syscom3
Pacific Historian
I saw this article this morning about EADS and the future of Airbus.
Please post any others you have. Lets keep this on a proffesional level and not have a silly name calling "Boeing vs Airbus" battle.
October 18, 2006; Page A21
Aerospace codgers must be having a Rip Van Winkle moment. There was a time when Europe's supersonic Concorde was ringing up orders and seemed destined to be the future of commercial aviation. Then costs ballooned and the economics dropped out of the project. Only 14 planes were put into service with the national airlines of Britain and France, a face-saving gesture subsidized by taxpayers.
Nothing quite so ignominious will likely be the fate of the giant Airbus 380, although it's interesting to note that 15 just happens to be the number of assembled, flightworthy planes stranded amid the current production shutdown. But one thing is certain: Any hope that Airbus would become more like a real company, and less like a make-work-cum-technological ego trip for European governments, just went out the window.
Christian Streiff, the short-lived Airbus chief who resigned last week, was concise about why he wanted full control to impose a brutal overhaul of how the European group does business: "We must generate cash to afford [to launch a competitor to Boeing's hot-selling 787] and continue investing in the future."
He was cashiered, which means investment cash now will have to come from somewhere else, i.e., European taxpayers.
The crisis suits Spain just fine, eager to increase its government ownership of Airbus and grab more of the work as a result. The German government is leaking a proposal to take a direct stake, buying shares that DaimlerChrysler wants to sell. The city of Hamburg craves a piece of ownership too, to protect local jobs.
All this is exactly the wrong way for Airbus to be headed, but there's another irresistible pressure on political meddlers. Five percent of Airbus's parent company was recently acquired by a Russian state-owned bank, which is now militating for a seat on the board. The Russian move, even more than the A380 troubles, probably guaranteed a reversal of Airbus's casual migration toward true privatization.
The A380 will fly in respectable numbers even if it never makes money. European taxpayers will see to that. The hastily redrawn A350 will sprout wings too, even if it's years late against the 787 and never recovers its costs. Ironically, the Airbus meltdown may one day be seen as the decisive ending of the flagging era of privatization. Its deficiencies notwithstanding, Airbus is admired by some Democrats as a template for future U.S. government enterprises to pursue carbon control and "energy independence."
This comes as Washington has its finger on the trigger of a World Trade Organization proceeding on Airbus subsidies. The lawsuit has been paused for government-to-government negotiations, but it's hard to see a resolution now. Airbus may be the case that blows up the WTO, or Washington may back down to avoid a nobody-wins trade war.
Yet folks at Boeing seem more bemused than worried about the Airbus meltdown and its consequences. Sales have lately been stupendous. Boeing's 787 and 777 have commanding positions in the lucrative long-haul market. Only Airbus's single-aisle A320, the company's true home run, has been outselling Boeing's 737, but Boeing still has a fat order book of 737s.
Airbus will continue to be a government-subsidized competitor, but much of this advantage will be dissipated over a featherbedded work force and inefficient manufacturing system. So Boeing has nothing to worry about?
Not entirely. Building large commercial aircraft is a business where the decisions are few, much agonized over, and pregnant with long-run consequences. The decision that Boeing has been noodling for years, and likely planned to continue noodling for years, is when to launch a replacement (or multiple replacements) for the 737.
Planes in this class sell in large numbers (Boeing sold 569 last year, compared to barely more than 1,400 jumbos in the 747's 36-year existence). They are the foundation of scale and scope in the airliner assembly business.
Boeing's decision is complicated by several factors: desire not to cannibalize sales of the 737, concern that technology is not yet proven that would allow dramatic efficiency gains. Conservative thinking along these lines served Boeing well in choosing not to join in Airbus in the superjumbo gamble, but there's a new consideration in the post-737 sweepstakes: Airbus may be able to tap taxpayer money, but there's no bottomless well of engineering resources and skills to tap. Its preoccupation with the A380 and A350 means Airbus would be in no position to match a Boeing investment in a new short-haul workhorse for a decade or more.
Enter Pratt Whitney, which has spent 20 years pursuing a "geared turbofan" as a breakthrough technology to rebuild its lagging share in the engine marketplace. Never mind the technical specifications: The engine would allow the various spinning parts of a modern turbofan to operate at their own efficient speeds, saving fuel and maintenance costs.
Other engine makers have their own breakthroughs in development, but P&W's is the only technology in the works likely to justify an early gamble on a 737 replacement. Pratt says the engine will be flight-tested in 2008.
Game theorists, fire up your workstations. CFO Dave Anderson of Honeywell told an investors conference last month that his company expects to compete for contracts related to the 737 replacement later this year. Southwest Airlines, a big 737 customer, is pushing for a new plane. Don't be surprised if Boeing, in despair at getting relief at the WTO, decides its best bet is to move fast to cement its lead while Airbus struggles.
Please post any others you have. Lets keep this on a proffesional level and not have a silly name calling "Boeing vs Airbus" battle.
October 18, 2006; Page A21
Aerospace codgers must be having a Rip Van Winkle moment. There was a time when Europe's supersonic Concorde was ringing up orders and seemed destined to be the future of commercial aviation. Then costs ballooned and the economics dropped out of the project. Only 14 planes were put into service with the national airlines of Britain and France, a face-saving gesture subsidized by taxpayers.
Nothing quite so ignominious will likely be the fate of the giant Airbus 380, although it's interesting to note that 15 just happens to be the number of assembled, flightworthy planes stranded amid the current production shutdown. But one thing is certain: Any hope that Airbus would become more like a real company, and less like a make-work-cum-technological ego trip for European governments, just went out the window.
Christian Streiff, the short-lived Airbus chief who resigned last week, was concise about why he wanted full control to impose a brutal overhaul of how the European group does business: "We must generate cash to afford [to launch a competitor to Boeing's hot-selling 787] and continue investing in the future."
He was cashiered, which means investment cash now will have to come from somewhere else, i.e., European taxpayers.
The crisis suits Spain just fine, eager to increase its government ownership of Airbus and grab more of the work as a result. The German government is leaking a proposal to take a direct stake, buying shares that DaimlerChrysler wants to sell. The city of Hamburg craves a piece of ownership too, to protect local jobs.
All this is exactly the wrong way for Airbus to be headed, but there's another irresistible pressure on political meddlers. Five percent of Airbus's parent company was recently acquired by a Russian state-owned bank, which is now militating for a seat on the board. The Russian move, even more than the A380 troubles, probably guaranteed a reversal of Airbus's casual migration toward true privatization.
The A380 will fly in respectable numbers even if it never makes money. European taxpayers will see to that. The hastily redrawn A350 will sprout wings too, even if it's years late against the 787 and never recovers its costs. Ironically, the Airbus meltdown may one day be seen as the decisive ending of the flagging era of privatization. Its deficiencies notwithstanding, Airbus is admired by some Democrats as a template for future U.S. government enterprises to pursue carbon control and "energy independence."
This comes as Washington has its finger on the trigger of a World Trade Organization proceeding on Airbus subsidies. The lawsuit has been paused for government-to-government negotiations, but it's hard to see a resolution now. Airbus may be the case that blows up the WTO, or Washington may back down to avoid a nobody-wins trade war.
Yet folks at Boeing seem more bemused than worried about the Airbus meltdown and its consequences. Sales have lately been stupendous. Boeing's 787 and 777 have commanding positions in the lucrative long-haul market. Only Airbus's single-aisle A320, the company's true home run, has been outselling Boeing's 737, but Boeing still has a fat order book of 737s.
Airbus will continue to be a government-subsidized competitor, but much of this advantage will be dissipated over a featherbedded work force and inefficient manufacturing system. So Boeing has nothing to worry about?
Not entirely. Building large commercial aircraft is a business where the decisions are few, much agonized over, and pregnant with long-run consequences. The decision that Boeing has been noodling for years, and likely planned to continue noodling for years, is when to launch a replacement (or multiple replacements) for the 737.
Planes in this class sell in large numbers (Boeing sold 569 last year, compared to barely more than 1,400 jumbos in the 747's 36-year existence). They are the foundation of scale and scope in the airliner assembly business.
Boeing's decision is complicated by several factors: desire not to cannibalize sales of the 737, concern that technology is not yet proven that would allow dramatic efficiency gains. Conservative thinking along these lines served Boeing well in choosing not to join in Airbus in the superjumbo gamble, but there's a new consideration in the post-737 sweepstakes: Airbus may be able to tap taxpayer money, but there's no bottomless well of engineering resources and skills to tap. Its preoccupation with the A380 and A350 means Airbus would be in no position to match a Boeing investment in a new short-haul workhorse for a decade or more.
Enter Pratt Whitney, which has spent 20 years pursuing a "geared turbofan" as a breakthrough technology to rebuild its lagging share in the engine marketplace. Never mind the technical specifications: The engine would allow the various spinning parts of a modern turbofan to operate at their own efficient speeds, saving fuel and maintenance costs.
Other engine makers have their own breakthroughs in development, but P&W's is the only technology in the works likely to justify an early gamble on a 737 replacement. Pratt says the engine will be flight-tested in 2008.
Game theorists, fire up your workstations. CFO Dave Anderson of Honeywell told an investors conference last month that his company expects to compete for contracts related to the 737 replacement later this year. Southwest Airlines, a big 737 customer, is pushing for a new plane. Don't be surprised if Boeing, in despair at getting relief at the WTO, decides its best bet is to move fast to cement its lead while Airbus struggles.
just as much in the tone of the writing than the subject matter..........
WB, a new family of long-range, medium-capacity jets, by signing a letter of intent for 20 aircraft.
