mm414: McCain vs. Obama takes to the skies

June 18, 2008

MUDGE’s Musings

The Government Accountability Office has tossed the Northrop Grumman/EADS refueling tankers contract back to the Air Force. This is a big relief to Boeing, which was stunned in March when they lost out in a competition that could be worth as much as $40 billion.

Boeing filed a protest after the consortium of Northrop Grumman/EADS, EADS being the European aerospace giant that has been competing savagely, and successfully, with Boeing for the world’s commercial airline business for more than 30 years, was chosen by the Air Force to provide 179 KC-45A aerial refueling tankers. The KC-45A is based on the popular Airbus A330 twin engine widebodied airliner. Boeing’s submission was based on the Boeing 767, a similar aircraft, but a decade older design.

If you took the trouble, faithful reader, to refresh your memory regarding the March award by clicking on the link above, then you know that this story is a true Washington lobbyist soap opera.

washingtonpost

GAO Agrees with Boeing in Air Force Tanker Contract

By Dana Hedgpeth | Washington Post Staff Writer  | Wednesday, June 18, 2008; 2:04 PM

The Government Accountability Office has sustained a protest from Boeing on a $40 billion contract awarded to rival Northrop Grumman to build new aerial refueling tankers for the Air Force, saying “a number of significant errors” had been made in the evaluations of the heated competition.

Read the rest of this entry »

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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.

Read the rest of this entry »


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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mm132: Delay imperils Dreamliner’s delivery date

September 7, 2007

MUDGE’S Musings

Friday is apparently catch-up day here at L-HC. In mid-July, Boeing rolled out the 787 Dreamliner to great acclaim.

Based on how industrially complex modern designed from scratch aircraft are, should we be surprised that delivery times are slipping?

chitrib

By Julie Johnsson | Tribune staff reporter

September 6, 2007

Boeing Co. officials acknowledged for the first time Wednesday that there is an increased risk it won’t meet its delivery schedule for its first 787 Dreamliner.

Production glitches have forced the planemaker to postpone the new jet’s maiden flight, once slated for late summer, until sometime between mid-November and mid-December, Scott Carson, president and chief executive of Boeing Commercial Airplanes, said on a conference call with analysts and reporters.

That leaves Chicago-based Boeing just six months to gain federal certification for the 787 before the first aircraft is due to be delivered to Japan’s All Nippon Airways in May. To compensate, the company plans the most aggressive flight testing for the groundbreaking jet in its history.

Boeing still believes it can deliver the first plane on time. But the delays leave it with little or no buffer to deal with any problems it discovers during its flight tests, said Mike Bair, who leads the 787 program.

And, indeed, it’s the complexity that’s making problems for Boeing.

[Per L-HC’s reformed process, please click the link below for the complete article — but then please come on back!]

Delay imperils Dreamliner’s delivery date — chicagotribune.com

Remember how everyone beat up Airbus because their schedule for the gigantic double-decked 380 has slipped by a couple of years?

Boeing made out well, reopening production of a 40-year old 747 model that seemingly was destined to cease manufacture, due mainly to Boeing’s aggressive selling to customers such as FedEx and UPS who found Airbus’ 380 delays unacceptable.

And during this duress, Airbus’ original, too-derivative design for a Dreamliner competitor, model 350, failed to move the market and has required a total redesign, which has delayed prospective deliveries of the newly named 350XWB until the middle of the next decade.

Airbus, a typical European governmental/industrial mashup of Tower of Babel proportions, has gone through multiple violent management changes as a result.

But, guess what? Boeing has discovered for itself that designing and manufacturing a commercial airliner, in these days of global participation (i.e., if you want to sell airplanes to Indonesia, you’d better manufacture some component there, even if it’s a landing gear door), is a pretty tricky business, requiring logistical organization perfection on a worldwide scale.

And, remember the Challenger tragedy of 21+ years ago? It was an average, utilitarian, unglamorous O-ring that did it in.

And the Dreamliner’s current problems are with average, utilitarian, unglamorous fasteners.

For want of a nail, indeed…

dreamliner

Pretty, though.

It’s it for now. Thanks,

–MUDGE


mm085: Danger In The Repair Shop

July 26, 2007

MUDGE’S Musings

My habit is to enjoy Business Week at (my usually) solitary lunch break. Imagine my digestive condition after reading this:

Business Week Online

JULY 30, 2007
GLOBAL BUSINESS

Danger In The Repair Shop

FAA inspectors are warning about the risks of outsourcing maintenance

The global economy has given consumers a lot to worry about these days: lead-laced toy trains, tainted toothpaste and pet food, and counterfeit drugs. Now add this to your list of fears: commercial jetliners that are routinely repaired in maintenance shops around the world that the Federal Aviation Administration has neither the funds nor the staff to oversee properly.

No one seems more worried than some of the FAA’S 3,000 inspectors themselves. They are sounding the alarm that foreign maintenance shops receive inadequate oversight and have become a risk for shoddy work and counterfeit parts. In interviews and in recent congressional testimony, inspectors and their union representatives say they are able to scrutinize thoroughly the work of only a handful of the 698 overseas maintenance contractors licensed by the FAA.

These facilities are sometimes found to hire unskilled and untrained employees. Inspectors, moreover, don’t have any ability to oversee an unknown number of obscure maintenance shops that lack FAA certification.

Fears about the safety consequences of outsourcing maintenance have been around since at least 2001. Worries were heightened in 2003, when an Air Midwest commuter jet crashed, killing 21, following faulty work by a domestic maintenance subcontractor. Now those anxieties are on the rise again as major carriers, faced with soaring fuel prices and cutthroat competition, move more of their work overseas. In March, Delta Air Lines (DALRQ ) outsourced the maintenance of airframes on 12 Boeing (BA ) 767 aircraft to a Hong Kong company, part of a wider strategy of moving repair work overseas that the company says saves about $250 million annually.

Two years ago, United Airlines Inc. (UAUA ) outsourced its 777 maintenance to another Chinese company. Delta and United say overseas outsourcing is safe and the facilities they use meet FAA standards. “Safety is always our first priority,” says United Airlines spokeswoman Megan McCarthy. “We’re not worried about the quality of the work.”

Every major U.S. carrier, in fact, has outsourced repair work beyond U.S. borders. But the extent of such work is growing. The Transportation Dept. estimates U.S. airlines spent 64% of their maintenance budgets, or some $3.7 billion, at outsourced facilities last year, up from 37% in 1996. And with U.S. consumers ever more wary of tainted goods and services from China, the latest push could stir a fresh wave of anxiety.

Already, some legislators and safety advocates are warning that outsourcing repair work is a disaster waiting to happen. In an interview with BusinessWeek, Senator Claire McCaskill (D-Mo.), who chaired a June Senate subcommittee hearing on foreign maintenance facilities, said she thinks “Americans would be shocked if they knew we have foreign repair stations that are not secure, employees without criminal background checks, and mechanics who are not qualified.”

According to some FAA inspectors, there’s plenty to worry about. In Taiwan, for instance, inspectors have been deeply troubled by what they observed over the course of the past two years at Chiang Kai-shek International Airport, where Boeing is modifying four 747 jumbo jets into extra-large cargo freighters. Inspectors say they found discarded B-747 parts, which they worried could wind up back in a commercial aircraft. As the old parts came off the planes–everything from aluminum panels to generators–they were dumped into unsecured bins, according to two inspectors who each shared their concerns separately with FAA inspector Linda Goodrich, a 23-year veteran of the agency and a senior member of the FAA inspectors’ union.

The repair shop, a unit of the Taipei-based Evergreen Group, a transportation conglomerate, is required to seal off the work area and destroy the parts, according to FAA regulations. Inspectors worry that any scavenger could grab the parts and resell them into the brisk market for counterfeit aircraft parts. The FAA itself has estimated that some 520,000 counterfeit parts make their way into planes each year. “These parts could be installed back on a passenger jet,” says Goodrich, who is based in Washington, D.C. “There’s no telling where these parts might show up or what could happen.”

Boeing Co. officials say the company followed FAA regulations and the parts in question have been destroyed. A senior Evergreen executive agrees that the work complied with FAA guidelines and that the parts were disposed of properly.

[Following publication of the story, Boeing officials conceded that FAA inspectors’ account was accurate. Boeing officials confirmed that two years ago parts taken from 747 jets were not identified, destroyed or disposed of properly. But as soon as the problems were identified, Boeing and Evergreen resolved them, said Boeing spokeswoman Mary Hanson. “Boeing did have some initial issues with scrap part identification and marking when it first started up the modification program in Taipei,” Hanson said. “Procedures to ensure proper part identification and marking were promptly put in place.” She said Boeing and Evergreen have since been in compliance with FAA rules.]

More broadly, the FAA disagrees strongly with its unions that foreign maintenance facilities pose a risk, citing the impressive safety record of U.S. carriers in recent years. James J. Ballough, FAA director for Flight Standards Service, says the agency visits each foreign repair station annually. “I am confident that we get a true picture of the compliance posture of those repair stations,” he says. “We have a great safety record.”

Some FAA inspectors, however, dispute the official line. They claim their biggest problem is simply getting the funds and clearance to travel to overseas sites. One inspector based in the Midwest says he is charged with inspecting dozens of facilities in Asia and Europe. But he’s able to visit only one or at most two such facilities a year, and then only briefly. “We’re not able to oversee the work to ensure it’s been done properly, whether they are properly using the tools, whether they have trained technicians,” says the inspector, who insisted on anonymity for fear of losing his job. “When such facilities were located in the U.S., we’d be in the shops every day.”

When inspectors do get overseas to observe the overhaul of, say, a jet engine, they say they find myriad problems, including faulty engine installations and improperly documented parts, a red flag for counterfeiting, according to Goodrich and several other FAA inspectors. Another common violation is not cleaning critical rotating parts before they’re inspected and checked for possible cracking. Such cracks, if undetected, could lead to an air disaster if the component fails, the inspectors say.

Such accounts are similar to testimony before Congress last month. “Our mechanics have found that aircraft returning from overseas flights had departed with obvious mechanical problems,” testified Robert Roach, vice-president of the International Association of Machinists, which represents many of the U.S.-based airline mechanics. The union opposes outsourcing and views it as a threat to its members’ jobs.

The ranks of FAA inspectors are likely to thin, not grow, as half of them are set to retire by 2010. But more inspectors wouldn’t help what is perhaps the most worrisome aspect of repair outsourcing: the hundreds of unlicensed maintenance subcontractors that operate completely below FAA radar. Licensed outsourcers often turn to these shops to save money, according to recent congressional testimony by Calvin L. Scovel III, the Inspector General for the Transportation Dept.

The IG testified that uncertified foreign repair stations have been performing maintenance that goes well beyond the simple oil changes and tire pressure checks previously thought to be taking place at these facilities. Instead, they’re repairing critical components, such as landing gear, and performing complete engine overhauls. The IG said that the FAA did not know the extent of maintenance performed at uncertified repair facilities, though he said the FAA is trying to find out.

And how do U.S. carriers follow up to ensure the work has been done? The IG said they rely mostly on telephone calls to the repair shops with which they’ve contracted.

By Stanley Holmes

Danger In The Repair Shop

So, once again the Republican stewards of our nation have screwed up yet another facet of the government that they have been trusted to oversee.

Why should any of us be surprised that the administration that has brought us the circus in Iraq, the post-Katrina catastrophe, and the threat to the Bill of Rights that is the Dept. of Homeland Security should have stumbled so badly managing airliner repairs?

In this case, the joke just might be on them — since you have to figure that the members of the plutocrat party spend more time traversing the airways than we serfs.

Meanwhile, MUDGE is not a frequent traveler by anyone’s standards. Of course, for the first time ever for this employer I am due to fly to Boston for a conference in 10 days. And of course, United is my employer’s preferred carrier.

Do you suppose my boss would allow me a few extra days so that I can make the drive?

It’s it for now. Thanks,

–MUDGE

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