Evergreen Sues Boeing
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Evergreen Sues Boeing
Business & Technology | Dreamlifter operator sues Boeing as contract loss looms | Seattle Times Newspaper
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
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
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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.
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Sue away
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! 
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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.
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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...
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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?
A little off subject, but your first -400 was due this week, is it up and running?
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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..
Last edited by sidman; 3rd Apr 2010 at 12:45.
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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..
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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?
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?
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Boeing picks South Carolina for 787 line
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.
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.
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Experts: Boeing move a message to unions
The Post and Courier - Experts: Boeing move a message to unions - Charleston SC - postandcourier.com
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.
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.
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Un-Believable
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!
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!
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..
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
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?
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?