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If it happens it's their own fault. Over the last decade their leadership have spent ~96% of their free cash flow on stock buybacks. Boeing itself while not the

If it happens it's their own fault. Over the last decade their leadership have spent ~96% of their free cash flow on stock buybacks. Boeing itself while not the bankruptcy target of this article has spent 74%. Stock buybacks are designed to simply prop up the share price to allow the leadership teams to hit their bonus targets. If they had simply done what individuals are expected to do and save money they would likely be fine. This collapse is a reminder that we need to fundamentally change the way corporations are structured and start encouraging more focus on the business as a whole, especially its employees rather that obsess over stock price and executive compensation. 2008 was a reminder as well but we ignored it, just as I am sure we will ignore this one. In the meantime they get massive bailouts while letting employees go.

himinlomax 6y ago
No non-trivial company can reasonably be expected to stay in business when 100% of their client base is literally prevented from doing any significant business for months and likely to go bankrupt themselves. The stock buyback thing is just idiotic. It's just dividends by another name. Boeing/Airbus are not responsible for the current crisis, unlike the banks in 2008.
- bigie35 6y ago
  Right, but should they spent 90% of their free cash flow doing a stock buy back? Not a sound business practice IMHO.
  - asino 6y ago
    When a company (or anybody) has cash can do 4 things. (Assuming that the level of debt is sustainable.) 1 reinvest in new projects 2 put the cash on safe assets (bonds) 3 buyback 4 give back as a dividend Buyback is more tax efficient than dividends. What would you have done,if you were Boing CEO?
    - wonderwonder 6y ago
      Your comment is missing the point that you can do all of these things at once. They could easily put 80% into safe assets / employee 401ks, new project funds etc. and then spend 20% on buy backs. The focus on buy backs is due to the fact that American business ties executive bonuses to share valuation.
    - gshdg 6y ago
      The GP’s point is that the system that incentivizes this is flawed and needs to change. Do you disagree?
    - michaelt 6y ago
      > What would you have done,if you were Boing CEO? If you're Microsoft or Apple or Google, the answer is "Hold hundreds of billions of dollars of cash" [1] That article, from late 2019, feels such holdings are in need of explanation; today, they seem like common sense. [1] https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet-are-sitting-on-more-than-100-billion-in-cash.html https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet...
apta 6y ago
> This collapse is a reminder that we need to fundamentally change the way corporations are structured and start encouraging more focus on the business as a whole Not only that. The current economic system is fundamentally flawed due to the fact that it is based on usury (aka interest). We have known for thousands of years that interest is evil, yet people still engage in it. Then we complain about wealth gaps and how people lower on the economic-ladder are slaves, completely bypassing the fact that interest plays a direct role in keeping the cycle going.

himinlomax 6y ago

No non-trivial company can reasonably be expected to stay in business when 100% of their client base is literally prevented from doing any significant business for months and likely to go bankrupt themselves. The stock buyback thing is just idiotic. It's just dividends by another name. Boeing/Airbus are not responsible for the current crisis, unlike the banks in 2008.

bigie35 6y ago
Right, but should they spent 90% of their free cash flow doing a stock buy back? Not a sound business practice IMHO.
- asino 6y ago
  When a company (or anybody) has cash can do 4 things. (Assuming that the level of debt is sustainable.) 1 reinvest in new projects 2 put the cash on safe assets (bonds) 3 buyback 4 give back as a dividend Buyback is more tax efficient than dividends. What would you have done,if you were Boing CEO?
  - wonderwonder 6y ago
    Your comment is missing the point that you can do all of these things at once. They could easily put 80% into safe assets / employee 401ks, new project funds etc. and then spend 20% on buy backs. The focus on buy backs is due to the fact that American business ties executive bonuses to share valuation.
  - gshdg 6y ago
    The GP’s point is that the system that incentivizes this is flawed and needs to change. Do you disagree?
  - michaelt 6y ago
    > What would you have done,if you were Boing CEO? If you're Microsoft or Apple or Google, the answer is "Hold hundreds of billions of dollars of cash" [1] That article, from late 2019, feels such holdings are in need of explanation; today, they seem like common sense. [1] https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet-are-sitting-on-more-than-100-billion-in-cash.html https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet...

apta 6y ago

> This collapse is a reminder that we need to fundamentally change the way corporations are structured and start encouraging more focus on the business as a whole Not only that. The current economic system is fundamentally flawed due to the fact that it is based on usury (aka interest). We have known for thousands of years that interest is evil, yet people still engage in it. Then we complain about wealth gaps and how people lower on the economic-ladder are slaves, completely bypassing the fact that interest plays a direct role in keeping the cycle going.