Evergreen Sues Boeing

[Zoner]

Business & Technology | Dreamlifter operator sues Boeing as contract loss looms | Seattle Times Newspaper (http://seattletimes.nwsource.com/html/businesstechnology/2011504601_boeing02.html)




Thursday, April 1, 2010 - Page updated at 11:23 PM

MIKE SIEGEL / THE SEATTLE TIMES

Dreamlifter operator sues Boeing as contract loss looms
By Dominic Gates
Seattle Times aerospace reporter
Evergreen International Airlines is suing Boeing for $175 million because the plane maker switched the contract for operating its four giant Dreamlifter transport aircraft to another company.
The Dreamlifters are modified 747s that ferry large sections of the 787 Dreamliner around the globe. Boeing contracted with Evergreen in December 2005 to operate the aircraft, providing pilots, ground crews and maintenance.
In February, Boeing unexpectedly told Oregon-based Evergreen that the contract would switch in September to New York-based cargo company Atlas Air.
In a lawsuit filed Thursday in federal court in Seattle, Evergreen alleges bad faith and breach of contract, and also claims Boeing violated confidentiality agreements by providing Atlas proprietary Dreamlifter data from Evergreen.
The complaint says Boeing's only reason for switching the contract is to offset "Boeing's nearly billion-dollar liability to Atlas resulting from delays on the Boeing 747-8 program." That figure is attributed to a remark made by an unidentified Boeing employee to an Evergreen employee.
Atlas' pending order for 12 new 747-8 cargo planes is more than a year behind the original delivery schedule, and Boeing was negotiating with Atlas over its liability.
The original contract cited in the complaint said that after an initial five-year term, it "will automatically renew for an additional five years," unless terminated early due to certain specified conditions including breach of contract by Evergreen or "convenience."
Evergreen said Boeing cited only "current business realities" for the switch.
The complaint alleges that in a January meeting, Boeing's 787 global supply-chain vice president, Bob Noble, told Evergreen executives the contract would be switched "as part of a settlement for the lost revenue claim" from another carrier.
"Noble emphasized that the decision 'was not performance-related' and advised Evergreen that 'there's nothing you can do about it,' " the complaint states.
Because of the repeated delays that have left the 787 program more than two years behind schedule, Evergreen said it incurred considerable expense getting the Dreamlifter fleet ready and didn't collect the projected revenue. It had hoped to recoup those lost profits in subsequent years as production of the 787 ramped up.
The shift of contractor does bring some risk for Boeing. Atlas will have to train fresh pilots on the Dreamlifter's flight characteristics and bring ground and maintenance crews up to speed on its unique configuration. Evergreen says it has no contractual obligation to help with that.
"Evergreen is the only company in the world with any experience operating, maintaining, and performing the ground handling for the unique Dreamlifter airplane," states the Evergreen complaint. "Boeing has jettisoned its teammate and placed in jeopardy the operation of the (Dreamlifter) program and success of the Dreamliner program."
Boeing spokesman John Dern said Thursday the company has not yet seen the complaint and declined to comment.
Dominic Gates: 206-464-2963 or [email protected]

Copyright © The Seattle Times Company

[6000PIC]

Sounds like they have a case. One wonders if those managers making these seemingly poor decisions at Boeing have any accountability. If they lose , the money should come out of management salaries as a sort of penalty for prevention of such stupid and costly decisions in the future , then again , it`s not their first instance of breaking a contract.

[Po Boy]

I love the way that Evergreen makes it sound like they are the only one's in the world capable of flying these aircraft, Atlas has been operating the 747-400 series aircraft more than twice as long as Evergreen has been operating them! :ugh:

[sidman]

I think they are speaking of the LCF's...Lord knows Atlas has alot of time operating the -400's. But as you will find out there is alot that goes into making them move.

[WhaleDriver]

Looks like they'll know soon enough. Word on the street, Atlas will start operating one of the LCF's in July.

[GG747]

July of which year?

[sidman]

July is what we heard also..

[GG747]

We have been told that it will be Oct 1st of 2010 at the earliest. So if July is being talked about, I was wondering if it has been delayed to July 2011.

[sidman]

The contract ends Sept 30 so I assume you will have all the jets on Oct 1st. Now having said that Boeing would need to turn one or two over to Atlas before that so you can get them on you MX program and get the crews up to LCF speed.

[GG747]

I agree, but keep in mind that this comes from the two or three people on the top of the management tree. The regular line pilot is just a pon in this game of chess.

[sidman]

We will see...pure sour grapes..If the shoe was on the other foot would Atlas sue..If Evergreen did not operate per the contract I think Boeing would jump up and say WE ARE GETTING RID OF EIA FOR THIS REASON..There has been nothing from Boeing not even a press release noting the change from EIA the Atlas...

[WhaleDriver]

Look at it this way. If Del wins the lawsuit, imagine how many improvements can be made to the waterpark.

A little off subject, but your first -400 was due this week, is it up and running?

[sidman]

If he wins then we will have the best water park in MMV..Yes N491EV is almost here. It is painted and I think it should leave SIN around the 22nd of April. We were going to get it on the 7th or so but in the D check they found somethings that needed to be taken care of..I am glad to see them getting a -400F and we are hearing another 400 coming in June or July..

[sidman]

Them's the breaks is correct..Boeing can do what ever they want. It's there planes and there contract. I think it would have looked better if they let EIA re bid and then tell them to go away. Who knows in 9 years they can yank the contract and give it to someone else without reason..Them's the breaks..

[GlueBall]

This sob story is about as interesting as a train wreck in Mongolia. :{

Who cares whether it's Evergreen or Atlas pilots flying those ugly, odd shaped contraptions? Besides, how much prestige would a useless "Dreamlifter" type rating get you in the real world? :eek:

[Intruder]

AFAIK, the Dreamlifter is a 744 and requires no special type rating -- only differences training after the 744 rating.

[Earl]

Boeing picks South Carolina for 787 line (http://blog.seattlepi.com/aerospace/archives/183489.asp)

I do know one thing reported as fact.
Boeing moved most of these contracts from Seattle to CHS and is starting a new factory there with 4000 new employees to supplement the on going assembly plant there for this dream liner.
This was in the Charleston SC paper.
Some consider union busting or what have you,
SC has a right to work law, means no union required.
They were given perks and tax exemptions for this move from the SC government as probably normal.
Read where Boeing Seattle unions said they would not strike for 3 years if they kept the contract there in Seattle.
Offer not accepted, contracts for this moved to CHS.

[Earl]

The Post and Courier - Experts: Boeing move a message to unions - Charleston SC - postandcourier.com (http://www.postandcourier.com/news/2009/nov/01/experts-boeing-move-a-message-to-unions/)

Experts: Boeing move a message to unions
By Dana Hedgpeth, The Washington Post
Sunday, November 1, 2009

5 Comment(s)


Boeing's decision to open a second assembly line for its 787 jetliner in North Charleston is another blow for organized labor, experts say, signaling that major manufacturers are increasingly willing to look for nonunion work forces during a time of economic stress.

Chicago-based Boeing said Wednesday that it had picked North Charleston over Everett, Wash., the home of Boeing's commercial aircraft division, because it best fit its production plans for the 787 Dreamliner.

Full production of the jet has been much anticipated because it has more than 800 orders for the jet that is designed to carry up to 250 passengers. But the Dreamliner, which is assembled from parts made by suppliers around the globe, is two years behind schedule.

It has been plagued by production problems and delays, including strikes by union machinists in Everett and other sites in Washington state that forced the company to take costly write-downs as it closed commercial aircraft operations last year for eight weeks.

Boeing's move comes at an especially tough time for organized labor in the United States. The car industry is struggling to survive and is wringing historic concessions from its unions. Steel and other industries have restructured their deals with unions as more manufacturing heads overseas or to right-to-work states in the South.
Related story

Bringing Boeing to S.C.THE ART OF THE DEAL, published 11/01/09
Boeing coverage

Check out the special section on Boeing from The Post and Courier for more Boeing stories, photos and video

"This is the escape from collective bargaining," said Gary Chaison, a labor expert at Clark University. "Boeing is creating its own trend in heavy manufacturing, and more and more manufacturing is going to move south."

Boeing and officials from the International Association of Machinists and Aerospace Workers had been negotiating recently to put the second 787 assembly line in Washington state, but those talks broke down, according to union and state officials.

Tom Wroblewski, president of the union there, issued a sharply critical statement Wednesday, saying Boeing had "betrayed our loyalty." He went on to say that Boeing was "only using our talks as a smoke screen, and as a bargaining chip to extort a bigger tax handout from South Carolina."

Yvonne Leach, a Boeing spokeswoman, said that the union offered its "best and final proposal" last week and that it didn't have the "production stability" the company wanted.

There were also issues with cost-of-living increases, pensions and bonuses, guarantees on no strikes, and wages, according to those involved in and close to the talks.

Boeing said it expects to start construction on its assembly plant in North Charleston next month, with the first planes expected to be finished by the first quarter of 2012. It expects to produce 10 of the 787s a month by 2013, with seven being built in Everett and three in North Charleston.

Leach said putting the second assembly line in South Carolina was the "most efficient way to meet the needs of our customers. It gives us the manufacturing diversity we need."

The company already operates a factory in North Charleston, and it owns a stake in a plant that make parts and sections of the 787.

Boeing considered opening a second assembly line for the jet in California, Kansas, North Carolina and Texas. South Carolina officials offered Boeing $450 million in tax incentives in exchange for the promise of creating up to 3,800 jobs.

Harley Shaiken, a labor expert at the University of California at Berkeley, said Boeing is "sending a message to the union that this is our other alternative" by moving the second assembly line to South Carolina.

[Fr8Dog]

Po Boy
I love the way that Evergreen makes it sound like they are the only one's in the world capable of flying these aircraft, Atlas has been operating the 747-400 series aircraft more than twice as long as Evergreen has been operating them!

Try for the last 12+ years.

sidman

Them's the breaks is correct..Boeing can do what ever they want. It's there planes and there contract. I think it would have looked better if they let EIA re bid and then tell them to go away. Who knows in 9 years they can yank the contract and give it to someone else without reason..Them's the breaks..

You pay attention in 8th grade English class?

GlueBall

Who cares whether it's Evergreen or Atlas pilots flying those ugly, odd shaped contraptions? Besides, how much prestige would a useless "Dreamlifter" type rating get you in the real world?

No special type rating for the Dreamlifter, Atlas already has 600+ typed 400 pilots.

[sidman]

No I guess not..But I am glad you are here to correct me when I screw up.. I will try to do better next time..

[Graybeard]

Boeing considered opening a second assembly line for the jet in California, Kansas, North Carolina and Texas. South Carolina officials offered Boeing $450 million in tax incentives in exchange for the promise of creating up to 3,800 jobs.

That kind of bribery should be outlawed.

[Junkflyer]

Tax breaks to allow a company to build a manufacturing plant is not bribery. Extra taxpayer being sent a senators home state is.

[muduckace]

Sounds to me like boeing does not care about the lawsuit, evergreen will probably never get what they are sueing for and boeing gets to offset any losses with evergreen by profiting with atlas (well, the money they save giving the contract to atlas will eventually pay their debt to them for the breach of contract they are in by not delivering on the 748 on time).

Immagine the money Atlas may be saving if they are struggeling to keep their workforce busy (given this as a possible scenario). It becomes an incestual relationship.

Never liked evergreen anyways, surprized the scumbags are still in business.

[sidman]

Never liked evergreen anyways, surprized the scumbags are still in business

Nice to know we are all scumbags. Thanks!!

[Fr8Dog]

muduckace
Sounds to me like boeing does not care about the lawsuit, evergreen will probably never get what they are sueing for and boeing gets to offset any losses with evergreen by profiting with atlas (well, the money they save giving the contract to atlas will eventually pay their debt to them for the breach of contract they are in by not delivering on the 748 on time).

Immagine the money Atlas may be saving if they are struggeling to keep their workforce busy (given this as a possible scenario). It becomes an incestual relationship.

Never liked evergreen anyways, surprized the scumbags are still in business.



I can't even imagine that you are a professional aviator after reading this post. I have quite a few friends at Evergreen and they are all good people.

As far as Atlas "Struggling" to keep our pilots working, not only did we just recall all furloughed pilots, but we have just started hiring for 3 classes on the 400. You need to learn to #1 spell or use the spell check at least, (you are worse than sidman) #2 think I'll pass this on to Bubba and see if we can arrange a meeting of the two of you at the 5 towns.

What an absolute dick head you are to lambaste a group of fly boy's like that.

[sidman]

Well atleast he is worse than me :) Let me know if you can get Bubba to meet with him I would love to be there for that.

There are plenty of good (non scumbag) people that work for Evergreen..

Thanks Fr8dog!!

[muduckace]

First of all, I called Evergreen a ****ty company, no reflection upon those who fix and fly the planes. Secondly your weak attempt at dominating a thread by side slaming it on spelling (i will not spell check for your pleasure child) is weak.

Thirdly, I stated a possible scenario as to why an in incestuous relationship between boeing and atlas is in the works. Speculate or give facts supporting or opposing my speculation.

Clean your act up a bit, your obvious angry drivle is tiresom and should not be tolerated.

I can't spell and you have a hard time comprehending, my problem can be fixed with a computer, yours may have no fix.

[Zoner]

Aerospace News
Details from Boeing Dreamlifter lawsuit (http://blog.seattlepi.nwsource.com/aerospace/archives/200456.asp)
Details from Boeing Dreamlifter lawsuit

Boeing Dreamlifter. (Boeing)
Following up on Thursday's short report that Oregon's Evergreen International Airlines had sued Boeing over the cancellation of its contract to operate the Dreamlifter, here are some details from the complaint.

"Boeing committed bad faith and breached its contractual promises to conduct its business fairly, impartially and in an ethical and proper manner," Evergreen alleged in the complaint, filed Thursday in U.S. District Court in Seattle. "Boeing's bad faith and breach of contract have caused lost profits to Evergreen in excess of $175 million."

Boeing declined to comment Friday.

Boeing granted Evergreen the contract for the Dreamlifter, which transports parts for the 787 Dreamliner, in 2005. The initial five-year contract was set to automatically renew for another five years (with two more five-year options after that) except in certain specific circumstances.

The lawsuit said: "Evergreen received notification that Boeing was 'investigating other options' in 'light of current business realities.'"

In fact, Boeing started secretly negotiating with Atlas Air Inc., to transfer the contract to Atlas as compensation for delays in the 747-8 Freighters Atlas has on order, Evergreen said in the complaint. "Boeing dropped Ever
green in favor of Atlas to avert the multimillion dollar disaster that was looming over the 747-8 program."

Atlas has 12 747-8 Freighter on order, with options for another 14, Evergreen noted in the lawsuit. "A Boeing employee informed an Evergreen employee that Boeing's liability for penalties to Atlas approached $1 billion. By at least October 2009, Atlas had made a claim with Boeing for refunds resulting from Boeing's failure to meet delivery guarantees to Atlas."

While either party could cancel the contract, "the right was subject to both and express and implied covenant of good faith and fair dealing," Evergreen said in the complaint. "Accordingly, based on the express language of the contract, Evergreen reasonably expected that, absent bad faith conduct on Boeing's part or cause for default by Evergreen, the (Dreamlifter) contract would last 20 years based upon 'automatic,' five-year, renewals of the (Dreamlifter) contract."

Evergreen said Boeing also:
Breached contractual duties by misleading it into providing confidential and proprietary internal reports that Boeing passed on to Atlas;
Has demanded that Evergreen help transfer the program to Atlas, despite admitting that Evergreen's contract has no such obligation;
Has demanded that Evergreen provide Boeing and Atlas with "an enormous volume of highly confidential, proprietary, and trade secret information, a demand to which no reasonable company would capitulate."
Two years of delays in Boeing's 787 program also hurt Evergreen, which was paid based on actual flight hours but incurred "considerable expense" for Dreamlifter readiness, according to the complaint.

In fact, the switch to Atlas raises risks to the 787 program, Evergreen said in the lawsuit. "Evergreen is the only company in the world with any experience operating, maintaining, and performing the ground handling for the Dreamlifter airplane. Having already experience years for delay, by switching to Atlas, Boeing is jeopardizing the 787 program."

Boeing never comments publicly to such litigation, spokesman Dean Tougas said Friday. "We'll review the litigation and we'll respond through the appropriate legal channel."

Asked specifically about the idea that Boeing switched the contract as a payoff for 747-8 Freighter delays, he said: "We're not going to comment on our contractual dealings with our suppliers."

Posted by Aubrey Cohen at April 2, 2010 11:36 a.m.
· Return to Details from Boeing Dreamlifter lawsuit

[sidman]

If EIA were able to re-bid and lost than that would be OK..They were not given a chance to re-bid the contract and the contract was given to Atlas.

The contract was for 20 years with reviews every 5 years. Boeing told EIA that everything was OK so don't worry. Then they said no chance for re-bid have a nice day. We all bid on the contract 5 years ago and EIA won. If Boeing wanted to have a re-bid they should have opened it up to everyone who bid on it the first time.

I have alot of good friend at Atlas and I know you guys will do a good job with the contract. But if Atlas had the contract and 5 years down the road Boeing took it away. I think Atlas would want something for the effort.

If we bid and lost then sued, we would be BAD LOOSERS. EIA may or maynot get anything but you or I don't know that.

Atlas guys I wish you the best of luck with the LCF..I know you guys will do a good job as you always do. I hope everyone had a happy Easter.

[Deltabravowhiskey]

Boeing is just like any other ACMI (or in this case CMI) customer, Here today, and we'll see about tomorrow. If Boeing pulls the plug in 5 years you won't hear so much as a whimper as has been the case countless times with other customers. These contracts come and go, it's the nature of the business.

Now, suing a customer because they did not renew with you, not exactly a good tactic if you want to rebid it somewhere in the future. And, no sour grapes required (or in this case lawsuit), just move on to the next gig.

Now if Evergreen wants to place an order for 26 (12 firm, 14 options) for 747-8F's I'm sure that might help them in 5 years minus a lawsuit.

[Fr8Dog]

muduckace
“ Sounds to me like boeing does not care about the lawsuit, evergreen will probably never get what they are sueing for and boeing gets to offset any losses with evergreen by profiting with atlas (well, the money they save giving the contract to atlas will eventually pay their debt to them for the breach of contract they are in by not delivering on the 748 on time)”.

Immagine the money Atlas may be saving if they are struggeling to keep their workforce busy (given this as a possible scenario). It becomes an incestual relationship.

“First of all, I called Evergreen a ****ty company, no reflection upon those who fix and fly the planes”.

“Never liked evergreen anyways, surprized the scumbags are still in business”

I don’t see where you just accused the Company here.

Secondly your weak attempt at dominating a thread by side slaming it on spelling (i will not spell check for your pleasure child) is weak.

Let’s see here, seuing, Immagine, struggeling, incestual, surprized, drivle, tiresom. If your age of 35 is correct on your header, I was flying freight in a beat up D-18 5 years before you were born. So a child defiantly I am not. I do however take pride in my work and what I write on a public forum.

Thirdly, I stated a possible scenario as to why an in incestuous relationship between boeing and atlas is in the works. Speculate or give facts supporting or opposing my speculation.

This one I will give you, it is speculation.

Clean your act up a bit, your obvious angry drivle is tiresom and should not be tolerated.

Tolerated by whom?

I can't spell and you have a hard time comprehending, my problem can be fixed with a computer, yours may have no fix.


I do not believe that I am the one with the comprehension problem here, I have read what you posted, and see what you have written. You may have intended to express other opinions here but this is what you have written.

At least Sidman has a sense of humor!

FR8

[GG747]

The average line pilot isn't the problem and as line pilots we really can't tell our management teams what to do. Both the pilot groups at Evergeen and Atlas are a great bunch of people. Both can and have proven that they can fly airplanes.

The way I see it; is that each pilot group wants to fly the airplanes and will defend their own pilot group.

Lets have a beer at the bar together and remember that we fly airplanes and really have no control of who has the contract or even why things happen.

Cheers!

[Tediek]

as Evergreen also performs maintenance on the LCF's who takes that part over?

[Fr8Dog]

Tediek
As Evergreen also performs maintenance on the LCF's who takes that part over?


You are kidding here right? If Atlas is going to operate the aircraft, and Atlas already maintains 21 400's who do you think might do the maintenance on the LCF's ?

FR8

[GG747]

Rumor has it that Boeing wants to do all of the Maintenance on the LCF's. Atlas will have to worry about the SME's which are a pain.

[3pointlanding]

Two bottom feeders going at it. Gotta love it! Great people, ****ty companies.

[Po Boy]

Evergreen and Boeing are both Bottom Feeders? :}

[Fr8Dog]

3pointlanding

Two bottom feeders going at it. Gotta love it! Great people, ****ty companies.


That would be Atlas Air, the third largest cargo carrier in the world? Unless you work for FedEx or UPS I am thinking sour grapes here. Atlas is hiring and UPS furloughing.

Stock prices

AAWW $58+

FDX $91+

UPS $68+

[WrldWide]

That would be Atlas Air, the third largest cargo carrier in the world? Unless you work for FedEx or UPS I am thinking sour grapes here. Atlas is hiring and UPS furloughing.

By the sound of it you would think that Atlas gave birth to you, so defensive. You're loyalty is amazing, I doubt the feeling is mutual.
Cheers

[Skualo3]

Or maybe Fr8Dog does not appreciate remarks like "bottom feeders" when Atlas today pays better then same legacy carrier...
Do you think only FDX and UPS employees should be proud of their employer?

[WrldWide]

Or maybe Fr8Dog does not appreciate remarks like "bottom feeders" when Atlas today pays better then same legacy carrier...
Do you think only FDX and UPS employees should be proud of their employer?
Maybe Fr8Dog can correct me, but....they may be the best paid now, nearing the pre-2000 wages of some other pax folks, but that is immaterial. What is striking to me is this individuals elitist attitude toward another professional pilot based solely on the apparent success of the company that he currently works for, which I might add, he has contributed, as an individual, in such a miniscule way. Can we please stop this my company is better than your company BS. We all fly big, small, in-between sized airplanes.
The cheerleading is nausious. That is what I am trying to say.
Good luck Evergreen, Good luck Atlas, whatever......
Flight Info and APC are wide open for this sort of endeavor, can we please keep this forum a little above the chaff?

[Skualo3]

Sure, just stop posting!:}
Just kidding!
On a more serious note, the 2nd tier outfits have been mocked for ages by all the pilots of the “more established” carriers, and all of a sudden one of those is mixing it up with the big ones, I think a sense of pride is understandable. While the fact that Atlas wages are now similar to Legacy carriers is due to the concession given by some “more illustrious “ colleagues, it also proves that Atlas management has been able to ride the downturn without the same request to its workforce, which is no small feat..

[WrldWide]

Atlas management has been able to ride the downturn without the same request to its workforce, which is no small feat..
Granted. But as one pilot to another....c'mon. What are the deadly sins? What management does management does, we fly airplanes. I respect you, you respect me, the rest is nothing but.....you get my drift, I hope.

Today is today, Tomorrow is tomorrow.

[Fr8Dog]

WrldWide
Age: 43

By the sound of it you would think that Atlas gave birth to you, so defensive. You're loyalty is amazing, I doubt the feeling is mutual.
Cheers

Sorry it took so long to get back to you, been out on a 9 day trip.

Loyalty, yes! I started flying box's when you were just 3 year old. Atlas is the best Company I have worked for in the 40 years that I have been doing this for a living, and I have worked for quite a few! They also show us that the feeling in mutual from time to time. 26k profit sharing check was kind of a nice thing in March. Not to shabby for a "Bottom Feeder".

FR8

[411A]

26k profit sharing check was kind of a nice thing in March. Not to shabby for a "Bottom Feeder".


Not bad at all, actually.
I never could understand why some in legacy carriers look down their collective noses at smaller (yet profitable) aircarriers...especially when some of the smaller aircarrier guys earn (perhaps) more, especially if it's tax free.:}
This is generally called....smiling all the way to the bank.

[slowto280]

ahhhh........, that would be BOXES. Sorry, but just had to say it. It is true though, every now and then, some of us do fall into a good job, or should I say, some of us fall into a job that turns good......... :ok: