Albaugh Visits CharlestonNewly minted President and CEO of Boeing Commercial Airplanes, Jim Albaugh, made his first visit to Boeing Charleston and Global Aeronautica today as news spreads of the recently filed permits for the second 787 assembly line.
Though there appears to be no direct connection to Albaugh's visit to Charleston and the selection of a second line, that decision - expected by year's end - will define his early months at the helm of BCA.
The Charleston Post Courier reports that the details of the permits make way for a 720,000 sq. ft. facility at the southern end of Charleston Air Force base on the Boeing Campus. Scott Hamilton notes that the Everett factory is 4.3 million sq. ft. by comparison. A quick calculation shows that 720,000 sq. ft. is roughly one-sixth of the Everett factory, which is split into six main bays for final assembly of the 747, 767, 777 and 787. The 720,000 sq. ft. figure makes the new facility's footprint almost identical to that of the current 787 line.
Sources indicate that that there has been increased surveying activity at the Boeing Charleston site with heavy equipment arriving on site, such as an excavator, small bulldozer and a brush cutter.
Boeing emphasizes that no decision has been made on the location of the second line, however, the permits indicate that brush clearing would begin in November if the green-light is given.
In addition, the State of Washington has publicly made its own case for why it should be the site of the second 787 line. Scott Hamilton explores the important difference between Washington State not providing Boeing any incentive for the second line vs. Boeing not actually asking for anything from Washington.
Z18 Moves -9 Again
This page reported last week that the first 787-9 would be airplane 109 instead of 88. The 109 figure was correct, however only to the Z17 schedule, not the latest Z18 revision, which now puts the first 787-9 at LN139. Apologies for any confusion.
The Changing Tone of the Backlog
In recent weeks, the tone of the now 840 aircraft 787 backlog has shifted. When early customers discussed cancellations, the reasons given were attributable to the economic downturn. QANTAS, LCAL, S7, SkyPeace, RBS (unconfirmed) all cited the economy as the key driver for the cancellations. Earlier this week, TUI Travel, which recently merged with First Choice, reduced its combined 787 order by 10, while expanding purchase rights for an addition 13 aircraft.
However, as the global recession begins to bottom, 787 customers have begun to cite the program delays as a driver in future fleet planning. Oman Air now says its order for 10 hinges on the outcome of first flight, while Kenya Airways is openly discussing a potential A330 order for interim capacity and LOT Polish Airlines is considering placing an Airbus order as well. In addition, Vietnam Airlines is also weighing its options on its 787 order.
First flight could help to settle much of this uneasiness, however the number of airlines seeking either interim lift or discussing potential order cancellations has grown considerably. These four airlines hold firm orders for a total of 39 787s, according to Boeing's website.
Dreamliner Eleven
Boeing is set to take delivery of the final structural sections (Forward and Center) for the 11th 787 this weekend and early next week as the production pace beings to quicken. Early next week will also see the arrival of the wings for Dreamliner 12 as the line pulses forward. As the final body join for the 11th 787 gets underway later next week, the first production 787 (ZA100) will likely move out of final assembly to the paint hangar for closeout and aqueous wash of the wing tanks before receiving the official ANA colors. Access to the side of body and center tanks will still be available to install the wing fix later on.
Dreamliner Eight - Photo Credit Brendan Sobie
on September 30, 2009 8:35 PM | Reply
Isnt ZA001 sitting in the paint hangar getting the side-of-body fix? Which paint hangar will ZA100 move to?
on September 30, 2009 9:00 PM | Reply
Jon,
Any word on discussions with the Labor Unions for a no strike contract. There is talk of arbitration as well as discussion about no takebacks.
It appears that Boeing is making every step towards either a solid bluff or an actual location...even moving in brush cutters to clear the land and show intention.
What is the timing of this matter? Is there an outside date when this must be resolved ?
on September 30, 2009 9:06 PM | Reply
What's the status of side-of-body fixes on the new pieces arriving at the production line and in production? Have Boeing already sent out parts to be used so the ones arriving from now are correct?
on September 30, 2009 11:27 PM | Reply
The whole thing between Boeing and the union seems so ridiculous -- both are acting like little children. Could they perhaps try to cooperate instead of treating everything like a fight? Could they each yield a little to the other? I'm sure there were reasons for the adversarial relationship 100 years ago -- strong unions came into existance for a reason -- but geez, drop the stupidity already.
on October 1, 2009 4:11 AM | Reply
My opinion is that it is a normal reaction to defer or cancel orders during this severe downturn. IATA's latest stats say that while traffic volume is not declining as bad as it did several months ago, costs are still high and yields are down. As a consequence airline profitability remains distant ( http://iata.org/pressroom/pr/2009-09-29-01.htm ).
On the other hand, lease rates are falling and today there is an obvious overcapacity in the market. The plunging lease rates of relatively old models (A330, 767) provide a breathing space to airlines, which are struggling to survive in the short term.
So yes, there will be more 787 cancellations and deferrals. But that's absolutely normal.
On the other hand, American Airlines still has to firm their intent.
http://verovenia.wordpress.com/2009/09/23/event-horizon/
on October 1, 2009 5:25 AM | Reply
If this second line happens, does that mean Boeing will catch up the three year back log in say, two years.
And does that also mean that the -9 could be on time?
It would seem to me that an additional line would put out double what was origionally planned with just one line.
Or do I have the cat by the tail?
on October 1, 2009 5:38 AM | Reply
Giom, Boeing recently admitted that the Everett 787 line will only have a maximum capacity of 7/month. This is well short of the 10/month planned and is even further short of the previously assumed maximum capacity.
Boeing had previously said that by the 100th airplane it would take 6 days to go through final assembly, occupying each station for 2 days, which would allow for 10/month. Beyond that they thought they could halve the time for final assembly.
The most recent schedule update pushed the increase in rate to 10/month backwards another year to the end of 2013. The entry into service of the -9 was also further delayed. So, rather than allowing them to catch up it seems it is more to stop them slipping even further behind than they otherwise would..
on October 1, 2009 7:26 AM | Reply
The subject of the Boeing/IAM partnership since 1935 was never a major issue before- why now?
Is it because the McDonnell-Douglas crew at Boeing wants to manipulate the actual IAM strike history facts to obscure the total management cost of this project?
If the no-strike issue was there last year at negotiations why didn't it surface in any language until after the present contract was ratified??
To demand a no-strike provision in a contract makes it useless as a document-a guarantee of abuse and corruption creating an environment that led to the IAM representation in 1935. The year may be 2009, but human behavior does not change.
A veiled and sly way of passing it off to the ignorant Media and bystanders that 6% of the cost of their individual aircraft budget was too high of a price compared to their failed "partner" supply chain, manufacture, and "warranty" rework by the "partners" still on site??
Check the history of the contracts before drawing a incomplete conclusion that the union is the problem.
http://www.iam751.org/contract08pages/update082608.htm
As for S.C.- the 787 project was always meant to be built elsewhere- it was apparent to all present in July 2007. The application to assemble was not a surprise to anyone withing the Everett facility.
For anyone in a executive position at McDonnell-Douglas/Boeing to point at the capable mufti-generational aircraft workers in Everett as the cause of their woes is deception or an outright lie.
Until ZA001 flies for 100+ hours without major problems, all this planning& preparation is a waste of funds.
on October 1, 2009 9:29 AM | Reply
Jon, could you clarify what happened with the 787 wiring article yesterday, which seems to have been pulled off shortly after it appeared?
on October 1, 2009 10:24 AM | Reply
Jerry - It looks like we're heading toward a decision in the next 30-60 days based on the permitting requirements which state that the brush clearing would begin in late November.
Paul - I'm looking into it, I'm not sure why the article would be down. Very strange. Apologies for that.
Giom - The second line (to start) won't be for catch up as much as it will be for getting to 10 per month. Boeing says Everett can only do 7 per month right now, but I would be we'd see a 5/5 split between Line 1 and Line 2. Also, if 7 is the max rate, we may see as many as 14 per month, but that really depends on the ability of the supply chain.
-Jon
on October 1, 2009 10:45 AM | Reply
Paul - It should be fixed now, sorry about that. It was an editorial system SNAFU. We may need to rewire it. :-)
on October 1, 2009 12:18 PM | Reply
What does Boeing have to gain by "bluffing" that they're going to SC, when all the players in WA have agreed that nothing else (tax incentives, union concessions etc etc) will be put on the table?
on October 1, 2009 12:21 PM | Reply
There is not a single engine on the 787 final assembly line right now.
on October 1, 2009 12:31 PM | Reply
Jon,
Would Labor's decision to go along with a "No Strike" contract alter the decision as to where the 2nd Line would go?
on October 2, 2009 8:02 AM | Reply
Pointman -
You are absolutely right that Boeing's completely incompetent management have caused all of the 787 problems to date. Your frustration, anger and distrust with respect to these awful executives is fully understandable. Just thinking about what they have done, the opportunities they have squandered, and the disrespect of the airline industry which they have engendered makes me heart sick.
However, please do not let those legitimate feelings blind you and IAM to the clear and present danger that the result of this malfeasance is that the 787 program is right now at the very precipice of disaster, either in the form of a major acceleration in the decline of the program's huge backlog, or, worst case, a collapse of the whole enterprise. In either case, millions of jobs will be lost.
Evidence of these dangers is everwhere, in the form of airlines' cancelling or modifying 787 orders because of the delays, as Jon says in his piece, and/or buying A330s for "interim lift." Just yesterday, JetStar announced that its remaining 330s on order will be the new, increased MTOW version, which according to JetStar has a payload/range similar to the 787-8. See www.flightglobal.com. It is only a matter of time, if the delays persist, until Airbus offers linked contracts for the sale of the 330 and the 350-800; ie buy/lease 330s now as interim lift, keep them it as long as you want, then trade them in on 358s when they are available. If this happens, the 787's backlog will melt away.
To prevent these disasters, Boeing must very quickly give its customers credible assurances that they can reach max production buy 2012, as presently planned, and that once reached, that production will not be disrupted. In other words assurances that their customers will get their planes at some time they can live with.
wAmong other things, that means some kind of no-strike deal with IAM not just in Seattle but in Charleston if it comes to that. I am no labor lawyer, but there must be fair ways to do this. For example, the IAM and Boeing could agree that at the end of any contract, IAM members would get a low, interim, automatic salary/benefits increase until a new contract is made. No doubt there are many other ways of doing this, IF BOTH SIDES ARE OPEN IT.
THE KEY POINT that BOTH Boeing and IAM must face is that they are in the 787 mess TOGETHER, and will sink TOGETHER unless they can convince the airlines that they will work together to get 787s continuously out the door in large numbers from 2012 and beyond. The past was then, these disasters are now. It is time to do whatever needs to be done for Boeing and IAM to come together to achieve this goal, or risk losing millions of jobs.
on October 2, 2009 11:00 AM | Reply
Jon,
Last week American Airlines raised some refinancing capital which included monies for the GE engines for their "intended" 787 purchase. They have not firmed up that 100 plane order yet put monies down on the engines.
Is it possible that the AA order will materialize one of these days when enough cancellations take place to compensate for any other deferrals or cancellations.
It may need first flight and delivery confirmation...which is what every carrier is hoping for.
on October 2, 2009 3:38 PM | Reply
Mr. Dye, you have obviously mastered the art of hyperbole. But the point that you make about being in the same 787 boat is certainly valid. As you intimated, the past is history and is only useful in "lessons learned" exercises. The issue from here on out is getting the no strike agreement. Richard Branson gave both the union and the company the warning that strike delays were unacceptable and he will go elsewhere. That was but the first slavo from the airline industry.
A no strike agreement should not be the problem some union members seem to think that it is. Most states have no strike laws for their essential union personnel,i.e.police, firemen. They apply any settlements retroactive to the end date of the last contract. Get with it everyone. The 787 is a game changing aircraft concept. The company and IAM need to work together to survive or everyone will be pounding the streets for jobs.
on October 3, 2009 6:46 AM | Reply
Airplanejim - Actually my final piece was substantially toned down from my first draft. Talk about frustration, disgust, anger etc. I had forgotten about Branson's ultimatum. Hopefully other airlines have done the same in private.
I know Boeing have said from the beginning that the 787 will be a "game changer," and I understand the basis they originally claimed for that assertion (lighter weight, lower fuel costs, substantially lower maintenance costs because fewer C and D inspections, and terrific ppayload/range to allow the development of point to point routes world wide). But have these claims turned out to be true? The plane is overweight, as I understand it, so at least the range claims may not be true. Also, I know Richard Aboulafia has publicly speculated that for all its "new tech" stuff it may turn out operatiionally to be only mediocre. Anyone have any info on this?
Finally, may I suggest to Jon that he now make the no-strike issue a focus of his high-grade investigative journalism.
on October 4, 2009 8:05 AM | Reply
Thank you for your input, Christopher.
I am a 3rd generation Boeing worker- and I worked 2.5 years to get the 787 project on the forward track.
Any suggestions were squashed by managers as "Outdated Legacy thinking" and the "New Breed/Partner" concept will work at all cost.
The IAM is totally behind the 787 project succeeding-
Every worker in 2008 during the negotiation was hoping for the same 2005 contract with a slight bump for cost of living and we would have ratified it then.
The 2008 strike was initiated by McDonnell-Douglas/Boeing "lining out" major agreements in the 2005 contract-ones that made no sense except to force neutral workers to side with the strike option.
The strike got back the "line outs" and essentially a modified 2005 contract was ratified in 2008.
(There are rumors of a 40+ day delay in 777 deliveries because of a backlog of galleys that was caught up a few days before an agreement was reached.)
I believe that manufacturing evolution will replace the mismanaged parts streams, logistics, and negative morale practices into a more recognizable success profile of the Legacy lines before our 100th anniversary.
May I remind every union hater that there are 4 lines of Legacy IAM built aircraft that are constantly in various stages of completion in the Puget Sound region- some on a few day rate.
To judge the IAM on the words of a few McDonnell-Douglas schooled executives is a big mistake and a underestimation of the true agenda of Chicago HQ.
Branson's comments are irrelevant because of the nature of unions in his UK and Europe where the whole transportation system shuts down there.
I would like my son to work here someday, but I truly believe the near future of commercial aviation building will not be by a Boeing owned manufacturing force in Puget Sound- I believe the "For Sale" sign is already up in private McD conversation.
Just the opinion of an invested Boeing worker/stock holder..
on October 4, 2009 8:06 AM | Reply
Thank you for your input, Christopher.
I am a 3rd generation Boeing worker- and I worked 2.5 years to get the 787 project on the forward track.
Any suggestions were squashed by managers as "Outdated Legacy thinking" and the "New Breed/Partner" concept will work at all cost.
The IAM is totally behind the 787 project succeeding-
Every worker in 2008 during the negotiation was hoping for the same 2005 contract with a slight bump for cost of living and we would have ratified it then.
The 2008 strike was initiated by McDonnell-Douglas/Boeing "lining out" major agreements in the 2005 contract-ones that made no sense except to force neutral workers to side with the strike option.
The strike got back the "line outs" and essentially a modified 2005 contract was ratified in 2008.
(There are rumors of a 40+ day delay in 777 deliveries because of a backlog of galleys that was caught up a few days before an agreement was reached.)
I believe that manufacturing evolution will replace the mismanaged parts streams, logistics, and negative morale practices into a more recognizable success profile of the Legacy lines before our 100th anniversary.
May I remind every union hater that there are 4 lines of Legacy IAM built aircraft that are constantly in various stages of completion in the Puget Sound region- some on a few day rate.
To judge the IAM on the words of a few McDonnell-Douglas schooled executives is a big mistake and a underestimation of the true agenda of Chicago HQ.
Branson's comments are irrelevant because of the nature of unions in his UK and Europe where the whole transportation system shuts down there.
I would like my son to work here someday, but I truly believe the near future of commercial aviation building will not be by a Boeing owned manufacturing force in Puget Sound- I believe the "For Sale" sign is already up in private McD conversation.
Just the opinion of an invested Boeing worker/stock holder..
on October 4, 2009 8:08 AM | Reply
Thank you for your input, Christopher.
I am a 3rd generation Boeing worker- and I worked 2.5 years to get the 787 project on the forward track.
Any suggestions were squashed by managers as "Outdated Legacy thinking" and the "New Breed/Partner" concept will work at all cost.
The IAM is totally behind the 787 project succeeding-
Every worker in 2008 during the negotiation was hoping for the same 2005 contract with a slight bump for cost of living and we would have ratified it then.
The 2008 strike was initiated by McDonnell-Douglas/Boeing "lining out" major agreements in the 2005 contract-ones that made no sense except to force neutral workers to side with the strike option.
The strike got back the "line outs" and essentially a modified 2005 contract was ratified in 2008.
(There are rumors of a 40+ day delay in 777 deliveries because of a backlog of galleys that was caught up a few days before an agreement was reached.)
I believe that manufacturing evolution will replace the mismanaged parts streams, logistics, and negative morale practices into a more recognizable success profile of the Legacy lines before our 100th anniversary.
May I remind every union hater that there are 4 lines of Legacy IAM built aircraft that are constantly in various stages of completion in the Puget Sound region- some on a few day rate.
To judge the IAM on the words of a few McDonnell-Douglas schooled executives is a big mistake and a underestimation of the true agenda of Chicago HQ.
Branson's comments are irrelevant because of the nature of unions in his UK and Europe where the whole transportation system shuts down there.
I would like my son to work here someday, but I truly believe the near future of commercial aviation building will not be by a Boeing owned manufacturing force in Puget Sound- I believe the "For Sale" sign is already up in private McD conversation.
Just the opinion of an invested Boeing stock holder..
Keep your fingers crossed that I'm wrong!