June 2010 Archives

WTO ruling: "No" to launch aid

You may have seen or heard reports that the World Trade Organization (WTO) has ruled that billions of dollars in European launch-aid subsidies used by Airbus to develop its commercial airplanes are illegal.

This is a very significant decision which basically says that the launch aid subsidies that helped Airbus become a major player in airplane manufacturing have to come to an end.

The ruling declares that every instance of launch aid challenged by the United States in this case was illegal. Clearly, without this aid, Airbus would not have the market share it enjoys today.

Also, as Boeing Executive Vice President and General Counsel J. Michael Luttig put it in a statement today, the government subsidies to Airbus “have caused significant harm to America’s aerospace industry and its workers.”

Launch aid typically comes in the form of no- or low-interest loans with very generous repayment terms - basically no repayment needed during the years it takes to develop a commercial airplane, and no payments at all if a program fails.

This is a unique benefit to Airbus. The U.S. government doesn’t fund development of commercial products.

With the WTO having ruled that each and every instance of past launch aid was illegal, Airbus cannot now use the same launch aid subsidies to finance its new A350 model.

Also, under the ruling, Airbus must now repay or restructure on commercial terms the $4 billion in launch aid that it received from European governments for its launch of the A380.

Importantly, the ruling also sets out principles for all companies entering aerospace markets for new, competing products. To the extent governments choose to fund aircraft development, they must demonstrate that they are doing so on proven commercial terms.

The WTO’s full report is more than 1,000 pages. Understandably, it’s very complex, detailed and filled with technical legal analysis.

To help you understand all that’s in the report, we’ve posted some further information on the case and the ruling.

Hotter than July

Down in the desert we’ve finished a series of hot weather tests on the 747-8 Freighter, and initial data shows that the airplane performed well.

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RC522, the 3rd flight test 747-8, during ground testing in Arizona.

Basically we wanted to evaluate the capability of the 747-8’s new air-conditioning system during ground operations and flight.

Some airlines will operate the 747-8 in extreme climates, so this kind of testing is important in ensuring our customers’ expectations.

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During the ground testing, Boeing Test and Evaluation and Environmental Control System engineers analyzed real-time data from temperature, pressure and airflow monitors.

Talk about “hotter than July,” the temperature exceeded 105 degrees Fahrenheit (40.5 C) during testing at the Mesa, Arizona location.

Obviously, an ideal place to conduct the hot weather tests.

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Do not adjust your monitor. Any blurriness you may perceive around the 747-8 in the photo is the effect of heat rising from the desert floor in the triple-digit temperatures.

We’ll be doing further hot-weather testing at a later date for certification. For the time being, RC522 has now moved on to a cooler climate to conduct more tests.

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500 flight hours - now in the books.

One last piece of news about the 747-8. We’ve reached 500 flight hours for the 747-8 Freighter test fleet. Last week RC521 achieved the milestone on a flight (pictured above) out of Victorville.

787 inspections prioritized

Flight test is a constant balancing act and we’ve made a decision that will result in us not flying 787s for a couple of days.

After finding a workmanship issue on the horizontal stabilizer of an airplane in final assembly, we decided that we needed to inspect all airplanes to ensure they are in compliance with our design.

This includes the flight test airplanes.

ZA002 and ZA003 had been scheduled to fly Thursday. But as we do every day in flight test, we look at our priorities and change our plans.

So we decided that the best course to follow is to conduct inspections in order to find out what rework, if any, is required on those airplanes.

As you’ve seen over the years at Boeing, and over the last several months in particular on the 787 program, we’re dedicated to doing the right thing - and that isn’t always to prioritize the day’s schedule.

The overall program schedule can accommodate the inspection process and the required rework without jeopardizing our delivery commitment.

It’s disappointing to find workmanship issues. We’ll do root cause analysis and make the necessary changes to ensure these issues never find their way into the production flow again.

In the meantime, we’ll do what we always do - understand the situation and react accordingly.

Shanghai dreams

The past few months have been an extremely busy travel season for me. I’ve been to New York, Geneva, Jakarta, Singapore, Philadelphia, Orlando, St. Louis, Luxembourg, Dubai …

Well, you get the idea.

I finished my last major trip with a stop in China, where I had the opportunity to host a media roundtable and speak at the China Civil Aviation Development Forum.

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A Kodak moment at the civil aviation forum in Beijing. The ladies were from the Ordos region of Inner Mongolia where authorities are trying to attract investment to develop aviation infrastructure.

After my Beijing stop I got to “travel” around the world in an afternoon. By that I mean I visited Expo 2010 in Shanghai. It runs through October 31 and is intended to promote the exchange between different cultures and countries.

It’s the first time I’ve visited a world’s fair since Expo ‘74.

Boeing has a pretty cool exhibit inside the USA Pavilion at the Shanghai show. A staggering 70 million people are expected to attend the expo, and we think a good fraction of those will pass by the Boeing display.

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The lines were fairly long to get into the USA pavilion.

As a sponsor of the pavilion, Boeing has display space at the “Discover America” theme area. The Boeing story is about partnership, the connection between China and the U.S., and history, as told through technology, innovation and sustainability.

The centerpiece is something we’re calling the Boeing Dreamscape, an interactive wall featuring images and other content uploaded from BoeingDreamscape.com.

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Interacting with the Boeing Dreamscape wall.

We launched the website together with the Dreamscape wall so that people from China and around the world can share travel and cultural experiences with pictures and short messages.

I did. I submitted 2 photos of my own.

And of course on the Dreamscape site you can explore hundreds of images sent in by others from cultures and countries around the world.

One great feature of our exhibit highlights Wong Tsoo, who was Boeing’s first chief engineer. He helped design the Model C training seaplane which went on to become Boeing’s first financial success.

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The China Pavilion - understandably, a very popular exhibit.

During my visit to the expo, my Boeing colleague, Olive Wang, and I actually managed to walk the entire length of the grounds and back - a journey of about 4 hours.

Starting with the USA Pavilion at the far end of the grounds, we journeyed “east” through Canada, Europe, Africa, the Middle East and finally Asia.

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At the Porterhouse Irish Pub. Yes, an Irish Pub in Shanghai! Great food and a traditional Irish dance demonstration.

Before returning back to the USA Pavilion, we made a quick visit to the North Korean Pavilion, which interestingly was titled “Paradise for People.”

Sound intriguing? Well, if you may be considering a trip to Expo 2010 this summer, here’s my advice:

  • Wear comfortable shoes - the grounds are huge.
  • Bring your patience with you - lines are very long at many of the pavilions.
  • Buy a ceremonial passport - you can get it stamped at each country’s exhibit. People were very much into collecting the stamps.
  • Visit the small, less traveled, exhibits. Lines were shorter and the displays are fascinating. (We went into the Pavilions for Afghanistan, Bahrain, Jordan, Vietnam, North Korea, Denmark, and Cambodia without any waiting).
  • If you need directions, ask a “green cabbage.” These guides are dressed in light green track suits, speak several languages and give perfect directions.
  • Visit the USA Pavilion and the Boeing Dreamscape and be sure to upload your photos and messages before you go.
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Evening views - USA Pavilion (top) and our view from the Denmark pavilion.

Finally, the marketer in me has to point out that China is not only a long-time partner (nearly 40 years) and one of Boeing’s largest customers, but it’s a fast growing aviation market that will require thousands of new airplanes worth more than $400 billion over the next couple of decades.

So, needless to say it’s a thrill for us as a company to take part in Expo 2010.

Safe journeys to you wherever you may go as we enter the busy summer travel season!

ZA005 takes flight

The other day we talked about the “fifth dimension” as our 5th flight test Dreamliner took to the air for the first time.

With some new images now in, I had to share what I think are some really “otherworldly” shots of ZA005 flying above western Washington this week.

Let me know what you think of our newest flight test bird.

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In the clouds and out, above Mt. Rainier, a truly spectacular vision.

By the way, we passed yet another milestone this week - 1,000 hours of flying for the 787 flight test fleet.

We estimate that we’re now 40% through the test conditions we need in order to certify the first version of the Dreamliner - with a lot more work yet to come.

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Update: 21 June

Want to see more about the first flight of ZA005? Check out the video we just posted.

Fifth dimension

We got our first General Electric-powered 787 flying yesterday. It also happens to be the 5th Dreamliner to join the flight test fleet.

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Up, up and away for this beautiful Dreamliner - first flight for the 5th 787 in the flight test fleet.

Leading ZA005’s first mission was Capt. Mike Bryan, Boeing Test & Evaluation pilot, with Capt. Mike Carriker, our chief pilot for the 787, flying in the right seat.

They reported that the airplane handled just as expected, no surprises. That’s what we like to hear after a first flight.

As with our other flight test airplanes, ZA005 will now spend a bit of time on the ground, going through tests and preparing for additional flight tests.

Remember, ground testing hours required on the program are just as important as flight testing hours. Time on the ground is put to good use.

By the way, there are only 2 GE-powered airplanes in our flight test program. Primarily we use them to demonstrate that regardless of engine type, the 787 handles and performs as expected.

We expect to fly the 2nd GE-powered 787 (the 6th flight test Dreamliner) by the end of next month.

737 to ramp up further

About a month ago we told you that we’ll be increasing our production rate on the Next-Generation 737.

As I mentioned here, we would keep looking at the need for further 737 rate increases as the economy recovers and customer demand evolves.

Turns out we do see a need for a 2nd rate increase - from last month’s announced ramp up to 34 airplanes per month, to a new rate of 35 per month (by early 2012).

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737 employees are known for their efficiency and ingenuity - for example, note the use of a modified “hay baler” to load seats in final assembly.

What’s happening is we’re seeing long-term growth in the market for 737s, as customers place new orders or exercise options.

The pressure is definitely there to raise our production to meet this demand - and as we go forward we’ll continue to keep our eye on the market to determine whether further rate increases are needed.

First look - 747-8 Intercontinental

Next year we plan to deliver the first passenger model of the new 747-8.

But for now we can enjoy the fact that fuselage assembly has begun on the Intercontinental. Take a look:

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In Everett, mechanics have loaded the panels for the front section, known as Section 41 for the first 747-8 Intercontinental.

This piece of the airplane is 31 feet 8-inches (9.6 m) long, and as you know, this is where the flight deck and typically first class cabin are located.

The program began production on the 747-8 Intercontinental in early May with the start of wing assembly.

Boeing has 109 orders for the 747-8. 33 of those are for this new passenger model - offering better environmental performance and the best economics of any large passenger airplane.

By the way, we had other significant news about the -8 today. The very successful Freighter version has received expanded Type Inspection Authorization. It’s a big step for flight test and means we’re ready to move on to more advanced testing conditions for the 747-8 Freighter.

5 years time

Last month marked my 3rd anniversary as Commercial Airplanes V.P. of Marketing - and my 3rd year of blogging.

And it occurs to me as well that Randy’s Journal has been around for more than 5 years now.

Hard to believe, but over that half-decade-plus we’ve had 5 million page views from 2.9 million unique visitors.

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5 years and 2 Randys.

Boeing launched this “experiment” in the early weeks of 2005, when blogs were a relatively new medium. In the corporate world, it was virtually uncharted territory. We were one of only a small handful of major companies dipping our feet into the waters of executive blogs.

We certainly thought we could make Randy’s Journal into something, but at the time we weren’t exactly sure what that might be. Well, I think that as we celebrate 5+ years of blogging, it’s clear that we’ve exceeded even our own expectations.

We’ve posted about 450 entries and thousands of comments. Over time our blog has evolved into a really effective medium to interact and share with our own employees and retirees as well as our customers and stakeholders and of course, all of the aviation enthusiasts around the world.

Media read it, aviation analysts read it, competitors read it.

I’m constantly amazed at its global reach. Almost everywhere I go somebody asks me about Randy’s Journal. And we’ve actually made news through it. We’ve been quoted and cited (and endlessly debated) in the Wall Street Journal, Associated Press, Bloomberg News, Aviation Week, Airliners.net, Flight International, Reuters and many other media and blogs.

We’ve also helped pave the way for other successful ventures such as United States Tanker as well as a number of internal Boeing executive and employee blogs.

A great thing about doing this blog is the feedback, not only from the outstanding comments, but from the wider world of social media and the bloggers who blog about blogs.

One of the first prominent media and marketing experts to critique Randy’s Journal was Rohit Bhargava, senior V.P. of Digital Strategy at Ogilvy Public Relations and a blogger himself.

In his book, “Personality Not Included,” Bhargava cites Randy’s Journal as an effective corporate blog “that has managed to do what few other companies have managed to do - build a blog that is a true voice of a company.”

That’s pretty good results, and fairly well sums what we hoped to achieve with our little experiment when we launched it

So yes, we’ve come a long way in 5 years’ time. It’s been a great run and I can’t wait to see what the next 5 years have in store.

Cargolux 747-8

It’s always great to see a customer livery for the first time on a new airplane.

We got that look last night when a 747-8 Freighter left the Boeing paint hangar in the new-design livery of Cargolux.

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Luxembourg-based Cargolux is the launch customer and will receive the first delivery of the 747-8 Freighter in the 4th quarter.

The livery offers a glimpse into a new era for Cargolux. As the company puts it, the color scheme, with the widening strip of red towards the tail, is a symbol of “strength and growth, power and expansion.”

The new look will be incorporated into the entire Cargolux 747-8 fleet.

The day the 747-8 program launched, I happened to be in Luxembourg. It’s a special connection for me personally, and the coming months are going to be a very exciting time for Cargolux and the entire program.

Winning

Now this is a great way to end the week.

We’ve just learned that our Commercial Airplanes Communications & Marketing team has won a 2010 Silver Anvil award from the Public Relations Society of America (PRSA).

The award is for Boeing’s planning and execution of events surrounding the first flight of the 787 Dreamliner in December.

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At the Silver Anvil ceremony in New York. From left, John Vadino, CEO of The Production Network, which helped Boeing manage the live webcast and logistics for first flight, Yvonne Leach, 787 communications director, and Lori Gunter, 787 communications manager.

As you may remember, we had some 12,000 employees and guests on the flightline in Everett that chilly morning, along with a milion people watching via the Web and at first flight virtual events around the world.

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The airplane, and the crowds.

It took the work of hundreds of volunteers to pull off the successful first flight events - a great job by all.

This award is a really big deal in the public relations and marketing worlds - and I want to deliver my personal congratulations to the winning team!

Windows 787

No doubt a lot of the buzz when passengers start flying in the 787 Dreamliner is going to be about the windows.

They’re really big, and will give everyone on the airplane a view of the horizon. But there’s something else special about them - no window shades. They’re dimmable electronically.

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We’ve just posted a feature story and video about the technology behind the Dreamliner’s windows.

As you’ll see in our video, a 787 flight crew will be able to manage the window “state” of an individual passenger window, a cabin section or all windows on the airplane.

I’d be curious to learn your thoughts about what these new windows will mean for you as a traveler.

 

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