I’m beginning to get sniffs and whiffs to the effect that there is a non-zero chance that Boeing may not be able to survive their current problems - generated by their dreadful miss-handling of the 737 MAX accidents, both before and after the crashes. I find this hard to visualize, but practically each day the Seattle newspaper has new revelations about Boeing and the disaster, absolutely none of which are positive WRT Boeing.
Evidently they have written off over 6 billion dollars, and it’s not over yet. And their net sales are now in the negative - they have had more cancellations than they have had sales.
What do you Dopers think the betting odds are? Will Boeing survive? If they don’t, the effect on Washington State (and particularly Seattle), will be unimaginable. I have a son-in-law that owns an auto repair shop in Everett (where Boeing has a large facility), and he is already starting to sweat this one out a bit.
I’ve read several articles in the past weeks, and heard an interview on the BBC World Service with a longtime Boeing engineer, all of which concur that Boeing’s current problems all stem from their merger with McDonnell Douglas in 1995.
Prior to that, Boeing was an engineering company, with a scrupulous devotion to quality. After the merger, much of senior management were from the McDonnell Douglas branch of the company, and they had a much more business-oriented culture (the word “ruthless” was even used). The new management had a stronger focus on profitability and business results, and Boeing’s culture of devotion to quality engineering faded away.
Investors don’t seem to be too concerned right now. Airlines even anticipate reintroduction of the MAX this summer. Everyone has a “non-zero” chance of total failure and collapse. But there’s nothing to panic about just yet.
Boeing is a classic case of “too big to fail.” Without Boeing, the US wouldn’t have a commercial airliner industry at all. (OK, there’s a small Airbus factory in Alabama, but I think that’s about it.)
737Max accidents were not accidents. They were malfeasance. A Fed takeover, like Chrysler is the only way the US will be able to turn around the culture of corruption that"s destroyed our only major aerospace industry. We NEED this company or its equivalent, but NOT as it is now.
Boeing have a big defence presence as well which will surely help the cashflow in the short term. I think they’ll be ok. I hope so, Airbus needs the competition.
Boeing will recover well. Their 787, 777, and non-MAX 737s are just fine. Their 797 will likely be a hit. Furthermore, if Boeing came near to bankruptcy, that would allow Airbus to suddenly extort airlines with high prices (since it’d be a monopoly instead of a duopoly) and airlines would abhor that. The U.S. government would also never let the largest American manufacturer ever go under.
Defense-wise, they still have their Apache, F-15, F-18 programs. They’ll suffer from the MAX crisis, but they’ll survive and 5-10 years from now all this will just be an afterthought.
Even if Boeing the corporation goes bust, and even if it can’t be reorganized in bankruptcy but has to be liquidated, it still has a bunch of valuable product lines that pretty much have to be built where they’re being built now, at least in the medium term. That would be a bad process for a lot of people, but it wouldn’t be the end of commercial aircraft manufacturing in the US, or even in Washington.
This is a longish video, but it documents some whistle blowers that reported totally out-of-spec fuselage frames being knowingly installed in 737-NGs (prior to current -MAX debacle).
Neither Boeing management nor the FAA were interested in doing anything about it. The FAA leaked the whistle blowers to Boeing who fired them in retaliation.
The former Boeing employee and FAA official interviewed seemed highly credible, and the whole story smells authentic based on my experience as an engineer in avionics and other fields.
My impression is that the 737-MAX is not in any sense a one-off problem, nor even limited to poor engineering. It is just a symptom of deep systemic problems within the current Boeing management culture of profit over quality corner-cutting.
0-12 months: residential housing as well as commercial real estate prices will slide enough that there will be a bit of an exodus from the area. Some smaller supply chain companies will struggle and perhaps a handful of them will fold.
12-24 months: As is the case all over the United States right now, shell corporations will rush in and purchase available real estate for cash and simply sit on them - warehousing the space until it is more profitable.
24-48 months: since the US government will indeed protect this Corporation, there will be no long-term effects. Real estate availability in the greater Seattle area will drop as people struggle to pay increased rents; companies fighting if possible to relocate.
Too-big-to-fail applies more deeply to this corporation than all of the auto companies because of their entrenched relationship with the Department of Defense and other military agencies.
Their doors will not close because we have decades of contracts for military aircraft and support.
As horrible as the 737MAX thing is, he sheer value of Boeing’s other products is so enormous that the company cannot fail. This isn’t a “Too big to fail” comment - there is just too much value there. Boeing makes more money in a bad year than the entire professional sports industry in North America. Even if by some wild twist of fate the current corporation were to go belly up and the value of the stock went to nothing - which will not happen - it would be purchased by some other concern just to get the 787, 777, 737, military equipment and all the intrinsic value of the company. Or more than one concern. Shit, if no one else wants it, I’ll pay them fifty bucks for it.
In 2001, they moved headquarters from Seattle to Chicago. I thought that was a mistake, since it separates management from engineering and manufacturing.
I wonder if Boeing wouldn’t be better off dropping the 737 MAX altogether. Even if they get permission from regulators to fly it, are airlines going to buy them?
But the company as a whole will be fine. The 787 has been flying for a decade without a fatal accident.
My understanding is that the 737 Max offered really good range on a narrow body plane that could fly over oceans, so airlines like Southwest could fly to Hawaii from the west coast, or to Europe from the East Coast. I believe the specs made it very attractive to airlines, so they had thousands of planes ordered. The demand is definitely there. It just needs to be a plane that the airlines and the public trust to fly on.
Yes, it’s been a disaster, but Airbus had another sort of disaster in the A380, which they designed and built at massive expense, but it ended up being a big failure. No one wanted it.
Boeing is also a major space company. They build many satellites. They are building the core stage for NASA’s SLS rocket - NASA has already paid >$5 billion to Boeing, and will pay for 10 more core stages under a “cost plus” contract. And they are one of two companies building crew launch vehicles under NASA’s commercial crew development contracts.
