planemaker
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Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 7:11 am



Boeing, Boeing ... Gone
How an American titan clipped its own wings

By Eamonn Fingleton
January 31, 2005
The American Conservative

One evening a generation ago, several up-and-coming aerospace executives gathered to commune with the Boeing's chief executive, Thorton Wilson. The discussion turned to Boeing's vaunted expertise in making aircraft wings. Wilson evidently came across as boastful - so much so that a young General Electric executive named Harry Stonecipher suggested that Boeing was arrogant. "And rightly so," came Wilson's serene reply.

The exchange, which was recorded in Fortune magazine a few years ago, is worth recalling partly for what has happened to Stonecipher in the meantime - and partly for what has happened to Boeing.

In a remarkable twist of fate, Stonecipher now fills Wilson's old job at Boeing. But whereas the Boeing that Wilson led in the 1970s utterly dominated the skies, today's Boeing is another matter. Its once masterful technological leadership is gone and, in an orgy of indiscrimante outsourcing, Stonecipher is presiding over the destruction of what remains of Boeing's erstwhile manufacturing greatness - not least the world-beating wing business that was the apple of Wilson's eye.


A fairly comprehensive and detailed article that postulates how Boeing has fallen to No. 2, why it won't be able to regain its former greatness, and why that is very detrimental to America. Unfortunately, the 6-page article is not available on-line. However, if you don't want to get depressed, I suggest that you don't go out and buy it!

As indicated in the extract above, and the one following, the article does not reflect positively on Boeing's recent management....

Boeing's top management has presided over one of the most lamentable downsizing programs in American corporate history. Not only has the Boeing group cut 77,000 jobs in the last 7 years, but it has euthanized its research and development - all this while spending $10-billion to "enhance shareholder value" in a buy-back of one-sixth of its outstanding stock.

The title says it clearly: How an American titan clipped its own wings
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N328KF
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 7:14 am

I dunno, sounds to me like it's been spending an awful lot on R&D. I'm not just referring to the 787.
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Midway2AirTran
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 8:26 am

Let me now admit that I have wasted five minutes of my life reading this material, still trying to keep my mind open! Just don't personally agree with it. Should have judged it by the title of the publication. Outsourcing is the best thing that has ever happend for US companies, I personally come from a family of business owners and a employee myself so I am very aware of both sides of the story. It helps to create more wealth within the US in the way of savings and future expansion for the US COMPANY while creating opportunity for new wealth for the countries doing the work. Things are changing quickly so people here have to change their thinking or get left out on the street. Yes, extreme comments and hard truth, but that is true capitalism, the information age and the Global economy! Oh, by the way, Airbus also makes jobs for us here the US too.

As for Boeings "ignorant" stance, they are a dam'n good maker of aircraft and have the right to be that way if they wish whether it hurts them or not. As for the loss of market share, Airbus is also pretty dam'n good too and hence they are growing rapidly and taking on their own market share. Kudos to both for their innovations!

I could go on forever on this subject, but that is the summary!

**I'm not trying to offend any of those against the Global economy and wanting to keep the US in a bubble, they are also entitled to their own opinions!
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DfwRevolution
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 8:49 am

"How a titan clipped its own wings...."

Says a magazine called the American Conservative? Hahahahaha.... I'm trying to rate Eamonn Fingleton's comprehension of Boeing's quoted "demise," but it's so false I cannot find a sacrastic quip to match such an ignorant rant!

I much prefer a 50/50 diachotomy than I prefer a single manufacture dominating the market, it creates a tension that is positive for the industry.
 
B2707SST
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 8:50 am

Planemaker, I'm surpised someone so knowledgable about the aviation market could fall for this....


First, no one should ever listen to Pat Buchanan on economics. Ever.

But whereas the Boeing that Wilson led in the 1970s utterly dominated the skies, today's Boeing is another matter.

This is totally absurd. Boeing laid off almost one hundred thousand people between 1969 and 1971. Employment bottomed out at 38,000. The expense and difficulty of building the 747 almost drove Boeing into bankruptcy. After an initial wave, orders fell sharply as airlines were faced with huge overcapacity. The loss of the SST contract eliminated 12,000 more jobs (below, the mockup being hauled away).



The 1970s were not glory days here. Unemployment in Seattle hit double digits for the first time since the Great Depression. A suicide net was suspended below the Space Needle. There was even a billboard posted along I-5 that read "Will the last person leaving Seattle, please turn out the lights?":



The only reason Boeing "dominated" the skies was that Europe doubled down and lost on Concorde, while Lockheed, Douglas, and Airbus all fought each other to mutually-assured destruction over the 300-seat market.

But hey, it's easier to remain ignorant of history and make up wild, sensational articles than do some real research, especially when we can blame those dirty foreigners!


Not only has the Boeing group cut 77,000 jobs in the last 7 years

What are they supposed to do, pay thousands of people to stand around and do nothing? Recall them all back and see how well Boeing fares.


Stonecipher is presiding over the destruction of what remains of Boeing's erstwhile manufacturing greatness

Today, Boeing assembles airplanes in half the time, with less inventory and with fewer workers than ever. Higher productivity -- oh, the horror!

The 787 is one of Boeing's fastest-selling new products ever. The 777 is dominating its market segment and the 737NG holds its own against the A320. This doom-and-gloom garbage is getting pretty tiresome.

--B2707SST
Keynes is dead and we are living in his long run.
 
cedarjet
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 9:03 am

While B2707SST's assertions that "the 787 is one of Boeing's fastest-selling new products ever," that, "the 777 is dominating its market segment and the 737NG holds its own against the A320" are not strictly accurate, this article looks to be a little over-the-top and under-informed. The American Conservative? Ugh, I note another headline on the same cover is "How To Stop Gay Marriage" - like anyone with half a brain could give a shit about that.
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leelaw
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 9:06 am

B2707SST:

Nice and concise historical recap discounting the "good 'ole days" mentality of the article. Excellent job and good insight from someone who wasn't even a twinkle in his daddy's eye when all this went down.  Wink/being sarcastic

Regards
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atmx2000
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 9:12 am

Boeing's situation is somewhat analogous to IBM's situation, except with a lot less competition. Boeing has to improve productivity, focus on core compentancies, outsource where appropriate, offering outsourcing services to others where appropriate, and maintain good customer relationships. If they do all of those things, they will turn things around like IBM did. And one should note that IBM was in a much worse position in the early 90s than Boeing is now.
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MD11LuxuryLinr
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 9:18 am

Yeah, nice picture they're printing on the front of that magazine.. A 777 in a dive.. Wonderful.  Insane

Oooh.. and they're going to tell us 'How To Stop Gay Marriage' too? Terrific. Sounds like a super read..

Again, I say:  Insane
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DfwRevolution
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own W

Mon Jan 31, 2005 9:18 am

While B2707SST's assertions that "the 787 is one of Boeing's fastest-selling new products ever, are not strictly accurate."

Then which product is ?  Big grin

Boeing's situation is somewhat analogous to IBM's situation, except with a lot less competition.

IBM chopped themselves apart and put themselves for sale. Boeing became an aircraft assembler rather than an aircraft manufacture. big difference. In realty, Boeing is moving toward what Airbus has been doing from the 1970s...

Boeing has to improve productivity, focus on core compentancies, outsource where appropriate, offering outsourcing services to others where appropriate, and maintain good customer relationships

I'd argue that Boeing has already done this... though it will be several years before all the rewards are reaped. All I know is this article hasn't made me consider dropping BA stock  Insane
 
Vctony
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 9:19 am

I really wouldn't trust that magazine. That magazine, as well as others on both sides of the political spectrum, tend to write sensationalistic articles all the time.
 
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N328KF
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 9:25 am

Boeing's situation isn't like IBM's at all. IBM has continued to plow billions per year into R&D and are one of the largest (if not the largest) investors in pure R&D in the world. They are #1 when it comes to patent approvals on an annual basis, and they continue to dominate several industries. They have built the fastest computer in the world, and are selling the core processors to not one but all three of the manufacturers of the next-generation game consoles (so no matter which one of those three does best, the real winner is IBM.) IBM just jettisoned the dead weight—the low-margin divisions and turned themselves into a research and service company. They're like GE; even if the product you're using might not say IBM, there's a good chance there's something in there that they did. I am typing this on a system with IBM processors (a Mac) and there are several consumer electronics devices in my house with IBM components forming some part of the core functionality— and none of these devices are particularly unusual.

On the other hand, that article is intentionally baiting and skewed, and I'm a conservative. It is overly pessimistic and there are all indications that Boeing is on a comeback on the civil side. Sales are up and soon, so will production capacity. Aside from price, that seems to be their Achilles heel. Obviously the military side is doing reasonably well once they get over these ethics investigations.

[Edited 2005-01-31 01:30:10]
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LMP737
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 9:57 am

While I am concerned about where Boeing is headed I sort of agree with B2707SST that news of Boeings demise is somewhat exaggerated. As he pointed out Boeing has gone through tough times before. My biggest concern is that all the ex McDonnell people at Boeing will screw things up like they did at their old company.

Cedarjet:

The 737 is doing just fine.
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bennett123
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 10:56 am

LMP737

IMO Boeing faces two issues

Short term, keeping production up with the B757/B767 drying up. The key here is the KC767 contract, which they need to win. They also need to decide re the B747ADV.

Provided that the contract is awarded on the basis of what the USAF needs, then it would be hard to see why this should not be acheived.

In the long term, they need to start thinking more loudly about what comes after the B737NG. Like any other aircraft, it can not last forever. Equally a long term successor to the B747 is needed.
 
planemaker
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 11:05 am

B2707SST, your "inspired" response is based on only a couple of anecdotal introductory paragraphs out of a 6 page article. With absolutely no knowledge of the several points and supporting arguments that the author lays out in the body of the article, it is more than just a bit premature of you to go off on a tangential rant.

First read the article... then rant if you want to. But at least it will be informed!  Smile
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atmx2000
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 11:06 am

IBM chopped themselves apart and put themselves for sale. Boeing became an aircraft assembler rather than an aircraft manufacture. big difference. In realty, Boeing is moving toward what Airbus has been doing from the 1970s...


IBM didn't chop themselves apart. They have only sold some parts of their business. IBM has sold off manufacturing facilities and entire product lines in some cases, but Boeing is also selling off or in the process of selling off facilties. Why? Because the buyer can possibly use the facilties more efficiently by providing services and products to companies that Boeing might otherwise not be able to. Likewise, IBM sources more parts from other vendors than it did in past when IBM was more vertically integrated. Boeing hasn't sold entire product categories like IBM has, but then again Boeing didn't have the portfolio breadth that IBM did.
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Planesmart
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 11:55 am

B were distracted by the McD purchase.

B execs took a certain perverse pleasure in decimating McD facilities and expertise, rather than viewing it as an asset, although thats typical behaviour in an acquisition. The difference is that unlike general manufacturing, aviation is a knowledge industry, and you lose expertise at your peril.

B enjoyed a period where they could do no wrong. U want a 747 in 24mths, what else are you going to order?

Being top dog in any industry creates complacency. This again is not unique to B.

My background is in selling funding for capital items like trucks, ships, and for the last 14yrs civil airliners. In any of these industries, the best product and/or price does not necessarily win the order, because usually A & B are pretty close.

The deciding factor is often support and service, of which part comes down to perception.

B sales staff 14yrs ago were the most arrogant i had ever encountered. They didn't sell - they took orders, and if they didn't like you, you weren't supplied, or you got a so so price, or a lengthy delivery.

Times have really changed at B, but perceptions, memories, and of course the stories (which get embellished) live on far longer. To win back some of these customers, B doesn't need to just match, or even be a little better than A, they need to be consistently a lot better.

Like if you had a particular car (brand Z) and had lots of problems with it, so you bought a different brand (Y) and was happy with the car. You replaced a Y with Y, and again was happy with the purchase. Brand Z is going to really have to make it worth your while if they want to persuade you to buy from them again. A few dollars cheaper or an extra years warranty may still not be enough to get you to switch.
 
elwood64151
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 12:01 pm

B2707SST:

Every one of your points is true, but buying back billions in company stock in an effort to improve shareholder value was a stupid move. It makes you popular with your current investors but leaves you in a bad cash position to take on your competitors. It's a financial move, not a business move. And cost accountants/finaciers should never be the CEO...

Ugh, I note another headline on the same cover is "How To Stop Gay Marriage" - like anyone with half a brain could give a shit about that.

You'd be surprised how very intelligent people are worried about that very issue. I say take the government out of marriage entirely and let the churches sort it out. Give everyone civil unions. Let them be civily-united to their impact driver so long as it is of-age and can sign its own name, but don't give it the religious title of marriage... Who could be against that?

I'd argue that Boeing has already done this... though it will be several years before all the rewards are reaped. All I know is this article hasn't made me consider dropping BA stock

Excellent point.

Aside from price, that seems to be their Achilles heel

Which is one of the reasons for the currently depressed dollar. Like it or not, it helps us sell our products overseas. I would argue it's dropped a little too far, but that's my opinion, and I'm no economist.

but then again Boeing didn't have the portfolio breadth that IBM did.

Maybe Boeing should consider expanding horizontally. Offering contract maintenance like SABRE, et al; setting up a computer reservations system (buy OpenSkies?); expand into ground and sea transportation options.

Boeing may need to ask itself: Are we an Aerospace Giant, or are we a Transportation Giant? Some critical thinking for Mr. Stonecipher...

p.s. There is no reason that Boeing can't assemble boats. Especially hydrofoils, which may be the next development in trans-oceanic shipping. The boats just need to be a lot bigger than the largest hydrofoil I know if, which was a US Navy patrol vessel just over 350 feet long.
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Falcon84
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 12:04 pm

It helps to create more wealth within the US in the way of savings and future expansion for the US COMPANY while creating opportunity for new wealth for the countries doing the work.

And it takes wealth from the worker who's job is tossed out of country by said US COMPANY looking to squeeze a little more profit at the expence of US WORKER.

Forget that little caveat?
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goCOgo
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 12:49 pm

Falcon, you hit the nail on the head. Why is it that outsourcing advocates always claim that the savings to the company always results in the company spending that money on innovative projects and white collar hires? If they did spend the saved money on hiring domestic (typically U.S.) workers, what would they hire them to do, anyway? All the work is being done overseas. Are they going to hire a domestic worker to come in and twidle his thumbs all day just because they want to spend that money they saved? Rather, outsourcing execs typically line their pockets with the profits while sending the domestic worker on his of her rear.
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B2707SST
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 1:29 pm

B2707SST, your "inspired" response is based on only a couple of anecdotal introductory paragraphs out of a 6 page article. With absolutely no knowledge of the several points and supporting arguments that the author lays out in the body of the article, it is more than just a bit premature of you to go off on a tangential rant.

My point was that the "facts" laid out in the opening paragraphs of that article were completely wrong. If the author thinks that Boeing and Seattle were groovy places under Wilson in the 1970s, he obviously doesn't know anything about Boeing's history. Boeing's high market share in the 1970s was not due to visionary and adept management; for the first years of the decade, it was struggling just to survive. Boeing was fortunate in that its competitors decided to throw billions of dollars into a) a wildly expensive and commercially untenable SST or b) three separate aircraft designs pursuing the same limited market. If Airbus, Lockheed, or Douglas had instead invested in a real competitor to, say, the 727, Boeing might not exist today.

A geography textbook may have beautifully detailed maps, but if it begins with the assertion that the world is flat, it's still dead wrong. I have no interest in reading the entire piece when the author can't manage to get basic foundational facts right.


While B2707SST's assertions that "the 787 is one of Boeing's fastest-selling new products ever,"

The 787 received its launch order on April 26, 2004, or nine months ago, and has 186 announced and 116 firm orders. Within nine months of launch, Boeing had sold:

- 48 707s
- 81 727s
- 83 737s
- 85 747s
- 38 757s
- 49 767s
- 49 777s

Granted, some orders may have been announced earlier and only firmed up after 9 months, but I stand by my statement that the 787 is one of the fastest-selling new Boeing products ever.


that, "the 777 is dominating its market segment and the 737NG holds its own against the A320"

People on A.net have gone round and round on the 777 market share issue, but it's beyond dispute that the 777 has outsold its direct competitor, the A340, by 673 to 374 despite the Airbus' longer availability. The 737NG has sold about 2400 frames since its launch in late 1993 versus about 3400 for the A320 family since its launch in the mid-1980s, which is not bad at all.


but buying back billions in company stock in an effort to improve shareholder value was a stupid move. It makes you popular with your current investors but leaves you in a bad cash position to take on your competitors. It's a financial move, not a business move. And cost accountants/finaciers should never be the CEO...

I certainly agree. That cash could have been much better used launching the 787 several years earlier to counter the A330. Boeing's strategic focus in the late 1990s was pretty cloudy, to say the least. Phil Condit's tenure will probably go down as a low point in the Boeing story. I was quite skeptical of Stonecipher at first, but I have to say that he is doing a pretty good job so far.

I'm not arguing that all is hunky-dorey at Boeing. Far from it -- they are now playing second fiddle for the first time in 50 years and have a lot of work to do to get back on top. But I do think the 787 is exactly the right move after some false starts on 747 derivatives and the well-intentioned but unfortunately timed Sonic Cruiser. Hopefully further developments, including the 747ADV and a 737 successor, will follow in relatively short order.

In short, Boeing has enough problems without paleoconservative, protectionist, xenophopic columnists spewing forth dreamy fabricated visions of the good ol' days while condemning the very steps that Boeing must take to regain its former status.

--B2707SST
Keynes is dead and we are living in his long run.
 
planemaker
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 1:42 pm

As I have already noted, the article is 6 pages long. However, the people that have attacked the article (without having read it) have nevertheless missed the clear connection between the article title and the context of the short introductory paragraphs (I guess it "flew" right over their heads  Big grin ).
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atmx2000
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 1:43 pm

p.s. There is no reason that Boeing can't assemble boats. Especially hydrofoils, which may be the next development in trans-oceanic shipping. The boats just need to be a lot bigger than the largest hydrofoil I know if, which was a US Navy patrol vessel just over 350 feet long.

Except, the large civil ship building industry in this country went bust a long time ago due to foreign competition. Now maybe if Boeing figure out how to build a tough composite single piece hull and a autoclave big enough to cure it, they might have something.

I certainly agree. That cash could have been much better used launching the 787 several years earlier to counter the A330.

While it would be nice to have the cash now, it is not clear that they could have launched the current 787 much sooner, with 9/11 and the dot-com bust and without the advantage of a few more years of technology R&D by Boeing and by engine makers. And they can always go back to the equity markets and offer convertible debt to raise money if they can make business case for it.
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N328KF
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 2:05 pm

For what it's worth, Boeing has already built hydrofoils before. Look at the Pegasus class.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
iwok
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 4:50 pm

the outsourcing of key components such as the wings etc. is terrible. Clearly Boeing could have used other large manufactures here in the US (such as Lockheed) but instead they chose to use a lot of asian content, since that is where many customers are.

Unfortunately, there is not much that can be done about it. Stock price in King, and to get a good stock price you need sales. I think it is short sighted to give these key technologies away, but this is what Boeing thinks they need to do in order to keep the stock price high.

So I think the best thing to do is buy Boeing stock and wait for the returns. Then, when Fuji or Kawasaki heavy industries start their own aircraft (the day is coming, mark my words) products and take over the market, be ready for Boeing to do outsourcing for them, which will in turn take the stock price even higher.

This is the natural cycle of commerce and business. Just look, IBM sold their PC business to a Chinese outfit.

Eventually, the business and industry will return to the US after Asia has caught up with us. The the cycle will repeat itself. No country can remain dominant forever. A good example of this is the car industry. Remember when the first Japanese cars came to the US. We called them rice grinders and laughed. Then they became huge titans and took market share away from the big three. Then in order to meet demand, Toyota, Nissan etc started building plants here, and guess what, the jobs returned to the US. The same will happen with aircraft, electronics, consumer devices etc.

Bottom line. Buy Boing shares. They will be climbing for many generations to come.
 
columbia107
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Mon Jan 31, 2005 10:55 pm

I have just browsed the contents of this tread and all I can say is what utter nonsense. I call it "Have a scoop that sells" exercise. An engineering company which invests in future products, such as Boeing, will constantly reinvent itself. No one who depends on his past achievements survives in this world of ours. I for one Mr. Eamonn Fingleton, will not be selling my Boeing shares which I hope to hand over to my son the day he qualifies as an aerospace engineer in two years time as a reward for his efforts. Hopefully, some day he will be working for Boeing.
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planemaker
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 1:23 am

In short, Boeing has enough problems without paleoconservative, protectionist, xenophopic columnists spewing forth dreamy fabricated visions of the good ol' days while condemning the very steps that Boeing must take to regain its former status.

Interesting that you can come up with such a virulent personal condemnation of the columnist based on a couple of short introductory pararaghs... or without having even read the 6 page article!  Laugh out loud

More remarkable, however, is that not only do you go off on a knee-jerk apologist tirade unrelated to the contents of the introductory paragraphs, but that you then rationalize your own contradictory rant.

You easily accuse the author of fabrication, well then, show us the fabrication!

Please... show us exactly where the author "spews forth fabricated visions of the good ol' days."

It should be very easy for you to cut and paste from the short paragraphs precisely where he is "spewing forth" and where he is "fabricating" his "visions of the good ol' days."

And show us where exactly in those short paragraphs is the columnist being "xenophobic?" Do you even know what the word means???

In your rush to attack and falsely accuse the columnist you have missed the very basic, obvious point that he draws attention to!

As I have already stated, you may not agree with his point (which the columnist does back up in the 6 pages of the article) but derisively insulting the columnist for something that he doesn't write is completely incomprehensible!

Just try to read and understand what the columnist actually wrote instead of writing overwrought posts that don't at all address the point that he highlighted!  Smile
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
leelaw
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own W

Tue Feb 01, 2005 4:14 am

"buying back billions in company stock in an effort to improve shareholder value was a stupid move. It makes you popular with your current investors but leaves you in a bad cash position to take on your competitors. It's a financial move, not a business move."

Now stock buybacks are the bogeyman? Sounds more like a strawman to me. Don't multi-national corporations, like Boeing, have to make both "financial moves" and "business moves" in order to survive? How would "investing" another $10 Billion in R&D have necessarily made any difference at all, if the management was too incompetent, arrogant, and complacent to spend the money properly in the first place?
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glideslope
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 5:45 am

"Interesting that you can come up with such a virulent personal condemnation of the columnist based on a couple of short introductory pararaghs... or without having even read the 6 page article!  

More remarkable, however, is that not only do you go off on a knee-jerk apologist tirade unrelated to the contents of the introductory paragraphs, but that you then rationalize your own contradictory rant.

You easily accuse the author of fabrication, well then, show us the fabrication!

Please... show us exactly where the author "spews forth fabricated visions of the good ol' days."

It should be very easy for you to cut and paste from the short paragraphs precisely where he is "spewing forth" and where he is "fabricating" his "visions of the good ol' days."

"And show us where exactly in those short paragraphs is the columnist being "xenophobic?" Do you even know what the word means???

In your rush to attack and falsely accuse the columnist you have missed the very basic, obvious point that he draws attention to!

As I have already stated, you may not agree with his point (which the columnist does back up in the 6 pages of the article) but derisively insulting the columnist for something that he doesn't write is completely incomprehensible!

Just try to read and understand what the columnist actually wrote instead of writing overwrought posts that don't at all address the point that he highlighted!"



Nice post. If only life was so simple.  Smile

[Edited 2005-01-31 21:46:36]
To know your Enemy, you must become your Enemy.” Sun Tzu
 
aerokiwi
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 5:58 am

Planemaker: Why bother posting these paragraphs then if you don't want people to comment on them? It seems ridiculous that unless they share the same opinion as you (whos eyes have been 'graced' with the full article), their statements are pointless. You have only provided the first section of the article, and from that A.Net members have effectively contradicted it and argued that it is largely nonsense.

I doubt many would ever even consider purchasing this type of magazine, so if this is all we have to go on, then you must accept the responses.
 
leelaw
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own W

Tue Feb 01, 2005 7:12 am

Planemaker: I agree with Aerokiwi. Therefore, if, as you claim, there are such compelling arguments beyond the introduction which are significantly different in tone and/or content that you believe are worthwhile knowing; can't you at least briefly paraphrase or summarize them for us since there isn't access to the magazine online?
Lex Ancilla Justitiae
 
planemaker
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 8:22 am

"Why bother posting these paragraphs then if you don't want people to comment on them? It seems ridiculous that unless they share the same opinion as you (whos eyes have been 'graced' with the full article), their statements are pointless."

Excuse me??? Please... point out just where do I state or indicate that I don't want people to comment on the paragraphs!!!!

My posts thus far have only challenged the over-the-top & unrelated comments that are NOT based on the paragraphs by just one A.Net member... and I have been very specific! For example:

Please... show us exactly where the author "spews forth dreamy fabricated visions of the good ol' days."
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
lehpron
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 8:28 am

Why do I get the impression that if any journal comments/focuses on what Boeing may have done or what may happen is somehow B.S.?

The meaning of life is curiosity; we were put on this planet to explore opportunities.
 
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N328KF
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 10:43 am

Lehpron:

Depends on the journal. We're not likely to question Aviation Week & Space Technology or The Wall Street Journal. We are likely to question The New Republic or The National Review.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
B2707SST
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 11:27 am

Please... show us exactly where the author "spews forth dreamy fabricated visions of the good ol' days."

Fine. I'll go line by line, again.

But whereas the Boeing that Wilson led in the 1970s utterly dominated the skies, today's Boeing is another matter.

Boeing's "dominance of the skies," as I have pointed out twice already, was due to enormous strategic mistakes by its fragmented competitors, not outstanding managerial ability. Besides, maintaining such dominance in any industry is virtually impossible. Economics abhors a vacuum.

Its once masterful technological leadership is gone

The 777 and 787 are the most technologically advanced aircraft ever built. The 787 is the most revolutionary jetliner since the 747; no one has ever built an airliner fuselage or wing structures from composites before.

and, in an orgy of indiscriminate outsourcing

If the Japanese can build wings cheaper than Boeing itself can, then it would be "indiscriminate" -- and suicidal -- for Boeing to continue building them itself and basically throw money away. The 787 will sell for significantly less than the 767 or the A330 it makes obsolete -- how do you think these cost savings are achieved?

As I mentioned in another thread, David Ricardo explained the theory of comparative advantage 200 years ago, which conclusively disembowels the protectionist arguments, but apparently some people are still playing catch-up.

Even Paul Krugman, a hysterically anti-Bush New York Times economist/columnist who has become (along with Maureen Dowd) the poster child of the embittered left, has been repeatedly forced to point out the massive error of all this hand-wringing about oursourcing (see, for example, Ricardo's Difficult Idea, We Are Not the World, or The East is in the Red - A Balanced View of China's Trade). If you want the mathematical proof, let me know.

Besides, that "indiscriminate outsourcing" will result in hundreds of 787 sales in Japan, and by extension, prevent hundreds of sales Airbus will never book. It would be nice to imagine that political considerations have nothing to do with aircraft orders, but that's not the world we live in.

Stonecipher is presiding over the destruction of what remains of Boeing's erstwhile manufacturing greatness

Manufacturing employment at BCAG is higher than it was in 1970, when things were looking pretty tattered at Boeing.

That aside, assembling more aircraft in less time with fewer workers is a sign of progress. Employing lots of people to do redundant tasks does NOT create prosperity. What is so difficult to understand about this?

- not least the world-beating wing business that was the apple of Wilson's eye.

Let's take a deep breath and remember that Airbus was the first to introduce the supercritical wing, not Boeing. It took Boeing 10 more years to introduce the supercritical cross-section on the 757/767. The 727 had innovative triple-slotted flap systems, but the most important characteristics -- the cross-sections -- were derivations of NASA airfoils.

Furthermore, building a wing is not an especially difficult or competitively significant task. It has far more symbolic than actual importance. Designing a wing, on the other hand, is a much more valuable core competency, and that will stay with the engineers up the road in Everett.

A fairly comprehensive and detailed article that postulates how Boeing has fallen to No. 2

That's easy enough: complacent management, excessive conservatism, and a lack of strategic focus. Not "indiscriminate outsourcing."

Airbus passing Boeing in total sales and total deliveries has finally given management a much-needed kick in the pants. There is a hunger in the organization that has not been seen for many, many years. The Lazy B is finally waking up.

why it won't be able to regain its former greatness

I'm glad Mr. Fingleton has such an accurate crystal ball. Maybe next he'll try lottery numbers.

why that is very detrimental to America

No question there, but Boeing will not turn itself or American manufacturing around by sourcing components from the highest-cost provider.

Unfortunately, the 6-page article is not available on-line.

I noticed; citing the detailed arguments in the rest of the 6 pages is great, considering no one else can read it. Unless you'd like to retype it and post it, all I have to go on is the introductory paragraphs, which contain more than enough fallacies for now.

Boeing's top management has presided over one of the most lamentable downsizing programs in American corporate history.

As I said above, when Boeing is hit with recessions, terrorist attacks, massive overcapacity, order cancellations, what should they do? Start paying workers overtime to build aircraft that nobody wants?

Not only has the Boeing group cut 77,000 jobs in the last 7 years

Interesting how they conveniently measure from the cyclical peak in aircraft production. If the economy today was like the economy in 1998, virtually every industry, everywhere would be employing more workers. Bubbles are great fun while they last.

but it has euthanized its research and development

R&D is not the problem, viz. the 787 and Sonic Cruiser, both of which are revolutionary designs (in one case, too revolutionary). As I said above, results, not expenditures, are the only gauge of success. I see no evidence at all that Boeing is lagging Airbus in the technology department.

all this while spending $10-billion to "enhance shareholder value" in a buy-back of one-sixth of its outstanding stock

In hindsight, certainly a shortsighted move, but if Boeing needs more capital, it can just re-issue the treasury stock. In fact, it would probably realize a huge profit on the trade, given that BA stock was one of the best Dow performers in 2003 and 2004 and is trading near a three-year high.

In your rush to attack and falsely accuse the columnist you have missed the very basic, obvious point that he draws attention to!

Which is, no doubt, that Boeing's outsourcing of heavy manufacturing is "hollowing out" (a worthy contender for the list of banished words) America's manufacturing base, eroding its competitive advantage, and sealing its long-term fate. This completely ignores the fact that Boeing's true advantage is and has always been designing aircraft, not manufacturing them.

Whether Buchanan and his writers like it or not, manufacturing is migrating from high-cost nations like the US to lower-cost sites in the third world. We can weep and gnash our teeth about this, but there is nothing that can be done to stop it. The wage gap between the developed and the developing world is simply too high and manufacturing processes are too easily copied. Like water flowing downhill, transferable activities will, in the long run, be done in the lowest-cost manner. Boeing's challenge, and America's challenge, is developing the intellectual and entrepreneurial capacity to become a global innovator instead of a global manufacturer. The future of the US economy is not manufacturing, and anyone who pretends otherwise is in store for a rude shock.

And show us where exactly in those short paragraphs is the columnist being "xenophobic?" Do you even know what the word means???

If you don't think Pat Buchanan is a xenophobe, I'd say you're the one who has something to learn. His particular brand of paleoconservative isolationism pervades The American Conservative. In 1955, William F. Buckley criticized his fellow conservatives for "standing athwart history, yelling stop." Buchanan must be pretty hoarse by now.

--B2707SST

[Edited 2005-02-01 03:33:10]
Keynes is dead and we are living in his long run.
 
skymileman
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 11:33 am

I must say, I'm a huge Boeing fan, but I have been extremely unimpressed with their business methods lately. If they want the business, then darn it, go get it!!!! If they don't and Airbus does like has been going on lately, who the heck do they expect to get the orders. I mean, if Boeing wants to sit around on their duff and wait for the orders to come to them and their overpriced planes, then of course Airbus is going to win! I love Boeing, but they need to get it together.
 
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N328KF
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 11:35 am

B2707SST:
The 777 and 787 are the most technologically advanced aircraft ever built. The 787 is the most revolutionary jetliner since the 747; no one has ever built an airliner fuselage or wing structures from composites before.

Most technologically advanced?

I'd put in a good vote for this one:

When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
skymileman
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 11:37 am

N328KF
What on earth is that one? By the way, do you know what percent of the 787 will be the composites?
 
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N328KF
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 11:59 am

I don't know the percentage of the 787 that is composite. Try checking out the Boeing site. I'm sure it says there.

That aircraft is the RQ-3 Dark Star. It is a UAV that was developed by the Air Force and DARPA during the late 1990s. It's extremely stealthy. It's basically a Global Hawk or Predator taken to a whole new level.

Anyhow, it was cancelled...and then in 2003, Aviation Week & Space Technology found that they only cancelled it so they could turn it into a black project.

Here's a better image:

When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
DfwRevolution
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 12:08 pm

I don't know the percentage of the 787 that is composite. Try checking out the Boeing site. I'm sure it says there.

I've heard 80% by volume and 50% be weight... anyone else?

Most technologically advanced?

I'd put in a good vote for this one:


I disagree... the impetus on a commercial airliner to make a profit is often as challenging or more challenging than accomplishing a military objective. The extent to which the 777 advanced ETOPS procedures alone is on par with many defense projects....
 
DAYflyer
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 12:26 pm

Whoever wrote the article needs an immediate rectal lobotomy to remove his head from his uhemmmm...

Boeing is far from dead. Apparently the author neglects to mention competitors like Convair, Lockheed, McDonnel-Douglas, Airbus, Fokker, and others who also sold airplanes in the 70's. Correct me if I'm wrong, but are we not know down to 2 competitors left on this list for commerical aircraft???

Yup, that sure sounds like a total failure to me of Boeing's...........we only knocked out or eliminated all of the competition but Airbus. And without all those French and German subsidies, who knows if Airbus would have even survived......
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Thrust
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own Wings

Tue Feb 01, 2005 3:51 pm

Boeing is anything but dead, I agree. The 787 is going to sell incredibly well, and the 777 and 787 remain the most technologically advanced aircraft out there. Boeing is working on the next 737, and is an important supplier of military aircraft. Airbus has NO role in the military. Airbus, as Dayflyer mentions, exists only because the European governments let it. Pull out the European government support, and Airbus collapses into a heap of rubble. Boeing, meanwhile survives without the help of the government. Boeing may be in hard financial times, but anybody who says they are down and out needs to wake up and smell the air. Airbus may have surpassed them with the A380, but that does not mean Boeing falls to no. 2, at least in my view. That is only one category Airbus has proven superior in. In the twin department, Boeing is still no. 1, for both big and small twins.
Fly one thing; Fly it well
 
N79969
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RE: Boeing, Boeing...Gone: Titan Clipped Its Own W

Tue Feb 01, 2005 11:15 pm

B2707SST,

I think your last post was among the best I have read in a long time. I
consider myself a disciple of economic thinking, free markets, and generally agree with the points you made-- particularly in regards to the hysteria surrounding outsourcing.

However I do not dismiss the author's point entirely.

First I want to point out that Boeing has outsourced the design
responsibility for the wing structure to MHI. The design of the wing is
not entirely in Boeing's hands.

http://www.mhi.co.jp/nasw/tokusyu/7E7/

It is in Japanese only unfortunately.

While I do not think Boeing is out of the game quite yet, I think they do
need to be careful when deciding what and to what extent they procure from
the outside. Boeing brings know-how to the table. This know-how asset is
the accumulation of knowledge and experienced from having manufactured and assembled substantial portions of airplanes. It is not contained in a big stack of documents, but is in the minds and limbs of engineers and line workers who have put together thousands of airplanes. Designing the wings is a core function of an aircraft maker. It is not just the guys sitting in front of computer screens who add value but the people on the line who actualize the design and have to deal with the practical problems that inevitably turn up when manufacturing such a complex product. Their collective experiences
constitute the knowledge and know-how that are Boeing's key assets.

By outsourcing some of these core functions, Boeing will no longer
accumulate the knowledge that comes with having people turning wrenches and people working with the slide rules in the same place at the same time.
This could forseeably affect Boeing's ability to innovate in the future.
The points I raise have supposedly been raised not only by Boeing union
members but also board members. I think these effects are probably
incredibly difficult to quantify and thus have not made it into economic
literature. In contrast, the benefits of outsourcing and free movement of
capital are far easier to quantify and thus for economists to espouse.

The U.S. government pays subsidies to keep economically unviable shipyards
in Mississippi open for a reason. In addition to simply keeping Trent Lott
happy, they want to make sure we can make ships on our own should an emergency arise. If the lines close, it will take a long time and costly
screw-ups to regain the lost know-how. I am not suggesting that
commercial airplane wings are important to national security but I use this
example to illustrate the value of actually physically making certain
things.

Another, perhaps better, example is Sharp of Japan. Sharp is a leader in flat screen televisions. Maybe the Leader. When it comes to some core manufacturing processes, they are intentionally bucking the surge of outsourcing to China which has become the norm among the Japanese electronics industry. They go as far as intentionally adding steps using human labor to a manufacturing process that could be otherwise entirely automated. They also modify factory machinery from manufacturer defaults. The reasoning is that they want to avoid a situation in which a competitor buys the same exact capital equipment and becomes a head-on competitor. They want to ensure that the firm retains know-how and the ability to create know-how in the future.

Again, I am not suggesting that Boeing or anyone else replace automated
processes with human labor. But I do believe that economists may inadequately value know-how when they make certain blanket statements.

While I value the analyses of academic economists such as Paul Krugman (despite his foaming-at-the-mouth hatred for Republicans), you have to give some consideration to actions of successful profit-seeking private enterprises such as Sharp.