Odds and Ends: Boeing’s presence in Seattle; 747-8 future; Japan awaits 787 NTSB hearings; Airport delays
Boeing’s presence in Seattle: Bill Virgin, a respected local journalist and observer of aerospace and manufacturing, wrote this column for the Tacoma News-Tribune looking at Boeing’s future presence in the Seattle area.
The points Virgin raise are valid, and in total have been discussed for years here. We raised some of these points as far back as April 2009 in a speech to a local economic development group.
Parochially, of course, we want to see Boeing stay here. Putting on our business hat, we can make a solid argument for Boeing’s diversification. We see Charleston becoming to Everett what Hamburg is to Toulouse: a major, major manufacturing center and aerospace cluster.
We are firmly convinced that when the day comes Boeing designs an all-new airplane to replace the 737, South Carolina will be its assembly home and Renton’s facility will close, to be given over to mixed use development along the lines of what’s called Renton Landing. Boeing’s “move to the lake” has been years in the planning and years in the making. We don’t believe it is over.
What about Everett? We see the future of Everett solid for at least a generation and probably a lot longer, at least until the 787 production begins to wind down. Local politicians fear Boeing will assemble the forthcoming 777X somewhere else. We don’t think so. The 777 tooling is here, the skilled workforce is here and it wouldn’t make sense to build a derivative elsewhere, just as it didn’t make sense to build the 737 MAX anywhere but Renton. Furthermore, we firmly believe the 777X will kill off the nearly morbid 747-8I. This will free up space to build the 777X here.
747-8 Future: The Puget Sound Business Journal last week published a long story about the inter-relationship between the 777X and the 747-8I, an its impact on the struggling program. On the same day the story was published (Friday), Boeing announced a production rate cut in the program from 2/mo to 1.75/mo. We had expected a deeper cut. One consultant we spoke with on Friday suggests Boeing will do what it can to keep the 747-8 alive pending recapitalization of the 747 at the USAF–in other words for Air Force One and the Doomsday aircraft. We’ve been saying the former for quite a while but had not thought about the latter. But there are only four aircraft. Still, the prestige of having the 747 as Air Force One is worth a lot.
The PSBJ article is here: PSBJ 747 041913
Japan Awaits Hearings: Japanese regulators are waiting for the Boeing 787/Japan Air Lines hearings by the National Transportation Safety Board this week before deciding whether to approve a return-to-service by the aircraft, according to this news report.
Airport Delays: You can track airport delays resulting from controller layoffs here.
Odds and Ends: Cybersecurity and aviation; lithium-ion batteries; WA worries about SC; Porter Airlines
Cybersecurity threat to aviation: Addison Schonland at AirInsight has been working on a project related to cybersecurity and the threat to aviation. He’s posted this article that raises serious issues.
Lithium-Ion Batteries: On the eve of the NTSB two-day forum on lithium-ion batteries, Reuters has a think-piece about these batteries in general: uses in cars and other products, for example. It’s been a 10-year research project by battery designers. Quite an interesting article.
WA worries about SC: The Seattle Times writes that Washington State officials are worried about the latest expansion by Boeing in South Carolina.
In advance of Porter CSeries order: A lot of Tweeting from an aerospace writer in Canada:
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:
Update, Dec. 21: A story on this topic:
Charleston Post-Courier: a much longer, in-depth piece than its original report linked below.
Boeing has agreed to buy a lot more land in Charleston (SC) to expand its plant there over time.
Illustrations via Charleston Post-Courier.
We believe Boeing is preparing to eventually locate new airplane programs in Charleston rather than Washington State. This would be the successor to the 737 MAX, potentially the 777X and we would not be at all surprised to see the 787-10 assembled in Charleston.
The contentious SPEEA negotiations aren’t going to help matters. We also believe Washington’s strict environmental laws are a factor, which seem on a track to get stricter with the move to clean up Puget Sound to save the fish.
Our estimated timeline is over the next 10-20 years (sooner if the 787-10 is placed in Charleston).
This is entirely our assessment–we can’t say we know anything about this. But the old adage is that if it looks like a duck and walks like a duck, then it’s a duck. And this sure quacks to us.
A350 Loans: The German government is withholding repayable loans (aka launch aid) for the Airbus A350 in another one of its regular snits over work share. Airbus ought to forget these loans and either self-fund or go to the commercial markets. The German government scuppered the merger with BAE Systems. Forgetting government loans would give Airbus more freedom to do what it wants with less government interference. It would also get the US off its back.
Speaking of Corporate Welfare: Read this article about Boeing, others and Oklahoma.
CSeries: AirInsight has a 13 minute podcast with the head of the CSeries program, talking about the assembly of Flight Test Vehicle (FTV) 1 and the program’s status.
SPEEA Update: The engineers union at Boeing seems to be gearing up for a strike, according to this article.
Speaking of Unions: The IAM is back at Boeing’s Charleston plant with a union drive.