^ Perhaps, but I think that the VLA market just isn't there anymore as it once was, either. Airlines are realizing it's generally better to fly more smaller planes than fewer larger planes, and that's hurting AB and Boeing at the top ends of their lineups - AB to the point where they've stopped manufacturing the A380 and Boeing to the point where the 747 is practically dead (at least for passenger carrying) while the 777 is an unfortunate victim of being the largest passenger plane still manufactured, aside from the last few A380s (weird to think about). Hopefully sales pick up for the 777X as original 777s come to retiring age, but who knows if airlines still want nearly as many planes of that size, especially with the financial issues the Middle Eastern airlines that have typically been some of the 777s strongest purchasers are having.
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^ The 777 is a big part of the reason there's no market for VLAs. (Maybe the single biggest part.) Large twins are perfectly capable of flying the same routes and with more capacity flexibility. The 777X is, as I recall, more about fuel efficiency than capacity, so that should place it well. It uses the material sciences of the 787, new engines, and larger more efficient wings. It's things with more than two engines that are really having problems more than simply aircraft that are big. Even if they don't go the 777X route the 787 is a strong contender.
Anyway, don't want to get too far into the weeds on specific aircraft. My basic point was that even with the present non-trivial problems I don't really expect Boeing to fail, and I don't think I hear you saying you think they will. And even if they do fail, I expect the government wouldn't allow the major components to disappear or fall into the hands of overseas ownership. And short of a Toys-R-Us grade complete corporate death and dismemberment I don't see their woes affecting operations here much, if any. (And I'm not even quite sure what that would look like with an aircraft manufacturer now. Particularly since the whole shebang is presently a duopoly anyway. And nobody really wants to see the two become one.)
Anyway, don't want to get too far into the weeds on specific aircraft. My basic point was that even with the present non-trivial problems I don't really expect Boeing to fail, and I don't think I hear you saying you think they will. And even if they do fail, I expect the government wouldn't allow the major components to disappear or fall into the hands of overseas ownership. And short of a Toys-R-Us grade complete corporate death and dismemberment I don't see their woes affecting operations here much, if any. (And I'm not even quite sure what that would look like with an aircraft manufacturer now. Particularly since the whole shebang is presently a duopoly anyway. And nobody really wants to see the two become one.)
I wouldn't be so optimistic. 30 years ago I am sure someone somewhere was saying the same thing of the domestic airliner manufacturing industry.symphonicpoet wrote: ↑Dec 23, 2019And nobody really wants to see the two become one.
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^Thirty years ago Airbus was new and shiny and finally competitive. What had been two had just become three. And Boeing devouring McDonnell was a purely domestic problem. No foreign regulators required. Airbus buying Boeing would require the EU to sign off as well. They're not quite as far down the Reaganomics/Chicago School/Greed is Good toilet as we are. And do you really think even the current US FTC and DoJ would allow the last two manufacturers of large passenger aircraft to combine, particularly when that would mean control of one of their two largest suppliers of 'splodey things would devolve to a smallish town in the Netherlands nobody over here has even heard of?
Don't mistake this for optimism. I have no particular love for the current Boeing. I can't even imagine the present management is well loved in Seattle. Watching the entire C-suite deploy their golden parachutes at once would be . . . amusing . . . if it weren't for the fact they're about to disappear onto some tropical island with all the cash that a lot of other people built. (Wouldn't want to mistake them for people jumping out the side door of a Douglass product to do something useful.) Honestly, I would love nothing more than to see Boeing dismembered. I just don't expect it to happen.
And in any case, whatever happens in Chicagoland, I don't think it will have any noticeable impact here. . . . Unless Airbus announces an investigation of Hunter Biden, in which case all bets are off.
Don't mistake this for optimism. I have no particular love for the current Boeing. I can't even imagine the present management is well loved in Seattle. Watching the entire C-suite deploy their golden parachutes at once would be . . . amusing . . . if it weren't for the fact they're about to disappear onto some tropical island with all the cash that a lot of other people built. (Wouldn't want to mistake them for people jumping out the side door of a Douglass product to do something useful.) Honestly, I would love nothing more than to see Boeing dismembered. I just don't expect it to happen.
And in any case, whatever happens in Chicagoland, I don't think it will have any noticeable impact here. . . . Unless Airbus announces an investigation of Hunter Biden, in which case all bets are off.
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First I've heard of this in published media. It's possible and could work out well for the company. And of course, there's the possibility of STL having another publicly traded company HQ'ed here should they base operations at the old McDonnell Douglas HQ. It's intriguing, and it's very early in the process. Let's keep watching how this whole thing plays out.
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I read that article this morning and wasn't under the impression it was a decision being seriously considered. It read more like "this is something that can be done" from an outside perspective. Otherwise, it would be nice to have a publicly traded HQ here!
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That's how I read it too. However, if Boeing did spin off its defense division, the HQ would probably be in Washington DC to be close to the Pentagon. BDS used to be headquartered in St. Louis but Boeing moved the division to DC a few years back for that reason.
Yep, I find it more plausible that they would base the company in DC. In any case, this answers my previous question on how the MAX debacle (and the others) could potentially affect Boeing's presence in St. Louis.
The 1997 merger that paved the way for the Boeing 737 Max crisis
https://qz.com/1776080/how-the-mcdonnel ... ax-crisis/
https://qz.com/1776080/how-the-mcdonnel ... ax-crisis/
Isn't Boeing's Defense units/executives already based outside of DC? Believe the move was rather recent, maybe 2-3 years ago for the very reason of being close to Pentagonbillikens_19 wrote: ↑Jan 02, 2020That's how I read it too. However, if Boeing did spin off its defense division, the HQ would probably be in Washington DC to be close to the Pentagon. BDS used to be headquartered in St. Louis but Boeing moved the division to DC a few years back for that reason.
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Oh dear . . . the Boeing hagiography it burns. In no particular order:hebeters2 wrote: ↑Jan 06, 2020The 1997 merger that paved the way for the Boeing 737 Max crisis
https://qz.com/1776080/how-the-mcdonnel ... ax-crisis/
Boeing didn't get to be the biggest by building planes with a "damn the expense, make it perfect" attitude. Quite the opposite. The 707 was cheaper than competitors, like the Vickers VC10, Convair 990, and indeed the Douglas DC-8. Likewise they won with the 737 because it too was cheap. They spared plenty of expenses. Boeing never used the fancy blind landing features manufacturers like Lockheed and BAC were putting in their contemporary jets. They didn't add excess power for shorter runways. They shied away from the niftier flight characteristics associated with in and overwing engine placements in favor of easier to access (and thus operationally cheaper) below wing engines. It turned out you didn't really need those features often enough to pay for them, so BOAC, for instance, which specced a lot of the fancy bought so many 707s anyway they came to be known as the Boeing Only Airline Company. And now BAC is a minor part of Airbus and Lockheed is out of the airliner business altogether. They made expensive jets that did lots of neat things. Boeing made cheap but serviceable jets.
And Boeing jets had plenty of teething problems that resulted in planes spiraling out of the sky at speed and in pieces. The lists of their hull loss accidents show pretty similar rates to their competition if you read the fine print. All the majors are pretty close. (Because airliners have basically been solved for a good long while now.)
Further, Boeing's penchant for updating the 737 well predates the McDonnell merger. The very fact that there were three generations and nine variants already before the MAX says it all, as far as that's concerned. Heck, Boeing wanted to build a new ground-up model, but American and Southwest wanted more 737s. You really can't blame that on Stonecipher or anyone else from McDonnell. No matter how you want to twist it.
This whole "Boeing was better" before McD business is utter hogwash. It wasn't McDonnell that changed Boeing. It was the general economic pressures of the 80s and 90s. They didn't get the development model for the 737 MAX from McDonnell. They got it from Toyota, apparently. (Though they failed to read the fine print about how Toyota managed it. Or to notice that Toyota was, just about then, having some pretty significant problems of their own. My wife did a pretty nice paper on the 737 MAX problem for a supply chain class. It was enlightening stuff. I can ask her if I can share it, if you're interested. Probably better as a PM, though.)
In any case, Quartz's little article reads like nothing so much as a poorly researched opinion piece ghost written by disgruntled former Boeing brass.
And no, Boeing's history wasn't unique. The entire history of virtually every early aviation company was written at a single airfield . . . right up until they merged with someone else in the 70s or 80s. Or 90s, if you happen to have been lucky enough to be the biggest.
The business changed. Airline deregulation played a role. European forced mergers maybe played an even bigger role. (Which is odd, if you think about it. Kind of merger by regulatory fiat so US companies couldn't swoop in and buy it all, J. P. Morgan style.)
I will grant the author this: that first executive that didn't come up through the industry always spells trouble. And moving the HQ so far away from the factory or the design offices is never good for anyone except the outsider C-suiter with the posh stock option.
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Isn't that exactly what I just said? lol. Not really sure the reason for quoting me just to rephrase. But yes, a few years ago, Boeing Defense, Space & Security moved from the former McDonnell-Douglas headquarters building to Arlington (literally right across the highway from the Pentagon).dredger wrote: ↑Jan 06, 2020Isn't Boeing's Defense units/executives already based outside of DC? Believe the move was rather recent, maybe 2-3 years ago for the very reason of being close to Pentagonbillikens_19 wrote: ↑Jan 02, 2020That's how I read it too. However, if Boeing did spin off its defense division, the HQ would probably be in Washington DC to be close to the Pentagon. BDS used to be headquartered in St. Louis but Boeing moved the division to DC a few years back for that reason.
And if this did happen, St. Louis / Missouri better go out with an amazing incentive package and bring it back. As laughable as that sounds, the region better jump on that one real quick..
^ That already did happen. BDS has all their executives in DC. It’s only a handful of people. Since they did that Boeing has added an additional 2,000 jobs in STL. Even if Boeing did spin off the Defense unit, I wouldn’t worry about their operation here. They’re not just gonna close down all these plants and then rebuild them elsewhere. Especially with how well the St. Louis unit is currently performing.
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Let's all also remember that the Boeing STL plant is home to a lot of work on civilian/commercial aircraft, especially the 777X's wings. As an investment industry guy, I'm interested in learning more about how Boeing could consider splitting off the Defense/Space division into a separate company (which it would own the majority of shares), but I'm not certain that this is something at hand, nor would it be necessarily the best thing for STL. Right now, nothing appears imminent, so let's just keep our eyes out for this.
Yep, sorry Bilikens, I meant to respond to the previous post that Boeing Defense HQ already in DC so any spinoff pretty much have its HQ already in DC/near Pentagonbillikens_19 wrote: ↑Jan 07, 2020Isn't that exactly what I just said? lol. Not really sure the reason for quoting me just to rephrase. But yes, a few years ago, Boeing Defense, Space & Security moved from the former McDonnell-Douglas headquarters building to Arlington (literally right across the highway from the Pentagon).dredger wrote: ↑Jan 06, 2020Isn't Boeing's Defense units/executives already based outside of DC? Believe the move was rather recent, maybe 2-3 years ago for the very reason of being close to Pentagonbillikens_19 wrote: ↑Jan 02, 2020That's how I read it too. However, if Boeing did spin off its defense division, the HQ would probably be in Washington DC to be close to the Pentagon. BDS used to be headquartered in St. Louis but Boeing moved the division to DC a few years back for that reason.
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https://www.stltoday.com/business/local/germany-said-to-be-eyeing-mix-of-f-18s-and-eurofighters-to-replace-aging-tornado/article_3b14a6ab-b181-5fb6-b2de-95f289c335e9.html
Hopefully Germany places this order. They might purchase 45 jets from Boeing. This can only help sustain production in Hazelwood.
Hopefully Germany places this order. They might purchase 45 jets from Boeing. This can only help sustain production in Hazelwood.
^ Just came here to post that lol.
Little bit of detail for those without a subscription:
Little bit of detail for those without a subscription:
Last part there is probably good news for STL. I would expect any cuts here to be in the 777x wing assembly.The jobs cuts will come through voluntary layoffs, turnover and involuntary layoffs, the company said.
"That is 10% in total for the enterprise," Calhoun said. "We'll have to make even deeper reductions in areas that are most exposed to the condition of our commercial customers — more than 15% across our commercial airplanes and services businesses, as well as our corporate functions."
He added that "the ongoing stability of our defense, space and related businesses will help us limit the overall depth of the cut."
Losing the F-35 contract was devastating.
When the F15 and F18 production lines are closed it is going to be a bloodbath... probably 6,000 - 8,000 people will lose high paying, high-quality jobs. Not a bright future.
When the F15 and F18 production lines are closed it is going to be a bloodbath... probably 6,000 - 8,000 people will lose high paying, high-quality jobs. Not a bright future.
^ It's almost like you're rooting for that to happen...even though it probably won't. People were saying the F/A-18 line would go dormant in 2017 and the F-15 line would this year. Wrong on both counts. Probably not entirely unrelated to the unmitigated disaster that has been the F-35 program thus far.
It also appears you haven't been paying attention here at home:
They're going to be producing close to a dozen jets a month for at least the next decade. What was the point of this comment exactly?
It also appears you haven't been paying attention here at home:
Now Boeing’s St. Louis presence, which includes a missile and munitions plant in St. Charles and a facility in Mascoutah, has a new lease on life and confidence that it will keep churning out jets for more than another decade.
In the last 18 months alone, Boeing’s regional workforce has grown by 2,000 people to about 16,000, said Shelley Lavender, who leads Boeing’s St. Louis operations.
On top of the commercial work, military orders picked up in the last couple of budget cycles: orders of F/A-18 Super Hornets for Kuwait and the U.S. Navy, plus a retool of older Hornets, so they can fly longer; F-15 orders for Saudi Arabia and Qatar; plus a new version for the U.S. military, called the F-15EX, though Congress hasn’t given final approval on the new fighters. Last year, Boeing won the competition to build the MQ-25 refueling drone; the company is still deciding whether to assemble it in St. Louis County or in its Mascoutah plant. And its win last year in the Air Force’s trainer competition means the company will be churning out its new T-7 trainer jet until at least 2034. It anticipates more orders of that jet from the U.S. and abroad, plus opportunities to trick it out as a light fighter for foreign customers.
https://www.stltoday.com/business/local ... d0dcf.htmlAll of a sudden, the St. Louis campus will go from producing about three jets a month to 11 or more. “As we look forward to the next several decades here at the site, this is a very viable and healthy site for the long term,” Lavender said.
If St. Louis can hold onto its position as an aviation manufacturing hub, Boeing eventually may have another shot at a lucrative, decades long contract: competition for the Air Force and Navy’s sixth-generation fighter. “They’ll probably get there with their current working pipeline,” said Richard Aboulafia, a longtime military aircraft analyst for the Teal Group.
They're going to be producing close to a dozen jets a month for at least the next decade. What was the point of this comment exactly?
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^They have some new tricks coming too, including the loyal wingman project.
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I haven't heard too much about this project yet, but the idea has been batted around for a while. Theoretically, they would serve as a force multiplier, giving every pilot a small group of aircraft to command, each with their own munitions, sensors, and capabilities. In a lot of ways, that's probably the shape of the future much more than the F-35. (Or any other particular manned airframe. There will still be manned airframes, of course, but maybe not so many of them.)
I haven't heard too much about this project yet, but the idea has been batted around for a while. Theoretically, they would serve as a force multiplier, giving every pilot a small group of aircraft to command, each with their own munitions, sensors, and capabilities. In a lot of ways, that's probably the shape of the future much more than the F-35. (Or any other particular manned airframe. There will still be manned airframes, of course, but maybe not so many of them.)
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Background: I'm an investment manager and aviation nut...
When looking at Boeing, I recognize that the Defense & Space division is the revenue-generator. It is the primary source of monies coming into the company now as commercial aircraft is in trouble, both from the problems of the 737MAX program and the new uncertainties resulting from COVID-19 leading to decreased global passenger service. Currently, their pipeline is well stocked for continued production, noting as well that government military contracts aren't going anywhere. As noted above, STL has strong manufacturing for the F/A-18 and the F-15 both domestically and internationally. This comes while the F-35 recognizes multiple cost overruns and less stellar results than originally planned. There's also the F-15X potentially entering service as well as the Growler version of the F/A-18 leading to further potential increased domestic military consumption. STL also has the new Trainer, which I see now is going by the moniker the T-7, and potentially the unmanned programs also noted above. So it looks like we can have reasonable confidence in the domestic pipelines.
I also see how Boeing itself is an important company for the country's total economy, with Boeing able to account for nearly 1% of Gross GDP under normal circumstances (i.e. not during a pandemic). This makes it strategically important for the government to protect it. Therefore, I think it's reasonable that the government will do what it can to shore up Boeing. This may mean they'll continue to purchase Defense & Space production to further the company's total revenue generation while it contends with difficulties in the commercial divisions. Seattle's problems may be STL's gains. This also notes how the company has other Defense programs besides aircraft and munitions manufacturing, such as IT-related products and services. That "loyal wingman" ATS program mentioned above gives me even greater confidence in the STL operations going forward.
Previously, I've written here how it may be possible Defense & Space could be spun out by Boeing into a stand-alone operation. This may still be possible, if Boeing corporate becomes and remains the primary shareholder of any spin-off. Same time, I see the likelihood of this probably going down in the near term. Doing a divisional separation like this for an IPO - effectively relaunching McDonnell Douglas - could bring Boeing metric crap tons of quick-time revenues from asset sales which could help them as they straighten up commercial production. But, this could be expensive to pull off; could dilute their total revenue generation; will dilute their autonomy; and may not be advisable amidst so much broad market instability. This may be too much for them to pull off right now, maybe down the road if they need the cash (and the government won't help them first).
TL/DR: Boeing's STL operations are strong and growing. Defense & Space is their shining star division for revenue generation. If anything, it'll get bigger locally.
When looking at Boeing, I recognize that the Defense & Space division is the revenue-generator. It is the primary source of monies coming into the company now as commercial aircraft is in trouble, both from the problems of the 737MAX program and the new uncertainties resulting from COVID-19 leading to decreased global passenger service. Currently, their pipeline is well stocked for continued production, noting as well that government military contracts aren't going anywhere. As noted above, STL has strong manufacturing for the F/A-18 and the F-15 both domestically and internationally. This comes while the F-35 recognizes multiple cost overruns and less stellar results than originally planned. There's also the F-15X potentially entering service as well as the Growler version of the F/A-18 leading to further potential increased domestic military consumption. STL also has the new Trainer, which I see now is going by the moniker the T-7, and potentially the unmanned programs also noted above. So it looks like we can have reasonable confidence in the domestic pipelines.
I also see how Boeing itself is an important company for the country's total economy, with Boeing able to account for nearly 1% of Gross GDP under normal circumstances (i.e. not during a pandemic). This makes it strategically important for the government to protect it. Therefore, I think it's reasonable that the government will do what it can to shore up Boeing. This may mean they'll continue to purchase Defense & Space production to further the company's total revenue generation while it contends with difficulties in the commercial divisions. Seattle's problems may be STL's gains. This also notes how the company has other Defense programs besides aircraft and munitions manufacturing, such as IT-related products and services. That "loyal wingman" ATS program mentioned above gives me even greater confidence in the STL operations going forward.
Previously, I've written here how it may be possible Defense & Space could be spun out by Boeing into a stand-alone operation. This may still be possible, if Boeing corporate becomes and remains the primary shareholder of any spin-off. Same time, I see the likelihood of this probably going down in the near term. Doing a divisional separation like this for an IPO - effectively relaunching McDonnell Douglas - could bring Boeing metric crap tons of quick-time revenues from asset sales which could help them as they straighten up commercial production. But, this could be expensive to pull off; could dilute their total revenue generation; will dilute their autonomy; and may not be advisable amidst so much broad market instability. This may be too much for them to pull off right now, maybe down the road if they need the cash (and the government won't help them first).
TL/DR: Boeing's STL operations are strong and growing. Defense & Space is their shining star division for revenue generation. If anything, it'll get bigger locally.
