Opinion: Will Boeing become the Next McDonnell Douglas?

 

I get this Digital Magazine in my email box because I am an airline employee and it has a lot of good stuff in it.  I thought it had some cool stuff about Boeing and the problems the company is having.  I have blogged before about Boeing and the Hiccups the company is having.  We in the aviation industry are concerned about the future of the company.  We don't see Boeing going away, but somehow it going away from its Commercial airplane division and focusing on government contracts and leaving the commercial planes to Airbus and the Chinese startups which would be a disaster for America.

   

Douglas Aircraft started down a 30-year path toward extinction when it merged with McDonnell in 1967. McDonnell management prioritized military programs and was not willing to make the investment necessary to maintain its commercial jetliner market position. By the time it merged with Boeing, Douglas’ jetliner products were on their last legs.

It has been nearly 25 years since Boeing and McDonnell Douglas merged. Given Boeing’s significant engineering cuts, program execution problems, clear prioritization of shareholder returns, extremely uncertain product development road map and deteriorating market share outlook, it is time to consider whether Boeing Commercial Aircraft (BCA) is destined to share Douglas’ fate. Three criteria are key.

1. Slashed engineering spending. Boeing announced it would cut BCA independent (noncontract) research and development (IR&D) by about 25%, and indeed, 2020 spending fell from 2019 by slightly more than that.

Yet over the past 10 years (2011-20), BCA spent $22.3 billion on IR&D, an average of 4.8% of BCA revenue in that period. McDonnell Douglas, by contrast, spent an average of just over $300 million annually on all noncontract R&D between 1993 and 1996, and this included military and space technology research. If McDonnell IR&D was two-thirds commercial, then BCA’s engineering spending has been about 10 times greater.

However, much of this BCA R&D budget was spent on rectifying problems with the 787 and 737 MAX. The rest was spent on derivatives. Boeing has not launched a clean-sheet jetliner since 2004, when the 787 began. Douglas went 30 years without a new jet launch; Boeing is at the 17-year mark.

2. Market coverage gaps. Douglas never had the product line needed to cover all market segments. But as new segments emerged, such as twin-aisle twinjets, Douglas’ coverage further deteriorated. Also, it lost single-aisle bandwidth as the MD-90 failed as a broader family.

BCA has much broader coverage, with no significant gaps relative to Airbus. But its midmarket-segment standing is a major problem (see graph). The A321neo is outselling the 737 MAX 9/10 by about 5 to 1. This implies a sizable market-share loss in coming years.

 

3. Abandoned product developments. McDonnell Douglas mooted multiple concept airplanes aimed at shoring up its market standing: the MD-XX advanced trijet, the MD-XX twinjet and the MD-12 quadjet, among others. The MD-90 was envisaged as a broad family of single-aisle jets; ultimately, just the 150-seat -30 was built, with the -10, -40 and -50/55 failing to launch.

Boeing’s history of failed concept jets is smaller but more concerning. Over the past five years, considerable engineering resources were expended on the new midmarket airplane (NMA). As Senior Editor Guy Norris wrote recently (AW&ST Feb. 8-21, 2021, p. 12), the NMA might be revived. But as I wrote four years ago (AW&ST April 3-17, 2017, p. 12), using a twin-aisle to compete with a single-aisle may be a badly flawed idea, and the idea of leveraging an existing model series—a larger 737 MAX, shrunken 787 or reengined 767—is an even worse option. Boeing needs to go back to the drawing board and create a new large single-aisle. 

These three criteria are cause for concern for BCA. Yet if Boeing does not launch a new product, industry competitive dynamics might still save BCA or at least prolong its decline. The slow death of Douglas Aircraft took 30 years. But Douglas faced two very aggressive competitors that were constantly investing in the future. If Airbus refrains from new clean-sheet launches and is content with a 60-65% market share, Boeing, even without a new airplane, might be able to maintain its current position for decades. This remains an industry with very high barriers to entry.

But if a new jetliner prime emerges, one more credible than the longtime Russian or Chinese contenders, BCA’s aging product line would be an easy target. Alternatively, Airbus could decide to make a few key investments in jetliner product development, targeting, say, the 737 MAX 8 with a stretched version of the A220 or targeting the 787 with a new clean-sheet model.

Boeing, therefore, should not rely on the complacency of competitors—that is a poor substitute for strategy or investing in the future. And a Douglas-like fate would be a tragedy for the entire industry.

How our neighbor up north viewed our elections and aftermath.

I saw this in an email my Dad sent out.   I am shamelessly cutting and pasting this.   This person said it far better than I could.

    

By Marc Patrone, Sun News network

 America is on the edge of a second revolutionary war.

    It may not be bloody like the first one, but it will be hugely important.

    Some might suggest it’s more a civil war, but with liberty and the constitution hanging in the balance, revolution seems a more appropriate comparison.

    There are no British troops or monarchy to fight this time.

    The ‘shot heard around the world’ wasn’t fired from a musket, it came from the ballot box.

    Americans have taken a long hard look at the kind of fundamental transformation promised by Barack Obama and the Democrat party and they want nothing to do with it.

    The Republican victory suggests Americans are more than just unhappy with the direction the country is headed.

Such was the devastating scope of the electoral debacle for the Democrats that it appears Americans are mobilizing for war against the Obama agenda.

    They are only now truly beginning to understand the threat to liberty he presents.

    What’s so deeply troubling, albeit not entirely unexpected, is the disdain, arrogance and contempt  with which this president dismissed the results.

    “So to everyone who voted, I want you to know I hear you. To the two-thirds of voters who chose not to participate in the process yesterday, I hear you, too,” he said.

    Meaning what?

    He seems to be suggesting that by not voting, the majority of Americans agree with what he’s doing.

    Terrifying? You bet.

    It’s taken six years, but the ugly truth about Obama’s contemptuous attitudes toward the people who elected him twice is becoming all too evident.

    Lame duck? Guess again.

    The man probably realizes that a chance to remake the U.S. according to his far left view of the world may not come around again.

    His time is running out. Obama’s ‘nuclear’ option is amnesty for millions of illegals.

    He expects those illegals will become dependents of the state, thus stacking the electoral deck in favour of Democrats by promising the new ‘wards of the state’ a suite of entitlements.

    The depth of this destructive agenda is clear, rip off trillions in wealth (which Obama believes was stolen anyway)  and give it to those whom he considers ‘victims’ of capitalism.

    The beneficiaries will naturally reward the progressive left with voter support into perpetuity. Viola, the progressive dream of a one-party state is realized.

    This has been decades in the making. The left has infiltrated, corrupted, and subverted the institutions that had, up to now, served as pillars supporting freedom, democracy, and prosperity.

    The bulk of what was once a free and independent media has been reduced to little more than an arm of the Democrats.

That tens of millions of Americans are flocking to Fox News, Conservative talk radio and online news sites is heartening but doesn’t change the fact most TV, print media outlets are in an advanced state of putrid, cancerous liberal rot.

    The same cancer has undermined the school system, ‘big labour,' the environmental movement, and the Hollywood culture machine.

    Even capitalism itself has succumbed to the lure of easy government money, power and cronyism.

    So who is left to fight for freedom? The rest of America.

    Obama will attempt to ram through amnesty, climate change, wealth redistribution and he will ignore the constitution to do it.

Republicans have assured Obama impeachment is off the table. And so the battle lines are drawn.

    Fasten your seatbelts Canada, we’re about to get a front-row seat to the battle for the soul of America and indeed the free world.

    Let’s hope that, as in the first revolutionary war, that the right side wins.

    If it doesn’t, we all lose.

media bias

I got this from here
   Cal Thomas is a far better wordsmith than I am.

If the big media in 2008 had dedicated the resources they are now squandering on Sarah Palin's emails from when she was governor of Alaska and probed Barack Obama's background and associations, she might now be vice president of the United States and Obama might still be a junior Illinois senator.
Regardless of what you think of Palin, the vultures attacking her 24,000 pages of emails may represent the most flagrant example of bias since, well, since their attacks on any other Republican. "It could be fun," said Ken Schwenke of the Los Angeles Times about the email probe.
Three TV camera crews and 30 journalists waited for the release of the emails at a state administrative building in Juneau.
What has the public learned so far from this investment of media time and money? We have these great revelations from The Washington Post: "Palin felt passionately about issues of importance to her state, the documents show, and she waged battle with foes large and small"; and she showed "concern about alcohol in Alaska governor's mansion" because of the presence of young children.
This is news?
With so many far more important issues to be covered, why have these media outlets spent time, money and energy examining Palin's emails? What were they expecting to find? A message from Rep. Anthony Weiner? Clearly they are not looking for anything that would reflect positively on Palin.
London's liberal Guardian newspaper promised "live coverage" as the emails were released. The New York Times and Washington Post asked for volunteers to help sort through the documents, offering "credit" to any they used in news stories. How pathetic is that? Since most readers of those newspapers might be considered left of center, does anyone think this exercise in voyeurism will produce anything but their intended goal: the political destruction of Sarah Palin?
Yes, I know, some people think she daily commits political suicide.
ABC News, which, in partnership with The Daily Beast website, offered breathless updates of the email dump, lumped Palin in with Donald Trump as a "sideshow." If she's a sideshow, why are they paying her the kind of attention normally reserved for a main attraction?
The answer is that Palin, along with Rep. Michelle Bachmann (R-Minn.), who is considering a presidential run, represent everything the liberal media hate: They are attractive women who are married to the same men they started with. They think big government is the problem, not the solution to our problems. They are pro-life and, gasp, believe in God.
In Palin's case, she and her husband have a Down syndrome child, which she refused to abort. Right there you have enough to offend pro-choice feminists, who treat abortion as a sacrament and appear to have no problem with eliminating the "defective," as was the case with their patron "saint," Planned Parenthood founder Margaret Sanger.
The big media, rather than being honest brokers in the process of selecting the next president, see themselves as players. Many regard themselves as kingmakers, or in Palin's case, "queen destroyers." Increasing numbers of the public regard their arrogance with disdain. It is a major reason why broadcast news ratings have been falling, along with subscriptions to the Times and Post. Rather than correct their ways, they keep on doing what is harming their publications and pretend the problem lies with the readers and viewers (now non-readers and non-viewers), rather than with themselves.
Sarah Palin's negatives are high enough and her support low enough to recommend against her running for president. But no one deserves this kind of treatment. Let her rise or fall on her ideas (or lack of them) and not on old emails.
Have they no shame? Obviously not.
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