Boeing's top airplane salesman apologized to customers yesterday for the "pain" caused by the Boeing Machinists strike, but said the company...
Boeing’s top airplane salesman apologized to customers yesterday for the “pain” caused by the Boeing Machinists strike, but said the company owed it to airlines to “hold out for a fair and reasonable settlement.”
Scott Carson also delivered an unusual mea culpa for missteps Boeing made earlier in the decade that led the company to neglect international customers and fall behind its European rival, Airbus, in airplane sales.
“The Boeing Company wasn’t lying down. We just allowed ourselves to step back from our customers too far,” said Carson, who has led the Boeing Commercial Airplanes sales team since December.
Carson made his comments during a luncheon address to the Cargo Facts Aircraft Symposium at the Sheraton Hotel and Towers in Seattle.
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Reflecting on the strike by the International Association of Machinists that began Sept. 2, Carson acknowledged the Machinists helped Boeing dramatically improve its production efficiency in recent years and he praised them as among the best mechanics in the world.
But, Carson said, “they are also some of the best-paid mechanics in the world.”
While Boeing values and appreciates the Machinists’ contributions, Carson said, the union simply “wanted more than we were willing to give.”
Boeing has delivered no new airplanes since the strike began. Boeing understands the difficulties such delays cause for carriers, but Carson said the consequences would be dire if Boeing agreed to a contract it could not afford.
“We believe economically it is important to go through this for the industry,” he said.
Boeing is enjoying one of its best airplane sales years ever. Through Tuesday, Boeing had received 605 orders in 2005. That is more than double the 272 orders received in 2004 and the most since 1999, when Boeing won 620 orders.
The windfall is a byproduct of “the re-emergence of Boeing as a focused, driven, active competitor in the marketplace,” Carson said.
Perhaps buoyed by Boeing’s resurgence, Carson admitted that Boeing made mistakes after the terrorist attacks of Sept. 11, 2001.
Boeing worked feverishly to reschedule more than 1,000 airplane deliveries to ease the financial burden on its U.S. customers, he explained.
An unintended consequence was “we lost contact with a lot of [international] customers,” Carson said. Dedication to rebuilding those relationships has helped Boeing win major sales campaigns this year in Asia, Europe and the Middle East.
The post 9/11 downturn in orders and deliveries also forced Boeing to “recognize that we have a competitor overseas [in Airbus] that has a production system that is more efficient than our own, and fix it,” Carson said.
The comment was a rare Boeing admission that Airbus surpassed Boeing as the world leader in airplane deliveries because, at least in part, Airbus was doing certain things better than Boeing.
The subsequent implementation of moving assembly lines and other lean manufacturing techniques reduced Boeing’s costs and improved its flexibility and responsiveness to customers.
Despite its struggles, Carson said Boeing deserved credit for persisting in the development of the 787 Dreamliner, which has sold well since its launch in December 2003, and three new versions of the 777 and of the 747 Advanced, which will incorporate lightweight composite materials and new engines developed for the 787.
Carson said the outlook for 2006 is promising but 2005 would be difficult to match. Nonetheless, he expressed obvious satisfaction at the prospect that Boeing could be on the verge of besting Airbus in sales for the first time in several years.
“When you’re number two,” Carson said, “it’s not a good place to wake up to.”
David Bowermaster: 206-464-2724 or email@example.com
Ex-general to head
Boeing hired former Air Force Gen. Craig Cooning as general manager of its space and intelligence unit to help oversee projects, including spy satellites.
Cooning, who retired from the Air Force three weeks ago, will be in charge of staffing, technology development, quality control and day-to-day operations at the unit, including the top-secret Future Imagery Architecture project, spokeswoman Marta Newhart said yesterday.
Boeing, which is working to settle conflict-of-interest charges relating to government defense contracts, said Cooning’s employment was approved under new processes aimed at avoiding such conflicts. The new rules were adopted after former Chief Financial Officer Michael Sears and former Air Force acquisition official Darleen Druyun were fired in 2003 for discussing a job for Druyun during talks to buy refueling tankers.
Cooning, a two-star general, retired Sept. 1 as the Air Force’s top military officer in charge of space acquisition programs.
may restart jet deal
ACE Aviation Holdings, the owner of Air Canada, said it reached an agreement with its pilots union that may allow the carrier to renegotiate an aircraft order with Boeing.
The Air Canada Pilots Association, which represents 3,100 pilots, agreed to a binding arbitration process that gives the airline “certainty on pilot costs,” the Montreal-based carrier, the country’s biggest, said yesterday.
In June, the pilots rejected a contract with Air Canada to fly new Boeing jets because of an internal union squabble, a move that forced ACE to cancel a $6.1 billion order for 18 Boeing 777s and 14 787 Dreamliners.
An agreement with pilots would allow ACE to approach Boeing for another order.