Well, Max is back in the air, at least for Alaska Airlines. United is not so clear. Boeing is now saying it cannot delivery the Max 10, which United has ordered (over 200 of them) and has engaged in talks with Airbus regarding the 320neo. Not sure the deets but it could be that Boeing is gong to offer to make neo's instead of the Max to seel to airlines.
@tboyer what do you think of this? With 10,000 neos on order and the MAX tanking, this may be the end for Max and, perhaps, Boeing is we once knew it.
Boeing stock eased ahead of Q4 results Wednesday as Alaska Airlines resumes 737 Max 9 flights. United Airlines seeks Airbus deal.
www.investors.com
I wouldn't say Max is tanking yet. Too many airlines fly 737s and recertifying pilots is very expensive (and especially difficult in a world with severe pilot shortages). Max may be starting to become toxic with passengers but it doesn't matter because flights are full and passengers can't exactly be picky about what they want to fly on. (and btw I wouldn't personally feel flying Max is risky, even after the recent horrors; it's a modern jet with tons of redundancy built in)
A lot of current Max sales Boeing only gets because Airbus's backlogs are so long. United is frustrated because it wants those 10s now, but it won't necessarily get them any sooner from Airbus. But over the next few years Airbus is investing in production capacity. When they can manufacture 1,000 jets a year, Boeing may lose so much market share that it will be just a winding-down operation. Airbus isn't going to let off the gas. And if they screw up (like with the A380, a freaking $30 billion mistake) the Euro governments just bail them out anyway.
I think Boeing has about 5 years to change the dynamic and I really don't know how they do it. They needed to launch the Max and have it stable and THEN announce a new clean-sheet narrowbody to leapfrog the A320 (which is also a dated design, just not as dated as the 737). Even if they launched a program today it would be 8-10 years till they're delivering jets in quantity, but they are years from an announcement. You can't be talking customers into launching a new aircraft family if you're not demonstrating that you can successfully build the old one.
That is not a problem that Boeing used to have. But pretty much since the McDonnell-Douglas merger Boeing has trouble executing. The 787 wasn't nearly the home run it should have been because Boeing corporate botched the outsourcing arrangements. The 767 tanker program was supposed to be a layup, it was all building on established platforms and well developed technology. But it turned out to be a nightmare because Boeing just couldn't execute and then their relationship with DOD went sour. And the 737 has been one misstep after another for close to 20 years now.
Boeing moved their corporate HQ to Chicago because of that stupid GE mindset that corporate leadership should only care about financials. But it seems since that move Boeing's engineering leadership in Seattle has struggled. Maybe the distance between corporate leadership and engineering leadership is really a problem -- maybe (well, not maybe, obviously) Boeing clearly fails to get resources put in the right places. There's a pattern of going cheap, then having a crisis, then being forced to spend billions to put fires out and then not having money for R&D.
Jack Welch and his disciples had this ideology that margin was everything, therefore manufacturing was a bad business because margins would never be as good as they are with, say, financial services.
That whole idea is completely discredited now (it killed GE for starters) but meanwhile Boeing still has its Chicago corporate leadership that acts as if Boeing isn't an airplane manufacturing company. Boeing makes planes. They make money through engineering. Chicago still acts as if Boeing is a ****ing investment bank.
They should get the hell out of Chicago and heck, move their corporate HQ to South Carolina if they don't want to be in Seattle. But one way or another corporate has to pay more attention to making airplanes if they're going to make any attempt to catch up to Airbus. You gotta count beans, sure, but you also have to make planes and not screw them up or there are no beans to count.
Their current CEO, Calhoun (who won't be in his job much longer), says he cares about airframe manufacturing (esp. when they have subassemblies falling out mid-flight) but he isn't demonstrating it. They need a total culture change in Chicago and I don't see it happening.
If I were in Boeing Chicago I would want those executives on the phone to Seattle and South Carolina and Wichita every hour of every day saying, how's it going building airplanes, what can we do now to keep production running smoothly next year and not have any problems with the FAA or subassemblies falling out of planes because someone forgot to install bolts?
But you know that's not how it goes. Instead the average Boeing Chicago executive is asking, how much money did we make in the last 12 hours? Is there a corporate jet available to take me to Davos next week? Is my bonus going to be enough to buy that island that I have my eye on near Guam?