General Joseph Dunford, chairman of the Joint Chiefs of Staff, told the Senate Armed Services Committee last week that Pentagon officials decided to buy the F-15X partly because it’s “slightly less expensive for procurement than the F-35, but it’s more than 50 percent cheaper to operate over time and it has twice as many hours in terms of how long it lasts.”
“Today, Boeing continues to produce the 737 Max at full tilt, which will rapidly create billions of dollars of immobile plane inventory. This suggests the manufacturer is confident in the fixes that it has proposed, and that customers will be able to take delivery and fly the plane again before too long. But will they?” • Too big to fail? https://www.bloomberg.com/opinion/artic ... where-soon
^ Is this really relevant? I understand the connection to Boeing, but considering they do zero 737 work in STL, I'm just not sure how this relates I guess.
^I think the argument could be made that weak commercial aircraft sales have hurt St. Louis in the past, even though none of those aircraft were made locally. (Or to my knowledge even designed here.) Poor sales of the MD-11 and MD-90 relative to Boeing and Airbus competitors, and money lost on projects like the MD-12 did McDonnell Douglas no favors. And we know what happened when Boeing moved in. I can't see Boeing folding over the 737 troubles. (I'm very much inclined to think they'll work through it and Max will go on to become one last winner for the 737 lineage before the retire the design and move to the next big thing.) But I can believe it will hit cash flow in such a way as to slow down other projects. Worst case: they spin off or sell the defense division to raise capital. Of course . . . that could also be the best case, since it could open a range of opportunities.
Honestly, I don't think it's likely that Boeing's corporate automation will drive the St. Louis plant into a fatal nosedive, but . . . it already came kind of close, but for some skilled engineers correcting the problem.
^ Is this really relevant? I understand the connection to Boeing, but considering they do zero 737 work in STL, I'm just not sure how this relates I guess.
Agreed. It's not relevant. Boeing Defense, Space and Security is a completely separate line of business from commercial airplanes.
While there is little 737 work being performed in St. Louis, there are a lot of Boeing employees and retirees in St. Louis that have Boeing stock in their 401Ks. Exactly 10 years ago Boeing stock was 39. Now it is 392, down from a high of 440.
Boeing employees care more about fixing the Boeing 737 Max 8 problems so no more people die than they do about the stock price. They are aerospace professionals and work with the government and industry to make flying as safe as it can possibly be. But it will be interesting to see if there was any pressure from management to take any shortcuts to get the 737 Max 8 on the market. I think they may have made questionable design decisions to get an upgraded 737 out early to compete with Airbus Neo, but I doubt if that had anything to do with this particular design issue.
Usually, there is so much redundancy in an aircraft that it takes an extraordinary sequence of bad events to occur in short order for there to ever be a problem. But it sounds as if this one can be solved with a software update. (Incidentally, fixing a failure in software is not an indication that the software was built as intended. It just means the problem--h/w, s/w, system, or training--is best mitigated with a software addition.)
Boeing employees care more about fixing the Boeing 737 Max 8 problems so no more people die than they do about the stock price. They are aerospace professionals and work with the government and industry to make flying as safe as it can possibly be.
Well said. I suspect every employee at Boeing, top to bottom, expects to sit in an airborne 737 Max at some point. Boeing employees mostly fly commercial just like the rest of us. (I honestly expect much more than the overwhelming majority of us.) And in the end, I really believe they will fix Maxie's problems. (Fairly quickly and well enough to make her an exceptionally safe and efficient bird.)
The Bloomberg piece is strictly opinion. (And it is labeled as such.) The Business Standard piece also carries a Bloomberg byline, though no specific signature. Boeing has stated that they intend to push the software fix before the end of the month. It will take at least a little while after that to get approval to get the aircraft flying again and presumably to distribute the new training materials. And I fully expect approval will come more slowly some places than others. But I really wouldn't expect this to stretch into years. It won't be flying tomorrow, but . . . soon. They've had these problems before. This is not the first new aircraft they've had grounded. (Nor will it likely be the last.) And while this is something everyone wants to avoid, the most important thing is that we learn from our mistakes and move forward. I don't think anyone would suggest we quit flying. It's still far and away the safest way to get between two points. Yes. It will be flying again soon. I'd guess by summer at least domestically. In any event, we shall see. We've been down this road before. Unfortunately. And we will be again. In fact, every aircraft manufacturer has been down this road. All of them have had problems with training materials, with pilots that expected the plane to do one thing but instead it did another. With systems that didn't quite work or weren't quite sufficiently redundant. (Lockheed, ironically, has probably had the smoothest new aircraft launches of all the majors and look how well their commercial aircraft division is doing these days . . . )
^He makes some interesting points. He's clearly done his homework. But he is, by his own admission, entirely an amateur. Not a pilot. Not an engineer. A journalist who likes planes, reads the aviation press, and has presumably studied on his own time in the literature and home simulators and so forth. Essentially . . . much the same as myself and several other people on this board. In the end the standard aviation board response to this sort of conjecture applies: wait for the professionals. The data is all there. The pros know what happened. They know how to fix it. They will. This is a lovely piece of well studied conjecture. But that is all. The tin pushers and Boeing engineers will work off the data. If it's a software problem a software fix will suffice. If it's a training problem then training will be required. No one in a position to know has in any way suggested a significant redesign of the aircraft will be required. And serious decision makers very much in the loop clearly believe it is not. (Boeing is, after all, still producing the things. Right now. Unchanged.) I'm going to trust the professionals on this one. They genuinely do know what they are doing.
written by a pilot
Boeing produced a dynamically unstable airframe, the 737 Max. That is big strike No. 1. Boeing then tried to mask the 737’s dynamic instability with a software system. Big strike No. 2. Finally, the software relied on systems known for their propensity to fail (angle-of-attack indicators) and did not appear to include even rudimentary provisions to cross-check the outputs of the angle-of-attack sensor against other sensors, or even the other angle-of-attack sensor. Big strike No. 3. None of the above should have passed muster.
His basic message is that the MAX failure is a result of software engineering culture slipping its way unimpeded into aircraft engineering. https://spectrum.ieee.org/aerospace/avi ... -developer
hebeters2 wrote:
written by a pilot
Boeing produced a dynamically unstable airframe, the 737 Max. That is big strike No. 1. Boeing then tried to mask the 737’s dynamic instability with a software system. Big strike No. 2. Finally, the software relied on systems known for their propensity to fail (angle-of-attack indicators) and did not appear to include even rudimentary provisions to cross-check the outputs of the angle-of-attack sensor against other sensors, or even the other angle-of-attack sensor. Big strike No. 3. None of the above should have passed muster.
His basic message is that the MAX failure is a result of software engineering culture slipping its way unimpeded into aircraft engineering. https://spectrum.ieee.org/aerospace/avi ... -developer
And a lesson on the dangers of monopolies and regulatory capture (i.e. the FAA doing anything Boeing wants)
Saw this in the paper this morning. In the last 18 months Boeing St. Louis has added around 2,000 new jobs brining their employment total in St. Louis to roughly 16,000. The plant is poised for future growth as military contracts have picked up and as the St. Louis facilities move into the commercial side of things with the 777X wing assembly.
Boeing St. Louis has definitely been on a roll. However, that article kind of downplays the significance of the F15-EX for the St. Louis site. More likely than not, the Air Force will buy hundreds of them to replace the F-15C/D. On top of that, I'm guessing there will be a lot of international orders. So it's basically as significant as a new program such as the MQ25 or T7A Red Hawk. Now, if only the county/Hazelwood would show their appreciation to Boeing by repaving McDonnell Blvd. from 270 to Lindbergh. That stretch has got to be one of the worst in the entire region, with the exception of city streets.
^I think they're downplaying it as it's not yet a done deal. Contracts have been awarded on the other two, if I am not completely mistaken. Enabling legislation has passed. Pentagon has put out requisition orders. Someone or other in a tangerine hue has signed off. Whole ball of wax. The F-15EX, by contrast, still faces a lot of opposition from the USAF and Lockheed who see it as a threat to the F-35 program. Things are looking up. It has backers in the pentagon, Congress, and the administration. But . . . it's awfully hard to make a branch buy a thing it doesn't want. Not impossible, but hard. And man, there are some top AF brass that don't want. So I think the paper's position is pretty reasonable. It's a promising program, but not a done deal as I read it. (Beyond the first two airframes, at any rate.) DOD wants AF to buy something like 14 a year. Of course, the Navy is indeed buying F-35s many in their top brass have not wanted for years, so I do remain hopeful about more bald Eagles.
Airplanes and Accounting Games: The Coming Boeing Collapse? Matt Stoller
Interesting as always from Matt Stoller.
Boeing also said on its conference call some customers have stopped making advanced payments. That was a new revelation. Essentially, customers put down deposits when buying a jet. As the delivery date approaches, customer payments come due. Don’t forget, the current backlog of MAX orders stretches out years. Of course, the vast majority of cash comes in when the plane is finished, but suspension of payments is another—albeit small—cash headwind and one that could indicate strain with customers.
This looks to me like their key weakness. I commented a few days ago about my experiences in an engineering company when an enforced 6 month break which led to mass redundancies ended up significantly increasing long term costs. Former employees had to be rehired as consultants on multiples of their past hourly wages. Suppliers went bust or took on other contracts, meaning new suppliers had to be found at often far higher costs.
You don’t need to be a financial expert to see that if your main product line faces significant cost increases at the same time as the purchasers feel they are in a position to drive down what they pay per unit, and also refuse to make early payments without proof of delivery, then at some stage those two curves are going to meet and you are going to hit a serious cash crunch. It might be some years away, but it will happen.
^While they're doing well here and I don't expect that to change it is fair to ask what happens to the larger company. So far they haven't talked about laying anyone off, so far as I've heard. They're moving folks to other projects. I suspect they're large enough and healthy enough to weather this. A lot of their suppliers doubtless have multiple contracts, and many are probably large enough to weather downturns themselves. Mind you, I'm no expert, so don't take this as a stock tip.
But it actually is kind of interesting to speculate about what would happen if they failed. (In the "May you live in interesting times" curse sense, that is. And well, we do anyway, so why not just embrace it?)
So what would the likeliest scenario be? They still have some very desirable products. I'd assume even if they failed, they'd just go through a reorganization that would keep the lights on, change the name on the letterhead a little, and allow them to shed some of the debt.
But if they really really really failed . . . now that gets really interesting. Then the divisions probably get sold off individually. Defense to one buyer, commercial to another, space to a third, and so forth. Maybe defense emerges as an independent company. Commercial probably gets bought quickly by someone who wants the products that aren't grounded. (The 777 and 787, after all, are both still selling like gangbusters. And there's a new triple seven in the pipeline just about ready for market. And there's probably been significant investment in 797/MoM.) Someone will want all of that, and it seems unlikely the FTC would allow Airbus to buy them, as that really would create a dangerous monopoly. So maybe a smaller aviation concern buys them on the cheap: Bombardier or Mitsubishi. Or an investor like Buffet. Maybe they buy the whole thing, even. Again: change the name on the door and write off some of the debt, more or less, though by a different route.
The third option is that the whole thing goes splat and the factories close and Airbus or Mitsubishi start buying up the tools, but I just don't see that happening. Certainly Uncle Sam would never let a foreign investor truly control Boeing Defense. And apart from Lockheed there's not really any domestic aerospace company big enough to swallow something like that. And I don't think they'd even begin to let Lockheed take over as, again, dangerous monopoly. That would gouge the the Pentagon even more than they already do. So that leaves an investor buying the parts, really. Which most likely brings us back around to someone slapping new signs on the door after writing off some of the debt.
In the end, I don't think there's really that much risk here. Boeing will pull through this, and even if they don't someone will pull Boeing through this. If the government can't let GM fail they REALLY can't let Boeing fail. That one's kind of strategically significant. So . . . they won't.
Now if some McDonnell kid has the kind of cash to invest to maybe pick up the pieces of this fiasco . . .
Aren't fever dreams wonderful?
Again: pure speculation. And fever dreams. No stock tips.
(The 777 and 787, after all, are both still selling like gangbusters. And there's a new triple seven in the pipeline just about ready for market. And there's probably been significant investment in 797/MoM.)
Not sure the sales numbers are quite that rosy still, as 787 sales have started to slow down some and the 777 really isn't selling that well anymore - in fact, the overall order book for the original 777 has decreased by 3 this year, and the 777X hasn't ever really sold that well despite the investment by Boeing, especially with the order reductions by the Middle Eastern airlines, and its order book only sits at slightly over 300 at this point in time. There's also some hints that Boeing might also be realizing that the market for the MoM just isn't there as they predicted (or has eroded due to the capabilities of larger narrowbodies), and therefore can't continue to justify the cost of a program that might not sell that many planes. With the MAX debacle, the smarter play might be replacing the 737 entirely with a slightly larger plane, (MoM lite) and perhaps have Embraer develop a new plane or grow the E2 to become the smallest plane in Boeing's lineup.
^^I believe part of the reason the 777X isn't selling well . . . yet . . . is that they're not really selling it. They delayed the launch with the 737MAX problems. And the current MoM/797 seeming softness may have as much to do with a (likely temporary) snit between Delta and Boeing, since Delta was the airline expressing the most interest in the thing before Boeing tried to get nasty about the A220. This too shall pass. They do need to design a 737 replacement and I don't doubt they'll get right to that so long as Southwest and American quit piling the pressure on.
^Heard about the Starliner failure. I think it sounds a lot worse than it was. Apparently mostly amounts to a clock someone set improperly which they couldn't fix once it was off the pad, as I understood the story. This is a problem, but not a terminal one. So long as it comes down okay I expect it will be fine. Not that ULA is necessarily the best bet anyway; the margins are probably not any better than airliners and the development expenses are an order of magnitude worse.
