whitehatter
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Boeing-GE Merger....possible?

Fri Jun 18, 2004 9:15 am

For industry watchers...do you think there is any possibility of Boeing and GE merging within the next ten years? Or GE bidding for Boeing outright?

There are already signs there. GE has become a major risk sharer on projects like the 773ER/772LR and a partner in BBJ. Boeing CEO Harry Stonecipher is also an ex-GE executive, and could be well placed to drive the merger forward.

The combined company could offer economies of scale, with Boeing's finance arm fitting with GECAS for example. Other GE businesses could take on work that Boeing currently subcontracts elsewhere. Management structures could be simplified and merged.

Or would a merged GE Boeing Corp be too much of a dominant player in aviation for the US Government and other bodies such as the EU to accept?

As I said, it's just a point to debate for now. Although there have been suggestions in the financial press that this could well happen.

Opinions?
Lead me not into temptation, I can find my own way there...
 
Guest

RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 9:20 am

And they called the child:

Boeing-Douglas-GE-NBC-Universal.

Probably not.
 
N79969
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 9:20 am

This was raised as a possibility about 5 or 6 years ago. That time there was talk that GE would acquire Boeing.

I don't think it will happen for a variety of reasons. To cite one, the EU will never accept it. The EU apparently thought a combination of GE and Honeywell was anticompetitive. No way they will tolerate General Electric and Boeing.
 
whitehatter
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 9:27 am

It would be interesting to watch if GE went into battle to get it through with an army of competition lawyers.

Boeing is a good bit larger than Honeywell, and there are all sorts of arguments that could be made if they were seriously out to make a bid.

No doubt there would be a shopping list of concessions that would be required before it happened, such as selling off or demerging parts of GE's portfolio.
Lead me not into temptation, I can find my own way there...
 
boeingbus
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RE: Boeing-GE Merger....Possible?

Fri Jun 18, 2004 10:13 am

Is the pope Jewish?

Never... The EC/US would never ever allow this... 2 of the greatest American powerhouse companies joining forces? Ha ha... EC Wouldn't allow GE to purchase the tinny Honeywell... PW Would go bazerk if this happened. Also, this would ruin the Franco-German ambition to create corporate powerhouses....

a possible merger would be Boeing and BAE...That would be cool... I could even see Boeing target a small planemaker....
Airbus or Boeing - it's all good to me!
 
gigneil
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 10:14 am

EC Wouldn't allow GE to purchase the tinny Honeywell...

Honeywell, tiny?

What?

N
 
DfwRevolution
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 10:18 am

I think the general consensus that the EU would hit the roof is an understatement. On the otherhand, giving half the execs at EADS a massive stroke could work in Boeing's favor even if the deal didn't go through  Big grin

GE has become a major risk sharer on projects like the 773ER/772LR and a partner in BBJ

Boeing selected GE as a partner on the 777LR program mainly because they had the most capable engine. Had the Trent 800 been in the position of the GE90, we would probably see Rolls Royce as a risk sharing partner on the 777LR.
 
whitehatter
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 10:22 am

a possible merger would be Boeing and BAE...That would be cool... I could even see Boeing target a small planemaker....


Not a chance because of the way BAe is positioned at the moment.

Boeing would end up with 20% of Airbus! Can you imagine Boeing's publicity coup if that happened...."No Airbus can fly without Boeing wings"!!!

Priceless!  Smile

There is also the shareholdings of BAe to consider. The Saudis and Kuwaitis are large BAe shareholders. Boeing would need to talk them into selling.

BAe also has other non-aviation businesses which wouldn't fit well with Boeing. The BAe Systems group would probably need to be broken up, and that would definitely not go down well with the UK Government as it could destabilise defence procurement.

What about SAAB? The Swedish manufacturer could be an interesting target with its spread of products (excluding cars, but then again why not....?)

[Edited 2004-06-18 03:25:14]
Lead me not into temptation, I can find my own way there...
 
boeingbus
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 10:25 am

Market Caps

Honeywell 31.08B
GE 330.48B
Boeing 41.71B

OK, so using the word 'Tiny' is not the right word, but I was simply implying that if GE wasn't able to purchase a smaller aerospace and defense firm for 31B they are not going to get one for 41...
Airbus or Boeing - it's all good to me!
 
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sammyk
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 10:35 am

Isn't Boeing selling it's finance arm (or has already done so)?
 
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N328KF
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 10:42 am

Gigneil

Honeywell, tiny?

What?


Compared to General Electric, they are. Depending upon how their stock is doing (or if you go by revenue), they are sometimes the largest company in the world, alternating with Microsoft, Walmart, and Exxon.

Sammyk:

No, just the non-aviation financial portion.

Anyhow, I don't think ownership of Boeing falls into GE's corporate strategy--unless Boeing fell upon hard times, then I could see GE Capital doing a buyout/splitup operation. I don't think the FTC/EU would object to an arbitrage deal.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
greaser
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 11:45 am

If it happened, i would like to see a Ge-90 on a 757!!! YeehAA!!!
Anyway, can Boeing buy Airbus??? Smokin cool
Now you're really flying
 
gigneil
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 12:00 pm

Boeing selected GE as a partner on the 777LR program mainly because they had the most capable engine.

Boeing selected GE not only because of the GE90. They selected it because GE was willing to pony a LARGE amount of money, and because GECAS can help them place aircraft.

The Trent was arguably in a position to compete.

N
 
Vorticity
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 2:53 pm

Boeing sold the non-aviation related part of their financial group to GE. They actually had hoped to model that part of Boeing after GE, however lately they've decided to re-focus their efforts.

A lot of people would probably throw a fit if GE made a move for Boeing. That's just my hunch. People were throwing fits at the idea of anyone grabbing Northrup Grumman after all.
Thermodynamics and english units don't mix...
 
BCAInfoSys
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 3:43 pm

Just re-affirming what Vorticity has said. Boeing's Finance of Commerical Aircraft remains; we're keeping our core competancies. What we sold was our financing of non-aviation projects. I think I remember something about us financing construction equipment or something like that?
Militant Agnostic - I don't know and you don't either.
 
Alessandro
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 4:22 pm

SAAB aircraft department isn´t for sale, to heavly linked to the JAS Gripen,
imagine if the buyer would cancel it in favor of F22?
I don´t think GE is so interested in Boeing,
From New Yorqatar to Califarbia...
 
ualonghaul
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RE: Boeing-GE Merger....Possible?

Fri Jun 18, 2004 4:39 pm

Do you have any idea how many branches of GE exist? Of all of these, Aircraft engines is not the largest. GE Owns everything from aircraft engine manufactures to consumer electronics to capital managements firms to media companies.

Boeing is also a large company, with a large portion of its revenues coming form defense and satellite products.

I encourage you to look at the 10ks for each company, the civil aircraft arm of Boeing and the aircraft engines of GE are two very smaller branches in two very large and complex companies.

Just think, if they merged (I still cannot belief that people actually thought this could or would happen) GE could make the cordless blenders for the apaches!!!

This thread should be deleted on the grounds of plain stupidity.

 
andz
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 7:24 pm

Maybe the source of this thread is the announcement by GE that they have acquired $2bn in assets from Boeing Capital.

http://www.ge.com/files/usa/company/investor/downloads/boeing_capital_acq_052404.pdf
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AirframeAS
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 8:44 pm

The EU wouldnt even allow it if it were to happen, but I would love to see them freak out like they did when Boeing was attempting to buy McDD. It was really funny how it played out too.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
Greg
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 11:14 pm

Boeing has a rather strong 'poison pill' plan for hostile takeovers...
They would be tought to take over, both financially, and in this regulatory environment...
A lot of lawyers, making a lot of money! Bring it on!  Smile
 
NDSchu777
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RE: Boeing-GE Merger....possible?

Fri Jun 18, 2004 11:49 pm

I think this kind of merger between aircraft and engine manufacturers is strictly prohibited by US law. What about the Air Mail Act of 1934? After the air mail scandals of the early 30's this act was passed to curb anti-competitive activities in commercial aviation. One provision of the act was to bar a single company from operating an airline and manufacturing engines and aircraft. This act is what split up United Aircraft into United Airlines, Pratt & Whitney, and Boeing. Correct me if I'm wrong, I'm no legal expert, but I believe this law would still be in effect and therefore at GE-Boeing merger would be outright illegal.

~Nick
 
PHLBOS
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RE: Boeing-GE Merger....possible?

Sat Jun 19, 2004 5:17 am

If the referenced-merger did happen and restricted all future Boeing aircraft to use only GE engines, then NW would probably never purchase any future Boeing aircraft. The reason dates back to a clause in a former-NW's CEO (I forget who it was at the time) Will that, in a nutshell, states that NW will not use GE engines on any of their aircraft. This animosity dates back to the late 50s and had something to do with a raw deal NW received from GE regarding engine parts on the Boeing Stratocruiser.

I received this information from my father, who was a young engineer with GE at the time. Clarifications on this from any old-timers and/or vintage aviation buffs are more than welcomed.

That's probably the main reason why NW 753s are the only ones with Pratt-Whitneys on them.
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Vorticity
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RE: Boeing-GE Merger....possible?

Sat Jun 19, 2004 5:35 am

That's probably the main reason why NW 753s are the only ones with Pratt-Whitneys on them.

Well their other choice on the 753 was RR, not GE. I think NW is the only airline flying the 753 with PWs, but it's not GE grudge.
Thermodynamics and english units don't mix...
 
BDLGUY
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RE: Boeing-GE Merger....possible?

Sat Jun 19, 2004 8:03 am

Boeing-GE Merger?

That would be illegal in the U.S. because they are a monopoly.

I recalled back in the 1930's or 1940's, The Boeing, United Airlines and Pratt & Whitney (which it was called an United Aircraft) were combined in one company but the U.S. supreme Court ordered the company had to break up all three separate companies because of a monopoly.

Correct me, if I'm wrong.  Laugh out loud
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gigneil
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RE: Boeing-GE Merger....possible?

Sat Jun 19, 2004 8:08 am

NW will not use GE engines on any of their aircraft.

The could give a shit about that CEO's will. They have used GE engines on their DC-10, and even more recently on their A320 family aircraft.

N
 
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N328KF
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RE: Boeing-GE Merger....possible?

Sat Jun 19, 2004 9:34 am

That would be a vertical monopoly, which isn't always illegal. Other industries do it all the time. It depends upon the specific industry. The United Aircraft merger that from 1929 that you are referring to would be different from a horizontal monopoly, which is what the Standard Oil breakup was.

Then you have the AT&T breakup, which was actually both.
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