Tough year for Boeing but company has not ruled out designing a new airplane

Boeing’s third-quarter earnings release was chock-full of headline-grabbing, grim news — the continuing debacle of the 737 Max, COVID-19 pummeling passenger traffic, more layoffs and plans to cut 30 percent of its real estate — so it wasn’t until the question-and-answer session of the conference call with investment analysts that two intriguing topics came up.

Intriguing, because they’re interconnected to each other and to the long-range prospects for the company and for jobs and the economy in this region.

Issue No. 1: One of the callers asked chief executive Dave Calhoun what he planned to do with all that vacant space at the Everett plant that will be freed up by the winding down of the 747 production line and the plan to consolidate 787 production in South Carolina.

“Would you think about moving Max up there at some point?” the analyst asked, going on to suggest that another use for the idle space would be an entirely new airplane line.

Issue No. 2: Speaking of which, Calhoun said the idea of a new airplane hasn’t been jettisoned entirely, just deferred.

On the immediate topic of what to do with the Everett and Renton plants, Calhoun nixed the idea of consolidating in one Puget Sound area factory.

“We’re not ruling out big changes,” he said.

But for now the plan with that space is, to use his terminology, to “line it off for quite a while because I don’t want to move lines from one place to another just because it’s available.”

Moving an aircraft final-assembly line would seem to be an immense logistical undertaking. Aside from needing a lot of space, it takes a lot of stuff — tools and equipment — to put an airplane together, not to mention the challenges of getting parts and subassemblies to the right place at the right time, and the employees to do the actual work. But it’s not impossible, or else Boeing wouldn’t be planning to move the 787 line out of the Everett plant.

Then again, whatever gains Boeing might achieve by consolidating production could take years, and there are no assurances that such a move would produce any such gains; such huge projects always hold the potential for huge troubles. Boeing doesn’t have the time or need for such distractions right now, considering what other issues it’s dealing with.

Calhoun says he’ll be patient.

“We’re not just going to try to fill empty space,” he said, according to the transcript compiled by the Motley Fool. “That would not be in our best interest.”

For one, Boeing wants to see how and when the market for aircraft recovers; it might actually need that space in most plans should demand rebound.

He added, “And then the next product’s going to come along.”

Wait, what? A new plane?

That’s something you haven’t heard much chatter about in what seems like years but is really just since the outbreak of the pandemic. True, Boeing has been talking about the next airplane model for several years, starting with the discussion of whether to come up with a replacement for the 737 or try for a “middle of the market” aircraft that would fit into the portfolio between that plane and the wide bodies.

The decision was made to extend the life of the 737 with the Max, and focus development efforts on a plane that would fill the market slot once occupied by the 757. Even with the Max’s resulting problems and considerable second-guessing about the decisions made about it, Boeing was still publicly discussing a proposed new plane and privately talking to airlines to see what they might want in one.

The pandemic largely squelched any mention of a new plane, since airlines didn’t need or want the ones they had already ordered, never mind a new model. Boeing executives say it will be several years before the global airline industry recovers. But Calhoun’s most recent remarks were one of the first public signs in months that Boeing is thinking beyond the immediate crises.

Calhoun said Boeing has “some incredible underlying technologies that are going to support” the design of that next airplane.

“We’re going to assess this market based on everything that’s happened in the last year and probably the next year,” he said. “… We’re not out of the development business. We’re still in it.”

Having Boeing return to expansion mode is no guarantee that its expansion will occur here. While there’s much less of a feeling of antagonism between the Puget Sound region and Boeing’s current management than there was with Calhoun’s predecessor Jim McNerney, any new plane program is going to be put up for internal and external competition and can as easily be built in South Carolina as in the Puget Sound region.

But the fact that Boeing is talking publicly at all about a new plane has to be counted as a bit of optimism about its future and that of the local aerospace sector. Thin gruel, to be sure, but these days only the delusional are helping themselves to heaping bowls of upbeat outlooks and perspectives on much of anything.