Weekly Roundup, Friday 13 September 2019

The plane that never was. Artist’s impression of the Boeing 2707 SST.

Good morning

I’m writing to you from Scotland this morning, with our lovely Scotland’s Highland Highlights tour getting underway, with people joining today, tomorrow, and Sunday, variously here in Glasgow, or in Fort William or Inverness.  And, as you’ve hopefully already seen, a last minute cancellation might allow you a chance to urgently come join us too.  I know there are a few readers who have in the past responded extremely quickly to such things, but many of them are already on the Scotland or France tours!

Indeed, this is the second cancellation.  The first cancellation was one half of a couple, and the other person is still traveling.  I couldn’t offer to everyone a chance to share with a stranger which is why you’re only being offered this other super-last-minute opportunity.

Noting that we’ve had a 10% cancellation rate – one due to a home being flooded, the other due to illness – I’m again reminded of the benefit of trip insurance.  Sure, it adds an appreciable extra cost to a journey, but any time you’re booking far in advance (more time for things to go wrong inbetween times) and any time you’re booking/buying travel arrangements with cancellation penalties (which is invariably the case with tours/cruises), you really need to at least stop and think carefully before deciding to pass up on travel insurance.

On a happier note, this has now been the second week of our annual “PBS” style fundraising drive.  I’m still struggling to get the reporting working correctly, which is an enormous frustration, but hopefully will get sorted soon.

In case you missed it, and I do know that only about one third of people read each newsletter so there’s a chance you have missed it, we are now into this year’s fundraising – the important time of year; and important to both you and me.  Important because your support ensures that The Travel Insider ensues.  Everything here is voluntary, but we rely on your free and generous support so we in turn can be free and generous with our time and the content we provide you, every week.

You can choose to support us at any level you feel appropriate, and you can do this on a one-off basis or set up ongoing quarterly or annual repeats (that are very easy to cancel!).  You don’t get much extra in return, although there are a few added member-only pieces that you get instant access to.  But hopefully the rush of good karma you get from knowing that you’ve voluntarily done a good thing will be worth something, and the small investment you’ve made, especially when considered alongside the weekly material received, will give you continued pride of participation in the year ahead.

So whether you base the value of each week’s material at as little as $1 (or even less) or as high as $10 (or even more – thank you, Mike!) please do consider reflecting this by choosing to become a quarterly or annual supporter at whatever level you think fair and appropriate.

Many thanks.

What else this week?  I’m fighting against time here at present, so I’m offering you one article which ends up as a discussion of why The Travel Insider is both “edgy” and also important, and then I’m trying an experiment.  I don’t know if it will work in the email, but I’ve tested and if this email looks strange, it will look correct on the website.  I’m cutting and pasting some of the tweets from the last week.

Also attached is my summary and analysis of Apple’s new products announced on Tuesday.  A new ipad, a new Watch, and three new iPhones.  Should you be lining up outside an Apple store to buy any or all of these?  The article answers this question, of course!

Do I Hate Boeing?

I received an interesting email from a reader and long time Travel Insider Supporter

I have been a supporter but am hesitant this year.  Am wondering why you have such a negative fixation on Boeing: This Week’s Bad News for Boeing?  A simple answer like “They wrongly terminated me.” or something else?

My husband worked for Boeing (absolute BEST contractor in his 48 years on the Eastern Missile Test Range), and gets a pension, so I’m curious.  Best wishes for your most informative newsletter.

I know that many supporters choose to review what I’ve written about over the last year and then decide to contribute or not based on how much they have “liked” my content and commentary.  Perhaps I should explain, in case others are also curious.

But I’d also urge you please to avoid the terrible inward-looking echo-chambers that so much of the media is becoming.  We should all be reading not to affirm but to challenge our knowledge, beliefs, and perceptions.  If something I write makes you uncomfortable, perhaps that discomfort and the expanding knowledge it offers is more potentially valuable to you than the hundreds of thousands of words of material I also write that you agree with!

Other people have similarly criticized me for daring to say unkind (but truthful!) things about Apple, Tesla, and assorted other companies over the years.  I lost a very kind and long-standing/generous reader because she has a Tesla and can’t bear to read any criticism of the company, the car, or Elon Musk.

Hey, NYT – planes don’t “take aim”. People do….

And I’m sure that if I were to post a copy of this tweet from the New York Times and note how ridiculous their careful phrase “since airplanes took aim and brought down” is, while avoiding any mention of the fact that the planes were being piloted by religious terrorists from the Middle East – possibly because they are so used to blaming guns and not the gun-users – that might lose me some more readers/supporters too.  🙂

So, where were we.  Oh yes, Boeing.  First, and because the first thing people invariably rush to do when they don’t like something I write is to criticize me and accuse me of bias, I should answer the question in the reader’s email as to if I hold a grudge for some specific reason.  No.  I’ve never worked for Boeing, and never applied to work at Boeing.  I don’t own and never have owned any Boeing shares (nor shares in competing aerospace companies).  I have absolutely no vested interest or secret agenda whatsoever.

Indeed, I used to love Boeing and its planes.  I remember feeling a sense of betrayal when United first ordered some Airbus planes, and I used to even sometimes parrot the phrase many people used to say, especially in the Seattle area (but which few continue to utter now) – “If it’s not Boeing, I’m not going”.

I do however feel “betrayed” by Boeing, as part of what I see as a broader betrayal not directed at me personally, but a gratuitous action by Boeing that has betrayed the entire country.  They have abandoned their historical pursuit of bold excellence, and their willingness to invest heavily to develop new paradigm-shifting capabilities that have revolutionized our modern world and impacted amazingly positively on all our lives.

Boeing’s success is a key component in the country’s success.  It is the country’s top exporter, and a huge employer of over 150,000 people, mainly at good rates of pay.  The flipside of “too big to fail” is a responsibility not to fail.

But Boeing has perhaps become overly protective of itself and its size.  Somewhere in the late 1960s/early 1970s, its braveness and boldness got lost.  If I had to point to a specific act that marked the change from bold innovator to sheepish follower of the safe status-quo, it would be their abandonment of their B2707 SST development in 1971.

The reason for the cancellation was concern about the cost/feasibility of the project, and (this being the kicker) the inability of Boeing to secure more government funding to allow them to develop the plane on the taxpayer’s dime.

But isn’t that a fundamental underpinning of our free market economy?  Companies invest their money in projects, and accept the risk of loss as the premium for/cost of making profits.  If they are profitable/successful, they then keep their profits.  Sure, if there is “free money” on offer or available from any source, it is prudent to obtain it, but absent government funding, private enterprise doesn’t collapse and fail.  It does its own thing, sets its own priorities and specifications and budgets, and does what it thinks best, how it thinks best, and wins or loses as a result.

I’ll grant that the SST project was risky, but when did risk stop Boeing before?  And no-one can now validate Boeing’s decision to exit the SST field almost 50 years ago, because none of us know what would have happened with 50 years of development if the project had proceeded.

People say “SSTs are too noisy, costly, fuel-inefficient”, but that is a meaningless statement.  You are comparing the technology of 50+ years ago, in a field that was in the early stages of development and with every probability of it being steadily improved over the years that would follow, with modern state of the art technology in sub-sonic passenger planes and jet engines that have benefitted from the hundreds of billions of dollars and 50 years of steady developoment.  Compare an SST design in the 1960s with a traditional airplane and engine design from the 1960s for a fair comparison.

Boeing is not only now a timid company, but it is making cost-saving a higher priority, and perhaps sometimes a too-high priority.  The 787 battery fires that saw that plane grounded was based on two cost saving compromises – switching to a lighter more volatile type of battery, and insufficient battery containment box.  It was also based on a lack of accuracy in the promises Boeing made to the FAA about the risks inherent in their design approach (I’m being careful not to say “lies”).

And now we have the 737 MAX grounding, after two fatal crashes with the loss of everyone on board both planes.  Again I’m not going to say Boeing deliberately lied to the FAA about how its MCAS system would work, but the in-depth reporting in particularly the Seattle Times and the Wall St Journal would seem to suggest that, at the very least, there was a “lack of communication” and some “unshared changes” as between Boeing and the FAA on these points.  Whether that was due to appalling program mismanagement or deliberate venality probably doesn’t even matter much, because neither explanation is acceptable.

Let’s also remember that the 737 MAX program was so rushed because Boeing dithered and delayed a decision about starting it.  I’ve been writing for years about Boeing’s need to consider a 737 replacement, and the Airbus announcement of its upgraded A320 NEO line was not a surprise to Boeing, but its inability for over half a year to decide how to respond caused it to donate more market share to Airbus than was necessary.

In this week’s latest curious twist and turn, we are told that a Boeing official is pleading the Fifth Amendment and refusing to testify into an enquiry into the circumstances of the 737 MAX certification.  Why would he do that?

Some of the other major mistakes Boeing has made in recent times would include the 2001 decision by senior management to move the corporate headquarters away from the Seattle region where the largest part of their actual manufacturing and R&D is located, and instead to base themselves in Chicago.

It could be said that many of the problems since then have been due to the physical distance and greater disconnect as between senior management in Chicago and line-level/operational management in Seattle.  It is at best a very conceited notion that senior management can keep a close finger on a company’s pulse even after moving 1500 miles away.  Boeing used to be managed by engineering types – people who had committed their lifetimes to the airplane industry, people who loved and lived airplanes day and night and could think of nothing better than to “walk the line” and talk to the people on the production line actually making the planes.  Now we have “professional managers” and MBAs with no passion for airplanes, just for profit, and a preference to be thousands of miles away from where the planes are actually made.

Talking about the disconnect between management and production line staff, a more vivid example of that couldn’t be found than the terrible delays in completing the 787 development program.  Note – these are delays prior to the plane’s launch, unrelated to the further delays when the plane was grounded.

Senior management decided that for the 787, they’d do things differently.  They’d outshop a lot of the work; indeed, they’d not only outshop it, but they’d contract with companies in other countries where, by doing so, they might be able to save on the cost of manufacturing in the US and/or earn some political points in countries where government approval is an important part of selling planes.  Furthermore, doing this would mean Boeing would not have so much money invested into development costs, making the new plane less expensive to develop and giving a better return on invested capital to its shareholders.

What could possibly go wrong with that?  Oh, just about everything!  The net outcome was some years of self-caused delay to the plane’s launch, skyrocketing costs because of the delay and scrambling to resolve supplier problems in the order of many billions of dollars (no-one really knows, but possibly $10 billion, maybe even more), and a major blow to Boeing’s credibility.

Senior management then decided they’d try and feast even more at the public trough.  After yet another adversarial round of “negotations” between Boeing and its labor unions, senior management decided to open a new assembly line somewhere out of Washington, in a “right to work” union-unfriendly state.  Two benefits – they’d be able to play the states off each other and find whichever state would give it the most billions of dollars in incentives to move there, and they’d create a lower cost workforce for future airplane assembly.

A third benefit – this would give them a huge lever to use to bully the Seattle area unions into accepting lower wages and reduced benefits – the threat to move more work to the non-union location in the future.  And an endlessly repeatable threat to Washington’s government – if you don’t do this/give us that, we’ll move more work to SC.

South Carolina was chosen in 2009.  To date, it has been a decision with mixed outcomes and unclear benefits, and even now, quality control is thought to be massively inferior to the Washington assembled planes.  I wrote about this just a week or two ago.

What else?  Well, there was Boeing’s decision to use political pressure to win the Air Force tanker bidding competition, after failing at its original attempts to get the business.  Airbus submitted a clearly superior offer based on a modern current airplane, but Boeing repeatedly bullied the Air Force and Government to change the bid specifications and eventually ended up winning.

Boeing’s win has yet to be seen to also be the Air Force’s win.  Although Boeing was awarded the contract in 2011, and based its bid on the essentially obsolete 767, the delivered planes have been beset by problems and limitations, as most recently shown yesterday in this article.

This was neither the first nor last time Boeing used its political pressure to influence outcomes when ordinary selling tactics and fundamental product superiority were lacking.  In 2017, Boeing lodged a complaint against Bombardier, claiming that Boeing was being harmed by Bombardier selling its new Cseries airplanes in the US.

The Department of Commerce obediently upheld the complaint – a complaint that almost no-one in the industry thought had any grounds in reality and fact at all, because the Cseries planes were appreciably smaller than the smallest 737 Boeing makes.

Subsequently the US International Trade Commission unanimously overruled Boeing and the Commerce Dept, and Boeing declined to appeal or take the matter further forward.  But the damage to Bombardier was such it had to sell the Cseries program to Airbus, and Airbus has breathed new life into the plane – now called the A220 – and is using it to strengthen its competing with Boeing across the board.  Another Boeing own goal.

These are just the major headline reasons why I might be seen to be dumping against Boeing.  But please don’t blame me for Boeing’s shortcomings.  I just report the facts, I don’t cause them.  And if my voice seems more strident than most on these issues, again, don’t blame me.  Instead, ask the mainstream media why they are so forgiving of Boeing and its many faults.

This is, after all, one of my main reasons for existing.  I see my role as bringing to you the important information that the mainstream media doesn’t or won’t cover, or, if it does, will cover in as obscure a manner as possible.

And Now, the Experiment

Here are some of the tweets I’ve sent this week.  In each case, there is a short comment from me introducing a link to some article.  You should be able to click to go directly to the articles if you wish to read them.

If the formatting looks weird, you can simply read the newsletter online, where the formatting will be correct.

I hope my “experiment” worked and gives you some articles to click over to.

Until next week, please enjoy safe travels

 

David.

 

 

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