Leeham News and Analysis
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Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Pontifications: Two sentences described Boeing’s last two years
By Scott Hamilton
Oct. 24, 2022, © Leeham News: The question to Boeing CEO David Calhoun was put in levity. His response was telling.
Susanne Clark, the president of the US Chamber of Commerce, noted before last month’s Aerospace Summit that Calhoun assumed the CEO position in January 2020.
“It’s been a long 10 years,” she postulated.
“Yes, it’s been a long 20 years,” Calhoun replied.
These two sentences couldn’t describe the situation at Boeing more clearly.
Although Calhoun had been on the Board of Directors since 2009, including serving as lead director, the challenges he faced with the 737 MAX grounding were greater than he expected. Two months after becoming CEO, the COVID-19 pandemic erupted. And seven months later, deliveries of the 787 were suspended.
The MAX and 787 issues went on much longer than anyone expected. (The MAX challenges still aren’t over.) Recovery from the pandemic is going better than forecast.
The Chamber’s Aerospace Summit was an in-person event. The previous one was in March 2020.
Existential Crisis
“I never imagined exactly what was going to happen post-January 2020,” Calhoun told the Summit. “We had an issue to deal with. I refer to it as a bit of an existential crisis. Most people think that when I say that they use economic terms. Yes, Boeing will borrow a lot of money and they’ll do this and do that. With no MAXes, how do we survive?
“For me, the crisis was the confidence of the flying public. We went through a very rough period post-Ethiopia,” he said, referring to the March 2019 MAX crash that led to the grounding of the global fleet. There were a lot of changes Boeing had to make, many of which were significant. “But the big question amongst investors and even in some of our own people was, how to get the flying public back on the airplane.”
When regulators across the globe grounded the nearly 400 MAXes then in service, few believed the grounding would last more than two or three months. Boeing reduced production from 52 MAXes a month to about 47. By the end of 2019, Boeing built 450 737s, storing them in Washington State, Texas, and California. But there was no end in sight when the Federal Aviation Administration would recertify the airplane. Dennis Muilenburg, the CEO when the MAX crisis began, was fired in December. Calhoun was named the new CEO, but he didn’t take office until January as he unwound other business commitments.
One of Calhoun’s priorities was to improve relations with the FAA, which had fractured under Muilenburg. Two months into his job, the pandemic began, which complicated the work to fix the MAX and work with the FAA to recertify the plane. It would take until November 2020 to do so.
“We were patient”
“We were patient. I think we took the appropriate amount of time with our regulator to prepare our approach and to give it time to go through its own discovery,” Calhoun told the Summit. (In reality, Boeing had no choice but to give the FAA all the time in the world.) “It would be unfair to keep pressing for a certification every next three months because that’s what got us in trouble in the first place. We put a one-year timeline in place. We both worked diligently on getting from here to there.”
Since recertification, Boeing delivered about half of the stored inventory of 450 parked airplanes. But delivery has been slower than expected. So has resuming production rates. Boeing hoped to be producing more than 40 MAXes a month by now. It’s hard-pressed to produce 31 a month, a target reached early this year.
Returning those 400 MAXes that were grounded to service and delivering the 450 stored aircraft were high priorities. But then, COVID happened.
“While I know most people will talk about COVID as the big moment, we were already in the big moment, and then we had another one,” Calhoun said. With little history to draw from, Boeing and others in aviation forecast that it would take until 2024 to return to normal.
But US domestic and intra-European traffic came roaring back in 2022. International traffic lagged and China’s zero-COVID policy continues to suppress recovery there.
“It turns out the demand came back much faster, and the reason is vaccine development,” Calhoun said. But full recovery also has been inhibited by supply chain issues. Suppliers downsized dramatically to survive financially through the pandemic. Not all have. But as US employment rebounded, the worker pool isn’t as big as before the pandemic. Europe’s supply chain for Airbus (which also has a big US supply chain) saw similar challenges.
“Never could we forecast the supply chain issues that would become the constraint, and it is a constraint. I don’t think there’s a supplier, I don’t think there’s a company anywhere in our field, a customer that isn’t feeling some of the impact and the constraint of workforce shortages,” Calhoun said.
“One of Calhoun’s priorities was to improve relations with the FAA”
Well, judging by the sentiment vented in various recent FAA letters, there’s little sign of such improved relations.
************
In light of last week’s ruling by a Texas judge — which describes the MAX crash casualties as “crime victims” and opens a path for the existing DPA to be binned — it would appear that the existential crisis at BA is far from over.
https://www.necn.com/news/national-international/families-of-passengers-killed-in-boeing-max-crashes-are-crime-victims-judge-rules/2851169/
It must have come as an awful shock to Calhoun that there is No Easter Bunny, Santa Clause and gasp, Tooth Fairy (you have to wonder if it was not very recently)
In the article it mentions that the Max “crisis” happened while Dennis Muilenburg was CEO. That guy took a lot of heat for deception and very poor program management that happened prior to him taking the CEO position. Jim McNierny and Ray Conner should have gone to jail for the cover-ups and blatant lies to the FAA to get that thing certified. Dave Calhoun was a big part of all that nonsense as well. All that happened was corporate musical chairs in that company and Muilenburg took the fall. Look at the dates of the information provided to the FAA for certification, Muilenburg was with Boeing Defense and Space when that all went down. I hate that Calhoun keeps getting a pass on this like a saviour or something when he was one of the lying dirt bags that aided (via. omission) in the death of 346 people. I worked (used to, I quit for conscience) for Boeing pre. Calhoun and it was a better company before him; now when Thiers a problem they just re-shuffle the deck.
I guess Calhoun is right on most he says, even more in the article above, on the green deadlines and perception management going on. Bjorn has been explaining the basic possibilities & impossibilities for a year, but still lots of believers.
Often it’s easier, more comfortable to join in blind optimism, even if you know it’s a dead end. It creates temporary jobs, attracts capital & gives hope, in the short term. Everybody loves good news.
“…but still lots of believers.”
I’m not sure that “believer” is the correct term — because, in order to “believe” something, one must first question it.
I think that “blind followers” is more appropriate: you even hint at this in your subsequent reference to “blind optimism”.
A lot of people have difficulty accepting objective reality.
Bryce
“A lot of people have difficulty accepting objective reality”.
Spot on. For so long, BAs employees looked at their Engineering Talent Pool as the best on earth, and a reasonable case can be made for that until post VietNam era engineers started leaving around 2002 ish. That was the start of the Brain Drain. Solid engineers that carried the can timed out and their replacments werent developed. The merger didnt cause this, but it exacerbated it tremendously as the management structure started managing engineers as FTEs instead of specific talents. Bean counters managed costs instead of capability. Thats the crux of virtually every problem at BA. The bean counters mismanaged the talent pool, lousy decisions were made and major bad calls set into motion decades of problems. Adopting Catia/Enovia for the 787 when CAPP/PDM wss better facilitated the adoption of the horrificy bad idea of distributed production. The bean counters approved the so called cost benefits this brought them despite older airplane guys screams of YGBSM. Brain drain failed to stop the 747-8 mission creep, resulting in a POS follow on to 747-400. The moronic support for an FAA certified COTS tanker ended up with a 767-2c. Whoever thought this bullshit interim feedstock airplane was a cost savings measure missed the mark by a wide margin, but in fairness Airbusses MRTT suffers the same inefficiencies. Textbooks on Engineering Design Risk Avoidance will forever use the Max as a case study. And lets not forget trying to pass off a huge carbon fiber folding wing airplane using the largest engines hung in Everett as a derivative of a metal winged 777 as the height of madness. Things have been going south for a while. Thankfully, real changes are happening, engineering talent needed for new product launches is being identified and hired. Boeing is late in the realization of the need for change as its a cultural thing, but the change in direction is there. One would hope the current projects in PD get funded and rolled out as they are the right products to bring to market, but even then, unless the engineering team rules the programs direction, it wont get any better… Cost reductions are important but cutting costs at all cost got BA to where they are today……
All true, but only a step in the right direction. Another aspect the MBA’s ignored is tribal knowledge. It takes years to create a development team. New engineering graduates don’t have it and transplants from competitors don’t have it. Cost cutting prevents yearly additions to the development team. Sure, the old timers could keep the ball rolling till they retired and walked out the door, but when they do the ability to develop products on time and to specification is lost.
It will take years and lots of money to regain that capability.
The 767-2C was the plane the USAF asked for .
They wanted an in production civil airliner, which was why the A330 was the other contender.
Of course the ‘tanker’ specific parts caused the problems as there was poor Boeing oversight of the contractors who developed and provided these systems as well as the Boeing Defense employees who modified the 767-2C airframes from Everett ,and acted like like sub contractors on a house build with shabby work practices
The strange move by Boeing was mainly not to do a B757 replacement, nor a 767 replacement as the 787 is in a different leauge by cost and range, using the GE Risk and Revenue sharing partner setup on the 787 was poorly executed, it has lots of financial benefits run correctly in the US but Boeing missed their first try. The 777-8F can be a sucessful freighter, 737MAX and 747-8 were of the same generation of being too old from the beginning. Airbus did similar misstakes with A400M, A380. The NH90, Tigre was ahead of its time like the 787 being reliability nightmares initally. Boeing need to make sure military programs pump in money, the T-7A can be evolved into an export success, the Truss brazed NASA sponsoerd aircraft can be a 737 replacement, a 757 replacement narrowbody NBA is a must, a cheap limited range 767 replacement optimized for cargo is needed, the 787-9 can stand on its own, the -10 to get a new generation engines and the 777-9 might be sucessful thanks to its engines even though the A350-1000 is lighter but with RR engines that can scare off many customers after the T1000 experience and RR historical arrogance. So a McAir Inquisation in Seattle and getting great engineers running the show can turn Boeing around, this time with 3 new programs of replacing the 737,757,767.
Except that there’s no money for any of that.
Analyst consensus is for another quarterly loss tomorrow (Q3): this time -8ct per share (excluding one-offs).
It seems that there’s just too little margin on the planes being delivered to be able to meaningfully exceed costs — including $550M in debt interest per quarter.
@Bryce
I wonder for how long BDS would continue to bleed money and drain cash
Draining the much needed cash for R&D and investments.
Genius BA wanted to strong-arm into new contracts by losing money, a ton of money. Yup it more or less works according to the plan, at least the money losing part.
It seems FAA relations are still not all they “should be” judging by the ongoing FAA scolding of Boeing’s (lack of ) performance regarding. MAX 7 and 10 certification documentation.
It is simply unbelievable that Boeing should be underperforming in this critical area.
There appears to be a lot of – deliberate? – foot dragging. Could this be in some way done on purpose? Why would Boeing knowingly bait the regulator? Are they betting the house on a political waiver for the many thousand orders for the two models?
Even if Congress gives a waiver — which is far from certain — it looks as if the FAA won’t certify until it’s thoroughly satified that all its requirements have been met. We already saw that with the 787.
That may well turn out to be a LONG wait, judging by BA’s deficient behavior in submitting the required SSA’s.
Maybe BA is hoping for a Rep. president in 2 years time — which may lead to appointment of an FAA chief who’s more “accommodating” toward BA.
Doubting T:
As the FAA noted with their letter on the 777X, Boeing culture is having a hard time understanding things have changed (words to that affect)
The USS Texas memorial is a case in point. The hull rot kept getting worse and worse and so the remedy to fix it got more and more costly and takes vast amounts of time.
Toxic culture is the same. Trust me, I can write volumes on toxic culture. In one case a manager and an employee are yelling and screaming at each other and the F bomb is being dropped. Just another day at the office.
Its easy to tear things apart, its a hard slog to fix them.
If the 737-7, 737-10 need a up to date crew alert system, EICAS, why wouldn’t the 1000 delivered 737-8’s and 3000 MAX (-8) on order?
Want to put a price tag on that? Or a time line, customer response, commonality gab compensation?
https://simpleflying.com/swapa-supports-737-max-certification-extension/
Boeing has a lot of priorities and investing in industry standard flight safety solution EICAS for the 737 apparently isn’t in the top 5.
But who knows it is starting to cost them billions anyway now.
https://www.euronews.com/2022/07/03/airbus-secures-mega-order-from-four-chinese-airlines
We have yet to see how other major regulators react to the MAX-7/10.
China appears to have already laid an egg on the matter (CAAC condition No. 3).
EASA may yet say “no EICAS, no cert”. The EASA did, after all, raise the issue of the CAS in its re-cert AD.
We may yet see the -7 and -10 getting axed.
From the EASA press release in Jan, 2021 (emphasis added):
“EASA has also agreed with Boeing that the manufacturer will work to even further increase the resilience of the aircraft systems to AoA sensor failures so as to further enhance the safety of the aircraft. ** Boeing will also conduct a complementary Human Factor assessment of its crew alerting system within the next 12 months, with the aim of identifying the need for longer term improvements. **
https://www.easa.europa.eu/en/newsroom-and-events/press-releases/easa-declares-boeing-737-max-safe-return-service-europe
****
From the EASA RTS report (emphasis added):
“The return to service in Europe is undoubtedly a milestone – but it is definitively not the end of EASA’s work on the 737 MAX. We have committed to follow the aircraft closely after the return to service – analysing any operational problems that may occur and taking action as appropriate. ** We have also secured commitments from Boeing that it will make proposals to further enhance the safety of the aircraft in the long term. **”
“In order to ensure the long-term safety of the 737 MAX, EASA has also agreed with Boeing two key post-RTS actions: (i) the development of a modification to further improve the AOA integrity, to be integrated in 737-10 version and retrofitted on the in service fleet, ** and (ii) the further evaluation of the CAS. **
https://ad.easa.europa.eu/ad/SD-2021-01R1
Keesje:
You should note too that something around 5000 737 x NG are flying and a number of what is called the classics (though classic would be the original).
Its dishonest (convenient) to espouse changing the alert system on the -10 and not forcing a change on all of them.
I have no like of Boeing management, but as a pilot and a technician/engineer, it makes zero sense and in fact was intended to apply to future aircraft not ones in development.
But it makes for a spurious excuse to bash Boeing for bashings sake. .
@ TW
The B757 had EICAS from the outset — and that was 40 years ago (1982).
BA has thus had 40 years to get the 737 up to the same (basic) standard. Since it has failed to do so, it seems that coercion is required. BA knew about the approaching cutoff date for 2 years, and it still didn’t get its act together.
It’s made its own bed, so it’ll just have to go and lie on it.
@ Keesje: Wow, that big order for 4 Chinese Airlines should be a heck of a wake up call to the Boeing board to get going on The NSA. The hurdle being – is the World ready for the UltraFan, the Blended Wing or is it too early for that jump in Technology? Boy, that A220 could be quite successful for a couple of decades… I do understand that Boeing needs Cash and has to clear-out the MAX’s order backlog.
If the Chinese are boycotting Boeing it matters not what aircraft Boeing comes up with, they still won’t buy it.
keesje wrote
October 24, 2022
If the 737-7, 737-10 need a up to date crew alert system, EICAS, why wouldn’t the 1000 delivered 737-8’s and 3000 MAX (-8) on order?
The answer is quite simple. The previous model aircraft fly with an approved TCDS’s and nothing compels those to be revised. The aircraft met all conditions for certification when their TCDS’s were published. The FAA is not directing BA to install EICAS on the aircraft subsequent to the current curoff date. Congress did that, and the FAA has to enforce the law irrespective of its merits or lack thereof
The EASA, however, *is* requiring in-service MAXs to be retrofitted with a third AoA input to MCAS, and it has yet to lay an egg vis-à-vis EICAS: maybe the latter deliberation will also result in a retrofit order, who knows?
I’ve lost all trust in Boeing. Safety first is just words to them.
“We put a one-year timeline in place. We both worked diligently on getting from here to there.”
– After all, I had a $7 million bonus riding on it, even though I was part of the problem that got us into this mess, but hey – everyone’s gotta get paid, right?
Interesting development in the Qatar-AB lawsuit:
AB has subpoenaed Qatar to provide details of its purchase of MAX aircraft from BA, for use in a retort to a damages claim from Qatar regarding the A321 cancellation. BA is now intervening to prevent submission of such details, since they contain sensitive pricing information.
“The airline has accordingly been ordered to hand over a preliminary version of the MAX contract to Airbus, but Boeing objected on Friday to Airbus’s internal lawyers seeing the data.
““The disclosure of pricing information … that is dynamite,” Boeing’s lawyer Paul Stanley told the court.”
https://www.aljazeera.com/economy/2022/10/14/enter-boeing-as-airbus-and-qatar-airways-resume-court-battle
Yea the same trial where Airbus admitted the MAX was as good as the A321.
Our poster is good at cherry-picking a news wire report out of context to fit his agenda. It’s a pattern.
If you are serious to quote words from AB, you have to talk with its head Faury or sales chief Scherer.
That was priceless….
@TransWorld , that was priceless.
Love how these comments go 180 degrees from whatever article is printed. Guess everyone got bored with the CEO’s comments.
@TransWorld,
“Qatar subsequently ordered the Boeing 737 MAX and this catapulted arguments about the relative merits of the jets into court, with Airbus unusually saying the MAX was as good as the A321 in a bid to avoid being forced to build the jets for Qatar.”
Yes, priceless indeed
“For its part, Qatar Airways accused Airbus of trying to bring European regulators “on side” by controlling what they saw.
It reproduced an internal Airbus email titled “Easy mtg” from the top A350 engineer asking colleagues to show the European Union Aviation Safety Agency (EASA) the worst damage, adding, “We need to damp the first impression they will have”.
An Airbus spokesperson said this demonstrated a “warts and all” approach. EASA did not respond to a request for comment.”
Oh come on EASA, I am dying to read a response to this. You can’t leave us hanging……..
“…go 180 degrees from whatever article is printed.”
The article refers to the “existential crisis” at BA.
The comment relates to pricing information on the MAX-10. Pricing determines margin, margin determines earnings, earnings determine profitability — which is very relevant for a company trying to dig itself out of a $60B debt pit.
No “180 degrees” at all.
Similar to what Leeham said
‘About the same’…as the basic A321.
https://leehamnews.com/2017/03/13/boeing-737-max-10-analyzed/
Which is why of course Airbus has poured big bucks into developing it’s latest derivatives XLR and LR
Except, of course, for the fact that the A321 neo is certified whereas the 737-10 is not…
Airbus developed the LR and XLR versions so as to capture (a larger portion of) the 757 replacement market. Judging by the sales figures for these aircraft, it would seem that the plan is working.
BA, unfortunately, has nothing to offer in this segment — which is why it will try to block the XLR’s certification.
When was the A321XLR certified. Thats the Max 10 beater you are talking about
I hear there are issues with the certification schedule and its been delayed.
Thats what every certification faces these days.
Duke
Egads, the Elert System does not fix all cert issues, the next thing you are going to tell me it does not fix corruption, I can’t stand to take the shock of that!
Define “about the same”: CASM on shorter routes?
Other than that:
Plane * MAX-10 * A321neo * A321LR * A321XLR
MTOW (kg) * 92,000 * 93,500 * 97,000 * 101,000
Range (km) * 6,110 * 6,850 * 7,400 * 8,700
Another poster eager to repost and repost endlessly outdated info to muddy the waters
Yet there’s a concensus the MAX 10 is severely compromised, not competitive
Customers voted with their money:
– both QF & AF/KLM defected to AB;
– AC & UA rushed to order A321neo
Yeah the MAX 10 is “about the same”!!!
From Scott in early 2017:
-> In my own presentation to PNAA, I said Boeing is on the defensive in the single-aisle arena. *The MAX 7 isn’t selling. *The Max 9 is outsold 4 or 5 to 1 by the 321neo. The MAX 200 is a niche airplane. *The MAX 10 won’t recover market share.
-> I was clear that Boeing isn’t in dire shape, by any means, not with a 737 backlog of 4,400 family members (3,612 of which are MAXes). But for a company that once led the single-aisle sector by a wide-margin, to be down to 39% is an anemic showing.
@ Pedro
Suggest you send Bjorn an email then. And correct his analysis.
@ Williams
No e-mail necessary: read Bjorn’s article and notice the (now outdated) assumption that he made w.r.t. the MTOW of the MAX-10…
@Bryce
I wonder if Will has even read the whole article. If that was the case, certainly our poster would then know what’s the conclusion at the bottom:
-> If Boeing decides to go ahead with the MAX 10, it will have a credible alternative to the standard A321neo. The MAX 10 will have worse field performance (essentially the same as MAX 9, which is a bit of a ground hog), but for airlines serving large airports at reasonable altitudes, it will be OK.
For airlines with the 737 MAX as their standard single aisle aircraft, the MAX 10 is certainly more competitive than a MAX 9, given a reasonable net price. *The only problem is that the MAX 10 represents what the MAX 9 should have been in the first place. Boeing should have taken its time to define the 737 MAX product range more thoroughly. Two thirds of the product range (the MAX 7 and 9) was not right, as witnessed by sales*. The remake brings a fix, but it’s a late brush up.
@William
Did you write to Joyce of QF demanding an explanation why QF didn’t pick the MAX?? Roll eyes 🙄
10 Minutes About the A321XLR and Why Boeing Can’t Compete
https://leehamnews.com/2021/01/26/podcast-10-minutes-about-the-a321xlr-and-why-boeing-cant-compete/
Why so many here refused to admit what’s the reality??
How difficult is it to get your head out of the sand?
The standard A321 is compared to the Max 10.
The orders are for the much higher gross weight versions, for mostly the extra range. Higher weight and range means much higher price too.
But good on Airbus for going for it . Boeing did the same when they bought in the 777-300ER and gazumped the A340. Boeing didnt know it at the time but this plane also led to demise of A380 ( and its own upgraded 747-8 passenger version)
Customers buy aircraft that can fly a range of missions. The MAX 10 is a serious compromised product and the MAX range lacks capabilites that A320neo family offers. That’s why customers vote with their money and feet for A320neo family.
TW,
Either what Airbus admitted in court is true, or Airbus lied in court.
IMO AB in court is basically saying Qatar is not damaged since they have an alternative aircraft available that should mostly be able to fly, how well is not specified …😇
Precisely.
@ TW threw the discussion off kilter by his choice of the verb “admitted”.
In the context, “posited” or “asserted” would have been a better choice.
TW only quoted from a news report, not directly from a court transcript!!
Apparently some posters also fell into the trap.
DT,
Airbus making claims about damages to either side, without quantifying any of it, is what won’t fly well. Why do you think they are grubbing after Boeing’s pricing info? They need that AND the relative operational economics between the types to make their case. That is where Airbus’ admission, assertion, suggestion, or whatever Bryce is trying to call it, came into play.
I find the admission hilarious.🤣
-> “Airbus making claims about damages to either side …”
Really?? Who are the parties AB claimed against? 🤣
Mike Bhonet:
When you testify in court, you are under oath.
But people do lie under oath and I find it hilarious what Airbus is lying about and trying to spin.
Gasp, you would think it was Boeing on the stand!
Uhh to clarify things your honer, we just make poor products, the only reason people buy them is they really don’t like Boeing.
@ TW
How do you come to the conclusion that the statement that you’re attributing to Airbus was “testimony”?
Not all communication in court proceedings is “testimony” — for example, argumentation by counsel is not “testimony”.
@Bryce
*Lawyers arguing with each other over access to documents*. Solid proof how detached from reality is our poster here 🙂
Please TW, stop posting this info that Airbus said the mad max was just as good as the A321. That’s your opinion and no others. Ask any pilot (that doesn’t work for Boeing) that’s type rated on both and see the answer you’ll get….. like my son.
Many here have mentioned that a Republican Congress or presidency will change things for the better for Boeing. I don’t think so.
Some have posted that a different FAA administrator will be better and ‘friendlier’ to Boeing. Highly unlikely given the current working attitudes. Besides, an administrator is simply a figurehead and wouldn’t risk giving the ok for an exemption. Politics being what they are of course I may be proven wrong and then eat crow.
But Bryce pointed out correctly about EASA’s statement on the mad max, thank you. In the scenario, even if the FAA grants this exemption for EICAS on the -7 and -10, how will EASA and all the other key regulatory agencies react? They haven’t been to keen since getting burned on the max from the FAA in the beginning. Such is the case with the CAAC.
Someone mentioned that things are greatly improving at Boeing? From what I’m hearing the culture is just as toxic as ever and the workforce doesn’t share the same proud build quality attitudes that once was the mantra of the people who previously built and delivered the products.
People are being hired left and right off the street with no experience, the tribal knowledge gained from the former workforce is long gone. Engineering being hired that are clueless on the product change rules and certification CFR’s and working with other regulatory agencies.
Am I all doom and gloom? One only needs to look at how this company isn’t performing on their products. They’ve had two years to address this congressional ruling on the EICAS and dragged their feet (on purpose?).
The 777X remains a quagmire.
New airplane program you might say will do the trick. Good grief that’s simply more obfuscation when you look at the track record the past twenty years.
Tomorrow the 3rd Qtr results. Wait for it.
Airdoc said…Someone mentioned that things are greatly improving at Boeing?
Thank God that wasn’t me. I did say that changes have started, but I also said that unless the bean counters turn program directions back to Engineers, what they are doing won’t matter….. Try not to paint pictures that aren’t there especially when talking about BA and an improving corporate culture. I ran off a litany of failures and some very very minor changes in corporate direction. Yeah I know you have to start somewhere, even at that, What I described was the very start of the process. It’s encouraging, but at the same time it’s extremely fragile because of the magnitude of change and the rot and decay that needs to be fixed. I hope they get it done in a timely manner,but I have my doubts that the culture can be repaired very quickly, and maybe it’s a decade away. Until that happens, BA is completely capable of having another disaster. The optimist in me says that this journey is one of many steps, and we see the first of them and that’s good. The realist in me says, that BA will find a way to eff it up again…….
@Correa
Calm down. I didn’t call you out specifically and don’t be so defensive.
I’m thinking you’re a Boeing executive, but then if you were you wouldn’t be using this name. Have you ever really worked for this company at all?
If you have, you’d understand the company is a basket case….. and has been since 1997.
There’s no leadership from the BOD on down. Boeing doesn’t lead they follow. They’ve blown $20 billion on the mad max debacle and there’s no accountability, enough money to have financed a new clean sheet.
Don’t you, in the least find it stunning that the same leadership involved with the mad max decisions, with exception to Muilenberg, are still running this company.
Go ahead, call me cynical.
Airdoc,
Instead of derisively questioning Scott Correa’s background, why don’t you do a simple web search to answer your own question and save us all from your 5 sentences of blather. He wrote a guest article for LNA about 1.5 years ago that pretty much details his background in this industry.
https://leehamnews.com/2021/05/27/industry-stands-together-on-safety/
Thanks Mike,
Glad you noticed, have a great day.
@Correa
With apologies.
Airdoc.
No problem….
Thanks
@ Scott Correa
Are you related to Chick Correa, the jazz player?……I kid, I kid……..Regarding whether Boeing’s culture has changed will not be seen for a decade. When the NMA is debuts or the next NB is launched.
Boeing has gotten the message from those who matter, the customers, in a way that Boeing understands, orders or lack of. How does Boeing respond? Will be seen around 2030.
Williams
Absolutely agreed….
With what I see happening behind the curtain, the correct moves have started. Its a long journey and one of the unacknoleged problems in this forum is the SEC and how the drive back to an engineering lead culture may clash with the short term requirement to always increase shareholder equity. Interesting times are ahead…..
Airdoc:
Its on the record and I published both the statement and the link to the article it came out of.
You may not like the facts but that does not make them any less factual.
“…I published both the statement and the link to the article it came out of.”
Where did you “publish” this link?
Not in this thread, in any case.
Please enlighten us.
Worth recalling that when Calhoun took the throne in Jan, 2022 in the face of the twin existential crises of the Max and Covid, his first action was to borrow $11 billion and use $6 or $7 of it to pay the standard dividend. Just shows his priorities.
Jan, 2020
https://dividendstocks.cash/dividend-profile/Boeing-Dividend
“When does Boeing pay dividends?
Boeing did not declare dividends within the last 12 months.”
https://www.fool.com/investing/2020/04/27/boeing-ceo-to-investors-dont-expect-to-see-a-divid.aspx
“Loans taken, must be repaid. There won’t be money left over for dividends.
It’s been a little more than a month now since Boeing (BA 0.52%) told investors it will stop paying its dividend “until further notice.” It could be another three to five years before they get it back.
Boeing CEO Dave Calhoun, speaking at the Boeing annual shareholders meeting, warned that, as a result of the COVID-19 crash in air travel and the tremendous destruction in demand for airplanes that resulted from it, Boeing is going to have to “borrow more money in the next six months in order to get through this really difficult moment,” Reuters reports. “
https://www.streetinsider.com/dividend_history.php?q=BA
The dividends were declared before he became CEO, and of course are a board decision
Calhoun was the lead director, sitting in a front row seat …. on the cheerleader bandwagon He’s the enabler of the rot, crowning Muilenburg etc
So to be clear, Calhoun did not borrow $11 Billion dollars to pay a $6 and $7 dividend.
Now back to our regularly scheduled program of ” The Death of Boeing”.
Nobody said he borrowed it “to” pay the dividend: the assertion was that he used the loan to pay the dividend. There’s a difference.
If one replaces “pay” by “fund”, the assertion is technically correct 😏
Don’t know why we are parsing words here but the comment, assertion, musing or whatever is the stockholders got a special payout.
I don’t see that “assertion” anywhere. I guess I could email Charles Shaub
https://dividendstocks.cash/dividend-profile/Boeing-Dividend
I don’t see that “assertion” anywhere. I guess I could email Charles Shaub, but after a short Google search , I would look mighty stupid. Even if one hates Boeing, or Calhoun. No need to make up stuff up.
“I don’t see that “assertion” anywhere.”
Strange…since the assertion in question (by @ John) is what started this thread…
@Bryce
While Calhoun knew it’s hard time after the grounding, BA continued to produce the MAX at high rate as if nothing had happened, and continued to pay dividend. All this further drained BA’s cash and forced it to borrowed $11 billion and BA still hasn’t been able to dig itself out of that financial sinkhole.
Did Calhoun suggest to board to cancel the dividend after he became the CEO?? Hah.
Mostly paid out by the time he became CEO. ( declared date was 16 Dec 2019
Boards decide dividends not CEO
Muilenberg was sacked late Dec 2020 ( but should have been dumped a year earlier)
But since you dont understand dividends from Boeing , you didnt notice that was the *last* quarterly dividend for 2019.
So yes ‘the board’ didnt pay any more quarterly dividends for 2020 period – or since.
Did you read the article of association? Do you know how it works in practice??
Last dividend was paid in Feb 2020 dude. Lol.
Poster good at digging up outdated info has difficulty to find the reality.
The chilling statement (if you accept it as fact) that Calhoun claimed not to know what was going on with Boeing.
They should have him in court as its a violation of his duties as a member of the board and failing to carry out those duties has (should) penalties.
The improvements Boeing is making is despite him not because of him.
Not Feb 2020 . The ‘eligible’ date was 16 Dec for shareholders for a 2019 dividend .
They didnt have hindsight on the events that began in early 2020.
Anyway no quarterly dividends at all from Boeing in 2020 or since
Experts have considered the more general question
“Final dividends
On the face of it, a final dividend that has already been declared by a company becomes a debt owed by the company to the relevant members and its payment cannot be cancelled. However, if the articles of association contain an express provision which gives the directors the authority to do so, it may be possible to cancel a final dividend even if it has been declared.”
https://www.burges-salmon.com/news-and-insight/legal-updates/corporate/dividend-cuts
The dividend was not paid until Feb 2020.
From your quote, a dividend declared can be *canceled*. Any questions?? 🙄
Boeing has no express conditions in it’s articles to cancel already declared dividends.
Q: Calhoun has been a director for over a decade. Did he vote against the dividend??
-> However, in certain circumstances − *such as the sudden shocks that businesses are currently experiencing as a result of the COVID-19 crisis* − a dividend that was lawful when declared may *not be lawful upon the payment date*.
In that case, the dividend may *Not* be paid.
FYI: *The dividend is payable March 6, 2020*, to shareholders of record as of *February 14, 2020*.
Duke is only good at posting outdated information/ mis/disinformation
I remember the first thing Calhoun did was cancel the NMA. Shows you where his priorities are: ensure the fund guys’ interest, cost cutting etc
It hadnt been announced as ready for marketing. And in the circumstances that soon developed was the right decision- for once.
Leeham analysis from April 2020 – now out of paywall- strongly hints the the twin aisle is the way to go
https://leehamnews.com/2021/04/08/analyzing-the-trades-between-a-single-and-twin-aisle-nma/
After dithering for over a decade, BA still has no answer (not even a vaporware like NMA) to fill the MOM hole in its product lineup.
Failure is touted by our poster as if it were a success.
Anyone see this?
Judge Rules Boeing Max Families Are “CRIME VICTIMS” Opens Door To Criminal Prosecution
https://www.youtube.com/watch?v=sJR-Txgx5Ck
US judge applies ‘crime victims’ status in Boeing 737 MAX crashes
https://www.aljazeera.com/news/2022/10/22/us-judge-applies-crime-victim-status-in-boeing-737-max-crashes
Yes: I posted it in another LNA article.
Big trouble brewing for BA.
I wonder how difficult is it to close the business case for 757 and 767 replacements. Pretty tough I guess. The longer BA waste its time, the smaller the market (taken up by its competitor) and the harder to proceed.
No one has a magic wand, including BA
https://leehamnews.com/2019/03/04/pontifications-doubts-continue-over-boeing-nma-launch/