Its Always Been About The People Who Build Boeing

Boeing's internal demographic statistics show a vulnerability during the next ten years where thousands upon thousand will be leaving the company through Retirement. The baby boomers will be "dropping the mic" and leaving the company. Boeing just announced it will be laying off 4,000 plus workers through attrition. The HeraldNet reports about 7,000 to 9000 could go sooner rather than later. It also reports about 7500 Professional Engineering Employees in Aerospace SPEEA workers are over 50 years of age which brings up a well-known consideration, "Succession Planning". 

Every company, organization or public governance prepares an annual plan for its workforce. Boeing has had many years for this day for the HeraldNet's reporting. Boeing has a know-how vulnerability during the next ten years. Perhaps announcing the 4,000 layoffs last week signaled a succession planning correction. Boeing knew it was losing thousands of workers due to retirement, even though it was something it had planned for a long time. It now will announce those retirements masked through a workforce reduction statement which is Stock Market speak "everything is Okay we are a responsible corporation". They are pruning the hedge when in fact too many will leave too soon, and Boeing will have to hire too many too fast in the near term while using a 4,000 workforce reduction announcement through attrition when it really obscures the real problem of an aging workforce.

Succession planning is nothing to be feared as Boeing will inflow its workforce from many outside sources, especially those who can't match Boeing's pay or career opportunity potential. It is a (Puget) sound bet, University and Trade industry applicants can supply the partially trained workforce, before the (in training) workforce requires its premium working knowledge as a Boeing Engineer or Mechanic.

After all, not everyone is retiring in the next 10 years from Boeing. It has a strong workforce under the age of 45. This is the heart of Boeing that should never be ripped out. They are the standard bearers for Boeing's future which should be the real succession planning talking point. How is Boeing's aging workforce component from age from 25 to age 50? It represents about 80% of the workforce for what Boeing is doing as an airframe maker. The plan Boeing is currently showing is a workforce trimming, controlling what it can control looking forward with its future plans. 

787 1st Quarter Numbers (Updated)

Boeing, during March regained some production pacing for the 787 program with 13 deliveries. This moved the over-all 787 delivered at 393 units for its worldwide fleet. The 787 footprint eclipses the Airbus 16 units for A350's delivered to date. Backlog for Boeing's 787-# slips underneath the A350-# backlog of 761 during the first quarter 2016 as Boeing has reduced the 787 backlog to a standing 746, 787's yet to be built.

Chart 1.

The ninety day moving average had a tepid quarter producing only at a rate of 10 units a month which falls below guidance of 10.667 units a month. However, Boeing has positioned itself for a 12 a month pacing the remainder of the years and should deliver about 35 787's during second quarter 2016.

Chart 2.

Chart 3.

Boeing 787-9's are progressing towards a top position during the next three year as it now has 98 787-9's delivered as shown in Chart 4.

Chart 4.

Production inventory is slightly down over its former 50 + units in process, as it now stands at only 45 units of all types in the works-in-process mode (Chart 5).

Chart 5.

Five Hundred Days Later Airbus Struggles

It's been about five hundred days since the first A350-900 was delivered with Qatar Airlines. The Airbus record shows only 16, A350-900 delivered. During Boeing's first five hundred days it delivered about fifty 787-8's. This of course does not include Boeing's hiatus with battery fire and then shut down. A fair comparison for the two giant framers should go past another hundred days after had Boeing resumed post fire deliveries. This will come in another blog on another day.

Fig 1.

Airbus data does not illustrate a time period "break-out" for every 100 days, where Boeing data is accessible and does so. However, a straight line Airbus approach assumes about 5 units every 100 days until the last period recorded only shows one delivered A350-900. For the sake of illustration, during Airbus' first four hundred and seventy-two production and delivery day period it remains that it only delivered 16, A350-900's. While in a similar span of time, Boeing delivered fifty 787-8's.

It is also important to note, Boeing has a more complex assembly of technology applied to the 787. Airbus gave a technological forbearance and went with the current level of technology proven industry wide. Boeing took higher risks and still produced 50 787's during its first 500 days. Little press is given for the stark contrast between the two production giants.

Upcoming is the segment of Boeing 787 groundings. Where zero 787's were delivered during the 500-600 day time frame. However, Boeing regained its production prowess once the grounding ended and it regained its delivery pace. A complete comparison should include a 700 day delivery set absorbing the grounding and any Airbus improvements or stumbles within its delivery schedule. Even though Airbus is dependent on Zodiac seats for a timely delivery, Airbus is treating this delay as if it were like a Boeing grounding of its delivery schedule. Both air framers have suffered delays and mishap. All things being equal this becomes a measure of resolve over obstacles. Airbus falls on its own omission, "we are being so careful", when in fact they cannot resolve production setbacks.        

Below is an unabashed chart from Wikipedia showing the A350 delivery progress. Even though its un-official, since it does not come from Airbus, it is an excellent thumbnail sketch with all Airbus excuses, included for how Boeing and Airbus both delivered its product during each other's first 500 days in production. Boeing wasn't free of mishap during its first 500 days, therefore this side by side comparison in time suggest how each manufacturer was able to overcome initial start-up woes and Boeing's taller mountain climbed beat the Airbus hill by a wide margin.

Fig 2.

Norwegian Air Will Need To Up Order 787's

Norwegian Air has 787's on the books but not fifty in play for its Gatwick operations. Moving some 787's from other European Norwegian bases will not account for it ever expanding fleet of 787's. The Gatwick nod for Norwegian Air coming into its airport is a done deal. Now Norwegian will need 50 787's for filling its slots. Therefore, more Boeing 787 orders for 2016.

Norwegian commits to Gatwick expansion with Dreamliner fleet

"Norwegian – currently Gatwick’s third largest airline – has announced ambitious plans to locate 50 Boeing 787 Dreamliners to serve global long haul destinations at an expanded Gatwick.

Chicken Little Put on F-35 Oversite

Sputnik and Mina have taken to the oversight of everything problematic concerning the F-35. Examples of this type of journalism is twofold, one is  soliciting clicks for sensational rebukes of the F-35, the other comes from the river denial for anything US made is somehow inferior to Russian made. Sputnik reports about a Chinese hacker stealing F-35 secrets is a Chinese national hero.

Sputnik International: "Su Bin pled guilty to conspiring with others to break into the networks of Boeing and other American defense contractors in a federal court in Los Angeles, California. The hacking took place between October 2008 and March 2014, according to prosecutors." 

Hacking is a sketchy outcome. Even with the F-35 struggling with its ALIS system fixes clear to next year, the hackers have long since left the "terminal" mic drop (Bam). The F-35 is no longer your big brother's F-35 it has become more like your little brothers F-35. "He is still looking for the batteries not included" The Chinese could have stolen developmental and conceptual engineering data, but does not have concurrent data, which brings forward the F-35 lethality.

The Chinese version of stealth may incorporate design features of the F-35 in a Chinese looking F-35 knock-off. However, the things that make the F-35 scary is not its looks nor its Block I capabilities, but what follows-on in the mad science of the JSF. In 2015 many enhancements were added to the F-35. By 2014 "the Chinese" were caught with the F-35 hacks while it had not reached its full capability. Many proposals were still on the table in 2014. When hacking began in 2008 the F-35 had not found its soul or making the grade it so had desired. Hack away, hack away and hack away all, the F-35 was "the bomb". What was stolen isn't applicable with today's F-35. China go make your...

Chinese J-20 Stealth VTOL

  

What China has learned is a conceptual purpose from the F-35, which has currently evolved beyond the relevant range of its own J-20 capability. The Chinese engineers have probably achieved a collective appreciation of how far they have to go, and by the time they get there the F-35 will have to go further forward causing some military angst. China needs hackers not in jail, but remaining on the front lines of intellectual theft. Getting caught does not make you a hero it makes you caught and in jail. Access denied! Concurrency confuses the Chinese as well as Lockheed.

Next Round Of 787 Orders Are Simmering Until...

The 787 orders have reached a bottom lull as if it were an inverted bubble about to burst. Several noted slips of the tongue suggest more 787 orders could be announced. One customer has already spoke of more 787 orders in the makings, Norwegian Air and TUI have mentioned they need more wide bodies. China is in need of further expansion from its leading Airlines. Hainan has already filled in with 787-9 orders not noted. The Boeing 787 backlog is rapidly shrinking making a Boeing purchase more likely as it goes for producing twelve 787 a month. The "tea leaves" suggest a market ready to absorb more 787 orders during 2016. So what are the ordering stoppers and shoppers?

Ordering Stoppers:

·      Fuel Prices staying low indefinitely

·      National economy and lower currency valuations (ex: China Market)

·      Outstanding commitments with competitor manufacturer

Ordering Shoppers

·      Profitable 2016 (China/Hainan)

·      An in place working fleet expansion built on the 787 Model.

·      Threat of rising fuel prices

·      Economic soundness (Qantas)

·      Market opportunity remains open (Norwegian Air)

·      Fleet expansion (Air India) 

·      2nd tier airlines (waiting for its ship to come in) ordering has begun.

The above bullet points are the obvious items affecting both buying or not buying the 787 in 2016. Further study could go deeper into causal reasons for both situations determining the 2016 order book for the 787.

When fuel price reaches a low plateau it will trigger the pent up energy for ordering the 787. No longer can airlines wait it out using older less efficient airframes on the low fuel price tide. A constant fuel price norm will force airlines to eventually use up the used inventory of less efficient aircraft where they will be forced to buy the newer more efficient aircraft. 

Airbus has already charted this condition and is taking the opportunity with its A330-900 offering, hoping it snips at the heels of the 787 market. Airbus already sees a "flat fuel price market/fleet renewal condition" as it offers the A330NEO as its answer. If the fuel price climbs steeply, then the 787 will have its highest demand quotient.

The market is in transition from the 2015 dynamics for ordering wide bodied aircraft. The "other factor", such as reduced production backlog, hence available production slots, are ready for the market. The internal profitability factors and fleet opportunity, all contribute towards more 787 orders. The A330NEO is an example of low fuel price opportunity, and the 787 is an example of higher fuel price opportunity, and all other market conditions point towards buying the 787 first and consider other manufacturer types second. 

Market forces will return with having a 787 choice over the A350 member of aircraft. In light of constant low fuel prices there are too many compelling reasons for buying the 787 offsetting the price of fuel at bottom.

Boeing Being Bean, "A Spent Force"

From the "Johnny English" movie fame comes a term from Mr. Bean "I'm a spent force", from his arrogant humility coming out from super-secret agent talk addressing his beautiful counterpart at the door. Is Boeing (being) "a Bean spent force"? They (Boeing) have deadlines for its tanker program with only a year to deliver 18 KC-46 Tankers. The tanker program just started flying its test beds with two more yet to fly for this purpose. It has unanswered solutions from tests fleet discoveries before installing remedies on the first production flow. 

Boeing has just started first assembly of the 787-10 in Charleston, SC. Boeing has built and flown the first Max 737-800 test aircraft. It’s also nearing completion of the Everett wing building for the 777X program. How would a "Mr. Bean" handle all these daunting, make or break challenges? Go to the Orient? It remains a Yes and Yes answer to those questions. Having oriental sales and production capability would lift Boeing's wide spread programs moving forward. With a Boeing, Being, "Bean" approach, somehow Boeing’s great aviation convergence will meet by 2018. Boeing has a plan which contains the number eight prolifically throughout its insanely paced catch-up over its rival Airbus. 2018, 787 and Max 8.

In the sport of hockey there are line changes to put the freshest player on the ice gaining a way for superiority over the opposition. A goal is all that is required from any line change.  Boeing has flipped its leadership through a line change at a crucial point for all its programs during the last few months. One VP to Chicago one VP transferred in the Seattle rink. A new CEO here and a new VP there is the line change. However, the problems remain for Boeing. The KC-46 program is at a crucial crossroads for any hope of early profitability. If "being" a little late, it loses hundreds of millions for the Bean counters. There are many risks and unforeseen risks yet to be resolved after tests have begun. There are production woes of no space and no time to build the KC-46 on time.

The Boeing's big wing plant opens this summer at which time, that building starts contributing to the 777X program bottom line. It is a big cash out depository moving into the capital valuation category. Return on the building asset is years away. Who would buy a wing plant if it were for sale anyways? Who would even attempt to buy the World's Largest Building somewhere in the NW rainforests for that matter? Boeing is stuck in Everett and the new line of execs have entered the game taking over the hand that is dealt them. 

Boeing Being Bean In The Orient

737 Max will reach first delivery as projected. The 787-10 will once again prove the 787-9 is not a one off experience. The 777X is coming months late for covering any of its own production Gap from the 300er to the 9X, but when it comes, it will change the market. 

The KC-46 project will reach completion a little late costing Boeing more millions (it's the military stupid) but Boeing big pay day comes later where the military says the 179 tankers are a down payment for its overall tanker fleet renewal. In fact the Military will need another 200 tankers for complete renewal over the next ten years. By then, Boeing will have the corner on the Tanker Market, and that is what they now will spend money towards perfecting.

All in all, Boeing Being Bean is a sound strategy, it has a new line of men and women inserted in the game with fresh legs.

F-35 Repairs Before IOC is Declared

• Joint Program Office (JPO) and Lockheed programs synced 
• Declaration Initial Operational Capability (IOC) scheduled for the August 1 to December 31, The AKA, The IOC Window 
• Work on the latest version of the F-35’s logistics system, the Autonomic Logistics Information System (ALIS) version 2.0.2, could delay IOC by 45 to 60 days, 
• Block 3i programing is reached, which the Air Force requires for IOC. 
• Mission data files (MDF) implementation and testing of Block data for operational theatres where the F-35 is deployed
• P & W engine software syncing with Air Force ALIS
• Retrofitting F-35A for 9 G operations, 3 of 12 aircraft retrofit completed for the IOC flying tests where 12 are needed by August 1, 2016.

My Uncle, The P-38 Lightning and The SR-71

Every Family is proud of its member’s accomplishment and valor. The stories remain a hidden resume of nerves, steel and titanium. This is an incomplete story because I don't know all of it by any means, since my Uncle only talked in brief cryptic tones about his accomplishment. If he were alive today he would have a strong opinion about the F-35. Titanium was developed on his watch with his years with Lockheed and the SR-71 program. He started with it after the war in the late 1950's (1964 officially) and finished his career at the SR-71's retirement in 1998. 


Kelly Johnson's the Skunk Works ringleader was the author of the P-38 and the instigator of the SR-71. A distinct connection to Paul Mellinger's career where he wasn't far behind Kelly's next big deal.

Kelly Johnson's P-38 Lightning Circa 1937

My uncle first flew the P-38 Lightning at the onset of World War II against Germany. He also served in the Navy in 1940-41 and asked for a transfer to the Army Air Corps before the Pearl Harbor attack occurred. After my uncle moved to the Army late 1941 before the infamous date of December 7, 1941. His radio man technical skill and aviation enthusiasm made him a sure bet for the Army Air Corps, and then World War II happened and England's wilting front needed aviators.

   My Uncle Paul Mellinger far left at Beale AFB during his Lockheed assignment.

Paul Mellinger could be pictured here in this flight of Thunder Bolts

Lockheed Photo Of Paul Mellinger

His mission just got started after four years combat pilot and closing as an Army flight instructor in Florida until 1945. Lockheed needed skilled pilots and technical people for building the SR-71 at the Skunk Works garage much light the P-38 Lightning emerged from in 1937. Only 20 operational SR-71 were ever built and his job was to keep it flying during its service years until 1998. Much like the F-35 II Lightning both the P-38 and SR-71 had the spirit of can do under impossible odds of making an exceptional difference in times of war. The P-38 has to change its propeller spin to fly without crashing during an aborted take-off and the SR-71 did speed boat runs on Lake Washington testing hull designs.

The "stories" I got from both aircraft gave me a significant appreciation for overcoming daunting obstacles encountered when making them the most successful aircraft they became. The people who made them made the difference by a long margin. Changes and corrections came from slide rulers and common sense solutions. Today there are computers and more computers who will make the F-35 take both the P-38's and SR-71's DNA forward. The DNA comes from hundreds of thousands of people who contribute to the F-35. When mounting cannons on the F-35 for CAS functions look at the P-38 Lightning's formidable nose with four machine guns and a 20 millimeter cannon. It evaporated advisories in the Pacific with one burst. 

During WWII a rare story recounted where the P-38 came down on a military ammunition train, several burst later up went the munitions under the P-38, blowing my uncle sky high during the pass. A badly damage P-38 leaking oil made it back to England miraculously. The shock and awe of the P-38 gave my uncle a pass home where he trained others for the fight from Florida. He received the Distinguished Flying Cross for sitting in on the fray and masterfully flew the Lightning. My expectations for the Lightning II comes from that same DNA found in WWII from all those pilots who served with courage and honor from the P-38 seat.

Lightning II has much to account for when comparing future heroic encounters but it is built by the right stuff and will learn to change its propeller spin from the people who are now making it fly like the F-35 advisory that is envisioned.

Epic and True Story About the 787

Hook-up your TV to your computer and stream this story it's worth the viewing.

All my favorite aviation experts are included in this documentary. Dominic Gates, Ray Connor and Mike Carriker just to name a few. How the 787 prevails over its competition is from its people.