March 14, 2009
Cause & Effect?

The chair of the political Science Department at my alma mater likes to tell his students that he is training them to be "good, cynical political scientists."

Accordingly, I think there is more probability of linkage between the recent US-China dust-up at sea and a major Chinese customer for Boeing unexpectedly declaring the 787 "doesn't 'fully meet the quality that Boeing touted earlier'" than some might be willing to admit.

Posted by Eric Earling at March 14, 2009 01:25 PM | Email This
1. Plenty of other airlines are also delaying or cancelling new aircraft deliveries -- and none of them are based in countries who have had recent "dust-ups" with the US Navy.

It's the economy, stupid! :-)

Posted by: scottd on March 14, 2009 01:13 PM
2. It's more than just the economy.

The 787 is an example of bad, really bad, p!ss poor bad, worst in BA history bad, management.

The clowns running BA today have ZERO experience in building ANYTHING. They command (and DEMAND) exorbitant salaries while being unable to:

-build and deliver the 787 on anything resembling a budget or schedule
-build or deliver the 747-8 on anything resembling a budget or schedule
-manage AEW&C into anything feasible on anything resembling a budget or schedule
-any number of other projects...

The Red Chinese, along with EVERYONE ELSE in the WORLD, isn't taking any deliveries of the 787. It ain't being built. It's the BIGGEST BONER in BA's history. BA is so far behind schedule (and technology) it will never recover.

Oh. But McNerney is doing a bang up job. Worth every penny of that $14 million+.

Posted by: vere veritas on March 14, 2009 03:25 PM
3. Eric,

I think you fell asleep in class and are not a "good, cynical political scientists."

The China dustup on 8 planes is a minor issue.

The real question is whether Boeing has real problems with the 787 being 2 years behind schedule and the cancellation of 31 orders this year (by a Russian airline and a Dubai leasing company) and Boeing's acknowledgement of not being able to meet the forecast range.

Part of the problem is that the industry in a cycle where the airlines are not interested in buying because they have excess compacity

Aerospace projects are long term contracts that have revenue recognition based upon engineering percentage of completion and progress billings to the customers based upon milestones.

While Boeing is not penalized for strikes and other acts of nature, Customers may be able to began breaking contracts based upon failure to meet specs and being behind on delivery. (I'll let the Boeing sales force comment on this)

Perhaps a better use of your time would be to sit down with James Wallace of the PI to determine to the best of your abilities whether this is a serious issue with Boeing or the "normal" delays and failure to meet specs that it has experienced with the delivery of the 707, 727, 737, 747, 757, 767, and 777. Remember TA Wilson and the engineers who "bet the farm" on the 747 (an unsuccesful bid that Lockheed won with the C5A Galaxy, see Wings on the Discovery Channel) are no longer around

The sad part about the slippage is workers are not being paid, sales and earnings are not being booked, and Boeings stock price goes South

Posted by: Succesful Mary Washington grad's brother on March 14, 2009 05:57 PM
4. Can't say it better than the other folks here. You really should stop with the conspiracy theories.

Posted by: demo kid on March 14, 2009 09:11 PM
5. #4 Posted by demo kid on March 14, 2009

" Can't say it better than the other folks here. You really should stop with the conspiracy theories. "

Without theories, conspiracy or otherwise, considering his reality, what else would Eric have to talk about?

Posted by: Brian Thomas on March 15, 2009 07:52 PM
6. Wow, are the Leftists WAY off base here...

You know, sitting in Shanghai this morning, the sun starting to come out (it's 6:30 AM, the day is just starting here, it's going to be another 22-23 deg sunny day - NICE!) I think back on the conversations with factory managers and business owners I've had here for the last 2.5 weeks...

Are they concerned about the economic downturn? Absolutely! It's affecting everyone. They're especially concerned about the stimulus package and the damage it will do (yes, the Chinese business community stays abreast of US politics - they know who their number 1 client is!). And the fact that most economists - in the US, EU, and Asia - say it is a bad plan. See, the Chinese still understand that $800 BILLION is a LOT of money!

But they know the recession will end. Their biggest concern? The Obamassiah's insistence on "buy American". Legislation pushing just that. Is China as open as the US in terms of trade? No, and the Chinese would be the first to say so. But it is opening, ever slowly (did you know that GM and Ford are EXTREMELY profitable in China - their cars sell VERY well and are held in equal regard to VW, Audi, and Mercedes, above Honda and Toyota?)

But to think there isn't a bit of pre-emptive tit-for-tat going on is insane. You'll hear it straight from the upper level management, and if you read between the lines of the Government officials, that's EXACTLY what's happening.

The Chinese airlines won't cancel the planes; they'll cancel the 787s and replace them with Airbus planes. And they'll kick up development of their own widebody planes another decade.

Thanks Obama for showing once again that a community organizer from the dirty politics home of Chicago hasn't got an ounce of common sense when it comes to business and trade!

Posted by: Shanghai Dan on March 16, 2009 03:21 PM
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