Boeing lost 1.2B in 2022 first quarter | Hacker News Reader

Boeing lost 1.2B in 2022 first quarter

aviacionline.com

72 pointsdlcmh72 comments

I'd love to hear some insider scoops about the Air Force One contract on which they attributed $660 million of the loss. There are lots of vague statements, but no details on what really went down.

> «I’m going to call it [the Air Force One deal] a very unique moment, a very unique negotiation, a very unique set of risks that Boeing probably shouldn’t have taken,» he said. «But we are where we are, and we’re going to deliver great airplanes. And we’re going to recognize the costs associated with it.»

I'm surprised shareholders haven't demanded a better explanation yet.

The article says they are delivering two Presidential planes, total cost paid by the gov’t 3.2 billion.

Can someone explain why two these planes are more than a third of the total cost of the James Web Telescope?

What exactly do they need to do in order to protect one apparently irreplaceable man?

Don’t they fly with fighter jet escorts so the need for offensive weapons can’t be significant. Seriously, why do they cost so much?

The F-22 program was $11.6 billion, F-35 $1.7 trillion, Boeing recently got a contract to manufacture 100 more AH-64E attack helicopters at $3.4 billion.

We spend a lot on the military, including air force 1, and spend very little on science like JWT.

The joke is that F-35 is a considered a failed fighter jet project. But as a money laundering machine with no end in sight, the F-35 is a HUGELY successful endeavour.

The USA had a strong hand in blocking domestic aviation projects in countries that lost WWII.

I'm happy to see that a lot of countries are now slowly reaching viability of more diverse more or less modern jetliners. I wonder what disruption this will bring to the aviation market. It's clear that the duopoly of Boeing and Airbus is not a feasible approach to affordable aviation.

It will be even more important given that the EU wants to block more and more Russian imports. Which means that a block on titanium would further increase Airbus pricing.

As far as I can see the F-35 has actually ended up as a pretty good plane, most people massively against it (but in favour of having fighters) are either stuck in 2014 or living in a parallel universe where the (say) gripen is actually competitive.

It's an expensive aircraft but everything is expensive now, even a new F-16 is as near as makes no difference the same cost (not including maintenance...)

A plane that: - is outmaneuvered by any legacy fighter in the sky - carries less useful load than any legacy fighter in the sky - is underpowered - has a useless, unfixable gun - cannot fly high and fast because it starts peeling off its precious radar-absorbent coating - cannot be refueled by a truck that has been sitting in the sun, due to cooling issues - cannot be reliably be operated in hot & dusty environments due to risks of premature engine damage - cannot be flown by pilots below a certain weight (70+ kg, a problem for women) due to the risk of terminal, neck-snapping damage when ejecting - relies on an unwieldy, buggy maintenance prediction software that has already be re-written from scratch once, and, by the looks of it, will have to be re-written again - that has a service life of about 1/4 of the original requirement - has an operational availability of less than 60% - [..] (the list goes on an on..)

cannot, objectively, be called a pretty good plane. No. At best, it can be considered a pretty good cash cow for Lockheed and its shareholders. A bottomless pit being endlessly re-filled with dollars in exchange of empty promises.

Where it did succeed, however, is in being an excellent Trojan Horse. With all the unattainable promises it made, it lured in a few European countries, that, once it was clear the costs would sky-rocket, where in too deep to pull out. And all the cash that was wasted in the process was not used to fund/develop a competitor.

Oh. And Lockheed got lots of valuable, free knowhow in the process, in exchange of construction promises that never materialized, because, you know, top-secret developments, leak risks of sensitive technologies, etc.. So win-win for them again.

Sources?

Every time I've read about the F-35 getting killed its either in a situation where it's not supposed to be (it's not meant to be a dogfighter as per se, all the sensor fusion is for BVR) or really really old dogfights from when the jet was still having proper teething issues.

Similarly this weight limit seems to be resolved.

https://theaviationgeekclub.com/lukes-f-35s-receive-upgraded...

Within the last year or so at least two countries in Europe have ordered the F-35, competing aircraft do exist they just aren't good enough apparently.

What is the modern dogfighter though? My understanding is that the orthodox thinking was that the F-35 would be so powerful as to render dogfighting unnecessary - which is not a bar I believe it has or can hit. So it may be an effective plane, but it’s still a problem that it pulled the oxygen out of the room for developing modern dogfighting capabilities.

The whole point of the plane is to never dogfight. If it gets into a dogfight, it's already failed.

Ukraine has raised the question of what the right tradeoff is between numbers of fighters at $100m each vs small drone munitions such as the Switchblade 300 (~$5000, but single use). There has been remarkably little use of air power in that war compared to anti-tank weapons, artillery, and drones.

Ukraine just called their Bayraktars useless, and all the stingers, switchblades, Javelins, NLAWs have not delivered on their promises.

I have sent my friends and families videos of Javelins and Switchblade videos marvelling at how amazing these pieces of tech are. But given the numbers that have supposedly been pouring into Ukraine and what is realistically happening it seems more like an unrealistic sales video than actual performance.

So you might want to rethink that. By all measures the war in Ukraine is fought with Artillery + reconnaissance drones right now. And the one with the better recon and artillery seems to be winning.

To your cost tradeoff. It actually seems more like the real tradeoff is cheap armour that your factory can churn out at a realistic pace, while being an uncomfortable powderkeg vs. really expensive equipment that you're too worried to use, because for every one that you use the other side can build 6.

> The USA had a strong hand in blocking domestic aviation projects in countries that lost WWII

And in those who were on the winning side too.. Likely in large part due to pressure from America, Canada killed the Avro Arrow and bought American Voodoos instead.

The 1.7 trillion figure is for the projected cost of the program till at least 2070. Less than half that has been spent so far.

> We spend a lot on the military, including air force 1, and spend very little on science like JWT.

Silly humans. Don't even have anyone to fight but themselves.

Maybe if our telescopes were better we could find more civilizations to fight!

Some years back, the plane the German air force uses to transport politicians broke, and Angela Merkel was scheduled to take part in a conference in South America. So they just booked for her and her immediate staff business class tickets on a commercial plane going there :) There was an interview with a German who sat in the next row from her and even had a small chat.

A plane maintained by Lufthansa. That was really good advertising for the dependable, reliable, made-in-Germany.

And to add insult to injury, she needed to fly with Iberia to get there on time..

> made-in-Germany

Are Lufthansa planes made in Germany?

The exact details are classified, but, if the current aircraft are anything to go by:

Military-grade sensors, telecommunications equipment (the current aircraft have 87 telephones and 19 televisions each), additional exit points, a completely remade interior, including the President's private quarters, a kitchen, storage equipment, cold storage equipment to store enough food to serve hundreds of people (or a few dozen people for several days, there was an article about a $20M fridge a few years back), anti-nuclear shielding, reinforced glass, separate quarters for guests, senior staff, Secret Service and security personnel, a medical annex, which includes a fold-out operating table, emergency medical supplies, and a well-stocked pharmacy, the president's executive suite, a conference room, modified engines.

Air Force One does not have a fighter escort most of the time.

Is it possibly over-engineered?

I would describe it more as made-to-order / custom rather than over-engineered. Over-engineered would suggest that the complexity of the engineering is unwarranted by the requirements. I think in this case, the issue is just that the requirements are very high, and since the requirements come from the customer, they simply must be met.

If you consider the military the end customer, sure. But take a step back and the military is the just the defense vendor for the People. If the People don't need their president to be supplied with all that tech, then the military has over-engineered their solution to the People's "our president should be able to move places relatively quickly and relatively safely" problem.

The President needs to be able to do their job as President from these planes while in the air, including some of the more unique responsibilities of the job like directing a nuclear war. The requirements go pretty far beyond just providing speedy and safe transit.

My point is that the presence of unusual or even absurd requirements is a different thing than over engineering, even though the results can seem similar. If a design incorporates complexity that is not warranted by the requirements or the constraints, it can be described as over engineered. Requirements can cause the same complexity, but it is now warranted.

You may, of course, disagree about the requirements, but that really is a matter of risk tolerance, and preexisting policy.

I've wondered about that. Protecting the president's life isn't worth infinite investment, but I think the planes also serve as command posts during warfare, including nuclear war. That's worth quite a bit.

It's definitely over-engineered, which is the point. The plane needs to be ready for multiple situations.

Do you know how many televisions and telephones a commercial 747 has?

> total cost paid by the gov’t 3.2 billion.

The sticker on just the two planes, without modifications, would be $0.8 billion. So it's a $1.2 billion increase per plane.

> Don’t they fly with fighter jet escorts

Not usually

> What exactly do they need

This is classified (or more secret than that). But you can imagine it needs to be resilient to atmospheric nuclear blasts, have the ability to support tons of communication gear, internal security, radar jamming/chaff systems, infrared suppression, support for press operations. There are rumors about things like onboard surgery suites.

> But you can imagine it needs to be resilient to atmospheric nuclear blasts, have the ability to support tons of communication gear, internal security, radar jamming/chaff systems, infrared suppression, support for press operations. There are rumors about things like onboard surgery suites.

Why?

They might be useful to help the president in case of an emergency.

Following Abraham Lincoln's "I can make a brigadier general in five minutes, but it is not easy to replace a hundred and ten horses", an alternative would be to accept a higher risk of losing the President and having to failover to the hot spare, in the weird and unlikely circumstances that the AF1 measures would actually help. Thereby saving a few billion dollars.

Zelensky seems to be doing OK in a helmet and flak jacket. I did check whether he has a presidential plane - the previous president was a notorious big spender - and the answer appears to be a leasing co. https://en.wikipedia.org/wiki/Ukraine_Air_Enterprise based at Boryspil airport southeast of Kyiv. "Temporarily closed" on google maps.

I think it's not just about keeping the president alive, but also about keeping the president functional. A president who's alive but trapped in a plane without good communication isn't very helpful to the country. In a time of emergency the president needs to make decisions and communicate them quickly.

Because the theory that the president is easily replaceable is not widely accepted despite a bench of more than a hundred million backups.

The American president lives like a Roman emperor surrounded by his Praetorian guard. It seems kinda sad for a democracy.

Perhaps if Americans could stop shooting at them, the security could be relaxed a little.

Can someone explain why two these planes are more than a third of the total cost of the James Web Telescope?

The same general reason, they are very complicated and need to work perfectly for many years with a lot of challenging constraints. First off they need 2 of them to create coin flip risk for attackers. Then they need to be adapted for mid air refueling so that they can stay airborne indefinitely in the event of nuclear war. Speaking of Nukes all the systems need to be hardened against EMP. The climate control system is probably equipped to filter out any biological or chemical agents. All or parts of the aircraft are probably armored to mitigate small arms fire. The planes keep a Nasa Apollo capsule in their belly so that the president can jettison from the plane in the event that is necessary, that's probably a pain in the a* to install. The whole aircraft is probably setup to mitigate surveillance attacks with things like windows that deliberate vibrate to thwart laser based audio eavesdropping. Then each plane needs to host a few dozen staff and reporters who accompany the president. Then also the 747's travel with cargo planes and/or Ospreys also made by boeing to transport the armored limos and/or helicopters. All or some of those support aircraft might be included in the price. Probably a bunch of other classified stuff I haven't thought of. Still outrageous but I can kinda see why it adds up to billions.

The Presidential limo is also terrifyingly expensive.

You bejewel a plane with the president’s name, then suddenly there’s a new president! Your fixed-price contract just got a lot more expensive.

Air Force one has never mounted offensive weapons. The danger of having offensive weapons on the plane is too great.

It does likely have countermeasures of some kind, but obviously I have no idea what kind.

Those planes also have to be designed to survive EMP, they have special communication equipment to be used talk to the military, I think they might have the ability to have a really long and antenna they have a special low frequency communication system for submarines under the water, hey can do something like put a long wire out behind the airplane. They have some way to eject the president and an emergency ;-) they have anti-missile systems.

> Can someone explain why two these planes are more than a third of the total cost of the James Web Telescope?

Because they're complicated and custom, just like that telescope?

Here are some more details about the Air Force One deal: https://www.cnbc.com/2022/04/27/boeing-lost-billion-dollars-...

They outsourced it for some reason to some weird company. You would think a multi-billion dollar contract would be enough money.

> I'm surprised shareholders haven't demanded a better explanation yet.

I think we all know what happened.

They have to kick out the MBAs. They ruined the company.

Better keep them contained there.

Imagine the damage all these ex-VPs of whatever could do if unleashed.

mmm I'd rather they work on something 100% useless like NFTs, instead of airplanes.

Non Flying Things

Too late, they already took over Amazon's drone program[1]. Who knows where else they've spread?

[1] https://dronedj.com/2020/03/31/ex-boeing-executive-to-spearh...

I just made a headcount. Of the 22 members of Boeing's Executive Council, 9 have a MBA, and 1 has a Master of Science in organizational management. Still, a slight majority of Boeing executives do not have a MBA.

Are any of them aeronautical engineers?

9 of them have engineering degrees (mostly aerospace, aeronautical, and mechanical engineering)

It’s not really boeing anymore though, not since McDonald Douglas reverse acquired them

That was a brilliant move. Take over Boeing by having Boeing buy McDonald Douglas with Boeing money. The heist of the century!

It doesn’t matter what Boeing loses. Uncle Sam will backstop. This isn’t a nightmare. It’s just life. The idea that the US would allow any poor outcome for Boeing is like believing PG&E will go bust.

Uncle Sam will ensure that the US has an aerospace industry adequate to meet military needs. Whether this will forever include Boeing I'm not certain. Seems like there is an opportunity here for companies such as Lockheed to make a move?

Almost all of the USAF's cargo and tanker jets are made/supported by Boeing. Big jets are not Lockheed's competency; the C-5's development was a mess, and Lockheed hasn't been in the airliner business since the Tristar failed. Almost seeming to mirror this, Boeing seems to be useless at making fighter jets.

Also, the US Government would be wise to preserve their domestic airliner industry. Suppose the US decided to invade Iraq a third time and the EU responded with sanctions, cutting off US airliners from Airbus. This is the sort of situation Russian airlines faces today, but who's to say it couldn't one day happen to America if Boeing no longer existed? It's not as though America is any stranger to waging unpopular wars.

Lockheed could probably still do it, but these days Boeing itself contracts out a lot of the manufacturing to companies like Spirit Aerosystems. The real capability Boeing has is in engineering and systems integration, and those capabilities are looking shakier than they used to.

One dark horse competitor to Boeing is Gulfstream. The G700 is a business jet, but it has a 53 ton takeoff weight, which is about as much as a 737-100. Gulfstream also delivers plenty of aircraft to the military and is part of General Dynamics. They pretty clearly have the capability to make largish jets.

Regarding Gulfstream, we saw how a similar thing played out with Bombardier and their C-Series. It had cost overruns and delays, but in the end resulted in a pretty good plane that would have been successful if not for US protectionism and Boeing being afraid of any competition. Instead Bombardier are ruined, had to do a fire sale, and Airbus got the C-Series programme for free.

> Suppose the US decided to invade Iraq a third time and the EU responded with sanctions, cutting off US airliners from Airbus. Now why would they invade Iraq a third time? The second time was already unjustified, unlawful and borderline genocide..

> This is the sort of situation Russian airlines faces today, but who's to say it couldn't one day happen to America if Boeing no longer existed? It's not as though America is any stranger to waging unpopular wars.

Not at all. Russian airlines face that situation because Russia decided to nationalize planes that did not belong to them.

No, Russian airlines cannot service even the planes they legally own outright, insofar as those planes depend on parts made by western companies that are no longer allowed to sell plane parts to Russian airlines.

Uncle Sam won't backstop the shareholders. See: AIG.

The company won’t be allowed to dissolve. What that means for shareholders, who knows? In the worst case, the government buys the company outright.

In the nightmare scenario it probably looks a lot like the GM bankruptcy where shareholders get wiped out. New GM was owned by a combination of the government and the unions and eventually IPOed again.

That was then. Things have changed. Will buy BA to prove skin in the game and that I believe.

"in April 2020, it had already declared it would cost 168 million for «engineering inefficiencies» caused by the pandemic" -> what do they mean blaming engineering inefficiencies on the pandemic?

Could be delays caused by engineers not able to show up to the office/factory.

or maybe the cost of redesigning things around chip shortages or other supply issues of specific components?

Americans hiring outside of US: "you realize that with 45k USD salary you'd be in the top 5% of your country's population? Best we can do is 35k USD".

Americans spending on their military: "billion here, billion there, everyone gets a billion".

The cost does seem excessive, but it’s surprising that Boeing would make such a bad deal given that the U.S. government had no real alternative. What is the president going to ride in, an Airbus?

If Boeing didn't win the contract, it would have likely gone to other US contractors. They would have purchased 747-8 airframes from Boeing and modified them in their own facilities.

Lockheed comes to mind as a company capable of doing this.

They need to open source they’re engineering specs abs let startups have at it.

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