As Jon points out in the previous post, Boeing’s “no-strike clause or else” threat to its unions comes across as a bit shrill and hollow considering Washington’s reputation for having one of the most favorable business climates in the nation. I mean, “or else” Boeing will move 787 production where?
Much has been made of Boeing’s recent purchase of Vought Aircraft Industries’ Dreamliner plant in South Carolina, speculating that Boeing might leverage its investment to build a second 787 assembly line there. But this speculation ignores the reality of the deal, which is that it was only made necessary by the utter failure of Voight, like many of Boeing’s other outsourcing partners, to meet the quality and delivery standards necessary to keep the 787 project on time.
Boeing’s purchase of Vought’s facility was, in effect, an admission that Boeing’s outsourcing strategy, the “systems integrator” approach, is not working. There may be a flaw in Boeing’s overarching corporate strategy of dumping costly assets and globalizing production.
That’s right, Boeing bought the plant, responsible for assembling large sections of the 787’s fuselage, because it couldn’t rely on Vought to fix the facility’s endemic problems. Do you really think that’s a signal that Boeing is eager to entrust even more responsibility to South Carolina workers and managers when it already has a large, highly trained workforce available here?
Indeed, not only does Boeing have an ample supply of trained workers available in the Puget Sound region, it also has an assembly facility available that could be converted to 787 production with minimal capital investment and in little time. Of course, I’m referring to Boeing’s existing, 767 final assembly line in Everett.
Think about it. The 787 was always meant as a replacement for the 767, whose production has long been scheduled to be phased out one way or another. Remember, the main attraction to our region of Boeing getting the Air Force tanker contract was that it was based on the 767, and thus would keep production going at the Everett facility years beyond the model’s life as commercial passenger liner, and saving thousands of good-paying local jobs in the process. But in response to the Air Force’s obvious preference for a larger tanker, Boeing has resubmitted its bid with a tanker based on the larger 777. Win or lose, that’s a death sentence for the 767 assembly line.
But once (if) the 787 flies and Boeing swings into full production, that makes the 767’s Everett plant the obvious location for a second 787 assembly line.
Last year’s machinists strike my provide useful rhetoric for Boeing as the aerospace giant seeks concessions from legislators and labor, but even management understands that the bulk of the 787’s production woes have had little to do with local workers, and apart from the recent design flaw, have mostly stemmed from production problems from Boeing’s many out-of-state partners like Vought. In that context, what could possibly make more sense than starting a second assembly line at an existing Boeing facility with a highly-trained workforce that has proven track record of delivering quality product on time?
And if that’s not reason enough to keep 787 assembly here in the Puget Sound region, no amount of tax or labor concessions will be enough to convince Boeing management to change its mind.
Yup, just that.
“… no amount of tax or labor concessions will be enough to convince Boeing management to change its mind.”
You keep assuming that Boeing management actually wants the Boeing to succeed.
The shareholders do want Boeing to succeed. And Boeing management answers to the shareholders.
What an idiotic statement.
Boeing isn’t moving their future profit maker to S.C. without proof positive to the shareholders that the reason they had to purchase Vought won’t cause losses.
I mean, have any of the right-wing yum-yums figured out why Boeing had to buy Vought and no other company purchased them???
What about all the support businesses that know and understand the Boeing business model that are located here?
Think they all will just pick up and leave Seattle, or open another facility?
Think that just anyone can become a supplier to Boeing – a highly regulated FAA compliant industry.
Yeah, go ahead, move to SC and abandon Seattle because of the union.
If this were poker I’d call their “all in” bluff. Because that’s exactly what’s going on.
Goldy, It’s “Vought”.
Boeing will be in that purchase over a billion when it’s all said and done per reports. That is on top of already buyin gout Vought’s share of Global Aeronautica already.
Boeing? Leave?
Why? If they stay here for another year or two, then China will buy the whole effin thing and ship it to Beijing.
Everett ought to start thinking about what to do with all them empty hangers. Maybe Patty “I LUV the F22” Murry can lobby Congress to build dirigibles there?
Of course we could declare war on BC and use Everett as a staging base!
Boeing? Leave?
Can anyone say “Airbus we have a freakin’ deal of a life time for you!!”
That would be the death knell of Boeing and they know it.
http://horsesass.org/?p=17714#comment-929169
Goldy, quit stealing my work!!!
**just kidding** of course….
All this would be more predictable if we could assume that there are any of the “old hands” left in Boeing’s management hierarchy who (1.) know a damn thing about making airplanes and/or (2.) give a shit about making airplanes.
And I hate to tell ya, gbs, but your claim in comment 3 ain’t true. All the rhetoric about “returning value to the shareholders” has pretty well been shown in the last year to be a cover for “take the money and run”. It’s possible for a management team to make a lot of money building a company up or tearing it down, and it’s a hell of a lot easier (in the short term) to do the latter in bad times.
Al Mulally certainly would do the former. The fact that he chose to do so elsewhere suggests that he knew that in the “new” Boeing, that wasn’t the game plan.
I commented on this when it came up a before.
Why bother negotiating with Boeing? This is one instance where the municipalities are really in control.
Boeing CANNOT up and move from the area. Billions would need to be re-invested if they move (It’s not just by chance that there’s a rail line running from Everett to Renton.) Now perhaps Boeing could find a state willing to invest in roads, rail, ports, airfields and highways to make the business work. But I say, “Uhh, good luck with that.”
Artfart @ 9:
Well, we’ll just have to agree to disagree.
Boeing managment and certain board members won’t be in thier positions beyond 2010 if things do not start to change.
Boeing is not a one trick pony and there’s too much at stake in other industries to allow the commercial division to drag the rest of the company down.
There will be changes, and it won’t involve moving to S.C.
By the way….Yanno that “ultra-guppy” 747 conversion that Boeing cobbled together to fly in those fuselage sections from all over the world for assembly? Have they built more than one of those things? Seems like that would be a rather weak link in the chain once (or if ever) the Dreamliner goes into full-scale production.
I’m just sayin…
drool @4,
Hey, I got the spelling right 2 out of 4 times. That’s not bad for me considering “u” and “i” are right next to each other on the keyboard.
Right Stuff @7,
Me stealing from you would require me actually reading my comment threads on a regular basis.
ARt @ 2: I’m not sure how many of the Dreamlifters Boeing has right now, but I’ve seen two at a time on the flight line at Boeing field. I wouldn’t be surprised if they didn’t have three or four.
But 747 airframes are a dime a dozen right now, especially in the form of freighter conversions. You can go down to the desert at several locations in California, Nevada, and Arizona, and pick several up relatively cheaply. The rescession hit the cargo carriers really hard, they’ve been parking airplanes right and left rather than flying them 2/3 empty. And air cargo rates are dropping like a rock, because ocean cargo rates have also dropped to almost nothing.
Boeing’s beef with the union has no more logic to it than the schoolyard bully trying to assert supremacy.
It’s Barney Fife shooting himself in the foot all over again (It’s a compelsion).
By the way, right now Boeing has a sort of “unofficial” second 787 assembly line going, with airframes undergoing final assembly in the 747 and 767 bays. But with the new 747-8’s starting to come down the line, there’s a lot of juggling going on, and a handfull of 767’s still on order, there’s a lot of juggling going on with airplanes being moved back and forth a lot.
It would be idiotic for Boeing to move 1/2 of it’s final assembly to a location on the other side of the country. Boeing would have to duplicate too much logistical support and infrastructure to support it (parts warehouses, supply chain management, employee training programs and benefit support, engineering support, etc.). Even the customer airlines would have to open duplicate offices for their engineering staff there, as some of their aircraft would be delivered out of Everett and others out of Charleston. It would be, all around, a useless and stupid duplication of costs. If they do so, they would probably locate the entire production there, as soon as new facilities could be built to house them. But there’s no compelling reason for them to give the final assembly to the very people who caused much of the intial assembly problems in the first place.
But that doesn’t mean Boeing won’t do it. The Boeing guys in Chicago do seem to have an anti-union stance which isn’t practically justified. Some of it seems to be motivated by Chicago management spending too much time listening to Vought’s management complaining about Boeing union workers, rather than going on the factory floor in Everett to see the root cause of the problems.
Clearly Boeing’s current problems aren’t caused by the unions, but current management would like the public, politicians, and shareholders to think otherwise. Like a lot of officials in the former Bush administration, it seems that Boeing higher management in Chicago is willing to kill the goose that laid the golden egg as long as they maintain their ideological purity and preference toward out-sourcing and union-busting. This attitude was present BEFORE the strike – Boeing insisting on outsourcing rather minor jobs (maintenence electricians, I think it was), was a major cause of the strike.
But that doesn’t mean the local politicians, or the unions, should – or can – do anything to change that equation. Boeing management has already decided whether they are going to move to Charleston or not. Management knows that the “no strike” challenge is something the union could never agree to. It mirror’s the current Sonic/whatever owner Bennett throwing down the gauntlet to the City of Seattle (and Renton) and proposing a deal which no reasonable person would accept, then using the refusal to try to push the blame for a move off onto someone else. If you need further proof that the “no strike” pledge isn’t a serious demand, note that Boeing has yet to bring up the subject with the unions!
So one of two things are happening:
(a) Boeing management has already decided to move ALL 787 production to Charleston (the first assembly line to follow the second). In that case any further concessions by the Union or local officials would be wasted.
or;
(b) Boeing has no plans to move 787 final assembly to Charleston, and this is all a bluff to get as many concessions as possible out of the unions and the state. Boeing did this before in the 1960’s, getting lots of concessions(and the land upon which to build the Everett plant) by bluffing that it was seriously considering locating the initial 747 production in Wichita. Again, in this case, no serious concessions by local officials or the unions are necessary.
Hey, wow, someone who actually believes in Homo Economicus. It’s a specimen of an endangered species! “Hey, maw…!”
Nah, most management isn’t nearly so rational. Nor most shareholders.
I heard somewhere, in the news the day after Boeing bought Vought, that the employees there are Union(as much as they can be in South Carolina, not sure everybody is in it). I also heard of a strike by UAW people at Bell in Texas. Thought Texas being Right to Work would break that strike. They just settled. Seems only the Rotor Blade and Transmission plants at Bell were union.
http://www.ainonline.com/news/.....exas-ends/
Artfart,
There are to be four Dreamlifters (the 747 Large Cargo Freighter). Not sure if #4 is built yet.
Y’all ought not to forget, it was WASTATE librals who gave the lazy B all they wanted and the libral Patty Murry who has been whoring for the lazy B in the Senate fight over the “plane that can’t fly in the rain.” (She lost to our REPUBLICAN Secty of Defense!)
For that kmatter don’t you Numchuck avoiding cowards know why Patty supports Obamacare? B_O_E_I_N_G! Get rid of corporate healthcare and the only excuxse for unions anymore would ve corporate pork .. and pigs grow lots better in S. Carolina!
Our prisons are full, our coffers are empty and now the librals wanna fight to keep unions in Boeing! A good Republican would fix this .. privatize the prisons and use the inmates for labor at Boeing!
…..
Maybe we can use the 787 hanger building to house a new basketball team?
The real interesting part will be once they stitch up the 787 prototype to the point where it can do a once-around without any major pieces falling off and Wall Street has a minor orgasm over Boeing stock. Then watch to see how fast the Chicago guys cash out their options.
Why not have Government Motors take Boeing over?