More delays before Boeing 787 enters commercial service

American Airlines revealed on Thursday in a Securities and Exchange Commission filing that their Boeing 787's, ordered for the US's second largest airline, will now arrive a further year late - in the second half of 2013.

The Texas-based company has ordered 42 Boeing 787-9 aircraft, to be delivered between September 2012 and 2019.

Under its contract with Boeing, American isn't obliged to acquire the jets if it and its pilots union can't agree on work rules for the jets or if doesn't confirm its purchase agreement with Boeing at least 18 months before the scheduled delivery date for an aircraft.

Gulf Air orders more 787's

Gulf Air of Bahrain has exercised options to add 8 more Boeing 787s to their earlier order for 16 planes.

This is the first this year for Boeing and gives Boeing a net of four new jetliner orders for the year, after 32 cancellations because of the recession.

Boeing ( one of the great engines of US industry and exports) has been issuing monthly layoff notices after announcing in January it would cut 10,000 jobs this year. Earlier this month Boeing announced it would scale back production of the 777, which is produced at the widebody factory in Everett.

777

Air France (with one of the largest 777 fleets in the world) took delivery last wek of the 777th Boeing 777 airplane. The new Boeing 777-300ER also will be the first to bear a new Air France livery and company brand identity. see pic.

Boeing 787 Dreamliner launch delayed for 4th time - Management reshuffled

Boeing have announced today a delayed launch (their fourth delay) for their 787 Dreamliner, their first new commercial plane since 1995.

The 787's first test flight is now expected to take place in the second quarter ( between April and June ) of 2009. This they say will enable first deliveries to be made to All Nippon Airways in the first quarter of 2010.

Hit by redesign of major parts, such as the wing box of this mainly carbon composite plane, problems with overseas suppliers, the need to replace thousands of fasteners in early production airplanes because technical specifications describing the preparation of the fastener holes were poorly written , integration of software controls and the 58 day machinists strike the programme is now 2 years behind schedule - with the airframe still well overweight.

Management Shuffle

Pat Shanahan, 46 who has been in charge of the 787 programme for the last 12 months is now in charge of a new Airplane Programs organization cpvering all current production and development programs, including the 787 Dreamliner and 747-8 and will report directly to Commercial Airplanes President Scott Carson.

Ray Conner, VP Sales has been shunted to head Supply Chain Management and Operations, which includes Supplier Management, Fabrication, Propulsion Systems and the Manufacturing and Quality unit and reports directly to Carson.

Scott Fancher moves from the missile-defense business in Boeing's Integrated Defense Systems division to take over Shanahan's job as
the 787 program's general manager.

Marlin Dailey now head of sales efforts in Europe, Russia and Central Asia takes over Connor's role as VP sales.

CEO Scott Carson will be 63 next summer.

Detroit flounders like NOLA post Katrina - Senate rejects aid bill

The US hastily cobbled $14 billion bailout for Detroit has died in the Senate after failing on a procedural vote.

Bipartisan talks on the rescue broke down over Republican demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers.

Majority Leader Harry Reid is now hoping that President George W. Bush would tap Hank the Bank's back pockey US$700 billion Wall Street bailout fund for emergency aid to the automakers.

Senate Republican leader Mitch McConnell of Kentucky led a revolt in announcing his opposition to the White House-backed rescue bill passed by the House on Wednesday. Mitch isued a Press release We Simply Cannot Ask the American Taxpayer to Subsidize Failure wich is well worth reading ..and quoting..

...its greatest single flaw is that it promises taxpayer money today for reforms that may or may not come tomorrow.

We simply cannot ask the American taxpayer to subsidize failure.

He and other Republicans said wages and benefits for employees of Detroit's Big Three dinosaurs should be renegotiated to bring them in line with those paid by Japanese carmakers Toyota, Honda and Nissan in the United States.

Hourly wages for UAW workers at GM factories are about equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour. But the unionized factories have far higher benefit costs.

Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the UAW was willing to make the cuts — but not until 2011....which is shorthand for never.

GM claims their total hourly labor costs are now US$69, including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around US$48. The Japanese automaker has far fewer retirees and less generous pension and health care benefits as UAW workers.

A Pew Research Centre poll said 39 % approved the "loans" to keep GM, Ford and Chrysler in business, This broke down to 45 % Democrats and 31 % Republicans supporting the proposal.

Detroit's problems are far more fundamental and historical than shop floor pay scales. They have too many brands, too many models, they burn too much gas, their build quality is poor ... and the whole industry is struggling because the buyers don't have the money and cannot / will not take the loans to buy new vehicles.

Wall Street is going to sink like stone... see also "Bernard L. Madoff, the founder of Bernard L. Madoff Investment Securities and a fixture of the Wall Street trading world for decades, was arrested Thursday morning by Federal Bureau of Investigation agents and charged with criminal securities fraud by federal prosecutors in Manhattan." WSJ

Apparently Madoff, 70, told senior employees on Wednesday that his business was "a giant Ponzi scheme."

Plenty more of those due to fail yet.

UPDATE : By 0816 GMT the FTSE 100 was down 147.1 points, or 3.35%, at 4,241.59, with bank shares seeing the biggest falls.
Royal Bank of Scotland shares fell 13.8%, HBOS shares were down 10.1% and Barclays dropped 9.4%.

Detroit gets it's Christmas present - US $25 Billion repayable loan (Ho.Ho.Ho.) to get them through till about Superbowl time.

Today's New York Times reports that , frightened shitless by the November unemployment figures, Senate majority leader, Harry Reid, House Speaker Nancy Pelosi have , with the Chairman of the Senate banking committee, Democrat Christopher J. Dodd, colluded with Joshua B. Bolten, President Bush’s chief of staff, after helpful chats with the unbiquitous Rahm Emanuel, Mr. Obama’s chief of staff and even President-elect Barack Obama to cobble together a last minute , last ditch give away and Christmas present to Detroit.

With typical political financial legerdemain they have transformed an already but delayed pot of $25 billion in federally subsidized loans intended for developing fuel-efficient cars into ..er ... a "short term rescue plan"...which will eventually seee US$100 Bn + shovelled their way.

This unblocks the legislative Congressional log jam allowing Treasury secretary, Henry M. Paulson Jr., to request the remaining $350 billion of the financial industry bailout fund to squander as he chooses.

It seeems a good time to review Section 8 of the 3 Page bill Hank the Bank sent to Congress initially on September 20th 2008.

Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

It also seems a good time to re-publish this :

18/3/05 GM makes you sick - published 18th March 2005


“Detroit catches a cold the US gets pneumonia”. GM common stock today trades at 35% of its Jan 1 2000 value, over at Dearborn, Ford suffer even more, their stock has sunk to 25% of it’s millenial value.

The Asian cuckoos in the nest have prospered. Honda? Up 155% in the same period. Nissan? 190% and Toyota, GM’s major rival in the US home market 97%.

Wall Street scribes sneer that GM, Ford are welfare / pension businesses with a car plant attached – the lap dog media have an unholy alliance with the Detroit car makers that stifles criticism, shared by the Unions – It takes a lot of outside agitation before safety, legislative or environmental stories see the light of day.

Faced with slumping sales and market share, CEO of GM, Rick Wagoner reporting disastrous Q1 2005 figures this week said: “We have had an incentive-driven strategy that has been quite effective. That effectiveness has eased off. [Now] there will be more focus on value.” This is Detroit easyspeak for, “Well we’ve tried giving away the product, now we are going to spend more money on advertising”. A sure sign that if management ever understood the problems they long ago ran out of solutions.

GM’s flagship Chevrolet Silverado pick-up slipped by 1.4 per cent in the first two months of this year. By contrast, sales of Nissan’s new Titan made in Canton, Mississippi, soared by 55 per cent and Toyota’s Tundra made in Princeton, Indiana, rose by almost a third. Honda made their first motorbike in the US in Ohio 25 years ago and now have 12 North American plants. This year they launch the brand new Ridgeline truck made in Alliston, Ontario .

So if you have some money to invest, do you stick it in GM whose shares dropped 14% yesterday to $29 Mkt Cap $16.4 Bn or boost Milwaukee economy and stick it in Harley Davidson stock with Mkt Cap $17.7 BN – or go buy an Electraglide in Blue – priceless ?

The results for 1st Qtr of 2005 announced this week don’t encourage anyone to advise the widows and orphans to invest in GM. Warren Buffet certainly won’t be – at any price. They will lose $1.50 a share in 05 Q1 and “maybe” earn $1 a share this fiscal year 2005 against a recent January forecast of $ 4/5 a share.

GM’s sales are off 6.3%, profits 37% and market share below 25% for the first time since the 1930’s. Sports Utility Vehicles ( SUV ) sales dropped 37% in Q4 2004. Meanwhile Toyota’s US market share remorselessly rose from 12.1 to 13.1 % in 1st 2

Moody’s Credit rating of Baa2, puts GM just two notches above junk status.

Standard & Poor’s Rating Services “negative” from “stable.” GM’s BBB rating, one step above junk status.

Rumour says GM may get help from Washington to reduce health-care costs, which are expected to top $5.6 billion this year, up from $5.2 billion last – adding $1,500 to the ticket price of every vehicle they sell. GM has 430,000 North American retirees, 2 1/2 times its active workforce,

Demand is dead. GM’s North American production is down in Q1 2005 to 1.18 million vehicles, down 12% year on year.

GM, has $116 Bn of Bonds, the extra yield investors demand to hold GM’s 6.875 recent note maturing in 2011 over U.S. Treasuries has widened this week about 60 basis points to 3.85 percentage points.

U.S. crude oil futures ended at a new record price after the government reported a larger-than-expected drop in gasoline supplies last week. West Texas light for April delivery settled at $56.46, gaining $1.41, after soaring to an intraday peak of $56.50.

So what have GM been doing to increase fuel efficiency? Well fleet performance of GM cars has gone from 27.8 miles per US gallon to 28.8 mpg in the last 5 years and for light trucks 20.7 mpg to 21.2 (which includes a notional “E35 credit” for ethanol) says the Company 2004 Corporate Responsibility report. It explains “since 1990, new vehicle fuel economy has been relatively constant as consumers, reflecting increased disposable income and relatively low fuel prices, have not emphasized vehicles with high fuel economy”.

That’s it folks, it’s down to the consumers, faced with refinery shutdowns, declining oil resource, increasing oil imports from less stable political zones we did nothing. The dollar dives, the imports soar – and do you know, it’s the consumers fault – those wacky guys over at Toyota with their hybrids (sales over 500,000 worldwide as they lead the technology) and customer queues sneaking round the block, well, maybe they just got lucky.

GM has too many mouths to feed, too many brands / divisions and no vision. No hybrid vehicles just more gas guzzlers – the world has changed and they didn’t see it, not only high and rising gas prices but steel and oil based plastics etc., – so says Rick we’ll spend more on advertsing.

If you think GM is sick, if you think Ford is sick, look at Boeing, their stock dropped 3% when Continental (with unions rejecting a pay cut deal) threatened dropping orders for the Dreamliner 787, their trump card in the sales battle with Airbus. The composite construction Dreamliner with a rudder made in China, fuselage and wing bases in Japan, nose cone in Everett California, de-icing kit made in the UK is a throw in, the last chance saloon for a company who chucked out their CEO last week for romancing in the office.

US manufacturing industry has failed to understand and react to a rapidly changing world. Emboldened by the strident, pre-emptive, transformational world of the Bush imperialist gang, exporting by force of arms and bribery their distorted vision of democracy, their own has been disembowelled.

Black Monday II coming soon at a Stock Market near you.

GM's Volt - an electric shocker

General Motors are in serious trouble.

They plan to produce the GM volt towards the end of 2010. This is a 4 door 2,500 pound sedan, described as a plug-in hybrid whose primary source of power is an electric motor. A single charge of the lithium-ion battery,(estimated to cost $10,000 to US$15,000 a car) will provide a range of 40miles.

An integral 1.4 litre, 4 cylinder engine will run a generator that will power the car and recharge the batteries once they are depleted and extend the range to 640 miles.

GM plan sales of 10,000 Volts in the car’s first year, current estimates provided by GM are that the car will retail at US$40,000. Toyota currrently advertise their Prius starting at US$22,000.

Mysteriously Jon Lauckner, G.M. vice president for global program management said at the LA Motor Show. “It’s a huge change in the whole paradigm of where cars have been.”

“We’ve turned into a plug-in society. We’ve got cellphones, PDAs, you name it, that are all plugged in. To a certain extent, it’s not much more complicated conceptually than coming in and plugging in your cellphone.”

So the guys who run this company have plans for a car that will generate US$40 Mn. sales, runs for 40 miles on a charge and will have (given a replacement battery is going to cost US$10,000 plus) virtually no resale value.

The same guys who have run the company for many years, whose shares sell today at US$3.04 and have a market capitalisation of US$1.84 Bn.

The same guys who want Congress to throw them billions to make the payroll till the end of January.

Bridge / Tunnel / Dollar Collapse ?

The American Society of Structural Engineers (ASCE) have a website which every US citizen and tax payer should visit. It also helps you keep up to date on the Minneapolis Bridge Collapse ;

"As of 2003, 27.1% of the nation's bridges (160,570) were structurally deficient or functionally obsolete, an improvement from 28.5% in 2000. In fact, over the past 12 years, the number of bridge deficiencies has steadily declined from 34.6% in 1992 to 27.1% in 2003. The Federal Highway Administration's (FHWA's) strategic plan states that by 2008, less than 25% of the nation's bridges should be classified as deficient. If that goal were met, 1 in 4 bridges in the nation would still be deficient. There were 590,750 bridges in the United States in 2000; however, one in three urban bridges (31.2% or 43,189) was classified as structurally deficient or functionally obsolete, much higher than the national average. In contrast, 25.6% (118,381) of rural bridges were classified as structurally deficient or functionally obsolete."

".......The annual investment required to prevent the bridge investment backlog from increasing is estimated at $7.3 billion. Present funding trends of state departments of transportation call into question future progress on addressing bridge deficiencies......

Adding to these problems is the inability of the Administration and Congress to reauthorize the nation's Transportation Equity Act of the 21st Century (TEA-21), which has now had six extensions since the program expired on September 30, 2003. The progress made in the TEA-21, which authorized $218 billion for the nation's highway and transit programs in 2001, is beginning to slip as America continues to shortchange funding for much-needed road and bridge repairs. etc., etc., "

Mean while Dubya is keeping Congress back in school until they pass a law allowing him to do anything he fucking well wants ....

Coming soon ... to a bridge, tunnel, subway, near you.

Oh! By the way the Big Dig collapse pictured above killing 38 year old Milena Delvalle, ... ?

The National Transportation Safety Board, an independent federal agency responsible for investigating transportation accidents, (except 9/11) found that the accident was caused by inferior quality building materials, sloppy work on the part of the construction firms (Gannett Fleming, Inc., and Bechtel/Parsons Brinckerhoff ) , and carelessness on the part of the local highways department, the Massachusetts Turnpike Authority.

"I don't think anyone can feel the tunnels are safe, given what happened this morning," said Gov. Mitt Romney