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Admitting the mistake and scrapping the Max program would likely mean the end of the company unless it got the mother of all bailouts from Uncle Sam.
by AmVess 7y ago
Admitting the mistake and scrapping the Max program would likely mean the end of the company unless it got the mother of all bailouts from Uncle Sam.
- rossdavidh 7y agoWhich it would.
- OldGuyInTheClub 7y agoNikki Haley, former South Carolina governor and recent Ambassador, joined their Board recently. https://boeing.mediaroom.com/2019-02-26-Boeing-Nominates-Nikki-Haley-for-Election-to-Board-of-Directors https://boeing.mediaroom.com/2019-02-26-Boeing-Nominates-Nik...
- ncmncm 7y agoSo much for Boeing, then.
- BOOSTERHIDROGEN 7y agocould you explain how scrapping the max program could bankrupt entire company ?
- AmVess 7y agoThe 737 and its variants pay the bills at Boeing. They don't have a replacement for the 737, and the sales from the rest of their planes would not be sufficient to keep the company afloat.
- 0xffff2 7y agoIs that really the case? I've long been under the impression that the military side is making at least as much as the civil side at Boeing.
- TylerE 7y agoWell, just to buyback the 400 existing airframes you'd be looking at $50 billion in cash, to start. Boeing doesn't have $50B cash, or anything close to it.
- michaelmrose 7y agoWhen I buy a chocolate bar for $1 and sell it for $1.10 I only gain 10c. If it turns out its rotten and I can't get my money back I will lose the $1 not the 10c. There are 393 delivered to customers at this time and another 300 produced. The unit cost ranges from 100M to 130M. The cost of all units is aprox 80 billion dollars whereas their annual earnings are about 8 billion. They have aprox 9 billion in cash and cash equivalents. Scrapping all maxes would therefore require them to borrow 9-10 years worth of earnings. I predict they find a way to kill more people before cratering and being bailed out on all our dimes. We should just order them scrapped now and buy the pieces after the company becomes insolvent and skip the dead people but if this happened now we would probably end up with Jared Kushner running Boeing.
- holler 7y ago> We should just order them scrapped now and buy the pieces after the company becomes insolvent and skip the dead people. Maybe they made their own bed then... A major shake up would lead to restructuring within the aerospace industry and new competitors would spring up. The company would likely be majorly downsized but wouldn't go out of existence. Taxpayers shouldn't be liable just because they made a catastrophic miscalculation and built a fatally flawed aircraft.
- ramblerman 7y agoIt's interesting when you put it like that, because it's clear there is no incentive to ever do the right thing then. You either come clean and bankrupt the company, or move forward and try to make the defective thing work asap, which is sort of what they did. I'm not sure what the solution is, but clearly having the only incentive being the morality of those involved willing to risk their livelihood is not the solution.
- jacquesm 7y ago> if this happened now we would probably end up with Jared Kushner running Boeing. I would not know of a quicker way to ensure that Boeing really would end as a company.
- 0xffff2 7y agoThis analysis seems to assume that the scrapped airframes are worth $0, which clearly isn't the case. Unfortunately I don't have anywhere near the expertise to produce a realistic value of their scrap value, but I would expect that large portions of the avionics and engine systems would retain significant value.
- deleted 7y ago[deleted]