Boeing Made Mistakes. Now They Want Your Money.
Former U.N. envoy Nikki Haley quits Boeing’s board over its plea for $60B in aid, Geekwire
“Earlier this week, Trump told reporters that he supported a Boeing bailout — and referred indirectly to the company’s 737 MAX troubles: “it was unthinkable what happened, with respect to Boeing. Probably I would consider it the greatest company in the world prior to a year ago. Now they get hit in 15 different ways and they have different management. I’ve met the new people running Boeing. I think it’s going to be outstanding. “But, yeah, we have to protect Boeing. We have to absolutely help Boeing. They were doing a job. … It was coming along well. And then all of a sudden, this hits. So, obviously, when the airlines aren’t doing well, Boeing is not going to be doing well. So we’ll be helping Boeing.”
Boeing CEO says company may reject stimulus if Treasury seeks equity stake
“Boeing chief executive David Calhoun on Tuesday suggested that the aircraft manufacturer would not accept federal aid as part of a pending economic rescue bill if it meant giving the Treasury Department a stake in the company. … Boeing is requesting $60 billion in federal loans from a $500 billion corporate assistance program created in the Senate’s $2 trillion economic stimulus bill. The bill, which is still being negotiated, also allows the Treasury secretary to take a stake in bailed-out corporations, as the government did to major banks who received federal rescue funds in 2008.”
Boeing to Emerge as Big Stimulus Winner, WS Journal
“The company has declined to detail the components of the $60 billion it has been seeking. After the Senate passed its stimulus bill late Wednesday, Boeing praised the package, saying its liquidity boost was “critical for airlines, airports, suppliers, and manufacturers to bridge to recovery.” Faced with mounting financial strain, Boeing has suspended its dividend and has been considering potential layoffs. Executives have said they were working to avoid cutting or furloughing employees from its 65,000-worker commercial arm. Under the proposed stimulus plan, certain loan recipients must maintain at least 90% of their current workforce through Sept. 30, among other worker protections, eliciting praise from the International Association of Machinists and Aerospace Workers, which represents Boeing factory workers in the Seattle area.”
Dare I ask…what happened to the concept of capitalism?
Yes, national security concerns, sure.
Keep attendees at the bankruptcy sale to American entities only..
You could “Conrail” the company, and eventually the Feds could sell it off in a few years for a profit.
Live by the sword, and well, if it happens, die by it…
Otherwise, you (they) better admit, the capitalism they tout is BS!
Capitalism like Communism are abstracts that never existed in the real world in the theoretic form that Karl Marx wrote about. Both need to be compromised to reflect the reality of how economics actually works in the real world. That is they are more representative of economic philosophy rather than economic science.
Oh boo hoo, cry me a river.
https://www.marketwatch.com…
I thought we already helped Boeing with SLS
And Starliner, and KC-46.
… and everything else.
I guess buying back $43 billion of their own stock since 2013 hasn’t worked out as well as they’d hoped.
Boeing Enhances Shareholder Wealth through Share Repurchases
By Anirudha Bhagat, Jun 28, 2019
https://marketrealist.com/2…
I have little sympathy for Boeing. They’ve short changed engineering on numerous programs in order to “enhance shareholder value”. I personally think it’s time to break up Boeing. They should sell off all of their businesses that aren’t directly related to building aircraft.
Agree. 100%
Too BigTo Fail™ ?
It appears President Trump agrees and wants to prohibit companies being rescued from doing buy backs, as he stated today.
I’ll believe it when I see it. The present bill has no such conditions.
What the President wants and what Congress puts in a bill are never the same. Expect the lobbyists to ensure there is nothing to hurt the folks they work for.
The airlines are reportedly asking for a quick $ 50 billion to sustain them. Meanwhile in the past few years they have used their record profits from their flying cattle cars and sardine cans to buy back $ 39 billion of their own stock . We should deduct that last sum.
If the airlines want $ 50 billion but reinvested $ 39 billion in cash to their own ends, any bailout should be capped at $ 12 billion.
Given the stock market is at low tide right now and the central bank lending rate is near zero percent, it is an excellent time to borrow money at low interest by using their cattle cars, sardine cans, and ticket counters as secure collateral . Right ?
Same goes for Boeing manufacturing. Borrow the money at super-low interest and sign the deed to your factories over to The American People, your new stockholders. Right again ?
A one time bailout of airlines will probably not save the industry from decline. It was already under strong pressure from climate change activists from the CO2 emissions it generated. A reluctance for folks to travel after this, likely a return to health regulations on travel and a rethinking of the global supply chain will likely result in further reduction in demand. This is a good time for governments to consider how to rationally downside the industry via mergers and buyouts.
How would climate change activists exert any real pressure on the airline industry?
Simply by getting folks to fly less.
https://www.cnn.com/travel/…
Thousands of people have stopped flying because of climate change
Isabelle Gerretsen, CNN • Updated 17th December 20, 2019
Yes, but that’s a much bigger trend in Europe than in the United States. In Europe, with a good rail system, it’s a matter of convincing people to spend two days in transit on the train, rather than most of one day if they fly. And the lower hasel of getting to the train station and on the train is a selling point. As is the greater space and ability to work while on the train. (Given the spacing of seats on airplanes, good luck using your laptop if the person in front of you leans his seat back.) But the US lacks functional, long-distance passenger trains. So the same environmental case involves convincing people not to travel at all, not convincing them to spend an extra day or two in transit. And I’d like someone to point any viable alternative to flying when it comes to travel from the US or Asia.
True, Amtrak is everything that you would expect for a Congressionally funded corporation run by government.
But I suspect that as business recognizes the increased productivity and reduced cost of telepresence they will adapt and promote it as part of their climate change strategy. Meanwhile tourists will use it as a socially acceptable rational to avoid overseas travel rather than admitting that the Corvid-19 experience put them off of traveling overseas.
Not necessarily. I think it may show the limitations of working from home. We’ve seen slower response from those at home. Also schedule delays by not being able to work on hardware in other states. That ignores traveling for vacation. Once restrictions are removed, I believe air travel will once again increase.
What you are seeing is the result of them having limited experience working at home combined with supervisors failing to make expectations clear to the workers. I have been working mostly at home these last twenty years in organizations experienced with it. I have my work email on a work dedicated smart phone which allows instant access, along with text, phone calls and video meetings as needed. It is “my office” that is with me during working hours.
Maybe. Other issues are those people that ignore calls and emails. Many times I end up having to go to their office to get an answer. Much of our work is with actual hardware in multiple sites so while I could work from home for small intervals, most of the time it won’t work.
Yes, we need to learn to work like Waldo.
Waldo (1942) Robert Heinlein
Actually, Amtrak turned a profit this year. Amtrak suffers more from the American notion of having the freedom to drive my car everywhere more than anything.
Mostly but, I think, not entirely. The Washington to Boston line is fairly good, although it’s the only Amtrak line I can say that of. But the cities on that line generally have good (or functional) public transportation within the cities (or tons of taxies…) In some cases, you wouldn’t want a car at your destination.
In general, I think it’s cars and driving that put the American passenger rail system on a downward spiral. But part of the problem is that, once you don’t have enough passengers, you don’t have enough income and start cutting the frequency of service. And you start getting delays and late trains due to maintenance and infrastructure issues. All of which encourages passengers to use any alternative (cars and planes) instead. Which makes the whole problem worse.
Only partially. Few folks today realize that in the 1930’s the American railroads had high speed trains in service that could do over 100 mph. But the ICC and railroad unions made it very difficult for railroads to innovate. Then large government subsidies for airlines and highways after WWII finally forced them to write off passenger service.
I don’t think we’re disagreeing. You’re talking about the causes, and I’m talking about the consequences. Some things, including the ones you describe, turned rail from a widely used to a less used form of travel. (Although I doubt regular passenger service in the 1930s managed 100 mph on a regular basis.) But once those somethings resulted in a loss of passengers and income, they got into the downward spiral I described and things went from bad to worse. I suspect better management could have prevented that, but it didn’t happen.
Yes, we are mostly in agreement. However the U.S. had some of the fastest trains in the world during that era. Trains like the City of Portland reguarly hit that speed on their routes in the 1930’s.
I don’t think better management would have helped as there were some very innovated railroad presidents at the time. But it was just too hard for the presidents of railroads to battle both the ICC and unions. For example, the technology existed in the late 1950’s to eliminate the function of cabooses, but it took until the late 1980’s to finally get rid of them because of outdated rules and regulations.
Just for reference, the French and German intercity rail services are companies which are wholly owned by the national governments. They don’t seem to have a problem. In any case…
I’m not sure how complete a change in travel (or work) we could expect. First, I expect a spike in tourism as soon as this is over. There will be plenty of people saying, “I’ve always wanted to visit Paris, and now that I can, I want to do it before something _else_ happens.” (I also expect lots of business at restaurants, from people who have been cooped up in their homes for a month or two.)
Second, people may discover that there are reasons for face-to-face meetings (or imagine there are.) Lots of business at conferences gets done in the hallways or over dinner. So much so that many people just use their presentations as a justification to attend. It’s quite possible that, after trying to do things by telepresence, they’d discover that a few in person meetings a year are desirable. In fact, Planetary Science Institute may be an example of that. PSI is know for letting their scientists work where ever they want (Johannesburg is the most distant place I’ve heard of.) The main office in Tucson mostly for the support staff handling budgets and contract paperwork. But they still feel it is very important get everyone together and have one, all-hands, face to face meeting each year.
In addition, people may learn the wrong lesson. People will have trouble working from home if they aren’t used to it, and they may not learn how to do it right before these quarantines end. In that case, many people will use the teething pains as “proof” that working from home isn’t effective. And I can imagine some managers who would love to reach that conclusion. Some people just hate the idea of having to call or email someone instead of walking down the hall and knocking on their office door. They don’t know how to deal with anything else. I doubt many of the people who think that way want to learn something new (and, in the process, admit that their approach isn’t the only or best one.)
Yes, but I suspect it is also generational. I find the older faculty here have much more problems working online than the younger faculty. I suspect the high average age of the NASA workforce makes working at home more difficult for them because they were not raised in a digital world. Why knock on the door when its quicker, and less intrusive, to send a text to them?
I’ve certainly noticed some age dependence, but it isn’t entirely linear (or monotonic.) I’ve noticed that some of the older people involved are more insistent on videoconferencing, as opposed to text and voice only exchanged. I suspect that’s because it’s more like the face-to-face contact they grew up with.
Yes, it really depends on how early you recognized the advantages and adopted the technology. Most faculty here are used to having students come to their office for face to face advising and they are very uncomfortable that its not allowed now because of the virus forcing them use distance methods like the phone. By contrast I have been advising my students via texting for years, they love the convenience and speed, so it won’t require any adjustments on my part. Meanwhile the other faculty are trying to fit their old habits, like having students make appointments with the Department Assistant to talk to them on the phone, into the new environment.
Maybe. Or perhaps we’ve learned with time that distilling an interaction to text simply isn’t ‘communicating’. Sure, video helps, a lot, but much remains missing. Depends on the topic, often, but there’s really no substitute for directly seeking with someone to get the Big Picture. Read between the lines.
Simple text certainly isn’t everything. Nor are teleconferences. But they can communicate quite a bit, especially when the people involved know each other, are more-or-less in agreement about what they’re trying to do, and are passing the details and results around. My comment was more of the sort of managers who think everything, or virtually everything, ought to be done through in-person meetings. And, yes, there are quite a few people like that.
My experience with Cassini, where virtually all of the science planning was done over email and teleconferences, was that you do need some in person contact, but not necessarily all that much. We didn’t necessarily agree on what we should do (in fact, much of the work was arguing about it and coming to a consensus.) But we did agree on the process, and how we’d reach a consensus. Doing that took lots face to face meetings at the start. And we also had project meetings with everyone there and other meetings where many of us were there. Between that, team meetings and conferences, etc. probably about eight per year. That seemed to work fairly well.
I also know one scientist who, as a grad student at Imperial College and because of housing costs in London, worked from home in Briton three or four days a week. The other day or two, he took the multi-hour commute to London. That seemed to work for all concerned.
“And I’d like someone to point any viable alternative to flying when it comes to travel from the US or Asia.”
What do you think all those cruise liners (ill suited as they are) are going to be doing after this blows over? Their Q-Tip market may have just tanked for good! All we need to complete the picture is for someone to wheel out airships again… It is the bottom of the decade so it is about due an airing.
A bit off topic here, but to follow on your cruise ships idea….
As a sailor, thru and thru, the idea of “cruise” ships is repugnant//// Sorry. Apologies to all my family and friends, who thoroughly enjoy their cruises…. =)
I do wonder what sea traveling would or could be like. Imagine we cannot fly…. we could go to Europe on a “steamer”, Panama Canal, around the tip of Chile. We could plow through with diesel power, under sail or hi-speed, jet powered contraptions that would be developed if we suddenly became “grounded” birds. Here’s a Salute to Greta, the young activist who sailed to America to discredit airplanes, and the pollution they create. I would love to take a trip like that. Downwind from Spain to Florida, like Columbus. Ha!
I don’t really understand the idea of cruise ships either, but there are a few problems with ocean travel. I think converting cruise ships is out. Given the recent events, I suspect people would avoid them like, well, the plague. But I could imagine new-built ships with ventilation, layout, etc. designed to make them safe enough should someone onboard get sick. Maybe enough to make people comfortable using them. I suspect the existing ones would also be pretty inefficient for transportation. But the other problem is speed. How fast can a commercial ship go while still being efficient? 30 knots or so? Thats still four or five days on a New York to London run. That’s probably too long for business travelers. On the other hand, if people do get used to working mostly from home, then they can work from anywhere with good internet connections. So a five day trip with the ability to work from a cabin might be viable.
With regard to Ms. Thunberg, her recent trip worked for her, but it isn’t what I’d consider practical. Most people crossing the Atlantic aren’t rich enough to own their own ship, nor are they famous enough to get a ride from someone who does. I was thinking of ordinary business travel when I asked about viable alternatives to flying. Assuming it isn’t canceled, I was planning to attend a conference in Spain at the end of September. At the moment, flying is the only viable option I can think of.
“that’s a much bigger trend in Europe than in the United States”
I also think a major factor in Europe is that telepresence can never be as effective a tool in polyglot Europe as it is in monoglot US. When everybody is working in a second language the physical presence at the meeting is at a premium. The importance of acculturation and body language cannot be over stated on such occasions. I think this may impact how business works across the board. Adaption will be greatest in the US. It may also raise some ‘intangible’ barriers to global supply chains for good or ill.
I can see that. English is my only fluent language and my Spanish and German are pretty poor. But I can get by in just about any European country with only dozen or so words and lots of gestures.
Low cost health care training for airline employees
It would be nice if the bailout would be linked to Boeing splitting off a part of its commercial aircraft unit to another aerospace major so there is more competition. But it will be hard as they have fully integrated MDD into their existing commercial division. Perhaps sell off the B787 to Lockheed Martin or Northrop-Grumman?
In terms of space and fighter aircraft they already have competition with Lockheed.
Well good news for them their 2024 SLS 1B integrated lander concept is probably just weeks away from handing them a big bailout. It just will cost NASA any integrity of the BAA process or achieving any real exploration goals.
If it has become the policy of the federal government to bail out companies that have, by there own stupidity and failure destroyed there own reputations then may I inquire if there is a bailout anticipated for the Ford Motor company over the Edsel? Of money’s forthcoming to reinvigorate the electronics firms that stuck with the vacuum tube when solid state was up and coming? Perhaps the buggy manufacturers and the oil lamp makers should be guaranteed a continued stipend as well? <bleep> Boeing. It is not, and never has been the purpose of the Federal government to guarantee the survival of any individual company! If needful Mr. Winke’s idea of following the Conrail model of Federal receivership of the company until it’s parts can be successfully spun off to others could be followed. I’m sure Mr. Bezos or Mr. Musk might be interested in random bits of it. Or perhaps the board of Northrup Grumman may care to pick up a piece or two at fire-sale prices.
It is a complex problem. Boeing is one of the major companies that develop and deliver our Defence hardware. So it is not the same as “too big to fail” regarding the banking system. In this case, Boeing is “too big to fail” regarding our National Security programs and aircraft.
Having said that, Boeing has become reliant on Government handouts and grants and programs to such an extent that you really cannot tell the difference between the Capitalist system in the USA and the Communist system in the late-phase USSR.
Unfortunately, I think if a high-level task force were to oversee this problem, then the lobbying power of Boeing would probably direct the recommendations to whatever Boeing wanted them to be. But as for myself, I think a possible resolution could be that the military portion of Boeing is broken up into various sub-units and sold to other aerospace companies.
It is really disappointing to see that the titans of capitalism cannot be bothered with following basic financial common sense. When an individual saves no money for a rainy day, they are branded “financially irresponsible.” When these guys do it, they are “increasing shareholder value.” I have zero sympathy for a company that literally let billions of dollars pass through their hands while saving nothing for leaner times. These people should know that the industries in which they operate have seen lean times in the past and will in the future.
If they need money now, they should sell some or all of the shares they’ve been buying back on the open market. If the government is the only buyer, so be it. At least we will all be getting something for our money.
So true, and expressed so well. “…When an individual saves no money for a rainy day, they are branded
“financially irresponsible.” When these guys do it, they are
“increasing shareholder value.”…”
Damn Boeing! They deserve to be broken up and sold off.
Not that I am at all happy with Boeing’s performance over the last few years, but we should remember that breaking them up would simply be undoing the things that the government hugely encouraged them to do in the first place with all the mergers and acquisitions in the 1990s. Boeing – Rockwell – McDonnell – Hughes, all that was instigated by the government in its post-Cold War shortsightedness.
What does Nikki Haley know about the aerospace business???
She knows a good paying gig when she sees it. Seriously though, executives and boards of large corporations are a huge network for the rich and powerful. They vote themselves onto each others boards. Anyone with the right political connections (like Nikki Haley) can slide right into that network.
So, you don’t have to actually know anything about the business to get on the board.
Do I really need to explain the importance of outside board members? Ms. Haley is a very well respected and bright person who would bring some clear thinking to any enterprise.
The big legacy aerospace companies have been little more than government design bureaus, except for Boeing’s commercial aircraft division. Now, since their colossal cluster-flop with 737MAX, even that isn’t true anymore! I wonder, however, if a major equity stake by the Feds in Boeing would do other than add another layer of bureaucracy that would do little more than increase Inefficiency? What they need is someone like Elon Musk. I said, “LIKE.” I doubt he would want the thing if it was given to him! If Congress really wanted to do something, they’d cancel the SLS/Orion and throw the money that would go to Boeing under that waste bin, directly to the company.
Meanwhile, while Old Space is looking for a bailout, Elon Musk used his connections in China to buy 1200 ventilators and give them to the USA…
https://www.usatoday.com/st…
Tesla CEO Elon Musk acquires 1,200+ ventilators from China to help alleviate coronavirus shortage
Nathan Bomey
USA TODAY
Published 8:40 am ET Mar. 24, 2020
Updated 10:52 am ET Mar. 24, 2020
“If you want a free ventilator installed, please let us know!” he added.”
If I recall, doesn’t Boeing have an assembly plant for B737s in China? Couldn’t they have thought of using their connections there to help the USA?
Not an “assembly plant”, they have a finishing facility there (where things link cabin interiors are installed.)
Given their recent performance on SLS, Starliner, and 737 Max, perhaps they need to hurt.
That’s a nice defense industry you’ve got here, guv’nor. Would be a shame if anything were to … ‘appen to it.
https://uploads.disquscdn.c…