Murray: U.S. sits idly by as Airbus 'creams' Boeing

http://seattlepi.nwsource.com/business/171930_murray05.html



Wednesday, May 5, 2004

Murray: U.S. sits idly by as Airbus 'creams' Boeing

By CHARLES POPE
SEATTLE POST-INTELLIGENCER WASHINGTON CORRESPONDENT

WASHINGTON -- Resuming an intense feud with Airbus and the Europeans, Sen. Patty Murray says the United States is "sitting on our hands while Europe is doing everything it can to dismantle our aerospace industry."

The remarks that Murray plans to deliver in a Senate floor speech today expand on complaints that Murray and The Boeing Co. have been making about subsidies Airbus receives and their impact on the competition between the worlds' two largest aerospace companies.

Airbus, a consortium of European companies, has made significant strides in the aircraft market and this year surpassed Boeing as the world's leading builder of commercial aircraft.

Murray, however, insists those gains have been won unfairly. Her comments suggest that the Bush administration and to a lesser extent, Congress, deserve the blame for letting it happen.

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I dont have too much of a dog in this hunt, other than pulling for one of "our" companies to do as well as they can - it helps all the local workers and, with the size of Boeing, is helpful to the country's enconomy in general. Okay, here's my beef - Boeing used to be the company that was willing to take the calculated by risky leaps of faith in new technologies, etc. From my perspective, Boeing seems to have stagnated and, at least with the commercial airliner division, is no longer pushing that philosophy - they had the chance to take a bold leap with the Sonic Cruiser (which is still not radical enough for me), but instead cancelled that program and are now pushing the less risky (though certainly technologically advanced) 7E7 Dreamliner instead.

Just some random comments on Boeing....

of its revenue from passenger planes, they don't have to bet the company on a new airliner.

All those military contracts could be seen as "subsidies" in some eyes, and why try to come up with a competing monster jet when there won't be enough market for two companies to make one. If airlines ever start making money again, the Dreamliner seems like a pretty good idea, and more useful than another jumbo. Airbus doesn't have anything quite like it.

What everyone in the business should be looking over their shoulders at is Embarcadero in Brazil. They make a nice, inexpensive commuter jet and there's nothing stopping them from making a bigger one.

the market is not big enough for two jumbos - assuming the A380 hippo flies, I think the 747 has lost that niche. Regarding the dreamliner, I like what they're trying to do with, but it seems more along the lines of improving what they already manufacture (although significant improvements) rather than something revolutionary. I like the fact the dreamliner is more eco-friendly and efficient and I believe that is one of the plane's big marketing points.

is that runways have to be widened, and possibly lengthened, to handle the huge wingspread of the 380, which pretty much restricts its use to a few long-haul destinations. Not many airports want to spend the money for that. Some don't have the room.

The 747 isn't dead yet.

the 747 is one of my personal favorites from the Boeing commercial fleet.

Boeing Increases Quarterly Dividend; Resumes Share Repurchase Program
http://www.boeing.com/news/releases/2004/q2/nr_040503a.html

So they have money and have decided to give it to shareholders in dividends and stock repurchases, indicating they don't see profitable R&D re-investment? They could evidently lower prices if thats what the competetive pressure was.

They claim to put the 'best of boeing' into their R&D group which seems focused on military work. Does this mean they have the second-best working on commercial planes? Very hard to tell as they keep their commercial developments more secret than their military work.

Hmm they just bought a VTOL UAV company Horizon.

The sonic cruiser was to push mach1 and get you there faster on the same fuel. The 7e7 is to run about the same speed as todays planes but use less fuel. I don't really know what other differences there are in the programs but reducing fuel use sounds like a good move as fuel prices rise.

At the moment the "Dreamliner" appears to be just that: a Dream. So far no real specs have been released, the PR pictures change on a weekly basis.
Apparently the design will use many detail only used by Airbus so far, it seems to be
a wider 767 cabin with Airbus A330 wings and a 777 Cockpit. Throw in new turbines and state-of the-art electronics, as well as an active PR department.

In effect the 7E7 wants to attack the A300 - a smart move, as the A300 is an outdated design. Should the "20% less fuel" promise turn out to be true, without leading to a short turbine lifetime, then the 7e7 might prove a very smart move. The problem I see is the family thing: modern planes, especially Airbus jets, belong to "families", allowing pilots trained on one type to quickly switch to another. That design trades performance to flexibility - if Boeing wants to open a new family with the 7E7, then it might scare off buyers. This is because the advantages promised are not big enough to justify replacing the whole fleet.

Bottom line: If Airbus is quick with an A300 replacement, then Boeing might find itself in serious trouble.

Murray complained that Airbus was spreading "distortions and half-truths" about a $23 billion deal Boeing struck with the Air Force to supply 767 aerial tankers.

So, Patty, sitting idly by as Boeing 'creams' the American taxpayer?

Boeing and McDonnell Douglas both failed because they nearly abandoned their commercial aircraft business to whore for government money.

While at the same time Airbus went into overdrive,

The real thing destroying what is left of the American commercial aircraft industry is Boeings plan to outsource basically the entire 7E7 program to the Russians and Japanese.

Boeing is throwing away its engineering and manufacturing base, the only thing preventing the Japanese from building large jets of their own is their government policy forbiding it. If that policy were to change, Boeing already gave them the kitchen sink.

During the WW2, the west gave Stalin everything he needed to build copies of Western equipment, they didn't stop just because of the cold war.

According to Airbus, Boeing has received more direct and indirect subsidies for the 7E7 than Airbus has for the A380 (including construction plants).
So it seems to me that the two companies are behaving pretty much the same. Neither Boeing nor Airbus is shy when it comes to stealing public contracts.

However Boeing's strategy looks a little strange to me:
-not present at the 2003 Air Show in Paris-Le Bourget
-not present at the 2004 Berlin ILA
-a CEO openly wishing for his clients to go bankrupt

So, Boeing stays clear of major industry events, while Airbus sells many planes during the fairs. At the same time a Boeing Manager (Blair) says that he wants less costumers, i.e. wishes for supposedly valued costumers to fail.

Stonecipher is an idiot, his only virtue is he was the only Boeing executive not implicated in serious corruption... recently.

Wasn't there some evidence that the U.S. used the Echelon spy network to get info about business negotiotions between the Saudis and Japan? And that they gave that info to Boeing, helping Boeing get a contract to sell their planes to the Saudis instead?

I read that somewhere recently, but I'll have to go look it up again.

for Boeing. I forget if they were alleged to have been using the Echelon system or not, but they got nailed. The story was covered some years ago by some of the same people who investigated the Contra-Coke dope dealing. I have a recording of a hearing that Rep. Conyers held in which David Corn of the Nation discusses this.

I don't recall it had to do specifically with the Saudis and the Japanese, but I suppose that could have been part of it. What I remember is that word of the Airbus A-3XX (for "xtra-xtra-large") super jumbo project got out to Boeing while it was still on the drawing board at Airbus.

.. is that Boeing aircraft aren't 100% all-american, and that all Airbus (Airbi's?) aren't 100% all-European.

In fact, a lot of US companies are building parts for Airbus, while a lot of European & Japanese companies are building parts for Boeing.

we gave them the world to get the 7e7 and have no guarantee about how many jobs we'll get

how do you get a 3 bill tax break when you don't pay ant to begin with

Ever hear of peak oil? It's staring us in the face within a decade (the latest estimates I've seen).

Since fuel is the biggest cost per flight, and oil will be getting more and more expensive, the average flier will be caught in the big squeeze.

We will reach the point before too much longer that the business traveler and the gov't exec will be the only ones who can afford to fly. We will be back to the same situation as the industry was before deregulation. A few airlines with a few profitable flights serving a few well to do passengers.

And folks, there ain't no alternative now. Instead of research into how to do transportation more efficiently and polution free, they just have to build the bigger, and bigger, and BIGGER aircraft.

But wait. This is america. Bigger is always better, right?

BooHoo. Free trade, bastards...when it blows there way these guys are all for it. Whe it doesn't, they are first in line for corporate welfare and price fixing

...and studying the Bi Bull all the time.

Guess they forgot how to run the company!