Friday, January 29, 2010

I dare you to cross this line! No, this one! Wait a minute. I double dare you to cross THIS line! I double secret on pain of instant death dare you !

As is true with all good soap operas, the decedent suddenly emerges anew, who, having been written off for dead was really spirited away and confined on a Greek isle with no telephones, or was knocked unconscious and woke up in a dumpster in Spokane six months later trying to figure out how he got there.

That's the case with the A400M GretaGarboliner.

After the last 'final round of talks' in which the Germans decided they weren't going to pay anything more than 2 billion euros more than they expected to pay for the A400M airlifter comes word to us that there will indeed be another 'super double secret round of talks' on February 4 in which Airbus will attempt yet again to wheedle another 5 billion euros out of the buyers.

The last round of talks, which was the third and final round of talks, ended on the 26th with no clear winner and no indication that the people who bought this thing are going to pony up more than they already offered to.

What's all the palaver about, you ask? Simple.

The A400M, as we have opined, is something of a super sized Herk with a filet mignon price tag. In addition to it being a clean sheet of paper design, the engine is also a clean sheet of paper design, and it's in a class where it's unlikely to ever find a home on a civilian airframe, unless it's in the cargo bay. The aircraft came with a limited order book, about 184 frames at last count.

Overweight. It's been reported by Financial Times Deutschland as cited by AFP that the aircraft is 12 tons overweight and the payload is 4 tons less than advertised.

Over budget. The initial order book was for 20 billion euros for approximately 180 airframes more or less, and it now seems that the project is over budget by anywhere from 5 billion to 11.2 billion euros depending on who you believe. In addition, Airbus has asked that the contracting governments ante up 5 billion euros to cover cost overruns on the project, essentially trying to renegotiate a fixed price contract it had the bad fortune to sign. The folks from Price-Waterhouse-Coopers have audited the A400M program and concluded that the cost overruns could be anywhere between 7 billion euros and more.

Over due.
At the present time, the program is at least four years behind schedule. One of the major problems has been repeated delays with the engines-which anyone who's ever been involved in an engine development project could tell you was inevitable.

So....what could the buyers have gotten for the extra funding that they are about to have extorted out of them?

Depending on how much of a shellacking they're willing to take, anywhere from 25 to 45 brand new, shiny C-17 Globemaster IIIs.

And that's the price for European mee-tooism. The only question is whether and when Dandy Don Meridith will start tuning up the pipes for a chorus of "Turn out the lights, the party's over."

Monday, January 25, 2010

What's Love Got To Do With It?

There's an old saying around here: "I may be an Okie but I've been to town."

"Do the math" is another way of saying that something doesn't add up.

Of course the big question on everyone's minds around the Dougloid Towers is "when's the other A380 shoe going to drop?" I suspect that we rude frontiersmen may be more sensitive to such things, perhaps because we're in such bad shape, economically.

A brief recap.

The A380 is a conventional structure, 4 engined, double decker bus of an aircraft that is the largest cattle hauler ever built, and which promises to hold that blue riband indefinitely. Others will never be developed. Passenger capacity, depending on configuration is running at about 550 maximum with some room for expansion-how much is a subject of dispute as well.

The A380 development program costs in 2000 were projected to be about 8.8 billion euros, but that had escalated to nearly $20 billion US by the time the first aircraft was delivered according to James Wallace, the Seattle PI aviation wizard. It's reasonable to suppose that development costs have declined but not disappeared, as the first production airplanes required significant major rework and customization for the buyers.

At present, Airbus projected the 'break even' point for the project at somewhere west of 420 completed and sold aircraft. Assuming that's correct, the sunk development cost on each frame is just shy of $50 million per aircraft, exclusive of escalations and the economist's bugbear, the time value of money. That's money that's required to pay the lenders and refill the piggy bank.

Parenthetically, that's also money that you don't get to allocate to other projects like the A350 and the A400M. Oh, you may squeeze out the money but it's definitely going to have a chilling effect on those programs.

The cash cow that is the European taxpayer has its limits, whatever they happen to be, and even reasonable people can be inspired by a Howard Jarvis type. Nobody likes to see good money thrown after bad, even if it is for la gloire, as they say.

At present the order book stands at 202 firm A380 orders, with 23 deliveries as of December 2009. There may have been a couple more deliveries in the interim, but the order book has been stagnant-since 2007, only 13 aircraft have been ordered. 25 aircraft have been delivered since the first delivery in 2007.

There it is, folks. Unless Airbus acquires another 220 or so firm orders for the A380 that are not loss leaders, the program's not going to make money, and loss leaders are, in many cases how the orders thus far have been acquired. It's not only going to not make money, it stands to lose a crapload of money before this is over.

What this all tells us is that what happens at Farnborough in July of this year may well be make or break time, given Airbus' predilection for announcing large orders at airshows.

As we opined elsewhere, it is going to be an interesting year. Some folks took that to mean I had no clue as to what may or may not happen this year.

Well, it's true. We're all clueless.

Friday, January 22, 2010

"Super Size Me!" Brings Sticker Shock at Airbus

We've commented about the future prospects of the A400M-you know, the Euro airlifter that is four years behind schedule and $7 or 8 billion over budget....but it seems as if matters may well be coming to a head. Airbus, it seems, is requesting that the contracting parties who ordered the airlifter ante up an extra 25 per cent to help subscribe the increased cost of the project.

The contracting parties are not happy, particularly the Germans who have the biggest dog in this fight.

Airbus agreed to and sold the project on a fixed price contract basis back when the project was put together-which in retrospect was the very apotheosis of a "bad idea", because the one constant in aircraft projects is that they always go over budget and over weight, particularly when there's both a new airframe and an unproven powerplant in the mix.

Always. It has never been known to fail. Ever.

Going over budget is the polestar of every aircraft project-that, and figuring out how to get the customer to eat the difference, which usually consists of getting the customer in deep enough that they feel they can't back out.

I did work on part (a very small part to be sure) of the Canadair Challenger project-which was both a new airframe and a new engine (the 'born under a bad sign' ALF-502), and it was only the availability of the General Electric CF34 that saved the Challenger from the rubbish tip when the ALF502 turned out to be one of the greatest airborne turds of all time. So I know whereof I speak.

So how anyone could have thought that this project was going to be any different is, well, mildly stunning.

At the present time, there are about 190 or so aircraft on order, and the projected price of the contract amounts to $28 billion give or take, which comes out to about $150 million each, assuming that costs do not escalate further. An additional 25 per cent would put the price per unit closer to $190 million per unit. The project is also four years behind schedule and the first flight was recently accomplished.

So what are the people who ordered it going to get for their money, if ever?
A super sized C130 with a C-17 price tag attached is what they're getting. Looking at it another way, it's like getting a quart and a half of milk but paying for a gallon. Hardly anyone likes that kind of math, even if it is a 'buy fresh, buy local" Europork project.

It must hurt, knowing that you are tied to this project when any number of C17s can be had for about the same price, out the door, drive them away.

It's the very definition of throwing good money after bad, which seems to be popular among government types these days. The notion of getting what you want, on time and on budget never seems to have occurred to the players.

I suspect that if one of the major players bails (i.e., the Germans) then the project will be ready to stick a fork in.

Come to think of it, Alex Pajic could probably make a pile by selling his domain and website to Airbus-truth in advertising and all that.

Image courtesy of Alex Pajic-best damn barbecue chef ever.


One of my correspondents suggests that the over-budget cost of the A400M is on the order of $15 billion USD that Airbus may be asking the contracting governments to eat, and mentions that at $280 million each that money could buy them 4o or more brand new shiny C17s.

Just a thought.......

Friday, January 08, 2010

Me and Artie and Vinnie and Green Livin'

Artie is, of course, King Arthur's flour-as fine a grind as ever came out of Vermont, more of which anon-not the least of which is that King Artie is owned by the employees and is as all-American as you can get.

Vinny is the KitchenAid mixer you see before you which shows that all good things come to he who waits-in this case, it took two years of going to auctions to get this one for $15.

That was a couple of years ago but Vinny's done for baking what google did for the internet-the gap between the idea and the concrete expression of it is painless, easy and rapid. Time was that baking involved a lot of beatings and effort. No more.

I gave Vinny a run through a couple weeks ago in an idle moment and today's going to net me two loaves of home made bread with less effort than it takes to describe it. It sounds better than paying three bucks for a single loaf of Mr. Wonder's best.

And that's what green living is all about, folks-using or recycling things that are already there for us to take hold of, if we but imagine it.

Putting Your Money Where Your Mouth Is: the Last Angry Man Speaks Out

Every once in a while, if you live long enough, you have one of those moments of clarity that explains everything-well, it's food for thought maybe.

I've been thinking about aviation this morning, particularly the sparring going on between the twins of Orwellian duopoly, Boeing and Airbus over the air force's future tanker program.

And, I've got a small axe to grind-otherwise why would I be rapping about this?

Some symbology is appropriate. You can figure out which image belongs to which player....

In considering the ruckus that's gone on with the Air Force's requirement for a future tanker, we're confronted with two flawed producers and some bit players.

You can count Northrop Grumman out as they're merely the stalking horse for Airbus, the French aviation combine. (Parenthetically, anyone who thinks Airbus is not a French combine run from Toulouse can now leave the room.) You can also count out the Alabamians-they're noisy teabaggers who've bought into the notion that the French are actually interested enough in what goes on in this country to put their money where their camembert hole is.

So-Airbus and Boeing.

As we already know, a few years back, Boeing had the tanker contract sewed up, in the bag, deal done, and all they had to do was tote the cash to the bank. Then, there was that unfortunate business of people going to jail, malfeasance in high office, suborning perjury, bribes-you get the picture.

The takehome was that the KC767 contract got cancelled. And there things stood for a while, until an allegedly squeaky clean new regime of management people who had "seen the light"arrived to restart the process.
Airbus, on the other hand, has trailed its skirts with a canard of dangling a 'production facility' in front of the Alabamians who, showing that they're as dumb as they were back in 1865, actually believe that this is something that's going to happen as advertised.

We here at the Dougloid Towers are not uninformed about such matters-there was the "second 737 line" for Long Beach, there's the "second 787 line" for what? South Carolina?, there's the Chinese Airbus plant and the Chinese MD80 plant-you see where this is going, right?

We're confident that if Uncle bites the Airbus cyanide capsule, a building will be erected in Alabama for a "production facility". What that means is that shortly thereafter someone will "announce" that Toulouse is actually a county in Alabama, a Confederate flag will be raised there to convince doubters, and newly naturalized Alabamians in berets, brandishing baguettes and reeking of brie and garlic will be adding "y'all' to everything-"après moi, le déluge , y'all."

The airplanes will be flown in to Alabama green with a ferry pack of avionics, and they'll be outfitted with the rest of the tanker gear and a paint job. It may be a completion center but it most definitely will not be building airplanes, and when the order's completed the "aircraft plant" will be "repurposed" to a chicken farm quicker than Cinderella's coach turned into a pumpkin.

Why is this going to happen? For the same reason we'd do it if the shoe was on the other foot, and for the same reason there was really no chance at all for that "second 737 line". The workers won't have it-and I can respect the French aircraft workers for it. They're not going to train Americans to do their work for them in any substantial way-to do what? To lose work they'll never get back once it goes offshore?

Which brings me to my main point. Boeing, for all its flaws, is an American company. It builds most of its planes here, it spends money on infrastructure, it pays its workers well, and it's here for the long haul. It hasn't tried to insult the French people with transparent charades like this 'Alabama aircraft plant'.

Hell's bells, as my father would have said, they had the chance to buy McDonnell Douglas' commercial operations at a fire sale price in the early nineties when even Taiwan Aerospace-whatever that is-got cold feet. They would have had their assembly line and their tanker program right there.

Even now, I think it's a lead pipe cinch that if Airbus was really interested in the American market as a place to tap expertise and skills, and actually construct aircraft from the keelsons up, and had made that investment in Alabama or anywhere else-they'd already have the tanker contract in hand.

That's the view from here.

Tuesday, January 05, 2010

A reminder from the editor to spammers and hustlers

Just a gentle reminder. If you had any sense, you'd read the stuff in the masthead and realize that a spam message to my comment inbox is wasted effort and time you'll never get back. If you waste enough time you'll die.

All posts are moderated-not just some of them. That means that the only person who sees them is me, to start with. If they're not ready for prime time they get canned. Spam is automatically deleted without comment in a matter of hours. Nobody here thinks that if you just click on the link in the message that you'll be taken to a wonderful website where all our problems will be solved. We know that what you're really doing is trying to get paid per click and you don't care whether we live or die.

Do I think it'll make any difference? No. Does that mean you have an advantage? No.

I'm running things here.

Are we clear?

Monday, January 04, 2010

Big Stuff In Dubai

We're reliably informed that today is the official opening day for the Burj Dubai. For those of you who have been on special assignment, the Burj Dubai is without a doubt the tallest building in the world, and may or may not be the tallest structure ever built-it is without a doubt the tallest building in Dubai, anyway. Among big buildings, the Burj Dubai steals a march on its nearest competitor in Taiwan.

In a world where wretched excess and the next! biggest! thing! is commonplace, the Burj Dubai is without a doubt a big deal, and everything about it is so massive in scope as to leave our cities looking like Omaha by comparison. We can take some comfort in the fact that it was designed by the Chi-town architectural firm Skidmore, Owings, and Merrill-which means that the architectural bragging rights, and more important the repository of technological excellence-are right here in the midwestern heartland. As we've said on other occasions, reports of our death have been greatly exaggerated.

One may well wonder where all this is leading, or, as Fr. Martin used to opine, that the folks in Dubai have the outward and visible signs is undeniable-whether they have the inward and spiritual grace is undetermined. Framed against the general malaise in world economic affairs and a steep downturn in local development, the short term prospects are daunting, and it remains to be seen how long the Burj Dubai will own the bragging rights.

At any rate it's Dubai's day to shine and welcome to it they are.

The Tribune has an excellent retrospective. It is well worth your consideration, and I commend it to your kind attention.

Photo Chicago Tribune.

Friday, January 01, 2010

Before You Beat That African Djembe Read This

We're reliably informed by the New York Times that a New Hampshire woman managed to get herself a severe case of gastrointestinal anthrax (you know, that nasty critter that's been around since forever minding its own business until someone decided to make a career out of mailing it to post offices).....where was I?

Oh, yes. Now I remember. It seems that the woman was among sixty or so like minded folks who attended a 'community drumming circle', whatever that is, in Durham at the United Campus Ministry. I did a little recon, as you might say, and I discovered that among its other activities the UCM-Durham sponsors a monthly Drum Circle and Free Pasta Supper the first Friday of each month.

It is supposed that the enthusiastic whacking of the hides on their Authentic African Djembes dislodged anthrax spores which were inhaled or ingested-perhaps in the Free Pasta-by the victim in this case-assuming that the Free Pasta came after the Drum Circle. The possibilities are endless and the implications are troubling.

It seems that this drum circle thing is bigger than I thought, if the usually reliable source is to be believed. I do not know if the master himself, Chick Webb, would have identified with this drum circle business.

The Dougloid Papers-Cranky Four Year Old, Not Ready For Prime Time

This month marks the fourth anniversary since I began this project, and as we did last year it's time for a little self analysis-scrutinizing the old navel, y'know?

Since last year, Jake returned from his all expenses paid tour of Paktia province in Afghanistan. As we expected he's learned a lot since he left, he had his bell rung more than once, but for the meantime he's parked at Campbell. He's also set sail on the sea of matrimony and we've got plenty of good things to say about his choice in womenfolk-this one seems to be a keeper as near as we can figure, and talented and smart in the bargain.

Jennifer seems to go from strength to strength, and she has turned her setbacks into positive things that others will benefit greatly from. We're proud to have had a part in that, small though it is, and what comes through loud and clear with both of these folks is the commitment to service to others. I don't know where they got it from, but the world's a better place for it.

We are not happy about the choices some people around us have made-they're offensive, dangerous, and poisonous, and we earnestly hope that they will see the error of their ways, although the chances of that are slim to none, based on past performance.

The economy has not gotten a great deal better, and it's removed at least one part time job I had-which led to me starting another enterprise which has shown some signs of life-it is in a state of becoming but you can check in occasionally and see what's going on at I'm always bemused that occasionally people will pay me to do things I like to do and be with people I like to be with.

We've had a lot of snow here, so I've had more than enough shovel time than I like. If I had a few cans of hair spray I'd go outside and try and hasten global warming.

The motor vehicle fleet has improved mightily and we are happier for it. This past year we acquired a new Honda Fit, which is "the berries" as Al Capone sometimes observed, a nice serviceable Ford Ranger pickup for suburban chores and general schlepping, and a self propelled Snapper mower that takes what was a tiresome chore and turns it into a stroll in the garden with a friend. It also does a better job cutting the grass.

The Snapper was quite a find-it had been moldering in someone's garage for four or five years, covered in cobwebs and dust, and followed us home from an auction for a mere twenty smackers. Not expecting much, I changed the oil, dumped a quart of Mr. Mobil's best in the tank, gave a tug on the cord and it started on the first try. Fifteen bucks worth of parts put it in fighting trim, and we sold the old hand bomber Murray for twenty five bucks. We came to find out that the Snapper sells new for about $700, so that put us about $650 ahead, tax free to boot.

We were wrong on our last year's prediction that bankruptcy judges would get the ability to cramdown residential mortgages, and nobody seems to be talking much about it anymore. The economy's like a punchdrunk fighter, operating on reflex and instinct but little else. It remains to be seen whether we'll make any progress this coming year, but if the past is prologue, the Walmartization of our manufacturing is going to continue bearing dark dividends.

Film at 11, as they say.