This past week marked the end of an era, when 38 year Aerospace industry veteran, Scott Carson, retired from Boeing’s commercial division. Carson had a remarkable career, however the past few years have been highly stressful at the company, mainly due to the many delays for the 787 jetliner. Surprisingly, Boeing has decided to give Carson’s position to Jim Albaugh, formerly the head of Boeing’s defense business.

Investors have been calling for a change to the commercial division’s structure since the 787 aircraft has been forced to go through several costly delays, however by moving Albaugh from the Defense Contract position, one wonders if Boeing’s market share will decrease in the highly competitive defense landscape.

Several investor analysts were perplexed at the timing of Albaugh’s job change. Considering that it was under Albaugh’s leadership that Boeing became of the leaders in the defense contract industry, it would stand to reason that Boeing’s competitors may take advantage of the situation.

Considering that Boeing’s defense business now makes up for roughly 50% of the company’s annual revenues, investors became wary of the management shuffle, causing the stock to drop 2.7% after the announcement.

Dennis Muilenburg, currently the president of military support and services business will take over for Albaugh’s defense position at Integrated Defense Systems.

Xytech Systems announced that the first installation of its new product, MediaPulse, is complete at the Boeing. MediaPulse has been successfully implemented in the company’s Creative Services division. Boeing Creative Services manages extensive and dynamic inventories of video, graphics, and photography across a global network of external and internal users.

MediaPulse is a next-generation application suite for asset and resource-based media workflows, and leverages Xytech Systems’ 20-year history of providing business workflow solutions to the media and entertainment industry. From the inception of MediaPulse, Xytech Systems envisioned a dramatically new type of software, one that transcended earlier limitations and offered users greater functionality and ease of use. MediaPulse was developed using the latest technology benefits of the .NET framework to create a product specifically designed to improve, streamline, and automate media operations. The powerful, multi-tiered architecture of MediaPulse provides Boeing with the increased performance and flexibility the company sought as it replaced its client/server applications.

MediaPulse was installed at Boeing Creative Services during its beta testing phase in late 2008. Since that time, MediaPulse has been fully implemented as a tracking and billing system for resources, a function that involves 700 users and 95 departments nationwide. In addition, MediaPulse has proven instrumental in the division’s purchase order management and reporting structure. Accurately and quickly managing the movement of assets is another critical requirement in Boeing Creative Services’ workflow. Richard Gallagher, CEO of Xytech Systems, commented that, “MediaPulse was developed for challenges like the ones faced at Boeing Creative Services: large volumes of diverse assets must be managed, tracked, and reported with speed and precision. The testing and final implementation that has taken place has been an exciting collaboration. It is an honor to continue our 19-year history with Boeing by launching a product that we are so proud of.”

B/E Aerospace has announced that The Boeing Company has selected B/E Aerospace as its manufacturer of cabin lighting for the next generation Boeing 737 aircraft program. This innovative B/E Aerospace supplier furnished equipment (SFE) system will become standard equipment on all next generation Boeing 737 aircraft, and is part of B/E Aerospace’s $2.3 billion unbooked SFE backlog. Program deliveries are expected to commence in late 2010, with volume deliveries commencing in 2011.

B/E Aerospace’s digital light-emitting-diode (LED) lighting system will play a critical role in the new Boeing “Sky Interior” for the 737. This innovative, lightweight LED system features adjustable lighting with full spectrum color capabilities, providing superior cabin ambiance and unprecedented lighting control. Studies have provided conclusive evidence that cabin illumination enhances passenger comfort.

“We are honored to have been selected by Boeing as the supplier partner of next generation lighting for the new 737 “Sky Interior”. We look forward to continuing our long-standing and excellent relationship with Boeing as we both develop ways to enhance aircraft performance and passenger comfort,” commented Amin J. Khoury, Chairman and Chief Executive Officer of B/E Aerospace, Inc. “This award is part of our strategic “OEM direct”, or SFE, focus to substantially increase our revenue content per aircraft. The value of the OEM direct awards which the company has won currently totals over $2.3 billion, only a very small portion of which is included in the company’s backlog. Our current backlog of $2.8 billion, along with unbooked SFE awards, is in excess of $5 billion. As we deliver products from our total $5 billion plus backlog (booked and unbooked) we expect to substantially add to our current $7.3 billion installed base, which in turn should facilitate growth in our spares business over time.”

Boeing recently selected Boost eLearning Google Search Training to save Boeing employees time and improve search results when using Google to search the Internet or the Boeing intranet. Boeing will use Boost eLearning Google Search Training to enhance the skills of Boeing employees to obtain fast, accurate search results.

Victor D. Alhadeff, CEO and founder of Boost eLearning, commented, “We are delighted to have this opportunity to work with Boeing by providing Boost eLearning Google Search Training for Business Research as a performance enhancement tool. Our Google Search training courses will provide Boeing with significant savings by increasing the productivity of Boeing employees when searching the Boeing intranet or the Internet.”

This past week has proven to be a difficult time for the aerospace manufacturer.  James Bell, the company’s CFO, speaking at the recent Cowen and Co. Aerospace and Defense Conference in NYC, informed the investors attending that Dubai’s LCAL has limited its order of 787 Dreamliners from twenty-one to five.  This was not a surprise considering that Boeing’s CEO, Jim NcNerney, warned investors on January 28th that he expected an increase in order cancellations.

Christopher Hinton from Marketwatch had this to say about the situation, “The 787, an all-new and more fuel-efficient airliner that can carry up to 250 passengers and that makes extensive use of light-weight composite materials, has faced a series of design and production delays that have pushed back the estimated first commercial delivery of the plane to the first quarter of 2010.”

The world’s first commercial aviation test flight powered by a sustainable second-generation biofuel this past week in New Zealand.  The Air New Zealand Boeing 747-400 will have one of its four Rolls-Royce RB211 engines powered by a biofuel blend derived from a second-generation biofuel plant – Jatropha Curcas.

The Air New Zealand test flight is a joint initiative with partners Boeing, Rolls-Royce and Honeywell’s UOP in commercial aviation’s drive for more sustainable air travel for future generations. Captain Morgan will detail the various stages of the flight and the tests that will be undertaken to check the performance of the biofuel blend under a variety of operating conditions.

Air New Zealand and its partners have been non-negotiable about the three criteria any environmentally sustainable fuel must meet for the test flight program. These are social, technical and commercial.

GE Aviation has been awarded a $40 million contract from Southwest Airlines to provide the new SDS-6000 large area display suite for Boeing 737 Classic aircraft. First production deliveries will take place in early 2011. The systems will be installed on up to 150 aircraft.

Integrated with the flight management system upgrade awarded to GE by Southwest last year, the combined system will provide the full benefit of flying the most efficient Required Navigation Performance (RNP) operations available. Southwest will be well equipped to lead the way in the expansive use of these approved routes realizing fuel, emission and noise reductions.

Patricia O’Connell, president, Civil Business unit for GE Aviation Systems, said, “Southwest Airlines is the launch customer for this new large area display suite. This integrated display system, coupled with our flight management system, enables operators to fly advanced navigation procedures and reduce operator costs from less fuel, less emissions and less through life costs.”

The GE solution comprises a complete integrated cockpit display solution, including primary flight displays, standby instrument and control panels. The primary flight displays, which have been designed to mimic the appearance of the B737 Next Generation cockpit, feature new 15.4” widescreen displays with innovative dual-channel display architecture, which is patent pending and offers unprecedented levels of display availability. The displays feature integral signal and video processing and graphics generation, eliminating the need for a separate symbol generator. The suite includes GE’s Integrated Standby Instrument System (ISIS), which provides a single box solution for standby instrumentation. Southwest has selected Boeing Commercial Airplanes as the integrator of the system into the fleet of Boeing 737 Classic aircraft.

A LA Court jury awarded ICO Global Communications $236 million in punitive damages in its case against Boeing. This award is in addition to the at least $371 million awarded last week when the jury found Boeing liable for fraud, tortious interference, and breach of contract. In addition, the Court will determine the amount of pre-judgment interest to be added to the award, which ICO expects to be approximately $100 million. The total expected judgment to be entered against Boeing in favor of ICO is approximately $707 million.

“We appreciate the sacrifices made by the jury in performing their civic duty over this lengthy trial,” commented J. Timothy Bryan, chief executive officer for ICO. “ICO’s attention now turns to collecting all of the damages awarded, including all of the substantial post judgment interest which will accrue to ICO from the date of the judgment should Boeing pursue an appeal.”

In case you are unfamiliar with the company, ICO developed and launched the G1 satellite, which is intended to serve as the platform for the “ICO mim” (mobile interactive media) service. This service is planned to include live mobile television, interactive navigation and emergency communications capabilities, and will serve the continental United States, Alaska, Hawaii, Puerto Rico and the US Virgin Islands. Alpha trials of this service will begin in 2008 in Las Vegas, Nevada and Raleigh-Durham, North Carolina. The company is working with Alcatel-Lucent and Hughes Communications on its alpha trials, and has an agreement with Delphi Corporation to develop its mobile video service for the North American automotive market. NBC Universal and Discovery Networks are providing live mobile video content for the trials.

The past two weeks have had both good and bad news for Boeing collectively.  As we reported at the beginning of the week, the machinist union strike ended this past Sunday, November 2nd.

Boeing’s longest labor dispute in the past decade came to a close this past weekend as union machinists returned to work this past Sunday.  The strike cost Boeing an estimated $100 million dollars a day in deferred revenue and further delayed the production of the 787 Dreamliner aircraft.

So what was the final result of the dispute?  J. Lynn Lunsford, of the Wall Street Journal, had this to say about the situation, “Officials with International Association of Machinists and Aerospace Workers said 74% of union members voted Saturday to accept a new contract that includes a 15% increase in wages and improved job security. In a change that will guarantee Boeing a more predictable delivery timeline, the union agreed to extend the contract a year to four years in exchange for increased pay and other concessions.”

Even with the strike ending, Boeing officials predict it will take several weeks for the workforce to get fully up to speed.  Boeing CFO, James Bell, intoned that production would be delayed ‘on a day-for-day’ basis.  Despite the ambiguity, Boeing’s stock share price has climbed dramatically since October 27th, when investors became confident of an impending end to the labor dispute.  Share price has risen from $42.50 to $52.50 since the 27th.

Industry experts estimate that Boeing has missed 70 deliveries due to the 57-day strike.

L-3 Communications announced this week that its Vertex subsidiary has been awarded an indefinite-delivery contract valued at $569 million by the U.S. Navy. Vertex, which has teamed with The Boeing Company for this project, will provide logistics services and maintenance materials in support of T-45A and T-45C trainer aircraft.

Work under this contract is now underway and includes four option years, extending its period of performance through September 2013. Vertex has been providing T-45 logistics support to the Navy for the past five years.

“We are proud our team has been selected to continue this mission-critical work, and we remain committed to delivering the highest level of quality and performance excellence”, said Ed Boyington, L-3 Vertex president.

Mr. Boyington added that under this contract, Vertex will service 71 T-45A and 108 T-45C aircraft based at Naval Air Stations in Meridian, Miss., Kingville, Texas, and Pensacola, Fla.

Boeing will manage the supply chain in support of the contract. “We are pleased to be working with L-3 to provide support for this important training aircraft,” said Jim O’Neill, Boeing Integrated Defense Systems vice president and general manager of Integrated Logistics. “This team will provide maximum readiness at an affordable cost for the U.S. Navy on the T-45.”

L-3 Vertex Aerospace, a subsidiary of the L-3 Integrated Systems Group, provides aviation, aerospace technical services and ground systems primarily to government customers. The company has over 11,000 employees working from 300 locations worldwide.