With all the failures (and underwater fixed price contracts), I would think you’d have to pay someone to accept the burden of Boeing’s space business.
intercst
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This situation reminds me of the famous line from Bob Ueker.
I signed a very modest $3,000 bonus with the Braves in Milwaukee. And my old man didn’t have that kinda money to put out.
WTH
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The inept chairman of the board can not figure out when to fire himself.
Dealing with negative cash flow and possible downgrade to junk bond status. Selling assets makes sense. Space division is an obvious choice. But deal would likely take a year.
Defence business is a keeper. Bankruptcy could mean sale of the passenger aircraft business.
Boeing is not going Bankrupt. This is a duopoly is something many folks keep forgetting.
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The $64,000 Question
What space business?
How do you sell something you don’t have?
Used to have does not count.
And a rocket production line that is uninsurable for launching purposes?
A bailout is guaranteed, because “jobs”, and, increasingly “defense”, because “Godless Commies”. Doesn’t matter how sloppy, careless, and wasteful, Boeing is.
Steve
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China has entered into commercial airlines. No longer a duopoly.
I do think BA will survive. The new CEO seems to be making sensible moves including layoffs and selling NPAs.
In ability to ship airplanes to meet customer needs creates an opportunity for changes. New ownership might be part of that. BK does do that.
It also creates opportunities for competitors to challenge that duopoly. China is readying a plane. Embreaer in Brazil might take a run at it. And there may be more.
Indeed. That is why Boeing’s share of the commercial market has been cut in half over the last 30 years. Airlines don’t tolerate cost overruns and late deliveries, like DoD does.
I doubt the Chinese will become a factor in the US market, because “national security”, just like Chinese comm equipment, EVs, and “connected car” systems have been, or are in the process of being banned.
Steve
Boeing didn’t take government money during COVID, so it will not like to cede its ownership to government so quickly. I may not be interested in BA equity but if its debt could yield a decent return, risk adjusted, I might be interested in it.
Oh, it won’t cede ownership to “big gummit”. It will be claimed to be about “jobs” and “national security”, but reality will be a “stigma-free” handout of government cash to bail management out of it’s own Welchedness. Management will then continue with it’s Welchedness, while everyone else gets a haircut.
Steve
The USA needs to come up with some form of BofD and top executive (TOP!) management capital punishment.
The corporation gets taken over and sold off, and the BofD and top executives become legally uncertifiable for any future equivalent fiduciary role. Would that be legally possible (I understand given the power relations in the USA that would be utterly impossible short of Bernie Sanders taking over everything….
d fb
Hold the execs personally liable for their failures as leaders of the business. So they AND their families suffer major loss/bankruptcy and are not allowed to personally profit at the expense of business/shareholders. Absent that risk of personal loss, the current problem of “privatize profits/socialize losses” will be perpetual because there is NO PERSONAL RISK TO TOP MANAGEMENT/EXECUTIVES based on outcomes due to their choice(s).
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The ex CEO now Chairman could conceivably be up on fraud charges. But it would be along the lines of incompetency. Still his resume might be the be evidence of fraud. It is inherently a lie about his ability.
MBAs do not know much. Case study without a single ability should not equal any pay. That is the fraud.
The word capital punishment means death penalty. So let us not use words like that loosely.
Not always the CEO or BofD can save a bad business, or stave off technology, industrial changes. I understand the frustration that executives make poor decisions or decisions that are explicitly done with an eye towards immediate profits, which will boost their compensation and asking for clawback of such compensation is understandable. But this is something that capital markets and shareholder base has to deal with.
The best thing that government can do is, move the long-term capital gains to 2,3 or 5 years. This will remove lot of incentives from activist, hedge funds to goose up the share price. Also, has the side benefit of increasing the revenue. Half of the country is busy giving them a tax break, so this might balance it a bit…
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China is, at the very least, years away from regulatory approval to fly to the US, and probably most other Western countries as well. But the US cannot allow Boeing to go upside down because of the defense business, and letting China and Europe take away the domestic airline business means tens of thousands of jobs in assembly and in subcontractors and maintenance in probably every state in the Union.
Eventually China will probably have a hand to play, but not all that soon, I suspect.
Just like car, an airplane is a transportation device, and should become fungible. I know most in the west still think very poorly of China or for that matter non-western technology or engineering. Today China in many areas is catching up with US and west in general. They may not be cutting edge, but a generation or two behind with a great price to value. Western engineering companies have lost a great deal of talent, skill and they are not recognizing it.
I am going to accumulate 2027 BA leaps based on the following comment
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MBAs do know not to take a job that risks ending their careers or time in prison.
Getting tough on CEOs may sound good but how do you fill the position with first rate people?
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