Boeing

[stockton]

21st January 2020
Wall Street pegs Boeing's 737 MAX bill at more than $25 billion
"We are expecting Boeing's up-coming results to be 'an absolute disaster', and that now looks guaranteed," Stallard said.

A truly staggering amount of money.

However BA has lost over $60B in market value since the trouble started. What the affair does emphasise is the strength of BAs market position - customers simply cannot go elsewhere.

[AsleepInYorkshire]

24th January 2020
Financier doubts add to Boeing's MAX headaches
To restore faith in the 737 MAX, Boeing needs to prove its flagship jet is not just airworthy but also a safe investment.
...
While several airlines have said Boeing agreed to compensate for MAX delivery delays, some lessors are arguing that falls in the value of the jet should also form part of the discussions.

Boeing is considering another cut to 787 Dreamliner production
Boeing is considering additional cuts to production of its 787 Dreamliner, the company’s higher-priced wide-body line of aircraft.

AiYn'U

[AsleepInYorkshire]

25th January 2020
Boeing's 777X jetliner successfully completes maiden flight

Initially. I thought Boeing had something in the tank to smile about.

Then I read this

Boeing officials said the maiden voyage would herald months of testing and certification before the aircraft enters service with Emirates in 2021, a year later than originally scheduled because of snags during development.

Whilst I'm aware that the development of any new aircraft will have it's share of problems I couldn't help but sense a trend ... Boeing seems to under estimate timelines and [ultimately] costs and over estimate their own internal abilities to deliver within budget and on time. Critical failings?

AiYn'U

[AsleepInYorkshire]

26th January 2020
Boeings China Problem

China's CAAC was the first to ground the Max. Good call. Now Boeing has to work hard to sell into its largest market. In 2018 a new aircraft was delivered to a Chinese Airline every 21 hours.

It's entirely possible that the recent trade wars will have a huge negative impact on Boeing. But that's just the start of Boeings problems. China is building its own aircraft. Comac is developing & building China's own aircraft. The Comac C919 will compete with Airbus and Boeing single aisle aircraft. And it's new ... with all the problems that come with that. But with 7 out of 8 airlines in China being state owned it's highly unlikely China will not endorse the vehicle for these airlines.

China is not just Boeing's opportunity. It's a requirement. Without China Boeing's sales will shrink. Boeing's place at the top of the table has slipped. It's going to be hard to reclaim that place, without pain. It's looking more likely that the main burden of that pain will be upon the current shareholders.

AiYn'U

[AsleepInYorkshire]

28th January 2020
Boeing are due to announce their 4th quarter results tomorrow

In the meantime ...

Boeing’s travails run deeper than a few bad apples
In addition, Boeing is about to cut the rate of production on its popular 787 wide-body, and the 777X still faces significant challenges before it enters service.
...
But it is Mr Calhoun’s job to set a very different tone from his predecessor. Nor can he blame a handful of rogue employees for the toxic culture that led to the 737 Max tragedy.

The Airbus-Boeing Duopoly Is Extremely Unbalanced
Boeing could yet decide that the best way to leave behind the 737 Max ignominy is to build a completely new single-aisle aircraft, which would oblige Airbus to follow suit.

AiYn'U

[scotia]

4th Quarter Results - out today
https://investors.boeing.com/investors/investor-news/press-release-details/2020/Boeing-Reports-Fourth-Quarter-Results/default.aspx?mod=article_inline

[monabri]

I would have thought that this debacle would have tanked the share price to a much greater extent than it appears to have. I wonder if there is any shorting of BO?

One Year


Five years

[AsleepInYorkshire]

30th January 2020
Why is Boeing's share price still flying high despite Q4 losses?
This is why the share price is still holding up above US$300, because it is hard for fund managers to exit since it is harder for them to short,’ they added.

31st January 2020
Boeing discloses U.S. SEC probe over 737 MAX
The U.S. plane maker said in a regulatory filing bit.ly/38XcQXC it was cooperating with the regulators and cautioned that any adverse results could have a further material impact on its financial position.

AiYn'U

[AsleepInYorkshire]

Last year I predicted the costs to Boeing for this situation would be of the order of $10-$15bn. There was no accurate science at all. A guess. That number has now been surpassed and there's still no bottom.

Since then Boeing's headwinds have increased in my opinion

1. The Max has not returned to service
2. Boeings credit rating has slipped and is likely to fall further
3. Trump has manifest a trade war that is highly likely to impact upon Boeing in both the short and long term
4. It is highly likely that China (Boeings largest customer outside the US are approaching the ability to supply their own aircraft
5. Boeing still has no replacement single aisle aircraft in development
6. Boeing's "Tanker" offering to the US Air Force has come under further scrutiny for not being able to do what it was purchased for
7. Boeing has not replaced the board under whos watch the fatal crashes occurred.
8. Boeing has accepted that pilots will need simulator training for the Max as a standard measure.
9. The number of those refusing to use the aircraft upon it's return remains virtually the same as just after it was grounded
10. Each aircraft will be individually inspected by the FAA before being signed off as fit to fly
11. Boeings suppliers are struggling to survive

It remains a mess.

AiYn'U

[airbus330]

It is a horrible, inexcusable mess. But, and I think the lack of a real SP tank (so far) bears out that, in the US at both public, financial and government levels Boeing is too important to be allowed to fail. Probably, in a world where there are only 2 significant airframe manufacturers, it wouldn't be good for the industry for it to fail. It is an unfortunate fact that the air safety that we enjoy today when we jump on an Easyjet £29 seat has been built on the bodies of thousands of dead passengers in the past. Each horrific crash brings forward technology or working practise changes so another potential accident trap is closed off. Most of these changes you'll never see or hear about, but they never stop coming for every minor incident that is reported within the industry. A more public example has been the adoption of cockpit style checklists in operating theatres so that operations are a replicable procedure and random errors are lessened. AIY's list of Boeing's sins is really shocking, but I was hearing questionable things about their engineering practises a decade ago during the 787 development. Unfortunately the rot spread in the search for cost cutting measures. I grew up with pilots joking 'If it ain't Boeing, I'm not going' and the jokes about the Scarebus, 'whats it doing now'. How the tables have turned! Boeing is wounded, but will emerge stronger at the end of the process, IMHO, simply because there are so many vested interests that say it has to.

[AsleepInYorkshire]

It is a horrible, inexcusable mess. But, and I think the lack of a real SP tank (so far) bears out that, in the US at both public, financial and government levels Boeing is too important to be allowed to fail. Probably, in a world where there are only 2 significant airframe manufacturers, it wouldn't be good for the industry for it to fail. It is an unfortunate fact that the air safety that we enjoy today when we jump on an Easyjet £29 seat has been built on the bodies of thousands of dead passengers in the past. Each horrific crash brings forward technology or working practise changes so another potential accident trap is closed off. Most of these changes you'll never see or hear about, but they never stop coming for every minor incident that is reported within the industry. A more public example has been the adoption of cockpit style checklists in operating theatres so that operations are a replicable procedure and random errors are lessened. AIY's list of Boeing's sins is really shocking, but I was hearing questionable things about their engineering practises a decade ago during the 787 development. Unfortunately the rot spread in the search for cost cutting measures. I grew up with pilots joking 'If it ain't Boeing, I'm not going' and the jokes about the Scarebus, 'whats it doing now'. How the tables have turned! Boeing is wounded, but will emerge stronger at the end of the process, IMHO, simply because there are so many vested interests that say it has to.

Yes. I am genuinely bereft at how robust the share price has remained. For what little financial knowledge I have I am not convinced the share price is actually a true valuation of Boeing. I'm more than confident that Boeing will not fail. However, I'm not sure that's ultimately a guarantee for any current stakeholders. I'm more than sure that the Max will be recertified. And I'm only sure of this because Boeing literally do not have a plan B. The Max has to return to service and all Boeing's stakeholders must hold their breath and hope that passengers trust the returned vehicle in sufficient numbers to allow it to remain profitable. And therein, my own jury is out. I don't think the numbers will be strong enough and the Max will end up filling the void it has created whilst Boeing attempt to design and develop a new single aisle airframe capable of carrying 200 passengers. But it doesn't end there. It's entirely possible that we are witnessing the beginning of the end of the business as we currently know it. Potential competition from China could become real and if it does then, I think for Boeing & Airbus, all bets would be off.

So yes Boeing will survive. Stakeholders such as shareholders may not. They have just taken second place to the debt that Boeing has started to accrue. I suspect The Max will not make the kind of profit needed to fund the development of that "elusive" single aisle airframe that Boeing so desperately need. And the debts could grow.

This will play out for at least the net decade, if not longer.

In the early 1970's Boeing stole the market with their Jumbo Jet. An extremely safe aircraft. Somewhere between that and the Max they managed to pull defeat from the jaws of victory. It was theirs to lose and they have done that quite magnificently. The saddest part of all of this is that 346 people had to lose their life before Boeing would accept they had chosen the salesman's path, not the engineers.

AiYn'U

[dspp]

It is a horrible, inexcusable mess. But, and I think the lack of a real SP tank (so far) bears out that, in the US at both public, financial and government levels Boeing is too important to be allowed to fail. Probably, in a world where there are only 2 significant airframe manufacturers, it wouldn't be good for the industry for it to fail. ...............But it doesn't end there. It's entirely possible that we are witnessing the beginning of the end of the business as we currently know it. Potential competition from China could become real and if it does then, I think for Boeing & Airbus, all bets would be off.

So yes Boeing will survive. Stakeholders such as shareholders may not. They have just taken second place to the debt that Boeing has started to accrue. I suspect The Max will not make the kind of profit needed to fund the development of that "elusive" single aisle airframe that Boeing so desperately need. And the debts could grow.

This will play out for at least the net decade, if not longer. ...

AiYn'U

I think the most important aspect is that Comac will now succeed, perhaps one generation faster. China needs a large airframer, and they will make sure they get one for the same reasons that the USA will make sure they retain one, and so will Europe. Brazil have, on the other hand just given up their attempt to forge a pathway, much as the UK did all those years ago.

regards, dspp

[dspp]

SEC investigation ($$$)
https://www.seattletimes.com/business/b ... d-737-max/
dspp

[AsleepInYorkshire]

9th February 2020
Experts Question Whether Boeing's Board of Directors is Capable of Righting the Company
"Why should [Boeing] keep the old regime that ratified all of the problems under Muilenburg?" he asked. "The whole board should resign."

I've not seen this angle before. The view being that Boeing's Board threw Dennis Muilenberg under the bus but remained in their own rosy seats afterwards. And the more I look from this perspective the more I don't like what I see. The deaths of 346 people didn't just occur on Muilenberg's watch. The entire board was there at the time. And I'm beginning to feel that Calhoun needs to be quick to come out and say that once the Max is returned to service he will look for his replacement. In my humble opinion there's a real danger that the Board at Boeing are really doing little more than lining their own pockets.

AiYn'U

[EmptyGlass]

https://www.cnbc.com/2020/02/11/boeings-next-step-in-testing-737-max-operating-it-like-an-airline.html

Boeing pilots are flying the 737 Max as part of the company’s latest step in testing new software in the aircraft.
The flights are the latest indication Boeing may be getting close to a recertification flight.

[AsleepInYorkshire]

13th February 2020
Southwest prepares for another peak summer season without the Boeing 737 Max
Southwest Airlines on Thursday pulled the Boeing 737 Max from its schedules until mid-August, meaning the low-cost carrier expects to go another peak summer season without the fuel-efficient planes.

Boeing fires supervisor of pilots who slammed 737 MAX jet
Boeing has reportedly ousted the boss of the pilots who lambasted the troubled 737 MAX jet in internal messages — including one saying the plane was “designed by clowns.”

Airbus Presses Boeing Rivalry With Jet Deal, Production Ramp-Up
Airbus SE pledged to churn out more aircraft than ever and consolidated its ownership of the A220 jetliner, pressing home its advantage over Boeing Co. and its grounded 737 Max in the growing narrow-body market.

Prosecutors challenge antitrust approval of Boeing-Embraer tie-up
Brazilian prosecutors have filed an appeal with antitrust agency Cade asking the regulator to reconsider its approval of a deal selling control of Embraer SA’s (EMBR3.SA) commercial aviation division to Boeing Co (BA.N), according to public filings.

AiYn'U

[dspp]

https://www.onderzoeksraad.nl/nl/media/ ... dekker.pdf

"On the morning of 25 February 2009, TK1951, a Boeing 737-800 was vectored to the localizer for an ILS approach to runway 18R at AMS at 2000"

" What is not in Boeing 737 documentation and training available to pilots "

https://en.wikipedia.org/wiki/Turkish_A ... light_1951

9 fatalities, from 135 on board, could have been a lot worse.

The things Boeing doesn't tell ........

The whole Boeing board are the problem, and have been for a couple of decades. They sacrificed Muilenberg when they should have all gone.

regards, dspp

[AsleepInYorkshire]

15th February 2020
Troubled 737 MAX Boeing airplane had at least 13 other safety incidents, ex-employee says
A former senior manager at Boeing, who urged the company to shut down the 737 MAX factory, has revealed the fleet experienced at least 13 other safety incidents in the aircraft's short lifespan.

I don't know if ABC News reports are similar to those raised by the Daily Mail.

Boeing's vehicle killed 346 passengers. I struggle to call it an aircraft as essentially it doesn't fly. And this, in my humble opinion is Boeing's core business. To build aircraft. I've mentioned that during the 60's Boeing developed the Jumbo Jet which went on to be an extremely safe aircraft which began commercial flights in 1970. According to Wikipedia by June 2019 1554 of these aircraft had been built. By 2017 61 of these aircraft "hulls" were lost with a total of 3,722 deaths. Of these "hull losses" 32 resulted in no loss of life. A small number were older aircraft with minor damage but were "retired due to their age. I won't bore you with details but it's difficult to assign all of the aircraft's hull losses to design, manufacture or flying capabilities. Indeed during the early 70's several were hijacked. The 747 hasn't been without issues that could be solely attributed to Boeing.

Boeing 747 hull losses

Compare that record with the Max. The Max had hardly got into the air before it began falling out of it. Where was the board of Boeing whilst all this happened? They haven't been as reluctant to refuse their monthly pay as they have been to step up and accept responsibility for the deaths of 346 people. Where was the FAA? There's a clear precise path back to the root cause of these deaths. Commercialism has usurped safety. Its swept it away with amazing efficiency.

There appears to have been significant information available indicating that the Max was heading for a serious accident. The Board at Boeing weren't watching the game though. They were off selling their new found strikers. The "noise" surrounding the vehicles shortfalls lost in the hubris. I'm not aware that Boeing "silenced" any "naysayers". There's one thing worse though - that's not even knowing what their issues were - because ultimately the "naysayers" have been proved right. A Board that doesn't hear the doubts and concerns of its workforce is out of touch with reality. I continue to remind myself that two days after the second vehicle crashed, adding to the death toll, Muilenberg reassured President Trump the vehicle was safe.

Board of Directors
Robert A. Bradway - Director Since 2016
David L. Calhoun - Director Since 2009 - President and Chief Executive Officer, Boeing
Arthur D. Collins Jr. - Director Since 2007
Admiral Edmund P. Giambastiani Jr. - Director Since 2009
Lynn J. Good - Director Since 2015
Nikki R. Haley - Director Since 2019
Lawrence W. Kellner - Director Since 2011
Caroline B. Kennedy - Director Since 2017
Edward M. Liddy - Director Since 2010
John M. Richardson - Director Since 2019
Susan C. Schwab - Director since 2010
Mike S. Zafirovski - Director since 2004

Boeing's Core Values

1. Annual Global Engagement Summary
2. Environment
3. Ethics & Compliance
4. Code of Basic Working
5. Conditions and Human Rights
6. Diversity & Inclusion
7. Employee Safety
   From the beginning, safety has been Boeing’s number-one priority, starting with the first Boeing Safety Council in 1917. Our Enduring Values of safety, quality and integrity are integral to all we do as we design, build and service the highest-quality, safest products.
8. Education
9. Military & Veteran Engagement
10. Community Engagement

I'd suggest it's entirely possible that Boeing's core values aren't working. There seems to be an ample number of Directors and at least one should have been hearing "chatter & noise" from those reporting into them. I would also suggest that Calhoun oversees the period to return the Max to service and at such time he should stand down. From there the board should be replaced as quickly as is viable.

AiYn'U

[dspp]

AiYn'U

AiY,
You may want to read this https://www.nakedcapitalism.com/2020/02 ... cover.html
regards, dspp

[ReformedCharacter]

It seems that Boeing's recent Starliner Flight Test went worse than was initially announced. It was obvious from the test that there were 'timing issues' that prevented the Starliner from reaching the ISS but it has only recently been announced that there was another potentially worse problem that had to be fixed 'in-flight'. Before re-entry the capsule detaches from the service module and then the service module is supposed to perform various thruster firings in order to move it away from the (soon to be manned) capsule. However, due to a software error the wrong mode of thruster firings was selected and if the problem had not been spotted it may well have made contact with the capsule, potentially damaging the capsule's heat shield, obviously not a good thing to happen. Interestingly, Boeing have admitted that they would not have noticed the latter problem in time had they not suffered from the first problem. Boeing isn't getting much right at the moment.

As Scott Manley points out (below) Boeing's contract to deliver astronauts to the ISS costs NASA 60% more than the same deal from Spacex.

https://www.youtube.com/watch?v=Mx6Vjw489WI

RC