Today’s column
Published 9:00 pm Tuesday, June 28, 2005
Subscribers to The Herald this morning got to read some highlights from analyst Scott Hamilton’s weekly aerospace industry update, which knocks Boeing executives for spending money on stock buybocks and not new jets. (Just think, those people get a hard copy of a daily report filled with all kinds of useful and interesting information, custom-printed and hand-delivered to their front door. Call our circulation folks at 425-339-3200 to get your own.)
Here’s a link to Hamilton’s recent writings on the topic, which I quoted in the column:
http://www.leeham.net/filelib/ScottsColumn62805.pdf
and
http://www.leeham.net/filelib/ScottsColumn62105.pdf
I thought the June 21 essay, which was written as the Paris air show wound down (and while I was on vacation) was particularly interesting in that Hamilton included a side-by-side comparison of Airbus and Boeing list prices — not that anyone PAYS list price, mind you, but still — and he also found an old NASA press release that crows about all the US government-funded research that went into the 777. Airbus of course, points to that as an example of US subsidies for Boeing; Boeing quickly notes that Airbus takes advantage of the same NASA-funded research.
Here’s a link to my column:
http://www.heraldnet.com/stories/05/06/29/100bus_corliss001.cfm
And here’s a link sent by an FOB (Friend of Blog) to a story that shows that Airbus parent company EADS also does stock buybacks. Thanks for sending that, Jim — that was something I really wanted to research, but Tuesday was my first day back from vacation and I didn’t have time to do that, sift through 350 pieces of spam AND write the column.
http://www.eads.com/frame/lang/en/800/content/OF00000000400004/7/81/32918817.html
OK, one more thing — Hamilton’s June 28 essay talks about Richard Aboulafia’s recent report, in which he speculates about whether Boeing will deliver the 787 on time. Aboulafia told his clients that he thinks Boeing can’t hit its targets, and will probably be six to nine months behind schedule.
That’s NOT what Boeing’s telling me. Regular readers may remember that I asked 787 program chief Mike Bair about this before Paris, and he was very confident about hitting his 2007 first-flight target and 2008 delivery date. He acknowledged that things are running a little behind, and that the plane’s a little overweight, but said he’s not losing “inordinate” amounts of sleep over it.
I chatted with Richard about this Tuesday (he was on his cell; he and his wife were shopping for ingredients for a paella, which, he reports, turned out quite well … let me know if you’re interested and I’ll post the recipe). He says he doesn’t have any insider information on this, but:
* Boeing has set itself an aggressive set of deadlines;
* Boeing is trying to do something no one’s done before (ie., build a plastic airplane);
* There is all kind of vague industry buzz that Boeing’s having more trouble with the program than it’s letting on;
* It took Boeing much longer than it expected to reach contracts with its key suppliers; and
* Most new-airplane programs in the Jet Age have taken longer than expected to get in the air.
Given all that, he said, it only seemed prudent to advise his clients — who are playing with a whole lot more money than I’ve ever had — that they shouldn’t be surprised if Boeing misses its 787 deadlines by a few months, and should factor that into their strategic thinking.
