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(photo: Matthias Rhomberg)
A disheartening report from Glenn Hurowitz at Grist a couple of days ago:
Most underplayed economic story of the week: European aircraft manufacturer Airbus “trounced” the traditional U.S. behemoth Boeing at the Paris Air Show, booking a record $50 billion more in orders for new planes. The reason: commercial plane buyers’ demands for high fuel efficiency and low emissions…. Airbus racked up a whopping 730 new plane orders compared to a measly 142 for Boeing….
That giant sucking sound you hear is approximately half a million well-paying American jobs leaving Boeing factories in Seattle and other parts of America and heading to Airbus facilities in Toulouse, Seville, and Hamburg…
… As Rick Perlstein wrote in his seminal essay “The Stockticker and the Superjumbo,” Boeing is still paying for abandoning its once-successful strategy of long-term investments in innovative, groundbreaking products like the 747 jumbo jet in service of short-term profits meant to goose its quarterly earnings. Meanwhile, Airbus has maintained a decades-long commitment to the kind of painstaking, long-term R&D that helped it deliver the star of the Paris Air Show, the hyperefficient A320neo.
And it gets worse:
I wish I could report that the president was providing a counterweight to this anti-innovation attitude, in the same way he has signaled that he’s going to force American auto companies to achieve moderately ambitious increases in fuel efficiency. But just as Airbus was drubbing Boeing at the Paris Air Show, the Obama administration took the opportunity to announce that it would insist that Europe-bound flights on U.S. carriers be exempted from European laws requiring them to cut their emissions. If you can’t beat ‘em, unleash the lobbyists.
Of all the many, many disappointments the Obama administration has brought us, this personally ranks pretty high. As a candidate, Barack Obama really seemed to grasp the potential of a “green recovery” to make economic and environmental progress at the same time — more so than the mere expedience of being a political candidate seemed to require. But despite ongoing noises in that general direction, there has been the all-too-familiar lack of results.
When short-sighted corporate thinking meets weak-willed politics, the outcome is rarely good for the rest of us.
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Hey Michele Bachmann … get on that jet plane and leave … before we learn even more about you.
Michele Bachmann Exposes 23 Minors to Possible Pedophile
Let me state at the outset that everything you will read after this sentence is based on logic, but only as logic applies to someone with Michele Bachmann’s belief system; if Bachmann really believes what she claims to believe, then her conduct in exposing 23 minors to whatever risks her home might have posed to those minors…
Article:
Michele Bachmann
swopa!
This isn’t change I can believe in; it’s unbelievable how little things are changing.
This is crap Boeing can’t sell planes because the ones it has to sell are older than the Bush administration. Boeing not doing research?
Ever heard of the Dreamliner it was suppose to be launched 4 years ago it was at the time very high tech. But Outsourcing and right o work states could not deliver the parts on time to make the plane.
Boeing is going down because it wanted cheap non union labor.
The current US, (not just Boeing), business model. And whenever it inevitably fails, it must be because we weren’t conservative enough or something. It has nothing to do with the greed of the shareholders, Heavens no!
Boeing’s unveiling of the new 787 Dreamliner, auspiciously timed for 7/8/07, drew a crowd of 15,000 employees and their guests to Boeing’s Everett, Wash., facility in a manner fitting for what is the most successful, fuel-efficient commercial jetliner in history. To date, 47 carriers have ordered 677 of the planes. Carbon fiber composites make up 50% of the plane’s material by weight (compared with only 12% in Boeing’s last released jetliner, the 777), enabling Boeing to offer cost savings and more passenger comfort to airlines.
Why the fanfare? Boeing is confident that the advantages offered by the Dreamliner for passengers, airlines and the environment is a winning combo. And a lot of it is thanks to the plane’s composite construction. Optimally, the 787 will get 100 miles per gallon per seat, compared to the 76 passenger miles per gallon of a 767. Air filters will reduce the smell of fuel.
http://www.time.com/time/business/article/0,8599,1641341,00.html
http://my.firedoglake.com/thingscomeundone/2011/06/08/i-heard-this-line-before-it-didnt-work-before-so-why-does-time-think-it-will-work-this-time/100mpg per seat vs 76 mpg per seat this is not innovation?
Destroying jobs is also a job for the private sector, right, Barack?
That too. Maximizing profit by cutting innovation and labor costs. Who coulda predicted it wouldn’t end well for them? Oh yeah! Me and everybody else who was paying attention.
Boeing had originally planned for a first flight by the end of August 2007 and premiered the first 787 at a rollout ceremony on July 8, 2007, which matches the aircraft’s designation in the US-style month-day-year format (7/8/07).[45] However, the aircraft’s major systems had not been installed at that time, and many parts were attached with temporary non-aerospace fasteners requiring their later replacement with flight fasteners.[46] Although intended to shorten the production process, 787 subcontractors initially had difficulty completing the extra work, because they could not procure the needed parts, perform the subassembly on schedule, or both, leaving remaining assembly work for Boeing to complete as “traveled work”
On September 5, Boeing announced a three-month delay, blaming a shortage of fasteners as well as incomplete software.[50] On October 10, 2007, a second three-month delay to the first flight and a six-month delay to first deliveries was announced due to problems with the foreign and domestic supply chain, including an ongoing fastener shortage, the lack of documentation from overseas suppliers, and continuing delays with the flight guidance software.[51][52][53] Less than a week later, Mike Bair, the 787 program manager was replaced.[54] On January 16, 2008, Boeing announced a third three-month delay to the first flight of the 787, citing insufficient progress on “traveled work”.[55] On March 28, 2008, in an effort to gain more control over the supply chain, Boeing announced that it planned to buy Vought Aircraft Industries’ interest in Global Aeronautica;[56] the company later agreed to also purchase Vought’s North Charleston, S.C. factory.[57]
http://en.wikipedia.org/wiki/Boeing_Dreamliner#Production_and_delivery_delays
http://my.firedoglake.com/thingscomeundone/2011/06/08/i-heard-this-line-before-it-didnt-work-before-so-why-does-time-think-it-will-work-this-time/
Boeing’s problems stem directly from trying to break their Union.
Boeing can’t get good quality parts from China until they learn from Apple and work their employees so hard they have to put up Suicide Nets outside their factories like Apple does.
Or they could just hire Union workers and get good quality parts on time.
I got on this story after talking to you:)
Swopa as usual has an informative post supported by good research. With fishing in the tank Seattle will be in deeper than they already are. Those right to work jobs are going to well paid European workers. Obama’s legacy will not be celebrated by anyone as the beneficiaries are not his supporters either. How stupid is that?
There will be hundreds of suppliers for the engine, ranging from United Technologies’ Hamilton Sundstrand division to Sweden’s Volvo.
Pratt & Whitney president David Hess admits that the PurePower engine is very much a bet-the-company proposition.
http://www.time.com/time/business/article/0,8599,2072437-2,00.html
http://my.firedoglake.com/thingscomeundone/2011/06/08/i-heard-this-line-before-it-didnt-work-before-so-why-does-time-think-it-will-work-this-time/
Pratt has a new jet engine very high tech but they are outsourcing like Boeing did I expect Pratt to have the same problems as Boeing I expect first Boeing and then Pratt will need government bailouts.
If I recall correctly, the Korean free trade deal (gag me) also was held up because the Korean’s didn’t want our low gas mileage cars and our biologically (on multiple levels) shitty beef.
Unless Microsoft has a great new product soon Seattle real estate prices will dive even more any news from Bill about a new product?
I heard stories in the 70′s Boeing had problems and so many locals left Seattle there were jokes people leaving told the ones who stayed.
The last one here has to turn off all the lights before they leave.
Shareholders hire board members, who hire executives, who hire management, all to increase shareholder value.
To keep the CEO (etc) focused on shareholder value, they hand out lots of stock options.
That’s been going on for many years, and it actually isn’t a terrible system. So what has gotten FUBAR lately?
Low taxes.
If taxes are high (say 60%) and long-term capital gains require holding for the LONG TERM (say 20 years, not a year-and-a-day), executives are incentivized to build shareholder value over the LONG TERM, which means R&D, a well-trained and efficient and healthy workforce, etc.
When taxes are low (so the advantage of long-term capital gains is swamped by short-term market fluctuations), and the holding period is short, executives are incentivized to goose profits over the short term. So that’s what they do.
Shareholders want the short-term goose as well, and for the same reasons. They want to flip the stock. They aren’t investors, buying a part of a company and prospering along with it, they are all speculators.
Low taxes are like trying to live on pure sugar. Unlikely to have a positive result over the long term.
There are rumors of Windows 8 by fall 2012. Just rumors.
But it doesn’t really matter. Microsoft is a boring company now. It’s too big to experience significant growth. Even entering a new market, like game consoles, where they are pretty successful does very little to the bottom line.
Bingo.
A 1/2 million jobs lost but O won’t back Unions and the GOP won’t say anything about outsourcing or how their right to work states are directly responsible for killing 1/2 million jobs by making Boeing wait 4 years to and counting to build the Dreamliner.
Greenspan and Thomas Friedman both need to look at the Real World effects of free trade before they promote their theories.
What ever happened to experiment then report the results? Pulling theories out you ass ended with Aristotle.
Will it be big or a yawn? Big might save Seattle a Yawn dooms it. Lose seattle Washington State goes from Blue to Red…Very Red.
It’s sad to point out, but a whole lot of Democrats, and progressives even (Rachel Maddow, etc..) turned into Boeing cheerleaders when the Boeing 767 was competing against the more advanced EADS (aka Airbus) 330 for the new Air Force tanker contract- We need to save all those union jobs! But the thing is, if Northrop Grumman/EADS won the contract, they were going to eventually move production of all the tanker/freighter 330 models to the United States- including ones that were sold oversees. It would have been the start of American production of Airbus aircraft, which is exactly what Boeing wanted to prevent.
While Boeing finally won the tanker contract after it was tossed out and re-bid (Yea union jobs!) It decided to move production of some of its new 787 aircraft to non-union South Carolina to punish its union workforce for actually having the gall to strike…
Win8? No bigger than Win7. New machines will get it installed. Big companies will buy site upgrade licenses once they think it is stable. Lesser geeks will upgrade their own machines (greater geeks run Linux). There will be solid revenue, but nothing that gooses the stock price.
No, Boeing taking a major hit like this will utterly trash the Seattle housing market.
The US military is by far the worst polluter on the planet. I’m sure that the American public would be appalled (probably not come to think of it) by the amount of jet traffic between the US and Iraq and Afghanistan! How do you think all those billions of dollars of crap we’re wasting in these countries gets there?
More or less, you hit the nail. Same this as what stuffed Detroit, as well. Shareholders & CEOs went into short/quick profit mode, rather than long-term investment. Detroit built shittier & shittier gas-guzzling vehicles that fell apart after a few years’ use. Detroit CEOs “blamed” it on “poor marketing” and, of course, their all-time favorite whipping boy, the Unionized workers.
I’m no auto engineer, but even I could point out numerous design flaws with just about any US-made car. There was no point in buying them bc you weren’t really supporting the US workers; you were just pouring your good money into greedhead pockets for a crappy product that polluted more than any other vehicles out there.
So now Boeing, which has been riddled with similar problems, is in the same spot, but the conservatives will jump on the band wagon to blame allegedly overpaid lazy US unionized labor… and the bulk of the populace will go along with it… just as they lined up wag their fingers in blame at Detroit when the crash happened.
The stupidity, cupidity & vapidity are so overwhelming anymore… it’s just an endless series of dumbitude ju jour enabled by the greedheads at the top but incessantly blamed on the lower 99%. As long as US citizens continue to go along with this nonsense… well, what’s tomorrow’s story du jour?
Point that out to your friends and acquaintances and watch their reactions. Almost everyone I know could care less… their eyes glaze over and then the subject gets changed. US citizens have been programmed to not give a sh*t about “trivia” like that… more’s the pity.
Payback’s a bitch.
(Reuters) – Secretary of State Hillary Clinton said on Thursday the United States was concerned that recent events in the South China Sea could undermine stability and opposed any threat of force to advance territorial claims. Clinton, appearing with the visiting Philippine foreign minister, repeated that the United States had interests in the South China Sea, where China and its neighbors have seen tensions flare over competing maritime sovereignty claims
in other news:
At Paris Air Show, China Helps Airbus Beat Boeing == China aviation and aircraft leasing companies helped Airbus surpass Boeing in newly signed purchase agreements at last week’s Paris Air Show in Le Bourget, France. Airbus signed agreements for the purchase of 88 A320 single-aisle aircraft with China Aviation Supplies Company (CAS) and ICBC Financial Leasing Co, Airbus said in a press release posted on its website on June 28.
I think we can refer to a low-tax regime as a “hummingbird economy”.
I like to think that Seattle will endure, but Detroit is a haunting example. I’m from Michigan, went to school in Ann Arbor. A childhood buddy of my father’s was an auto engineer at Ford. There were little factories producing things like transmissions and such in every town of any size. Even my little town, where my high school graduating class had 104 people, had a small auto parts plant for a few years.
The ruins of Detroit weigh on my mind. Places that I was warned against going by the people I went to college with (many of them from the wealthy burbs of Detroit) have completely returned to the forest now. I’ve got collections of photos from on-line, and a nice book from a guy who specializes in such things.
Gary, Indiana is the same way.
What sort of civilization is wealthy enough, or careless enough, or foolish enough, to discard cities like they were hamburger wrappers, tossed out the window of your muscle car.
Wither goest thou, America? Wither goest thou in thy shiney black car in the night?
In addition, when taxes are higher, the government can provide better “incentive” with a tax code that credits long term investments in labor and technology (both for corporations and individuals). But, all of that is moot when you have control fraud and collusion between government and corporations with lobbyists writing the tax codes.
Do commercial buyers in other countries ever ask the question, if they treat their OWN labor force with disdain, how will they treat me as their customer? Can I expect them to innovate if their primary concern is cost cutting?
Nice poetry about a very sad topic. I feel similarly. I spent time in my youth in Ohio, which had a lot of spill-over from Detroit in terms of various kinds of factories and plants. Nearly all is gone now with not much happening and Ohio, I understand, is pretty dead in terms of jobs.
Recently EdenPure opened some kind of a factory in Canton Ohio, and I guess thousands turned up to apply for some paltry number of min wage jobs. Well that’s what they want, isn’t it? People so desparate that they’ll work for min wage probably with no benefits and certainly no collective bargaining rights.
I have a very part-time job that pays paltry wages, but that company is doing everything in its power to downgrade our palty pay to min wage. It’s happening right before our eyes. I happen to know that the CEO makes more than $5mill/year, plus stock options, benefits, etc. Of course, in terms of the MOTU, $5mill is chickenfeed, laughable… so of course, workers are gonna get the shaft. In the meantime, that company that I work for is doing an increasinly LOUSY job at enabling workers to provide good service to our customers. Corporate this year is constantly *yelling* at us (via email) to sell sell sell sell more products, but guess what??? Consistently we do NOT get products to sell.
I don’t know exactly what’s going on. I have customers all year who are ready to buy stuff, but I don’t have the things they want to sell to them. customers are getting disgusted or bored and wandering away. Yet corporate keeps “yelling” at staff about not selling enough.
It’s kind of weird and eerie what’s happening… I’m glad I don’t rely on this job for my mainstay pay (albeit in today’s economy who knows). But some staff certainly do, and they’re finding it harder and harder to make ends meet. But I find that most of them are conservative votes and go along with the status quo…
What a world we live in anymore.
Apparently this is not a situation that you can take advantage of on your own?
Spot on -
also Boeing does what the civilian head of the Pentagon demands because you see “its a national security thing” (to subsidize the building of airframes within the US). Low emissions and high mileage are not US Oil/GOP/GWBush objectives.
GREAT example Swopa of why we are failing in all aspects of this nation.
If I could I would Rcc’d it. N I do.
Great story n diary.
Bless ya.
Europeans can afford to pay for quality when quality is most important simply (!) because they don’t have to pay excessive health care insurance premiums. European workers and employers. But what do I know.
Effin OT a bit early without the decency to say so?
Crude.
That stupid immense ABus can’t handle today’s airports, though. It crashed its wing into a retaining wall in Paris and the manufacturer had to borrow a Japan Air Lines plane for the show. Kind of embarrassing when your top-of-the-line aircraft has to tiptoe around the jetway for fear of banging into something.
Boeing has been doomed for a long time. But the moment that stands out in my mind is when Debbie Hopkins, the neoliberal, Wall Street approved, spokes-ditz who had found her way into senior finance management during the 2000 SPEEA strike, asked stridently “Why does Boeing needs engineers anyway?” It was an amazingly stupid question for the chief finance officer of a company whose main asset was its engineers.
Eventually, SPEEA “won” that strike (No nerds, no birds) and the money boys were so outraged they insisted that the management of Boeing relocate to Chicago so as to avoid any hint of solidarity with the people they needed to build their airplanes in Seattle.
So now the greatest aircraft manufacturer in history cannot deliver aircraft ordered and paid for and gets trounced at the 2011 Paris Air Show by Airbus. It was the inevitable outcome of the MoTU believing that even rocket scientists are just another form of labor to be screwed. Ah yes, the banksters can screw up ANYTHING.
money boys were so outraged they insisted that the management of Boeing relocate to Chicago
Guess it wasn’t the magic lure of the great Chicago Symphony Orchestra after all.
We will pass into myth simply because the plain facts are too incredible.
Gad. I notice nobody has mentioned that Airbus is a state owned company with no need to turn a profit to exist. Would you taxpayers out there like to contribute a few bucks yearly to Boeing so they can design greener airplanes?
How’s Govt motors in Detroit doing by the way? Is everyone on board to spend $40,000 to buy an electric car?
Duh.
http://www.reuters.com/article/2011/05/18/us-eu-usa-aircraft-ustr-idUSTRE74H4LH20110518
Yes Airbus is a protected industry. But so is Boeing. Do you really think there would have been a 707 without the KC-135? ETC!
Boeing has been a BIG recipient of government money over the years–a fact noted whenever Airbus EADS is mentioned in trade hearings.
Interesting what you write. Actually, there’s sort of an earlier precedent. The mining communities of the UP were once thriving, though never massive cities like Detroit of course. To see the state of them today is also shocking. When I lived in MI and visited, I was reminded of the depopulated and abandoned parts of eastern Russia I know. There, the abandonment is much more recent, but the process is broadly similar and apparently, there is no recovery.
Aha, the little Glibertarian troll is back.
Now off to the itulip.com forum with you. Go and play with the big congregation of randian fuckwits where you belong.
When you own the government there’s no need to innovate. American exceptionalism at it’s best.
The Audacity of Hope springs eternal.
US to Old Europe: You’ll take our smoking gas guzzlers and you’ll like it.
You want green? We’ll paint them green. USA USA USA!
At the Paris Air Show there were representatives from a number of states trying to convince foreign companies to relocate to their state. There biggest selling point to the foreign companies, they wouldn’t have to worry about unionized labor. I suppose if there had been representatives from Somalia at the air show they could have used the same argument.
I thought around 2003 everyone was cheering Airbus for being farsighted by building the world’s biggest plane. When no one wanted to buy them (and airlines started backing out and production delays started) then people became a little more rah rah about Boeing, who’d gone in for a more fuel efficient stretch version instead.
Now maybe that’s the Dream, don’t know, but count the dollars when it’s flying. Including this assessment of Boeing’s rosy glassed venture into outsourcing: http://articles.latimes.com/2011/feb/15/business/la-fi-hiltzik-20110215
This industry goes back and forth. When Boeing decides by end of year, my guess they’ll be max 2 years behind out of gate. Lots of speculation what China will do as well, but I’m skeptical.
Swopa, thanks for this! I’m finally starting to put the puzzle pieces together in my head. The same things that you describe here that are destroying American industry are now being brought to bear on American public schools.
I’ve been baffled as to why experienced teachers are being driven out of classrooms by the “reforms” that are so popular with Obama’s administration. They are part and parcel with the short term profit mentality. Experience costs money in salaries and benefits so teachers who actually know how to teach and manage a classroom are being driven out to be replaced by low-wage, inexperienced recent grads everywhere you look.
America is eating our seed corn and I don’t see a future for us anymore. Once these MOTU’s have destroyed everything we once held dear in the name of quarterly earnings what will we have left? Not enough to start again it seems.
I believe that employer is Foxconn. I won’t buy anything I know is made by Foxconn.
HRT, anyone? Pulling theories out your ass is still very much in vogue.
I do not believe this is one person’s disappointment. As one president once said, “you get enough people to fight for a cause and I will champion it”.
Without a strong movement things don’t happen. Take the very long struggles, such as Black People’s rights, or Women’s rights ( to own property, vote, own a business, equal pay, etc.), have peace on earth (pretty difficult task), etc.
So many of us can blame the present president, with justifiable reason, but look at the people on both sides of the aisles (we call political leaders). There is very few that we can sider as real thinks, moving this country forward!
It is all a game, but the question is how are you playing it?
No. I work for a company. I don’t have the capability on my own to manufacture and/or somewhere purchase the very specialized products that my customers are seeking. I’m not sure what you’re driving at.
If you work in Macy’s, for ex, and Macy’s doesn’t have something that a customer wants, then what is the sales associate meant to do? run down the street, buy something at Nordstrom, run back and sell it under the counter to the Macy’s customer (who’s somehow been patiently standing there waiting)???
People come to certain businesses for certain purposes. They want the stuff that that particular business is selling. This isn’t rocket science.
Frankly most bigger US corporations are heavily subsidized by the YOUR tax dollars and MINE. It’s risable how libertarians love to live in a dreamland created by crapulous “author” Ayn Rand, which posits that all the giantorundous US corps are these “free standing” corporations doing everything on their own. Not by a long shot. Most of ‘em get all kinds of tax breaks, loop holes and tax incentives.
I’d love to see all those CEOs and their high-falutin’ shareholders make as much money as they do now without all the money that YOU and I contribute to their day-to-day running… all while the off-shore US jobs to third world countries.
Very sweet for the upper 1% to *enjoy* corporate welfare while pointing fingers of blame at alleged “slacker” poor people in the USA.
Is there some reason to believe Obomba is weak-willed? I think he’s thoroughly focused on his concerns, such as bombing other countries to prove he’s worthy of his Nobel!
It’s amazing how globalization is only about offshoring our jobs to low wage countries, but has nothing to do with corporations actually producing competitive products in the global market place. It’s all just more government sponsored bullsh*t, and symptomatic of the corrupt relationship between government and business.