Boeing May Halt 737 Max Production
nytimes.com
nytimes.com
No doubt there would be an economic impact but the writing is just full of hyperbole and doesn't name any sources for it's claims (like 0.6% of GDP growth rate - note the growth rate, not 0.6% of GDP or 0.6% of GDP growth ...). It also fails to differentiate between the impact of existing planes not able to fly and continued production.
This smells like a PR campaign to put pressure on regulators.
Only, in this instance, the FAA probably won't risk further embarrassment by declaring the plane safe while EASA is holding out. Most of the world will wait for them rather than go with the FAA.
You're taking it way too far in the other direction. It's not whether we have safety or not, it's a matter of some very close to 100% number vs. a different very close to 100% number. (And at this point it's more likely the same future safety level but different amounts of training.)
0.6% of 2% of $19 trillion is $2.2 billion. Theoretically, if enough of that could be captured and used to directly reduce airfare on 737 MAX planes (and/or provide a fat guaranteed payout in the event of death) then I bet a lot of people would choose to fly--possibly even in the U.S., but certainly in many parts of the world where people already assume substantial risks when traveling.
It would be difficult to capture it, though, especially because Boeing would be better off shutting down production and waiting as the manufacturer duopoly means Boeing is likely to sell all or most of those planes eventually rather than lose out on a large number of sales entirely.
But if we were able to somehow force Boeing to factor in the real costs to employees of labor disruption (i.e. if Boeing was forced to be 100% unionized now and for the indefinite future) then I imagine Boeing might choose to keep a minimal production line going and sell at discounted prices, in turn permitting some regional airlines to sell cheaper tickets. Actually, more likely Boeing would be better off paying their labor to sit around (and their employees richer for it) by giving labor a greater share of the future expected surplus from duopoly pricing. Or maybe some combination of the above.
I have no idea how to even attempt to pencil that out, though. My point is merely that it could work, depending on the numbers; not that it necessarily would work. In other words, your question can be answered quantitatively, whereas I assume you intended it rhetorically with an implied, categorical, "no".
While it's not a lot relative to the mass of the GDP, aerospace is one of the key areas that the US has had a strong presence in over the years.
US Health Care spending is approaching 20% of GDP but this is because health care is a bloated corrupt mess. Other parts of the GDP also have debatable reality - overprices infrastructure project also are added to the GDP. But selling advanced airplanes is something real the US does - though with Boeing's many shenanigans, maybe not as much as before.
Of course, it's Boeing gutting itself and stretching every area of safety and regulation that brought us here and the regulators letting this go wouldn't stop a fall at all.
Airbus just had an excessive pitch problem in the A321neo, nearly the same as the 737-MAX troubles. https://simpleflying.com/airbus-a321neo-pitch-problem/ Suddenly, the FAA might take aggressive action to ban that aircraft. Maybe the EASA doesn't really object to the 737-MAX as much as they thought they did.
CAAC would like smooth approvals for Chinese aircraft. Huawei is also having issues. Things could suddenly change after a day of golf at Mar-a-Lago. Lots of things could change, some quietly and some publicly.
After a bit of high-level discussion using that leverage, things may change.
These decisions, in all countries, are being made with consideration for international economic implications. The resulting decisions will be given technical justification as required.
off topic: you sound like a president who thinks that "maximum pressure" is good, but it has not been proven to work.
The issue consists of the anti-stall protection not being aggressive enough under SPECIFIC circumstances:
- Airplane is in Flare mode - Pilot applies sudden and excessive pitch up - Keeps the pitch during pre stall and stall period
Source: https://leehamnews.com/2019/07/19/bjorns-corner-airbus-a321n...
"anti-stall protection not being aggressive enough under SPECIFIC circumstances" means "not enough MCAS in the A321neo"
(there is no leeway for "SPECIFIC circumstances" unless to grant that to the 737-MAX as well)
The FAA could require more MCAS in the A321neo, and of course more testing.
I don't know how much about planes do you know (I'm starting to feel not much since excessive, maintained pitch during flare didn't tell you anything). But the context explained here is rare and obviously more manageable than "one of three redundant sensors failed and an aircraft went out of the sky without giving the crew even a possibility to save their lives".
EDIT: Found new details. The pilot has to keep the excessive pitch although AWARE that he is stalling the aircraft.
This is what I think is going on:
Part of the 737MAX fundamentally is that 737 NG pilots did not need retraining to fly it.
That's a nice goal, but it is not compatible with MCAS. With MCAS in the picture, pilots need to fly out two situations in a simulator: (1) MCAS goes bezerk and they have to manually disable it, and (2) they get into the kind of trouble that MCAS is supposed to stop and then MCAS doesn't stop it.
I think Boeing is hoping they can do a software fix but not add a training requirement and I think that's a major reason why the fix is taking so long. I can't believe that regulators will clear the MAX to fly again without the training requirement. If Boeing is trying to avoid simulator training, they are doing a lot of harm to themselves, their shareholders, their employees, airlines, their suppliers, the U.S. Economy, etc. If they bite the bullet and accept the simulator requirement they can probably get back in the air soon -- they might have to pay for the simulator training that they promised airlines wouldn't have to pay for, but that's probably less than what they are going to pay because of delays.
Another problem with their foot dragging is that delays beget more delays. The more time they waste, the more new problems will be discovered, the more it will cascade. The fast way out is the way through, but from the beginning to this moment, Boeing has not appeared to recognize the gravity of this situation.
If they would have to treat this plane as completely unrelated to any existing model, doing an entire training program from scratch, then there is a legitimate need for regulatory compromise.
where did you read this? The latest I've heard, the EU was ready to go further with the tariff wars[0].
[0] https://www.financial-world.org/news/news/business/2659/eu-p...
High-bypass turbofans are finicky things. It seems likely there will be more teething problems in that area. The GE-9x increases the bypass ratio by 11% from 9 to 10 over the GE-90 based on comparison of specs published in wikipedia. [1,2]
So the interesting question for launch is what else pops up.
[1] https://en.wikipedia.org/wiki/General_Electric_GE9X
[2] https://en.wikipedia.org/wiki/General_Electric_GE90#Specific...
Until April, they were producing 52 planes per month. Then they reduced to 42/mo. Now maybe zero for some while. At $100 million per plane, that's $5.2bil/mo!
And over $400 billion in 7 years. Can their defense business cover that? Can the employee 401k's survive?
Anything can be made to fly if you spend enough money on it. But Boeing are in the business of making money. So they can't just get the 737 Max to fly at all costs. Even if they went all out the reputational harm is very much deHavilland Comet. They fixed the Comet and it was a lovely plane, but nobody wanted it. With the 737 it needs a full redesign, otherwise it is just an exercise in polishing a turd. Even if the MCAS works perfectly it is still an ugly hack.
To Boeing the decision to be selling single aisle short-hop planes might be something they get completely out of. They can finish orders for 737 oeo (old engine option) and just shut the whole thing down.
After 2008 the US auto sector was pared down a bit, GM getting rid of Pontiac to shutter it for good was needed to solve the bigger GM venture, similarly 737 MAX might be best closed in order to save the company. Much like how quick they were with the Dreamliner, in 5-10 years time Boeing could be back with another Ryanair grade offering.
Ford, GM and FCA decided to give up on making saloons for the domestic market, they let the Germans fill that niche. Similarly, with the 737 it might be better to be realistic about the competition, not just from Airbus but China, Russia and anywhere else. If China has a good plane to rival the 737 in 2-3 years time then it would be hard for Boeing's unionised workers to compete with their robots.
That includes all stages of engineering knowing the big picture, even if they don't happen to be acting upon it, so that there are safety checks possible at every stage of design and implementation.
It doesn’t matter how safe something is if no one is going to buy it.
Safe means "not a death trap."
That level of safety is a hard prerequisite for a viable product. There is no ambiguity about this.
This is always touted around. Fine, you're not wrong. I think the missing implicit assertion that also needs the same level of preaching is "and truly free markets".
Last I checked, the plane industry was not a free market
The A320 costs about what the 737 costs and it has a flight envelope protection system with much better safety. It's had problems in the past that Airbus has learned from and that Boeing has applied to their newer airliners, but that Boeing got amnesia for when it came to the legacy 737.
(The A320 fly-by-wire also improves fuel efficiency, lowers maintenance costs, rides out turbulence to improve comfort, etc.)
Also the lack of safety has not saved anybody any money. I think now Boeing is saying they've lost $8 billion because of the MAX problems, and if they took that plus what they spent to make the MAX they could have been a clean sheet replacement for the 737.
People are so used to the 737 that they don't realize what a backwards airplane it is. Every other airliner from every manufacturer makes some claim that it is comfortable on their official web page. The 737 doesn't because it is the least comfortable airliner (and thus is the baseline everything is compared to.) The 737 is loud for passengers, pilots, and people on the ground. The A220 and E190 are smaller planes that are much more comfortable because they are designed around the human body as opposed to 1960's aeronautics. Compared to a clean sheet design, the 737 wastes fuel, causes excess global warming, has a higher seat-mile cost, and it makes everybody miserable while doing so.
The 737 is what secular stagnation looks like.
The A320 and 737 have similar sticker prices, but it's not clear if one is cheaper to buy than the other because the prices paid for planes tend to be around half of the sticker price but the real prices aren't public.
The A320 is around 10k lbs heavier than the 737 and the A320 series burns more fuel per passenger mile (https://en.wikipedia.org/wiki/Fuel_economy_in_aircraft). The A321 NEO is nearer the efficiency of the Boeing 737-900 than than the 737 MAX 10.
The passenger comfort of the 'human focused' designs often comes at the cost of fuel efficiency.
You're right that the 737 is loud and an old design. I don't dispute that Boeing messed up their one job (making safe planes) but to call the 737 secular stagnation when the newest version is nearly three times as efficient (in terms of fuel burned to move a passenger one miles) as the original 737 misunderstands "stagnation".
An engineering prof I worked with years ago said that the 737 NG was already long in the tooth
https://www.newsweek.com/boeings-737-airplane-prone-problems...
and has a great quote from Tony: "Boeing are (sic.) stuck with a design that they want to fly forever."
It's kind of deliciously ironic that Boeing's attempts to cut corners are going to cost them more than a clean sheet redesign, but I really wonder what's going to replace the 737.
We're at the point where we're doing inappropriate things with single aisle aircraft - it's just not great that we're about to have 9 hour flights on A321XLRs. It seems like there's a natural limit of 140-160 passengers on single aisle aircraft but and hubris has us cramming 220 people in them.
Hopefully someone figures out composites enough to create lifting wide bodies but we'll see.
In a company with failing engineering quality, what typically happens is that, of all the engineers qualified to sign off, management over time tend to choose the ones who are more willing to sign off. The more careful engineers who refuse to sign off, or attempt to negotiate harder for safety before signing off, are not promoted over the less careful engineers. The result is that the engineers in a position to sign off increasingly comprise the less careful ones.
Who is to blame in this case: the management who drive the process that selects the less careful engineers, or the less careful engineers?
The leadership (including the board who are proxies for stockholders) is ultimately liable - they hire, fire, set the strategy, values, and goals for the company. They reap the rewards of profits and take on some risk. That's the difference between a regular employee and an officer. When you have a business that involves public safety like car and airplane manufacturers, a large part of your business should be ensuring that everyone from the lowest level employee to the CEO is at or above industry standards for safety.
>... if the grounding of its most popular plane persists ...
as if the grounding was an uncontrollable event, like - say - weather.
I would have written it as:
"if we (Boeing) cannot soon find a solution that is considered safe enough by the relevant Authorities ..."
EDIT: To be clear, I think the best outcome is for the 737 Max to be made safe and to fly again. If it can't be made safe, obviously cancelling production of useless planes is a good idea.
But the question still stands, hopefully someone who actually knows the answer comes along.
One thing, however, that bothers me lately is the pursuit shareholder value above all else. The commentary always arrives at that end (shareholder value) in order to justify the means every time a company's direction might not translate so nicely for customers: YouTube ads, Uber rate increases, Boeing cutting corners, etc.
Being a profitable company is one thing, but I can't help but watch and think, I don't feel any sense of compassion for shareholders losing a few bucks because they were impatient or made a bad investment. Of course Boeing's shareholders want <insert new Boeing thing> delivered yesterday, but the "bloody ROI"[1] can't be what drives Boeing development.
[1] https://www.forbes.com/sites/stevedenning/2014/03/07/why-tim...
Of course the whole point of public share ownership is profit without responsibility. The distancing of benefit from external consequences is considered sacrosanct. So this suggestion is the the worst kind of heresy.
But why should share ownership somehow magically excuse consequences that would be considered criminal in other contexts? If management has to justify its actions to people who share the risk and the blame, it's going to pay a lot more attention to consequences.
It's a simple feedback loop. It gets pretty silly when you look at the share buyback plans many companies operate, huge sums are "invested" in the company's shares for a relatively small - a few million - return to individual management.
Aerospace is a sizable part of the US economy. It really isn't FUD at all.
Oh shit, let's bail them out!
Political concern would be the micro engineering of small towns focused on single product industries and promises made to them.
Edit: Of GDP refers to a stock. Of GDP Growth refers to a rate of change. These are different.
EDIT: Also, "0.6% Of GDP growth" typically means 0.6% as relative to total GDP, not to whatever growth was expected to be. Yes it's stupid, but it's also the standard nomenclature.
And the direct quote from the article is "By one estimate, a production halt would shave about six-tenths of a percent off the gross domestic product growth rate, the financial equivalent of a prolonged government shutdown or a significant natural disaster", which clearly intends for 0.6% to be relative to GDP and not GDP growth.
That's not how economies work. The people who work at Boeing take home money and spend it in the local economy. That effect happens several times for each dollar taken home. Same thing happens for Boeing suppliers, they pay their people and those people spend in to the economy with a multiplier effect. This, spending money earned by workers, is how the engine of the economy is fueled when it is healthy.
Who do you think is going to be paid the dollars that Boeing workers are spending now, if they shut down?
This is assuming that airbus isn't doing the same things that Boeing was doing....
Impacts to GDP growth are almost always measured relative to total GDP, not to expected growth.