mm303: Boeing loses the big one

March 2, 2008

MUDGE’s Musings

Boeing Corporation is one of this country’s economic superstars. Through years of growth, organically and, as has been typical of the aerospace industry since the end of the Cold War, through acquisition, Boeing has become one of the top three defense contractors in the U.S.

Boeing competes globally with Airbus, the “upstart” European aerospace consortium, for the privilege of supplying the world’s airlines. In both roles, military and civil, Boeing has remained a shining exception to the cataclysmic conversion of the U.S. economy from manufacturing to not.

Boeing, long based where it began during World War I, in Seattle, unexpectedly transferred its corporate headquarters to Chicago, MUDGE’s home, so Boeing stories, always of interest to yr (justifiably) humble svt due to his lifelong fascination with all things aviation, now have a home town component.

Boeing, a hometown hero in several locales: Seattle, Wichita, St. Louis, Long Beach, and lately Chicago, took a hard hit Friday, when the U.S. Air Force announced that it lost its bid to furnish refueling tankers to its most bitter competitor, Airbus.

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mm257: The R-Word – Not that racy television show…

January 17, 2008

MUDGE’S Musings

On more and more minds, and lips, lately is that dreaded R-Word, recession.

First some news that we won’t have to work too awfully hard to relate to the topic at hand.

1. A critical gear in the export engine gets stripped

The aerospace competition between Europe’s Airbus and the U.S.’s Boeing has been hard-fought (think: Saturday-night saloon, brass-knuckles style) commercial dueling of a classic nature.

Boeing, complacent after lucrative decades owning global airline sales was embarrassed when upstart Airbus, an amalgam of several European aerospace firms unable individually to compete with the Boeing colossus began to outsell the arrogant giant.

Thus it was with no small satisfaction that Boeing watched Airbus announce delay after delay delivering its latest product, the immense 600-passenger A380, finally released to its first customers late in 2007.

Now, the shoe is on the other foot, as Boeing yesterday was forced to admit that its latest product, the new-age, environmentally sensitive 787 Dreamliner, has encountered delivery glitches of its own, the impact of which will push deliveries back to 2009.

Here’s the word from Boeing’s home-town paper, the Seattle Post-Intelligencer (sorry, Chicago Tribune, but Boeing’s head may have relocated, but its heart remains in Washington State).

seattlepi

Boeing explains new 787 delay

Company ‘underestimated’ time to finish partners’ work

By JAMES WALLACE
P-I AEROSPACE REPORTER

It was 90 days ago Wednesday that Boeing troubleshooter Pat Shanahan took over the 787 program after then-Dreamliner boss Mike Bair was sacked.

A week earlier, The Boeing Co. had announced an embarrassing six-month delay, with the first Dreamliner deliveries to airlines slipping from May until the end of 2008.

Boeing believed at the time that it would be able to complete work on the first plane in its Everett factory and have it flying by the end of March. It is the first of six that will be needed for the flight test program before the 787 can be certified by regulators to carry passengers.

The story rings true enough; the 787 is a new aircraft, being assembled a new way.

The 787 represents a new way of building airplanes for Boeing, which turned over most of the manufacturing and assembly work to key partners in Italy, Japan and elsewhere in the United States.

But those partners were unable to complete a significant amount of work before the unfinished sections of the first of six test-flight planes arrived in Everett for final assembly. Boeing has struggled to catch up on all this “travel” work.

Typical complexity issues, perfectly understandable, if disappointing.

[Please click the link below for the complete article — but then please come on back!]

Boeing explains new 787 delay

It will take a more adept macroeconomist than yr (justifiably) humble svt (not a very high bar to scale either) to tell us the effect of this delivery delay on the economy. Exports are an important piece of the economic pie, and Boeing a critical element of that slice.

Boeing sneezes, and we all should start looking around for our Nyquil.

2. Okay, it’s a recession. Which candidate makes the most sense?

There’s a presidential election campaign going on, you may have noticed.

NYTimes’ Paul Krugman, one of our favorite economic analysts, takes a look at their positions. Voters are getting nervous; tell us you know how to make us feel better:

nytimes

Responding to Recession

By Paul Krugman | Published: January 14, 2008

Suddenly, the economic consensus seems to be that the implosion of the housing market will indeed push the U.S. economy into a recession, and that it’s quite possible that we’re already in one. As a result, over the next few weeks we’ll be hearing a lot about plans for economic stimulus.

Since this is an election year, the debate over how to stimulate the economy is inevitably tied up with politics. And here’s a modest suggestion for political reporters. Instead of trying to divine the candidates’ characters by scrutinizing their tone of voice and facial expressions, why not pay attention to what they say about economic policy?

In fact, recent statements by the candidates and their surrogates about the economy are quite revealing.

And he proceeds to get to the heart of each candidate’s economic sound bites.

  • McCain: ruefully admits he doesn’t know what he doesn’t know about the economy
  • Giuliani: his cure, a huge tax cut, isn’t
  • Huckabee: just wrong
  • Romney: who just might know something, won’t say anything, fearing to offend
  • Edwards: driving the agenda with a clearly designed policy
  • Clinton: following suit
  • Obama: after an awkward false start, now has a plan, although less progressive than the other leading Dems

[Please click the link below for the complete article — but then please come on back!]

Responding to Recession – New York Times

Can’t help but wonder what Michael Bloomberg thinks… Mike, Mr. self-made billionaire, what get’s us out of our funk, fast?

3. Recession: Bitter but necessary medicine?

Another of MUDGE’s favorite economists, Daniel Gross of Slate, weighs in on our looming distress, and how it could provide a wake-up call to U.S. business:

slate

The Good News About the Recession

Maybe it will finally teach Americans how to compete globally.
By Daniel Gross | Posted Wednesday, Jan. 16, 2008, at 11:53 AM ET

House for saleA sign of the housing slump

A recession may be upon us, which would mean fewer jobs, declining tax revenues, and sinking consumer confidence.

But for some (congenital Bush-bashers, the Irvine Housing Blog, critics of rampant consumerism), the parade of bad news is an occasion for schadenfreude….

(By the way, schadenfreude is defined thusly. Admit it, you always wanted to know but never bothered to look it up. Sequitur Service© at your service!)

… They enjoy seeing inhabitants of the formerly high-flying sectors that got us into the mess—real estate and Wall Street—being laid low. Others hold out hope that a recession will iron out distortions in the housing market, thus allowing them to move into previously unaffordable neighborhoods. Some econo-fretters hold out hope that reduced imports and the weaker dollar—both likely byproducts of a recession—will help close the trade deficit. And a few killjoys believe recessions can be morally uplifting. “High costs of living and high living will come down. People will work harder, live a more moral life,” as Treasury Secretary Andrew Mellon put it in the disastrous aftermath of the 1929 crash and ensuing Depression. Not for him stimulus packages and enhanced unemployment benefits. “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” (Thanks in part to such comments, voters liquidated Republicans for a generation.)

With the exception of a few gleaming stars, like our friends Boeing, U.S. companies have been woefully ineffective at selling to global markets.

The world is running away from us. The volume of global trade in merchandise has been increasing rapidly. And it’s not just the United States importing goods from China. It’s China importing natural resources from everywhere and building infrastructure in sub-Saharan Africa, sub-Saharan Africa buying oil from the Persian Gulf, Dubai investors purchasing Indian real estate, Indian builders buying German engineering products and services, and German engineers buying toys made in China. With each passing day, an increasing number of transactions in the global marketplace do not involve the United States. We’re still a powerful engine. But the world’s economy now has a set of auxiliary motors.

We know we’ve been floundering; the way out may well be to find business leaders with global skillsets.

[Please click the link below for the complete article — but then please come on back!]

The good news about the recession. – By Daniel Gross – Slate Magazine

It’s going to be an uphill fight. We’ve earned our way into this economic distress: outsourcing our jobs instead of figuring out how to become competitive; living high on borrowed money that is now coming due big time; wasting geopolitical and real capital, and thousands of young American lives, on a poorly designed, inadequately executed, military misadventure in Iraq.

The R-Word

We hope you enjoyed this week’s three-part episode, and hope to heaven that we don’t have to do run too many more of them!

It’s it for now. Thanks,

–MUDGE

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mm197: Short Attention Span

November 17, 2007

MUDGE’S Musings

shortattention_thumb2

Short and sweet for a football Saturday:

Daily, the media reveals the results of some important new medical study. Daily, the survey results seem to be spun out of all recognition of what are the true implications of the research.

Sandy Szwarc blog, Junkfood Science, punctures the preconceptions and the distortions by actually reading the studies, cutting through the spin and reporting to her growing audience the truth. We’ve highlighted some of her recent work here and here, and our Drafts folder of our Windows Live Writer has the makings of a future such post, pending suitable long attention.

This week, Sandy Szwarc marked the first anniversary of her extraordinary effort, Junkfood Science.

A cupcake for each of you

It’s Junkfood Science’s first birthday. While I can only share a cyber-cupcake with each of you in celebration, it comes with thanks and a note to let you know how terrific you all are! Readers have grown in numbers, without hit gimmicks or paid media connections, to nearly 1 million. We’re mere days away to the millionth reader.

Regular readers get what this blog is all about, too. It’s not trying to sell you anything; market some politician or agenda; promote some health and wellness program, diet or pill; or scare you. Of course, that’s the fastest, surest way to make one unpopular among all those who are. Despite what some may believe or claim, there is no money in the truth and speaking out for scientific integrity, either, which is probably why we so rarely hear it. But you deserve better than the nonstop “the sky is falling” drumbeat we get everywhere.

Happy blogversary, Sandy Szwarc! You remain a glowing example of the power of the blogosphere to inform and educate.

[Please click the link below for the complete article — but then please come on back!]

Junkfood Science: A cupcake for each of you

shortattention_thumb2[6]

Some of our highest highs and lowest lows are the result of our enjoyment of Patrick Smith’s Ask the Pilot column at Salon.com. Highs, because he writes so compellingly as a working commercial airline pilot about his profession and the ailing industry.

Highs, because our posts referring to his stories are among the most read at this nanocorner of the ‘Sphere©.

Lows because my derivative howbeit well-intentioned blogging efforts came to the attention of Salon’s lawyers. Oh, well, the day one stops learning is the day one stops.

Patrick’s column this week takes an interesting swipe at that Apple iPhone television commercial we’ve all seen.

Not buying it when the pilot tells you weather is holding up your flight? iPhone to the rescue!

Nov. 16, 2007 | If you’ve been watching TV at all, you’re by now familiar with Apple’s iPhone blitz. You know the campaign I’m talking about. Each ad stars this or that insufferably regular Joe who proceeds to share some touchy-feely tale of how his iPhone all but saved the nation from calamity. As a rule, I don’t like talking about television, especially commercials, but I’m obliged to address the iPhone spot featuring the pilot.[…]

Alas, not everyone is wisely skeptical, and the first time I saw the ad, I flicked off the set and offered up a silent prayer for pilots and flight attendants the world over. Thanks to this half-minute charade, they must now contend with legions of smart-aleck iSleuths gullible enough to believe what they’re told by a commercial.

So I guess today’s potpourri has some commonality after all. Most weeks Patrick Smith, and all of Sandy Szwarc’s posts, skewer the assumptions we’re fed by what many of my colleagues in the ‘Sphere contemptuously refer to as MSM, the mainstream media.

[Please click the link below for the complete article — but then please come on back!]

Ask the pilot, Patrick Smith, iPhone | Salon Technology

For some, for these two certainly, blogging is so much more than a hobby or creative outlet. Patrick Smith and Sandy Szwarc are both listed on the L-HC blogroll2, and MUDGE is grateful for their hard, always illuminating work.

shortattention_thumb2[8]

Since as a typical guy, MUDGE is fascinated by planes, trains and automobiles (and in some lighting [all right, any lighting] might even distressingly resemble a very much shorter John Candy, sorry to admit), our last segment is an editorial from the NYTimes this week.

The Prince and the Plane | Published: November 14, 2007

On Monday, a Saudi billionaire, Prince Walid bin Talal, placed an order with Airbus for his new private plane, the A380. That superjumbo will be the largest private jet on the planet. No hard figures were mentioned, but the asking price for an A380, which weighs 200 tons more than a Boeing 747 and has a floor space of about 6,000 square feet, is around $300 million. That is for the raw plane itself, hull, wings, engines, etc. — nothing to distinguish its interior from the hold of a cargo plane. But even unfurnished, the purchase of this Airbus offers some interesting numbers to think about.

For instance, the average-size house in America — about 2,300 square feet — would cost $106,812,000 at the price per square foot that Prince Walid paid. Even in California, this is a lot.

a380

Notwithstanding the fact that the Times editorial gave us an always welcome excuse to include an aircraft photo, and even lets us remind you that Patrick Smith believes the A380 to be the ugliest aircraft ever placed into commercial service, this is a salutary reminder of the wretched excess that our insatiable appetite for Saudi oil makes possible. A comparatively benign example at that.

Sigh.

It’s it for now. Thanks,

–MUDGE