1) The problems with the 737-MAX are fixable and will be fixed (either in a new airplane name by branding, or with time as people trust the new MAX variant again)<p>2) We can't discount all the revenues generated by defense spending, both by the US and abroad. That's a non-trivial amount of Boeing's income.<p>3) The US Gov't may not allow Boeing to fail for National Security reasons. Both as a major Defense Contractor, and as the sole producer of domestic airliners. (that is, if Boeing is even in a position to fail)<p>I think the 737-MAX issues are bad, but not bad enough to destroy the company. The 737 airframe has been the workhorse for decades, and I don't see that changing soon. Major airlines operating the 737 variants will just continue to use the perfectly good 737-700,800 and 900 variants until something new and fixed comes out.
I got to the part about Blackstone having two board members, a "private equity vector for financializing corporations" "experienced in dealing with corporate crises". That's one way to describe them; the simpler way would be "one of the world's largest investors in corporate equities". Is it at all weird for one of the US's largest investors to have board members at one of its largest publicly traded companies?<p>"The board of Boeing is a group of people who know how to cut corners on safety". Is this in evidence? They're the CEOs or former CEOs of Amgen, Duke Energy, Allstate, Aetna, and Medtronic, along with 2 Admirals and a couple ambassadors.
Is it just me, or is it weird how little reference there is to Airbus or Comac or Bombardier? If you want to talk about financial issues for an aircraft manufacturer, and their accounting model and risk, surely you need to talk explicitly about the comparable at-scale entities in the same market?<p>I think the underlying one-paragraph hit which I paraphrase as: <i>the way the cost of the hole they are digging is buried into future sales is not making the author comfortable</i> is something which really demands discussion of Airbus accounting. If they also do this, if the entire industry is using future profit models to justify up-front capital and operational spend, Then its not just risk in the US markets, it's worldwide.<p>(at some level it's worldwide anyway: the investor model these days can't stop at national borders unless the investment itself is regulated, which may be possible in the case of Boeing, I don't know)
Those are pretty big accusations with very little proof. They use a perfectly legal accounting method and anyone interested can largely figure out how much risk Boeing takes by investing in new programs
Monopolies are caused when the government prevents competition through licenses, excessive regulation, patents, etc. Starting a new bank is an astronomically hard and impossible endeavor, whereas it was pretty easy to do in the 1800s. It’s hard to start an aerospace company, a convenience store, a restaurant, and so on. The only easy companies to start are tech companies! It’s absurd!
I can’t tell difference between Boeing, airbus, or embrayer planes when I fly - as I suspect most others who fly. They all feel amazing and personally floored every time I realize I’m up in the air moving hundreds mph.
Real Synopsis:<p>Boeing 737 Max aircraft have aerodynamic and engineering design flaws<p>The sensors that can detect potential problems were not reliable. There are two sensors but the Boeing design only used one of them.<p>Boeing cut corners to save money<p>To save even more money, Boeing allowed customers to order the planes without warning lights. The planes that crashed didn't have those warning lights.<p>There were pilot training and maintenance log issues.<p>Finally, according to the Seattle Times, the regulators got into bed with companies they were supposed to regulate<p>Conclusion:<p>This company should go out of business and the MBAs that cut costs on this plane thrown in jail for murder
HBR has a case study on the exact same topic - dated 2017<p>[Accounting Turbulence at Boeing] Unlike its rival Airbus, Boeing used a practice called program accounting to record its commercial aircraft expenses since the 1980s.<p><a href="https://hbsp.harvard.edu/product/118020-PDF-ENG" rel="nofollow">https://hbsp.harvard.edu/product/118020-PDF-ENG</a>
Is Boeing a reasonable company to consider nationalizing?<p>Genuinely curious -- it seems like it's in our interest to ensure that Boeing is around, that they are sustainable, that workers continue to view Boeing as a good job, that they have the right motivations of safety vs profit, etc.
Does this make any of you fearful about getting on a plane? I mean, with all this airing of dirty laundry and scrambling I feel like mistakes are more likely now than ever, plus no new planes = we are stuck on old hardware, and when those planes do go back into service they will have been outside collecting rust.