Boeing to decide by year-end on 737RE: McNerney

Boeing CEO Jim McNerney told an investor’s event that the company will decide by year-end on a 737 re-engine program, and by year-end or early next year on enhancing the 777, saying a new 777 is “unlikely.”

Here is the Dow Jones report.

10 Comments on “Boeing to decide by year-end on 737RE: McNerney

  1. They are going to decide when to decide…or something like that. They have too many planes to deliver in the next few years…they will wait until comprtition demands it…the rest is talk…..

  2. No 777 replacement is a no brainer, for BA has no money.

    Likewise a 737 re-engine, it will be done, because there is no money for a new replacement program, and Airbus will re-engine the A-320. And because Boing now pumps out 737’s like mad, with apparant ease and total cost control. It’s the one thing they do well these days, so why screw with it if they can avoid it.

    One should not underestimate just how bad the cash situation for Boeing really is, and new debt is going to drag on profits for years. The coming win on the tanker will be good long term, but will also suck up cash for the first 3 to 5 years.

    Boeing will be in the unenviable position of showing decent top line growth beginning next year, with the bottom line still sucking badly.

  3. Why would a tanker win suck up cash? Won’t the Pentagon be feeding them cash for development?

  4. The tanker will be a fixed price deal.

    Which is not to say there will not be gaffs, there will be, on Boeing’s dime.

    Then there is the conversion to lean production line, and that’s not cheap. Remember also, that to accomodate the 787 surge line, significant re-tooling will take place on 767 to reduce it’s footprint and point it in the opposite direction. There will be a whole laundry list of costs BA will have to eat before realizing significant revenue, and they had best mind their manners, thank it’s congressional delegation, it’s own unions, god, and good fortune, and not try to take advantage of the situation with any price gouges. It needs to restore good relations with the Pentagon and congress, and I’m sure there will be some idiots inside Boeing sorely tempted because … well, that’s their proven nature.

    Being a derivative implies no advantage with Boeing, look at 747-8, and wedgetail.

    The unwise might point to the P-8 but remember, only test units have been built and no serial production will take place for years yet.

  5. OneMan, I have yet to read ONE positive thing you have to say about Boeing. I have never commented on this board before, but I read all the comments, both good and bad, pretty and ugly…

    I’m certain you are a good man, but the constant negative comments about Boeing leave many of us wondering about the credibility of your past statements about the Comapny.

      • Uve,

        Coming from your perspective as the seemingly Airbus PR department on this site, it doesn’t surprise me what you think about those “contributions”.

        OneMan, as I alluded to earlier, we both are Boeing stockholders, and I agree with you that as owners and stakeholders, we should look at the happenings at Boeing, with no less then a critical eye and I sincerely appreciate your perspectives. My concern is that it often appears one sided. Lord knows Boeing has screwed up royally, especially over the last two years. And they certainly have given you plenty of ammunition to beat them over the head with. Having said that, its a company producing state-of-the-art products, and in many ways represents the technological lead America still enjoys.
        I invested in Boeing years ago, no so much to make money, although that was a secondary consideration. I invested in it because I believe in its uniqueness and importance in our country’s present, past and future.
        You have an excellent grasp of Boeing’s state and I sincerely appreciate your willingness to share your thoughts… I just would like to see the positive mix as well. Thanks for listening.

  6. Well Joe, the nature of my commentary stems from financial analysis and the market performance of Boeing stock.

    It would seem to me that the vast majority of readers of sites and blogs like this on and similar ones have and overly simplistic and and romantic point of view based on a love of all things aero and the greater glories of aviation.

    I have an element of that in me, but I am foremost an investor. I’m into taking my personal income and hard won investing gains, and putting them to work to make money.

    Boeing, through skillful PR, half truths, misstatements, omissions and outright lies, have cost me. So what? Others have done it and oh yes, I have been hard on them as well.

    But never have I found a large cap corperation so difficult to extract truthful facts and data from.

    So I feel quite justified in my skepticim. Even as I continue to hold shares just trying to break even. Once I do, I’m out and done with BA stock. It’s impossible to be long BA. There is no sound justification for it.

    None of this is vengeance. It’s the cynical eye I have seen fit to view this company through, and eye that it deserves.

    Admit this:

    You have to be pretty bad to mess up your half of an effective duopoly. You have to be pretty bad to have such ruinous relations with congress and the pentagon. You have to be pretty bad to have such rotton relations with your workforce, both blue AND white collar.

    And finally, you have to be really, really bad to take your stock price from the $100+ range down to the low sixites (long before the financial meltdown and concurrent recession), and all the way down to the high 20’s even as you post record production numbers, misleading shareholders (or keeping them totally in the dark) as to the status of new programs all the way down.

    None of this has to do with the quality, viability, or prettyness of Boeing’s products, which really take a back seat to nobody. But in the end run, that doesn’t matter if the share price is treading water, the company is issuing debt, buying back stock at too high a price, or paying dividends with borrowed monwy, all leaving itself incapable of beating the competition to market with technologically superior products, because it hasn’t the money to pull it off.

    I’ve been right, besting the analysts many times. A perfect example is the 737. As most of them predicted production cuts ad nauseum (most notably Richard Iwillaughatya (Aboulafia), I told you that Boeing woul NOT cut the rate and told you why.

    And here we are. Individual investor VS the professional analysts. Who got it right? The analysts are scratching their heads.

    And mark my words:

    Boeing’s current financial position os NOT a good one. It WILL experience decent top line growth and some, maybe even the market, will sing it’s praises. But it’s bogus balance sheet and the slight of hand involved will drag on the bottom line for years to come. Likewise it’s poor labor relations and wasteful spending trying to defeat it’s own workforce in some sort of idiological conflict will serve it poorly.

    Look, it’s all down to one thing. Money. Not 787’s in the sunset, or 747 8’s over Mt Rainier. I’m not hypnotized by Boeing commercials during Meet The Press. I am less impressed yet by Boeing PR, or Randy Tinseth’s blog.

    I listen to the conferance calls. All of them. I read the 8-k’s, 10-k’s and 10’q’s.

    I hang on James Bell’s every word. And I study them, verify them, parse and analyze them. You have to really do some work to make a conclusion from them and right now, the truth ain’t great. And seemingly, at every turn, sombody is there to tout some sort of BA achivement that will erase all doubt.

    I beg to differ.

    • For all the study of Boeing’s financials, their products and Jame Bell’s every word, there seems to be little understanding of the business and market holistically. If there were, investment decisions may have been quite different.

      First, history has shown this industry to be fraught with danger, not just from an investors perspective, but the manufacturer’s as well. One wrong bid decision could yield a severe imbalanced balance sheet or bankruptcy, or outside influences like a big oil spike reeking havoc to book-to-bill ratios, to name a few. Over the post war (WWII) decades we’ve seen these companies reach their highs and lows rapidly; employment then unemployment. It’s no wonder the industry has consolidated; the remaining “duopoly” is a prime example, with McDonald and Douglas then Boeing, and the European aviation industry consolation of Sud (Aerospatiale), Deutsche Airbus and Hawker Siddeley into the EADS/Airbus (to say nothing of the consolidations within their military divisions, nor within Lockheed-Martin, Northrop-Grumman nor BAE, etc).

      It’s no wonder each of Boeing and Airbus are sorta rough around the edges with doses of desperation sprinkled in. Then, without a government safety net, they know the next strategic decision could be their last.

      From this perspective, would an investment been wise without this understanding?

  7. To: Joe on February 14, 2010 at 5:38 am

    Ever read one of the NTSB reports on accidents?
    Remember the wording and the lack of judgemental
    and highly emotional language used?

    Now compare that to the highly loaded commentary
    given solely by Boeing fans on all subjects discussed.
    The trend to deviate from topic and insert Airbus bashing at every possible and impossible moment when discussing Boeing internals.

    You may not like what other people observe but hitting back with rather tenuous assertions on moral integrity does nothing for your cause.

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