Boeing strike ?
JF Mezei
A few days ago, there was an interesting press release from one of the
unions:
http://biz.yahoo.com/bw/080830/20080830005020.html?.v=1
The union contends that the 787 is still having supply problems and that
Boeing needs to bring work back in-house to solve it. (aka: hire union
workers).
And the 787 delays have now caused its first casualty (cancelled order)
from Azerbajan Airlines.
Is this strike threath just rethoric ? Or is there a serious possibility
of a strike ?
Have airlines delayed deliveries to a point where Boeing could afford a
short production shutdown ? I could see 737 having spare production
slots, but isn't the 777 delivery schedule pretty solid with few
airlines wanting to delay 777 orders ?
(in terms of the 767 and 747, are those down to a point where production
shutdown wouldn't really matter anymore ?)
In the case of the 787, once test flights begin, would a strike still
prevent test flights ?
.
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A Guy Called Tyketto
Hash: SHA1
JF Mezei <jfmezei...@vaxination.ca> wrote:
> In the news is now a threath of a strike at Boeing.
No real threat, but more close to fact.
http://www.king5.com/topstories/stories/NW_082908BUB_boeing_final_offer_TP.24af3c6b.html
They are out and out calling for it.
> And the 787 delays have now caused its first casualty (cancelled order)
> from Azerbajan Airlines.
Reported here about a month ago.. however, there was the
cancelled order from Primaris a long while ago.
> Is this strike threath just rethoric ? Or is there a serious possibility
> of a strike ?
>
> Have airlines delayed deliveries to a point where Boeing could afford a
> short production shutdown ? I could see 737 having spare production
> slots, but isn't the 777 delivery schedule pretty solid with few
> airlines wanting to delay 777 orders ?
In terms of the B787, delayed deliveries won't have anything to
do with it. The question for the rest is how many of their deliveries
have been deferred, let alone cancelled? B737 through B777F?
> (in terms of the 767 and 747, are those down to a point where production
> shutdown wouldn't really matter anymore ?)
I would think so.. Outside the Tanker War, what's left on the
B767 schedule? I know there are still some deliveries outstanding for
the B744, but isn't the B767 nearing end of production?
Actually, with the B747, they already opted to delay it, so
there wouldn't be any real delay concerning the B747-8, so if B744
production would seamlessly roll into that.
> In the case of the 787, once test flights begin, would a strike still
> prevent test flights ?
If the one they had at BFI was just for show and nothing else
in it, if they are missing parts, no test flight is going to begin. A
strike will hurt any test flight, let alone any subsequential flight.
Bottom line here is that if any strike happens at Boeing, it will
affect the B787, and more cancellations would be coming down the pipe.
BL.
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Brad Littlejohn | Email: tyk...@sbcglobal.net
Unix Systems Administrator, | tyk...@ozemail.com.au
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JF Mezei
> Bottom line here is that if any strike happens at Boeing, it will
> affect the B787, and more cancellations would be coming down the pipe.
With the 350 still vapourware compared to the 787, I have to wonder how
many airlines would get better deliveries on a 350 vs their established
(but moving) slots for the 787.
Cancellations might come from lesser airlines who haven't yet grown to
be large enough to warrant 787s. They'd use the delays as an excuse and
easy way out of orders they shouldn't have placed in the first place. (I
suspect Azerbajan Airlines would be such a case).
But I suspect the vast majority of orders for the 787 are from airlines
who are desperate to get a more fuel efficient aircraft to replace their
aging 767s and those sales would be pretty solid, even if demands for
compensation might grow.
And since sales have pretty much dried up, there aren't that many new
sales that will go to Airbus because of a Boeing strike. Besides, new
sales would get deliveries far enough into the future that this strike
wouldn't really matter.
The USD may have regained some strength, but at 1.44 it is still way
higher than the 1.20 that Airbus had originally planned for. It may no
longer be a crisis for Airbus, but it still doesn't make Airbus ultra
competitive.
I have to wonder how many 737 slots in the next few months are assigned
to USA airlines. I suspect that USA airlines would be more than happy to
delay deliveries at this point in time and this would greatly minimisze
the costs to Boeing should there be a strike.
For the 777 however, I think that almost all airlines waiting for 777s
want them delivered ASAP to replace older planes (as opposed to growth).
.
JF Mezei
complete, but assembly has stopped. Estimated daily cost to Boeing is
$100 million.
Last strike lasted 25 days if I remember correctly. I take it this
strike won't be allowed to last much longer ?
From what I have read, this is just the IAM strike, but other unions are
also eying strikes. Any feelings on whether the IAM strike might be
followed by strikes from other unions ?
JF Mezei
777s will be delivered late. Two were scheduled to be delivered towards
the end of 2008 and one in early 2009.
AC's first 787 won't come until 2012 (and that was before the strike).
Now, this is what puzzles me:
##
Earlier this year, as oil prices headed toward a record above $147 a
barrel, Brewer said Air Canada might retire wide-body Airbus A330-300
sooner than planned, and use replacement jets to reduce fuel costs
before the 787s start entering the fleet
##
What "replacement jets" are more fuel efficient than a 330 in that size
class ?
Or is this just some leasing issue which favours returning the 330 early
, but AC and Boeing decide to spin the 330 as being fuel inefficient ?
I can understand AC having put priority on returning the 4 engined
A340s. But are the 330s really considered fuel guzzlers compared to a
DC10/MD11/767?
Or is Air Canada trying to get Boeing to lend some 777s and pay for the
fuel difference until its 787s are to be delivered ?
JF Mezei
Boeing today released some quarterly numbers (ending in September).
Numbers are low, of course, but only a part of the quarter was affected
by the strike. Next quarter ending in december might be far worse unless
strike is resolved earlier.
Boeing says it is financial capable of widthsnding a long strike.
At one point, won't penalties for the later 777 and 737s start to climp
to some major amounts ?
(I think the 787 penalties won't be so bad because the 787 was already
late and already required airlines take on paliative measures to keep
older aircraft and seek compensation).
Miles Bader
> Anyone have any insight on the Boeing strike ?
Nope, but I'd certainly interested to see a good overview that isn't
overly biased for one side or the other.
[I've seen a lot of online comments from boeing workers (typically in
response to various newspaper stories about the strike) that make them
look like complete douchebags, but on the other hand, it also looks like
management was being kind of slimey too...]
-Miles
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A Guy Called Tyketto
Hash: SHA1
JF Mezei <jfmezei...@vaxination.ca> wrote:
> Anyone have any insight on the Boeing strike ?
>
> Boeing today released some quarterly numbers (ending in September).
> Numbers are low, of course, but only a part of the quarter was affected
> by the strike. Next quarter ending in december might be far worse unless
> strike is resolved earlier.
>
> Boeing says it is financial capable of widthsnding a long strike.
>
> At one point, won't penalties for the later 777 and 737s start to climp
> to some major amounts ?
>
> (I think the 787 penalties won't be so bad because the 787 was already
> late and already required airlines take on paliative measures to keep
> older aircraft and seek compensation).
The strike is definitely starting to have an impact. 787 is a
given. But now that schedule is starting to slip from the delays it
already has:
What is going to hurt is that since a lot of the parts are
being outsourced, those suppliers aren't getting the parts to Boeing on
time, as they promised and are contracted to. That puts Boeing past the
45 day clock Boeing has for missing deliveries on the military side of
things, and now they have to pay the penalties for that.
Secondly is the 737s. AAL still has that outstanding order for
B738s that has to be filled. Normally, that wouldn't be a problem,
except that AAL is retiring their Mad Dogs faster than they are being
replaced with the B738s. Either AAL is going to have to keep a fair
number of them in service, or get recouped the money from the delayed
deliveries from Boeing.
Third, back to the B787. The longer the delivery dates slide,
the more viable the A350 becomes to airlines who can afford it/fit it
into their business model. As successful as this project has been,
Boeing does not want to risk losing customers of this plane to Airbus.
BL.
- --
Brad Littlejohn | Email: tyk...@sbcglobal.net
Unix Systems Administrator, | tyk...@ozemail.com.au
Web + NewsMaster, BOFH.. Smeghead! :) | http://www.wizard.com/~tyketto
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JF Mezei
> The strike is definitely starting to have an impact. 787 is a
> given. But now that schedule is starting to slip from the delays it
> already has:
>
> http://tinyurl.com/68ppgt
I would be curious to see whether Boeing was working with the suppliers
during this period to get them to improve the completion rate of their
parts so that Boeing could reduce its time consuming travel work once
these incomplete parts arrive.
I am still puzzled as to why a supplier, given sufficient time (like
they have now) wouldn't be able to fully assemble/outfit a fuselage part
so that it is delivered 100% complete to Boeing.
Boeing has given many statements to the fact that these parts arrive
incomplete, but has never explained WHY they arrive incomplete.
In other words, shouldn't Boeing be using this down-time to fix up its
suppliers so that when work resumes, the suppliers will have
significantly improved their products so that Boeing would then be able
to assemble planes faster and thus help catch up on the delay ?
As I recall, Boeing had not expected full production rate before 2012
because of all the travel work. If it reduced travel work, wouldn't it
then be able to ramp up production at an earlier date ?
BTW, one of the arguments used by the striking workers is that they do
not want Boeing to outsource this way, and that the 787 fiasco wouldn't
have happened if Boeing has kept work in house where it has very
experienced and capable unionised workers.
> Secondly is the 737s. AAL still has that outstanding order for
> B738s that has to be filled. Normally, that wouldn't be a problem,
> except that AAL is retiring their Mad Dogs faster than they are being
> replaced with the B738s.
My guess is that so far, AA has retired the MDs to match capacity cuts.
My guess is that the strike will end just in time to start to supply AA
with new 737s to allow it to actually replace MDs with 737s. (and
remember that they are not likely to replace MDs with 737 1 for 1 since
737s have greater capacity).
> Third, back to the B787. The longer the delivery dates slide,
> the more viable the A350 becomes to airlines who can afford it/fit it
> into their business model.
In theory yes. But in practice, I highly doubt it. The 350 is still very
much vapourware. The 787 has had power up and is awaiting first flight.
The good news for the 350 is that with the US dollar back up, Airbus has
far less motivation to outsource the 350 to various USD based places,
and if it keeps production in-house, it is less likely to suffer
production problems like Boeing has.
Also, and more importantly, I think that the 767 replacement wave is
over now. And I don't think we'll see that many new orders for 787/350.
The new delays may help the 350, but I don't see Air Canada or American
switching their orders from 787 to 350s. Apart from United, there aren't
many large airlines who haven't yet committed to either the 350 or 787.
To get airlines to cancel 787 orders and go with Airbus, it would take
some extraordinary event like a 787 crashing during flight testing
requiring Boeing to go back to drawing board and change structural
elements etc. And I would get Boeing's stock would also crash at that
point. But this isn't going to happen. I am pretty confident that first
flight will only happen once Boeing is very confident the prototype 787
will be safe.
.
JF Mezei
SEATTLE, Oct. 27 /PRNewswire-FirstCall/ -- Boeing and the International
Association of Machinists and Aerospace Workers today reached a
tentative agreement on a new four-year contract covering 27,000
employees in Washington, Oregon and Kansas. Union leadership is
recommending that employees vote to ratify the contract.
The company retained the flexibility necessary to manage its business,
while making changes to the contract language to address the union's
issues on job security, pay and benefits. The offer provides general
wage increases every year and increases pension benefits. In addition,
Boeing is proposing no changes to the cost share employees currently pay
for a selection of outstanding health care plans.
"This is an outstanding offer that rewards employees for their
contributions to our success while preserving our ability to compete,"
said Scott Carson, president and CEO of Boeing Commercial Airplanes. "I
thank both negotiating teams and the federal mediator for their hard
work and commitment in reaching this agreement. We recognize the
hardship a strike creates for everyone -- our customers, suppliers,
employees, community and our company -- and we look forward to having
our entire team back."
By mutual agreement, details of the agreement will be released first by
the union. If employees vote to approve the offer, it will end the
strike by approximately 27,000 employees in Washington, Oregon and Kansas.