Source: Dow Jones News of 17.06.2003

Source: Dow Jones News of 17.06.2003
Boeing Co (BA) may be making a lot of hype at the Paris Air Show about its
proposed 7E7 airliner that was dubbed the Dreamliner over the weekend, but
the chief salesman of Boeing's rival
Airbus (F.ABI) knows a sales gimmick when he sees one.
"The "dream machine" or whatever it's called? I couldn't have hoped for a
better name, being
their competitor. It's a PR man's dream, but an engineer's nightmare," John
Leahy told Dow Jones Newswires in an interview.
Leahy says he's convinced that, like the Sonic Cruiser idea that Boeing was
touting around the last
Paris Air Show as the new superfast substitute for the soon-to-be-defunct
Concorde, the Dreamliner is more of a marketing department's brainchild than
something he's really worried about. Five years ago, Boeing's 767-300 jet
was dominating the market for medium-sized twin-jets, he noted, and now it's
dead in the market. Boeing knows it will eventually have to come up with a
replacement for its 757s and 767s, but if it hoped to put the fear of death
into Airbus by saying it's planning a new airliner that would fly by 2008,
the effect has been lost on Leahy.
Boeing's idea is to leapfrog Airbus's A330-200 airliner by bringing out a
fuel-efficient, modern-technology airliner to carry between 200-250
passengers and with a maximum range of nearly 15,000 kilometers.
Boeing is betting that there will be increased demand for point-to-point
flights and that the Dreamliner would respond to that demand. "It's purely a
PR man's dream," said Leahy. "I think the
traveling public knows that, too, which is probably why they voted for it,"
in a name-picking scheme organized on the Internet by the U.S. company.
"In fact," Leahy said, "it seems most of the people at Airbus who voted
picked the Dreamliner. Some of the traditionalists voted for
"Stratoclimber," which would have been a better name." "I was pretty much
convinced that they would do it in recent months. But now I'm convinced
they're not going to do it," the Airbus executive went on.
"Why? Because now they're talking about the sexy shape of the windshield,
the distinctive nose and the rake of the wingtip fences and how it will be
distinguishable from other airplanes in the marketplace.
And how people will just look at it and say: "Now!" Leahy recalled the five
or six strenuous years when he and other Airbus executives fought endless
battles to persuade Airbus's partners, shareholders, customer airlines and
suppliers that the company's strategy of spending $10.7 billion
to develop the A380 super-jumbo - the world's largest commercial jet was the
right one.
"But nobody ever said: "But what's the name?" or "You know, I think it needs
to look sexier." "When someone starts doing that, it's because they're
saying to themselves: "I've got a "me-too" product. I'm trying to leapfrog
the A330-200 and what the engineers have just come up with looks an awful
lot like my competitor's airplane.
" Noting that Chicago, where Boeing is based, isn't too far from Detroit,
Leahy said Boeing's
strategy is "a bit like a bunch of guys in the 1960s in Detroit saying: "We
can hold the Japanese off for a few more years.
We've got to get those tailfins just a little bit higher, get a little bit
more chrome, some really
dynamite headlights, and the Japanese are going to be history, because
everyone's going to want our new Cadillacs or whatever.
And they went right off the edge of a cliff doing it." He said manufacturers
tend to put a layer
of "Gee-whizz and pizzasz" around their products when they're not capable of
selling themselves. "When people do that, they're clutching at things.."
Leahy poured scorn on the notion that people might buy commercial aircraft
on impulse as they might a fancy car.
"I hate to say this, as we're spending a lot of money to be here, but we are
machine-tool makers. These are the machine tools of the air transport
industry. They're sold on seat-mile costs, ton-mile costs, range, payload,
environmental efficiency and fuel burn," and not on their looks, he said,
adding: "That's not the way you buy machine tools." Leahy said that what
convinced him that the Boeing project won't fly was Boeing's announcement
that it was going to have a final assembly cycle of three days instead of 30
days, a reduction of 90% compared to the norm in the business.
"Why would you do that? Because the business case isn't working."
Boeing's estimates for the potential market for the new airliner of up to
3,500 aircraft are also unrealistic, he said, noting that sales of Boeing's
767, which the Dreamliner is supposed to replace, only totaled 930 over the
last 25 years. Leahy says he's so convinced the Dreamliner will never fly
that he's starting taking wagers.
He predicted that, if Boeing does launch the Dreamliner program, it will be
a commercial flop as Airbus's competitor will have to amortize the $8
billion development cost, which he said would automatically add $15 million
to the sticker price and give Airbus an advantage because the development
cost of the A330-200, which it is supposed to kill, was only $400,000 as it
is a derivative of the A330-A340 family. He noted that the commercial
aircraft industry is cyclical
and that another cycle is likely in the middle of the next decade that will
force Boeing and Airbus to have to invest large amounts eventually to renew
their product lines. "If they bring out something that costs $8 billion in
2008, they're not going to be around for the 2012-2015 cycle," he predicted

I assume Airbus responded to the preceding article like so...

2003: Exactly right...
2005: I mean oops...
2006: Augh $#@#$@$@#$!!!!

What a pompous ass he must be to publically lambast Boeing like that. I
hope he get's copies of this article emailed to him on a weekly basis.

I for one have zero sympathy for what Airbus is going through. Both
companies made the call years ago to go in a certain direction and now
they have to live with it. Well, maybe not Airbus because they got the
EU to pony-up the billions of Euros needed to finance their mistakes.
Oh, and the comparison of that money to local state tax breaks for
Boeing is utterly ridiculous.

Marco

wrote:
Source: Dow Jones News of 17.06.2003
Boeing Co (BA) may be making a lot of hype at the Paris Air Show about its
proposed 7E7 airliner that was dubbed the Dreamliner over the weekend, but
the chief salesman of Boeing's rival
Airbus (F.ABI) knows a sales gimmick when he sees one.
"The "dream machine" or whatever it's called? I couldn't have hoped for a
better name, being
their competitor. It's a PR man's dream, but an engineer's nightmare," John
Leahy told Dow Jones Newswires in an interview.
Leahy says he's convinced that, like the Sonic Cruiser idea that Boeing was
touting around the last
Paris Air Show as the new superfast substitute for the soon-to-be-defunct
Concorde, the Dreamliner is more of a marketing department's brainchild than
something he's really worried about. Five years ago, Boeing's 767-300 jet
was dominating the market for medium-sized twin-jets, he noted, and now it's
dead in the market. Boeing knows it will eventually have to come up with a
replacement for its 757s and 767s, but if it hoped to put the fear of death
into Airbus by saying it's planning a new airliner that would fly by 2008,
the effect has been lost on Leahy.
Boeing's idea is to leapfrog Airbus's A330-200 airliner by bringing out a
fuel-efficient, modern-technology airliner to carry between 200-250
passengers and with a maximum range of nearly 15,000 kilometers.
Boeing is betting that there will be increased demand for point-to-point
flights and that the Dreamliner would respond to that demand. "It's purely a
PR man's dream," said Leahy. "I think the
traveling public knows that, too, which is probably why they voted for it,"
in a name-picking scheme organized on the Internet by the U.S. company.
"In fact," Leahy said, "it seems most of the people at Airbus who voted
picked the Dreamliner. Some of the traditionalists voted for
"Stratoclimber," which would have been a better name." "I was pretty much
convinced that they would do it in recent months. But now I'm convinced
they're not going to do it," the Airbus executive went on.
"Why? Because now they're talking about the sexy shape of the windshield,
the distinctive nose and the rake of the wingtip fences and how it will be
distinguishable from other airplanes in the marketplace.
And how people will just look at it and say: "Now!" Leahy recalled the five
or six strenuous years when he and other Airbus executives fought endless
battles to persuade Airbus's partners, shareholders, customer airlines and
suppliers that the company's strategy of spending $10.7 billion
to develop the A380 super-jumbo - the world's largest commercial jet was the
right one.
"But nobody ever said: "But what's the name?" or "You know, I think it needs
to look sexier." "When someone starts doing that, it's because they're
saying to themselves: "I've got a "me-too" product. I'm trying to leapfrog
the A330-200 and what the engineers have just come up with looks an awful
lot like my competitor's airplane.
" Noting that Chicago, where Boeing is based, isn't too far from Detroit,
Leahy said Boeing's
strategy is "a bit like a bunch of guys in the 1960s in Detroit saying: "We
can hold the Japanese off for a few more years.
We've got to get those tailfins just a little bit higher, get a little bit
more chrome, some really
dynamite headlights, and the Japanese are going to be history, because
everyone's going to want our new Cadillacs or whatever.
And they went right off the edge of a cliff doing it." He said manufacturers
tend to put a layer
of "Gee-whizz and pizzasz" around their products when they're not capable of
selling themselves. "When people do that, they're clutching at things.."
Leahy poured scorn on the notion that people might buy commercial aircraft
on impulse as they might a fancy car.
"I hate to say this, as we're spending a lot of money to be here, but we are
machine-tool makers. These are the machine tools of the air transport
industry. They're sold on seat-mile costs, ton-mile costs, range, payload,
environmental efficiency and fuel burn," and not on their looks, he said,
adding: "That's not the way you buy machine tools." Leahy said that what
convinced him that the Boeing project won't fly was Boeing's announcement
that it was going to have a final assembly cycle of three days instead of 30
days, a reduction of 90% compared to the norm in the business.
"Why would you do that? Because the business case isn't working."
Boeing's estimates for the potential market for the new airliner of up to
3,500 aircraft are also unrealistic, he said, noting that sales of Boeing's
767, which the Dreamliner is supposed to replace, only totaled 930 over the
last 25 years. Leahy says he's so convinced the Dreamliner will never fly
that he's starting taking wagers.
He predicted that, if Boeing does launch the Dreamliner program, it will be
a commercial flop as Airbus's competitor will have to amortize the $8
billion development cost, which he said would automatically add $15 million
to the sticker price and give Airbus an advantage because the development
cost of the A330-200, which it is supposed to kill, was only $400,000 as it
is a derivative of the A330-A340 family. He noted that the commercial
aircraft industry is cyclical
and that another cycle is likely in the middle of the next decade that will
force Boeing and Airbus to have to invest large amounts eventually to renew
their product lines. "If they bring out something that costs $8 billion in
2008, they're not going to be around for the 2012-2015 cycle," he predicted

I assume Airbus responded to the preceding article like so...

2003: Exactly right...
2005: I mean oops...
2006: Augh $#@#$@$@#$!!!!

The voice between the two sets of remarks are vastly different. The
person from Boeing is not making any predictions with their statements.

Greg Farris wrote:
In article .com,
says...


What a pompous ass he must be to publically lambast Boeing like that. I
hope he get's copies of this article emailed to him on a weekly basis.



Looks like two can play that game :

WASHINGTON (AFP) - US aircraft giant Boeing Co. played down the competition
posed by the A350 long-haul plane newly unveiled by its fierce European rival
Airbus.

"We are not horribly concerned" about delays in orders for the US group's 787
Dreamliner, said Boeing Commercial Airplanes vice president of marketing, Randy
Baseler.
"Airlines are run by very prudent business people and they are going to look at
all of the alternatives," Baseler told reporters on a conference call.

"They certainly are going to take a look, but I would imagine they are
demanding that Airbus come up with what the characteristics and the technical
specifications of what this airplane (A350) really are," he added.

"Nobody knows. Right now it is just pretty much an extension of the marketing
brochure they put up at Farnborough," Baseler said, referring to the
international air show held in Britain in July.

In article .com,
says...


What a pompous ass he must be to publically lambast Boeing like that. I
hope he get's copies of this article emailed to him on a weekly basis.



Looks like two can play that game :

WASHINGTON (AFP) - US aircraft giant Boeing Co. played down the competition
posed by the A350 long-haul plane newly unveiled by its fierce European rival
Airbus.

"We are not horribly concerned" about delays in orders for the US group's 787
Dreamliner, said Boeing Commercial Airplanes vice president of marketing, Randy
Baseler.
"Airlines are run by very prudent business people and they are going to look at
all of the alternatives," Baseler told reporters on a conference call.

"They certainly are going to take a look, but I would imagine they are
demanding that Airbus come up with what the characteristics and the technical
specifications of what this airplane (A350) really are," he added.

"Nobody knows. Right now it is just pretty much an extension of the marketing
brochure they put up at Farnborough," Baseler said, referring to the
international air show held in Britain in July.