4 ms·
Good point. IMHO the company's survival is on the line, and the storage opex expense is worth it if it takes dropping production rate to 1% (about 0.6 737 MAX p
by yourapostasy 7y ago
Good point. IMHO the company's survival is on the line, and the storage opex expense is worth it if it takes dropping production rate to 1% (about 0.6 737 MAX per month) or less to find out what other quality problems are lurking outside of the design realm, and catch technical debt that they would regret later. This is far preferable to writing off the entire product, and would be a concrete start to re-establishing the old company culture's emphasis upon quality. They're under a regulatory and compliance microscope now, and any production problems when they restart are going to get a lot of negative attention.
They're tapping more debt and still plan on issuing dividends. Those dividends are likely going to be accompanied by equity buybacks. Those buybacks are measured in billions [1]. Carve out from the buyback funds what it costs to ensure quality where they can control it while waiting for clearance to reassure regulators, politicians and the general public, and tell the investors that it is either hold on with the team until quality is re-established within the culture, sell and come back later, or eventually zero out the investment because no one wants to buy from a plane manufacturer with suspect quality.
[1] https://articles2.marketrealist.com/2019/06/boeing-enhances-shareholder-wealth-through-share-repurchases/# https://articles2.marketrealist.com/2019/06/boeing-enhances-...