By the end of 2003 Boeing will employ only half as many people as it employed in September 2001. Today’s layoffs will leave 5,000 people out of work. Boeing’s management blames the economy but perhaps there is an engineering angle worth examining. Consider that Boeing’s commercial airplane products are much older designs than the Airbus series and therefore that they are more expensive to manufacture. Where Airbus would use a modern technique such as molded plastic, reinforced with carbon fiber or fiberglass (cheap; this is how my Diamond DA40 is built), Boeing would use a labor-intensive pre-WWII technique of bending or machining aluminum. Airbus’s lower costs give it the ability to undercut Boeing on prices. This apparently didn’t hurt Boeing too badly when the airlines were making money like crazy but now that the airlines are pinched being the low-cost supplier is critical.
Imagine Boeing trying to sell a 747 against an Airbus A380. The 747 was designed between 1963 and 1966 and first flew in 1969. The A380 program was launched at the end of 2000 and will be flying customers in 2006. The A380 incorporates nearly 40 years of new engineering ideas compared to the 747 (which of course has been improved incrementally, especially its engines and avionics, but never redone from a clean sheet).
Boeing was famous for being an engineering-driven company, headquartered right next to its factories in the Seattle area. Boeing became a finance-driven company, run by guys in suits from a new headquarters in Chicago. Instead of growing by creating new product designs the company grew by financial engineering, i.e., acquiring other companies. Instead of competing in the commercial market, Boeing now concentrates its efforts on supplying the U.S. military, which is reluctant to buy foreign airplanes even if they are cheaper.
Investing in engineering has a bad reputation right now, perhaps because so many computer programmers built so many things in the 1990s that users did not want. However, the alternative to spending money on engineering seems to be well illustrated by Boeing: slowly losing market share to a competitor who has invested in engineering.
You fail to mention the 777, which is a good piece of contemporary engineering. I haven’t flown in one, but I hear it is nice. Also, where did you get the idea that the airlines were ever “making money like crazy”? From what I’ve read recently, they’ve been losing money for years, it is just that investors were keeping them afloat for a while before the post 9/11 shake-out started. Cf. ‘Hard Landing’. Being ‘engineering-driven’ was what made Boeing a top company. And they still are, but have fallen on very hard times … that’s my impression.
Nick
Center For Advanced Aviation Systems Development
“By the end of 2003 Boeing will employ only half as many people as it employed in September 2001”
restated for IBM , Motorola, Intel , etc ,etc .
“By the end of 2003 Boeing will employ only half as many people IN THE USA as it employed in September , 2001 ”
(cont’d)
In China , Indonesia , India , and other asian countries , however , these and other “American Companies” expect their work force to quadruple .
Let’s face it Boeing’s time as a commercial aircraft manufacture are over. The latest plane on the drawing board is the 7E7 which is long overdue and will not complete against any of the newer Airbus designs. Boeing’s plans to farm out most of the manufacturing to outside suppliers located in Korea, Japan and China is proving once again that bean counters should not run engineering intensive companies. I’m positive that as soon as these countries have the technology transferred we will see the “HANG-FAT AIRLINE COMPANY SELLING LOW COST PLANES IN NORTH AMERICA”. As far as Airbus is concerned it was considered a joke for a very long time, but with heavy government subsides from France, Britain and Germany (billions and billions of dollars), it is now on top. Airbus farms out next to nothing and keeps almost all high technology manufacturing techniques in house far away from foreign countries. Airbus suppliers are only allowed to manufacture older designs reducing the risk of technology transfer, you know the way it was done in the U.S. Oh well I guess it’s time to go with the flow as North America moves from a manufacturing culture to an entertainment culture. ———Cut and print it, that’s such a touching moment, the Boeing plant is now closed.———-
“Investing in engineering has a bad reputation right now, perhaps because so many computer programmers built so many things in the 1990s that users did not want.”
How many programmers/engineers built things in the 90’s that nobody asked them to build? I would submit that the answer is vanishingly small.
Plenty of money was squandered on useless projects in the 90’s (y2k, *.com, etc, etc) but blame has to go back to managers, entrepeneurs and money men. The people who claimed to have the foresight and unique talents to fund and run engineering projects turned out to be the bunch of idiots that most engineers thought they were at the time.
As a junior-ish engineer at Silicon Valley startups in the mid-90’s I found it very frustrating that it was almost impossible to find/fund projects that were not fully buzzword enabled for whatever was hot in the stock market at the time. Nobody with money cared about customers or real problems. Never mind that whatever the money was currently chasing after was always a field that already had too many public competitors.
I don’t think that the Boeing Sales Division of Airbus will ever truly disappear.
And one day, when either our salaries and vacations have been beaten down, our children are working, or when environmental and labor costs in Afghanistan rise to our levels and they have their own (non-funded) Superfund sites, than just you wait, production and manufacturing will return to the US.
There is a downturn in airline orders- but Boeing is still faltering as Airbus gains in technology and sales. Boeing is trying to cut overhead- when they moved to Chicago and laid off thousands of workers, primarily in Washinton, more work shifted overseas (Russia, Malasia, South Korea, Spain) and to airline subcontractors that are now popping up everywhere (China, Japan, Africa). Boeing’s globalization pablum goes like this: “we are transforming — from a company that knows how to market in countries around the world to one that is a “citizen” of those countries. We want to weave Boeing into the fabric of the local economy and culture while benefiting from deep customer knowledge and the value of that market’s intellectual resources.” So while their busy weaving, Washington state (and many others) are now groveling for the chance to “assemble” the 7E7- parts shipped from abroad. Also, Boeing business IS shifting- it’s stated goal is to shift more business to services, away from manufacturing. (Reminescent of so many software companies). We’ll see- despite all the moving about they aren’t known as a nimble company- so it could be economics, or it could be bad business.
Interesting blog, just happened upon it while searching the A380. I’m a writer and photographer- and aero nut to boot. Just done a micro-story called ‘Sting'(micro = 200 words, on my web site) based upon a pilots last words. I do some photo work with the Farnborough Air Accedent people at times, and the thought of one of these fully laden beasts falling out of the sky … Do you fully trust the software?
Thanks to you, I might even join photo.net now !
Cheers,