Boeing and SPEEA are in the midst of trying to negotiate a new contract with Boeing just yesterday saying that they will seek federal mediation in the contract negotiations. However in recent weeks it has become very noticeable that the 787s that are on the flightline aren't flying that much despite many of these airplanes being outside for weeks and many that should have taken their B-1 flights have not made their first flight.
SPEEA has encouraged its members to take workplace actions such as slow downs and rejection of voluntary overtime. These workplace actions may be the reason why there has been a drop off in flight and ground testing activity on the deliverable 787s at Everett. I count at least 6 aircraft that haven't had any recent flight activity or has been out on the flightline for some time but have yet to take a first flight (this includes one aircraft in the paint hangar as of this morning). Boeing engineers are needed not just for design and production of the aircraft but are also for the pre-delivery ground and flight testing to resolve issues prior to delivery to the customer.
These workplace actions won't be enough to stop production and delivery but can significantly slow the delivery process down. SPEEA members hasn't taken a vote, yet, on whether to authorize a strike but with the current contract expired and the negotiations deadlocked, it may not be too long before that happens. If and when that happens then it is up to the leadership at SPEEA to call a strike and then all bet are off and production at Boeing's commercial aircraft plants will drastically slow down.
In the event of a strike by SPEEA, Boeing will probably turn to management engineers to fill the void but that will probably still won't be enough. IAM751 has a current contract with Boeing but I'm not sure if they would honor a picket line by SPEEA or not. As mentioned earlier, Boeing is asking for federal mediation in the contract talks so we'll have to see how that plays out.
Showing posts with label IAM 751. Show all posts
Showing posts with label IAM 751. Show all posts
Friday, November 30, 2012
Wednesday, November 30, 2011
Boeing and IAM 751 reach settlement on Charleston and Renton
Today is a day for big news out of Washington State. Boeing and IAM 751 which represents Boeing line workers in Washington State have come to an agreement after about 6 weeks of secret negotiations according to the Seattle Times. This agreement will supercede the current contract which expires 10 months from now.
The main provisions of the deal will require Boeing to locate 737 MAX production at Renton (this is logical given current 737 production is there). Boeing used the 737 MAX line as a bargaining chip to win settlement of another Boeing problem...the NLRB suit against Boeing which located the second 787 line in Charleston, SC. The details of this settlement of the NLRB suit are not yet known but I am assuming that it means that the NLRB will not pursue the suit against Boeing and Boeing will not have to shut down the Charleston plant.
Other main points in the 4 year deal is 2% annual raise plus COLA, a ratification bonus of $5000/employee as well as a 2% - 4% pay bonus. All this is pending IAM 751 membership approval. A vote is to take next week.
Dominic Gates said that there will not be an y immediate announcement of the NLRB suit due to it needing to be signed off by the NLRB and Obama. Given the current political environment and how the Republican party has raised its voice over this issue it is a no brainer for Obama and the NLRB.
This is a win on many fronts. It a win for Boeing because it ensures labor peace for four more years and the NLRB is off its back. Presumably the 787s will still be assembled in both Everett and Charleston but the details are unknown at this time.
It's a win for the union as it ensure that 737 production will stay in Renton and that members are getting the pay they expect as well as other benefits. It's a win for the NLRB and the Obama administration, even though they had nothing to due with the negotiations (as far as I know) as the NLRB suit became a huge issue for them in a year before the presidential elections are to take place. It will be interesting to know the details of the settlement of the NLRB suit though. It's a win for both the cities of Charleston and Renton as it will mean that there will be no layoffs at those plants due to non-economic factors.
Here's Boeing's press release on the agreement:
The main provisions of the deal will require Boeing to locate 737 MAX production at Renton (this is logical given current 737 production is there). Boeing used the 737 MAX line as a bargaining chip to win settlement of another Boeing problem...the NLRB suit against Boeing which located the second 787 line in Charleston, SC. The details of this settlement of the NLRB suit are not yet known but I am assuming that it means that the NLRB will not pursue the suit against Boeing and Boeing will not have to shut down the Charleston plant.
Other main points in the 4 year deal is 2% annual raise plus COLA, a ratification bonus of $5000/employee as well as a 2% - 4% pay bonus. All this is pending IAM 751 membership approval. A vote is to take next week.
Dominic Gates said that there will not be an y immediate announcement of the NLRB suit due to it needing to be signed off by the NLRB and Obama. Given the current political environment and how the Republican party has raised its voice over this issue it is a no brainer for Obama and the NLRB.
This is a win on many fronts. It a win for Boeing because it ensures labor peace for four more years and the NLRB is off its back. Presumably the 787s will still be assembled in both Everett and Charleston but the details are unknown at this time.
It's a win for the union as it ensure that 737 production will stay in Renton and that members are getting the pay they expect as well as other benefits. It's a win for the NLRB and the Obama administration, even though they had nothing to due with the negotiations (as far as I know) as the NLRB suit became a huge issue for them in a year before the presidential elections are to take place. It will be interesting to know the details of the settlement of the NLRB suit though. It's a win for both the cities of Charleston and Renton as it will mean that there will be no layoffs at those plants due to non-economic factors.
Here's Boeing's press release on the agreement:
Boeing Announces Intent to Locate 737 MAX Production in Puget SoundAnother important take away is that this agreement may start the healing process in the relationship between the IAM and Boeing. Time will only tell on that account.
- New airplane to be built in Renton, Wash., pending ratification of labor
agreement
SEATTLE, Nov. 30, 2011 /PRNewswire/ -- Boeing (NYSE: BA) today announced that it intends to build the new 737 MAX in Renton, Wash., pending approval of an early contract extension with the International Association of Machinists & Aerospace Workers (IAM), the union representing hourly employees in Washington, Oregon and Kansas.
As part of an effort to improve their relationship, Boeing and the IAM have been discussing the potential for an early contract extension for several weeks. The current contract is set to expire in September 2012.
Independent of that effort, Boeing has been conducting a review of potential sites for 737 MAX production since the company announced in August that it will build a new-engine variant of the market-leading 737.
Boeing has assessed the business case for locating production of the 737 MAX in Renton in light of the economics of a proposed new labor agreement, and the company is prepared to locate 737 MAX production in Renton provided the economics contained in that proposal are achieved.
Upon ratification of such an agreement by hourly employees, Boeing says it will make the necessary investment to produce Next-Generation 737s and 737 MAXs in its existing Renton facility.
"The 737 MAX builds upon the legacy of the world's best single-aisle airplane and continues to generate overwhelming response from our customers," said Jim Albaugh, president and chief executive officer, Boeing Commercial Airplanes. "If our employees ratify a new agreement, building the 737 MAX in Renton will secure a long and prosperous future there, as well as at other sites in the Puget Sound area and in Portland, Ore., where 737 parts are built."
To date, Boeing has received more than 700 commitments from our customers for the 737 MAX. The new airplane is expected to enter service in 2017.
Tuesday, May 10, 2011
787 North Charleston Factory becoming a hot button political issue
Wow, who'd ever thought that the 787 and the where it is built would be a hot button topic between the national political parties but there you have it. Republicans want President Obama to weigh in on the decision by the NLRB to pursue action against Boeing for locating a 2nd 787 production facility in a right to work state, South Carolina.
AS many of you all know, Boeing decided to place a 2nd assembly line for the 787 in Charleston. IAM 751 which represents Boeing machinists in Washington were incensed by the decision and filed a complaint with the NLRB alleging that the decision was "payback" for four strikes, the last of which was very damaging to Boeing.
The issue, for many, is can the Union (through litigation) force a company to alter or make business decisions that it disagrees with. Not surprisingly this has many people up in arms and can be the NLRB says it's an illegal transfer of work. The problem with that argument that Boeing didn't transfer work from Everett to North Charleston. The Boeing workers in Everett didn't lose their jobs with the decision to open a 2nd line in North Charleston nor are they going to...not with a backlog of over 850 787s to be delivered. Everett will be building 7 787 per month and North Charleston 3 per month when the full currently planned production rate is realized. Thus the NLRB case maybe on shaky ground in my opinion. What does seem certain is that this will be another wedge between Boeing and IAM 751 which will do neither side any good in 2012.
In the end I agree with what Flightblogger had said...Boeing will probably agree to make the 787 surge line in building 40-24, a temporary assembly line that allowed production to be increased as North Charleston came online, to be permanent. Boeing may need to increase production anyway to get back on schedule after the three years of delays in any case. Boeing will still have North Charleston opening up in the next few weeks and it will still give them redundancy in case there is a strike in Everett.
Back to the Republicans asking Obama to weigh in on the NLRB complaint against Boeing. This also puts the President on shaky ground and he doesn't want to appear anti-business (a charge that has been frequently hurled at him) but he does need the support of the unions going into 2012. It'll be interesting to see if the White House responds but I'm willing to bet that he won't take the bait and will remain on the sidelines on this one.
CNN: Top Republicans demand Obama weigh in on Boeing dispute
AS many of you all know, Boeing decided to place a 2nd assembly line for the 787 in Charleston. IAM 751 which represents Boeing machinists in Washington were incensed by the decision and filed a complaint with the NLRB alleging that the decision was "payback" for four strikes, the last of which was very damaging to Boeing.
The issue, for many, is can the Union (through litigation) force a company to alter or make business decisions that it disagrees with. Not surprisingly this has many people up in arms and can be the NLRB says it's an illegal transfer of work. The problem with that argument that Boeing didn't transfer work from Everett to North Charleston. The Boeing workers in Everett didn't lose their jobs with the decision to open a 2nd line in North Charleston nor are they going to...not with a backlog of over 850 787s to be delivered. Everett will be building 7 787 per month and North Charleston 3 per month when the full currently planned production rate is realized. Thus the NLRB case maybe on shaky ground in my opinion. What does seem certain is that this will be another wedge between Boeing and IAM 751 which will do neither side any good in 2012.
In the end I agree with what Flightblogger had said...Boeing will probably agree to make the 787 surge line in building 40-24, a temporary assembly line that allowed production to be increased as North Charleston came online, to be permanent. Boeing may need to increase production anyway to get back on schedule after the three years of delays in any case. Boeing will still have North Charleston opening up in the next few weeks and it will still give them redundancy in case there is a strike in Everett.
Back to the Republicans asking Obama to weigh in on the NLRB complaint against Boeing. This also puts the President on shaky ground and he doesn't want to appear anti-business (a charge that has been frequently hurled at him) but he does need the support of the unions going into 2012. It'll be interesting to see if the White House responds but I'm willing to bet that he won't take the bait and will remain on the sidelines on this one.
CNN: Top Republicans demand Obama weigh in on Boeing dispute
Thursday, March 4, 2010
Dreamliner 3 to fly around March 14; BCA Chief Talks
Sources have told me that ZA003 should fly (penciled in) around March 14th and Dreamliner 4 should return to the skies within the next one week after installation of more flight test equipment. Meanwhile the 787 test fleet is still racking up the hours with yesterday's test flights pushing the total test flight hours to over 225. Dreamliner 1 go to as fast as 0.96M at 33,000 feet in a test flight conducted on March 3, 2010.
Seattle Times reporter Dominic Gates had a revealing interview with Boeing Commercial Airplane group head Jim Albaugh.
Here's the extended interview:
In it he says Boeing prefers to build its commercial airplanes in the Puget Sound region of Washington State but only if they can get labor peace from IAM and SPEEA. The prospects of labor unrest is what motivated Boeing to locate the second line to Charleston, SC. Also very revealing is that Boeing will now dial down the 787 business model for future aircraft programs and not outsource as much work as they did for the 787. This will include the design, testing and production of the wings. Boeing will return more of the engineering in house for parts of the aircraft such as flight controls, composite fuselage and the wings. The outsourcing was driven more by business decision making rather than engineers making those decisions.
You can read the entire article below:
Dominic Gates' Interview with James Albaugh
Seattle Times reporter Dominic Gates had a revealing interview with Boeing Commercial Airplane group head Jim Albaugh.
Here's the extended interview:
In it he says Boeing prefers to build its commercial airplanes in the Puget Sound region of Washington State but only if they can get labor peace from IAM and SPEEA. The prospects of labor unrest is what motivated Boeing to locate the second line to Charleston, SC. Also very revealing is that Boeing will now dial down the 787 business model for future aircraft programs and not outsource as much work as they did for the 787. This will include the design, testing and production of the wings. Boeing will return more of the engineering in house for parts of the aircraft such as flight controls, composite fuselage and the wings. The outsourcing was driven more by business decision making rather than engineers making those decisions.
You can read the entire article below:
Dominic Gates' Interview with James Albaugh
Tuesday, December 8, 2009
Boeing may build some 787 parts in North Charleston
Editor Note: Dominic Gates of the Seattle Times broke this story on Dec. 7th, 2009
Along with final assembly activities, Boeing Charleston might also get more 787 part manufacturing responsibilities to boot. Currently, the Boeing facility in Frederickson, Wa. builds the vertical tail fin for the 787 and other Boeing facilities in Washington State manufacture other parts for the 787.
Because these facilities are staffed by IAM 751 members, Boeing is looking to have the Charleston facility or a 3rd party do the manufacturing of the tail fin and the other parts for Charleston assembled aircraft. Frederickson and the other Washington area facilities will continue to manufacture the parts for 787s assembled at Everett. Boeing is trying to ensure that the 787 will continue in production in case of labor disruptions at Everett.
There is a possibility that Boeing can outsource the manufacturing of these parts to a third party but I do think Boeing will keep these in house and base it out of Boeing Charleston.
The story is by Dominc Gates from the Seattle Times. You can read more about it below:
Charleston likely to build more Boeing parts
Along with final assembly activities, Boeing Charleston might also get more 787 part manufacturing responsibilities to boot. Currently, the Boeing facility in Frederickson, Wa. builds the vertical tail fin for the 787 and other Boeing facilities in Washington State manufacture other parts for the 787.
Because these facilities are staffed by IAM 751 members, Boeing is looking to have the Charleston facility or a 3rd party do the manufacturing of the tail fin and the other parts for Charleston assembled aircraft. Frederickson and the other Washington area facilities will continue to manufacture the parts for 787s assembled at Everett. Boeing is trying to ensure that the 787 will continue in production in case of labor disruptions at Everett.
There is a possibility that Boeing can outsource the manufacturing of these parts to a third party but I do think Boeing will keep these in house and base it out of Boeing Charleston.
The story is by Dominc Gates from the Seattle Times. You can read more about it below:
Charleston likely to build more Boeing parts
Wednesday, October 28, 2009
Boeing Selects North Charleston for 2nd 787 final assembly line
Boeing has pulled the trigger and announced that they will locate the second production line for the 787 in North Charleston, SC.
The talks with IAM has not resulted in an agreement and thus Boeing, in order to meet its contractual obligations to its customers will locate the line outside of Everett. It's important to note that this will create jobs in SC but not lead to a reduction of the workforce in Everett....for now. This decision does not come as a surprise to me and does represent a set back for the two main unions in the Washington area, IAM and SPEEA.
What is interesting is that Everett will be the location of a temporary surge production of the 787-9 until the Charleston facility is up and running. This indicates that the 787-9 production will be located in Charleston but that Everett will handle some of the inital 787-9 production.
The new Charletson facility will have not just a final assembly hall but also paint hangars, new taxiways and aprons as well as a fully functional flight test center. What this does for future labor relations with IAM and SPEEA is not completely clear but for now those relations appear to be worse than ever. Time will tell if they get better between now and 2012. Here are a few more sources of information:
Flightblogger
Leeham.net (Scott Hamilton)
Aviation Week
The talks with IAM has not resulted in an agreement and thus Boeing, in order to meet its contractual obligations to its customers will locate the line outside of Everett. It's important to note that this will create jobs in SC but not lead to a reduction of the workforce in Everett....for now. This decision does not come as a surprise to me and does represent a set back for the two main unions in the Washington area, IAM and SPEEA.
Boeing to Place Second 787 Assembly Line in North Charleston, SC
SEATTLE, Oct. 28 /PRNewswire-FirstCall/ -- Boeing (NYSE: BA) today announced that it has chosen its North Charleston, S.C., facility as the location for a second final assembly site for the 787 Dreamliner program. Boeing evaluated criteria that were designed to find the final assembly location within the company that would best support the 787 business plan as the program increases production rates. In addition to serving as a location for final assembly of 787 Dreamliners, the facility also will have the capability to support the testing and delivery of the airplanes.
"Establishing a second 787 assembly line in Charleston will expand our production capability to meet the market demand for the airplane," said Jim Albaugh, president and CEO of Boeing Commercial Airplanes. "This decision allows us to continue building on the synergies we have established in South Carolina with Boeing Charleston and Global Aeronautica," he said, adding that this move will strengthen the company's competitiveness and sustainability and help it grow for the long term.
Boeing Charleston performs fabrication, assembly and systems installation for the 787 aft fuselage sections. Across the street, Global Aeronautica, which is 50 percent owned by Boeing, is responsible for joining and integrating 787 fuselage sections from other structural partners.
Until the second 787 assembly line is brought on line in North Charleston, Boeing will establish transitional surge capability at its Everett, Wash., location to ensure the successful introduction of the 787-9, the first derivative model of the 787. When the second line in Charleston is up and operating, the surge capability in Everett will be phased out.
"We're taking prudent steps to protect the interests of our customers as we introduce the 787-9 and ramp up overall production to 10 twin-aisle 787 jets per month," said Albaugh.
"While we welcome the development of this expanded capability at Boeing Charleston, the Puget Sound region is the headquarters of Boeing Commercial Airplanes. Everett will continue to design and produce airplanes, including the 787, and there is tremendous opportunity for our current and future products here," Albaugh emphasized. "We remain committed to Puget Sound."
Approximately 55 airlines have ordered around 840 787 airplanes since the program was launched in 2003. The 787 family of airplanes will carry 200 to 250 passengers on flights up to 8,200 nautical miles (15,200 km). The 787 will be more efficient, quieter and have lower emissions than other airplanes while offering passengers greater comfort and the convenience of direct, nonstop flights between more cities around the world.
"The 787 will provide airlines with unprecedented operating economics and efficiencies. It also will take passengers where they want to go, when they want to go, and do it more comfortably and affordably than ever before," Albaugh said. "This airplane will allow us to continue to set the standard for commercial aviation in the second century of flight."
What is interesting is that Everett will be the location of a temporary surge production of the 787-9 until the Charleston facility is up and running. This indicates that the 787-9 production will be located in Charleston but that Everett will handle some of the inital 787-9 production.
The new Charletson facility will have not just a final assembly hall but also paint hangars, new taxiways and aprons as well as a fully functional flight test center. What this does for future labor relations with IAM and SPEEA is not completely clear but for now those relations appear to be worse than ever. Time will tell if they get better between now and 2012. Here are a few more sources of information:
Flightblogger
Leeham.net (Scott Hamilton)
Aviation Week
Boeing decision on 2nd 787 line may be imminent
Flightblogger and various other news sources are reporting that talks between Boeing and IAM have broken down. This may lead to Boeing to decide to locate the 787 2nd assembly line in North Charleston, SC.
Yesterday, the South Carolina State Senate passed a package of incentives to lure Boeing to North Charleston for the 2nd 787 line. It now appears that those incentives along with the breakdown of talks between Boeing and the IAM will lead to Boeing making an announcement that they will locate the 2nd assembly line in North Charleston. Boeing has already purchased land in the area as well as filed the necessary permits for construction of the assembly hall located next to Global Aeronautica and Boeing Charleston. Boeing said that those actions were necessary for planning purposes.
Now Washington State politicos are not giving up. Senator Patty Murray from Washington has requested that representatives from IAM 751 and Boeing meet at her Washington State offices in order to try and agree to a no strike deal. It seems that IAM has agreed to it but there has yet been no word from Boeing to Sen. Murray's invitation.
It may be that Boeing has already made up its mind. We'll soon know.
Flightblogger: 787 Line Saga
Bloomberg: Boeing, Union urged to meet in 787 talks
Yesterday, the South Carolina State Senate passed a package of incentives to lure Boeing to North Charleston for the 2nd 787 line. It now appears that those incentives along with the breakdown of talks between Boeing and the IAM will lead to Boeing making an announcement that they will locate the 2nd assembly line in North Charleston. Boeing has already purchased land in the area as well as filed the necessary permits for construction of the assembly hall located next to Global Aeronautica and Boeing Charleston. Boeing said that those actions were necessary for planning purposes.
Now Washington State politicos are not giving up. Senator Patty Murray from Washington has requested that representatives from IAM 751 and Boeing meet at her Washington State offices in order to try and agree to a no strike deal. It seems that IAM has agreed to it but there has yet been no word from Boeing to Sen. Murray's invitation.
It may be that Boeing has already made up its mind. We'll soon know.
Flightblogger: 787 Line Saga
Bloomberg: Boeing, Union urged to meet in 787 talks
Tuesday, October 27, 2009
787 Round Up
Here is some more 787 news for your reading pleasure. BTW, LN 8 (ZA101) is reported by Flightblogger to be in the Boeing paint shop. This now clears the way for Boeing to start final assembly on LN 12 once that rear fuselage secion for that airplane arrives in Everett.
- South Carolina is upping the stakes for the 2nd 787 final assembly line as the the SC State Senate approved a deal to entice Boeing to locate the line to North Charleston. This comes on the heels of news that there hasn't been much progress in Boeing's talks with the IAM to keep the second line in Everett. Paramount of Boeing's concerns is the strike by IAM that have occurred every 3 to 4 years. Boeing is trying to negotiate a 10 year moratorium on strikes by IAM. I wonder if they forgot about SPEEA?
- A couple things from Flightglobal - First Mary Kirby reported that Boeing has let an RFP to equip the 787s with wireless Internet connectivity. The connectivity would be via satcom broadband and Boeing is aiming to have it integrated into the in flight entertainment system (IFE). Panasonic and many airline customers have been pushing for this for sometime and it seems that the technology has matured enough that Boeing is now making it a priority.
Boeing RFI for 787 wireless internet connectivity
- Also from Flightglobal, is news that airline executives from Polish carrier LOT will be talking with Boeing about LOT's 787 order. The delay to the 787 has hampered LOT's ability to open up new routes. I am swilling to bet that Boeing will give the same deal and assurances to LOT that they gave to Qatar Airways.
LOT Senior Management talks 787 with Boeing
- Lastly, a new book hit the bookshelves this week. The title of this book: Boeing 787 Dreamliner by Mark Wagner and Guy Norris. The book covers the development of the 787 from the ashes of the Sonic Cruiser through today's continued issues that Boeing is still facing. It's certainly to be an eye-opening and informative book on this aircraft.
Wednesday, August 26, 2009
End of August and the 787 summertime blues
Well we're quickly approaching the end of August, the end of summer and hopefully the end of a period that Boeing would like to forget. If it weren't for the side of body issue the 787 would be flying around Boeing Field now for about two months. Now we have to wait about another three month for that happen (if Flightblogger is correct) and another month from now to hear Boeing's revised schedule. Too much is now riding on this for them to get it wrong. So with that in mind let's try and look ahead to what's yet to come.
As some of you may know, Boeing big wigs flew into Everett last week from Chicago and I believe the big topic of conversation was the 787. But I am hearing that Scott Carson might be retiring at the end of this year. Coincidence or not we'll see but right now it's just a rumor. I wonder if it's another coincidence that Boeing filed building permits today for the North Charleston site. Me thinks not! Boeing needs the second line to recover the lost ground in 787 production so the second line is inevitable (I said so a year ago) and I think Boeing will add additional autoclave capabilities to the 2nd line. The question will be where will the 2nd line go? At this point, if I'm a betting man it will be North Charleston but that will hinge on the vote by Boeing Charleston workers weather to decertify its union on Sept. 10th. If it is decertified then I think North Charleston is a shoo in despite what concessions Washington State and the IAM would give to Boeing. Boeing needs to have uninterrupted production if they are to catch up with deliveries. IAM going out on strike every 3 to 4 years will only get in the way of that.
Now articles are out that Air Berlin is considering cancelling it's order for 25 787-8s whether this is a bluff to wring out more concessions from Boeing is unclear though it sounds like Air Berlin is making an issue of the delays as a cornerstone of their arguments. That's a little surprising as they would be grateful for the delays as Air Berlin has a lot of capacity right now and they would probably need to add capacity in the future after the world economy recovers and air travel with it.
Now let's see what's happening on the tarmac at Everett. Well not too much there there is a big pup tent in the middle of the Boeing flight line where several of the 787 that will be in line for the fix will receive it. Out on the flight line there are 4 787s: LN2 (in ANA livery), ZY998 the fatigue air frame, LN6 and another test flight 787 in the Boeing 787 livery which I suspect may be LN 5. I think LN 4 is probably in 40-26 and LN 3 is still in 40-22 and LN 1 in the paint shop. That means that LN 7 and LN 8 probably have made or will make a line move soon to clear way to start final assembly on LN 9. The parts of this aircraft are in Everett.
Guy Norris also reported that tests are still going on on LN 2 on the Boeing flightline. He also has a great article on Boeing's moves in Charleston as well.
Guy's August 25 787 update
Guy's Boeing-Charleston Article
Air Berlin Mulls 787 Cancellation
Lastly, is Wall Street turning bullish on Boeing and specifically the 787? According to Scott Hamilton at Leeham & Co. a couple of Wall Street analyst now have a brighter outlook on the 787.
Scott's article on 787 forward loss.
As some of you may know, Boeing big wigs flew into Everett last week from Chicago and I believe the big topic of conversation was the 787. But I am hearing that Scott Carson might be retiring at the end of this year. Coincidence or not we'll see but right now it's just a rumor. I wonder if it's another coincidence that Boeing filed building permits today for the North Charleston site. Me thinks not! Boeing needs the second line to recover the lost ground in 787 production so the second line is inevitable (I said so a year ago) and I think Boeing will add additional autoclave capabilities to the 2nd line. The question will be where will the 2nd line go? At this point, if I'm a betting man it will be North Charleston but that will hinge on the vote by Boeing Charleston workers weather to decertify its union on Sept. 10th. If it is decertified then I think North Charleston is a shoo in despite what concessions Washington State and the IAM would give to Boeing. Boeing needs to have uninterrupted production if they are to catch up with deliveries. IAM going out on strike every 3 to 4 years will only get in the way of that.
Now articles are out that Air Berlin is considering cancelling it's order for 25 787-8s whether this is a bluff to wring out more concessions from Boeing is unclear though it sounds like Air Berlin is making an issue of the delays as a cornerstone of their arguments. That's a little surprising as they would be grateful for the delays as Air Berlin has a lot of capacity right now and they would probably need to add capacity in the future after the world economy recovers and air travel with it.
Now let's see what's happening on the tarmac at Everett. Well not too much there there is a big pup tent in the middle of the Boeing flight line where several of the 787 that will be in line for the fix will receive it. Out on the flight line there are 4 787s: LN2 (in ANA livery), ZY998 the fatigue air frame, LN6 and another test flight 787 in the Boeing 787 livery which I suspect may be LN 5. I think LN 4 is probably in 40-26 and LN 3 is still in 40-22 and LN 1 in the paint shop. That means that LN 7 and LN 8 probably have made or will make a line move soon to clear way to start final assembly on LN 9. The parts of this aircraft are in Everett.
Guy Norris also reported that tests are still going on on LN 2 on the Boeing flightline. He also has a great article on Boeing's moves in Charleston as well.
Guy's August 25 787 update
Guy's Boeing-Charleston Article
Air Berlin Mulls 787 Cancellation
Lastly, is Wall Street turning bullish on Boeing and specifically the 787? According to Scott Hamilton at Leeham & Co. a couple of Wall Street analyst now have a brighter outlook on the 787.
Scott's article on 787 forward loss.
Monday, July 20, 2009
787 round up - July 20
I've been out of commission for a week or so but I with the 787 essentially out of commission as well until the side of body structural issue is resolved there won't be too much information coming out. I am hoping that Boeing will have more information on the 787 this Wednesday when they release 2nd quarter earnings and have their quarterly conference call.
Flightblogger reported a major line move with ZA005 going to the paint hangar and ZA006 going to the 767 final assembly line in building 40-24. ZA003 still appears to be on the 747 line in building 40-23. Curiously ZA004 is still in 40-26 in position 4 on the 787 line and ZA100 is still in position 1. At this point ZA100 should have been structurally assembled so I'm wondering if Boeing is holding ZA100 in position 1 until the structural reinforcements are manufactured and installed. Lastly Flightblogger also reported that the wings for ZA101, the second production 787 are in Everett. No word on when final assembly will begin on that airplane though there are now two open positions in the 787 final assembly line.
Flightblogger: Factory Shuffle
Guy Norris is back with a few updates too! To date Boeing has conducted tests on the Crew Alerting System on the ZA001 (EICAS) and the multifunction displays (MFD). These tests were conducted around Ju;y 9th.
Guy's July 9th 787 Update
Soon after those tests, Guy noted in a July 13th report that ground testing has slowed down considerably but tests were conducted on the stall warning system, electronic engine control interface connections, navigation radios, and verification of the airspeed indication system. All this took place on ZA001 while ZA002 had more engines and systems tests done on her.
Guy's July 13th 787 Update
Finally on July 16th Guy reported that testing seemed to have picked up a bit on both ZA001 and ZA002. ZA001 will check the speed of stowing the aircraft's movable surfaces as well as their position when they're moved. There was fuel system ground verification testing as well as flight control systems checks and functional check outs done last week. ZA002 saw high lift testing being done using the APU and later engine power.
Guy's July 16th 787 Update
Lastly, Flightglobal has a nice article related to the upcoming fight for the 2nd 787 production line. My feeling is that unless IAM, SPEEA, and the State of Washington all do something dramatic, this line will be in Charleston, SC. There will be some great advantages like being able to supply European, Middle Eastern and African customers from the East Coast while South Asian, Far East Asia, and Australia will be supplied from Everett. Another twist is that 787-9 could be in Charleston though with a smaller backlog compared to the 787-8 I don't see this as being cost efficient for Boeing.
Flightglobal article on the 2nd 787 assembly line
Flightblogger reported a major line move with ZA005 going to the paint hangar and ZA006 going to the 767 final assembly line in building 40-24. ZA003 still appears to be on the 747 line in building 40-23. Curiously ZA004 is still in 40-26 in position 4 on the 787 line and ZA100 is still in position 1. At this point ZA100 should have been structurally assembled so I'm wondering if Boeing is holding ZA100 in position 1 until the structural reinforcements are manufactured and installed. Lastly Flightblogger also reported that the wings for ZA101, the second production 787 are in Everett. No word on when final assembly will begin on that airplane though there are now two open positions in the 787 final assembly line.
Flightblogger: Factory Shuffle
Guy Norris is back with a few updates too! To date Boeing has conducted tests on the Crew Alerting System on the ZA001 (EICAS) and the multifunction displays (MFD). These tests were conducted around Ju;y 9th.
Guy's July 9th 787 Update
Soon after those tests, Guy noted in a July 13th report that ground testing has slowed down considerably but tests were conducted on the stall warning system, electronic engine control interface connections, navigation radios, and verification of the airspeed indication system. All this took place on ZA001 while ZA002 had more engines and systems tests done on her.
Guy's July 13th 787 Update
Finally on July 16th Guy reported that testing seemed to have picked up a bit on both ZA001 and ZA002. ZA001 will check the speed of stowing the aircraft's movable surfaces as well as their position when they're moved. There was fuel system ground verification testing as well as flight control systems checks and functional check outs done last week. ZA002 saw high lift testing being done using the APU and later engine power.
Guy's July 16th 787 Update
Lastly, Flightglobal has a nice article related to the upcoming fight for the 2nd 787 production line. My feeling is that unless IAM, SPEEA, and the State of Washington all do something dramatic, this line will be in Charleston, SC. There will be some great advantages like being able to supply European, Middle Eastern and African customers from the East Coast while South Asian, Far East Asia, and Australia will be supplied from Everett. Another twist is that 787-9 could be in Charleston though with a smaller backlog compared to the 787-8 I don't see this as being cost efficient for Boeing.
Flightglobal article on the 2nd 787 assembly line
Thursday, June 25, 2009
Boeing Looking More Seriously at 2nd 787 Final Asembly Line
In an interview with reporters Mike Mecham, Guy Norris and Jens Flottau, Boeing CEO Jim McNerney gave the strongest indication that Boeing will go ahead with a 2nd production line for the 787. According to the Aviation Week article the decision may come as early as late this year with an year of starting operations in late 2010 when work on the 787-9 will be expected to get underway.
Aviation Week cites sources as saying that the second line announcement can come very soon and that North Charleston, SC has been chosen as the sight of the 2nd final assembly line. North Charleston does have the advantage of being nonunion as well as the locale for current 787 assembly activities done by Global Aeronautica (main fuselage integration) and Vought (rear fuselage fabrication and integration) as well established logistics capabilities and plenty of land to build a final assembly building near the current Vought and GA facilities. Boeing would have to only fly in the forward fuselage from Wichita and the wings from Japan (not counting the structures from Alenia in Italy and the structures from Fuji and Kawasaki in Japan that will go into the GA site as it currently does).
Predictably the Boeing Unions in Everett (SPEEA and IAM 751) are not happy at the prospect and they may have even more reason to worry in my opinion. If Boeing goes ahead with a South Carolina assembly plant, they could add enough space at that plant to possibly shift all 787 final assembly from Everett and there would be nothing that IAM or SPEEA could do about it especially if the new final assembly line is more efficient than the Everett line.
Aviation Week's 787 Second Line Article
Aviation Week cites sources as saying that the second line announcement can come very soon and that North Charleston, SC has been chosen as the sight of the 2nd final assembly line. North Charleston does have the advantage of being nonunion as well as the locale for current 787 assembly activities done by Global Aeronautica (main fuselage integration) and Vought (rear fuselage fabrication and integration) as well established logistics capabilities and plenty of land to build a final assembly building near the current Vought and GA facilities. Boeing would have to only fly in the forward fuselage from Wichita and the wings from Japan (not counting the structures from Alenia in Italy and the structures from Fuji and Kawasaki in Japan that will go into the GA site as it currently does).
Predictably the Boeing Unions in Everett (SPEEA and IAM 751) are not happy at the prospect and they may have even more reason to worry in my opinion. If Boeing goes ahead with a South Carolina assembly plant, they could add enough space at that plant to possibly shift all 787 final assembly from Everett and there would be nothing that IAM or SPEEA could do about it especially if the new final assembly line is more efficient than the Everett line.
Aviation Week's 787 Second Line Article
Friday, June 19, 2009
Next 787 Hurdle: Production
Now that the first six 787s are on their way to the air within the next couple of months for flight testing and certification, the next major hurdle for Boeing to tackle with this program is ramping up production.
Boeing will produce about 2 787s per month through this year and into 2010 (how far into 2010 is unknown). This is to make sure that any modifications and changes can flow up the supply chain without disrupting production in a significant way.
However Boeing is looking at ways to meet the demand and fulfill the current backlog. They can do this not only by increasing the production on the current line but also starting a 2nd final assembly line. Analyst predict that this 2nd assembly line won't be located in Everett but most likely in the South like South Carolina or Texas where labor won't be a problem to fulfilling the backlog. Pat Shanahan, in speaking to Jon Ostrower made that very clear that customers want an "assurance of delivery." In my opinion the IAM shot itself in the foot when they went on strike in September 2008. The ramifications of the strike will be realized in the next few months.
Now with a 2nd line also give Boeing an opportunity to bring some supplier work in house. In my opinion Boeing doesn't have to give work packages to suppliers in order to supply inventory to the 2nd production line. Instead they could set up a production facility with autoclaves to produce and pre-stuff the fuselage barrels for aircraft produced on the 2nd line. They probably won't do all the sections but I could see Boeing taking over the manufacture of the main fuselage sections and the rear fuselage sections from their current suppliers.
Already some of the suppliers are talking about the difficulties of ramping up production especially when they need more investment in order to do so. If Boeing hopes to produce 10/month or more by 2012 they would not only need to make sure that all production changes are incorporated successfully but that each supplier has all the necessary tooling and work force for the necessary production output which ultimately means more money needed by the suppliers.
Jon Ostrower's interview with Pat Shanahan
Seattle Time's article about production ramp up
Boeing will produce about 2 787s per month through this year and into 2010 (how far into 2010 is unknown). This is to make sure that any modifications and changes can flow up the supply chain without disrupting production in a significant way.
However Boeing is looking at ways to meet the demand and fulfill the current backlog. They can do this not only by increasing the production on the current line but also starting a 2nd final assembly line. Analyst predict that this 2nd assembly line won't be located in Everett but most likely in the South like South Carolina or Texas where labor won't be a problem to fulfilling the backlog. Pat Shanahan, in speaking to Jon Ostrower made that very clear that customers want an "assurance of delivery." In my opinion the IAM shot itself in the foot when they went on strike in September 2008. The ramifications of the strike will be realized in the next few months.
Now with a 2nd line also give Boeing an opportunity to bring some supplier work in house. In my opinion Boeing doesn't have to give work packages to suppliers in order to supply inventory to the 2nd production line. Instead they could set up a production facility with autoclaves to produce and pre-stuff the fuselage barrels for aircraft produced on the 2nd line. They probably won't do all the sections but I could see Boeing taking over the manufacture of the main fuselage sections and the rear fuselage sections from their current suppliers.
Already some of the suppliers are talking about the difficulties of ramping up production especially when they need more investment in order to do so. If Boeing hopes to produce 10/month or more by 2012 they would not only need to make sure that all production changes are incorporated successfully but that each supplier has all the necessary tooling and work force for the necessary production output which ultimately means more money needed by the suppliers.
Jon Ostrower's interview with Pat Shanahan
Seattle Time's article about production ramp up
Thursday, March 12, 2009
787 Production Progress: Vought bringing back some workers in Charleston, SC
In another sign of production progress, Vought is bringing back some of the laid off workers at the Charleston, SC plant where the rear fuselage is produced. These workers were laid off due to the IAM strike and are now being recalled to help support the increase in production of the rear fuselage sections for the 787.
Read the article here.
Read the article here.
Saturday, November 1, 2008
Aviation Centers and museums
The former Grumman facilities at BethpageRichard Aboulafia wrote a great piece on his web site describing how aviation centers have disappeared and provides a convincing story of how commercial aircarft manufacturing can disappear from the Seattle area.
He uses the Long Island region (where I live) as an example. All that's left from Long Island's aviation tradition are a few museums and dilapidated buildings like the one's in Bethpage, NY. I live a couple miles away from Grumman's former industrial campus (in Bethpage) that and there is another one few miles away at Republic Airport in Farmingdale, NY which was the factory site of Republic Aircraft which built the P-47, F-105 and the A-10. There's a small museum there now. Will the IAM (and SPEEA) turn Everett and Renton into aviation museums. Looks like they've started that process. Read Richard's article here.
Tuesday, October 28, 2008
Where does Boeing go from here?
Ok now that there is a tentative deal with IAM 751 with Boeing let's take a look at what happens here on out. First the IAM membership has to ratify the contract that it's leadership has unanimously endorsed to it's members.
Look for ratification by the end of this weekend at the very latest and the return to production very soon after that. I would say that Everett and Renton would be back on line before election day. at the latest.
Next up...SPEEA and those contract negotiations. While it is hard to predict, I do think that since SPEEA and IAM were coordinating to a point there efforts against Boeing management that the contract that was negotiated with IAM will essentially be the same contract that is presented to SPEEA and will be likely accepted by SPEEA. With the financial markets and the global economy in a tailspin it will not be in SPEEA's interest to go out on strike especially when Boeing gave a very good contract to IAM. I think this contract was aimed at both SPEEA as well as IAM and it will probably be enough to avoid and engineers strike on December 1st.
Now looking ahead to the 787, it is a pretty much a no brainer that the 787 first flight will not take place before December 31st, 2008. There is still plenty of work to do but let's assume that the work stoppage is ultimately 60 days (2 months) and add in 10 days for unknown unknowns, then first flight can possibly take place 70 days after the machinists return to work. I'm assuming that they return around November 1st so it is possible for the 787 first flight to take place as early as January 10th, 2009. But this is all dependent on many factors:
1) Before the strike Boeing was looking at factory completion of LN 1 around early to mid November which is about a month off thus the first flight could take place as early as February
2) Despite the strike there was work being done on LN 1. There was the crossing of the lines by some machinists who came under severe financial stress though it's not known if any were 787 machinists
3) LN 2 needs to be completed and under go vibration testing prior to first flight of LN 2. I hear that power may not even be on in this aircraft yet though that is unconfirmed.
Boeing will probably give a new schedule and production assessment after the machinist return to work but I think that it would be reasonable to assume that first flight will not occur until January to February 2009.
Lastly one thing to think about. The labor actions of the last couple months and the continuing negotiations with SPEEA has probably left a sour taste in the mouths of all involved. I wouldn't be surprised if Boeing starts the process of moving out airliner production out of Washington State into area which is less union friendly like Texas, Arizona an the US Southeast.
I think it's a no brainer that commercial aircraft production is on its way out at Everett. It'll probably start with 787 production moving to San Antonio and then possibly followed by 777 and 737 moving to a state(s) where the unions are not highly regarded like Alabama or South Carolina. IAM has ultimately shot itself in the foot. Certainly the Yellowstone 3 (large widebody) and Yellowstone 1 (737 RS) will be built at another location.
Look for ratification by the end of this weekend at the very latest and the return to production very soon after that. I would say that Everett and Renton would be back on line before election day. at the latest.
Next up...SPEEA and those contract negotiations. While it is hard to predict, I do think that since SPEEA and IAM were coordinating to a point there efforts against Boeing management that the contract that was negotiated with IAM will essentially be the same contract that is presented to SPEEA and will be likely accepted by SPEEA. With the financial markets and the global economy in a tailspin it will not be in SPEEA's interest to go out on strike especially when Boeing gave a very good contract to IAM. I think this contract was aimed at both SPEEA as well as IAM and it will probably be enough to avoid and engineers strike on December 1st.
Now looking ahead to the 787, it is a pretty much a no brainer that the 787 first flight will not take place before December 31st, 2008. There is still plenty of work to do but let's assume that the work stoppage is ultimately 60 days (2 months) and add in 10 days for unknown unknowns, then first flight can possibly take place 70 days after the machinists return to work. I'm assuming that they return around November 1st so it is possible for the 787 first flight to take place as early as January 10th, 2009. But this is all dependent on many factors:
1) Before the strike Boeing was looking at factory completion of LN 1 around early to mid November which is about a month off thus the first flight could take place as early as February
2) Despite the strike there was work being done on LN 1. There was the crossing of the lines by some machinists who came under severe financial stress though it's not known if any were 787 machinists
3) LN 2 needs to be completed and under go vibration testing prior to first flight of LN 2. I hear that power may not even be on in this aircraft yet though that is unconfirmed.
Boeing will probably give a new schedule and production assessment after the machinist return to work but I think that it would be reasonable to assume that first flight will not occur until January to February 2009.
Lastly one thing to think about. The labor actions of the last couple months and the continuing negotiations with SPEEA has probably left a sour taste in the mouths of all involved. I wouldn't be surprised if Boeing starts the process of moving out airliner production out of Washington State into area which is less union friendly like Texas, Arizona an the US Southeast.
I think it's a no brainer that commercial aircraft production is on its way out at Everett. It'll probably start with 787 production moving to San Antonio and then possibly followed by 777 and 737 moving to a state(s) where the unions are not highly regarded like Alabama or South Carolina. IAM has ultimately shot itself in the foot. Certainly the Yellowstone 3 (large widebody) and Yellowstone 1 (737 RS) will be built at another location.
Monday, October 27, 2008
BREAKING: IAM and Boeing reach tentative deal
Just out on the wires:
"SEATTLE - A Machinists union spokesman has reported a tentative settlement to end a strike that has shut down Boeing Co.'s commercial airplane operations since Sept. 6.
Francis "Frank" Larkin, a spokesman for the International Association of Machinists and Aerospace Workers in Washington, D.C., told The Associated Press the deal was reached Monday evening.
Boeing spokesman Tim Healy in Seattle says he's checking on the report. The apparent breakthrough came on the fifth day of talks at the Federal Mediation and Conciliation Service in the nation's capital.
Full details were not immediately available, but according to the union's Web site, it's a four-year deal. A vote will take place in three-to-five days, once all members have had a chance to look it over.
IAM workers went on strike Sept. 6, three days after Boeing's last offer was rejected with an 87 percent strike vote. Two days of last-ditch talks to avoid a strike failed, and another round of negotiations this month collapsed in the second day.
The union represents about 25,000 workers in and around Seattle, 1,500 in Gresham, Ore., and 750 in Wichita, Kan. Key issues include job security, wages, retirement benefits and medical coverage.
But the Machinists union isn't the only one locking horns with the Boeing Company these days.
SPEEA, the union representing engineers and technical workers also has more than 20,000 members in Puget Sound. Contract talks will enter their final phase at a Seattle-area hotel Tuesday. SPEEA's two contracts, one covering professionals and the other hourly technical workers, expire Dec. 1
“If they present a last, best and final offer that doesn't reward these employees for the success they brought to the company, they may very well vote to strike,” said Ray Goforth, SPEEA Executive Director.Take the issue of outsourcing. It's not only a big issue for Machinists who want to keep outside contractors out of the plants, but also for engineers, only the issue is different.
For example, SPEEA says the company tried to outsource too much engineering work on the 787, not to mention most of the parts, leading to more than a year-and-a-half’s worth of delays. The engineers want a say in the next airplane.
“That the engineering and technical employees have a serious voice in how it's set up. There are components of these planes where it makes sense to outsource and some components where it doesn't make sense to outsource,” said Goforth.
SPEEA has only had one major strike -- 40 days in 2000. The company says it is optimistic a deal can be reached in the next few weeks and a strike averted.
“We feel we have a process that works. It's worked the past couple of contracts. In fact, the contracts Boeing's offered has been approved by 80 percent of the voters,” said Boeing spokeswoman Karen Fincutter. "
Also read IAM press release about the settlement here.
"SEATTLE - A Machinists union spokesman has reported a tentative settlement to end a strike that has shut down Boeing Co.'s commercial airplane operations since Sept. 6.
Francis "Frank" Larkin, a spokesman for the International Association of Machinists and Aerospace Workers in Washington, D.C., told The Associated Press the deal was reached Monday evening.
Boeing spokesman Tim Healy in Seattle says he's checking on the report. The apparent breakthrough came on the fifth day of talks at the Federal Mediation and Conciliation Service in the nation's capital.
Full details were not immediately available, but according to the union's Web site, it's a four-year deal. A vote will take place in three-to-five days, once all members have had a chance to look it over.
IAM workers went on strike Sept. 6, three days after Boeing's last offer was rejected with an 87 percent strike vote. Two days of last-ditch talks to avoid a strike failed, and another round of negotiations this month collapsed in the second day.
The union represents about 25,000 workers in and around Seattle, 1,500 in Gresham, Ore., and 750 in Wichita, Kan. Key issues include job security, wages, retirement benefits and medical coverage.
But the Machinists union isn't the only one locking horns with the Boeing Company these days.
SPEEA, the union representing engineers and technical workers also has more than 20,000 members in Puget Sound. Contract talks will enter their final phase at a Seattle-area hotel Tuesday. SPEEA's two contracts, one covering professionals and the other hourly technical workers, expire Dec. 1
“If they present a last, best and final offer that doesn't reward these employees for the success they brought to the company, they may very well vote to strike,” said Ray Goforth, SPEEA Executive Director.Take the issue of outsourcing. It's not only a big issue for Machinists who want to keep outside contractors out of the plants, but also for engineers, only the issue is different.
For example, SPEEA says the company tried to outsource too much engineering work on the 787, not to mention most of the parts, leading to more than a year-and-a-half’s worth of delays. The engineers want a say in the next airplane.
“That the engineering and technical employees have a serious voice in how it's set up. There are components of these planes where it makes sense to outsource and some components where it doesn't make sense to outsource,” said Goforth.
SPEEA has only had one major strike -- 40 days in 2000. The company says it is optimistic a deal can be reached in the next few weeks and a strike averted.
“We feel we have a process that works. It's worked the past couple of contracts. In fact, the contracts Boeing's offered has been approved by 80 percent of the voters,” said Boeing spokeswoman Karen Fincutter. "
Also read IAM press release about the settlement here.
Friday, October 24, 2008
Vought may shut down North Charleston plant
In a press release, Vought is considering shutting down it's 787 operations in North Charleston. Currently, Vought has stopped production of the rear fuselage section (sections 47 and 48), reduced outside contractors, and redeployed most of the current workforce towards completing the existing sections (up to airplane 19).
Here is the relevant section of the press release pertaining to Vought's 787 production:
"787 Dreamliner Program A number of actions are being taken on the 787 program at Vought’s North Charleston facility because of the continuing Boeing IAM strike, coupled with the effects of previous 787 program schedule delays. Given that Vought has already fabricated enough barrels to support deliveries through airplane 19, the company must continue to slow its production rate and take the necessary actions across the program. Up until now, Vought has only released most of its outside assembly contractor workforce. Today, in addition to continuing this action, the company announced it is suspending its 787 composite bond fabrication operations, which will affect production and production support personnel. Assembly employees will also be redeployed to concentrate on existing fuselages closest to completion. Over the next 30 days, a variety of additional actions related to its 787 program activities are being considered, including the possible temporary shutdown of the entire plant. “This is a challenging time for all of us who support the Dreamliner program,“ said Joy Romero, vice president and general manager, 787 Program. “Since the beginning of the Boeing strike, we’ve been looking at ways to mitigate potential employee job loss in North Charleston, including the initial reduction of outside contract labor. We plan to work with our employees to identify temporary redeployment opportunities at other Vought locations, where possible. This activity will require everyone’s patience, focused attention, and best effort to ensure a smooth continuation of required work activities, while continuing to provide customer support.”
Here is the relevant section of the press release pertaining to Vought's 787 production:
"787 Dreamliner Program A number of actions are being taken on the 787 program at Vought’s North Charleston facility because of the continuing Boeing IAM strike, coupled with the effects of previous 787 program schedule delays. Given that Vought has already fabricated enough barrels to support deliveries through airplane 19, the company must continue to slow its production rate and take the necessary actions across the program. Up until now, Vought has only released most of its outside assembly contractor workforce. Today, in addition to continuing this action, the company announced it is suspending its 787 composite bond fabrication operations, which will affect production and production support personnel. Assembly employees will also be redeployed to concentrate on existing fuselages closest to completion. Over the next 30 days, a variety of additional actions related to its 787 program activities are being considered, including the possible temporary shutdown of the entire plant. “This is a challenging time for all of us who support the Dreamliner program,“ said Joy Romero, vice president and general manager, 787 Program. “Since the beginning of the Boeing strike, we’ve been looking at ways to mitigate potential employee job loss in North Charleston, including the initial reduction of outside contract labor. We plan to work with our employees to identify temporary redeployment opportunities at other Vought locations, where possible. This activity will require everyone’s patience, focused attention, and best effort to ensure a smooth continuation of required work activities, while continuing to provide customer support.”
Thursday, September 11, 2008
Effects of the strike on the 787
About a week and a half ago a Boeing 747 LCF made a routine delivery flight from Nagoya, Japan to Charleston, SC stopping in Anchorage, Alaska to refuel. Now typically these delivery flight are routine and usually not the subject of a blog entry but with the IAM strike going on at Boeing, it does underscore a couple of things about the what is happening with Boeing’s production model and it’s relationship with outside contractors and its labor unions.
First let’s look at the 787 as of late last week. Jon Ostrower, reported in his blog that ZA001 had its nose cone attached and that the airplane is sitting on its wheels which means that the landing gear swing tests seem to have been completed. Jon also says that he saw flight test equipment on the airplane. Right now the impediment to Boeing getting the plane out the door (other than the strike) is getting the remaining flight test and cabin equipment installed on board as well as knock on effects from some small systems integration issues. Schedule margin is tight without the strike as it is and Jon and Scott Hamilton reported that first flight would be delayed as much as 5 weeks (into mid December at the latest) before any strike effects.
Adding to the pressure of the 787 program is a report by Geoffrey Thomas saying that the production problems on the 787 are hurting new sales of the airplane. Apparently, delivery slots are not available until 2020 which means that the impact of the production problems have effectively pushed out the earliest delivery slots by about 2 to 3 years unless Boeing can manage an orderly increase of 787 output to about 14/month.
Now because there is strike on doesn’t mean that work on the 787 has come to a grinding halt as evidenced by the LCF flights this week. The tier 1 contractors like Global Aeronautica, Vought and Mitsubishi will continue to produce their respective work packages for as long as they possibly can (without shipping further sections and wings to Everett). Depending on when the strike ends, this work during the strike period will eliminate traveled work going to Everett. Boeing can restart production on LN 5 when those parts arrive with no traveled work to be done thus utilizing the 787 production line in a manner it was intended. This can only help in increasing the production rate of the 787 in the near term. So while the strike is on going at Boeing that hasn’t completely bought the 787 production to a grinding halt and may in fact help the production system recover fully by the time the strike ends. One note to all this is that some Boeing’s 787 suppliers are starting to cut back on production, namely Spirit has said they are cutting back on production on some of the products they supply to Boeing without citing any specific Boeing programs. At the end of the day there will be progress in the suppliers’ efforts to clean up the production mess and get their end of the business back on track because of the strike. If Boeing can get its end in order then the production model for the 787 can be a big success.
Read an AP report here.
That all said the question that should be asked (and so far has not) is the IAM being very short sighted in its on the issue of outsourcing. James Bell Boeing’s CFO said at a conference yesterday:
The union, he said, "would like all of the work to be done in the Puget Sound area and that's not realistic." Boeing, he explained, would like "complete flexibility" to outsource work to suppliers; "We have to figure out what's the right balance."
There is nothing that could stop Boeing from selling its Renton and Everett plants to an investor thus turning Boeing into a pure systems integrator and having Renton and Everett bid on work packages much like other firms did when they went shopping for suppliers for the 787. We’ve already seen that happen with Boeing Wichita when those operations were sold to Onex Corp. and was renamed Spirit Aerosystems. Is something like that going to happen, probably no but it is plausible. It is one thing for the IAM to fight for better wages and health care benefits for their membership and their retirees but it is another thing to try and dictate to Boeing management what can be built where in a world of tight margins and intense price competition from Airbus. To see how much things have changed Spirit is going to be building fuselage panels for the A350 for Airbus. Clearly outsourcing is not just an American phenomenon but a global one and Boeing competes on a global stage.
First let’s look at the 787 as of late last week. Jon Ostrower, reported in his blog that ZA001 had its nose cone attached and that the airplane is sitting on its wheels which means that the landing gear swing tests seem to have been completed. Jon also says that he saw flight test equipment on the airplane. Right now the impediment to Boeing getting the plane out the door (other than the strike) is getting the remaining flight test and cabin equipment installed on board as well as knock on effects from some small systems integration issues. Schedule margin is tight without the strike as it is and Jon and Scott Hamilton reported that first flight would be delayed as much as 5 weeks (into mid December at the latest) before any strike effects.
Adding to the pressure of the 787 program is a report by Geoffrey Thomas saying that the production problems on the 787 are hurting new sales of the airplane. Apparently, delivery slots are not available until 2020 which means that the impact of the production problems have effectively pushed out the earliest delivery slots by about 2 to 3 years unless Boeing can manage an orderly increase of 787 output to about 14/month.
Now because there is strike on doesn’t mean that work on the 787 has come to a grinding halt as evidenced by the LCF flights this week. The tier 1 contractors like Global Aeronautica, Vought and Mitsubishi will continue to produce their respective work packages for as long as they possibly can (without shipping further sections and wings to Everett). Depending on when the strike ends, this work during the strike period will eliminate traveled work going to Everett. Boeing can restart production on LN 5 when those parts arrive with no traveled work to be done thus utilizing the 787 production line in a manner it was intended. This can only help in increasing the production rate of the 787 in the near term. So while the strike is on going at Boeing that hasn’t completely bought the 787 production to a grinding halt and may in fact help the production system recover fully by the time the strike ends. One note to all this is that some Boeing’s 787 suppliers are starting to cut back on production, namely Spirit has said they are cutting back on production on some of the products they supply to Boeing without citing any specific Boeing programs. At the end of the day there will be progress in the suppliers’ efforts to clean up the production mess and get their end of the business back on track because of the strike. If Boeing can get its end in order then the production model for the 787 can be a big success.
Read an AP report here.
That all said the question that should be asked (and so far has not) is the IAM being very short sighted in its on the issue of outsourcing. James Bell Boeing’s CFO said at a conference yesterday:
The union, he said, "would like all of the work to be done in the Puget Sound area and that's not realistic." Boeing, he explained, would like "complete flexibility" to outsource work to suppliers; "We have to figure out what's the right balance."
There is nothing that could stop Boeing from selling its Renton and Everett plants to an investor thus turning Boeing into a pure systems integrator and having Renton and Everett bid on work packages much like other firms did when they went shopping for suppliers for the 787. We’ve already seen that happen with Boeing Wichita when those operations were sold to Onex Corp. and was renamed Spirit Aerosystems. Is something like that going to happen, probably no but it is plausible. It is one thing for the IAM to fight for better wages and health care benefits for their membership and their retirees but it is another thing to try and dictate to Boeing management what can be built where in a world of tight margins and intense price competition from Airbus. To see how much things have changed Spirit is going to be building fuselage panels for the A350 for Airbus. Clearly outsourcing is not just an American phenomenon but a global one and Boeing competes on a global stage.
Tuesday, September 2, 2008
Flightblogger reports possible 787 schedule slip
Jon Ostrower is reporting that there may be a schedule slip to the 1st flight of the 787 from mid December to possibly into early January, 2009. The reason behind the potential delay is not related to the potential strike by the IAM but rather to outfitting ZA001 with flight test and other cabin equipment. Also there was some time consuming trouble shooting related to some small systems integration issues but the net result of all this is eating up mostif not all the margin that program managers had left for themselves.
Read Jon's story here.
Read Jon's story here.
Friday, August 29, 2008
Countdown to a strike?
With Boeing's best and final offer out for the IAM and it's membership to study, a countdown has started towards midnight, September 4th. Boeing's offer called for a 11% increase in wages over three years. IAM was looking for 9 to 13% over the same period but was targeting the upper range of that number. An interesting offer was giving each worker $2,500 if they approve the new contract by September 3rd. Clearly, they're trying to talk directly to the machinists. There was also substantial improvements in benefits and Boeing has taken many issues off the table that IAM had objected to including moving to a 401(k) style retirement plan. One thing that Boeing is holding a line on is outsourcing which has formed the backbone of the 787 manufacturing process.
One experienced Everett employee that I talked to termed the final offer as "complete BS" as he'll receive only a pay increase of amounting to only $.25/hour and that new hires behind would essentially be making the same as him. He feels that he's not being paid for the time that he's put in.
Clearly there is dissatisfaction in the IAM ranks over this contract. However, there will be quite a few who will support it. I think particularly the older machinists will be more inclined to support this proposal because of the improvements in the wage and health care options. Boeing's strategy is to repeat what happened in 2002. In that negotiation 62% of the machinists voted against Boeing's proposal. But since they needed a 67% vote majority to go out on strike the proposal was automatically triggered and was forced upon the union membership. Clearly Boeing is hoping that this will be the case this time around.
This could have consequences 3 years from now if this happens as it could lead to a lot of bitterness within the membership that can result in a strike in 2011. We'll know in a few hours what the union leadership will recommend to it's membership.
One experienced Everett employee that I talked to termed the final offer as "complete BS" as he'll receive only a pay increase of amounting to only $.25/hour and that new hires behind would essentially be making the same as him. He feels that he's not being paid for the time that he's put in.
Clearly there is dissatisfaction in the IAM ranks over this contract. However, there will be quite a few who will support it. I think particularly the older machinists will be more inclined to support this proposal because of the improvements in the wage and health care options. Boeing's strategy is to repeat what happened in 2002. In that negotiation 62% of the machinists voted against Boeing's proposal. But since they needed a 67% vote majority to go out on strike the proposal was automatically triggered and was forced upon the union membership. Clearly Boeing is hoping that this will be the case this time around.
This could have consequences 3 years from now if this happens as it could lead to a lot of bitterness within the membership that can result in a strike in 2011. We'll know in a few hours what the union leadership will recommend to it's membership.
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