In an announcement Monday morning, Boeing Co. (NYSE: BA) said that the company could begin delivering its backlog of 737 Max passenger jets and that the plane may be certified by the U.S. Federal Aviation Administration (FAA) to begin flying again in January.
The company posted a list of five “key milestones” that it must achieve in order to return to service. The first, an FAA session to evaluate the safety of the overall software system, was completed last week, Boeing said.
FAA certification of the Max flight control software updates remains targeted for this quarter. If that happens, deliveries could begin in December, after the agency issues an Airworthiness Directive lifting the grounding order it imposed in March.
Boeing also said, “In parallel, we are working towards final validation of the updated training requirements, which must occur before the MAX returns to commercial service, and which we now expect to begin in January.”
The four remaining milestones are:
FAA Line Pilots Crew Workload Evaluation: A separate, multi-day simulator session with airline pilots to assess human factors and crew workload under various test conditions.
FAA Certification Flight Test: FAA pilots will conduct a certification flight(s) of the final updated software.
Boeing Final Submittal to the FAA: After completion of the FAA certification flight, Boeing will submit the final certification deliverables and artifacts to the FAA to support software certification.
Joint Operational Evaluation Board (JOEB) Simulator Training Evaluation: The Joint Operational Evaluation Board (JOEB), a multi-regulatory body, conducts a multi-day simulator session with global regulatory pilots to validate training requirements. Following the simulator session, the Flight Standardization Board will release a report for a public comment period, followed by final approval of the training.
Boeing also noted:
The FAA and other regulatory authorities will ultimately determine return to service in each relevant jurisdiction. This may include a phased approach and timing may vary by jurisdiction.
China, the European Union and Canada are among the many civil jurisdictions to have indicated that they will be conducting their own evaluations of the 737 Max’s fitness to return to service. This deadly story is not behind Boeing yet.
The company’s share price has risen more than 4% since the announcement, to $366.34 in a 52-week range of $292.47 to $446.01. The 12-month consensus price target on the stock is $379.00.
DECEMBER PAGE 2
China is absolutely critical to U.S. car manufacturers. It is the largest car market in the world, as it moved ahead of the American market in 2009. Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM), in particular, are up against the overall drop in the market in the People’s Republic. In addition, their portion of the market is shrinking.
The China Association of Automobile Manufacturers released data on automobile sales in China yesterday and said:
In September, the decrease rate of sales narrowed on yearly basis. This month, the production and sales of automobiles in China reached 2,209,000 and 2,271,000 units respectively, up 11% and 16% than that of last month, but down 6.2% and 5.2% year on year. The year-on-year decrease rate for production enlarged 5.7 percentage points than that of last month; but shrank 1.7 percentage points for sales.
Production and sales year to date were barely above 18 million.
GM’s sales in the third quarter dropped 17.5% to 689,531 vehicles.[AT&T TV]
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Ford’s numbers in China were worse. Third-quarter sales were down 30.3% to 31,060, a number that is staggering. The company commented, “Ford China remains focused on its business transformation following the launch of the ‘Ford China 2.0’ strategy.” That Ford’s sales can improve in China is a long shot.
The U.S. market has started to stall, with sales of barely 17 million. If U.S. car companies cannot reverse their problems in China, their global problems become more extreme by the year.
GOAL IS SMOOTH
In September, Volkswagen introduced its new all-electric ID.3 sedan, along with a plan to have the car on the road by the summer of 2020. The announced goal for the ID.3 and the other electrified vehicles in VW’s stable was to produce a million electric cars by the end of 2025.
On Friday, VW said it has pulled that target in and expects to produce 1.0 million electric vehicles by 2023 and 1.5 million by 2025.
The ID.3 is based on Volkswagen’s Modular Electric Drive Toolkit (MEB) and offers ranges from 330 to 550 kilometers (about 200 to 340 miles). The basic version of the ID.3 will cost less than €30,000 (about $33,500). VW also offered pre-booking for the ID.3. To date, over 37,000 customers have reserved an ID.3 and paid a pre-booking deposit, according to the company.
Thomas Ulbrich, a member of the Volkswagen brand Board of Management responsible for VW’s E-Mobility initiative, commented:
2020 will be a key year for the transformation of Volkswagen. With the market launch of the ID.3 and other attractive models in the ID. family, our electric offensive will also become visible on the roads. Our new overall plan for 1.5 electric cars in 2025 shows that people want climate-friendly individual mobility – and we are making it affordable for millions of people.[Tostitos]
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VW has announced an investment program in electric vehicles totaling around $36 billion. On Thursday, the company announced a mobile charging system that uses robots to deliver a mobile storage device to a parked car, connects the device to the car, leaves to deliver another device to another vehicle, and returns once the mobile storage device has finished charging the first car to haul the charger away. Here’s a demo of how the system works in a parking garage.
VW and its European dealers plan to install 36,000 of the mobile charging points throughout Europe by 2025 and most will be publicly accessible. The company is also launching its own home charger for its ID-series of vehicles and installing 400 fast-charges on major European highways.
The company has also opened its modular drive system, the MEB, to other carmakers. Ford Motor Co. (NYSE: F) will use the MEB to build and sell vehicles in Europe. VW expects to begin delivering the MEB platform in 2023 and to sell more than 600,000 MEB-based vehicles within six years. Ford will be among, the first automakers, if not the first, to build vehicles on the MEB platform.
VW said it plans to introduce its all-electric ID. CROZZ SUV in 2020 and will begin production of the new model later in the year. A second VW electric vehicle manufacturing plant based on the MEB platform is also scheduled to open in China next year.
Tesla Inc. (NASDAQ: TSLA) last month announced plans to build a fourth Gigafactory in Germany beginning next year with finished vehicles rolling off the line in 2021. Tesla is expected to build its Model Y crossover vehicle at the plant with an annual production goal of 150,000 vehicles a year. Tesla’s third Gigafactory already has begun building cars in China, less than a year after the company broke ground.
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