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Article On 787 Launch And Development Practices  
User currently offlineJoni From , joined Dec 1969, posts, RR:
Posted (9 years 5 months 3 days 20 hours ago) and read 6184 times:

I came across an article that discusses Boeing's approach to launching the 787, it's longish but fairly interesting reading.

"These data indicate that a substantial portion (46 percent) of the estimated $13.4 billion in launch funding consists of actionable/prohibited subsidies under both the 1994 WTO-SCM Agreements and the 1992 US-EU Agreement on Trade in Large Civil Aircraft."

http://www.findarticles.com/p/articles/mi_qa4127/is_200404/ai_n9388414

46 replies: All unread, showing first 25:
 
User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 1, posted (9 years 5 months 3 days 20 hours ago) and read 6116 times:

The link is interesting and does point out that Boeing is now using the same types of strategies that Airbus has used for 40 years with subsidies of one kind of another. Either let them both do it or drop them altogether.


One Nation Under God
User currently offlineSebolino From France, joined May 2001, 3682 posts, RR: 4
Reply 2, posted (9 years 5 months 3 days 19 hours ago) and read 6051 times:

Quoting DAYflyer (Reply 1):
The link is interesting and does point out that Boeing is now using the same types of strategies that Airbus has used for 40 years with subsidies of one kind of another.

Wrong.
Airbus is using what the agreement allows it to.


User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 3, posted (9 years 5 months 3 days 19 hours ago) and read 6020 times:

Quoting Sebolino (Reply 2):
Airbus is using what the agreement allows it to.

While this is true for the current spat, which is up to 33% of total development costs, Airbus did receive aid before this. THe 1992 agreement was designed to limit this and allow for Airbus to continue to grow without being unfair to Boeing, and aid to Boeing was also limited at the time.

Its interesting that a third party has commented on the subsidies of the 787 now, I knew they were receiving aid from Japan but this sheds a new light.


User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 4, posted (9 years 5 months 3 days 19 hours ago) and read 5986 times:

No news here.

Boeing took the decision to go this way and selected a "best defense is attack" strategy, combined with a massive PR media / Lobby campaign to convince everybody they were wearing the white hats & the playing field had to be leveled.

It worked (in the US)

The WTO is more objective however.


User currently offlineNorCal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 5, posted (9 years 5 months 3 days 19 hours ago) and read 5933 times:

I give this thread 3 more posts before it explodes into a pissing match.....

Thanks for sharing though Joni, always good to hear both sides of the story. Both sides think they have clean hands or try to distort facts to make it look like they have clean hands, when in reality both sides are guilty. The only people who are going to benefit from this WTO case are the lawyers. Let's hope this case never makes it to the WTO.


User currently offlineCo7772wuh From , joined Dec 1969, posts, RR:
Reply 6, posted (9 years 5 months 3 days 18 hours ago) and read 5834 times:

Quoting Sebolino (Reply 2):
Airbus is using what the agreement allows it to.

 confused 

AB has enjoyed a constant feed of Tax payer money since the beginning of AB . Anabling AB to cut throat the commercial a/c market to gain market share while ehe US spent cah billions $$$ protecting Europe from the REDS .

If it weren't for the US there would be " NO " AB .

Has AB ever made a Profit from the birth of AB to now ????


Is AB in the RED or BLACK ?


User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 7, posted (9 years 5 months 3 days 18 hours ago) and read 5832 times:

Quoting Co7772wuh (Reply 6):

If it weren't for the US there would be " NO " AB .

Ahh there we go, the post that makes all further discussion on this thread absolutely pointless.


User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 8, posted (9 years 5 months 3 days 18 hours ago) and read 5791 times:

Quoting Co7772wuh (Reply 6):
Has AB ever made a Profit from the birth of AB to now ????

You missed the news lately..

The signature says it all  Sad


User currently offlineNorCal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 9, posted (9 years 5 months 3 days 18 hours ago) and read 5768 times:

Well that didn't take very long for this to start degrading

Quoting Keesje (Reply 8):
The signature says it all

In all fairness, that is a quote from a TV show called "Family Guy."


User currently offlineToulouse From Switzerland, joined Apr 2005, 2759 posts, RR: 57
Reply 10, posted (9 years 5 months 3 days 17 hours ago) and read 5659 times:

Quoting Co7772wuh (Reply 6):


AB has enjoyed a constant feed of Tax payer money since the beginning of AB . Anabling AB to cut throat the commercial a/c market to gain market share while ehe US spent cah billions $$$ protecting Europe from the REDS .

If it weren't for the US there would be " NO " AB .

Has AB ever made a Profit from the birth of AB to now ????


Is AB in the RED or BLACK ?

Oh wow, I soooo wish I hadn't decided to read this thread. Anyway, I think this user's respect rating says it all, along with that "sad" signature...



Long live Aer Lingus!
User currently offlineRevelation From United States of America, joined Feb 2005, 12856 posts, RR: 25
Reply 11, posted (9 years 5 months 3 days 17 hours ago) and read 5596 times:

Quoting NorCal (Reply 9):
In all fairness, that is a quote from a TV show called "Family Guy."

I believe the quote is from John Belushi's character in National Lampoon's "Animal House" from the late 1970s.

As for the article in the thread starter, it is indeed interesting how Boeing has morphed over the years. I remember in the mid 90's that Boeing was saying Airbus couldn't compete with Boeing on price because Boeing did almost all their manufacturing in-house. Then reality hit, and Boeing took a good look at how and why they could not compete with Airbus on price. They found that the "systems integrator" model really drove costs down by forcing the suppliers to fund their own development and then compete with each other on price. This has really shook up some traditional relationships. For instance, the B787 has landing gear made in the EU, whereas the A380 has landing gear made in the US. And of course the other benefit is these suppliers can perhaps take advantage of some non-US government policies on aid whereas Boeing itself could not.



Inspiration, move me brightly!
User currently offlineCo7772wuh From , joined Dec 1969, posts, RR:
Reply 12, posted (9 years 5 months 3 days 16 hours ago) and read 5579 times:

Quoting Co7772wuh (Reply 6):
Has AB ever made a Profit from the birth of AB to now ????


Is AB in the RED or BLACK ?

Can anyone answer this legitimate question ???

 eyebrow 

Quoting Keesje (Reply 8):
The signature says it all



Quoting NorCal (Reply 9):
In all fairness, that is a quote from a TV show called "Family Guy."

Actually , it's a quote from a John Belushi film , Animal House !

 drunk 

http://www.animalhouse.com/john-belushi-animal-house.html


User currently offlineNorCal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 13, posted (9 years 5 months 3 days 16 hours ago) and read 5512 times:

Quoting Co7772wuh (Reply 12):
Actually , it's a quote from a John Belushi film , Animal House !

They must have copied it then because I could have sworn I heard it in a Family Guy episode. Either that or I have my comedy mixed up


User currently offlineToulouse From Switzerland, joined Apr 2005, 2759 posts, RR: 57
Reply 14, posted (9 years 5 months 3 days 15 hours ago) and read 5427 times:

Quoting Co7772wuh (Reply 12):
Has AB ever made a Profit from the birth of AB to now ????


Is AB in the RED or BLACK ?

Can anyone answer this legitimate question ???

According to your own Fox News a little earlier this year, Aibus had Net profits of $ 425 million for 2004.



Long live Aer Lingus!
User currently offlineCo7772wuh From , joined Dec 1969, posts, RR:
Reply 15, posted (9 years 5 months 3 days 14 hours ago) and read 5368 times:

Quoting Toulouse (Reply 14):
According to your own Fox News a little earlier this year, Aibus had Net profits of $ 425 million for 2004.

Hay ! Thanks for watching the FOX NEWS Channel !  cheerful 

However , the point I was making was : Concidering all the subsidies and launch Aid AB has recieved over the years " decades " .

Has AB made more then it has taken in , in launch aid and subsidies ???

It just appears that with the high taxes many European countries pay and the fact that "for example" AB are giving certain a/c away "A380" , that the citizens of Europe are Financing AB or a portion of it giving it an advantage over Boeing .

A luxury that the US doesn't seem to have .

John Mc Cain  scratchchin 

Quoting NorCal (Reply 13):
Either that or I have my comedy mixed up

That's what happens when you spent too much time at Delta House !!!!


 drunk 


User currently offlineUSAF336TFS From United States of America, joined Apr 2005, 1445 posts, RR: 51
Reply 16, posted (9 years 5 months 3 days 14 hours ago) and read 5364 times:

Quoting Keesje (Reply 4):
It worked (in the US)

The WTO is more objective however.

I agree with you, Keesje. And The EU also must agree with you because they seem to be sweating bullets in Brussels. The U.S. has a strong case and both sides know it.
That said, they should negoitiate another agreement that takes into account today's realities that both Airbus and Boeing are strong, mature companies with excellent products coming from both.
Some of the conculsions and facts in that article were just plain wrong. For example, it failed to mention the fact that 40% of the A380 is made in the United States. According to Boeings website, 75% of the 787's airframe with be U.S. content.
Okay, okay, I know someone will argue this tidbit with me, but I'm quoting Boeing's website.



336th Tactical Fighter Squadron, 4th Fighter Wing, Seymour Johnson AFB
User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 17, posted (9 years 5 months 3 days 14 hours ago) and read 5345 times:

Quoting Co7772wuh (Reply 15):
Has AB made more then it has taken in , in launch aid and subsidies ???

Let me just pipe in and say that the vast majority of that aid has either been repaid or is in the process of being repaid. The launch aid for the A320 has been fully repaid, with royalty payments being made to the British, French and German governments for the next 10 years. Because of these royalty payments, Airbus will have repaid twice the amount if received through launch aid for the A320.

THe A300/A310 launch aid is dependant on the production lines being open, and repayment probably wont begin on the launchaid for those aircraft until 2010.

The A330 launch aid has been repaid to the tune of 50%, with a similiar figure for the A340.

Anything before the 1992 agreement is fair game, because Boeing also received billions in aid during that period as well (guess who funded the SST - wasnt Boeing).


User currently offlineUSAF336TFS From United States of America, joined Apr 2005, 1445 posts, RR: 51
Reply 18, posted (9 years 5 months 3 days 14 hours ago) and read 5326 times:

Quoting RichardPrice (Reply 17):
nything before the 1992 agreement is fair game, because Boeing also received billions in aid during that period as well (guess who funded the SST - wasnt Boeing).

Richard, good point except for one tiny little thing.... As you know the SST program was cancelled and not one aircraft was ever built.



336th Tactical Fighter Squadron, 4th Fighter Wing, Seymour Johnson AFB
User currently offlineB2707SST From United States of America, joined Apr 2003, 1369 posts, RR: 59
Reply 19, posted (9 years 5 months 3 days 13 hours ago) and read 5279 times:

Our research indicates that the launch costs for the 7e7 will be approximately $13.4 billion dollars. This can be bench-marked against Boeing's reported 777-development cost of $6-7 billion that dates back to the early 1990s (compared to industry analyst estimates of somewhere between $8-12 billion). A recent comparison would be with the Airbus A380 with a reported launch cost of $10-12 billion, which in some estimates could be under by $3-5 billion. The 7e7 launch costs will be every bit as much as the A380 aircraft, though a smaller aircraft in size. Boeing is asking its partners to design and build two different sized aircraft. This will drive the cost of different sized engines, landing gears, airframe structure, facility space, tooling and additional machine tools to accommodate the launch of the 7e7.

This is absurd. There is no way that the 787 will cost anywhere near $13 billion. Best estimates from other, more reputable sources are consistently in the $5-6 billion range. Boeing got burned on the 777 and Board members have stated that they are not eager to repeat the experience. It was mentioned several times that the Commercial Airplane Group had to make a solid case that costs would be kept under control before the Board granted launch approval.

How did the authors of this piece come up with such a high number? They think the 787-3 and the 787-8 are so different that they should be counted as two separate aircraft because "one has to question the commonality of components, structure and engine technologies to service two aircraft versions that have an over 45% weight difference."

Apparently they've never seen specs for the 777-200A (545,000 lb. MTOW) versus the 777-300ER (775,000 lb. MTOW), a 42% difference. The total cost for the -200LR and -300ER derivatives was estimated at $1-2 billion, of which a large proportion was incurred uprating the GE90. Had the Longer Range 777s been designed at the same time as the original family members, the -200A and -200ER, the costs almost certainly would have been lower still.

Given the limited market for the 787-3 -- Japan, European holiday/charter carriers, and maybe one or two US legacy carriers -- Boeing would absolutely not be pursuing it if it adds billions and billions to the cost of the program. I'd guess an extra $1 billion at the extreme outside, with the actual cost estimate probably much lower than that.

In any case, there is absolutely no historical precedent for double-counting the cost of the entire 787 program because the -3 happens to have a shorter wing (chop off a few outer panels and fit a different winglet), lower fuel capacity (delete tanks and associated structural reinforcing), lower thrust engines (software derate, anyone?), lower MTOW, etc. These are not earth-shattering changes, and there is no conceivable way they will push the cost up to $13+ billion.

--B2707SST



Keynes is dead and we are living in his long run.
User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 20, posted (9 years 5 months 3 days 13 hours ago) and read 5259 times:

Quoting USAF336TFS (Reply 18):
Richard, good point except for one tiny little thing.... As you know the SST program was cancelled and not one aircraft was ever built.

You do realise that Boeing spent 4 years on the project, and ate up nearly $1billion in funding?

Or are you trying to say that because it never flew, we can forget about that aid?


User currently offlineDynkrisolo From United States of America, joined Feb 2001, 1866 posts, RR: 7
Reply 21, posted (9 years 5 months 3 days 13 hours ago) and read 5251 times:

Quoting RichardPrice (Reply 17):
The A330 launch aid has been repaid to the tune of 50%, with a similiar figure for the A340.

Lemme see, the 330/340 was launched in 1987. After 18 years, only 50% was repaid? And the European governments are ready to inject more money into its successor, the 350! Great investment! NOT!!!!!!!!


User currently offlineB2707SST From United States of America, joined Apr 2003, 1369 posts, RR: 59
Reply 22, posted (9 years 5 months 3 days 13 hours ago) and read 5237 times:

Quoting RichardPrice (Reply 20):
You do realise that Boeing spent 4 years on the project, and ate up nearly $1billion in funding?

Or are you trying to say that because it never flew, we can forget about that aid?

Unlike the Concorde program, which provided BAe and Aerospatiale with immense experience on international collaboration that was crucial to the formation of Airbus, Boeing took very little away from the 2707 program; the amount of technology transferred from the SST to subsonic programs was minimal. Very late in the project, Boeing did some initial research into CRT cockpit displays that later went into the 757/767, but that was about it.

High-temperature titanium/vanadium alloys, variable-sweep wings, zero-bypass turbojets, convergent-divergent inlet systems, and sonic boom abatement have limited utility on subsonic airliners. If anything, the SST turned out to be an enormous distraction for both Boeing and BAe/Aerospatiale. Money aside, the amount of time and talent that was essentially wasted on a dead end cannot be measured.

--B2707SST



Keynes is dead and we are living in his long run.
User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 23, posted (9 years 5 months 3 days 13 hours ago) and read 5207 times:

Quoting Dynkrisolo (Reply 21):
Lemme see, the 330/340 was launched in 1987. After 18 years, only 50% was repaid? And the European governments are ready to inject more money into its successor, the 350! Great investment! NOT!!!!!!!!

The A330 was first delivered in December 1993, the A340 was first delivered in January 1993. Thats 12 years of revenue, not 18 years, and the A350 will not close down the A330/340 line.

50% of $5billion repaid in jsut 12 years is a damn good investment, especially as orders arent slowing down on the Airbus side.

Over all, since 1992, Airbus has repaid $6.7billion USD not including royalty payments, which amounts to roughly 60% of outstanding debts including the A380 loans of $3billion. These loans are charged interest at the government borrowing rate plus 0.25% plus royalties.


User currently offlineGlacote From France, joined Jun 2005, 409 posts, RR: 2
Reply 24, posted (9 years 5 months 3 days 13 hours ago) and read 5175 times:

Please do not feed the troll.

25 DAYflyer : Thanks for taking my remarks completely out of context and starting a A vs B war here.
26 Post contains images Co7772wuh : That's the " Constant Feed " I was refering to !!! So , in fact AB is still in the RED and has yet to make a Profit ! They're coat throating the mark
27 Revelation : Richard, your numbers sound reasonable, but I am wondering what the source of your information is. One complaint about Airbus aid has been that it's
28 RichardPrice : Mostly my info comes from hours of trawling the EADS and BAe annual financial reports as entered into Companies House in the UK and various other ins
29 Brons2 : Nothing new to see here, this is the same article that has been batted around this forum a few times! It's a couple of guys from the University of Buf
30 Dynkrisolo : Then, care to explain why the British government happily announced to the world in 2001, 17 years after the 320 launch, that they had doubled their i
31 11Bravo : What I don’t understand here is why the US Government and Boeing are pressing this thing in the WTO if any significant part of this paper is true. I
32 Post contains images RichardPrice : Im pretty sure that NONE of my post was about the A320 in any form. I am completely aware that the A320 aid has been repaid, and Im pretty sure I cov
33 RichardPrice : Its not so much that Airbus are doing anything wrong, that the loans are fully within the 1992 agreement has never been disputed by the US trade dele
34 Atmx2000 : Airbus and its parent companies receive military contracts. Certain European posters on this website outright and proudly say that the A400 R&D is pa
35 Areopagus : That article points out that what's good for Boeing isn't necessarily what's good for the USA. Boeing is building proof sections of fuselage and wing,
36 Brons2 : Airbus does not pay these taxes for their European operations. They also get tax breaks on their North American operations, so I'm not so sure what t
37 Atmx2000 : Boeing specifically said that they hoped Onex would be able to win contracts from Airbus and other aerospace manufacturers to improve utilization of
38 Post contains images Glideslope : LOL, that says it all. Next.....
39 Atmx2000 : Yeah, the article is from Spring 2004.
40 Douglas7Seas : Ya know what gets lost in all the arguing? Both companies make cool airplanes. I thought I had become very jaded as I reached middle age. But then I f
41 Art : I agree that AB has enjoyed a constant feed of taxpayer money. IIRC in its early days, it was set up so that the accounts were more or less impenetra
42 AV757 : There is also that forgotten article "Airbus's Secret Past" published by the Economist on June 12 of 2003 reminding us of the not so ethical sales pra
43 Post contains links Joni : EADS has also estimated that Boeing has lined up over $5B in subsidies alone for the 787: http://tinyurl.com/8nq8j They also appear to be accusing Bo
44 Astuteman : Get's my vote every time. Long may it last! A
45 Post contains images Co7772wuh : These alledged subsidies Boeing gets from Japan . Are they from the Tax payers of Japan or the private sector ???    If they're not from the Japane
46 Joni : They are from public funds, that means from taxpayers.
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