McNerney on unions and other stuff; where will 777X be built?

Note to Readers wishing to comment: See this article and our Comment #35 and be forewarned.

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:

Odds and Ends: Independents like battery fix; 787 test flight today?; JAL and A350; PAL and 777X

Back to the 787 batteries: The Seattle Times had this story Saturday in which it talked with independent experts who like the battery fix proposed by Boeing. The Time also reported that the first of two test flights might occur today.

JAL may buy A350s: Japan Air Lines may buy 20 Airbus A350s, according to this news report. The aircraft would replace Boeing 777s, according to this report.

Hawaiian firms A321neo order: It was announced in January as an MOU and now Hawaiian Airlines has firmed up its order for 20 Airbus A321neos for use between the Islands and the US West Coast.

Philippine Air Lines may buy 777x: PAL may buy the forthcoming Boeing 777X, looking at the 400-passenger 9X version.

Boeing’s Ray Conner speaks to JP Morgan conference

Ray Conner, CEO of Boeing Commercial Airplanes, appeared today at the JP Morgan aerospace conference.

Here is a running synopsis:

Ray Conner (RC)

Joe Nadol (JN) of JP Morgan:

RC: It’s important to recognize that batteries are not used in flight. They are back-up to start the APU and for the systems. After events, put together 200 engineers. Have done 200,000 hours of analysis. Have come up with comprehensive solution and presented to FAA on Feb. 22 and last week to Japan.

• This is not just a Boeing-type of solution. We’ve worked with a number of people outside Boeing to ID causal factors and run by them and did the same with potential solutions.
• That’s what we presented to FAA.
• We’ve provided different layers of protection for fixes.
• Hope to see approval of certification plans and then move into certification testing.
• We would not go forward unless we thought we had it nailed.

It’s official: Boeing regains lead as No. 1 aircraft producer, sales king, but victory overshadowed by 787 crisis

On a day when Boeing would normally be celebrating its return as the world’s number one aircraft producer and retaking the order crown, the 787 crisis over shadow’s the Airbus 2012 Results review in which the European OEM concedes the lead for the first time in a decade.

Airbus today (European time) announced it delivered a record 588 aircraft to 89 customers in a single year, and took in 914 gross orders (833 net), achieving a 41% market share on the order contest. Boeing delivered slightly more than 600 aircraft last year and received just over 1,200 orders, driven by the 737 MAX.

Going into 2012, Airbus COO-Customers John Leahy conceded the turn-about. But he noted then that for 2011-2012 Airbus would likely retain the lead, and today he revealed that it did, reporting a two-year market share of 53%.

The A320neo retains a lop-sided market share of 62% at the end of 2012. Boeing edges Airbus in A320ceo v 737NG backlog with 51.5%. Other categories:

American to firm up 787 order, add two 777s and firm up MAX

American Airlines will firm up 42 orders for the Boeing 787, its 737 MAX order and add two 777 orders upon bankruptcy court approval, according to an SEC filing today.

American’s plans to acquire 75 787s had always been contingent on a new pilot contract–which has come through the bankruptcy process. The MAX orders, placed in July 2011, also were never firmed up due to the bankruptcy filing the next month.

Two new 777 orders were unconnected to the 787 and MAX orders.

From the SEC filing:

The Restructured Aircraft Purchase Agreements will provide for certain concessions and savings to American in connection with the acquisition by American of the 737 aircraft, the 787 aircraft and aircraft spare parts. The Restructured Aircraft Purchase Agreements will also provide for the substitution of up to 20 787-8 aircraft for 787-9 aircraft, an accelerated delivery schedule for the 787 aircraft with deliveries scheduled to commence in November 2014 and to continue in each calendar year through September 2018, and the confirmation of the purchase of the Boeing 787 aircraft, which previously had been subject to certain reconfirmation rights.

Under the Restructured Aircraft Purchase Agreements, as of January 31, 2013, American will have firm aircraft orders for 111 737 aircraft, 18 777 aircraft and 42 787 aircraft, with the option to purchase 40 737 aircraft, 13 777 aircraft and 58 787 aircraft.

MAX Aircraft Purchase Agreement. The Restructuring Agreement further provides that, upon approval by the Court, American will enter into a definitive purchase agreement (the MAX purchase agreement) pursuant to which American will acquire 100 MAX aircraft, equipped with new, more fuel efficient engines. The MAX purchase agreement will constitute the definitive purchase agreement contemplated by and will supersede the agreement entered into by American and Boeing on July 19, 2011 (the 2011 MAX order) that provided for the commitment of American to purchase such MAX aircraft (referred to in the 2011 MAX order as 737RE aircraft). The 2011 MAX order was subject to a number of contingencies, including the parties entering into a definitive purchase agreement and Boeing’s approval of the launch of the Boeing 737 re-engined aircraft program, which was approved in August 2011. Under the MAX purchase agreement, the MAX aircraft are scheduled to be delivered in each of the years 2018 through 2022. In addition, under the MAX purchase agreement, American will have the option to purchase 60 additional MAX aircraft in the years 2022-2025.