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To avoid the "bet the company" issue, maybe the future of new aircraft designs will be to create a company specifically to design and build one new aircraft. T
by caf 11y ago
To avoid the "bet the company" issue, maybe the future of new aircraft designs will be to create a company specifically to design and build one new aircraft. That company will have a management and marketing agreement with the aircraft company that created it, and will issue equity and debt to finance the design and build. Most of its staff will be on secondment from the "parent" company, and it collects royalties on the eventual aircraft sales/leases.
- rdancer 11y agoYou pretty much have to give equity for that kind of risk, because the interest on bonds you could sell would not be commensurate with the projected cashflow. But "betting the company" doesn't mean in this case that the company would disappear. It would just go bankrupt. That is a scary word, but in a case of Boeing, (some) equity would just be transferred from shareholders to creditors; operations would not be affected.