The market is a harsh mistress. In this case, not only will Boeing suffer, but so will all the end customers of those products suffer. That’s because in a duopoly, when one of the companies is “injured”, the other can take advantage, at least for a period of time, and increase prices almost at will.
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You are such a stickler 
. According to the manufacturer, should there indeed be a flight safety issue, it is at least not ‚immediate‘:
The discovery is “not an immediate flight safety issue,” Deal said, adding that all 737s can continue to operate safely. The incorrectly drilled bolts will, however, delay the delivery of 50 airplanes so the problem can be fixed.
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Demand already outpaces supply with both running at (or perhaps, above) capacity.
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Is this a chance for someone like Embraer to move up into slightly larger aircraft and make something to compete with the 737 and A320?
Airbus can’t handle the whole demand for that class, and Boeing seems to be imploding in on itself.
Embraer would need to start from scratch, as I don’t think their existing planes can be stretched any further to get up into that class. So it would certainly take some time. But it just seems like opportunity is knocking here.
Is there someone else still around that might be able to move up into this class?
–Peter
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Presumably the absence of those four bolts would have been thought not to be an ‚immediate‘ risk to flight safety either.
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Yep, that’s exactly the point. Demand is already above supply, so when one is “injured” and has to slow their supply while they fix their problems, then the supply.demand gets even more out of whack and the one stronger competitor can raise prices to customers coming with new demand.
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The bolts were not in place. Human error happens.
We see it here daily.
More inspections are exactly what are called for.
Employees do not insult each other with, “hey buddy you need to put screws in that”. Imagine corporate morale if second-guessing every nut and bolt was how they operated.
BTW Airbus is probably not much better. But the EU would have plenty of inspectors.
Why does the US not regulate and inspect things enough?
Because it would cost tax payer money and burden JC’s.
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There’s no doubt about that! The big question here is why does human error happen so often at Boeing? The likely answer is not enough attention paid to quality and process.
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I do not think it happens often.
Often enough that 300+ people already died. And a planeload of people were scared out of their wits. For mission critical things, that’s way too often. Way way way too often.
If 300+ people died after taking 100mg inadverstemin for 2 weeks, then you can bet that Suprapharma would be forced to take it off the market immediately and that would be the end of that drug. Even after they spent a billion or two developing and testing it and getting it FDA approved.
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Salient quotes:
“ To me, the [Boeing] problem is not the engineers, the problem is management,” says Vertical Research Partners analyst [Rob Stallard]
A good part of the problem, actually, is Boeing investors who were only too happy to take the short term gains of buybacks and dividends and increasing stock price over the long term needs of the company.,
The issue is partly the nature of the aerospace business, which is characterized by heavy investment, high regulation, and product cycles measured in decades, making strategic choices as critical as engineering decisions. “This is the sort of business that, from a product perspective, you build on, or not, over a long period of time,” explains GE CEO [Larry Culp].He wasn’t talking about Boeing. Culp was answering a question about GE’s leadership in jet engines. The company is pleased to point out that GE engines power [three out of four]commercial airline flights. Culp attributes that impressive statistic to decades of investment made by several management regimes.
R&D is a telling stat, but the context is in the shareholder returns (below)
His comment hints at how Boeing finds itself in the current [MAX mess]. The company has simply spent less on research and development and new plants and equipment than its most important rival.Between 2010 and 2023, Boeing spent about $70 billion on research and development plus new plants and equipment, according to FactSet. That spending amounted to about 6.2% of sales generated over that span, going back as far as FactSet had data readily available.
At the same time, Boeing leads Airbus in spending related to shareholders. Over the past 10 years, according to Bloomberg, Boeing has spent some $59 billion returning cash to shareholders, including about $20 billion in dividends and $39 billion on share repurchase.Boeing was a big buyer of its stock between 2014 and 2018. Shares outstanding fell from about 751 million at the start of 2014 to 568 million at the end of 2018. Boeing has about 610 million shares outstanding currently.
Airbus now has about 2/3 of the advance market in the commercial passenger jet segment (ignoring small personal and corporate jets).
Airbus has spent, essentially, nothing on share repurchases and about $10 billion on dividends over the same 10-year span.Choices about returns of capital and investment spending are management decisions. Those decisions manifest themselves in other numbers. Airbus has about 62% of the total backlog for 737-size jets and has delivered about 57% of those planes over the past 15 years. Things are slowly getting better for Airbus.
Shareholders, however, deserve some of the blame for management decisions. Boeing was rewarded with gains in its stock for its capital- return policies. From the end of 2013 to the end of 2018, Boeing stock returned about 20% a year on average, according to Bloomberg. Airbus stock returned about 10%.
The fault, dear Pogo, is in ourselves, and a system which rewards short term profits over long term planning. Or, to use another word I hope comes into even worse disrepute: Welchism.
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How many car deaths in the U.S. each year?
There are nearly 43,000 fatal crashes a year in the U.S., but there’s at least a glimmer of hope: The actual deadly car crash rate is less than 1%. Let’s dive into the numbers: In 2021, there were an estimated 6,102,936 police-reported vehicle accidents in the United States.Jan 16, 2024
The list is the 1980s till today.
Perfect example. How many were due to negligence (“human error”) on the part of the maker of the vehicle? How many due to “forgotten” bolts? Or software that made it crash regardless of what the driver does? VERY few. Even the famous Audi unintended acceleration was debunked and was solely due to driver error, and that one even reduced their sales to near-zero for 2 decades!
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I must say, if you have a product in use where 43k people die in a given year pull it. LOL
Ignition Switch Defects in General Motors VehiclesThis manufacturing defect caused cars to suddenly shut off at high speeds, leaving drivers with no working power steering, brakes, or airbags. General Motors’ faulty ignition switches killed 303 people and injured many others, as reported by AutoInsurance.org.Mar 31, 2021
Safety features are at the forefront of most auto product liability cases. Some of the most notable personal injury and wrongful death lawsuits involved the following vehicle defects:
- Tire separation and failure
- Airbag malfunction
- Seatbelt malfunction
- Fuel-fed fires
- Roof crush
- Rollover defects
- Door latch failures
- Poor crashworthiness
Skipping to a better topic.
Gun-related fatalities, anyone?