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Boeing to Suspend 737 Max Production in January

wsj.com

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Re: Boeing to Suspend 737 Max Production in January

#161

Post by oska »

TuringNYC wrote: post #159
JumpCrisscross wrote: post #36

Earlier quoted context omitted.

> lawsuits that are surely incoming are going to pile-drive this company into the ground Legally, everyone is indemnified up the wazoo. Strategically, airlines are in a worse position if Boeing goes under. Not only do they lose the planes on order. They also lose their service and replacement-parts provider. The survivors would, in the medium-term, face an Airbus monopoly and, in the long-term, a Chinese-European duo…

>> As emotionally-satisfying as it may be to see Boeing go under for its arrogance, it's neither helpful nor likely. (A well-managed break-up, on the other hand...) Not Likely is the key word here. They are large and have a strategic value to the US and hence Too Big To Fail https://en.wikipedia.org/wiki/Too_big_to_fail I'd bet the US Government steps in to re-structure and backstop as required to save the company. T…

> There are numerous ways we've discovered to do so post 2008.

All of them bad. Companies should fail and keeping bad companies alive via artificial means is bad. You get zombie companies and eventually a zombie economy (see Japan).

(And "Too big to fail" is a phrase meant to identify a problematic ideology, not a bailout excuse).

Boeing failing doesn't necessarily mean that the USA loses their technology and production facilities. It does mean some substantial losses to investors in the company, but that should be part of the risk of investment.

Re: Boeing to Suspend 737 Max Production in January

#162

Post by kn0where »

clintonb wrote: post #156
tyingq wrote: post #81

Earlier quoted context omitted.

They are saying that if the MAX isn't available, Southwest will have to consider buying a completely different aircraft.

Yeah...they can buy other 737 variants. The MAX may be one of the most fuel-efficient 737s on the market, but the 737NG line is still in production.

They are not going to buy more NGs. The NG is technically still in production but production has wound down significantly. All orders for airlines have been built, and all that remains are orders for the military version and various private customers. It would probably cost somewhat more for Southwest to order NGs now than it did during the production heyday where economies of scale made the plane cheaper to produce.

Buying brand-new, less-efficient 737NG planes when competing airlines gradually have more and more A320neos could allow Southwest to keep growing, but might not be a great long term investment. Southwest can keep flying their existing NG fleet for a very long time, however, so they can (and have to) wait for new planes.

Southwest isn’t forced to stay with the 737. It’s all about costs. Buying new NGs probably would cost more in the long run than (years from now when the backlong is reduced) starting to operate the A320neo, but far cheaper than either is if the MAX returns to service and they get hefty compensation from Boeing.

Re: Boeing to Suspend 737 Max Production in January

#163

Post by 8bitsrule »

themagician wrote: post #43
ryanisnan wrote: post #19

I'm surprised that the market hasn't reacted more negatively towards Boeing regarding the Max 8 disaster. Airlines operate on razor-thin margins (~1 to 2%), and several users of the Max 8 have had significant portions of their fleet out of service as a result. Westjet [1], for example runs 124 planes currently. 13 of which are the Max 8. Over 10% of their fleet. Southwest Airlines [2], for example, runs 748 planes, 3…

Boeing will be fine. By the end of next year everyone will have forgotten. Even if Boeing wasn't fine, it would be fine, because the government would just bail them out. Investors know this and ignore the drama.

> the government would just bail them out.

Good thing for the proponents of the supposed 'wisdom of the market'. Nice of US to help keep that 'wisdom' alive.

Re: Boeing to Suspend 737 Max Production in January

#164

Post by kn0where »

metafizikal wrote: post #25

why continue to make the planes when you have no idea when you can actually push them out the door? given that they continued to produce the MAX while they were grounded, they must be running out of storage space...

By stopping production, some of their suppliers will go out of business. It was a gamble to keep producing planes without knowing when they’d return to service, hedged against the cost of rebuilding parts of the supply chain from scratch.

Re: Boeing to Suspend 737 Max Production in January

#165

Post by 9nGQluzmnq3M »

djcapelis wrote: post #153
9nGQluzmnq3M wrote: post #128

Earlier quoted context omitted.

The C919 is a narrowbody jet aimed at the 737/A320. There are no Chinese widebody/twin aisle aircraft, now or anytime in the foreseeable future, that can compete with the 787/A350.

In a huge leap of naming they’ve named it the C929 with initial flights in 2025 and EIS planned for 2027. It’s cool to think they probably won’t hit those dates but pretending like a roadmap doesn’t even exist is not. https://en.m.wikipedia.org/wiki/CRAIC_CR929

The CR929 is vaporware: they're not even planning to begin construction of the first prototype until 2021. Also, it's "CR" for "China/Russia", since this is meant to be a joint venture between COMAC and UAC (Sukhoi). Which sounds like a great recipe to delay everything even further.

Also also, even if China does pull off the airframe, they'll still rely on Western jets to power it. China's first modern turbofan, the CJ-1000A, is not scheduled to go into service until 2030 (!) and even that is geared only for the C919: https://en.m.wikipedia.org/wiki/ACAE_CJ-1000A

Don't get me wrong, I'm sure China will get there sooner or later, as they've already demonstrated with high-speed trains and many other things. But timeframes for going from concept to a serious competitor in this business are measured in decades.

Re: Boeing to Suspend 737 Max Production in January

#166

Post by mehrdadn »

oska wrote: post #161
TuringNYC wrote: post #159

Earlier quoted context omitted.

>> As emotionally-satisfying as it may be to see Boeing go under for its arrogance, it's neither helpful nor likely. (A well-managed break-up, on the other hand...) Not Likely is the key word here. They are large and have a strategic value to the US and hence Too Big To Fail https://en.wikipedia.org/wiki/Too_big_to_fail I'd bet the US Government steps in to re-structure and backstop as required to save the company. T…

> There are numerous ways we've discovered to do so post 2008. All of them bad. Companies should fail and keeping bad companies alive via artificial means is bad. You get zombie companies and eventually a zombie economy (see Japan). (And "Too big to fail" is a phrase meant to identify a problematic ideology, not a bailout excuse). Boeing failing doesn't necessarily mean that the USA loses their technology and product…

I don't think the parent was endorsing this approach. It seemed like the opposite to me.

Re: Boeing to Suspend 737 Max Production in January

#167

Post by kn0where »

salex89 wrote: post #118
Medicalidiot wrote: post #9

I'm really wondering how much this will impact Boeing in the future and what their plans are for the 737 Max replacement.

It probably impacted already. The Boeing NMA is basically nowhere to be seen, the 777X deadlines are slowly being broken, and that should be the future of Boeing. For now, Boeing is dealing with the past, basically, corpses falling out of the closet. Not to mention the 787 engine issues.

It increasingly seems like NMA won’t happen before a 737 replacement. 777X is going to be under a lot of scrutiny post-MAX and I would not be shocked if regulators find issues that Boeing overlooked before the plane is certified. At least the 787 engine issues are Rolls Royce and not Boeing, and RR isn’t the sole supplier of 787 engines.

Re: Boeing to Suspend 737 Max Production in January

#168

Post by generatorguy »

ajross wrote: post #104
markus_zhang wrote: post #39

Earlier quoted context omitted.

Boeing is one of the pillars of the American economy and the market as well. Dumping the stock will hurt pretty much every fund that invested on it, plus Dow will plunge just because of this one stock if it's getting dumped. Boeing, as well as many other firms, are just too big to fail suddenly.

A quick google says Boeing is the 28th largest US company by both revenue and market cap (interesting that they line up exactly), sitting next to "pillars" like the Home Depot and PepsiCo. We'll be fine.

It takes a lot less skill and knowledge to build another retailer or soft drink company than one that designs and builds cutting edge airplanes.

Re: Boeing to Suspend 737 Max Production in January

#169

Post by TuringNYC »

mehrdadn wrote: post #166
oska wrote: post #161

Earlier quoted context omitted.

> There are numerous ways we've discovered to do so post 2008. All of them bad. Companies should fail and keeping bad companies alive via artificial means is bad. You get zombie companies and eventually a zombie economy (see Japan). (And "Too big to fail" is a phrase meant to identify a problematic ideology, not a bailout excuse). Boeing failing doesn't necessarily mean that the USA loses their technology and product…

I don't think the parent was endorsing this approach. It seemed like the opposite to me.

Correct. I'm the parent. Not endorsing this. Just accepting the reality. Most off our TBTF bailouts were unnecessary in my opinion, or if actually necessary, the bailouts were insufficiently punitive to investors. Most of it comes down to the political power and DC influence of the company management.

Re: Boeing to Suspend 737 Max Production in January

#170

Post by kn0where »

CydeWeys wrote: post #149
CharlesColeman wrote: post #119

Earlier quoted context omitted.

> Indeed. Though personally I feel perhaps Boeing should be left to fail, I'm considering going long if the stock slides further in the short term because I anticipate some form of bailout/buyout. I don't want to see it wind down as a going concern, but I wouldn't mind a bankruptcy and seeing the executives and board of directors fired with their compensation clawed back.

It's unbelievable that the CEO still has his job.

The shitstorm is far from over; who would want this on their plate? Better to let the current guy ride it out and then replace him once things can’t get any worse.
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