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Why do you think defense revenues and profits don't matter? Not sure you'd want to lose either part of the business.
by RandomLensman 3y ago
Why do you think defense revenues and profits don't matter? Not sure you'd want to lose either part of the business.
- lenerdenator 3y agoA lot of Boeing's defense revenues come from military aircraft that are based on civilian airliners.
- RandomLensman 3y agoAre you saying the cost etc. allocations in Boeing are underrepresenting the importance of commercial? Not quite sure I understand.
- lenerdenator 3y agoThey might be. They've been struggling to deal with the threat from Airbus for a decade or two now, and that means there's less of a guarantee their capital allocations to commercial planes will produce a profit. There's still quite a few brass in the US military who came of age in the immediate post-Vietnam era and remember the BUFFs being the core of the US bomber fleet, and will subconsciously favor Boeing over anything else. That means a better (though not guaranteed) likelihood of winning a contract. The issue is, a lot of their offerings for things like tankers, AWACS, general transport, VIP transit, etc. are based on airliners.
- dunmalg 3y agoAirbus is a threat, but they have a huge obstacle Boeing doesn't: they don't build planes in the US except for the A319-320-321. Any defense contract won with an Airbus airframe as its basis (e.g. NG's KC-X submission based on the Airbus A330 MRTT) also includes the expense and possible difficulty building a factory in the US to manufacture them. Boeing may have a bad reputation for screwing up manufacturing, but that's a known quantity vs. the giant question mark that is the quality of a theoretical Airbus factory--- run by a US defense contractor rather than Airbus--- that hasn't been built.
- dv_dt 3y agoDefense revenues are practically guaranteed because of the amount of consolidation allowed in the defense industry