Moon of Alabama Brecht quote
March 12, 2020

A Year After The Second MAX Crashed Boeing Is Faced With Ruin

On top of the damage that misguided shareholder value policy caused to Boeing will now come the effects of an unprecedented pandemic. Together they may well signal the end of a once great company.

On March 10 2019 Ethiopian Airlines Flight 302 crashed shortly after taking off in Addis Adaba. All 157 people on board died. It was the second crash of a Boeing 737 MAX airplane six months after Lion Air Flight 610 had crashed and killed all 189 people on board.

Exactly a year ago Moon of Alabama published its first piece about the MAX. At that time all MAX planes were grounded except in the United States. We described Boeing's shoddy implementation of the plane's maneuvering characteristics augmentation system (MCAS) and concluded:

Today Boeing's share price dropped some 7.5%. I doubt that it is enough to reflect the liability issues at hand. Every airline that now had to ground its planes will ask for compensation. More than 330 people died and their families deserve redress. Orders for 737 MAX will be canceled as passengers will avoid that type.

Boeing will fix the MCAS problem by using more sensors or by otherwise changing the procedures. But the bigger issue for the U.S. aircraft industry might be the damage done to the FAA's reputation. If the FAA is internationally seen as a lobbying agency for the U.S. airline industry it will no longer be trusted and the industry will suffer from it. It will have to run future certification processes through a jungle of foreign agencies.

Congress should take up the FAA issue and ask why it failed.

The MAX was developed and built as cheaply and is therefore not as safe as possible. Boeing cut corners and deceived its customers and  regulators. Its management had only one thing in mind - the stock price of Boeing and its so called shareholder value.

All MAX planes, the 400 that existed at that time plus the 400 Boeing has since built are still grounded. The accident investigation reports for the Lion Air flight and the Ethiopian jet (pdf) make it clear that Boeing's penny wise but pound foolish MCAS implementation was the root cause of both accidents.

A reasonable fix for MCAS, which was first promise for April 2019, is still not working. A re-certification of the type is still months away. After pressure from the European regulator EASA additional fixes will have to be applied to wire bundles under the cockpit which in case of a short circuit could cause another crash of a plane.

There are still dozens of open court cases and criminal investigations against Boeing. It will have to pay more billions of dollars for compensations.

During the first two months of this year total orders for Boeing commercial planes were negative. There were 25 more cancellations, or conversions of multiple MAX orders to fewer 787 order, than total new orders. During the same time its competitor Airbus won net orders for 274 commercial jets.

Since last year Boeing's share price has dropped from $440 in February 2019 to today's opening price of $160 per share. The company has developed a serious cash flow problem. It is now drawing down all credit lines it has with its banks. It is cutting all noncritical spending, instituted a hiring freeze and limits overtime.

The commercial airline business is not the only part of Boeing which is in deep trouble. Its military and space programs have similar problems.

The root cause for all this is Boeing's shareholder value mentality:

This mad scramble for cash and the existential urge to “preserve cash in challenging periods” comes after this master of financial engineering – instead of aircraft engineering – blew, wasted, and incinerated $43.4 billion on buying back its own shares, from June 2013 until the financial consequences of the two 737 MAX crashes finally forced the company to end the practice. That $43.3 billion would come in really handy right now.

The sole purpose of share buybacks is to inflate the stock price because they make the company itself the biggest buyer of its own shares. But those $43 billion of share buybacks cost the company $43 billion in cash. Now those buybacks have stopped because Boeing needs every dime of cash to stay liquid and alive, and shareholders, who’d been so fond of those share buybacks, are now getting crushed by the damage those share buybacks have done to Boeing’s financial position.

Boeing's new CEO David Calhoun, who had been on Boeing's board for ten years before taking up his new position, still does not get it. In a January media call he demonstrated no change of mind:

Calhoun said that nothing was wrong at Boeing. It is just that foreign pilots are incompetent, that Boeing workers lack practice and that its customers have no idea what they are talking about. Safety, he says, is just a prerequisite for shareholder value, not an inherent value in itself. Dividends must continue to flow, even when that requires the company to take on more debt. Boeing should not develop new airplanes as its derivatives of old ones can beat the competition. Calhoun also wants to stay in his new positions as long as possible even though he lacks the competence to fill it.

In short - Calhoun said all the wrong things he possibly could have said.

In a recent interview with the New York Times Calhoun blamed his predecessor for Boeing's trouble:

In a wide-ranging interview this week, Mr. Calhoun criticized his predecessor in blunt terms and said he was focused on transforming the internal culture of a company mired in crisis after two crashes killed 346 people.
...
Before becoming the chief executive, he vigorously defended Mr. Muilenburg, saying in a CNBC appearance in November that Mr. Muilenburg “has done everything right” and should not resign. One month later, the board ousted Mr. Muilenburg and announced Mr. Calhoun as his replacement.

Calhoun was forced to apologize after his attack on his predecessor. He has still to apologize for again blaming foreign pilots for crashing Boeing's badly engineered planes:

When designing the Max, the company made a “fatal mistake” by assuming pilots would immediately counteract a failure of new software on the plane that played a role in the Lion Air and Ethiopian Airlines accidents. But he implied that the pilots from Indonesia and Ethiopia, “where pilots don’t have anywhere near the experience that they have here in the U.S.,” were part of the problem, too.

Asked whether he believed American pilots would have been able to handle a malfunction of the software, Mr. Calhoun asked to speak off the record. The New York Times declined to do so.

“Forget it,” Mr. Calhoun then said. “You can guess the answer.”

The reduction of air travel due to the Coronavirus pandemic will cause many airlines to go bankrupt. Many more Boeing and Airbus orders will get canceled. Global air travel and orders for new airplanes will take several years to crawl back to the pre-pandemic level. Five workers at Boeing's widebody production line in Everett have come down with the Coronavirus disease and the production may have to be stopped.

The greedy mismanagement of previous years at Boeing brought the once leading company to the brink of ruin. The pandemic, and the global depression it will cause, now make it certain that Boeing will have to ask for a gigantic government bailout or go into bankruptcy.

---
Previous Moon of Alabama posts on Boeing 737 MAX issues:

Posted by b on March 12, 2020 at 18:00 UTC | Permalink

Comments

Boeing could also be nationalized or become a worker-owned co-op, although that's unlikely to occur. As I wrote on another thread, management desperately want that credit infusion as they need to pay themselves one last dividend before the company finally crashes into bankruptcy and they bailout.

Posted by: karlof1 | Mar 12 2020 18:24 utc | 1

While a year ago I wrote that Boeing would go bankrupt I have since been convinced that Boeing is like the TBTF private banks and will be propped up and not even nationalized which a smart nation with intelligent leadership would do.

Shareholder value mentality = profit/greed above all else

Just like the US economy crashing now being blamed on coronavirus, in 10 years time the Winston Smith controllers will have Boeings problems linked to coronavirus as well in the public's mind.....or not

What will humanity (d)evolve to after this civilization war that it is going through? More Boeing shareholder value mentality or less?

Posted by: psychohistorian | Mar 12 2020 18:31 utc | 2

Wolf Richter writes that Boeing is turning credit lines into cash right now because they are "worried that banks might freeze the credit facility later, and banks did during the Financial Crisis." I think that is likely correct, but only part of the story. The real story, of course, is that they are going belly up.

"Wolf Street" is mostly populated by hard-core capitalists but the analysis pretty much reflects reality (my version of it) instead of the usual rah-rah propaganda. It's a good ring-side seat for watching the current implosion.

Posted by: Trailer Trash | Mar 12 2020 18:37 utc | 3

Wall Street: "don't worry, American people, this brand new bailout will definitely work. Third time is the charm".

American people: "but there's been only one bailout so far... wait, what?"

Wall Street: "what?"

Posted by: vk | Mar 12 2020 18:55 utc | 4

An hour ago the Fed was going to save the banksters with a trillon dollar bailout. It is now up to a trillion and a half. For decades the goldbugs have warned us about hyperinflation. Maybe they are going to be correct after all...

Posted by: Trailer Trash | Mar 12 2020 19:07 utc | 5

A thought. Should Boeing not survive or at least, continue in a drastically reduced form, does this mean that U.S. airlines will be buying Russian aircraft as the U.S. military is buying Russian rocket motors?
And as 40% of Boeings titanium parts are made by Russian companies, will Boeing’s situation have a large effect on them?

Posted by: Beibdnn | Mar 12 2020 19:07 utc | 6

DOW seems likely to head under 20K tomorrow, 21 something right now. All those stock buybacks down the drain, whoosh.

Posted by: Bemildred | Mar 12 2020 19:11 utc | 7

Seems to me that what they will do if it comes to that is Nationalize it. The moment it looks like it will turn a profit they will privatize it at about 2 cents on the dollar.
Isn't that what they usually do?

Posted by: arby | Mar 12 2020 19:25 utc | 8

Besides helping to crater Boeing stock rapidly diminishing airline flights are will result in a reduction of global dimming and thus increase planetary temperature. The only question is to what degree will this occur?

Posted by: Trisha | Mar 12 2020 19:27 utc | 9

Yes, Boeing should be nationaled, along with the Fed, and the Networks. Ncov19 stinks of Rockefeller/Gates eugenics. "Damn the torpedoes and full speed ahead". The world is reaponding in "lock step" to a situation created for the purpose of prompting a call for 1 world government. The virus won't get us there, but it's a huge step forward towards that end.
Without the media and politicians scaring the hell out of everyone, it would be business as usual.

Posted by: Joetv | Mar 12 2020 19:38 utc | 10

You remember "Philip Green", the mob CEO of the Tangiers Hotel and Casino?

That's exactly who this David Calhoun guy reminds me of. Damn near word for word.

We are in trouble. There's already talk of delaying local elections in the UK. All the sports arenas are being shut down. That's a biggie. Netflix better start giving away free service if they don't want people to go out and riot.

Posted by: Just Me | Mar 12 2020 19:45 utc | 11

Boeing would never be allowed to fail, just like the big banks and AIG.
Frankly if they were still producing the Max they would be faced with lots of cancellations anyways since nobody needs new aircraft now.

Its the smaller airlines that are most likely to go under, which is great for the big airlines as they lose competition and increase market share

Posted by: Pft | Mar 12 2020 19:46 utc | 12

"Besides helping to crater Boeing stock rapidly diminishing airline flights are will result in a reduction of global dimming and thus increase planetary temperature. The only question is to what degree will this occur?"

The last time we had virtual stoppage of air travel was after the 9/11 attacks. As I recall, at that time any climate effects were temporary and of no long term significance. While our air travel system may have a slight effect on the climate, it is insignificant compared to major volcanic eruptions. The cooling effect of those are clearly visible in the global temperature record (the Pinatubo eruption of 1992, for example). In general, the aerosols emitted by industry, air travel, etc., have mainly short term effects, because the particulates are limited in altitude and drop out of the sky pretty quickly.

Posted by: R.A. | Mar 12 2020 19:59 utc | 13

The goose that laid the golden egg is killed by greed, a pattern of flawed human behavior that portends the collapse of civilization and extinction of life on earth. Humans are an invasive species that has failed to evolve.

Posted by: norecovery | Mar 12 2020 20:16 utc | 14

@#9 Trisha

It’s not will have an effect, it has had an effect. You do not need to take my word for it, or anyone else’s. Look at the night sky. Step outside and look up. Stars not seen in decades are plainly visible. Repeat. Do not believe me. Look with your own eyes.

Comment at #13 is half correct. Global dimming particulates do drop out in about two weeks. Thus they require continuous replenishment from the planet’s smokestacks and tailpipes. Expect substantial long term consequences.

Posted by: oldhippie | Mar 12 2020 20:37 utc | 15

$1.5 trillion for the repo guys. The reaction?..sunk the market. Not enough. Dow down 2,352.60 at 3:59 PM, EDT. The NY Fed trading desk has failed to stem the bleeding.

In the 2008 financial crisis, Feds printed $23 trillion. It was a "Recovery" built on debt.
Over these next few months, COVID-19, the debt bubble with slowing economies will be used as the catalysts for the total shutdown of the global economy. Italy alone may need $700 billion.
Imho, the G7 central banksters face a tab north of $3 quadrillion, due derivatives and credit needs. Over the last two days the big boys have pulled down $billions in revolving credit lines due fear banks will freeze up.

This time it's different. Global debt is over $255 trillion, an amount which is 3x the world's annual economic output.

Before COVID-19 arrived Economists did not agree whether, due the debt overhang, we face deflation or inflation. One would expect deflation. However .gov statistics is manipulated to hide raging inflation and supply chain disruptions (shortages) trigger higher prices - price gouging...

We have a monetary crisis triggered by the COVID-19 pandemic and panic.

The options: Hyperinflation. Debt jubilee. Debt default...
the great reset.

Posted by: Likklemore | Mar 12 2020 20:43 utc | 16

thanks b.... nationalize the losses, and privatize the profits.. that has been the name of the game for some time... capitalism at it's finest.. sarc/

Posted by: james | Mar 12 2020 20:55 utc | 17

i don't see the stock market correcting any time soon... we are on the down elevator..

Posted by: james | Mar 12 2020 20:58 utc | 18

james @18
The down elevator is the correction.

Posted by: Norwegian | Mar 12 2020 21:07 utc | 19

it's has a long ways down to go norwegian! but yes, i suppose i am being redundant...

Posted by: james | Mar 12 2020 21:18 utc | 20

Hahahaha...where the hell were the shareholders when boeing was buying its own shares at the top of the market?
Was there anyone not creaming their shorts, cause the stock was high and they were rich!? Surely to god someone knew this was a shitfuck on legs, and could only end badly?
“You’ll wonder where they yeller went, when you brush your teeth with pepsodent!”

Posted by: James joseph | Mar 12 2020 21:19 utc | 21

@7 Bemildred - "All those stock buybacks down the drain, whoosh."

It's a sweet comment, and thanks for it - but I'm not sure that's completely the case. Those stocks paid dividends too, and it was the cash income that shareholders wanted, and the performance bonuses that the directors wanted. All that income went wherever it went, spent or stashed, and will never be clawed back.

I don't know this field so I don't know if shareholders actually placed much of a value on the nominal price of the stock, the equity. That's what's crashing right now. I guess this means that the nominal collateral to take out more loans of nominal money has shrunk in loan-able value. But as far as I ever heard, the vast majority of such debt was corporate anyway (to make more buybacks - rinse and repeat as long as the Fed keeps pumping).

For the corporations, it's nothing that a bankruptcy can't fix. After the key stakeholders have received their final payments of course.

Yes, I suppose the value of one's stock-holding is important to one's net-wealth numbers. But I always assumed the smart guys squeezed the cash out of these things asap and didn't pay much attention to nominal wealth except for the scale of how it could be leveraged. The people who live in debt bubbles and disparage mark-to-market and cash liquidations are always the ones who secretly know it's the only thing that matters, or so it seems.

And I must repeat that I'm not an expert in any of this stock market chicanery so please forgive any simplicities.

Posted by: Grieved | Mar 12 2020 21:28 utc | 22

at this hr (6:00 PM EDT) Dow Futures @ -2817 .. tomorrow the carnage has a rip down at the open. In what form will government help? The Feds may be forced to buy and hold stocks for their own account and not through a churn from Cayman or drone some cash into companies' account as interest free loans 50 year term.

Global Airlines call for government aid. (IATA), a global industry group representing airlines, called on governments to consider extending lines of credit, reducing infrastructure costs and cutting taxes.LINK


Posted by: Likklemore | Mar 12 2020 21:56 utc | 23

Posted by: psychohistorian | Mar 12 2020 18:31 utc | 2

Excuse my chiming in mr historian, isn't war the classic solution?

Posted by: Michael | Mar 12 2020 22:18 utc | 24

Grieved @22--

There're a great many ways markets get manipulated all done by insiders to serve insiders. Just as an introduction to that mess, I suggest watching the second half of this Keiser Report, an interview of Max by Stacy. IMO, Boeing's stock price was kept artificially inflated via options, which you may grasp better after listening closely to Max.

Keiser Report's newest episode aired today, and everyone ought to view it, both parts. Not all will agree, but there's something for most everyone to use, although it would fit better on the COVID-19 thread.

Posted by: karlof1 | Mar 12 2020 22:24 utc | 25

Posted by: Grieved | Mar 12 2020 21:28 utc | 22

Well, you're not wrong, I expect deflation (like housing, fuel, ...), bankruptcies, lots of people will be hurt, in lots of ways. And I don't doubt Corporatistas take cash out that way, but not too much, watched it, the peons have to get permission. I did work for an "equities trading firm" for three years right before Y2K, I had a few shares myself from a stock plan they started shortly before I quit, but I ignored it, eventually they sent me a little cash (like $100) to close it out.

Most of billionaires' assets are not cash, and a lot of that stuff will get clobbered too. Trump is in entertainment and tourism, and he is going to lose a bundle, which no doubt explains his sudden switch to concern. With any luck he'll get the bug too. Since I own my home, I'm definitely expecting to lose a lot of "equity".

Some will make out like bandits, short-sellers will be ecstatic, it's an ill wind and all that.

But I was addressing the notion the CEOs did the buybacks to raise the price of their stock. Their bubble has been punctured. The Fed pumped in 1.5 Tr today and still lost 2000 on the DOW. It's down ~27% and not even looking like slowing down. My.

Posted by: Bemildred | Mar 12 2020 22:25 utc | 26

Likklemore @23--

Today's Keiser Report I linked to @25 asks that question and oh so much more. War against the Central Bankers is also discussed for Michael @24.

Posted by: karlof1 | Mar 12 2020 22:29 utc | 27

Posted by: Grieved | Mar 12 2020 21:28 utc | 22

The other thing is those stocks have been used a collateral, all those "derivatives", remember the mortgage crisis?, that's where Mnuchin got his money (IndyMac, IndyMac was a good bank here before Mnuchin got it.) Well they do that with stocks too, they borrow on their "value", and collateralize that debt to "insure" it.

The big cash-out is the IPOs these days or selling and buying companies and collecting the associated fees. But I think that is going to be a much harder sell too.

Posted by: Bemildred | Mar 12 2020 22:44 utc | 28

"isn't war the classic solution?"
Michael@24
I can't think of a crash of this sort which led directly to war.
Not in the C19th or C20th.

Posted by: bevin | Mar 12 2020 22:47 utc | 29

The glee is deserved. The problem is that the corruption is universal in the West. Boeing stock buybacks to increase executive bonuses, war for profit, plain greed kills people. Offshoring jobs and medicine manufacturing, for example, weakens nations. Unless democracy, government by and for the people, is restored, the disintegration of the USA, UK and EU is guaranteed.

I’m sheltering in place, prepped with about three weeks of supplies, and can survive as long as the banks remain open, government pensions deposited, mail and Amazon deliveries continue, and electricity and water stay on. But, even if I am in the lucky 30% who don’t get infected, when society crashes, I die.

Posted by: VietnamVet | Mar 12 2020 22:51 utc | 30

In response to #5 "Trailer Trash" The greater likelihood is deflation. That is, if it's possible to buy anything outside of barter. And people will soon realize that you can't eat gold. Can't even make tools out of it.
S.

Posted by: stu | Mar 12 2020 22:58 utc | 31

I've been puzzled what took so long for the Boeing share price to fall. Even now it is down only to the levels of 2017. Weird.

More worrying because prices were low and have also halved in recent weeks is the bank sector. Deutsche bank has a market cap of EUR 9billion (180bn in 2007), 50bn of capital and 1.3 trillion of assets. Analysts all predict profits this year.
There is plenty more like that.
Historically banks trade at 1 to 2x capital (P/BV), but quite a few are now at 0.2x.
A massive probability of a banking collapse seems to be priced into the market (and indeed much of the price weakness has been there for a year or two).

Posted by: Michael Droy | Mar 12 2020 23:13 utc | 32

@ karlof1 27

Thank for the suggestion on Keiser Report

If joe and jane mainstreet knew of the financial shenanigans there would be a shortage of lamp posts.

Will we, the self employed, small business owners and in the gig economy get a lifeline?
Perhaps a crumb - a 1% reduction on sales tax - not enough for a pint of water.

Globalism is done, well roasted. Stick a fork. 2 decades we have waited for the 11th Commandment to be invoked: 'The greedy shall not be fed.'

The Guardian reports the elites are scrambling off to their bunkers to escape the pandemic


++++++++++++

Happy news which may be helpful for Assange:

Whistleblower Chelsea Manning Ordered Immediately Released From Federal Holding
LINK


US District Judge Anthony J. Trenga ordered whistleblower Chelsea Manning released from detention on Thursday, a day after she attempted to take her own life. However, he did not release her from the fines she incurred as punishment, which total a quarter of a million dollars.

"Upon consideration of the Court's May 16, 2019, order, the motion, and the court's March 12, 2020, order discharging Grand Jury 19-3, the court finds that Ms. Manning's appearance before the grand jury is no longer needed, in light of which her detention no longer serves any coercive purpose,"
[.]

Do not applaud this judge. He had no choice. The grand jury was discharged.
Fees and fines for the gods of justus remain.

A Go-Funding for Manning may help.

Posted by: Likklemore | Mar 12 2020 23:19 utc | 33

> he implied that the pilots from Indonesia and Ethiopia, “where pilots don’t have anywhere near the experience that they have here in the U.S.,”

What amazes me here is why on Earth say it out evenif that was true?
He comes from salesmen, right?
He should be cheating and lying and doing everything to attract more buyers, right?

But he basically keeps repeating the same message on and on:

Nations of Indonesia, Ethiopia and their neighbours! Here my warning and do not say you were not warned! Our fair bird is too much for your crooked hands to handle! You can not hope to be her master, forget her and move by!

Well, that is what he says and that is what they should do. Skip the 737 and move on to the airliners that "even pilots of Ethiopia and Indonesia" can master.

Afterall, it is largely arbitrary decision, was it a pilot to dumb for the aircraft, or was it an aircraft too demanding of the pilots. It is a matter of personal choice.

But the invariant in both approaches is the same: the pilot and the aircraft are incompatible, whatever one chooses to bame a reason.

And if they are incompatible, then some other, compatible aircrafts should be purchased instead.

Just so simple. Mr. Calhoun in his wisdom keeps persistently propagandizing airlines and pilots of "Third World" countries against buying/flying Boeing. Does he have shares in Airbus, i wonder?

Posted by: Arioch | Mar 12 2020 23:20 utc | 34

Mr. Calhoun is a prime example of what is wrong with not only Boeing, but the American form of aggressive capitalism and government; profit and policy before people.

Posted by: Dick | Mar 12 2020 23:40 utc | 35

COVID-19: Further Evidence that the Virus Originated in the US


https://www.globalresearch.ca/covid-19-further-evidence-virus-originated-us/5706078/

Posted by: occupatio | Mar 13 2020 0:06 utc | 36

My contribution to this discussion is to observe that in the very remote and unlikely fantastical event that David Calhoun were to be POTUS, he could hardly do a worse job than the present incumbent.

The mind boggles at Calhoun's reaction to the NYT reporter's reasonable question as to whether US pilots would have been able to handle MCAS malfunctions. If Calhoun had been so confident, he would not have asked (demanded?) to speak off the record.

Posted by: Jen | Mar 13 2020 0:09 utc | 37

@ karlof1 | Mar 12 2020 22:24 utc | 25

I've been watching the Keiser Report for years, but FWIW I think Max is becoming more annoyingly uneven over time.

When he sticks to his strong suit of "markets, finance, scandal", he's informative and insightful. But although he fancies himself a universal pundit, when he ventures into topics outside his wheelhouse he's embarrassingly abysmal.

His perspective on capitalism and socialism is cartoonishly simplistic and warped by his libertarian bias; his dilettantish take on domestic politics is cringe/gagworthy. (He loves to hear himself say "AOC", as older people sometimes savor using "hip" expressions.)

Stacy is a reliable redeeming factor; they make a nice couple and team, but Stacy ought to have her own show-- or at least take over the interview segment when Max is in his self-indulgent whimsical gonzo mood.

His bitcoin pimping is tiresome. But worst of all is his recent New Age woo-woo blathering. Apparently Max has come to believe that he is the incarnate son of the Earth goddess Gaia, sent to convert the masses and save the world with the Holy Eucharist of bitcoin.

Once you get past all that, he's well worth watching. ;)

Posted by: Ort | Mar 13 2020 0:12 utc | 38

"... The greedy mismanagement of previous years at Boeing brought the once leading company to the border of ruin. The pandemic, and the global depression it will cause, now make it certain that Boeing will have to ask for a gigantic government bailout or go into bankruptcy."

A third and probably the likeliest scenario will be that Boeing will be broken up into smaller companies, and those companies taken over by other corporations and/or even foreign governments. This is based on an assumption that the US govt might - just might - decide that saving jobs, and stopping Boeing workers from going overseas to work for Airbus or (Jay-zus Christ forbid!) a Chinese or Russian aerospace company - is more important than allowing Boeing to go bankrupt.

Posted by: Jen | Mar 13 2020 0:14 utc | 39

Well said Ort @ #38

I stopped watching Kaiser regularly a while back. Apart from those you mentioned of which the Bitcoin spriuking is the worst, the interviews with 'expert's who are urging particular commodities or stock rather than objective analysis is too annoying

Posted by: A User | Mar 13 2020 1:02 utc | 40

A third and probably the likeliest scenario will be that Boeing will be broken up into smaller companies, and those companies taken over by other corporations and/or even foreign governments. This is based on an assumption that the US govt might - just might - decide that saving jobs, and stopping Boeing workers from going overseas to work for Airbus or (Jay-zus Christ forbid!) a Chinese or Russian aerospace company - is more important than allowing Boeing to go bankrupt.

Posted by: Jen | Mar 13 2020 0:14 utc | 39

Another solution is to order Aibus to stop competing with Boeing, and if not, USA will import wine from Canada rather than France and Italy, ban European cheese, basically, go full Putin on agricultural imports. At that point, EU may reconsider sanctions on Russia -- shouldn't they be allowed to export SOMEWHERE? Resulting amusements will divert our attention from corona virus.

Posted by: Piotr Berman | Mar 13 2020 1:16 utc | 41

Don't worry, CNN, the NYT, and the Washington Post are busy establishing a task force to prove that this is all the fault of Russia and that Boeing, as a poor innocent Putin victim, needs rescuing.

Posted by: Biswapriya Purkayast | Mar 13 2020 1:28 utc | 42

... stopping Boeing workers from going overseas to work for Airbus or (Jay-zus Christ forbid!) a Chinese or Russian aerospace company ... Jen | Mar 13 2020 0:14 utc

According to Russians, Chinese are capable of mis-designing airplanes without the outside help. Russians are close to have a complete set of new technologies, as restrictions and sanctions were forcing them to implement them one after another. They have long experience, including breakthroughs and failures, and many technologies from military aerospace. I wonder how briskly MC-21C will be going forward when Russia tightens the belt, but the costs are in rubbles, when oil goes down, dollar costs go down too.

Posted by: Piotr Berman | Mar 13 2020 2:13 utc | 43

to: Jen @ 39 "... Boeing is not a victim of mismanagement, it is a victim of a Trojan insider conspiracy . the Israelis want that business.
A bailout would allow the conspirators to get Boeing without pay one thin dime.


Posted by: snake | Mar 13 2020 3:14 utc | 44

Interferon. Search for Cuba & China and Interferon. The NWO is about China and Cuba proving Agenda 21 isn't controlling We the Humans and Earth, anymore. Oh the cosmic giggle can lol.

Posted by: Biloximarxkelly | Mar 13 2020 3:59 utc | 45

"Boeing will have to ask for a gigantic government bailout or go into bankruptcy."

Fuck Boeing. I'd say let them fail. Unfortunately, Trump will bail them out because he doesn't want to be seen as the killer of jobs in an election year. If I was Trump, I'd have a shit ton of conditions for Boeing that they must meet in order to qualify for a taxpayer bailout like all profits be confiscated for X number of years, along with firings and or jailing of the incompetent idiots, etc...


occupatio | Mar 13 2020 0:06 utc | 36:

Wrong thread. Try the previous one.

Posted by: Ian2 | Mar 13 2020 5:21 utc | 46

R.A. 13

"The last time we had virtual stoppage of air travel was after the 9/11 attacks."

You forget the 2010 Eyjaffjollajokull eruption, which halted north Atlantic air travel for a little while with similar temporary air-cleansing effects.

Posted by: Russ | Mar 13 2020 5:47 utc | 47

They attained heavier-than-air flight, thereby overcoming some superstitions. Then they brought their flying machines crashing back to earth by substituting an even more profound superstition, that of the sacralization of money.

Posted by: Russ | Mar 13 2020 5:52 utc | 48

Muilenburg and Calhoun are both Right-wing cranks. Right-wing cranks are incapable of accepting responsibility for their own mistakes. They expend more energy on finding someone to blame for their blunders than on seeking a practical solution to the ensuing problems.

In an ironic way, Calhoun isn't completely wrong in blaming the airlines and pilots of the two crashed MAX 737s which exposed this SNAFU. However, far from letting Boeing off the hook, this would tend to increase Boeing's responsibility to its less-than-perfect customers rather than diminishing it.

The reason I say this is that in one of MoA's early MAX threads, it emerged that one of AmeriKKKa's foremost and largest airlines, American Airlines(?), ordered its 737 MAXes with all the optional bells and whistles which AA deemed essential to maximum SAFETY, including more than 1 Angle of Attack Sensor. But AA didn't stop there. They also made sure that the instrumentation would enable AA pilots to quickly resolve a 'dispute' between two sensors.

This suggests that AA was big enough to employ one or more Aviation Experts to oversee the procurement/ purchasing procedures in order to optimise the technical specifications of each new aircraft.

Lesser, or second-ranking airlines probably lack the in-house expertise to explore every technical aspect of a potential purchase and could be forgiven for trusting that a hi-profile vendor such as Boeing wouldn't offer a potentially dangerous product.

"Someone" at Boeing must have known that a 737 MAX with only 1 Angle of Attack Sensor was a riskier proposition than a 737 MAX with 2 sensors. And yet no-one at Boeing was curious enough to phone the 1 sensor airlines and ask them why they didn't specify an extra sensor, and recommend that they do so?

Posted by: Hoarsewhisperer | Mar 13 2020 6:16 utc | 49

Shareholders and potentially bondholders wiped out yes, but the US Government won't let Boeing go to the wall.

You can take that to a bank. Which bank I can't tell you as I don't want to suggest one that won't be here in a year!

Posted by: Julian | Mar 13 2020 6:16 utc | 50

~~~~~~~~~~~~~~~~~~~~ //
VietnamVet | Mar 12 2020 22:51 utc | 30 (This article)

The glee is deserved. The problem is that the corruption is universal in the West. Boeing stock buybacks to increase executive bonuses, war for profit, plain greed kills people. Offshoring jobs and medicine manufacturing, for example, weakens nations. Unless democracy, government by and for the people, is restored, the disintegration of the USA, UK and EU is guaranteed.
// ~~~~~~~~~~~~~~~~~~~~

I've been thinking about this for a long time. You could say =/ the corruption is universal in the West. /=. Or =/ plain greed kills people. /=. That bears the ring of truth. However, sad to say, I've come to the conclusion that it's deeper and uglier than what what can be described in such terms. This rabbit hole goes deep indeed. It really is a dark path that leads to the realm of 'The Pod People' and 'The Night of the Living Dead'. That is where we really are at now.

I do suppose... I suppose it begins with 'Luxthralldom'. This luxthralldom is a hypnotic state, in which plain logic and and common sense are suspended in the presence of power and lushness and authority. Maybe it all started when I and a dear friend attended a McDonald's to indulge in one of their bizarre 'feasts'. I ordered a small coke, and then asked for a water cup so that we could split the soda, and this was refused, even when I explained that we didn't really want a whole coke. It then came to me that we were not actually purchasing food. No, we were actually purchasing an experience. And how could this come about? Suppose you were to just up and open a 'restaurant' with a baked-in theme involving colorful, but vaguely uncomfortable seating, with also a bizarre 'clown', also brightly colored, that perpetually danced on the edge of unspeakable perversion? Do you think that your 'business' would thrive? Probably not.

But then, if you had the money and power to use advertising and an unabashed reputation for sheer bigness, you could exploit that to mesmerize the 'customers' with the luxtralldom effect. The in-their-face insanity of it all would magically vanish, and the flock would come eagerly through your doorway.

Hospitals use this same effect, albeit on a more formal level. Even though hospitals kill about as many as they save, one is made to feel that they are 'In Good Hands'. And obviously, the airlines rely on the same 'Good Hands' illusion. So there is really no need to ensure that the aircraft are realistically safe. The Luxthralldom effect will get them on board. No need for top-notch engineering, nor quality production values. All that is required is a cadre of high-class executives who know how to call upon the proper advertising and public relations experts. They need not know what they are doing, but that doesn't matter. All that matters is that they can cast the luxthralldom spell of power, and make the 'consumers' feel that they are in 'Good Hands'. When the plane dives into the ground the passengers may very briefly awaken from the spell.

And this little allegory applies not only to McDonald's, hospitals, and passenger jets. It represents what is going on all over the place. Insouciantly, we are going down.

Posted by: blues | Mar 13 2020 8:07 utc | 51

Boeing is clearly too big to fail, and also an icon of USA technical superiority. In the case of bankruptcy it should be nationalized. Or maybe get it under state management, freeze part of the shareholders assets and use that money to save the company. Isn't that what great American entrepreneurs should do? I mean, they got a lot of money out of it, is only fair to put some back in these dire times.
But this, of course, will not happen. Instead some electronic money will suddenly disappear from pension funds, peoples savings, school budgets and the like, and mysteriously reappear in the accounts of the same people that bought this former American giant down.

Posted by: Tod | Mar 13 2020 9:35 utc | 52

And there is a third competitor who will probably enter the market next year.


August 20, 2019

China’s C919 large passenger airplane will enter into a new phase of intensive test flights in the second half of this year, according to the Commercial Aircraft Corp. of China (COMAC).
[...]
The C919 is expected to get the airworthiness certificate from the country’s civil aviation authorities in 2021.

China’s civil aircraft sector on course for growth

Posted by: terak | Mar 13 2020 9:40 utc | 53

The problem is with the limited liability protection companies give to owners and office holders. That allows them to play games and/or be incompetent or corrupt as they stash away their personal wealth knowing it can't be touched (usually).

Take away the protection and company directors would suddenly be very focused on ensuring the success of their companies. As if the company goes down so does all their personal wealth.

Posted by: Rancid | Mar 13 2020 10:25 utc | 54

America is throwing the Mother-of-All-Hissy Fits, as its stock market implodes, its regime predictably puts profits-before-people with its (mis)handling of the coronavirus, and now its beloved national "treasure" of Boeing goes tits up as its corruption comes home to roost.

Think of all this as Allah punishing the United States for all the criminal wars of aggression that the "Leader of the Free World" is guilty of for the past several decades from Korea to Vietnam to Central America to Serbia to Afghanistan to Iraq to Libya to Syria and beyond.

America learns the hard way that Karma is an avenging bitch.

Posted by: ak74 | Mar 13 2020 16:35 utc | 55

Boeing will be bailed out at taxpayer expense. Why is that so difficult to understand? It's the American way.

Posted by: corvo | Mar 14 2020 0:45 utc | 56

What a super opportunity for Trump with his five children from three wives and ten grandchildren. I wonder how many will sit on the board of the new "Boeing" after the bailout.

Posted by: corkie | Mar 14 2020 16:28 utc | 57

Boeing will have more than enough income from blowing up goat herders and wedding parties to stay afloat. Seeing how they destroyed Bombardier with the 800% tariff on the C-Series, I can't feel terribly sad for them.

Posted by: Pontius | Mar 14 2020 18:39 utc | 58

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