5 ms·

Lost, or invested? One imagines if they outright lost it and saw no opportunity to recoup (i.e. no longer an investment) they'd just end the program.

ceejayoz 3y ago
The contract doesn't permit Boeing to cancel. NASA can.
- mulmen 3y ago
  How does that work? Does Boeing pay a penalty if they don’t make progress?
  - randunel 3y ago
    US law allows companies to split off a subsidiary with all the liabilities and the main company to continue to function with all the assets just like before https://www.ltltalccommittee.org/ https://www.ltltalccommittee.org/ Boeing wouldn't need to pay anything.
    - radicaldreamer 3y ago
      They would never get another space contract again if they did that, but they can see this will be a larger market in 30 years, so they'll lick their wounds and continue on commercial space projects.
      - nordsieck 3y ago
        > They would never get another space contract again if they did that People say that, but I don't think it's true. Boeing pulled out of the Phantom Express project seemingly unscathed. https://www.space.com/boeing-withdraws-darpa-military-space-plane.html https://www.space.com/boeing-withdraws-darpa-military-space-...
        twiddling 3y ago
        Depends on how good their lobbyists are.
        ceejayoz 3y ago
        They're also vastly different projects. Phantom Express was very much experimental; Starliner wasn't supposed to be. Part of the selling point for Boeing was "this is mundane stuff we already know how to do".
    - humanistbot 3y ago
      You cite LTL / J&J like they got away with it. It's currently being litigated in multiple courts, it could go either way: https://money.usnews.com/investing/news/articles/2023-06-27/j-js-8-9-billion-talc-settlement-faces-us-bankruptcy-test https://money.usnews.com/investing/news/articles/2023-06-27/...
    - HDThoreaun 3y ago
      No, that is not how bankruptcy court works. The subsidiary needs to have enough assets to pay the creditors, up to the entire value of the company.
voxic11 3y ago
They could end the program but violating their contract probably costs them more than just finishing the work at a loss.
mezeek 3y ago
they would have cancelled a long time ago if they could
ragebol 3y ago
For that investment to work, they need to bring in some revenue as well. The ISS is scheduled to retire by 2030. Let's assume this capsule goes operational in 2025 and flies twice a year, that's 10 flights to recoup well, well over a billion by then. Let's say a 100 million per flight. Not sure what the contract is exactly, but it's not looking great. Pretty sure SpaceX is cheaper, so NASA will be the only customer.
- throwawaymobule 3y ago
  NASA plans to have other places to send astronauts by then. The ISS will almost certainly have its life extended again before that though.
- pavon 3y ago
  NASA has already awarded all the ISS crew flights up through it's scheduled retirement in 2030. Boeing is contracted for 6 flights, and SpaceX for 14 (including the 6 it has already flown). NASA hasn't published the milestone payment schedules, but the total contract was for $4.2 billion, so Boeing would have needed to budget a 26% profit margin on the whole endeavor to break even at this point. That wouldn't surprise me, but they are probably quickly reaching the point where they will actually be losing money.

ceejayoz 3y ago

The contract doesn't permit Boeing to cancel. NASA can.

mulmen 3y ago
How does that work? Does Boeing pay a penalty if they don’t make progress?
- randunel 3y ago
  US law allows companies to split off a subsidiary with all the liabilities and the main company to continue to function with all the assets just like before https://www.ltltalccommittee.org/ https://www.ltltalccommittee.org/ Boeing wouldn't need to pay anything.
  - radicaldreamer 3y ago
    They would never get another space contract again if they did that, but they can see this will be a larger market in 30 years, so they'll lick their wounds and continue on commercial space projects.
    - nordsieck 3y ago
      > They would never get another space contract again if they did that People say that, but I don't think it's true. Boeing pulled out of the Phantom Express project seemingly unscathed. https://www.space.com/boeing-withdraws-darpa-military-space-plane.html https://www.space.com/boeing-withdraws-darpa-military-space-...
      - twiddling 3y ago
        Depends on how good their lobbyists are.
        ceejayoz 3y ago
        They're also vastly different projects. Phantom Express was very much experimental; Starliner wasn't supposed to be. Part of the selling point for Boeing was "this is mundane stuff we already know how to do".
  - humanistbot 3y ago
    You cite LTL / J&J like they got away with it. It's currently being litigated in multiple courts, it could go either way: https://money.usnews.com/investing/news/articles/2023-06-27/j-js-8-9-billion-talc-settlement-faces-us-bankruptcy-test https://money.usnews.com/investing/news/articles/2023-06-27/...
  - HDThoreaun 3y ago
    No, that is not how bankruptcy court works. The subsidiary needs to have enough assets to pay the creditors, up to the entire value of the company.

voxic11 3y ago

They could end the program but violating their contract probably costs them more than just finishing the work at a loss.

mezeek 3y ago

they would have cancelled a long time ago if they could

ragebol 3y ago

For that investment to work, they need to bring in some revenue as well. The ISS is scheduled to retire by 2030. Let's assume this capsule goes operational in 2025 and flies twice a year, that's 10 flights to recoup well, well over a billion by then. Let's say a 100 million per flight. Not sure what the contract is exactly, but it's not looking great. Pretty sure SpaceX is cheaper, so NASA will be the only customer.

throwawaymobule 3y ago
NASA plans to have other places to send astronauts by then. The ISS will almost certainly have its life extended again before that though.
pavon 3y ago
NASA has already awarded all the ISS crew flights up through it's scheduled retirement in 2030. Boeing is contracted for 6 flights, and SpaceX for 14 (including the 6 it has already flown). NASA hasn't published the milestone payment schedules, but the total contract was for $4.2 billion, so Boeing would have needed to budget a 26% profit margin on the whole endeavor to break even at this point. That wouldn't surprise me, but they are probably quickly reaching the point where they will actually be losing money.