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There are always men who consider it unpatriotic to tell the truth, if the truth is not very flattering; but, aside from the morality of the case, we never can learn how to produce a certain effect unless we know rightly what the causes were that produced a similar effect in times past. - Theodore Roosevelt
Daily Update of Boeing 787 Dreamliner flight test program and occasional remarks (in italics) by me. Boeing updates its web site daily but does not leave the previous updates for comparison. I will continue to update this blog-style. Boeing's web site is http://787flighttest.com/ September 3, 2010 9:09 AM ZA001 194 flights 557 hour 00 min Total RR engine 486 flights 1566 hour 20 min ZA005 70 flights 161 hour 30 min Total GE engine 70 flights 161 hour 30 min Total 556 flights 1727 hour 50 min 13 hours of flight tests yesterday for the RR-engined 787s. If Boeing was attempting to finish on time, 560 hours short of the test goal and 12 days to go - an average of 46 hours a day of testing required - which would have been impossible. September 2, 2010 9:58 AM ZA001 193 flights 554 hour 40 min Total RR engine 480 flights 1552 hour 40 min ZA005 69 flights 157 hour 40 min Total GE engine 69 flights 157 hour 40 min Total 549 flights 1710 hour 20 min Since we know the RR-engined test program isn't going to complete on schedule, lets look at the GE-engined flight test program. ZA005 has been operational for 77 days, and has averaged 2 hours a day of flight tests. ZA006 is not yet operational, but has gotten as far as the fuel dock, and should be operational by early October, about 4 months late. 1200 hours need for certification; ZA005 should have a little over 200 flight hours by the time that ZA006 is operational. 1000 remaining hours at 4 hours a day will conclude flight testing in about 250 days from October 1, or about June 5, 2011, fairly close to one year after beginning flight tests. That closely mirrors the RR-engined program timetable. September 1, 2010 9:20 AM ZA001 191 flights 545 hour 30 min Total RR engine 473 flights 1518 hour 25 min ZA005 68 flights 154 hour 50 min Total GE engine 68 flights 154 hour 50 min Total 541 flights 1673 hour 15 min Only ZA001 flew yesterday, for a total of 5 hours. ZA001 has been the workhorse of the test fleet except during the 2 months it was down for lightning repairs. If the program was still on schedule, 610 test hours would still be needed in 14 days, an average of 43 hours a day. Scott Hamilton reports that 4 additional test aircraft will be added to the test fleet. August 31, 2010 8:08 AM ZA001 189 flights 540 hour 30 min Total RR engine 471 flights 1513 hour 25 min ZA005 68 flights 154 hour 50 min Total GE engine 68 flights 154 hour 50 min Total 539 flights 1668 hour 15 min The RR-engined 787s completed 12 hours of flight tests; 39 hours were needed if there was any attempt to stay on schedule. 15 days left to September 15; 620 flight test hours needed; 41 hours a day of flight tests needed to reach the goal. Matt Cawby reports that ZA006, the 2nd GE-engined test plane, has moved to the fuel dock in preparation for tests that lead up to initial flight. ZA006 is at least 3 months late. August 30, 2010 2:16 PM ZA001 186 flights 532 hour 15 min Total RR engine 467 flights 1501 hour 05 min ZA005 67 flights 152 hour 40 min Total GE engine 67 flights 152 hour 40 min Total 534 flights 1653 hour 45 min The 787 flight test program had its most productive weekend in 3 months. 42 hours were completed by the 4 RR-engined 787s and 15 hours by the GE-engined 787. 105 hours were needed to maintain the schedule but it was a good effort. We now know that the test schedule will not complete by September 15, but if they were still trying, 630 hours would be needed in 16 days, an average of 39 hours a day. August 27, 2010 8:23 AM ZA001 181 flights 517 hour 50 min Total RR engine 449 flights 1459 hour 20 min ZA005 62 flights 137 hour 30 min Total GE engine 62 flights 137 hour 30 min Total 511 flights 1596 hour 50 min Boeing today announced that first delivery would slip to February 2011 from December 2010. The test program was to have completed by September 15; there was no way that it could have completed by then, even if this latest problem with the Rolls Royce Trent engine had not developed. The RR-engined 787s completed 12 hours of flight tests yesterday. 34 hours were needed to maintain the schedule. If September 15 were still the goal, it would require 670 flight test hours in 19 days - 35 hours a day. August 26, 2010 8:12 AM ZA001 178 flights 510 hour 40 min Total RR engine 443 flights 1446 hour 45 min ZA005 61 flights 132 hour 25 min Total GE engine 61 flights 132 hour 25 min Total 504 flights 1579 hour 10 min The RR-engined flight test program needed 33 hours yesterday and it completed 8. 20 days remain until September 15; 680 test hours remaining; 34 hours a day of flight tests needed to reach required hours. August 25, 2010 11:54 AM ZA001 176 flights 505 hour 55 min Total RR engine 440 flights 1438 hour 50 min ZA005 60 flights 130 hour 15 min Total GE engine 60 flights 130 hour 15 min Total 500 flights 1569 hour 05 min The RR-engined test program completed 7 hours of flight tests yesterday; hours needed: 32. 690 hours needed by September 15. There are now 21 days left to September 15; flight test hours needed each day: 33. August 24, 2010 8:07 AM ZA001 176 flights 505 hour 55 min Total RR engine 439 flights 1431 hour 55 min ZA005 59 flights 127 hour 35 min Total GE engine 59 flights 127 hour 35 min Total 498 flights 1559 hour 30 min ZA002 completed an epic 15 hour 50 minute flight to the North Pole and back to Boeing Field, but the RR-engined test program fell further behind schedule. 700 hours are still needed before September 15. 22 days are left to September 15; 32 hours a day of test flights are needed to complete the schedule on time. August 23, 2010 11:22 AM ZA001 176 flights 505 hour 55 min Total RR engine 438 flights 1416 hour 05 min ZA005 58 flights 122 hour 15 min Total GE engine 58 flights 122 hour 15 min Total 496 flights 1538 hour 20 min The RR-engined 787s completed an average of 9 hours a day, each of the last 3 days, a total of less than 27 for the 3 days; 28 hours each day were needed to stay on schedule. The test schedule is hopelessly behind schedule - 710 hours needed in 23 days, an average of 31 hours a day. The RR-engined test program will not complete on September 15. The GE-engined test schedule is also falling further behind. ZA006 is not yet flying. ZA005 spent most of last week on the ground at Paine Field, not at Boeing Field. August 20, 2010 8:29 AM ZA001 174 flights 501 hour 25 min Total RR engine 430 flights 1389 hour 30 min ZA005 57 flights 119 hour 30 min Total GE engine 57 flights 119 hour 30 min Total 487 flights 1509 hour 00 min 9 hours and 50 minutes of testing completed yesterday; daily hours needed to complete testing by September 15: 28. 26 days left until September 15; 740 hours of test flights needed; hours needed per day, including weekends: 28. August 19, 2010 8:08 AM ZA001 171 flights 495 hour 00 min Total RR engine 426 flights 1379 hour 40 min ZA005 57 flights 119 hour 30 min Total GE engine 57 flights 119 hour 30 min Total 483 flights 1499 hour 10 min RR-engined 787s completed 8 hours of flight tests yesterday; hours needed: 27. There are now 27 days to September 15; the RR-engined test program needs 750 hours; hours needed per day, including weekends: 28. The GE-engined test program is at a stand-still. Both ZA005 and ZA006 are at Paine Field. Matt Cawby reports a leak of hydraulic fluid in ZA005 http://kpae.blogspot.com/ August 18, 2010 9:10 AM ZA001 165 flights 489 hour 35 min Total RR engine 419 flights 1371 hour 35 min ZA005 57 flights 119 hour 30 min Total GE engine 57 flights 119 hour 30 min Total 476 flights 1491 hour 05 min 0 test hours flown by RR-engined 787s yesterday; 26 hours needed. 28 days left until September 15; 760 test hours still required; 27 test hours now needed every day including weekends. August 17, 2010 8:00 AM ZA001 165 flights 489 hour 35 min Total RR engine 419 flights 1371 hour 35 min ZA005 56 flights 117 hour 25 min Total GE engine 56 flights 117 hour 25 min Total 475 flights 1489 hour 00 min One flight of one hour and fifty minutes yesterday; 25 hours was needed to remain on task for a September 15 deadline. 29 ays left to September 15; 760 hours needed; 26 hours of flight tests needed every day, including weekends. August 16, 2010 8:17 AM ZA001 164 flights 487 hour 45 min Total RR engine 418 flights 1369 hour 45 min ZA005 56 flights 117 hour 25 min Total GE engine 56 flights 117 hour 25 min Total 474 flights 1487 hour 10 min In the 3 days since the last report, Boeing completed 2 test flights for a total of 5 hours and 5 minutes. Boeing needed about 70 hours to stay on schedule for a September 15 completion of the test flight program for the RR-engined 787s. 760 hours of test flights are needed by September 15. 30 days to go; 760 hours needed - a little more than 25 hours a day. Boeing completed 36 hours and 50 minutes of test flights during the week of August 9-August 15. This follows 39 hours and 15 minutes the week of August 2-August 8. A total of 76 hours in 2 weeks, about the number of hours that is needed every 3 days. The is no humanly possible way that Boeing can complete the test program by September 15. August 13, 2010 8:10 AM ZA001 162 flights 482 hour 40 min Total RR engine 416 flights 1364 hour 40 min ZA005 56 flights 117 hour 25 min Total GE engine 56 flights 117 hour 25 min Total 472 flights 1482 hour 05 min 5 hours and 20 minutes of test flights for the RR-engined 787s yesterday; hours needed: 23. 33 days left until September 15; flight hours needed: 770. Daily hours needed to finish test schedule by September 15: 23. August 12, 2010 8:00 AM ZA001 161 flights 479 hour 45 min Total RR engine 414 flights 1359 hour 20 min ZA005 55 flights 114 hour 30 min Total GE engine 55 flights 114 hour 30 min Total 469 flights 1473 hour 50 min 12.5 hours of test flights for the RR-engined 787s yesterday; needed 22 hours. 34 days to September 15; 780 test flight hours needed by September 15; 23 hours a day needed to reach goal. August 11, 2010 9:28 AM ZA001 160 flights 473 hour 15 min Total RR engine 411 flights 1346 hour 50 min ZA005 54 flights 110 hour 40 min Total GE engine 54 flights 110 hour 40 min Total 465 flights 1457 hour 30 min 35 days to September 15. 790 hours required to complete testing. Hours needed per day: 23; hours completed yesterday: 11hours 10 minutes. August 10, 2010 8:46 AM ZA001 159 flights 466 hour 40 min Total RR engine 409 flights 1335 hour 40 min ZA005 54 flights 110 hour 40 min Total GE engine 54 flights 110 hour 40 min Total 463 flights 1446 hour 20 min News reports today indicate that Boeing is "assessing manufacturing issues". No mention of flight test issues. It is certain that Boeing can not complete the RR-engined portion of the flight test program by September 15. At yesterday's pace of one flight of 2 hours and 47 minutes the flight test program will go on into 2011. The GE-engined portion of the flight test is in worse shape than the RR portion. Only 1.5 hours of test flights for ZA005 in more than a week, and ZA006 is still sitting in ATS Hanger 3 as of last night. 36 days to September 15; hours of test flights needed to finish flight test program: 800; hours of flight tests needed per day to finish flight test program by September 15: 22. August 9, 2010 8:11 AM ZA001 159 flights 466 hour 40 min Total RR engine 408 flights 1332 hour 55 min ZA005 54 flights 110 hour 40 min Total GE engine 54 flights 110 hour 40 min Total 462 flights 1443 hour 35 min In 3 days since the last report Boeing completed 17 hours and 35 minutes of testing, an average of 5 hours and 52 minutes a day. Hours needed to complete the test program by September 15: 22 per day. 37 days left and 800 hours needed. August 6, 2010 8:34 AM ZA001 159 flights 466 hour 40 min Total RR engine 402 flights 1315 hour 20 min ZA005 54 flights 110 hour 40 min Total GE engine 54 flights 110 hour 40 min Total 456 flights 1426 hour 00 min 7 hours and 40 minutes testing yesterday (daily requirement for RR-engined aircraft to meet September 15 deadline: 21 hours) 40 days to go; 840 hours to go for reduced test schedule - 1115 hours for original schedule. August 5, 2010 8:53 AM No updates at the Boeing 787 test flight web site today, probably because there were no test flights yesterday. FlightAware shows no flights and radio monitoring by Matt Cawby shows no flights. Hours flown: 0; hours needed: 21. 41 days to September 15; 850 flight test hours needed to complete the reduced test flight schedule - 1120 hours needed to complete original schedule. August 4, 2010 8:17 AM ZA001 159 flights 466 hour 40 min Total RR engine 398 flights 1307 hour 40 min ZA005 54 flights 110 hour 40 min Total GE engine 54 flights 110 hour 40 min Total 452 flights 1418 hour 20 min Just over 7 flight test hours completed for RR-engined planes; 21 hours needed. 42 days left to September 15; 900 hours to go. ZA006 still not on flight line. GE-engined flight tests now at least a month behind schedule. August 3, 2010 8:16 AM ZA001 157 flights 460 hour 30 min Total RR engine 392 flights 1300 hour 20 min ZA005 53 flights 109 hour 10 min Total GE engine 53 flights 109 hour 10 min Total 445 flights 1409 hour 30 min PR trumps engineering again. ZA001 test flight was extended just enough to put the RR test program at 1300 hours. No other aircraft flew. Less than 7 hours of flights completed; 21 hours needed. 43 days left to September 15. ZA006 still missing from the flight line. August 2, 2010 8:21 AM ZA001 156 flights 453 hour 50 min Total RR engine 391 flights 1293 hour 40 min ZA005 53 flights 109 hour 10 min Total GE engine 53 flights 109 hour 10 min Total 444 flights 1402 hour 50 min 6 weeks to go to September 15. 900 hours to go on the reduced RR-engined test schedule. More than 21 hours of flight tests needed each day. This weekend Boeing completed about 11 hours a day. The test program looks to go at least 6 weeks long. The test schedule for the GE-engined 787s is in chaos. ZA006 has not yet made an appearance on the flight line - it will take about 6 weeks after arrival on the flight line before ZA006 is ready for its first flight. ZA006 is now about 3 months behind the schedule that Boeing claimed as recently as June 17. ZA001 is again the workhorse of the RR-engined aircraft, as it was before its unfortunate encounter with a lightning bolt in May. July 30, 2010 10:37 AM ZA001 151 flights 439 hour 10 min Total RR engine 380 flights 1260 hour 40 min ZA005 50 flights 105 hour 10 min Total GE engine 50 flights 105 hour 10 min Total 430 flights 1365 hour 50 min Boeing reported 26 hours and 20 minutes of flight time yesterday, which is just about the amount necessary to complete the test program by September 15. ZA006 is still missing, not yet on the flight line, and at least 2 months behind its intended schedule. July 29, 2010 8:21 AM ZA001 149 flights 433 hour 30 min Total RR engine 375 flights 1238 hour 30 min ZA005 49 flights 101 hour 00 min Total GE engine 49 flights 101 hour 00 min Total 424 flights 1339 hour 30 min July 28, 2010 1:37 PM ZA001 147 flights 425 hour 30 min Total RR engine 369 flights 1223 hour 00 min ZA005 47 flights 99 hour 00 min Total GE engine 47 flights 99 hour 00 min Total 416 flights 1322 hour 10 min By my arithmetic the total should be 1322 hours and 00 minutes. July 27, 2010 8:48 AM ZA001 145 flights 425 hour 30 min Total RR engine 365 flights 1215 hour 20 min ZA005 45 flights 93 hour 50 min Total GE engine 45 flights 93 hour 50 min Total 410 flights 1309 hour 10 min July 26, 2010 8:39 AM ZA001 144 flights 422 hour 00 min Total RR engine 361 flights 1205 hour 10 min ZA005 42 flights 88 hour 40 min Total GE engine 42 flights 88 hour 40 min Total 403 flights 1293 hour 50 min ZA001 is back. After sitting on the ground for 8 weeks, ZA001 is again the most active test aircraft, as it had been until the lightning strike in May. Whatever was wrong must now be working as planned. Whether the time lost can be made up is another question. 7 weeks until September 15, and 1000 test hours lacking. July 23, 2010 8:28 AM ZA001 140 flights 388 hour 15 min Total RR engine 346 flights 1138 hour 45 min ZA005 35 flights 72 hour 30 min Total GE engine 35 flights 72 hour 30 min Total 381 flights 1211 hour 15 min I have been out of touch for 3 days. I have no explanation for the hours on Boeing's web site. ZA004 and ZA003 seem to have lost hours. I think each has more test hours than show on this report. ZA001 is again flying after 8 weeks sitting at Boeing Field. July 19, 2010 9:01 AM ZA001 139 flights 384 hour 20 min Total RR engine 345 flights 1132 hour 05 min ZA005 25 flights 53 hour 10 min Total GE engine 25 flights 53 hour 10 min Total 370 flights 1185 hour 15 min According to Flightaware, ZA005 had 6 flights for a total of 6 hours on Friday, Saturday, and Sunday that do not seem to be included in the Boeing web site totals. July 16, 2010 9:07 AM ZA001 139 flights 384 hour 20 min Total RR engine 344 flights 1122 hour 35 min ZA005 25 flights 53 hour 10 min Total GE engine 25 flights 53 hour 10 min Total 369 flights 1175 hour 05 min Hours as reported by Boeing. My arithmetic says they have done just a bit better at 1175 hours and 45 minutes. ZA001 still not flying more than 7 weeks after lightning strike. July 15, 2010 3:18 PM ZA001 139 flights 384 hour 20 min Total RR engine 341 flights 1112 hour 55 min ZA005 24 flights 49 hour 15 min Total GE engine 24 flights 49 hour 15 min Total 365 flights 1162 hour 10 min July 14, 2010 8:57 AM ZA001 139 flights 384 hour 20 min Total RR engine 338 flights 1099 hour 15 min ZA005 23 flights 45 hour 35 min Total GE engine 23 flights 45 hour 35 min Total 361 flights 1144 hour 50 min July 13, 2010 2:00 PM ZA001 139 flights 384 hour 20 min Total RR engine 336 flights 1091 hour 30 min ZA005 16 flights 37 hour 35 min Total GE engine 16 flights 37 hour 35 min Total 356 flights 1132 hour 55 min July 12, 2010 8:50 AM ZA001 139 flights 384 hour 20 min Total RR engine 336 flights 1091 hour 30 min ZA005 16 flights 37 hour 35 min Total GE engine 16 flights 37 hour 35 min Total 352 flights 1129 hour 05 min Matt Cawby reports, "N787ZA was moved out of the factory Sunday night, but not to the July 9, 2010 8:55 AM ZA001 139 flights 384 hour 20 min Total RR engine 334 flights 1087 hour 35 min ZA005 11 flights 27 hour 45 min Total GE engine 11 flights 27 hour 45 min Total 344 flights 1115 hour 20 min Despite Boeing's claim that the 787s are flying again, a look at the numbers indicates otherwise. No flight hours for Rolls Royce-engined 787s yesterday. On May 20, at the stock analysts' meeting, Boeing said that about 90 hours a month per plane would get them easily to the flight test goal. They have averaged 50 hours per plane per month since. The 787 test program is now, without question, behind schedule and losing ground every day. When will Boeing admit it? July 8, 2010 8:40 AM ZA001 139 flights 384 hour 20 min Total RR engine 334 flights 1087 hour 35 min ZA005 10 flights 23 hour 45 min Total GE engine 10 flights 23 hour 45 min Total 344 flights 1111 hour 20 min July 7, 2010 12:36 PM ZA001 139 flights 384 hour 20 min Total RR engine 333 flights 1084 hour 00 min ZA005 7 flights 18 hour 00 min Total GE engine 7 flights 18 hour 00 min Total 340 flights 1102 hour 00 min July 6, 2010 11:03 AM ZA001 139 flights 384 hour 20 min Total RR engine 333 flights 1084 hour 00 min ZA005 5 flights 13 hour 50 min Total GE engine 5 flights 13 hour 50 min Total 338 flights 1097 hour 50 min July 3, 2010 8:42 AM No update on the Boeing Flight Test web site, but ZA005 did fly about 3 hours yesterday, the only 787 to fly since Tuesday. July 2, 2010 8:47 AM There have been no flight tests for 2 days, but the 787s are "not grounded". June 30, 2010 8:36 AM ZA001 139 flights 384 hour 20 min Total RR engine 332 flights 1080 hour 40 min ZA005 2 6 20 Total GE engine 2 flights 6 hour 20 min Total 334 flights 1087 hour 00 min ZA002 has taken over the flight hours lead from ZA001. ZA001 has flown fewer than 10 hours since the lightning strike in late May left it "undamaged". June 29, 2010 8:44 AM ZA001 139 flights 384 hour 20 min Total RR engine 328 flights 1076 hour 25 min ZA005 2 flights 6 hour 20 min Total GE engine 2 flights 6 hour 20 min Total 330 flights 1082 hour 45 min Information Release Edmonds, WA " Gateway to the Olympic Peninsula" June 28, 2010 For additional information contact: Tim Raetzloff 425 670 8167 Abarim Business Computers Is the Boeing 787 Safe? The genie is out of the bottle. Dominic Gates and the Seattle Times released the genie yesterday in a business section front page article. Is the 787, or for that matter the AirBus A350, as survivable as an aluminum airplane in hard landings or crashes? The new planes are built primarily of carbon composites; previous planes were built primarily of aluminum. Translate “carbon composite” as reinforced plastic. Boeing says that fears are unrealistic and overstated, but some former Boeing employees and others who have an understanding of the project believe that a carbon composite aircraft is less safe than one built of aluminum. Plastic is made mostly of oil, and we all know that oil burns. 80 years ago the aircraft industry changed from wood to aluminum as the principal structural material. Now Boeing and AirBus want to move from aluminum to plastic. It is an engineering step forward, but is it a step forward in safety for airline passengers? One of the positive features of aluminum was that it didn’t burn. Like wood, plastic burns. In a catastrophic crash it will make no difference what material the plane is constructed of; in a catastrophic crash there will be no survivors. It is the “minor” crashes (if any crash may be considered minor), and crashes that are less than catastrophic where the basic structure of the aircraft becomes important for survivability. The other concern about a plastic airplane is lightning. Aluminum airplanes are regularly struck by lightning, and continue flying. The conductivity of aluminum dissipates the energy of the lightning bolt. Lightning has been a special concern for the new airplane and it has been the subject of thousands of engineering design hours because plastic does not dissipate electricity. Safeguards have been designed, but do they work? Only one 787 has thus far been struck by lightning. ZA001 was hit late in May while on approach to Boeing Field. Boeing says the plane “appeared to be undamaged”. ZA001 may have been undamaged, and I am not in a position to judge that. But I do know numbers and statistics. An interesting thing happened to ZA001 after it was hit by lightning – it virtually stopped flying. According to the Boeing flight test home page, ZA001 had accumulated 135 flights and flown 374 hours and 45 minutes in the five months of testing before the lightning strike. ZA001 was the workhorse of the test program, accumulating more hours than any of the other test aircraft, and an aircraft that pilots apparently enjoyed flying. Since the lightning strike, ZA001 has flown 4 times for a total of 9 hours and 35 minutes. Boeing management says ZA001 “appeared to be undamaged”, but Boeing test records say that ZA001 has virtually stopped flying since being struck by lightning. Judge for yourself; which do you believe? As for me I will wait several years before I will voluntarily fly in a plastic airplane, Boeing or AirBus. Those of you who are more adventurous may fly in my place. Any flying I do will be limited to airlines that don’t own plastic airplanes, and my position in Boeing stock is again short. June 28, 2010 10:22 AM ZA001 139 flights 384 hour 20 min Total RR engine 325 flights 1066 hour 35 min ZA005 1 3 50 Total GE engine 1 flight 3 hour 50 min Total 326 flights 1070 hour 25 min ZA002 and ZA003 are again flying as of June 27, 2010, after inspections. June 25, 2010 7:56 AM All test flights cancelled for up to 10 days to repair improperly installed parts in horizontal stabilizer. "Program still on schedule" June 24, 2010 11:35 AM ZA001 139 flights 384 hr 20 min Total RR engine 323 flights 1057 hr 05 min ZA005 1 3 50 Total GE engine 1 flight 3 hr 50 min Total 324 flights 1060 hr 55 min June 23, 2010 8:31 AM ZA001 139 flights 384 hr 20 min Total RR engine 322 flights 1050 hr 50 min ZA005 1 3 50 Total GE engine 1 3 50 Total 323 flights 1054 hr 40 min June 22, 2010 8:22 AM ZA001 139 flights 384 hr 20 min Total RR engine 320 flights 1044 hr 20 min ZA005 1 3 50 Total GE engine 1 flight 3 hr 50 min Total 321 flights 1048 hr 10 min June 21, 2010 8:06 AM ZA001 139 flights 384 hr 20 min Total RR engine 318 flights 1031 hr 55 min ZA005 1 3 50 Total GE engine 1 flight 3 hr 50 min Total 319 flights1035 hour 45 min On May 20, Boeing executives reported at a financial analyst's meeting that each test aircraft would need 90 hours of flight testing a month to complete the test schedule on September 15. On May 21 the total flight time was 786 hours and 40 minutes. Those 4 aircraft are now at 1031 hours and 55 minutes, a gain of 245 hours and 15 minutes in one month. That is a deficit of 114 hours and 45 minutes from the estimates, 32% less than expected. There are 12 weeks left until September 15. To complete the test schedule, as laid out by Boeing on May 20, each plane must now fly 101 hours a month to complete the schedule on time. June 18, 2010 8:38 AM ZA001 139 flights 384 hr 20 min Total RR engine 313 flights 1014 hr 25 min ZA005 1 3 50 Total GE engine 1 flight 3 hr 50 min Total 314 flights 1018 hr 15 min A press release from Boeing http://finance.yahoo.com/news/Boeing-787-Dreamliner-Passes-prnews-2037880831.html?x=0&.v=1 indicates that the 787 test program is about 40% complete. There are less than 13 weeks to September 15 to complete the remaining 60%.
June 17, 2010 8:12 AM ZA001 139 flights 384 hr 20 min Total RR engine 310 flights 997 hr 35 min ZA005 1 3 50 Total GE engine 1 flight 3 hr 50 min Total 311 flights 1001 hr 25 min ZA005, the first 787 using the GE engine flew yesterday. As originally reported, the test program for the 787 with RR engine would be 2400+ hours, using 4 aircraft, and the test program for the GE engine would be 1200 hours, using 2 aircraft. The 2nd aircraft using the GE engine, ZA006, has not yet flown. On May 20, Boeing executives reported to financial analysts that the 787 program would need to complete 90 hours a week to finish the Rolls Royce portion of the test program by September 15. That indicated a reduction in test program hours to less than 2300 from the 2400+ originally anticipated. Boeing has completed 225 hours and 50 minutes in the subsequent 4 weeks, 62% of the number Boeing reported as necessary. To complete the program on schedule will now require more than 100 hours a week of test flights, a number that seems increasingly unlikely. June 16, 2010 9:27 AM ZA001 139 flights 384 hr 20 min Total 308 flights 994 hr 15 min June 15, 2010 8:12 AM ZA001 139 flights 384 hr 20 min Total 307 flights 982 hr 55 min June 14, 2010 8:40 AM ZA001 139 flights 384 hr 20 min Total 305 flights 964 hr 30 min First update from Boeing in 4 days, and only 26 hours total in 4 days. June 11, 2010 11:04 AM ZA001 135 flights 374 hr 45 min Total 297 flights 938 hr 25 min No update from Boeing today. ZA003 did fly nearly 10 hours yesterday, and ZA002 may have flown 2 short hops - flightaware.com is unclear on the results. Jon Ostrower at Flightblogger at www.flightglobal.com says that ZA001 is being re-engined, which accounts for its 2-week disappearance from flight testing. No explanation yet for the disappearance of ZA004 from flight testing. June 10, 2010 8:08 AM ZA001 135 flights 374 hr 45 min Total 297 flights 938 hr 25 min On May 20, 2010, Boeing management announced that it would need about 90 hours of test flights a week to complete the 787 test program on schedule. At that time there were 17 weeks until September 15, 2010. 3 weeks have passed. 166 hours and 40 minutes of test flights have been completed, less than 62% of the needed hours. There are now 14 weeks left and the necessary hours have grown to 97 hours a week. test planes ZA001 and ZA004 have not flown in 2 weeks. There were no test flights on May 29 and June 7. June 9, 2010 10:22 AM ZA001 135 flights 374 hr 45 min Total 295 flights 933 hr 50 min June 8, 2010 8:59 AM ZA001 135 flights 374 hr 45 min Total 293 flights 927 hr 55 min No flights yesterday. The second time this has happened in a little over a week. There were no flights on May 29. June 7, 2010 11:34 AM ZA001 135 flights 374 hr 45 min Total 293 flights 927 hr 55 min June 4, 2010 8:45 AM ZA001 135 flights 374 hr 45 min Total 288 flights 898 hr 30 min The total hours only add up to 888 hours and 30 minutes. However, I believe the total is correct - ZA002 was in the air more than 10 hours yesterday and I think hours for ZA002 should be 266 not the 256 indicated on the Boeing web site. Frankly, for a company that is worried about its image and press, and has nearly unlimited resources for the job, the Boeing flight test web site is badly maintained with almost daily mistakes. June 3, 2010 8:28 AM ZA001 135 flights 374 hr 45 min Total 287 flights 886 hr 20 min Only 33 hours and 45 minutes of test flights in the last week. There are now less than 15 weeks to September 15. It will take an average of 101 hours a week to meet the schedule. The only week that they hit more than 100 hours of test flights was the week from May 14 to May 21; coincidentally that was the week before Boeing announced to the stock market analysts that they only needed 90 hours a week and had hit 112 hours the week before. Did I say coincidentally? June 1, 2010 8:20 AM ZA001 135 flights 374 hr 45 min Total 285 flights 881 hr 25 min May 29, 2010 10:34 AM ZA001 135 flights 374 hr 45 min Total 283 flights 863 hr 40 min Boeing's total on the web site I total the time at 872 hours and 40 minutes - a gain of 9 hours and 50 minutes from the previous report May 28, 2010 8:31 AM ZA001 135 flights 374 hr 45 min Total 280 flights 863 hr 50 min Boeing completed 77 hours and 10 minutes of test flights in 7 days. After a one-week surge in test flights things are back to normal at about 3/4 of the hours needed to complete testing by September 15. There are 110 days (15 weeks and 5 days) until September 15; Boeing needs 1556 hours and 10 minutes to reach the scheduled 2430 hours. No sign that ZA005 or ZA006 are flightworthy yet. No new planes have taken to the air since March 14; so much for producing 2 planes a month. May 27, 2010 8:54 AM ZA001 134 flights 372 hr 45 min Total 278 flights 852 hr 35 min May 26, 2010 8:19AM ZA001 133 flights 368 hr 25 min Total 272 flights 840 hr 25 min May 25, 2010 8:04AM ZA001 133 flights 368 hr 25 min Total 267 flights 830 hr 45 min May 24, 2010 12:54PM ZA001 133 flights 368 hr 25 min Total 265 flights 824 hr 00 min May 21, 2010 10:02AM ZA001 128 flights 361 hr 25 min Total 252 flights 786 hr 40 min May 20, 2010 8:04PM ZA001 126 flights 357 hr 10 min Total 248 flights 771 hr 45 min May 19, 2010 1:23PM ZA001 124 flights 352 hr 55 min Total 242 flights 747 hr 15 min May 18, 2010 8:09AM ZA001 123 flights 347 hr 25 min Total 236 flights 720 hr 35 min May 17, 2010 8:32AM ZA001 122 flights 343 hr 10 min Total 231 flights 699 hr 15 min There has been a surge in test hours this week, 75 flight hours in 4 days. If Boeing can maintain this pace they can reach 2400 hours by September 15. But by my count the number of flights only add up to 230. May 16, 2010 10:05AM ZA001 11i flights 337 hr 55 min Total 225 flights 676 hr 35 min As reported on Boeing web site. I think that 11i for ZA001 should be 119. Matt Cawby reported about ZA005, "I noticed on Friday the right engine was run for a few hours and the left engine had the cowling open with some people working on it". May 15, 2010 10:58AM ZA001 115 flights 331 hr 00 min Total 219 flights 649 hr 15 min No flights or hours added - probably just an update glitch. FlightAware. com shows ZA001 with 2 flights on Friday with a total duration of 2 hours, and a 10 hour 53 minute flight for ZA004. I believe that 10 hour flight is the longest yet recorded by a 787. May 14, 2010 9:16AM ZA001 115 flights 331 hr 00 min Total 219 flights 649 hr 15 min May 13, 2010 8:01AM ZA001 111 flights 325 hr 40 min Total 210 flights 624 hr 50 min May 12, 2010 8:07AM ZA001 111 flights 325 hr 40 min Total 209 622 35 May 11, 2010 8:13AM ZA001 110 322 20 Total 206 617 00 Total flights should be 207 May 10, 2010 8:22PM ZA001 109 320 05 Total 205 609 20 Assuming that this list includes all flights through May 9, 2010, the 787 test program logged 109+ hours from April 16, 2010 through May 9, 2010, a total of 23 days. Boeing had noted that 200 flight hours was reached on February 28, 2010 and 500 hours on April 16, 2010. From February 28, 2010 to April 16, 2010, a total of 47 days the program logged 300 hours. The flight test program has actually slowed down from and average of 6.38 hours a day between February 29 and April 16, to 4.74 hours a day from April 16 through May 9. May 9, 2010 7:20PM ZA001 105 312 40
May 8, 2010 3:09PM ZA001 105 312 40
May 7, 2010 8:26AM ZA001 105 312 40 Total 196 588 00 May 6, 2010 ZA001 102 311 25
May 5, 2010 ZA001 100 308 00 Total 189 577 20 May 4, 2010 8:13 AM ZA001 99 305 20 Last Flew 4-14 Total 187 574 15 May 3, 2010 8:16 AM ZA001 99 305 20 Last Flew 4-14 Total 185 565 10 May 2, 2010 7:57 PM ZA001 99 305 20 Last Flew 4-14 Total 180 548 55 May 1, 2010 8:30 PM ZA001 99 305 20 Last Flew 4-14 Total 180 548 55 April 30, 8:08AM
Total 179 543 35 April 29, 2010 AM exact time not noted ZA001 99 305 20 Total 177 536 25 April 28, 2010 AM exact time not noted ZA001 99 305 20 Total 176 526 55 April 27, 8:08AM ZA001 99 305 20 Total 175 518 10 April 25 5:03PM ZA001 99 305 20 April 25 9:23AM ZA001 99 Flights 305 hours 20 minutes Total 171 505 45 Information Release Edmonds, WA " Gateway to the Olympic Peninsula" April 26, 2010 For additional information contact: Tim Raetzloff 425 670 8167 On April 21, Boeing CEO James McNerney, and Boeing Commercial Airplanes CEO James Albaugh enthusiastically reported the Boeing flight test program for the 787 was on schedule for completing the test program by mid-September. But that enthusiasm just doesn't match the numbers. Boeing Company says that the 787 flight test program has logged 500 hours as of Friday April 16, 2010. At 10:19 AM on April 26, 2010 the Boeing report at http://787flighttest.com/ says that the total number of hours flown by 787 test aircraft has gone up to 509 hours of test flights completed. They completed 9 hours in 10 days. The test program requires 2400 hours of flight tests. At this pace the program will be done in 2015. OK so that is an exaggeration based on a bad week. This was the least productive week of testing since January. A better comparison is to measure how much has been accomplished in the last 2 months. Boeing had announced that the 787 program had logged 200 hours by the end of February 2010. In the 8 weeks to April 26, the test program has logged an additional 309 hours, an average of 5.5 hours testing a day. This is better, but at this pace Boeing still will need 343 days (until April 4, 2011) of testing to complete the 2400 hour test program. To complete the test program by the target of September 15, 2010, 142 days from today (just over 20 weeks), Boeing will need to test at a rate of 13 hours and 18 minutes a day, a number that seems unlikely in view of what has been completed so far. Boeing completed 200 hours of flight testing by the end of February with only 2 test planes for most of that time. Test plane ZA004 flew for the first time on February 24, but only completed 3 hours of testing during February. The first 2 aircraft completed the bulk of the testing and averaged 3 hours of testing per day, a little over 1.5 hours per plane. (About 15 hours of testing was done in December 2009, the remaining 185 hours in January/February 2010) The 4th test aircraft, ZA003, joined the program on March 14. There were a total of 309 hours of testing in the 8 weeks of testing between February 28 and April 25. That is an average of 5.5 hours a day or less than 1.5 hours a day per aircraft. (I counted ZA003 as ¾ aircraft because it didn't fly until March 14) The aircraft utilization remained constant compared to what it was in January and February. It is difficult to see how Boeing can increase aircraft utilization by 150% over what has been a near constant for 4 months of testing. Boeing does have an out. Boeing has only promised that the 787 will enter service in the 4th quarter of 2010. It is possible that a test program that completed by November 1 could still accomplish that goal. That would add 6.5 weeks to the test schedule, 46 days. The necessary flight hours to reach that goal would then be reduced to 10 hours a day, or 2.5 hours per aircraft. This number may be attainable, but the number of test hours needs to increase soon to achieve it. Since Boeing posts the hours on its http://787flighttest.com/ web site we can all see for ourselves. I have decided that I don't expect Boeing to succeed at even the delayed schedule. I expect deliveries of the 787 will not occur until next year at the earliest. Based on that expectation, I have shorted Boeing stock. Programs that start badly usually continue badly - as an example look at the AirBus A380 program. The much-delayed A380 entered service in late 2007, but is still far behind on scheduled deliveries, delivering only 10 in 2009, compared to the intended 18. I believe that the 787 program is just such a program. One former Boeing employee proudly told me how the 777 fuselage sections went together perfectly when the prototype was built 20 years ago. He also described how the 787 sections couldn't be forced together when it was first tried. The 777 program has very been successful. I doubt that the 787 ever will be.
Information Release Edmonds, WA " Gateway to the Olympic Peninsula" February 1, 2010 For additional information contact: Tim Raetzloff 425 670 8167 Microsoft: The Most Profitable Company in the World The title as the most profitable company in world fell upon IBM. IBM held the title until the early 1990s. From the early 1990s to 2002 the title belonged to GE, except in 2000 when it was Exxon. The Iraq war in 2003 drove up the price of oil. The most notable beneficiary of the spike in oil was ExxonMobil, based in Irving, Texas. ExxonMobil profits soared from 11.46 billion dollars in 2002 to a record 21.51 billion dollars in 2003. ExxonMobil profit nearly doubled in one year, and the profit of more than 21 billion dollars was the largest profit ever recorded by any company. ExxonMobil profits continued to soar as the price of oil soared. In 2008 ExxonMobil recorded a profit of 45.22 billion dollars. But the price of oil has declined by 50% from the peak in July 2008, and ExxonMobil profits have declined with it. ExxonMobil profit fell to 19.7 billion for 2009, and to just over 6 billion dollars for the quarter ending December 31, 2009. Will it last? Stay tuned to find out.
1 ExxonMobil
Microsoft http://www.microsoft.com/msft/earnings/fy10/earn_rel_q2_10.mspx and Exxon http://www.exxonmobil.com/Corporate/Files/news_release_earnings4q09.pdf
Information Release Edmonds, WA " Gateway to the Olympic Peninsula" January 29, 2010 For additional information contact: Tim Raetzloff 425 670 8167 Microsoft: The Most Profitable Company in the World ? According to Forbes Magazine the 10 most profitable companies in the world at the end of 2008 were 1 ExxonMobil
Thus far, IBM reported 4.8 billion in earnings, and Procter & Gamble reported 4.66 billion dollars. ExxonMobil will be closer than that, but should come in about 1 billion dollars below Microsoft. A few years ago Microsoft was the most valuable company in the world, as measured by market capitalization, the value of its stock; now Microsoft is on the verge of becoming the most profitable company in the world. Edmonds, WA " The Friendliest Town on Puget Sound " For additional information contact: Tim Raetzloff 425 670 8167 At Abarim Business Computers, Inc. And the Biggest Financial Company in the Northwest Is?? November 7, 2009 Nobody answered correctly. Who would have guessed? A company often described as conservative (in the traditional sense), even described as stodgy by some, has outlasted the go-go, trend-setting companies, and is now the largest financial institution headquartered in the Northwest. Seattle-based, but no one in Seattle thought to mention it. In September this company sold more than 300 million dollars in additional shares in a secondary offering of stock, but even the stockbrokers I asked didn’t think of it. Shares in this company are trading near their 52-week high. The market capitalization of this company is only about 20% below its all-time high market capitalization. Market capitalization is calculated by multiplying the value of one share by the number of shares outstanding. This company has more than 12 billion dollars in assets. Do you need more clues? 26 years ago the then-CEO of this company said of Washington Mutual, “If they will buy stock in that, they will buy anything.” It took 25 years, but time ultimately justified him. Any guesses now? The answer is, ta-da, Washington Federal. Boring old Washington Federal. Washington Federal that mostly just lends on fixed-rate 30-year mortgages. How last millennium. On Friday November 6, 2009, Washington Federal shares closed at $17.83 a share. Washington Federal has 112,270,330 shares outstanding as of October 30, 2009, according to the most recent 10-K (annual report) filed at www.sec.gov Put those 2 numbers together and the result is a market capitalization of just over 2 billion dollars. The market capitalization of the closest competitor to Washington Federal is about one eighth as much. Earnings are larger at Washington Federal than at any Northwest competitor, and WaFed now has more assets than any of its Northwest competitors. By national, trillion-dollar standards, WaFed is small, but, for now, it is the biggest in this part of the woods. I don’t know whether this is the classic tortoise/hare story or just a temporary fluke. Commerce and industry are dynamic; some other financial organization may grow past WaFed, but at this moment Washington Federal is easily #1.
Recent television appearances: Enrique Cerna Connects on KCTS October 30, 2009 http://www.komonews.com/news/67386457.html October 28, 2009 Boeing management continues to look for a scapegoat. Boeing management is the problem; this decision doesn't change that fact. Boeing has not yet gotten one 787 production line to run; does anyone really believe that they can run two? This is the same Boeing board that rubber-stamped Phil Condit, replaced him with Harry Stonecipher, and now plays golf with Jim McNerney, the present absentee CEO. I am not much of a fan of the union, but this entire charade is ridiculous. The kowtowing done by our local politicians to Boeing is embarrassing. Boeing has not created a new job in Washington in 40 years. Tax breaks given to Boeing have probably aborted tens of thousands of new jobs in the small businesses that are forced to make up for the Boeing gimmes. If the concessions that Boeing wanted, in wages, healthcare, and other benefits, had been granted, it would have probably been a larger equivalent loss to the local economy than the loss of jobs because it would have spread across all lines, not just the 787. South Carolina may discover, to their grief, that Boeing doesn't keep all of its promises. Chicago is still looking for the 500 jobs that were promised for the gimmes that Boeing got in that move.
Edmonds, WA " The Friendliest Town on Puget Sound " For additional information contact: Tim Raetzloff 425 670 8167 A Pair of 50 Billion-dollar Companies October 25, 2009 The stock market was down on Friday October 23, 2009. Amazon.com (AMZN), however, was up nearly 27% because of spectacular growth in sales and earnings. At the end of trading on October 23, AMZN had a market capitalization of 51.3 billion dollars. Market capitalization is calculated by multiplying the value of one share by the number of shares outstanding. For the first time since June 2001, Washington, and King County, has 2 companies with a market capitalization of more than 50 billion dollars. The other company is, of course, is Microsoft (MSFT - I own some of it for full disclosure), which was also up in a down market. Microsoft has a market capitalization of almost 250 billion dollars, 248.8 to be accurate. Amazon had 432,982,766 shares outstanding on October 19, 2009, according to the latest 10-Q filed at SEC, and a closing price of $118.49 a share on October 23, 2009. Microsoft had 8,879,121,378 shares outstanding on October 19, 2009, according to the latest 10-Q filed at SEC, and a share price of $28.02 on October 23, 2009. According to Forbes magazine, only 65 companies in the world had a market capitalization of 50 billion dollars or more, when the Forbes list came out 6 months ago. http://www.forbes.com/lists/2009/18/global-09_The-Global-2000_MktVal.html The last time (June 2001) Washington had 2 companies with a market capitalization of 50 billion dollars or more, the 2 companies were Microsoft and Boeing. At that time Boeing was intending to leave town 4 months later, but the stock was drifting lower. For a time Boeing shares bloomed in the new Chicago soil, but Boeing shares are worth less now than they were in June 2001. The market capitalization of Boeing shares is 36.3 billion dollars, based on 726,599,064 shares on October 16, 2009 and a closing price of $49.89 on October 23, 2009.
When Will 787 Fly - Will It Fly? Edmonds, WA " The Friendliest Town on Puget Sound " The Boeing 787 was to have made its maiden flight 4 weeks ago. It didn't and now the question is, when will it fly? Do Boeing executives have a clue? Today they say that a new schedule will be announced before October. I won't claim that I have a clue either, except that once upon a time in the West I worked for Boeing in engineering design development on a plane that had a problem with its wings. Wings are a necessity if you ever want to do more than exercise the engines taxiing at Paine Field. I remember reading about a Navy pilot in WWII who didn't like it when the first planes with folding wings arrived on the early aircraft carriers. Flying a plane with retractable wings made him uncomfortable. My experience with a new plane that had wing problems was also with a retractable wing. The SST wing was intended to retract in high-speed flight and extend when in low speed mode. Like the planes on aircraft carriers, which have used retractable wings successfully for 70 years, the SST probably would have flown as well - except for one slight problem. The engineer who designed the wing pivot (to retract the wing) made a mistake in his calculations. The wing pivot was too heavy for the aircraft. The SST required a complete redesign, and it was never built. The engineer who designed the overweight wing pivot moved to project after project until he reached the highest level of the Boeing Company. The SST was attempted in another era and it wasn't the 787, but it was a revolutionary plane that used relatively untested materials (titanium alloy compared to the composites used by the 787) to advance air transport technology. The SST was a leap forward, not just a step, and the same may be said for the 787.
This history doesn't mean that the 787 will never fly. One Boeing executive says that the wing problem can be cured with inexpensive parts that will fit in the palm of your hand. I hope that is true. But it never seems to be that easy. When those parts that "fit in the palm of your hand" are installed the stress points will move. Tests and simulations will need to be run to learn if the stress reinforcers require additional stress reinforcers at the new points of stress. Every component that is changed carries the potential to force changes to nearby components. It may turn out that the entire fuselage/wing marriage must be redesigned. Redesigning any marriage is difficult at best. Changes may add weight and increase fuel usage, decrease range and load capacity - all the selling points of the 787. The problem isn't one of engineering. I have great confidence that Boeing engineers will get it right if they are given enough time. The problem is on the corporate side. It wasn't very long ago that Boeing executives were mocking the AirBus A380 program because it was 2 years behind schedule. The 787 is now 2 years behind schedule and counting. It will certainly be 3 years behind before it is ever flown. Boeing executives are under the Wall Street gun to get a plane in the air - any plane - 787, 787a, b, c…q. In view of the design problems, and, more importantly, the manufacturing problems in places like South Carolina, the 787 has thus far encountered, the hurry up test program that Boeing intended to implement will probably be thrown out by the FAA. It is hard to see how first flight can occur before 2010 and how deliveries can occur before late 2011. Boeing started with a 4 year lead on the AirBus A350. That lead is now down to 18 months. I have been a booster for Washington and, especially, Snohomish County, for twenty years. I realize it is important for this region that Boeing get it right. But the sad truth is that everything about the 787 program has been wrong from the start. Boeing executives can blame unions, but it appears to an impartial observer that the unions are responsible for less than 5% of the delays, and the real number may less than that. Boeing management hastily designed a Rube Goldberg construction plan that was more concerned with moving production out of the hands of union workers than it was with producing a quality airplane. It is amazing to me to see headlines blaming the union. Anyone who knows me knows that I am no fan of unions. Union blindness certainly helped destroy many industries in this country, but this time they aren't guilty. Boeing management alone caused this debacle. Boeing management pulled the trigger and shot the company. Clearly it is more serious than a wound in the foot. It remains to be seen if the wound will be mortal.
Naming Rights - The Solution to Budget Deficits Edmonds, WA " The Friendliest Town on Puget Sound " Many people are concerned about the budget deficits at the federal level and at the state and local levels. Governor Schwarzenegger in California has been talking about the possibility of selling some California landmarks to balance the budget. The possibility of just selling the naming rights has been brought up as an alternative. This isn't a new proposal. Actually it was Enron that began to make inquiries about renaming the Space Needle in Seattle a number of years ago. Enron management apparently thought they should have an appropriate With the number of billionaires in Seattle, both those who own sports When city fathers in Paris heard Obviously, if a sports venue can claim $10 million a year Apparently at some point sports franchises got into the naming rights story because it seems that the local teams are acting as consultants to Seattle and the Space Needle leasing authority. The sports teams will get an agent's commission. That might pay for one more "superstar". Just think, the Mariners could hire back Richie Sexson or bid up a new contract for Adrian Beltre from the commission they will get advising Seattle on selling naming rights. Nationally, Wal-Mart is reputedly the leader in the bidding war for the Statue of Liberty This interest in naming rights has even spread outside the US and Europe. Citigroup is so flush with TARP money that it has offered to pay the entire budget of Nepal for naming rights to Mount Everest. This has caused 2 problems. China says that Nepal can't sell naming rights to Mount Everest because China owns at least half of the mountain. The other problem is that 3rd World activists are Stay tuned and, as I learn more, I will continue to report on this innovative solution to budget deficits. Now if it were only April 1 and this wasn't real.
Washington is Still Producing Billion Dollar Companies At Abarim Business Computers, Inc. The economic downturn has certainly hurt in Washington, as it has almost everywhere. But, new companies continue to grow to replace the ones that have disappeared. Measured by market capitalization, there are 17 companies in Washington that have a value of more than one billion dollars as of the close of trading today, June 3, 2009. Market capitalization is calculated by multiplying the value of one share by the number of shares outstanding. I haven't done as well reporting on new billion-dollar companies as I have done in the past. As a catch-up, or maybe that is just a ketchup, I decided to mention a few of the newer billion-dollar companies that may have been missed. Seattle-based Dendreon has benefited from a great deal of positive coverage about its prostate cancer drug candidate, Provenge, has propelled Dendreon to a market capitalization of 2.511 billion dollars. Itron is based in Liberty Lake, WA (that is in Spokane County), and has seen its shares rise because its products monitor the use of energy, and we all know how important that is. Itron is now worth 2.189 billion dollars. Concur Technologies provides software that better enables companies to measure and control employee expense. Concur has a market capitalization of 1.526 billion dollars. Each is relatively small compared to the established companies in the region, but maybe in 20 or 30 years??
Amazon 36.812 billion dollars Starbucks 11.239 billion dollars Expeditors International 7.209 billion dollars Nordstrom 4.917 billion dollars F5 Networks 2.595 billion dollars Dendreon 2.511 billion dollars Itron 2.189 billion dollars Concur Technologies 1.526 billion dollars Washington Federal 1.151 billion dollars Potlatch 1.055 billion dollars 15 of the billion-dollar companies are based in King County, and 2 in Spokane County. All numbers are based on the 4PM New York closing price for each company and the reported number of shares for each company at the SEC from the most recent 10-Q or 10-K available on this date.
Information Release Edmonds, WA " The Friendliest Town on Puget Sound " April 14, 2009 For additional information contact: Tim Raetzloff 425 670 8167 Shares outstanding March 5, 2009 98,201,864 Amazon More Valuable Than Boeing Act II Edmonds, WA " The Friendliest Town on Puget Sound " March 4, 2009 For additional information contact: Tim Raetzloff 425 670 8167 At Abarim Business Computers, Inc. On February 22 I reported that Amazon.com was more valuable than Boeing by one billion dollars in market capitalization as of the close of trading on February 20, 2009. Market capitalization is calculated by multiplying the value of one share of common stock by the number of shares outstanding and provides a snapshot of value. In the 8 trading sessions since February 20, the market has declined about 7%. Amazon has gone up. As of March 4, 2009 Amazon has a lead of almost 6 billion dollars over Boeing. Amazon is worth 27.8 billion dollars, up 1.5% since February 20. Boeing is worth 22 billion dollars, down 16% over the same span. Boeing is a component in the Dow Jones Industrial Average; Amazon is not. According to the most recent filings at http://idea.sec.gov/idea/searchidea/companysearch_idea.html Boeing has 726,127,813 shares as of February 6, 2009, and Amazon has 428,583,135 shares as of January 22, 2009. Amazon closing price on March 4 was $64.81 a share; Boeing closing price was $30.31.
Amazon More Valuable Than Boeing Edmonds, WA " The Friendliest Town on Puget Sound " February 22, 2009 For additional information contact: Tim Raetzloff 425 670 8167 At Abarim Business Computers, Inc. Amazon.com gained $1.91 a share to close at $63.86 a share on Friday, February 20, 2009. That was a gain of 819 million dollars. On the same day Boeing lost $1.26 a share to close at $36.31, a loss of 915 million dollars. At the end of trading on Friday, February 20, 2009, the market capitalization of Amazon was 27.369 billion dollars; Boeing market capitalization was 26.366 billion dollars. Market capitalization is calculated by multiplying the value of one share by the number of shares outstanding. When trading began on Friday, February 20, 2009 Boeing was more valuable than Amazon by 730 million dollars; by the end of trading Amazon was more valuable by more than a billion dollars, a change of almost 1.75 billion dollars in one day. According to the most recent filings at
Boeing has 726,127,813 shares as of February 6, 2009, and Amazon has 428,583,135 shares as of January 22, 2009. There is another interesting bit of information at the SEC web site. The web site has recently been updated to make it easier to use. It is now possible to do searches by state and by just the first letter of two of the name. If you enter Boeing and IL, there are no matches. If you enter Boeing and WA, there is information on Boeing Co, Boeing Capital, and Boeing Capital Securities. 8 years after Boeing supposedly moved to Illinois, the SEC, the official arbiter of such things, says that Boeing is still a Washington company. Fortune 500, are you paying attention? This is actually the 2nd time that Amazon has been more valuable than Boeing. At the end of the Internet Insanity Bubble 9 years ago Amazon was more valuable than Boeing for a few days. That value was based on hope, expectation, and just plain foolishness. This time the valuation looks like it may be permanent.
Information Release Edmonds, WA " The Friendliest Town on Puget Sound " April 18, 2005 For additional information contact: Tim Raetzloff 425 670 8167 Shares of Western Wireless were down a little more than 1% in the week ending Friday April 15, 2005. Usually that would be cause for disappointment, but this was an unusual week. The S&P 500 was down more than 3%, and many companies were down more than 3%. Of the 1500 largest companies on the New York Stock Exchange more than 100, over 7%, were down 10% or more. Of the top 1000 NASCAQ companies more than 100, over 10%, were down 10% or more. Western Wireless held most of its ground while dozens of companies fell past it. As of the close of trading on April 15, 2005, Western Wireless is one of the top 500 companies in the U.S. as measured by market capitalization. Market capitalization is calculated by multiplying the value of one share by the total shares outstanding. The Seattle-area now has 15 companies in the top 500 measured by market capitalization. This is the largest number since early 2000. The Seattle-area companies ranked in the top 500, and the market capitalization as of the close of trading April 15, 2005 are: # 3 Microsoft $266.1 billion * Note: Boeing counted as a Seattle-area company because SEC filings continue to show Boeing principal business address as Seattle, 4 years after Boeing supposedly left. ** Usual Note: I own shares of Washington Mutual and have no financial or business interest in any other company in this release. This result is reversed from the experience of the last 2½ years, and probably represents a move to the safety of the largest companies. Over 2½ years since the bottom of the last bear market the platinum circle has gained more than 28% in market capitalization, the gold circle has gained 46%, and the silver circle has gained 62%. The smaller companies have gained value more quickly than the largest companies. The largest companies have been very active in buying back shares to support stock values. Since the relaxed rules for buybacks following 9/11 many of the largest companies have spent billions of dollars supporting the value their shares. Cisco has been the most active, buying back over 820 million shares, or $14 billion at current value. Oracle as bought back 400 million shares. ExxonMobil has bought back the largest dollar amount, 370 million shares, or $20 billion. Repurchases of 100 - 200 million shares have been common in the platinum circle. The net effect has been an appearance of a stronger market among the largest companies. During a bull market companies usually issue more shares as options are redeemed and investors reinvest dividends. This bull market has been unusual as shares have been bought back rather than issued. The Dow roughly measures the movement of the platinum circle and is up about 34% since the bottom of the market, while the market capitalization is up only 28%. The difference is the large number of shares repurchased by the largest companies.
March 10, 2005 5 years ago we talked about the top of the stock market. Ever skeptical, you asked me to let you know the next time I thought the market was near a top. I think we are there. We are near 4 year highs today, and the market is still 10% - 20% below the last top, depending on which index you follow; but I think that we will see a break down into a new bear market soon, and at the absolute outside before Thanksgiving. I also think that we will see a break in the hot real estate market (big shock !!!) at the same time. This will be the first time since 1969 that the stock market and real estate market turn down together. I expect this to be a normal bear market of shorter duration and less depth than the one we suffered through from 2000 through 2002. My guess is a decline of 30%-35% in the S&P over 18 months. I don't know what the trigger will be but there are certainly plenty of possibilities. The collapse of the dollar has benefited the earnings of companies that have overseas operations, but the growth rate in overseas earnings will slow even if the dollar continues to drop and that will lower earnings expectations and acceptable multiples for earnings. In plain language stock prices of multi-nationals won't hold. Interest rates are certainly headed higher. Another President from Texas gave us "guns and butter" 4 decades ago. It couldn't be done then and it can't be done now. Interest rates have remained remarkably stable in the face of massive deficits. Expect that to change. I expect mortgage rates to climb to 8% for a 30-year fixed by the end of 2007, up from 5½% just a few weeks ago. When interest rates go up it will destroy the entire dynamic of the current housing boom. People who need to buy houses will still buy houses, but the mania will come to an end. Expect the builders to have overbuilt just as they did during every upturn in the 60s and 70s. Expect inflation to creep back into our daily lives. That will actually mitigate the housing market so that it doesn't collapse. The term stagflation will be resurrected into daily jargon on the news. The age of boomers seems to be considered in health care, but not in relation to investing. The leading edge of boomers turn 59½ in less than 4 months. They don't have to begin taking distributions from their tax-deferred accounts, but they can, and certainly they will think more about what is in those accounts. For those who have enough to be secure and don't want to risk it further, look for a move out of stocks into interest-bearing investments. If younger workers are permitted to put some social security investments into private accounts it will not be enough money, quickly enough, to stave off this bear market, but it will fuel the next bull market. Then there is oil. I don't understand how folks who are so worried about reducing taxes don't recognize that the tax of higher oil prices is far more devastating to regular folks than an income tax will ever be. Maybe the blindness is caused by the reality that the tax goes to friends in Texas, Oklahoma, and Saudi Arabia, who will finance the next campaign. Every time oil has reached record high prices in the past it has tanked the stock market and the economy. I keep hearing Wall Street types say that this time is different. Maybe it is different, but that is the same thing they were saying about technology stocks 5 years ago. I can't see any reason why it should be different this time. There just aren't very many like you driving hybrids, and the more money that goes for gasoline and heating oil is less money for food, clothes, and entertainment. Maybe the trigger will be China when they stop buying our bonds and financing the fiscal foolishness in DC. This also amazes me - where are the real conservatives? Are there any left who care about fiscal responsibility? When foreign counties decide to stop financing our debt maybe it will be a wake-up call, but it would also trigger a bear market. And there are terrorists. I regard this as the least likely scenario. It took Bin Laden and friends 8 years to organize their 2nd attack on the World Trade Center. I expect it may take them many more years to arrange a major attack. Nevertheless we continue to spend billions destroying our own airline and travel industries with excessive measures. There were adequate safeguards to stop terror before 9/11, but no one paying enough attention to detail. I expect that the multiple layers of bureaucracy that has been put in place since 9/11 actually makes us less likely to halt a terror attack but it certainly uses more resources. The terrorists may never need to make another attack. The weight of the anti-terror force may be enough to wreak economic devastation of its own. Maybe there won't be one trigger that causes the new bear market to start, but a combination of things. The biggest thing that I notice is that the charts of many stocks are getting top-heavy. It is only a matter of time before that corrects itself. It always does. The sky isn't falling but it may lower expectations when we have another bear market so close on the heels of the last one. Information Release Edmonds, WA " The Friendliest Town on Puget Sound " March 7, 2005 For additional information contact: Tim Raetzloff 425 670 8167 Abarim Business Computers Thoughts About Harry On December 1, 2003 I wrote the following: [ "I have been a vocal critic of Boeing management, offending some who receive these releases. The news that Phil Condit has "resigned", following the firing of Mike Sears, should be good news. It isn't. The appointment of Harry Stonecipher is a step backwards. Mr. Stonecipher said that Boeing has thousands of talented employees. At least he got that right. Mr. Condit talked about the great accomplishments of Boeing. He got that right also. Virtually nothing else that I heard in the press conference made any sense at all. The Senate investigation will now be even more thorough, and nearly certain to take a year or more. That puts the Everett 767 production line in jeopardy. Unless Boeing gets new 767 orders between now and the end of 2004, it may be impossible to keep production going long enough for the tanker contract to begin. If the Air Force really needs tankers, the planes ordered may not be 767s. This sudden action removing Mr. Sears and Mr. Condit makes it appear that the hands of the CEO were not clean in the tanker contract scandal. Mr. Sears appears ready to defend his actions as approved by his superior, and, probably, by the board. I don't think I need to remind anyone that this is an election year, and political advantage will determine what finally happens with the tanker contract. Boeing may finally get the contract because there are few alternatives, so the company may not ultimately suffer at all; but, for the workers on the 767 production line, that determination may not come soon enough to save their jobs. My very strong opinion is that the Boeing board has been asleep. Phil Condit's conduct of Boeing has been in question for more than 5 years, ever since the production snafu in the commercial airplane division. A prominent Seattle business columnist wrote in 1998 that Mr. Condit would not survive long in the job. Unfortunately that prediction was wrong. The problems at Boeing are not limited to commercial airplanes. Every Boeing division has had at least one crisis in the last year. This indicates serious problems at the very top, of which the tanker scandal is little more than the proverbial tip of the iceberg. As layers are disclosed in the investigation no good for Boeing can come from it. The frustrating part of the entire process is that the responsible parties seem certain to retire in wealth, while the employees pay the full bill of management failures. The State of Washington should be reviewing the $3 billion giveaway to keep Boeing 7E7 production in Washington. If the tanker process has been tainted, is there any reason to believe that Boeing has operated any differently in the 7E7 decision? The $3 billion in "incentives" to Boeing will be made up by every other business in the state. Is the damage done to those other businesses worth the "gain" of 7E7 jobs, and does that make Washington a more "business-friendly" environment? Wouldn't Washington be more "business-friendly" if the $3 billion was spread around to every other business in the state by small across-the-board reductions in the B&O tax? If the state is willing to give up $3 billion to be more "business-friendly", why not spend the money where it will really generate more jobs? This crisis in Boeing management gives Washington the opportunity to review the "incentives" and use the money in a more rational, and more productive way." ] Today I have to add that the board has finally awakened and done its job. That is very good news for the ultimate health of Boeing. However, the excuse for firing Harry Stonecipher sounds bogus, just like almost everything associated with Harry Stonecipher has been bogus right along. Harry's great skill has been the ability to bs Wall Street and administration officials. How ironic that the government should return Boeing to its good graces on Friday, in recognition that Boeings ethics woes are behind it, and on Sunday the board of directors should find it necessary to dismiss CEO Stonecipher for a lapse in judgment and ethics. I believe there is more to the firing than an affair. Almost certainly the board had more reason to request the resignation. There is, at least, a suspicion that investigators are getting closer to Harry in the Darlene Druyun investigation, and other ethics investigations of government contracts improperly awarded to Boeing. Sadly, this new cloud makes it almost certain that the 767 line in Everett will be shut down. It also will strengthen Boeing opponents in Congress. How much better if the board had done its job 15 months ago and cleaned house at the top. Boeing must fully cooperate with government investigators to remove the last of the suspicion. It is time to reconcile Boeing and Seattle. The individuals who were the cause of the friction are now gone. There is much to be gained for Boeing and the region if we find that we can again work together and salvage as much as possible from the situation. Information Release Edmonds, WA " The Friendliest Town on Puget Sound " July 18, 2004 For additional information contact: Tim Raetzloff 425 670 8167 No this isn't a pipe dream. I realize that Boeing made a huge production out of the move of the headquarters to Chicago, probably the biggest such move of the last decade; but check out Boeing's file at the SEC. Boeing's files at the SEC indicate that Chicago is the company mailing address, and that Seattle is the actual business address. It is not uncommon for a company to use 2 addresses for a year or more while moving the company headquarters. Burlington Resources kept Seattle as a mailing address for more than a year when BR moved to Texas 10 years ago. Potlatch kept San Francisco as a mailing address for more than a year when moving to Spokane 5 years ago. What is unusual (in fact the only case I found while checking companies that have moved headquarters in the last few years, there may be another but I didn't find it) is that Boeing did not keep Seattle as the mailing address, but installed a mailing address in Chicago and maintained the business address in Seattle. What is also unusual is the length of time - Boeing is using Seattle as its business address nearly 3 years after the "move". I can't find another example of dual addresses used that long. If you want to check for yourself go to: http://www.sec.gov/edgar/searchedgar/companysearch.html Less than half the expected 500 jobs landed in Chicago. It looks like Chicago got the CEO and some support staff, but a lot of what is considered to be executive functions remain in Seattle. I can only guess at why. An absentee CEO is not all that uncommon. You need only go as far as Redmond to AT&T Wireless where John Zeglis has been missing in action since AWE was spun from AT&T. Then there was notorious case of Bill Agee (Mr. Mary Cunningham) who would never go to Idaho to the headquarters of Morrison Knudsen, of which he happened to be CEO. There are literally hundreds of cases of absentee CEOs. Before I digress too much it appears that what Chicago really got was an absentee CEO and his entourage. The real headquarters remains in Seattle and is so indicated in the SEC filings. I can't blame Mr. Reed for believing that Chicago was cheated. I found only 1 other top 100 company in the country which uses a mailing address in one state and a business address in another state. That company is First Data, which moved from Atlanta to Greenwood Village, CO about 2 years ago. During the process of leaving Atlanta, a mailing address in Omaha was set up and is still on the SEC filings, but the business address is in Colorado where the company is really relocated. Fortune magazine lists First Data as a Colorado company, which is certainly correct. Using the same criteria, Boeing is still a Seattle company. I have decided that I will include Boeing in reports about Seattle companies until Boeing begins to use Chicago as its business address. Information Release Edmonds, WA " The Friendliest Town on Puget Sound " March 17, 2003 For additional information contact: Tim Raetzloff 425 670 8167 Abarim Business Computers 2 Years Since Boeing decided to Leave When Boeing announced that it was leaving Seattle 2 years ago, the city had barely stopped shaking from the February earthquake, and was still psychologically shaking from the Fat Tuesday riots a few weeks before and the WTO riots a year before. That timing probably made the Boeing announcement even more startling, and caused even more doubt and discussion than it would have at any other time. Boeing had been the economic engine of Seattle for 60 years, and Boeing was going away. Would the lights really go out this time? The lights didn't go out. After 2 years the Seattle area share of the market capitalization of the United States not only hasn't gone down, but it has gone up slightly, despite the loss of Boeing and 2 other large companies, as the region has clearly out-performed many other areas of the country. On March 16, 2001, the last Friday close before the Boeing announcement, there were 12 Seattle companies in the top 500 in the US when measured by market capitalization. The value of Seattle companies was $489.560 billion, 4.557% of the US total of $10.7425 trillion. Boeing was a little less than 10% of the Seattle total. In the 2 years since, Seattle lost the headquarters of Boeing, and also VoiceStream Wireless (now T-Mobile a part of Telekom), and Immunex (now a part of Amgen). The value of those 3 companies was $79.76 billion (17%) of the 2001 Seattle total, which should have reduced the Seattle portion of the top 500 to 3.8%. Yet on Friday March 14, 2003, there were again 12 Seattle companies in the top 500. The total market capitalization of Seattle companies had declined to $378.446 billion, a loss of 22.697%. Over the same period of time, the total market capitalization of the 500 most valuable companies in the US had declined to $8.0306 trillion, a loss of 25.245%. The Seattle portion of the total is now 4.713%, a higher percentage than it was 2 years before. 3 new companies that had never been in the top 500 in 2001 are now on the Seattle list: Expedia, Plum Creek, and Expeditors International. Of the old companies, the value of Amazon, Starbucks, PACCAR, and SAFECO have gone up. Washington Mutual and Weyerhaeuser are virtually unchanged. Microsoft and Costco Wholesale have both declined less than the national average. Of the largest Seattle area companies, only AT&T Wireless has declined more than the national average. The Seattle area doesn’t seem to have been damaged at all by the Boeing move. The biggest losers in the process seem to have been Boeing itself and the New York Stock Exchange. The value of Boeing shares has declined by 52.465%, and the total market capitalization of Boeing has declined by 57.197%. Boeing was the 52nd most valuable company in the US in 2001, and is now #80. Much of that loss can be attributed to September 11, and the devastation to commercial airlines. But there is anecdotal evidence that small Seattle area investors have quietly abandoned Boeing shares, and Chicago area investors have not filled the gap. Boeing shares were the foundation of many Seattle area portfolios for decades, through good times and bad. That attachment is now broken, and Boeing is probably a little the worse for it. Boeing was the largest New York Stock Exchange company in the Seattle area for 50 years. NYSE companies were 26.7% of the Seattle total in 2001, but the NYSE share has declined to 16.3% in 2003. The momentum that NYSE had built up in the late 90s by listing Washington Mutual and Nordstrom is now gone. Seattle is once again firmly NASDAQ territory. Boeing left Seattle, but the Seattle area is still among the dynamic areas of the country. Boeing’s arrival in Chicago didn’t do a thing for Chicago, but put the spotlight on the declining fortunes of the Windy City.
Appended Statistics: Largest Seattle area companies on March 16, 2001, market rank, market capitalization, share price, and shares outstanding: # 2 Microsoft $290,932,360,000 $54.56 5,332,338,000 shares # 52 Boeing $ 47,754,130,000 $53.75 888,449,000 shares # 57 AT&T Wireless $ 42,504,000,000 $18.40 2,310,000,000 shares # 86 WashingtonMutual $ 29,945,810,000 $51.49 581,585,000 shares #112 VoiceStream Wireless $ 20,581,650,000 $90.31 227,900,000 shares #135 Costco Wholesale $ 16,638,030,000 $37.13 448,102,000 shares #192 Immunex $ 11,421,940,000 $21.25 537,503,000 shares #207 Weyerhaeuser $ 10,616,060,000 $49.88 212,832,000 shares #257 Starbucks $ 8,243,000,000 $43.81 188,158,000 shares #456 Amazon.com $ 3,914,500,000 $11.00 355,864,000 shares #480 Nextel Partners $ 3,579,380,000 $14.75 242,670,000 shares #493 PACCAR $ 3,429,130,000 $44.81 76,526,000 shares
Largest Seattle area companies on March 14, 2003, market rank, market capitalization, share price, and shares outstanding:
# 1 Microsoft $266,036,430,000 $24.86 10,701,385,000 shares # 53 Washington Mutual $ 31,052,130,000 $33.53 926,100,000 shares #109 AT&T Wireless $ 16,037,580,000 $ 5.92 2,709,050,000 shares #123 Costco Wholesale $ 13,487,210,000 $29.59 455,803,000 shares #150 Weyerhaeuser $ 10,622,280,000 $48.51 218,971,000 shares #171 Amazon.com $ 9,593,480,000 $24.71 388,243,000 shares #177 Starbucks $ 9,403,350,000 $24.26 387,607,000 shares #282 PACCAR $ 5,612,360,000 $48.43 115,886,000 shares #327 SAFECO $ 4,710,140,000 $34.42 136,843,000 shares #349 Expedia $ 4,301,930,000 $37.14 115,830,000 shares #366 Plum Creek Timber $ 3,974,510,000 $21.50 184,861,000 shares #387 Expeditors International $ 3,615,570,000 $34.74 104,075,000 shares
Dow Jones Industrial Average March 16, 2001 9823.41 March 14, 2003 7859.71 Percent change - 19.99
S&P 500 March 16, 2001 1150.53 March 14, 2003 833.27 Percent change - 27.58
NASDAQ Composite March 16, 2001 1890.91 March 14, 2003 1340.33 Percent change - 29.12
Top 500 Market cap March 16, 2001 $10,742,542,740,000 March 14, 2003 $ 8,030,618,340,000 Percent change - 25.24
Seattle top 500 companies March 16, 2001 $ 489,560,190,000 March 14, 2003 $ 378,446,970,000 Percent change - 22.70
Boeing share price March 16, 2001 $53.75 March 14, 2003 $25.55 Percent change - 52.47
Boeing market capitalization March 16, 2001 $47,754,130,000 March 14, 2003 $20,439,440,000 Percent change - 57.20
And I suppose I should again provide the disclaimer. I do own shares of Washington Mutual. Neither I nor Abarim Business Computers have any financial interest in any of the other companies, except to the extent that local companies doing well is good for the local economy.
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