Boeing to cut 10% of workforce amid staggering $641 million loss in first quarter

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https://komonews.com/news/coronavirus/boeing-to-cut-10-of-workforce-amid-staggering-641-million-loss-in-first-quarter

[Heavy Delta]

I'm surprised its only 10%, I suppose they are counting on getting support from peoples Taxes

[DaveReidUK]

Does anyone seriously believe Boeing will be able to continue to employ the remaining 90%.

[Spooky 2]

I suspect you are correct Dave. Probably just the first wave of layoffs with many more to come. They have to get this MAX debacle behind them so they can concentrate on moving forward, no matter what that looks like.

[ATC Watcher]

And as a result the Boeing share price jumped 10% today ... :rolleyes: crazy world.

[tdracer]

Does anyone seriously believe Boeing will be able to continue to employ the remaining 90%.
Local news is reporting that the cut will be much more than 10% in commercial aircraft - presumably there will be little impact on Defense and Space - the 10% is a company wide number. Commercial accounts for roughly half of total employment so do the math...
Also reporting they plan to be back up to ~30 737 MAX aircraft/month by the middle of next year, 777 and 787 production will be reduced, while 747 and 767 production will remain at the current rate.
No surprise about the 767 - all 767 production is either freighters or KC-46 (and cargo is the one part of aviation that's still going strong), but even though all 747 production is freighters, I've been expecting to see an announcement that the 747 production was going to end. The vendor that makes the 747 fuselage panels shut down that factory recently (after doing a 'build ahead' for the 747s currently ordered) - so if Boeing wants to keep the 747 in production they either need to make the investment to bring the fuselage in-house, or find someone else to manufacture those parts. Even though I suspect most of the tooling still exists, re-establishing that capability will mean a significant investment to keep the 747 line going.
It makes me think that Boeing has reason to believe they are going to get more orders for the 747-8F in the near future.

[vikingivesterled]

And as a result the Boeing share price jumped 10% today ... :rolleyes: crazy world.

A Reuters article of 28/4, states that Boeing instead of a new clean sheet look at the NMA, is now looking at a 757-Plus possibly involving new engines for a single aisle A321XLR competitor.
That could have given the Boeing share a lift.

[tdracer]

A Reuters article of 28/4, states that Boeing instead of a new clean sheet look at the NMA, is now looking at a 757-Plus possibly involving new engines for a single aisle A321XLR competitor.
That could have given the Boeing share a lift.
Someone is playing with words - the 757 is 15 years out of production, and the only tooling that still exists would be some of the 737 fuselage tooling. So a "757-Plus" would be a clean sheet design aside from perhaps having a common fuselage diameter with the original 757 (which, IMHO, would be a mistake - that long, narrow fuselage was the worse feature of the 757).

[b1lanc]

Someone is playing with words - the 757 is 15 years out of production, and the only tooling that still exists would be some of the 737 fuselage tooling. So a "757-Plus" would be a clean sheet design aside from perhaps having a common fuselage diameter with the original 757 (which, IMHO, would be a mistake - that long, narrow fuselage was the worse feature of the 757).
Is any airline buying any new aircraft from any manufacturer? Enough $ to support any new development?

[turbidus]

Someone is playing with words - the 757 is 15 years out of production, and the only tooling that still exists would be some of the 737 fuselage tooling. So a "757-Plus" would be a clean sheet design aside from perhaps having a common fuselage diameter with the original 757 (which, IMHO, would be a mistake - that long, narrow fuselage was the worse feature of the 757).


Concur. As you state, the 57 tooling is loooong gone.
There was some talk of the revamped 767 freighter becoming pax, but that does not make sense.

My concern for Boeing is that aside from the 737MAX, which, has been struggling to leave the ground.....given market conditions, they have few aircraft to sell for the next 10 years.
787, 777X, 747...this market is dead for a long time.

Is any airline buying any new aircraft from any manufacturer?
Well, yes, the 220 series is selling well, and given current market conditions, may well sell even better..

Airbus has the 220-500 , which will be a killer in 2 years. and will be able to replace many 737 and 320 sales. but they have nothing else in program development that I am aware...

Boeing has nothing, no NMA, no NSA....they hoped that ERJ would develop a new NSA, but well...

[b1lanc]

Well, yes, the 220 series is selling well, and given current market conditions, may well sell even better..

Selling does not equal delivery or payment. Which airlines are surviving this crisis so well that they continue to take delivery? Nothing much in the US. Maybe different overseas.

[tdracer]

I don't know that the A220 series is going to much of cash cow for Airbus - it's very expensive to build, and most of the sales to date are for less than the recurring manufacturing costs. A big part of Airbus picking up the C-series was they thought they could get better economies of scale and get the manufacturing costs down enough that they could actually build them at a profit. But what I'm hearing is that hasn't panned out so far, and if there is a major reduction in build rate, those numbers just get worse. Remember, Airbus has very little skin in the A220 game - if they find they can't make money on it, they can simply walk away.
Smaller aircraft might look good short term, but this isn't going to last forever.

[b1lanc]

I don't know that the A220 series is going to much of cash cow for Airbus - it's very expensive to build, and most of the sales to date are for less than the recurring manufacturing costs. A big part of Airbus picking up the C-series was they thought they could get better economies of scale and get the manufacturing costs down enough that they could actually build them at a profit. But what I'm hearing is that hasn't panned out so far, and if there is a major reduction in build rate, those numbers just get worse. Remember, Airbus has very little skin in the A220 game - if they find they can't make money on it, they can simply walk away.
Smaller aircraft might look good short term, but this isn't going to last forever.
Perhaps. I could see older aircraft in storage (paid off) returning to service if fuel prices stay low (that's anyone guess). Roll back the clock about 15 years. Could happen.

[Dave Therhino]

A friend told me Boeing Long Beach engineering is partially furloughing their employees, with everyone going to 75% hours.

[tdracer]

A friend told me Boeing Long Beach engineering is partially furloughing their employees, with everyone going to 75% hours.
Makes sense - the primary task of Long Beach engineering is product support for the commercial fleet. Not much product support needed when most of the fleet is parked...

[Thaihawk]

Does anyone seriously believe Boeing will be able to continue to employ the remaining 90%.

The answer to that has to be a negative. This is but the first tranche to go. I would expect at least 30% to be gone or going by the end of the year. New commercial orders are going to be few and far between, and also far smaller than hitherto.

As to whether the 737 MAX ever re-enters service, and if it does will it be profitable, the outlook is far from rosy.

Boeing may be surviving on DoD contracts in a few years.

[Ddraig Goch]

Some more problems to add to the existing woes at Boeing. Article from Market Watch:

Boeing Co. BA, +5.86% (https://www.marketwatch.com/investing/stock/BA?mod=MW_story_quote) faces criminal and civil scrutiny into years of widespread quality-control lapses on its 737 Max assembly line, according to people familiar with the details, potentially exposing the plane maker to greater legal liability than previously anticipated by industry and government officials.

link to article:https://www.marketwatch.com/story/boeing-probed-for-quality-control-lapses-on-737-max-assembly-line-2020-04-28?mod=mw_latestnews

[neville_nobody]

As to whether the 737 MAX ever re-enters service, and if it does will it be profitable, the outlook is far from rosy.

Probably a good time to scrap the MAX and make a proper new aircraft from scratch. By the time they finished there might be some demand for air travel again and the interim will give them breathing space.

[procede]

Makes sense - the primary task of Long Beach engineering is product support for the commercial fleet. Not much product support needed when most of the fleet is parked...

You would be surprised how much attention parked aircraft need, unless you accept you need to do a full A-check (or higher) before you can use them again. For one need to cover the engines and then uncover them when you start the engines every few days.

The 757 is dead. Compared to the 737 MAX9/10 it does not offer enough passenger or range advantage.

Revamping the 767 would make sense. High bypass engines, weight savings, aerodynamic improvements (sharklets) and integrate the 787/777 fly by wire system, so it is type rating compatible (and the larger diameter engines do not cause MAX like issues).

[tdracer]

Probably a good time to scrap the MAX and make a proper new aircraft from scratch. By the time they finished there might be some demand for air travel again and the interim will give them breathing space.
So, Boeing scraps ~900 built aircraft and writes off something on the order of $100 billion. Not to mention the billions they are going to lose over the next couple years until the market rebounds.
Where are they supposed to get another ten to twenty billion dollars to develop a "proper new aircraft from scratch"?

[tdracer]

You would be surprised how much attention parked aircraft need, unless you accept you need to do a full A-check (or higher) before you can use them again. For one need to cover the engines and then uncover them when you start the engines every few days.

The 757 is dead. Compared to the 737 MAX9/10 it does not offer enough passenger or range advantage.

Revamping the 767 would make sense. High bypass engines, weight savings, aerodynamic improvements (sharklets) and integrate the 787/777 fly by wire system, so it is type rating compatible (and the larger diameter engines do not cause MAX like issues).
Boeing has published manuals and procedures covering how to take care of parked aircraft - not much need for day-to-day coverage by a large team of customer support engineers who normally deal with things like AOG and operational aircraft problems that the operator can't figure out how to fix.
I've long advocated for a "767X" - a new (or at least updated) wing, engines, and updated avionics - but my friends on the inside keep telling me that option isn't even on the table.
One of the biggest hurdles to any new mid-market aircraft is that currently there are no modern engines in the necessary 40k-50k lb. thrust range. So someone has to step up and commit to spending several billion dollars to develop a suitable engine.

[Less Hair]

And then you end up with some old fuselage and setup just with new wings and engines?
Any truly new airplane will be constructed with automated manufacturing in mind, made from new materials and with latest systems layout, aerodynamics and such integrated into one concept from the beginning. This is how you get the maximum efficiencies.
Some legacy 767 might be good enough for today and as a freighter but not for tomorrow. Boeing therefore should invest in something truly new not an update. The 767 fuselage diameter will always be too small for lower deck LD3 pairs.

I agree we need more workhorse airplanes again like the 767 was. Made for easy operations low operating cost, robust, simple and a little less fancy all together.

[procede]

I've long advocated for a "767X" - a new (or at least updated) wing, engines, and updated avionics - but my friends on the inside keep telling me that option isn't even on the table.
One of the biggest hurdles to any new mid-market aircraft is that currently there are no modern engines in the necessary 40k-50k lb. thrust range. So someone has to step up and commit to spending several billion dollars to develop a suitable engine.

It is probably just the marketing department why it is off the table. I do not see how a new NMA could improve on the 767 with respect cabin layout or the general wing. Also composites do not make much sense.

The only new engines that come close are the Trent 7000's, which are slightly overpowered. Maybe they could base it on the MD-11 instead and use 3 Leap 1A's? ;-)

[Aso]

Revamping the 767 would make sense. High bypass engines, weight savings, aerodynamic improvements (sharklets) and integrate the 787/777 fly by wire system, so it is type rating compatible (and the larger diameter engines do not cause MAX like issues).

Agree and give it a lighter fuselage too... Oh hold on... That is already the 787 :8

[vikingivesterled]

And that is why the 757-Plus is a viable single-aisle option. And the 737 kept growing into that category to such an extent it has become overstretched.
Might not be ideal but could definately be an alternative stopgap if the Max debacle keeps going on and on and on. And faster development than a clean sheet.
It certainly is a pretty longlegged bird in TrumpForce One disguise. Plenty of room for big diameter engines. Any thoughts of it with a composite body and winglets.
With a new cockpit in addition if some tooling is lost not so important. But these things are seldom lost, just stored, and one can always make new tools based on existing parts.

[tdracer]

And that is why the 757-Plus is a viable single-aisle option. And the 737 kept growing into that category to such an extent it has become overstretched.
Might not be ideal but could definately be an alternative stopgap if the Max debacle keeps going on and on and on. And faster development than a clean sheet.
It certainly is a pretty longlegged bird in TrumpForce One disguise. Plenty of room for big diameter engines. Any thoughts of it with a composite body and winglets.
With a new cockpit in addition if some tooling is lost not so important. But these things are seldom lost, just stored, and one can always make new tools based on existing parts.
Viking, there is no 757 tooling in existence - it was all scraped over a decade ago. If you're going to go through all the time, trouble, and expense to retool a 40 year old design, you might as well do a clean sheet. A clean sheet won't take any longer, won't cost significantly more, and the result would be a modern design with all the advantages that go with it - not a rehash of a 4 decade old design.

[b1lanc]

Viking, there is no 757 tooling in existence - it was all scraped over a decade ago. If you're going to go through all the time, trouble, and expense to retool a 40 year old design, you might as well do a clean sheet. A clean sheet won't take any longer, won't cost significantly more, and the result would be a modern design with all the advantages that go with it - not a rehash of a 4 decade old design.
Always my favorite aircraft. I don't buy any clean sheet design in this environment. What is the probability that some of the stored (and paid off) aircraft will return to the skys as opposed to taking delivery of more fuel efficient but costly airframes, particularly if fuel prices stay on the low side? What is the differential in cost of recovering tooling for designs that probably still exist vice creating from scratch in a market that has so much uncertainty that layoffs are the order of the day? This is like rolling dice because nobody knows what is going to happen in the next two years. I'd suggest a clean sheet design is not financially practical from a corporate perspective in a market where airlines are delaying delivery, cancelling orders, and laying off crew. I expect that the smaller aircraft of the regionals will dominate for quite some time in the US - at least on domestic routes. In my local airport, SW is the only airline still flying 'full-sized' AC and a good portion of those flights are cancelled daily.

[procede]

Agree and give it a lighter fuselage too... Oh hold on... That is already the 787 :8
The 787 has a much higher OEW due to the larger wingspan for the longer range requirement.

But yes, a 787 with a smaller wing will also work.

[Banana Joe]

Are they considering reintroducing the 787-3?

[SMT Member]

The 787 has a much higher OEW due to the larger wingspan for the longer range requirement.

But yes, a 787 with a smaller wing will also work.

The "787 with a smaller wing" has been tried, and it failed miserably. Turned it only produced a marginal improvement over the -8 on sectors shorter than 500NM or so.

[Less Hair]

The -3 had some -8-wing that had just been brutally chopped off. Not very efficient. At that time the 787 was overly expensive to build and needed some serious redesign. So they restreamed early built -8s with not enough range to the -3 role and didn't built the -3.
The 787 is still said to be costly to produce but with some custom made short range wing it might nicely fill that niche. And it might fill empty slots in final assembly.

[vikingivesterled]

Neither a smallish 787 or an updated 767 will solve Boeing's single aisle problem. How can widebodies help replacing the overstretched and shortlegged ExMax
2 aisles require more cabin crew and a low fares airline will only fly with what the rules minimum requires and that is 1 per 50 passengers.
How do you do sample safety demos with 5 cabin crews in a 250 seat plane with 2 aisles and no back of seat screens.
How do you, to avoid delays waiting for passengers, offload that 1 bag quickly if the luggage is in belly containers. Not to talk about all the containers and container handling equipment needed.
And no freight advantage because the likes of Ryanair don't do freight, normally.
Do they come with onboard steps, to avoid waiting for availability of external steps, for prompt offloading.
Do they fit in the relatively narrow and cheaper stands of most airports.
Besides airport parking fees are per tonne.

Widebodies might be more prectigious to fly, for some, but they don't suit 1-3 hour short hops which is sample Ryanair's bread and butter.
And they are the likes who have pressed for the more passengers = longer 737 with more economical = bigger diameter engines.

[Less Hair]

Some shuttle Dublin-London would be exactly the market we talk about. And it could go to New York as well.

[PAXboy]

And as a result the Boeing share price jumped 10% today ... :rolleyes: crazy world.
The stock market is looking for ANYTHING that will push stocks higher - so that they can then sell them to recoup some losses. This movement is insignificant as the market has not yet reached the bottom - by some measure.

Boeing will make sure they get FAA approval for the Max - so that they can say that they did it. It's subsequent failure can then safely be seen as the fault of CV19. As PAX I would see it as a point of principle not to fly the Max.

[DaveReidUK]

Some shuttle Dublin-London would be exactly the market we talk about. And it could go to New York as well.

It seems a strange time to be talking about Boeing launching a new aircraft or new variant of a current type.

[vikingivesterled]

It seems a strange time to be talking about Boeing launching a new aircraft or new variant of a current type.

The thread is about Boeing and its current predicament, and it and the industry will hope there is a continued furture in selling and flying passenger aircrafts.
Therefore in time it will need a new cash machine now when the 737 is coming to the end of its life,
Something it can sell at least 7000 of, or rather convert its existing 7000 ExMax orders to, that would save its continued presence in the passenger aircraft market.
Else we are talking about a greatly reduced size of Boeing also after the pandemic dip.

[PerPurumTonantes]

YOU ARE THE NEW CEO OF BOEING :ok:

The entire board has been sacked in a shareholder revolt and they've appointed you to turn the company round. What would you do?

Here's my 2p worth:

1) Put 737Max on the back burner.

2) Fill the board with genuinely good senior engineers.

3) Pull the best young engineers together from across the business, and start a clean sheet design for 737 replacement.
3a) Design philosophy full fly by wire, but keep connected yokes and thrust levers that move properly (no secret computer generated thrust)

Reasoning:
MAX: There's no demand for the next few years, just keep a few staff chipping away at approvals until it's certified. If it's not certified after a year, write it off. 900 airframes yes; but sunk cost. Break for parts, reuse engines.
New design: The best time to start a new business, start a new anything, is in the middle of a recession. By the time you've got set up / got certification, the world will be out of depression and flying again.
Design philosophy: Take the best of both A and B.
Engineers: Get back to Boeing's heritage of a cutting edge engineering-led company.

That's my plan, what's yours?

[Check Airman]

A staggering $641m? The biggest airlines here would gladly have lost merely $641m.

[LGW Vulture]

YOU ARE THE NEW CEO OF BOEING :ok:

The entire board has been sacked in a shareholder revolt and they've appointed you to turn the company round. What would you do?

Here's my 2p worth:

1) Put 737Max on the back burner.

2) Fill the board with genuinely good senior engineers.

3) Pull the best young engineers together from across the business, and start a clean sheet design for 737 replacement.
3a) Design philosophy full fly by wire, but keep connected yokes and thrust levers that move properly (no secret computer generated thrust)

Reasoning:
MAX: There's no demand for the next few years, just keep a few staff chipping away at approvals until it's certified. If it's not certified after a year, write it off. 900 airframes yes; but sunk cost. Break for parts, reuse engines.
New design: The best time to start a new business, start a new anything, is in the middle of a recession. By the time you've got set up / got certification, the world will be out of depression and flying again.
Design philosophy: Take the best of both A and B.
Engineers: Get back to Boeing's heritage of a cutting edge engineering-led company.

That's my plan, what's yours?

I'd take on tdracer as my COO.

[nicolai]

Design philosophy: Take the best of both A and B.
Engineers: Get back to Boeing's heritage of a cutting edge engineering-led company.


Good idea!

When Boeing was run like that - especially the "best of Boeing design language and fully-integrated (Airbus-style) automation" - they produced the 777, their last unequivocal success.

If they'd done that with the 737-latest (now MAX) they would not be in the pickle they are now. They might have different problems, as Ryanair and Southwest took turns in abusing them for making those airlines have to spend anything on new pilot training, but that would not have placed them in a worse position vis-a-vis Airbus (only an even position). They also wouldn't have two smoking holes in the ground full of corpses and a shattered safety reputation.

[VH DSJ]

Staggering? $641 million is the cost if two 787’s. Just a drop in the ocean?

[Una Due Tfc]

Staggering? $641 million is the cost if two 787’s. Just a drop in the ocean?

It was only really mid March when the industry really hit the skids, so 2 or 3 weeks of those Q1 numbers. Airlines are not accepting deliveries, cancelling orders, engineering support is minimal as fleets are not flying, projects hit due staff not working due lockdowns.....A & B are both in big trouble, as is pretty much everyone in the industry sadly.

[tdracer]

I'd take on tdracer as my COO.
Thanks for the vote confidence, but I'm not sure I'd want the job. It sounds like a rather nasty job (especially now), and I'm rather enjoying this retirement gig :ok:.

[hec7or]

The Seattle Times has been awarded a Pulitzer Prize for their reporting on the Max
https://www.seattletimes.com/inside-the-times/seattle-times-wins-pulitzer-prize-for-boeing-737-max-coverage/?utm_source=marketingcloud&utm_medium=email&utm_campaign=BNA_050420202654+Seattle+Times+wins+Pulitzer+Pr ize_5_4_2020&utm_term=

[Less Hair]

Well deserved I'd say.

[kiwi grey]

The Seattle Times has been awarded a Pulitzer Prize for their reporting on the Max
https://www.seattletimes.com/inside-the-times/seattle-times-wins-pulitzer-prize-for-boeing-737-max-coverage/ (https://www.seattletimes.com/inside-the-times/seattle-times-wins-pulitzer-prize-for-boeing-737-max-coverage/?utm_source=marketingcloud&utm_medium=email&utm_campaign=BNA_050420202654+Seattle+Times+wins+Pulitzer+Pr ize_5_4_2020&utm_term=)

Dominic Gates and his team absolutely deserved this recognition, they did an absolutely brilliant job, at the beginning in the face of much scepticism from the rest of the aviation world

[vlieger]

Dominic Gates and his team absolutely deserved this recognition, they did an absolutely brilliant job, at the beginning in the face of much scepticism from the rest of the aviation world

Agreed, that was journalism at its finest.

[GoldenGooseGuy]

With the 737 Max now requiring the full simulator training that Boeing was trying to circumvent in the first place, they might have well avoided all the shortcuts taken which caused them to arrive here in the first place. They will have to repair the reputational damage by committing to their current customers of the 737 Max by spending whatever it takes to assure customers that this is a safe aircraft with multiple redundancies. Fortunately for them, the 737 lineage itself is still an intact brand with a good safety history. I don't see them abandoning ship - they have too many orders to scrap the airplane and it will take 5 years for them to design its successor.