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boeing says india jet decision `no sooner' than 2010 (update2)
by chan sue ling
may 30 (bloomberg) -- india's government will decide on its plan to buy 126 new
boeing, lockheed martin corp., saab ab, mig corp., dassault aviation sa and
european aeronautic, defence & space co., the parent of airbus sas, submitted bids
to the government on april 28 for the contract. the order may be worth $11
billion, the biggest for combat planes in 15 years in india.
asia, which contributes about $2 billion a year in defense sales for chicago-based
boeing, will account for 50 percent of international sales at the defense unit in
five to 10 years, the company said. india is spending more to buy military
aircraft, helicopters and weapons as neighboring pakistan buys aircraft from the
u.s. and china develops its own fighter planes.
the company is protesting a u.s. air force award of a $35 billion aerial-refueling tanker program to northrop grumman corp. and the parent of airbus sas, saying that changes made midstream in the contest unfairly favored its european rival.
``there is going to be plenty of opportunities to sell 767 tankers in the event
that the protest we have is sustained and there is a recompetition and we're
fortunate enough to win that recompetition,'' he said.
to contact the reporter on this story: chan sue ling in singapore
last updated: may 29, 2008 23:30 edt
boeing (ba) chairman and ceo jim mcnerney has taken his share of hits lately. the
ambitious 787 dreamliner is about 15 months behind schedule, and in late march,
boeing lost out on a multibillion-dollar contract to build a fleet of refueling
tankers for the u.s. air force. that deal, which is being protested, went to
northrop grumman (noc) and partner eads (eads), the european consortium that
builds the airbus and is boeing's archrival.
boeing's stumbles have caught many by surprise, primarily because mcnerney, a
disciple of former ge ceo jack welch, is held in such high regard. after a stellar
19-year career at ge, mcnerney became chairman and ceo of 3m, moving to boeing as
chairman and ceo in 2005. i talked with mcnerney on may 22 in chicago at a
conference on competitiveness sponsored by the commerce dept.
i don't see any business plans that any companies in our industry have that don't
assume a very high price of oil, because it is having a big impact. you can see
the impact on our airline customers with american airlines' (amr) announcement
about curtailing capacity. [on may 21, amr, american's parent, said it would cut
back on flights.] they've got to deal with it. and it has sort of a double-edged
impact on boeing: on the one hand, our customers are taking out inefficient
capacity because at the current price of oil, they're not making money on certain
routes. on the other, the replacement technology they need are the planes we're
building now that are 20%, 30% more efficient.
well, 30% overall operating savings, with 20% to 22% fuel savings driven by engine
technology. also, this is the first carbon-fiber titanium airplane ever built, and
it's 20% lighter. and so the combination of engine technology and lighter
materials produces those savings and lessens the environmental footprint. two big
deals in today's economy.
boeing stock went from 100 to 75 because of delays with the dreamliner. how did
you allow that to happen?
well, i would characterize the 787 as a leading-edge innovation, all right? the
good news is we're five years ahead of our competition with an innovation that
they're having trouble duplicating, and we have market acceptance for this
airplane that has been better than any airplane ever marketed. we have almost
1,000 orders for this airplane. now on the supply-chain side, i think we ran into
some issues. we overestimated the ability of our partners to get things done with
the timing we'd all hoped for. our oversight of that environment was not as good
as it could have been. it's a big global enterprise, this 787, and we have some
problems that we've got to learn from, and we've got to do better.
i don't think the guys in seattle [where the dreamliner is being built] would
characterize me as low-profile regarding my involvement with the 787. having said
that, you can always look back on these situations and say if i d moved two months
we have a high level of confidence. we regret the stumbles we've had, particularly
the impact we've had on our customers. but i think we've got it down to an
executable plan we and our partners can implement together. it's still the most
successful introduction in aviation history. we'll get there.
i was talking with a money manager who has a position in boeing stock, and he
said: "the dollar has put enormous pressure on airbus, and yet they're outselling
boeing in the smaller end of the market." how is that possible? why haven't you
been more successful there?
overall our defense business is doing very well. we won 9 out of 11 competitions
last year that we were in, but we did, as you alluded to, lose a tanker
competition, which we are protesting, that [went to] an airplane made by airbus in
france. and we are protesting that decision not on the basis of where the airplane
is made and some of the political atmospherics, but on the basis of the decision
process, which we think was flawed.
what's the timing on that protest?
the gao [general accountability office] will render a decision on june 19.
you've got roughly $12 billion in cash right now. a lot of people might say:
industry. things happen quickly. billions of dollars move this way and that. i'm a
pretty conservative manager who likes to keep probably more than enough cash
boeing to install test hardware/ software
may 27, 2008
amy butler/aerospace daily & defense report
the u.s. air force is expecting boeing, its c-130 avionics modernization program
a low-rate initial production review and decision is expected in november; boeing will manufacture those units. two full-rate production contractors, however, will be selected in the second quarter of fiscal 2012, air force officials say. boeing lost that work after former air force acquisition chief darleen druyun admitted she steered the amp work in boeing s favor. losing bidders lockheed martin and l-3
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