Boeing's 2014 Strategic Must Haves and Should Be

The Strategic Audit is complete and 2014 will be a year of findings and recommendations for Boeing Airplane effort. This is a performance audit so don't expect financial errors or brilliant manipulations in the financial market reported on from 2013. It is an audit of strategic milestones and new bench marks predicting a 2014 out come and its relative position to its competitor, Airbus. So reading this report will enable a point of view on Boeing's 2014 potential achievements in order the it continues its repositioning in the market place by the end of 2014.

First is a quick review of 2013 findings:

It was found that Boeing  has a star player, The 787:

• The Battery Fires found Boeing production delayed but not out.
• The multiple glitches reported found the 787 indoors too many times.
• Norwegian Airlines requested remedial assistance from Boeing
• Japan Air Lines Slapped Boeing in the face with an Airbus A350 Order
• Air India started acting like a real airline with Boeing's many 787 problems
• 182 new 787 orders is an Indication the 787 is a sound and valued business venture.
• Boeing is resolute with its 787 out of belief rather than the other option of "do over"

The second star player is the 737 MAX and it was found:

• The 737 had an enormous year orders, about 797 orders and counting.
• Design progress is an indication Boeing has a target better than the NEO
• It was found that a sufficient number of customers agree.
• Ryan Air has its own strategic plan using the NG (175 ordered)
• Dual Flight Feathers is the new Black.
• The 737 Max is doable and on time, not fashionably late with this model.

The Final Stars are the 777-8  and 777-9

• Boeing found on paper it can beat Airbus with a wider aspiration in a metal body.
• It was found that the right launch customer is the best recommendation.
• More 777 orders are ready for 2014
• The 777 is going to be built on the "Best of Boeing" called "wings and things".
• 280 orders and commitments are on paper

2014 Recommendation:

Boeing must keep its head and not do "Crazy Ivans" in the boardroom. They have a well thought out strategy, "don't fix it if ain't broke" is your 2014 mission statement.
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Now for the 2014 peanut gallery, "2014 strategic out look".

The 787 program will see a diminishing glitch factor in the program by June 2014 it will have to implement its marketing swagger, once again, by announcing the 787 is the "New Black" for airlines seeing red during 2013 when it grounded the 787. The 787 will have nearly 200 787 in the air by end of 2014, before the A350 is delivered. The question is, will Airbus carry the fear that the A350 can't match the 787 on any level? The reliability question will be retired and the 787 will reach its true fulfillment of the most advanced and reliable aircraft ever built. The 787 is the new standard for passengers and that they will measure everything against the 787. By year's end,  more aircraft from Boeing take-off with more people flying on them, also by the end of 2014 it could be said that Part I of the Boeing 787 Marketing Strategy will be anchored into the company's big picture game plan. Another 100 787's will be booked with confidence in the aircraft, its just not a good concept with amazing promise, its a reality with a budding legacy. The A350 and A330 becomes old before everyone eyes as the 787 dominance emerges. The press has to go back to school and learn new words besides "three years late" or "glitch". Writing it over 500 hundred times doesn't make a article worthy of a pay check.

The Max is the airplane no one saw coming and will surpass expectation before it is   built. Boeing is great at doing what it does, continuous improvement cycle will make the Max better than the paper airplane it sold to its customers. Boeing tends to error on the side of conservative estimates. The Max in 2014 will show in test it will exceed the sales pitch by several percentage points. The engine and aircraft refinements will make the NEO just a customer preference with Airbus not the lead in the Market. Another technological advancement on the Max will be revealed before the end of 2014 that will excite single aisle crowd. Boeing is secretly targeting putting its best with the best, i.e. Renton with the MAX and Everett and the 777. Boeing is going to fix Charleston in 2014-15  and turn it into an "Everett" like success it needs.

The 777 in 2014 will see ground  breaking infrastructure in the NW region with a wing plant and other ancillary production points needed for the program. Its not just for the life of the 10 year union contract, it will enable Boeing to go to the next stage in manufacturing advanced aircraft for both the military and commercial aviation. Boeing has a defense industry plan and new technologies developed in the commercial, share a military application when completed. The 777 technology is a synergistic core for other applications throughout the corporation. As is the 737 has been applied to the military and 767 is is new tanker program. Therefore, placing the new 777 in the NW supports Boeing's "other" ventures such as drone technology is found in commercial applications. Especially the zero visibility landing and take-offs for commercial aircraft. The NW in the future will become the US Air Force key resource center.

In conclusion 2014 will be a reconciliation year for the 787 and a hay maker year for the 737 and an ah ha moment for the 777-8 and -9 as customers really examine the the proposal, boosting another 150 sales beyond the the first 280 sold and in the file drawer. It is concievable that the 737 will continue sales numbers in 2014 where Airbus will realize that both the A350  and NEO will be second choice aircraft after customers make comparisons on the bottom line.

Alice Springs Australia 10 Day Weather Forecast 787-9 Test

Are you an AV Geek? I am, so here is the 10 day weather forecast at Alice Springs Australia for the heat condition tests during next week. Next weekend they should run the AC and do its easy bake testing. Click on DETAILS for each days up to date information.

MonJan 6

91°

64°

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0%

 

WIND:

SE at 19 mph

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TueJan 7

92°

61°

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WIND:

SE at 18 mph

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WedJan 8

93°

64°

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WIND:

SE at 15 mph

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ThuJan 9

96°

68°

Sunny

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WIND:

ESE at 13 mph

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FriJan 10

98°

74°

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SE at 13 mph

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SatJan 11

99°

75°

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ESE at 15 mph

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SunJan 12

99°

76°

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WIND:

ESE at 15 mph

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MonJan 13

97°

76°

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WIND:

E at 16 mph

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TueJan 14

99°

76°

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E at 16 mph

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IAM Joins The Real World And Votes Yes For The 777X

The 51 to 49% vote to continue building airplanes for  Boeing, validates IAM workers love for buying  cars, having mortgages and gaining an education for its children. They woke up Saturday morning and could tell there children go ahead and pick out a prom dress and plan your senior trip.  Another IAM proposes to get married and an older IAM cashes in retirement and buys gold.  The NW Washington communities can now get back to doing what they do best, making Puget Sound greener than what can be made green by raising property taxes in 2014. "These are a few of my favorite things" shouting out from the Olympic range of mountains as Boeing caused the Union to blink, then think and by a slim 2% edge, confirm that $25 dollars an hour is better than 26 weeks of unemployment at $375 a week, is the only choice.  IAM has corporate's number and will at some point in time come back, and make the point, "we took a bullet for the team", mantra will haunt the newer Executives who will go 10 years into the future; A VP or CEO can make some serious cash before leaving in the next five years. They then will make those cheesy statements," it would be better to spend more time with the family at home and cash those bonus checks at work before a revisit comes forward in 2023 with the IAM.

Of course many things will have happened by then that will nullify the IAM. Boeing would be smart establishing an infrastructure of engineering schools and machining arts at a non union manufacturing cabal in order to blunt more Union agitation down the road. One thing Boeing could do is just fail to address labor in the long run and go fish off shore.  However, if they want to put Airbus away as a second tier manufacturer they really need to stop procrastinating with its people. In Boeing South Carolina (BSC) they run 12 hour shifts, hire raw worker unfamiliar with aviation and turn over a large workforce of burned out workers. That dog won't hunt any longer. They have to take care of its work horses. They need real leadership for its workforce, with both the labor and front office coming together in a plan. Management by memo or walking by is the way of the dinosaur when you delegate HR to hire 5,000 bodies to build 787's in South Carolina. After two years, they are worn out and can't put two 787's a month out the door correctly. The newly trained experience "walks" when exhausted after multiple 12 hour shifts. Labor force continuity begins to fails Boeing, as workers (newbies) are replacing burn outs who can do it, but not anymore.  The leadership failure in SC screams volumes and the failed strategy is exposed. BSC needed to successfully to deal with the IAM through a well executed labor plan. Do I need to say the obvious. Okay, I will. "The failure is in the leadership down to the floor." Cramming the factory with crazy shifts is a plan for failure. It has been studied and restudied, that 8-9 hours shifts are optimal for quality and production performance. Overtime or long shifts "only" work in burst of time. A twelve hour shift does not optimise the worker, but it may optimize some efficiency by having fewer shift transitions each day.

When a flubbed product comes out the door that effiency savings from fewer shift transitions are wiped out with great time and money. Thus resulting in only two aircraft a month, if lucky! A triage center is set up on the flight line. With hundreds of your best and most experienced workers scrambling around over and under airplanes that were moved outside to get them flight worthy. The talent is no longer in the building, it's out side receiving a repair project/updates as if it were somewhere in world broken down. That scenario is true and comes back on the leadership. Production management sucks in BSC. I know because I read the newspaper. Boeing needs its best leadership in this crises on the floor. It needs its best and most experienced machinist and engineers shoring up the product on the floor. The flight line needs to operate with a mop up crew with all its systems validation done out side.

Poor Workmanship must be retired in the factory. Last month they had a factory accident that caused Boeing to resuffle the whole line. It made several models out of sequence and delayed December production at a crusial time. The accident occured and significantly damaged the production aircraft.

My Questions:

• Were the best people on the floor when this happened?;
• Where were the leaders at the moment of the accident, were they outside ?
• How long had the accident shift been running, how many hours?

Answers to these questions and other similar question may reveal my point that Boeing has given the IAM ammunition. The A Team is needed in BSC.

Reposting Comment From The Guardian "The Case Of The A380"

Rarely does one come a cross a post that makes a salient point worthy of reposting. But I came across this comment on the Guardian today and felt it would be worthy of reposting about the case


Repost: by: Pat Logan  (Without his permission and worth the read, please say yes to reposting , and thank you.) 

Gaurdian Link

"I see most have rightly picked up on the lack of comparability of the two aircraft - I'd even go further and say that the A350-787 comparisons are wrong, as for most A350 variants the competition will be the B777X.

One other oddment to throw into the pot, though.

Which of the two firms got it right when deciding whether to invest in developing an "very large" aircraft?

Go back to the mid-late 1990s, and Airbus and Boeing reached opposite decisions about whether it was worth putting several billions into developing a 747 successor. Boeing opted for a relatively cheap rewinging and upgrade to produce the 747-8 and Airbus went for the 380. Boeing reckoned on a market of around 700 aircraft by 2030, Airbus reckoned 1700+. By 2006, market estimates by independent experts were in the 400-800 range.

Developing the A380 cost about €11Bn. It's at 259 orders, some 8 1/2 years after it's first flight. It's never yet hit the production rates that were forecast when the programme was launched, and by next year, it looks like Airbus will be having to build "white-tail" aircraft - i.e. built in advance of orders.

The original breakeven point (i.e. recovering development and production costs) was supposed to be 270 aircraft, but as development was delayed and the dollar:euro exchange rate fell, that rose and when anyone last made an announcement it was north of 400 units - that was in 2006.

Things have got worse since then. Sales and production have both been slower, there have been fixes needed to things like wing cracks, and production costs have risen. It's also probable that there's been much heavier discounting of aircraft than originally anticipated, as Airbus needs to fill production slots. there have been claims of discounts as high as 40% against list price.

Airbus is now only saying that the aircraft will break even on a unit basis (i.e the sales price will be higher than the production cost) in about 2015 (based on comments in 2010). Every aircraft delivered until then will have made a loss for Airbus. Note that it's only AFTER unit breakeven that any contribution is made to recover development and finance costs.

There have been 61 net orders over the last five years - a rate of 12/year. The delivery rate is about 20-25/year (and was originally supposed to be 30+)

They've been utterly quiet on when programme breakeven will happen for several years now. On a reasonable commercial guess, allowing for Airbus carrying the €11bn development cost on the books, plus delivering over 100 aircraft at a loss, plus the fact that Emirates has them by the balls and will be driving a VERY hard bargain for the aircraft they're taking, that breakeven point will have now to be well above the 400 forecast in 2006 - doing some crude numbers, and assuming the white-tails at best break even, I suspect north of 600 units.

Airbus probably needs to sell about 300 - 350 more aircraft to recover the original development costs, EVEN ASSUMING no losses on white tails, further development cost, etc. At that rate, it'd take another 25-30 years to hit breakeven. Bringing that forward either requires a sudden jump in demand or huge cuts in production cuts.

Oh, and of the aircraft currently on order, 30 are for an airline in receivership - "Kingfisher" of India.

Sooner or later, Airbus is going to have to take a huge write-down on the development cost of the A380. Which is going to mean that the French, German, UK and other governments will lose all of their launch-aid loans.

It's a hellish impressive pain - but it's looking like a commercial disaster." End Quote

Exactly my friend!

Aspire Aviation's Big Story

Aspire Aviation Big Story

Starting 2014 out with the big 777X is very an appropriate story. What I've done is to paraphrase this article with Liftndrag commentary. Please feel free to set up a second browsing tag with Aspire link above or just go there now to get its real scoop on the 777X program and projected performance targets for the 777X. Aspire has compared several notable class airplanes that 777X will do battle with during its progressions forward into the market place.

It is important to note that Boeing continues to have several rabbits in its engineering hat that will appear along the way. I would like this blog to spot those "rabbits" as they appear along the developmental road. Aspire only reports what is known at this point in time. Customers of the 777X may have additional and  achievable bench marks on the 777X given by Boeing, that readers, pundits lack for its own opinion. I fall into the class of not having a precise opinion at this time, but have gathered clues why Boeing is doing the 777X in this manner.

This Manner is:

• Composite wings and flight surfaces
• Aluminum body not composite
• Bleed By Pass power for subsystems not the 787's central core all electric technology
• Heavier than the competition
• Bigger drag coefficient because of bigger diameter engines
• Greater lift surfaces with intuitive performance
• Greater passenger capability of 400+ seats
• Widest dual engine aircraft available. Its more than the  XWB!
• It will fly better father with more people, even at a greater weight.

Aspire Aviation Chart

Aspire Observation:

"Together with the 9,300nm ultra long-haul 777-8X that is capable of hauling 17 more tonnes of cargo when deployed on the same mission as the 344-seat A350-1000 while having a 5% lower block fuel burn per seat, or flying sectors that its competitor cannot, it would be safe to assume Boeing believes the 777X will be the ultra long-haul leader in the future.

Unsurprisingly, Airbus contests these figures and points out it estimates the 777-9X will be up to 35 tonnes heavier than the A350-1000 in terms of operating weight empty (OWE) as the A350-1000 is a clean-sheet design and utilises a carbon fibre reinforced polymer (CFRP) fuselage, whereas the 777-9X is a “5th derivative” bearing an aluminium fuselage. This will make the 777-9X more than 15% less fuel efficient per seat and the -8X more than 5% less fuel efficient per seat versus the A350-1000."

Let the war of promotional rhetoric begin between these two giants. If Boeing could not demonstrate to the Gulf of Arabia States what they had up its sleeves from engineering departments across the company, then they wouldn't have ordered 259 777X, after which Boeing rapidly picked up Cathy Pacific. A quick move counter to Airbus aspirations in its order book. They didn't receive any order of that nature during Boeing's 777X launch. Airbus painfully watches the Boeing order grow on a paper airplane while the A350 reality languishes. A boatload of 777X paper airplanes is a definitive slap on Airbus' nose.  My best guess on this example is that Boeing made its case in greater clarity than normal. They showed these initial launch customers where they are keeping those cute little rabbits with a promise on how the trick is done with its heavier airplanes.  Conventional wisdom says that Airbus uses an old school slide rule where it has computed Boeing over-weight into an inefficiency when comparing its A350-10 with the Boeing 777X. Boeing wings and body building divisions have a new bag since Christmas. They build world leading wings and have done body/airflow design changes, bringing out the best with its laminar air flows knowledge over its body. The body design adjust flows at key points that maximizes its slice through the air. Thus nullifying those suspended additional tons, as a penalty that Airbus' slide rule predicts. Boeing has been doing this research for awhile and has hinted that its conclusion will go forward with an active flight service and optimized composite wing that will retire the old school curriculum with a wrecking ball applications to Airbus school walls.

Its always in the details that gets competitors like Airbus. Slippery aircraft slide through the air significantly better than Big Box behemoths like the A380 or an A350.

I took specialize driver training as a requirement for my state employment. I drove ambulances, school buses and dump trucks through chicanes, skid pads and other devious situations to test my newly acquired advance driving skills. In a school bus it is a cumbersome behemoth on a narrow course. It wasn't  a fuel efficient slippery thing of beauty, Neither is an A350. I hit the skip pad with water jets and the instructor activated emergency brakes. A 360 turn had just begun, and I had to control it. Had I had a sports bus weighing the same as a standard school bus  I would have saved fuel and would have controlled its performance no matter the conditions. Enough digressing already! Boeing has demonstrated and not reported its summary to its customers who bought the 777X. They listened to Airbus and didn't buy period!

Therefore, no matter what Airbus says at this time from its own conventional wisdom, which doesn't take into account what Boeing attempts to do for the 777X. Final weight (tonage) are pending as the 777X matures. Boeing promised a plan as they promised with the 787. Airbus said, "impossible, improbable and its not going to happen with the 787". The 787 happened and yet we now have the A350 (improbable plastic), about to get kicked by a little of the old school, and then some new school in the 777X. Airbus, once has to say again impossible, improbable, and inconceivable (From Movie: Princess Bride).

Looking Back On 2013 Talking Point

Descending Order of Importance:

• 787 Grounding from January Through March 2013
• IAM Rejection of Boeing Moves Boeing Further away from the NW
• Glitching The 787 continues
• A re surging order Book of 797/737's  and 182/787's more to come by January 1.
• The Max configuration freeze
• 787 GE's frosty engine condition
• Japan Airline Airbus A-350 Order
• Charleston Production space expansion in the works
• Dubai Airshow Orders
• Paris Air Show General Duopoly News
• 175-737NG orders for Ryan Air 
• Production Stability in The NW and improving in the SE sites.
• Customers experience immense value in spite of 787 Glitching risk

2014 at a glance:

• 2014 gets its Boeing Team ducks in a row with a new commander
• Prediction: Order Book continues upward climb and catches the NEO
• Prediction: 787- series increase order book pad by another 150 units
• 777X: Gets tangible with GE prototype and A wing Builder site near SLC
• Boeing Announce 777X production location (???) Big money says...
• The Pacific NW tries to a new plan with Government and unions "Relevancy in 2014"
• Boise, ID gets nothing, zippo, scat from Boeing along with 22 other potential sites.
• Airbus gets desperate and moves its first A350 to market.
• Complimentary flights get complimentary about the A350 even though the windows are old school.
• The 787 Glitches becomes the Ghost of Christmas past finally!
• Nancy Pelosi Comments, "you have to fly it first before you can fix it" (awkward)

Rubbing Salt In Everett's Wound Is A New ZIP Code For The 777X

Its now clear that Charleston is destined for "other " things in Boeing's new facility landscape. Several other suitors have been given the never mind  rejection notice. Even my own failure for Boise, ID created a chuckle somewhere in the halls of Chicago, IL corporate headquarters. Oh well, it was worth a shout out.  But what I had ignored is that corrosive salt to the East of Boise.  Salt Lake City, UT is about 20 years ahead of Boise in its industrialization progress. It has at many levels of industrialization and developed a Space and Aeronautical presence for rocket engine testing, airplane tails and composite making. Boeing has two hundred acres adjacent to the airport. Utah is non Union. Technology skills have inspired a can do attitude in the north to south I-15 valley.

The Seattle Times presented A Salt Lake City Chamber of Commerce piece on why Boeing should expand in Salt lake City, UT.  Boise is just a rail stop  on the way to a deep water port on the coast. So I've concocted a new scheme for Boise, ID. The connection by freeway, rail and air is not lost on Boise. A connection for moving pre assembled large parts, spread from here to there could exist and make for a rolling assemble line until final assemble at the end of the supplier flow would be a new way to spread Boeing's foot print in a small region. Boeing could build 777X wings in Boise and ship it by rail in as little as 6 hrs to SLC area for its 777X assembly. Boise could also provide a short airlift hop to SLC from both the NW and Boeing at a rolling assembly of large parts within that corridor.

Salt Lake City has some congestion as most larger cities do as well. Boise could also provide a basis for adjunct computer manufacturing for its aircraft going east and west, connecting Boeing efforts from its subcontractors who manufacture component within the 777X frame.  GE could have a foot print for its Jet propulsion lab as they have already tested Saturn B rocket engines in the area. There are so many possibilities from an intelligent and hard working workforce. As I have mentioned before, technology is what makes Boise hum and it could provide a down the road resource for SLC's already advanced manufacturing as a major metro manufacturing base.

The North West may have worn out its welcome where both Utah and Idahos could offer  Boeing a New way of doing manufacturing with strategically located     centers from  SLC to the coast with stops in between. The manufacturing and supply chain comes from the Union Pacific railroad. Large capacity air freight is found along the way at various locations for moving time sensitive assemblies. It is about 300+ air miles from Boise to Salt Lake City and about 400 air miles from Boise to the NW. The supply chain is continuous from all destination whether by road, rail or air.

Even if Salt Lake City is Boeing's choice, then Boise could be a significant player with much to offer in a non union environment with lots of land available. A concideration for this would take a solid vision by Boeing when considering a rolling assembly centers from one end of the line to the other. Parts from all directions come to Salt Lake City from capable centers such as Boise or Las Vegas that could supply the final assembly if picking Salt Lake City for the 777X.

Boeing's Magical Mystery Tour On A Yellow Submarine

Boeing like a Rock Star moves out on tour being surrounded by city managers, realestate agents and people with money, all crowding in for a signature on its own community charter paperwork. Boeing like a Rock Star keeps on smiling as if on Ted's Most Excellent Adventure. Every community organizer in the nation is yelling like a teenage girl, "Pick me, Pick Me". I too, want Boeing to come to my community, Boise, ID. No chance of that, because our conservative no union base is thinking little tiny thoughts of getting the high school band just to march down to the Capitol building via 8th street with John Philip Sousa renditions of patriotic songs. Its almost shameless how these national communities are begging, screaming or plea for a signature on the community napkin found on the ground. Please  build a Boeing plant just for the 777X within our..., even near our county parameter. "Boeing we want you even in our state, we're desperate bunch of love sick groupies who want you to put a show on/in our school district ,city, state  the North Western region.

Boeing, The Rock Star has an agent, doing the PR work. They know what they are already going to to do. The  "Yellow Submarine Tour" is Boeing making a point with the Unions. Boeing is going to build in Charleston or Texas anyways. The magical mystery tour is just high level PR  campaign that will enable Boeing to make a point by stating its many positions to many people with a fire for effect result on its main target. Today's talking points:

• Unions were worked with (over) and given an opportunity
• The Washington Politicians were worked with (fleeced) and given an ear.
• Boeing seriously wanted an inclusive nation (oh yeah) to participate on this tour.
• The screaming teenage girls (Think Tank) are driving this relocation campaign
• Boeing is a very important Industrial Rock Star, and did every town gets its swag bag?
• Boeing will sing "She loves Me Yeah , Yeah, Yeah" at the announcement party.
• "We all live in a yellow submarine" is a metaphor, you think!
• Abby Lane is not a Boeing address.
• Sargent Peppers Lonely Heart Club, was penned in Everett,Wa
• At the press conference Boeing stated, "I wanna hold your haaaand! In harmony

Now you know how this whole sordid business is being handled. Boeing is the Rock Star inebriated on its own wealth seeking an Alpha for its future X projects. This is not an anomaly with Boeing, the pimping out its industrial might for each project is the new norm. The next great Airplane will be coming to an Industrial Park near you (already decided). The type of business trekking is a new type of industrial progress. Much like a mountain adventurer who watches each step through the boulders and doesn't assume the trail is smooth. The next great airplane will have another full vetting for its location. Because billions will do that for you. The Rock Star can own 5 homes around the world. If tired of the color scheme, they just move to a newly built mansion and sell the old house with its provenance for millions of dollars to the next wanna be.

Human nature is replicated in life with the same theme at all financial levels of life. How long does a Rock Star put up with disgruntled help? Talk to Donald Trump about that. You know him as, Mr. You're Fired. Boeing has a comb over attitude for what it wants to do. Either you go with it, and make as much as you can out the association with Boeing, or get out of the way. Community organizers everywhere are excited about wealth, and Boeing. They are not getting out of the way. They are jumping right in the way of Boeing's plans. Hoping for enough bread crumbs to build new schools and libraries and for re elections.

Am I so jaded that I will speak out like this about Boeing?  No I am not, because its not about Boeing, its about our country. Boeing is in "A Guy's gotta do, what a Guys gotta do", mode, and this nation is obliging the Boeing Sweep Stakes with shameless appeals for local recognition, and a consideration from Boeing. In order for Boeing's scheme to work there must be a demand from a raft of communities (customers) who would like Boeing's services.

Where will this magical mystery tour end? It will end where it started, in Charleston, SC. Boeing can then say, they did all they could  do  for everybody, and now the best decision for the corporation is on Charleston 400+ acre property. Those billion's already invested in Charleston will not go to waste.  They are closer to its launch customer's in the Gulf region by building in Charleston, SC. The hand writing is on the sand near Myrtle Beach. Boeing knows what it will sing, even before it started singing as a group. If only the Chinese or Japan had bought 250 777X's they would have considered the left coast. Don't Forget The Boeing Motto engraved in stone in Chicago, Il.  "A Guy's Gotta Do What A Guy's Gotta Do!

PS:Those yellow submarines are in Boeing's Defense Division in the archive department.

Labor and The Economic Jauggernaut

Not being an economist for the Federal Government I don't pretend to know the answers to our national economic policies. Taking the allotted number of economy classes during my University days only made me aware that a force with natural selection moves the economy around to a point of which it exists under the conditions that are presented. The government tries to influence those conditions for optimal political gravitas thus influencing the voters to keep them empowered. The term macroeconomics and microeconomics comes up only during final exams weeks. I remember that Macroeconomics is the result of forces applied to an open and free market throughout the world of making and selling stuff. You know it as the basic supply and demand paradigm. The enters government again but in a more regional or local influence on its industry and taxpayers. This is called microeconomic for the lack of a more precise idea.

Boeing and its union have a labor proposal on the table. This proposal is a response built on economic principals and not Union hubris of getting more for less from Boeing. However, the Macroeconomics trump the union during the prior no vote on Boeing's offer last month. "Boeing could get it done elsewhere with less hassle" in a cheaper housing market. Yes, the union has raised the price of homes in the Seattle market and costs, Through Boeing's more money to hire people to build its airplanes. You know it as $$ per hour, retirement and medical cost for its employee thing, in a market that has exclusive homes available for every worker who makes as much money in a New York minute than what they do in South Carolina. The union is now proposing a second look. Not with its labor force asking price, but the value it offers Boeing as compared to building a new production center, buying property and hiring "skilled labor" at a lower cost. You know it as "with enough people, with enough experience they can do it right." Board Room Momentum", in play.

James Bond came out with a song for one of its movies "Nobody Does It Better".

Carly Simon Union Plea Song.

Micro Economics is on display with this song. High Seattle Mortgages drive this sentiment because Unions have a preferred salary benchmark found in the area. Micro Soft and others around Redmond, Bellevue, and Bellingham. Assembled a cost of living Juggernaut that propels the same players to ask for more in order to keep up with its own self-induced cost of living increases. Minimum wage is a hot topic in the macroeconomic world. If all minimum wage fast food employees receive a $15 dollar an hour level of pay, which would knock against aviation workers around the country whether union or not. So those cities who think they can do it better, well ... better be careful as homes, raise in price and the local government increases its tax base. In the Northwest the workers already have an increased Tax Base, It increases the cost of living every time they raise the Boeing benefit bar another five dollars an hour within the package. This is a never-ending cycle that both labor and Boeing are trying to dance with, without end!

A solution is needed on both parts of the party of the first and second part. Boeing, no matter where they go with faces the microeconomics just showing up in a new state or even a new country. There are moving cost, local impact cost and a changing cost of living for just showing up at a new place. The Union argues they have paid that price in its NW area with microeconomic pricing, they have the skill set, and Boeing has invested so much in real estate. That a move of the 777X is  "Board Room Momentum" (thinking associated with body parts) that will ruin a sweet deal for all parties. The union says by eliminating all those intangible costs of moving, "We", the union give you the best value for the buck and a guaranteed result. Not being a Union fan it is a powerful talking point, worthy of Boeing's consideration.

Now Boeing is in a predicament they would like off its back. No More Union!!.  The problem I see with Boeing and the Unions is a lack of defined roles in this partnership. Labor wants more of Boeing and Boeing wants more of labor.

I say, "stop the nonsense and define your roles with great clarity". The union brings to the table its exceptional workforce which can't be duplicated without a greater cost on a mature idea (777X). Boeing brings forward capital, sales, and marketing, creating, " the demand" for its product.  Management is the demand factor for the 777X, and labor is the supply factor. Boeing and labor need to choose how they will balance these microeconomic factors to optimum results. Moving is senseless if you haven't dealt with what really ails the relationship. The supply side of labor needs to make themselves available, and I think they are gaining ground in doing that today. The Demand side of Boeing's 250 777X's sales is on the table from management. It isn't worth moving only 250 777X for all the bother of moving. Think 1,000+ plus copies made with your best suppliers in the NW, the IAM.

The union needs to get over the 19th-century strike mentality when shutting down everything every time it doesn't get its way. They are in the market of offering the best labor supply you can find anywhere, and here is the price of quality! Negotiation is for the minutia, not the end-all of an agreement. The offer on the table should not be from creating overstated promises to its membership as a  justification for union dues. It should be the sales job of providing the best value to Boeing for its skilled resources for building the best airplanes in the world. This is what is needed to do that job. If Boeing cheapens out, then Boeing go fish for warm bodies elsewhere.

The membership yells out, "what about the cost of living increases?" The answer to that becomes the minimum wage economic syndrome. Raise the wage beyond value and you raise your mortgagee beyond its value. It then it becomes a 2008 housing market do over. Macroeconomics kicks in with government bailouts, ala king. Then a Manufacturer is seeking cover in China. Boeing must get real and not rip off its supply chain (Labor) in the NW. Boeing is talking to the unions this week because they got all the proposals on the table. They would have already jumped at one proposal, if it beat the NW situation by light years, and been assured of all risks of new manufacturing environment are completely retired. They (Boeing) hasn't made a muster elsewhere, unless the Boardroom acts on peer pressure momentum, Taking it to new depths found during 1929.

Is the real problem with the Boeing Demand sector:, pride, Principal and paupers, or is it gratitude for where labor has brought the execution of its great corporate plan. I don't think elsewhere would do it better. If that is what Boeing corporate really wants is elsewhere, then so be it, mediocrity it is, and an undefined Charleston it will be. The company value was built with a superior supply-side effort, and company success is made with the demand side leadership.

You can make the best item in the world, but without the appropriate leadership at both home and in the market, that great item becomes a museum piece. However, demand needs making a perfectly made product from its supply chain of labor.

The only time Labor should be dismissed only if it fails in its mission. Unreasonable demands from labor are worthy of that dismissal, and unreasonable supply from the demand part is a corporate failure to do its job.

Oh Canada, What Have You Bought? A 737 MAX Eh?

Air Canada has ordered 61 MAX's in a fleet renewal plan. It also coincides with an order placed multiple years back for 24 787's. Air Canada has A320's (Airbus) in its fleet stable that are aging and need replacement. The order announcement is a victory for Boeing on many levels.

• Air Canada had three years to study the NEO
• Air Canada has had just 18 months to study the Boeing Max proposition.
• Both came to Canada with hat in hand offering a winning price.
• Canada ordered Max as it pairs it with its 787  order just as it is about to receives its first 787.
• This marks a turning point for Boeing in the North American Airplane wars as did the Battle of The Bulge turned in Europe in late 1945. They, the opposition ran out of gas in that battle.

Boeing Statement on Air Canada 737 MAX Commitment:

SEATTLE, Dec. 11, 2013 /PRNewswire/ -- Boeing [NYSE: BA] is pleased that Air Canada announced an agreement today that includes commitments, options and rights to purchase up to 109 Boeing 737 MAXs. When finalized, the firm order for 61 737 MAX 8s and MAX 9s is expected to be worth $6.5 billion at list prices and will be posted to the Boeing Orders & Deliveries website.

Fleet

Number
of aircraft

Boeing

777-300 (77W)

14

777-200 (77L)

6

Airbus

A330-300 (333)

8

Boeing

787-8 (788)

1

Boeing

767-300 (763)

27

Airbus

A321-200 (321)

10

Airbus

A320-200 (320)

41

Airbus

A319-100 (319)

35

Embraer

190 (E90)

45

Total:187

Operated by

Number
of aircraft

Bombardier

CRJ 705 (CRA)

Jazz

16

Bombardier

CRJ 200 (CRJ)

Jazz

26

Bombardier

Q400 (DH4)

Jazz

21

Q400 (DH4)

Sky Regional

5

Embraer

175 (E75)

Sky Regional

15

Bombardier

Dash 8-300 (DH3)

Jazz

27

Bombardier

Dash 8-100 (DH1)

Jazz

36

Beechcraft

1900D (BEH)

Air Georgian

14

1900D (BEH)

EVAS Air

3

Total:163

Number
of aircraft

Boeing

767-300 (763)

2

Airbus

A319-100 (319)

3

Total:5

• New Fleet
• Historical Fleet
• Fin Numbers

http://www.aircanada.com/en/about/fleet/

The bread and butter part of its Airbus fleet works as the key component of its every day service. It has a few long range Boeing's, but by observing this chart you will see that 61 new Max's, plus the additional Air Canada purchase options on the same model, solidifies a Boeing renewal and Air Canada's fleet expansion with this order. Ninety-six Airbus are in the inventory. Many of which are to be replaced, sooner rather than later. The Large 777 and A333 is being replaced with the double niche filler, 787 according to any seating configuration that is required. There is no room in Air Canada for an Airbus order. Boeing has flipped it away from Airbus, a North American significant victory. Air Canada shows that it was sold on the Boeing concept of flying the Boeing family, giving it an edge through its various features of common systems, maintenance and pilot layout and flying feel.

This also underscores that Boeing is not only competing with the Airbus myth spinners but beating the Team Airbus with a ground offensive and breaking its spell. Before throwing Boeing under another "Bus", airlines are now carefull of the long term consequences. Some airlines use mixed orders for leverage with each airline against each other. When Boeing matriculates its master plan of all airplanes are built reaching a high level of standardization, it would be difficult to play that game again of "leveraging with mixed orders".

I still don't understand how an airline would mix its fleet when they find a superior product. Air Canada is taking the approach that Boeing has market answers at all levels. Embraer need not worry because Air Canada has the need for 140 seats and under market in mind, of which they can do nicely with all carriers in that arena. Boeing, by this order have the new 777X as an offering for Air Canada when renewing its 2, 777's in the future. The option amount  of up to 109 MAX's is an Airbus order book downer. Another 49 Max's hang out there for fleet expansion later in its growth. Congratulation to both: Boeing and Air Canada validated the market plan that steps side by side with it Family concept of aircraft.