Friday, December 22, 2006

Hard Times At Maytag: Deja Vu All Over Again?

Today's the last day on the job for 200 soon-to-be-former Maytag workers in Newton. It is reported that the plant will be completely closed by the end of 2007. The story's eerily similar to my own.

In my case, I knew for better than two years my time was coming. I stopped spending money, paid off my bills, worked all the overtime I could get, and banked close to $20,000.

The outcome in Newton has been written large on the wall for all the worker bees to see for several years now, as one disastrous 'management' team after another contrived to make it ever less likely that Maytag could recover its fortunes. Ralph Hake, it seems, was brought in only to preside at the funeral.

Maytag was acquired by rival Whirlpool in a deal that smells as bad as the acquisition of Douglas by Boeing....the deal served two purposes. First of all, there was the satisfaction of eliminating a hated competitor, and second, the capacity was taken out of production, so that anyone with the idea of building appliances in the heartland doesn't get a shot at a turnkey operation.

Any way you slice it, however, Maytag was not going to survive in its present form, and that's been there for all to see for at least five or six years.

Folks, it's over.

It didn't kill me and it won't kill you. In fact, it brought me to a more satisfying place in life, even if the debt load for the education I got is taking most of my spare change and I'll never be able to retire.

Sell the Harley and the bass boat because you didn't need them to survive and you don't need them now. Make and mend or do without. Start using the brains that G-d gave you-you know, that three pounds of grey tissue that you checked at the door when you signed on at Maytag, because you didn't need it to work there.

Don't bother envying your neighbors who were lucky enough to retire a few years ago on juicy pensions. Unless I'm very wrong, their time is coming too. G-d didn't promise you an easy life, just the ability to survive nearly anything.

Wednesday, December 20, 2006

Last Minute Reprieve Ordered For A380? UPDATE

Bloomberg reports this afternoon that Qantas has converted eight options for A380s to orders. This brings their total ordered to 166. This is a welcome piece of news along with the good news from Singapore Airlines, and no doubt there are a few glasses being raised in the bars across the street from the Airbus plant in Toulouse.

However, it is, as people say, a long way to Tipperary, and it is also a long way towards the break even point for the program which is said to be 420 frames more or less. What we've seen the last few days is not, as one might say, new customers, but rather the confirmation of already committed buyers. It is thus not unequivocally great news, although welcome.

As this is the first substantial move in the right direction for the program since 2005, one wonders where the additional 250 orders are going to come from. They certainly can't come out of options that aren't spoken for as yet.

Bloomberg is reporting this morning that Singapore Airlines has ordered an additional nine A380 aircraft from Airbus. According to the report, this follows an initial commitment made in July for the aircraft and it includes a further six options.

Up in the Idle Speculation Department, we're wondering whether this accounts for all or most of the long lead items that were contracted for in the recently cancelled Federal Express order. When aircraft manufacturers decide to build an airplane, contracts are placed for so called 'long lead items', which are parts that may take two or three years to complete. This could include things like landing gear, avionics, and major structural components.

As I recall, JAT had ordered two MD11s when I was at Douglas, and then Yugoslavia disappeared when the aircraft were about fifty per cent complete. No problem. They were sold to American Airlines at a nice discount, the rework drawings were produced to modify the avionics and interior packages to AA standard, the parts were produced and the aircraft were delivered more or less on schedule.

Thursday, December 14, 2006

And Now, For Something Completely Different

It's been widely reported that Turkish Airlines workers celebrated the return of their 100th Avro RJ100 aircraft by sacrificing a camel and having an old fashioned hoedown and barbecue on the flight ramp, to the mortification of bystanders.

Well. Let me tell you. Although folks outside the brotherhood are shocked, I can say there have been times when I thought a barbecue was appropriate when the shop had finally gotten rid of some really obnoxious hangar queen. I'm thinking of a Piper P-Navajo in particular that could never stay fixed, and there have been others, not the least of which was the Canadair CL600 Challenger that I spent a week inside the fuel tanks of. I was glad to see that bitch leave, and it was enough to make me quit my job at Atlantic Aviation.

So fellow knuckledraggers, stoke up the coals and set a place for me at the table. I am with you.

Wednesday, December 13, 2006

Oantas to be Acquired By Something Or Other

The Financial Times tells us this afternoon that Qantas, the Australian flag carrier, is set to announce that it will be acquired by a consortium in something of a leveraged buyout. That is, a substantial chunk of the money that will be used to acquire the airline will be in the form of bonds secured by the assets of Qantas-primarily aircraft.

What this will do to the ongoing saga of the A380 and Qantas' orders for the same is anyone's guess.

Singapore Goes Shopping: UPDATE

The Business reports today that Singapore Airlines is seriously considering cancellation of part of its order for the A380. Unnamed sources close to the situation are saying that the airlines' tolerance for any further delay has reached its limit.

Stay tuned. It's only Wednesday morning.

Tuesday, December 12, 2006

A380 Type Certified

The FAA issued TC A58NM for the A380-800 today and you can see the type cert by clicking the link. Whatever anyone may say about the project management, it's a good day for the worker bees. Beers all around, guys.

Monday, December 11, 2006

Evolution of A380 Wiring Problems

When the bathroom toilet in the upstairs apartment is clogged and overflowing, sooner or later the dirty water will find its way out.

So it is with this article from the Herald Tribune which describes in a bit closer detail exactly what went wrong and when the problem became known. That, coupled with a managerial culture that did not focus on problem solving but instead on repeated assertions of Alles in Ordnung, Stupid! seems to be what the IHT pins the tail on the donkey with.

It's verrrrrrrrrry intereschtink. Take a look.

Sunday, December 10, 2006

Singapore Goes Shopping: Try, It, You'll Like It

Bloomberg's saying today that the CEO of Singapore Airlines is talking about ordering more Boeing 777s to make up for the shortfall in capacity occasioned by-what else?-delays in the A380 program.

What's interesting is that Mr. Chew Choon Seng said that the 278 seat B777 is a "useful alternative" to the anywhere from 400 to 550 passenger A380 depending on who you're paying attention to these days, of course subject to the payload/range issue which, as we have opined, is rattling its chains and making itself obnoxious like Marley's ghost.

That suggests that he doesn't think that the Albatross is the be all and end all that's been the main selling pitch until recently.

We're back to the "flying palace" model of theory as we have noted recently. People are saying "555 passenger interior? Who cares? We'll sell fewer, more expensive seats and make up with caviar what we can't sell in hot dogs."

The business case for the A380 was mass transit between hubs. That was why they built it, allegedly. Are we now seeing the emergence of a consensus that it can't be done with the hardware in hand?

Is this another Dornier X?

Thursday, December 07, 2006

News From Thailand: We Can't Get No Satisfaction

The Bangkok Post reports that Bangkok Airways, one of the operators that ordered the last iteration of the A350 is getting a little tense, as the delivery has now slipped from 2011 to 2013, and the price has gone up by $40 million USD. The president of BA is not pleased with the delays and "...may turn to Boeing".

This comes on the heels of the statements coming from flag carrier Thai Airways, which has said that they are in negotiations over compensation with Airbus for the delays in its A380 orders, and that their fallback position is cancellation if they don't get a satisfactory reply. Well, there's negotiation and negotiation, but this sounds like a gun to the temple. That decision, according to Reuters will come after Thai's board of directors meet on December 19.

Stay tuned. Joyeux Noel, y'all.

Airbus North America Fires McArtor, Appoints New Chief

Word arrived late today at the Dougloid Papers that after Alan McArtor, chief poobah of Airbus North America, called the B747-8 that Lufthansa just ordered an "Edsel", he was immediately hustled on a plane to Toulouse for regrooving.

The new chief of Airbus North America should be familiar to southern Californians, no matter where they are.

Gentlemen, a big welcome to Cal Worthington and his dog Spot. We know Airbus is in good hands tonight.

All together now:

"if you want a better deal go see Cal

get yourself a set of wheels go see Cal...."

photo credit to the Cal Worthington crew.

Wednesday, December 06, 2006

A350 Funding: All Heat and No Light?

We've been puzzling since Monday over the dang indefiniteness of the funding that's allegedly going to launch the latest! No! Newer! Better than any aircraft in the sky! A350XWB from The Maginot Line.

Reuters has said that the Line is 'drawing the veil' over how they expect to fund this project, probably because they don't really have a clue how they're going to put the package together-it's more of the "Shove it downhill-it should pick up speed." model of project planning.

So...let's apply a little Yanqui plain thinking to this subject.

If the Gulf State money men from Dubai and Qatar were interested or thought it was a great deal they would have been there at the Great Unveiling. They were not. At least not under the present conditions-perhaps they think that ruinous exactions are the way to go and are holding their hand for now. They also may be thinking they've got enough tied up in airplanes that may never get built and they're not interested in throwing more good money after bad. That's a possibility.

The Maginot Line has said they're going to be able to squeeze out several billion euros in savings from the Force 8 or Plan 8 program or whatever they call it....the only way this happens is through massive layoffs in Europe. Even so, savings of that magnitude may not be attainable and we might see some divestiture of non core assets. They'll be burning the furniture to heat the house. That's another possibility.

The governments of France and Germany will open their checkbooks and say "OK, you morons. How much does the bail bondsman want THIS time?" That's a real likelihood.

Fact is, they probably haven't a clue as to how they're going to finance the project, or else they would be trumpeting it to everyone who'll listen.

The only way this project makes sense is if they kill the A380. They haven't gotten that far in their thinking but give it time.

In other news, Thai Airways is making nasty cancellation noises if they don't get what they want and soon. That's fuel for the fire.

And we haven't even mentioned what the WTO case does to the picture. The Maginot Line's answer to this has been a consistent "You too, Boeing! So's your mother!"

Think about that for a minute. They're not denying they've been on the government teat, because they can't. That's a pretty piss poor sack of arguments to take to court or to an arbitration panel. Take it from this lawyer-it's not a winning argument.

Stay tuned....this could get ugly.

And Now For Something Completely Different: Observing Hermann

I tripped over the Observing Hermann blog today, written by a Yanqui in Germany. He's written a piece entitled "Airbus Outsmarts Boeing With New Dreamliner Clone" and it is hilarious.

See for yourself.

Tuesday, December 05, 2006

Lufthansa: I'll Have The Blue Ones, Please

Although not the subject of a formal announcement at this writing, it's been on the wire services that Lufthansa is going to pop for 20 of the Boeing 747-8 long haul aircraft. The formal announcement is forthcoming.

The 747-8 is the product improved version of the Boeing workhorse which will incorporate new engines and a mild stretch to come closer to the niche now occupied by the A380 Albatross.

What's really important here is what this signifies, and that is that one of the flagship operators of the A380 is hedging its bets on the A380. That can't be good news in Toulouse, knowing that one of your premier flag carriers in a partner country is showing signs of defecting to the competition.

However, this is not the first time we've discussed Lufthansa in this connection.

Here's what we said back in June of this year.

It is rumored that something's going on in Lufthansa that has to do with fuel economy on the A380 and it has to do with whether the fuel consumption is 2.9 or 3.2 liters per passenger per 100 klicks.Apparently there's a split between what sort of fuel consumption per seat mile was guaranteed and what is actually taking place. This could be due to a number of reasons. If the fuel consumption was predicated on 555 seats, it would of course look better than it does at a more realistic figure of around 500 seats.As we discussed here in February, the 800 pound gorilla on the coffee table is the fact that there's just not enough excess payload capacity on the Albatross to allow for 555 seats, luggage, cargo and range.Stay tuned-this could be a big issue if it has legs.

I believe I also mentioned that some Lufthansa execs were in Seattle over the summer to take a look at the proposals that Boeing had.

It's nice to see that some of the prognostications I've been peddling over the last 11 months are starting to bear fruit. What's not so nice is seeing that I'm a bit of a Cassandra.

Stay tuned.

Monday, December 04, 2006

ILFC Defers A380 Order, Dumps Freighters

Flight International is reporting this morning that ILFC, the aircraft leasing giant headed up by outspoken Steven Udvar-Hazy, has decided to defer its order for 10 A380s until 2013-14 and decided it wants no part of the A380F, instead choosing the passenger version.
If you were looking for a vote of confidence in the A380F program, this isn't it. Apropos of this is the Yogi Berra-ism "People are staying away in droves."

Stay tuned. We may hear from UPS soon.

Friday, December 01, 2006

A350WXB Gets EADS Board Approval:UPDATE

It's a go, according to Business Week....stay tuned for the WTO ruckus, part deux.


The picture's a little more interesting but as I haven't run the numbers or considered their implications I'm not ready to go on the record.

However there are some rumblings. It's rumored that a press conference is set for Monday, wherein The Maginot Line is going to announce 'orders'. That should prove interesting to see the usual suspects trotted out for the official perpwalk and lineup.

The retrograde construction method The Maginot Line plans to use (CFRP panels over structure with fasteners and adhesives) we've already talked about. I think it's a major mistake, and it is also an idea that will be shelved for an integrated fuselage because they will have to. The Maginot Line doesn't trust the technology right now but when the 787 starts flying in 2007, the handwriting will be on the wall for anything less than a full tilt integral method of construction. At that point, The Maginot Line will be just that much farther behind the power curve development wise.

The preliminary numbers being floated suggest that the A350WXB will really be aimed at the B777 rather than the B787. That's going to be one analysis we will run here when some 'specifications' start being released.

Of course, all this thinking is no doubt occurring to the folks at The Prussian Airplane Company. I'd be damned surprised if they did not have the replacement for the 777 in the works even as we speak. And, in fact, Richard Aboulafia said as much back in August of this year.

This could be the start of something big, as the tune goes.