 |
|
December 2, 2014
The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014
Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology
John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain
The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious
April 14, 2014
Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time
Eric Schulzke: First degree: How America really recovered from a murder epidemic
Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships
Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin
Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate
Justin Caba: Eating Watermelon Can Help Control High Blood Pressure
April 11, 2014
Rabbi Hillel Goldberg: Silence is much more than golden
Susan Swann: How to value a child for who he is, not just what he does
Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer
Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You
April 9, 2014
Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?
Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau
Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau
Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease
April 8, 2014
Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease
Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear
April 4, 2014
Amy Peterson: A life of love: How to build lasting relationships with your children
John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet
John Ericson: Why 50 million Americans will still have spring allergies after taking meds
Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves
April 2, 2014
Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?
Frank Clayton: Get happy: 20 scientifically proven happiness activities
Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene
|
| |
Jewish World Review
Jan. 18, 2007
/ 28 Teves, 5767
Boeing's winning hand
By
George Will
| 
|
|
|
|
http://www.JewishWorldReview.com |
CHICAGO — After an excellent year, Boeing is counting its blessings, which include its competitor. They also include an anticipated doubling of the commercial aviation market in the next 20 years, which will require 27,000 new planes, costing $2.6 trillion.
Americans ambivalent about globalization should note how Boeing, under chief executive James McNerney, is prospering. The Sept. 11 attacks devastated commercial airlines, causing Boeing — which cut its jetliner production in half — to rapidly shed more than 40,000 of its 93,000 workers who designed and built the planes. But the revival has added back some 13,000 jobs and raised Boeing's stock price from $25 to $88 a share.
Even without terrorism, the commercial aircraft industry is not for the fainthearted. Companies must wager billions developing products that anticipate travelers' preferences and airline strategies a decade later. Boeing reportedly wagered $8 billion in developing the midsize wide-body (seating up to 290 passengers) 787 Dreamliner, the first of which will be delivered in 2008. Boeing's bet is that the market favors point-to-point flights rather than a hub-and-spoke system with huge planes delivering passengers to a few large cities, from which they are dispersed to their destinations in smaller planes. With 471 orders and commitments for 787s, at up to $180 million apiece, the plane — made largely of a light (fuel-saving) carbon composite material — already is a huge success. Boeing's competition no longer is.
The average jetliner is struck by lightning twice a year. Boeing's competitor in the commercial aircraft duopoly, Airbus, has recently struck itself twice. The government-created European consortium decided to build the wrong aircraft, then built it badly.
| FREE SUBSCRIPTION TO INFLUENTIAL NEWSLETTER |
| Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". HUNDREDS of columnists and cartoonists regularly appear. Sign up for the daily JWR update. It's free. Just click here. |
|
The market quickly judged Airbus's A350 inferior to the 787, and costly redesigns have begun. Worse, Airbus, assuming that the world was wedded to a hub-and-spoke system, made a bad $16 billion bet on huge demand for its A380, a double-deck superjumbo (typically seating 555).
Created in 1970, Airbus prospered. From 2001 to 2005, its annual orders exceeded Boeing's, and it will deliver more planes than Boeing this year. But now Airbus has problems inherent in its role as Europe's iconic public-private collaboration. Such collaboration, called "industrial policy," involves the irrationalities of economic nationalism as each of the nine countries involved in subsidizing the A380 fights for "its" jobs.
And there have been gross management blunders. Wiring (the A380 has 312 miles of it) made in Germany was mismatched with airframes made in France. To truck huge components to a French assembly line, more than 100 miles of highway had to be widened and straightened.
The A380 has received $3.8 billion in cheap loans and other ongoing government subsidies misleadingly called "launch aid." This amounts to seminationalization, giving the governments involved an incentive to regard one another as rivals. Boeing wants the World Trade Organization to compel European governments to stop their subsidies. McNerney, however, acknowledges that some people think Boeing should allow Airbus to break WTO rules — and continue to be plagued by political decisions trumping economic rationality. Airbus is illustrating what happens when governments treat commercial enterprises as jobs programs and instruments of national glory.
McNerney says that what ocean shipping did for Hong Kong, jet aircraft can do for, say, Dubai, which is becoming a world trading center. He believes that over the next 30 years the growth rate for cargo aircraft could be significantly larger than for passenger aircraft. Fred Smith, founder and chief executive of FedEx, says that 98 percent of the weight of international commerce is shipped by sea, but the 2 percent moved by air constitutes 40 percent of the economic value.
Boeing exported $14 billion worth of commercial aircraft in 2005 and expects to prosper as China and India do. Boeing projects that over the next 20 years, in addition to the 367 orders yet to be delivered to the two countries, China will need 2,900 new passenger and freight aircraft costing $280 billion, and India will need 856, worth $72 billion. For the past four years, close to 20 percent of Boeing's orders have been from China, which since 1972 has bought 678 Boeing planes worth $37 billion.
Assuming that Boeing manages the supply chain — with 10 subcontractors on four continents — for a plane with 4 million parts, the 787 might solidify Boeing's supremacy. An Airbus chief executive recently said he hoped his company could catch up "in 15 years." Then he resigned. Boeing's successes — 600,000 people fly in its planes daily — have so filled its manufacturing capacity that it has limited Boeing's ability to further exploit Airbus's problems. For McNerney, such a problem is a blessing.
Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
George Will's latest book is "With a Happy Eye but: America and the World, 1997-2002" to purchase a copy, click here. Comment on this column by clicking here.
Archives
© 2006 WPWG
|
|
Columnists
Toons
Lifestyles
|
