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From: Eric11/17/2011 12:13:21 PM
   of 3331
U.S. Announces Aircraft Sales to Asia

NUSA DUA, Indonesia—The White House said Thursday that U.S. companies had reached trade deals worth more than $25 billion with East Asian nations, including an agreement to sell more than 200 Boeing aircraft to Indonesia.

President Barack Obama was to help announce deals with Boeing Co. on Friday on the sidelines of a meeting with East Asian leaders here as he emphasized his efforts to boost exports in support of U.S. jobs. The Boeing deals alone are worth $21.7 billion in Indonesia and $2.4 billion in Singapore, for a total of $24.1 billion.

The agreement includes the sale to Indonesia's Lion Air of 201 Boeing 737MAX and 29 Next Generation 737ER aircraft, the White House said.

These 230 planes were listed at $21.7 billion, making this deal the largest commercial airplane agreement in Boeing's history, the White House said. The agreement also includes options for an additional 150 aircraft valued at $14 billion.

The White House also announced a Boeing sale of eight 777-300ER wide-body aircraft to Singapore Airlines Ltd., with a total list price value of $2.4 billion. And it announced that General Electric Co. is signing a contract to sell 50 CFM56 engines to Garuda of Indonesia for $1.3 billion.

In addition, the White House said that Sikorsky, a subsidiary of United Technologies Corp., has been selected by the Brunei Ministry of Defense to supply 12 Blackhawk S-70i helicopters for the Royal Brunei Armed Forces Support Helicopter Project. That agreement was valued at $325 million, with an option for a second phase that would double the project's size. Brunei and Sikorsky are expected to work to finalize the terms and conditions of the agreement.

The announcements come near the end of a week-long trip to Asia Pacific in which Mr. Obama emphasized the importance of boosting trade to the fast-growing region.

"The Asia-Pacific region–with its tremendous economic growth and its large and growing middle class–is a key market for U.S. exports," the White House said in a fact sheet about the agreements. "Those exports are generating jobs in every corner of the United States."

The White House said it would announce or "showcase" trade transactions totaling more than $25 billion, supporting an estimated 127,000 jobs.

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From: Eric12/1/2011 9:59:07 AM
   of 3331
Boeing, union seal deal for jets, jobs, peace

The landmark agreement unveiled Wednesday by the Machinists union and Boeing should secure thousands of local jobs, end the simmering NLRB lawsuit, and offer an unexpected Christmas bonus to start off a four-year contract extension.

By Dominic Gates

Seattle Times aerospace reporter

The landmark agreement unveiled Wednesday by the Machinists union and Boeing should secure thousands of local jobs, end the simmering NLRB lawsuit, and offer an unexpected Christmas bonus to start off a four-year contract extension.

Beyond all that, though, the surprise pact may signify a new era for two forces whose bitter adversarial relationship and recurring clashes have repeatedly shaken the region and endangered one of its economic cornerstones.

Machinists union officials said the tentative agreement, to be voted on by members next Wednesday, represents "a new day" in labor relations that should help the Puget Sound region maintain its preeminence in aerospace manufacturing.

The agreement commits both sides to "a new working relationship" and to common goals that include sustaining and growing well-paid union jobs while also lowering production costs.

Gov. Chris Gregoire, who was aware of the secret talks and kept in close touch with Boeing Chairman and CEO Jim McNerney and IAM General Vice President Rich Michalski throughout the negotiations, described the outcome as "absolutely wonderful."

"At a time when I don't get much good news, this couldn't be better," said Gregoire.

Richard Aboulafia, an aerospace analyst with the Teal Group, said the prospect of labor peace transforms the outlook for aerospace in Washington state.

"As long as you can resolve the labor problems that have hobbled Puget Sound, the future looks extremely bright," Aboulafia said.

If union members ratify the deal next week, Boeing commits to build the new 737 MAX jet in Renton, which will mean new capital investment there and in its parts plants in Auburn, Frederickson, and Portland.

The company will also cut down on nonunion supplier employees doing work at the widebody plant in Everett.

And it may bring more Air Force tanker work here from Wichita, Kan.

The proposed four-year contract gives Boeing labor peace during the protracted ramp-up in jet production that's ahead.

The union has also settled its differences with management over the 787 assembly plant in South Carolina and will ask the National Labor Relations Board to drop its case against Boeing.

A high-level joint committee, with top union leadership and Boeing senior vice presidents, will meet monthly to review and discuss key business and workforce issues, including setting new performance targets that will determine annual incentive bonuses.

Secret talks

The deal was hammered out in secret talks that began in earnest in mid-October. Both sides said Boeing made the initial approach to the union, eager to make an early contract deal.

Only a small circle of people on both sides were aware of the high-level talks, which culminated in intensive negotiations at the South Park union hall last week, according to people with knowledge of the talks.

Leading the talks on the company side were Vice Presidents Ray Conner, who previously led negotiations with the union and now heads sales at Boeing Commercial Airplanes; and Rick Stephens, who heads employee relations from Boeing's Chicago headquarters.

For the union, the key players were Michalski; Mark Blondin, the former IAM district president who now heads the union's nationwide aerospace negotiations; and Tom Wroblewski, president of District 751.

10 months early

The contract extension comes 10 months before the existing contract expires.

The union pushed to nail down a contract early to ensure that Washington keeps final assembly of the modernized 737, the MAX. Earlier this year McNerney had signaled it could go elsewhere.

Many in the aerospace industry couldn't see a business case for Boeing to put the MAX anywhere but Renton. But the union — stunned by Boeing's choice in 2009 of South Carolina for its second 787 Dreamliner assembly line — couldn't take that for granted.

"The union saw Boeing put the second 787 line someplace else," said industry analyst Scott Hamilton of Issaquah-based aviation consulting firm "Boeing was fully capable of putting the MAX someplace else, too."

With Boeing facing heavy global competition for building single-aisle jets, "the world is changed," said the IAM's Blondin, in an interview.

For both the company and the union, "everything is always at risk," he said.

Boeing was offering a commitment to secure jobs in Renton, Auburn, Frederickson and Portland, said Blondin. "When you've got an offer on the table to put that in writing, I'm not going to call that bluff on behalf of this entire community," he said.

The tentative agreement also stipulates that if Boeing closes down its defense plant in Wichita, the work of installing military systems on the Air Force tanker will be done at Boeing's Puget Sound-area facilities.

Plant losing money

Boeing recently acknowledged it is considering closing the Kansas plant because it doesn't have enough work and is losing money. If that happens, said Blondin, most of the added work will likely be done on the tanker assembly line in Everett.

For Boeing management, one impetus for an agreement was securing labor peace for several years as it prepares a sharp production ramp-up.

But another key element that gave the union some leverage was the NLRB case, in which the company is accused of illegally retaliating against the union when it chose South Carolina as the site of the second 787 plant.

That case had already resulted this summer in the release of embarrassing company documents revealing details of internal discussions in 2009 over the siting of the second line in North Charleston. Imminent legal rulings threatened to force the release of additional internal documents, such as executive emails.

The NLRB's general counsel, and likely the Obama administration, would have to sign off on any formal settlement, but the union made clear Wednesday it will push to end the controversial case.

If the contract is ratified, the Machinists will notify the NLRB that "our issues with the Boeing Company are behind us," Wroblewski said.

Lafe Solomon, acting general counsel at the NLRB, issued a statement calling the deal "a very significant and hopeful development," and suggesting he is ready to act once the deal is finalized.

Although the NLRB case has become a hot political issue, with Republican presidential candidates taking Boeing's side against the federal agency, U.S. Rep. Norm Dicks, D-Bremerton, said he sees no political obstacle to a settlement because Boeing's 787 Dreamliner work in North Charleston, S.C., will also be secured.

"The people in South Carolina are going to be happy," said Dicks. "They won't object to this case going away."

In an interview, Gregoire said she doesn't want to be overoptimistic but hopes the deal may restore labor relations at Boeing to an era that seemed to end when former CEO Harry Stonecipher in 1998 publicly rejected the notion of the workforce as a "family" and warned employees, "If you don't perform, you don't stay on the team."

Said Gregoire: "They are looking like they are returning to the days of yesteryear when it really was the Boeing family."

Dominic Gates: 206-464-2963 or

Landmark agreement

The proposed deal extends the current contract by four years, to September 2016. Union members will vote on it Dec. 7.

Labor relations: Both sides commit to "a new working relationship" with common goals that include sustaining and growing well-paid union jobs, reducing costs and increasing productivity to deliver airplanes at competitive prices.

Job security: Renton gets final assembly of the 737 MAX, with parts fabricated in Auburn and Frederickson. Boeing will reduce the number of nonunion supplier employees performing work at the widebody plant in Everett. And if the Wichita defense plant closes, the military-systems installation work on the Air Force tanker will move here.

NLRB case: The union will inform the government that its grievance with Boeing over the placement of work in South Carolina is resolved. With that settlement, the National Labor Relations Board will likely drop the case against Boeing.

Economics: A signing bonus of $5,000 paid upon ratification. Wage increases of 2 percent each year of the contract, plus a new incentive plan that could add bonuses as high as 4 percent each year. The pension multiple is increased each year by $2 per year of service, reaching $91 in 2016. Union members' health-care costs increase across the board.

Source: IAM

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From: FUBHO1/9/2012 9:30:11 PM
   of 3331
World's biggest super-jumbos must be GROUNDED, say engineers after cracks are found in the wings of three Airbus A380s

  • Cracks found in two Singapore Air super-jumbos, and one Qantas
  • Both airlines admit cracks, but say planes are safe
  • 'We can't continue to gamble with lives' - engineer

      By Rob WaughLast updated at 6:51 PM on 9th January 2012

      Read more:

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      From: Eric1/25/2012 10:29:21 AM
         of 3331
      Norwegian carrier orders 122 Boeing jets, 100 from Airbus

      Budget carrier Norwegian Air Shuttle ordered 100 Boeing 737 MAX8s and 22 Boeing Next-Generation 737-800s as well as 100 Airbus A320 planes in what it called the largest ever aircraft purchase in Europe.

      OSLO, Norway — Budget carrier Norwegian Air Shuttle on Wednesday said it has ordered 100 Boeing 737 MAX8s and 22 Boeing Next-Generation 737-800s, in addition to purchase rights for an additional 100 737 MAX8 aircraft.

      Boeing said Norwegian is the first European carrier to complete an order for its 737 MAX aircraft.

      "The total order is valued at $11.4 billion at list prices and represents the largest-ever Boeing order from a European airline," Boeing said.

      In a separate deal, Norwegian also ordered 100 Airbus A320 planes.

      The combined 222 new aircraft ordered from Boeing and Airbus has a combined list value of $127 billion and is the largest ever aircraft purchase in Europe, Norwegian Air Shuttle said.

      "Today is a historic day for Norwegian," CEO Bjoern Kjos said. "We have secured our fleet renewal for years to come and are very pleased with the agreements with both Airbus and Boeing."

      In 2002, Ryanair ordered 100 Boeing 737-800 aircraft and took options on 50 more. The list price at the time was $9.1 billion.

      Norwegian Air Shuttle, one of Europe's fastest growing airlines, sees the acquisition of new, fuel-efficient aircraft as key to its strategy to offer low-cost fares. It has expanded rapidly in Europe, and Kjos told The Associated Press last month that it's planning to launch long-haul operations, with flights to New York and Bangkok scheduled to start in early 2013.

      The deal with Boeing includes orders for 100 Boeing 737 MAX8s and 22 Boeing Next-Generation 737-800s, in addition to purchase rights for an additional 100 737 MAX8 aircraft. Boeing said Norwegian is the first European carrier to complete an order for its 737 MAX aircraft.

      "The total order is valued at $11.4 billion at list prices and represents the largest-ever Boeing order from a European airline," the American company said.

      The Airbus agreement is for 100 Airbus A320neo planes, with purchase rights for an additional 50. The neo is a modified version of the existing workhorse jet, the A320, with improved engines and modified wingtips to make it more fuel-efficient.

      The A320neo lists for $126 million each, but airlines negotiate discounts for bulk orders.

      Kjos declined to reveal the price tags negotiated with Boeing and Airbus but said "we have gotten deals that otherwise wouldn't be able to get because we're first."

      Kjos said the deals will be financed by loans guaranteed by the Export-Import Bank of the United States and European export credit agencies.

      "The banks will be financing the deals against a state guarantee from the agencies," Kjos told AP.

      "It's a massive order which shows a big ambition on behalf of Norwegian," said John Strickland, director of London-based aviation consultancy firm JLS Consulting.

      The challenge will be to place the new planes in routes and markets where they can fill the seats, and not end up in a situation where "suddenly you're raking in losses instead of paying for the planes," Strickland said.

      Unlike budget carriers Ryanair and EasyJet, which are flying from destinations across Europe, Norwegian is focused on the Scandinavian market. Last year, the airline flew about 13 million passengers, rapidly gaining ground on regional competitor Scandinavian Airlines.

      Norwegian, which had previously only used Boeing planes, said it would benefit from using two aircraft suppliers "both in terms of ensuring adequate flight capacity, flexibility and competition between two manufacturers."

      Kjos, a former fighter pilot, owns 27 percent of Norwegian, founded in 1993 and listed on the Oslo stock exchange 10 years later. After struggling to make a profit in its early years, Norwegian bought competitor FlyNordic from Finnair in 2007 and ordered 42 new Boeing 737 planes, lowering fuel and maintenance costs.

      Before the announcement Wednesday, Norwegian had placed orders for 55 Boeing 737-800 and six Boeing 787 Dreamliners.

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      From: Eric1/25/2012 10:34:30 AM
         of 3331
      Boeing may overtake Airbus as No. 1 jet-maker in 2012

      Airbus has made more jets and sold more of them than Boeing for years, but an analysis shows that trend has a good chance of changing in 2012.

      By Dominic Gates

      Seattle Times aerospace reporter

      Airbus announces 2012 price increases
        Graphic | Boeing vs. Airbus orders and deliveries

        Airbus on Tuesday claimed the title as the world's No. 1 jet-maker, delivering 57 more planes and selling greater than 600 more airplanes than Boeing in 2011.

        Airbus has made more jets than Boeing for nine consecutive years now. It has sold more jets than Boeing for four consecutive years.

        Yet, beneath those top-level numbers, the picture is not so bleak for Boeing.

        Analysis of the year-end figures reveals that, while Boeing delivered fewer jets, it surpassed Airbus in their dollar value.

        Moreover, the data suggest 2012 could be Boeing's year to take back the No. 1 spot.

        In the year ahead, Boeing is almost certain to lead Airbus in jet sales. And if production goes as planned, it also could squeeze past Airbus in 2012 deliveries.

        First, the 2011 results: In a record sales year, Airbus delivered 534 airplanes to Boeing's 477, mostly due to faster production of its smaller, single-aisle A320 jets.

        However, Boeing delivered 82 of its more valuable very large jets, compared with 26 superjumbo jets for Airbus.

        As a result of that imbalance, a Seattle Times analysis using market-pricing data provided by aircraft-valuation firm Avitas estimates Boeing's total revenue from its deliveries at $33 billion, compared with an estimated $32 billion in Airbus revenue.

        Looking at the value of the jets also considerably narrows the gap in sales.

        The Seattle Times analysis pegs the value of the 2011 Airbus orders at $70 billion, compared with $66 billion for Boeing.

        That's a 51.5 percent market share for Airbus, far less than the 64 percent share in units sold.

        And what are the prospects for the year ahead?

        Richard Aboulafia, an aviation analyst with the Teal Group, said jet sales in 2011 were skewed by the eight-month gap between the launch of Airbus' new single-aisle jet, the A320neo, and Boeing's response, the 737 MAX.

        That gap meant the Airbus neo had phenomenal sales last year, with 1,226 firm orders, while the MAX barely got off the ground, with 150 firm orders.

        Airbus spokesman Clay McConnell acknowledged this year's sales must come down from last year's high.

        "Clearly, the neo is what drove that," he said. "No one expects us to have another year in 2012 like we had in 2011."

        Boeing anticipates that the MAX will replicate the neo's sales success in 2012. Boeing spokesman Marc Birtel said the MAX has more than 1,000 sales in the works, with one large firm order from Southwest Airlines and the balance consisting of commitments that are backed by deposits.

        "One guy got all the orders in 2011," Aboulafia said. "The other guy will get them in 2012."

        The only doubt in the minds of aviation analysts is that Boeing has not yet pinned down the specifications of the MAX. Birtel said several design studies are under way to optimize the jet's performance and economic efficiency.

        Aboulafia said Boeing is going out on a limb with the MAX and is very dependent on the LEAP engine from CFM International delivering its promised fuel efficiency and reliability.

        In contrast, the Airbus neo has a choice of two engines, hedging its CFM bet with the alternative geared turbofan engine from Pratt & Whitney.

        Airbus' McConnell said the industry won't know how the MAX will match up against the neo until the Boeing plane is "more clearly defined."

        Aside from the lopsided split of the single-aisle market, the most striking aspect of the 2011 figures is how Boeing dominates the widebody market.

        The Everett-built 777 won an unprecedented 200 net orders last year.

        Airbus' answer to the 777 is the forthcoming A350. Yet, that jet program had a net loss of 31 orders last year. Clearly, the aviation world has doubts about the A350 strategy.

        In an interview, Boeing marketing vice president Randy Tinseth said the A350 was planned as a three-airplane family that would span the size range from the 787 to the 777. But he said that has proved impossible and the larger A350-1000 model now has a different wing, landing gear and engine, making it essentially a different airplane.

        At a news conference in Hamburg, Germany, on Tuesday, Airbus sales chief John Leahy both acknowledged the 777's dominance and laid his hopes on the A350.

        "I've got to give (Boeing) credit on the 777; if you need lift in the long-range widebody market now, that's the plane," Leahy said, according to Bloomberg News. "The day we deliver the first A350-1000, the 777-300ER will become obsolete."

        Still, for the year ahead, Boeing will maintain its advantage.

        Boeing said it can offer 777 delivery slots in 2015; the A350-1000 isn't scheduled to enter service until 2017.

        While the 2012 sales picture favors Boeing, can it perhaps also catch Airbus in deliveries this year? That's possible, though it will be tough.

        Airbus Chief Executive Tom Enders said Tuesday in Hamburg that he'll increase total production this year to 570 jets. Boeing this month has increased its 737 delivery rate sharply from 31.5 jets a month to 35 jets, a move that alone should raise its annual delivery total by 42. And this year will be the first full production year for both its new airplanes, the 747-8 and the 787 Dreamliner.

        If Boeing at last can get 787 production flowing — admittedly, a big if — analysts are hoping that will add at least 40 deliveries. Full-year production of the 747-8 could add an additional dozen.

        If Boeing pulls all that off, the company would squeak a win in terms of airplanes built for the first time in 10 years.

        Dominic Gates: 206-464-2963


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        From: Glenn Petersen4/30/2012 4:29:19 PM
        1 Recommendation   of 3331
        Boeing vs. Airbus: The Air France Tragedy Revisited

        Walter Russell Mead
        April 30, 2012

        In about a month or so, French aviation investigators will release a report detailing the causes of one of the greatest air disasters in recent times: the disappearance of Air France Flight 447 over the south Atlantic in 2009. The Telegraph has a preview of the findings, including an absolutely gripping retelling of the final moments of the doomed flight. The report seems to place the responsibility for the crash largely on pilot error, which could seriously hurt both Air France’s reputation and its bottom line as liability lawsuits start piling up.

        But it wasn’t just pilot error that caused the disaster. The high-tech Airbus flight control system, which uses video-game-like “side stick” controllers to pilot the aircraft, seems to have contributed to the confusion which prevented the other pilots from correcting their colleague’s grievous and sustained errors of judgment.

        It seems surprising that Airbus has conceived a system preventing one pilot from easily assessing the actions of the colleague beside him. And yet that is how their latest generations of aircraft are designed. The reason is that, for the vast majority of the time, side sticks are superb. “People are aware that they don’t know what is being done on the other side stick, but most of the time the crews fly in full automation; they are not even touching the stick,” says Captain King. “We hand-fly the aeroplane ever less now because automation is reliable and efficient, and because fatigue is an issue. [The side stick] is not an issue that comes up – very rarely does the other pilot’s input cause you concern.”

        Boeing has always begged to differ, persisting with conventional controls on its fly-by-wire aircraft, including the new 787 Dreamliner, introduced into service this year. Boeing’s cluttering and old-fashioned levers still have to be pushed and turned like the old mechanical ones, even though they only send electronic impulses to computers. They need to be held in place for a climb or a turn to be accomplished, which some pilots think is archaic and distracting. Some say Boeing is so conservative because most American pilots graduate from flying schools where column-steering is the norm, whereas European airlines train more crew from scratch, allowing a quicker transition to side stick control.

        Whatever the cultural differences, there is a perceived safety issue, too. The American manufacturer was concerned about side sticks’ lack of visual and physical feedback. Indeed, it is hard to believe AF447 would have fallen from the sky if it had been a Boeing.

        We wouldn’t want to turn this awful tragedy into some sort of grotesque game of gotcha, trumpeting Boeing’s supposedly superior safety due to more conservative design choices. 228 people have died a horrible death, and the focus of the inquiry should remain making sure that it doesn’t happen again.

        Nevertheless, as the article makes abundantly clear, even as technology advances and airplanes become increasingly more automated, pilots remain critical in preventing disasters. If the systems they’re piloting end up bewildering them or not providing enough feedback for them to make the right decisions, the systems are poorly designed. Via Meadia hopes that, even if Air France ends up taking most of the blame for the disaster, Airbus will consider adopting some of Boeing’s stodgier designs for safety’s sake. And until the problem is fixed, some nervous flyers out there might find themselves asking what company made the planes their favorite airline has chosen to fly.

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        From: Eric10/25/2012 11:03:45 AM
           of 3331
        Boeing rakes in cash as production soars; 787 to beat year-end delivery target.

        With final-assembly plants in Renton and Everett humming, Boeing raised its 2012 profit forecast for the full year. A breakdown of where the 787 program stands suggests Boeing will handily beat its full year delivery target.

        By Dominic Gates

        Seattle Times aerospace reporter

        PREV of NEXT

        Boeing's commercial-jet business continues to boom even as the global economy flags.

        Soaring production rates at the final-assembly plants in Renton and Everett are raking in cash, and on Wednesday the airplane-maker reported a strong financial performance in the third quarter and raised its profit forecast for the full year.

        Meanwhile, as mechanics slowly work through a backlog of 787 Dreamliners parked in Everett, a detailed inside account of progress in the program suggests Boeing should handily beat its target of between 35 and 43 Dreamliners delivered by year's end.

        In a conference call with Wall Street analysts Wednesday, Chief Executive Jim McNerney expressed "confidence in our strategic position and growth trajectory."

        He reiterated previous forecasts that the company will deliver between 585 and 600 commercial jets this year, compared with 477 in 2011.

        The only dark cloud in the financial results — one that held down the share price — was a forecast of a higher-than-expected pension expense that will reduce net profits next year.

        But clearly Boeing's plants are humming.

        "Operationally, the company is doing fantastically well," said Carter Copeland, aerospace analyst with Barclays Capital. "They are delivering on the core programs and generating cash at high rates."

        On the 787 assembly lines, the quality of the work is steadily improving, said Chief Financial Officer Greg Smith.

        He cited a 35 percent reduction in work required to complete airplanes leaving the factory in Everett, compared with the beginning of the year.

        The overall number of jobs behind schedule in the 787 program is half what it was at the beginning of the year, Smith said, and Dreamliners are now rolling out of the Everett factory with only about 125 jobs to complete.

        The Dreamliners delivered so far include a mix of airplanes newly rolled off the assembly lines and earlier jets that needed extensive reworking at Boeing's modification center in Everett.

        McNerney said the flow of reworked planes will slow because "we did the easier-to-do airplanes first and now we are moving onto airplanes that need more work."

        While Boeing is assembling Dreamliner No. 87, those older, more problematic 787s — either stored in parking spots on the Everett flight line and around Paine Field, or being worked on inside the modification center at the airport — include Nos. 10 through 19 and a dozen more with line numbers lower than 40.

        Less rework needed

        But at the same time, new 787s that need little reworking are flowing off the line at a rate close to five per month and are expected to gear up to 10 per month by the end of next year.

        A reliable company source provided detail Boeing doesn't make public on where the 787 program stands.

        So far, Boeing has built 75 Dreamliners (not counting two ground-test airplanes, and three flight-test airplanes that have been written off) with nine more being assembled in Everett and in North Charleston, S.C.

        Since September last year, 31 Dreamliners have been delivered, including one to LAN of Chile Wednesday. That jet raised the number delivered this year to 28.

        Nine more Dreamliners are in pre-delivery flight test and six others are being prepped for test.

        Of the rest, two flight-test airplanes that will eventually be sold are in long-term storage at Boeing Field, and 16 more are in Everett, all in line to be reworked.

        A further 10 planes are being reworked now, all but one in Everett.

        A single flight test 787 is being reworked at Boeing's airplane modification center in San Antonio, Texas.

        With the "easier-to-do" airplanes already reworked, those 28 Dreamliners that need more extensive work clearly will be a drag on the program through next year.

        Nevertheless, this accounting suggests Boeing will likely surpass the high end of the 2012 delivery target range, with as many as 44 Dreamliners going to customers by year's end.

        And as Boeing slowly whittles away at the backlog of older Dreamliners, it is rapidly increasing current production.

        The 777 assembly line in Everett already is moving to an unprecedented widebody-jet production rate of 8.3 per month (or 100 per year).

        The 737 line in Renton is preparing to step up from 35 to 38 jets per month early next year.

        The ongoing boom in these cash cow programs is reflected in Boeing's financial results.

        While other large companies — including 3M, Xerox and DuPont — this week reduced their profit forecasts, Boeing raised the expected earnings per share for the full year by 40 cents to a range of $4.80 to $4.95.

        Revenue for the quarter was up to $20 billion, 13 percent higher than a year earlier.

        Net profit of just more than $1 billion was slightly down from the year earlier, largely a result of a $583 million pension expense.

        Earnings from operations rose 9 percent to $1.6 billion.

        Boeing's business generated $2.3 billion in cash during the quarter, driven by those rising production rates at the final-assembly plants here.

        Discounting $750 million in cash contributions for company pension funds, that still left $1.6 billion in operating cash flow.

        Despite the good news, the stock market looked askance at Boeing's noncash pension-expense forecast for next year: $3.5 billion.

        That's about $400 million more than analysts had expected and will come out of earnings next year.

        As a result, Boeing's stock closed Wednesday down slightly at $72.71.

        During the conference call, reporters quizzed McNerney on the schedule for future airplanes and the strategic decisions ahead on where work will be done, but he provided no new details.

        Decisions regarding the launch of the next version of the Dreamliner, the 787-10, and a new derivative of the 777, the 777X, are expected respectively late this year and early next.

        McNerney said airlines want the 777X to enter service by the end of the decade, and this is what Boeing is considering.

        He reiterated that Boeing engineers are considering a huge composite wing for the 777X. After Boeing launches the 777X program, it must decide where that wing will be made.

        Washington and South Carolina are each eagerly awaiting that news, but McNerney deflected a question on the matter, saying Boeing's first priority is to settle on the right airplane design.

        "We're a long way from making a decision on where we'll build the 777 wing," McNerney said. "A long way."

        Dominic Gates: 206-464-2963 or

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        From: Sidney Reilly12/20/2012 9:29:33 AM
           of 3331
        Is this agreement for real?

        Message 28616598

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        From: John Koligman1/18/2013 7:06:34 PM
           of 3331
        Once again I have put BA back on my trading list, every few years something seems to blow up with BA's products that allows a nice entry point into the stock. So far, this one has not resulted in a huge drop, I suppose it will depend on how long these planes are grounded and are there design defects. In view of the history of LI batteries, and the fact that they are often banned as baggage, one wonders if it was a good idea for BA to use them in this application....

        Praised but Fire-Prone, Battery Fails Test in 787

        Elaine Thompson/Associated Press
        Dreamliners at Paine Field in Everett, Wash. The F.A.A. has ordered the planes, the newest jetliners made by Boeing, to be grounded until a potential problem with lithium-ion batteries is resolved.

        By JAD MOUAWAD and CHRISTOPHER DREWPowerful and lightweight, lithium-ion batteries are the perfect power source for modern gadgets. But ubiquitous as they are, their short history has also been fraught with problems — they have caught fire in cellphones, laptop computers and electric cars, and even destroyed a small Navy submarine.

        Workers removed a lithium-ion battery from a 787 in Japan. The jet was forced to land after receiving a smoke alarm.

        Now, federal investigators are trying to determine why a lithium-ion battery caught fire in Boeing’s long-awaited 787 Dreamliner last week, and they have grounded the planes until they figure it out.

        While Boeing officials insist that the failure never endangered passengers or the plane’s integrity, the prospect that batteries would leak flammable fluids and smoke on flights packed with passengers has opened perhaps the most unnerving chapter in the technology’s relatively short life.

        For Boeing, the development of the 787 represented a push into new technology and energy efficiency, and the company staked much of its future on the plane. It turned to the new batteries for many of the same reasons that Silicon Valley and Detroit have: they pack a lot of energy in a small package and, unlike older batteries, can be charged rapidly and frequently without loss of power.

        Even though the safety standards are higher in aviation than most other industries, federal regulators decided in 2007 to approve Boeing’s use of lithium-ion batteries for the first time in one of its passenger jets. But the agency also required the company to take a series of steps, among them to keep pressure from building in the batteries and toxic gases from escaping.

        Just as in the early days of aviation, “you cannot do pioneering work without assuming some risk,” said Hans Weber, president of Tecop, an aviation consulting firm. “In today’s world, we don’t have to pay the price of pioneering with death anymore, but we have to accept the fact we will have some incidents.”

        Still, safeguards for lithium-ion batteries have progressed to the point that a fire on an airplane should never have happened, said Sanjeev Mukerjee, a chemistry professor at Northeastern University and an expert on batteries.

        “If a battery of that size catches fire, then a whole bunch of mechanisms didn’t work,” Mr. Mukerjee said. “Whoever is making that battery is doing a really bad job.”

        It is still not clear what caused the battery fire last week in Boston, about 30 minutes after a Japan Airlines 787 landed from Tokyo and passengers had gotten off the plane. The cleaning crew noticed smoke seeping into the cabin, and it took firefighters 40 minutes to put out the battery fire in the electrical bay in the back of the plane.

        On Wednesday, a 787 had to make an emergency landing in Japan after pilots received a smoke alarm. Officials found that a battery in the front of the plane was charred and swollen. Chemicals appeared to have leaked, and black discolorations on the plane suggested that there had been smoke inside.

        Investigators are considering a variety of causes, though it might be months before they pinpoint what went wrong and how to solve it. The problem could be in the basic design of the batteries, the units that charge them or in an undetected manufacturing flaw, experts said.

        “It might not be the underlying technology; it might be the design of this particular unit,” said Robert A. McKenzie, an electrical engineer and an aviation lawyer.

        Other industries have found out the hard way that minor imperfections in lithium-ion batteries can cause big problems. In 2006, Lenovo, IBM, Dell and Apple all recalled laptops because of concerns about the hazards of lithium-ion batteries manufactured by Sony.

        General Motors last year announced a series of enhancements to its electric car, the Chevrolet Volt, after two lithium-ion batteries caught fire days after a crash test.

        While those fires were started under extraordinary conditions — and did not involve Volt owners — General Motors nonetheless reacted swiftly to the negative publicity and bolstered the structure and cooling system to protect the battery further in the event of a serious accident.

        And about four years ago, Toyota considered switching to lithium-ion batteries for its popular Prius hybrid but decided to stick with an older chemistry, nickel-metal hydride. The reason was cost, said John Hanson, a spokesman for the company.

        The military has also had mishaps. In late 2008, a mini-submarine designed to carry Navy SEALs to shore was destroyed when its lithium-ion battery exploded as it was being charged.

        The dangers of these types of batteries were also well known in the aviation industry. Dozens of fires had broken out on cargo and passenger planes as computer batteries heated up.

        These accidents prompted regulators to limit the transport of these batteries in passenger planes and freighters planes.

        Despite all these problems, Boeing still saw enough benefits in the new battery technology. But Boeing’s request to use it for the Dreamliner set off some alarm bells, particularly with pilots, who were concerned about the risk of fires during flight and the ability of flight crews to extinguish it rapidly. At the time, the Air Line Pilots Association warned that the F.A.A. should stress that “preventing a fire and not reacting to one, if one occurs, is critical.”

        But Boeing officials said they felt they understood the potential hazards, and they built a system with multiple layers of protection that they said would keep the batteries from overheating and would contain any problem. In case any fumes or flames escaped, Boeing said, the pressurized air system would help keep smoke out of the cabin and vent it outside the plane.

        After the problems occurred in the last couple of weeks, however, Boeing engineers were clearly surprised. In addition to trying to figure out why the batteries overheated, Boeing and the F.A.A. now also realized the heat was so intense that it appeared to burn through the battery containers.

        Still, even former safety officials who have frequently criticized the F.A.A. say that as the 787 paves the way for airplanes to be more fuel efficient, it made sense for Boeing to shift to the latest battery technology.

        “It was a bit of a judgment call,” said John Goglia, a former member of the National Transportation Safety Board. “But I think I would have gone with the new technology myself, because you don’t make any advances if you stay with the same old equipment.”

        He said the decision to set conditions on Boeing’s use of the batteries was like saying, “You’re on probation on those issues.” But once the second lithium-ion battery problem happened, that “upped the ante” and forced the F.A.A. to ground the 787s.

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        To: John Koligman who wrote (3215)1/28/2013 1:14:55 PM
        From: Glenn Petersen
           of 3331
        Requiem for a Dreamliner?

        by James Surowiecki
        The New Yorker
        February 4, 2013

        The Boeing 787 Dreamliner is a technological marvel. It’s built largely of carbon-fibre composites rather than aluminum, which makes it significantly lighter than other planes. Its braking, pressurization, and air-conditioning systems are run not by hydraulics but by electricity from lithium-ion batteries. It uses twenty per cent less fuel than its peers, and so is cheaper to run, yet it also manages to have higher ceilings and larger windows. It is, in other words, one of the coolest planes in the air. Or, rather, on the ground: regulators around the world have grounded all fifty Dreamliners after battery fires in two planes, and Ray LaHood, the Transportation Secretary, has declared that the Dreamliner will not fly again in the U.S. until regulators are “a thousand per cent sure” of its safety. And this is just the latest in a long series of Dreamliner problems, which delayed the plane’s début for more than three years and cost Boeing billions of dollars in cost overruns. The Dreamliner was supposed to become famous for its revolutionary design. Instead, it’s become an object lesson in how not to build an airplane.

        To understand why, you need to go back to 1997, when Boeing merged with McDonnell Douglas. Technically, Boeing bought McDonnell Douglas. But, as Richard Aboulafia, a noted industry analyst with the Teal Group, told me, “McDonnell Douglas in effect acquired Boeing with Boeing’s money.” McDonnell Douglas executives became key players in the new company, and the McDonnell Douglas culture, averse to risk and obsessed with cost-cutting, weakened Boeing’s historical commitment to making big investments in new products. Aboulafia says, “After the merger, there was a real battle over the future of the company, between the engineers and the finance and sales guys.” The nerds may have been running the show in Silicon Valley, but at Boeing they were increasingly marginalized by the bean counters.

        Under these conditions, getting the company to commit to a major project like the Dreamliner took some doing. “Some of the board of directors would rather have spent money on a walk-in humidor for shareholders than on a new plane,” Aboulafia says. So the Dreamliner’s advocates came up with a development strategy that was supposed to be cheaper and quicker than the traditional approach: outsourcing. And Boeing didn’t outsource just the manufacturing of parts; it turned over the design, the engineering, and the manufacture of entire sections of the plane to some fifty “strategic partners.” Boeing itself ended up building less than forty per cent of the plane.

        This strategy was trumpeted as a reinvention of manufacturing. But while the finance guys loved it—since it meant that Boeing had to put up less money—it was a huge headache for the engineers. In a fascinating study of the process, two U.C.L.A. researchers, Christopher Tang and Joshua Zimmerman, show how challenging it was for Boeing to work with fifty different partners. The more complex a supply chain, the more chances there are for something to go wrong, and Boeing had far less control than it would have if more of the operation had been in-house. Delays became endemic, and, instead of costing less, the project went billions over budget. In 2011, Jim Albaugh, who took over the program in 2009, said, “We spent a lot more money in trying to recover than we ever would have spent if we’d tried to keep the key technologies closer to home.” And the missed deadlines created other issues. Determined to get the Dreamliners to customers quickly, Boeing built many of them while still waiting for the F.A.A. to certify the plane to fly; then it had to go back and retrofit the planes in line with the F.A.A.’s requirements. “If the saying is check twice and build once, this was more like build twice and check once,” Aboulafia said to me. “With all the time and cost pressures, it was an alchemist’s recipe for trouble.”

        In a different time, none of this might have mattered much. As plenty of people have pointed out, “teething problems” have, historically, been common in new planes. The 747’s engines were notoriously temperamental, the DC-10’s cargo doors were a major safety issue, and a number of Lockheed L-188s had wings shear off in flight. By those standards, you might think the Dreamliner’s battery issues are minor. The problem for Boeing is that those standards don’t apply anymore. The expectations of both customers and regulators are much higher, because, these days, so many products work well from the start. Automobiles, major appliances, televisions: a quality revolution in the past few decades has made products more reliable and durable than ever before. So our tolerance for failure is lower.

        The same is true when it comes to airline safety. In the past, the F.A.A. was remarkably hesitant to take planes out of service. The problems with the DC-10 were well known to regulators for years before a 1979 crash forced them to ground the plane. But, again, those standards no longer apply. In the nineteen-seventies, after all, airplane crashes occurred with disturbing regularity. Today, they are extraordinarily rare; there hasn’t been a fatal airliner crash in the United States in almost four years. The safer we get, the safer we expect to be, so the performance bar keeps rising. And this, ultimately, is why the decision to give other companies responsibility for the Dreamliner now looks misguided. Boeing is in a business where the margin of error is small. It shouldn’t have chosen a business model where the chance of making a serious mistake was so large

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