Boeing R&D spending continues to rise, surpassing/matching 2020 level

By Scott Hamilton

Oct. 27, 2022, © Leeham News: The Boeing Co’s research and development spending for the nine months ending Sept. 30 is 10% higher than the same period in 2020. R&D spending for Boeing Commercial Airplanes for the current period is fractionally lower than for the nine months in 2020.

R&D spending in 2020 took a sharp dive as the global COVID-19 pandemic set in beginning in March. With the global 737 MAX fleet grounded (from March 2019) and production halted (from December 2019), CEO David Calhoun took a knife to spending as cash flow dried up.

Comparisons to “normal” years

Total R&D spending is still down 16.7% for the current period compared with the nine months to Sept. 30 in 2019. There was no pandemic then and the MAX had been grounded for six months. Production rates were trimmed from 52/mo to the 40s, but then-CEO Dennis Muilenburg remained optimistic the MAX would be recertified soon.

BCA R&D spending in the current period is down 28% compared with the same period in 2019. Muilenburg began to cut spending during the grounding. He was fired in December 2019, when it became clear that there was no end in sight for the grounding and relations with the Federal Aviation Administration frayed to the breaking point. MAX production was halted the same month. Calhoun was named to succeed Muilenburg, taking office the following month.

Compared with 2018, the last normal year before the MAX and COVID crises erupted, the current nine month R&D spending is down 14.8% for the corporation and 32% for BCA.

23 Comments on “Boeing R&D spending continues to rise, surpassing/matching 2020 level

  1. The big question: what’s this BCA R&D money being spent on?
    – NBA/NMA? Wasn’t that supposed to be “ready to go” long ago?
    – 777X redesign / 777XF? Is it worth it?
    – 787 HGW / 787F? A logical step (for a change).
    – Factory of the future? Is that just hot air?

        • Its $2 billion .

          The no nothings will of course drive their clown cars around the subject.
          But the circus tent is empty

          • None of which actually answers the question…

            “Only 2 billion”
            Well, 2 billion represents 15% of BA’s total available cash at the moment. It’s also enough to pay 3/4 of BA’s annual debt interest.

            Who’s the clown now?

      • Well, we saw the same “incremental pushing out” with the 777X cert date, didn’t we?
        And with the KC-46A up-to-spec date.
        And with the Starliner ready date.

    • There are lots of common engineering spending not tied to a particular aircraft type, like all materials research and testing, primers, paints, adhesives, welds, brazing, metal alloys forming, surface treatments and NDT like Barkhausen noise NDT, REACH compliant chemicals substitution, composites processing including qualifying the different Finnish papers on the back side of pre-preg rolls.

    • Instead of focusing on the $ input of R&D, I would look at the output, what have BA achieved: how the current development programs progress, are certifications progress smoothly without amiss etc.

      I don’t see anything that is worthy for the current mgmt to tout.

      • -> Compared with 2018 … the current nine month R&D spending is down 14.8% for the corporation and 32% for BCA

  2. Additive manufacturing. But if those models Scott was given are any indication on the ‘research and development’ I’d be concerned.

    I’m thinking the creative accounting money is being channeled into Congress for them to provide the exemptions on the -7/-10 mad max’s.

    • You beat me to it.
      I was going to point out that a *booking* as “R&D expenditure” doesn’t necessarily mean *actual* R&D expenditure. We know how creative the accountants at BA are, so it’s possible that (at least part of) this money is actually being spent on something totally different.

      • Elon Musk just completed his $44B deal to take over Twitter and fired all the top brass and BOD.

        This is what’s needed to fix Boeing….. seriously.
        I’m sure this will spark additional comment.

        • Needed?
          It was the very worst business buyout decision in the last decade. $15 bill thrown away in overpaying maybe more. Has Musk installed his very own MCAS and will dive into the ground no matter what he does to correct.

          • We’ll see Duke

            But he’s a much smarter man than you and I.
            As I predicted, spark additional comments… lol

        • @ Airdoc
          It may be what’s needed, but who would want to buy Boeing?

          Split it up and “sell” the defense division to LM or NG (for example) for 1 dollar. The rest has little value.

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