some news about Cargolux and Qatar yesterday; The Seattle Times has this piece about the threat to the Boeing 747-8F from Cargolux’s problems.
Odds and Ends: Cargolux, Qatar to split; P-8A and MAX; More on Sequestration; Dodging that depth charge
Cargolux, Qatar Airways to split: Several news stories report that Qatar Airways is going to dump its 35% stake in Cargolux. The stories indicate a disagreement in the direction of Cargolux. This story is the most detailed, although it’s now a month old and out-of-date.
The day before the news broke last week, we were told that Qatar wanted to set up a Cargolux hub in Doha and decline more deliveries of Boeing 747-8Fs to Cargolux in favor of using Qatar Airways’ Boeing 777Fs. This tracks similarly with the month-old story linked above. Cargolux has eight 748Fs on order.
There is a general softness in global air cargo traffic that is causing some cargo airlines to consider deferring 748Fs as well, complicating Cargolux’s viability.
We were also told there are sharp personality differences between the Qatar and Cargolux board members that aggravated relations between the two companies.
P-8A and MAX: Bloomberg has this story that looks at an angle about the Boeing 737 MAX that hasn’t been discussed before: Boeing will stick with the NG-based P-8A Poseidon and not shift to the MAX.
Sequestration: We had a recent think piece on how sequestration might not be a bad thing in the long run because it would force the Pentagon to truly re-think its global defense strategy. This piece in Defense News, an authoritative trade publication, picks up a similar theme.
Dodging that depth charge: EADS wanted to merge with BAE Systems. BAE is the prime contractor of the UK’s nuclear submarine fleet. Read this story about the HMS Astute. EADS may well have dodged that bullet–er, depth charge.
The CEO of Republic Airways Holdings seems to be vying to be America’s version of U-Turn Al, Akbar Al-Baker, the CEO of Qatar Airways.
Bedford appears to be engaged in a campaign to raise questions about the Bombardier CSeries, for which he has orders and options for 80 CS300s, much the same way U-Turn Al alternatively praises then complains about the Airbus A350, Boeing 747-8F (ordered by Cargolux, in which Qatar owns a third) and the Boeing 787. U-Turn Al has also alternative praised, condemned then praised the Airbus A320neo, Bombardier CSeries and the Pratt & Whitney GTF.
Keeping up with U-Turn Al’s about-faces has been a dizzying prospect.
Bedford praised the CSeries when ordering it but has become increasingly skeptical of the program once he ordered the A319neo (with CFM LEAP engines) in what was a financial bailout of his ailing company being dragged down by Frontier Airlines. The Airbus order raised questions whether Bedford would cancel the CSeries since the A319neo competes with the CS300. Bedford initially said the order would stand. More recently, he appears to be doing everything to cast a shadow over the program.