BA management has made their strategy going forward clear: leach off of DoD, like Lockheed does. DoD will put up with cost overruns and delays like no commercial airline ever would.
Steve
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Which, unfortunately, is the EUâs default approach to everything - stifling over regulation. Pretty much what you would expect when almost every decision has to be by consensus among committee members whose salaries primarily depend on contributions made by their respective home countries
To paraphrase Sinclair, it is difficult to get a man to enable autonomy and accountability in private enterprise when his salary depends on his preventing it
While the FAAâs attempt at developing Boeingâs internal quality control capability was a fiasco, the principle of building quality into design, engineering and manufacturing is well proven, notably by the Japanese.
Do It Right The First Time is always going to be a win-win for all stakeholders if industry management has the brains and the guts it takes.
Evidently Boeingâs top management hasnât had either for some time now
Well, when it comes to aviation safety I see merit over the current-day US approach of corporate âself-regulationâ combined with regulatory capture, up to the point too many planes fall out of the sky for the stock price to stay up.
Must be because I am one of those whiny EuropeansâŚ
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Boeing has been primarily focused on returning shareholder value. Theyâre not the only company to prioritize shareholders over their customers.
Would it be better if companies regulated themselves? Sure, but until we live in a world filled with rainbows and unicorns, regulations should be in place to protect the public from bad actors.
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Hi SuisseBear - thanks for your response
Luckily, one doesnât have to be European to be whiny - and vice versa 
If regulatory capture is what worries you, examples abound across the EU as well:
- Its Common Agricultural Policy is held to ransom by its farmers and their respective governments
- German regulators bent over backwards to cushion its automakers from increasingly stringent environmental requirements
In a way itâs a bureaucratic version of Stockholm Syndrome - the more stifling and all encompassing the scrutiny, the greater the bonding between the regulator and its âprisonersâ
Of course self-regulation in Boeing was arguably doomed to fail, given the much discussed deterioration in its erstwhile standards of engineering excellence since acquiring McDonnell
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And those shareholders were too busy laughing all the way to the bank to notice it was actually destroying shareholder value instead
We do tend to get the management we deserve
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Governmental regulation is necessary but useless without civic virtue in the citizenry. The correct response to BofDâs and execs looting Public Corporations, breaking laws, and corrupting regulators are a panoply of reactions that begin with public fury expressed with throwing rotten tomatoes and epithets through to electing Presidents and Attorney Generals who enjoy throwing rich crooks into jail and penury.
Our problem is a lack of civic virtue.
d fb
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Welchism works until it doesnât. A recent column I read noted that BAâs shareholder return so far this year, has been the second worst in the S&P 500. I sold on 10/11/17 at $260.94. BA closed today at $181.15. Is that âcreating shareholder valueâ, or enriching the âJCsâ, at the expense of everyone else, including the shareholders? Seems Welchism is a cousin of Ponzi schemes.
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Thatâs fair, probably why thereâs a class action from shareholders.
You canât feel too sorry for investors who lost their shorts. Shareholders were taking a chance by investing their money in a company that was pumping their share price through stock buy-backs, cutting R&D and quality along the way.
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Did the column mention who was first worst?
Tesla and Boeing Are the Worst Stocks in the S&P 500 This Year. Theyâre Paying for Decisions Made Years Ago.
Tesla stock was down about 31%. Boeing shares were down about 30%. The S&P 500, overall, was up about 8% year to date.
[Current issue of Barronâs]
The Boeing slump is blamed on exactly what has been discussed so far in this thread. Teslaâs slump is blamed on the focus on the Pick-up, to the detriment of the âlower priced EVâ, now eating Teslaâs lunch in China (and perhaps the world, depending on trade regulations and timetables to develop the product. BYD, meanwhile, doing quite well with the sub- sub- sub version of an EV.[
In the case of Tesla, a prototype of the avant-garde Cybertruck was unveiled in 2019, giving it priority over a lower-cost vehicle. At the time, the decision seemed sound. EV pricing wasnât a concern and full-size trucks make up a large portion of new car sales in the U.S. Today, the decision doesnât look as smart. The Cybertruck is expensive and hard to build. And BYD has become the largest seller of all-battery electric vehiclesâmainly by offering lower-priced EVs, while Tesla has nothing to offer car buyers in the sub-$30,000 price category.
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That seems to be the essence of Welchism, make your numbers with financial manipulation, rather than building the company. After all, building the company is hard work. One of the recent pieces talked about how many aircraft BA delivered last year, vs the considerably greater number delivered by Airbus. I remember when those numbers were the reverse, with BA dominating the commercial airliner market. Now, the BA âJCsâ say they donât care about market share. I hear the same attitude from VW and Ford Motor: they donât care about market share, as they cull their lower priced products, to inflate ATP and GP.
Steve
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