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Re: Boeing takes $2bn in charges

Posted: Tue Jul 26, 2016 5:31 pm
by speedbored
Stitch wrote:
Because Boeing is run by MBAs now and they only look at the bottom line and how they can improve it.

You might be right. I gave up trying to understand the workings of an MBA's mind long ago.

Still seems to me that the "improvement" to the bottom line from this sort of action will last 3 months at best, and then have the opposite effect to that intended for far longer.

Re: Boeing takes $2bn in charges

Posted: Tue Jul 26, 2016 7:56 pm
by Flyglobal
We in Automotive had the same ideas some years ago: Pay the suppliers who deliver Just In Time ideally at the time when the vehicle is already sold to a dealer or customer. Seems Boeing has the same 'idea'.
But it changed in automotive, it was identified that to some extend you can do it with mainstream parts, however some for special parts e.g. Valve train systems where pure knowledge is behind you are limited with your demands. Today we are more trying to achieve traget costs together.

Flyglobal

Re: Boeing takes $2bn in charges

Posted: Wed Jul 27, 2016 6:11 pm
by KarelXWB
From Leeham today:

The 787 program continues to have near breakeven gross margins. The combination of production challenges, change incorporation on early build aircraft, schedule delays, customer and supplier impacts and changes to price escalation factors has created significant pressure on program profitability. If risks related to this program, including risks associated with productivity improvements, supply chain management, planned production rate increases or introducing and manufacturing the 787-10 derivative as scheduled cannot be mitigated, the program could record a reach-forward loss that may be material.


https://leehamnews.com/2016/07/27/747-p ... nd-boeing/

Is it possible we may see more charges in the future?

Re: Boeing takes $2bn in charges

Posted: Wed Jul 27, 2016 7:03 pm
by Stitch
Credit Suisse calculates that Boeing is adding around USD 1 million to deferred production cost with each delivery, which is a significant drop from the USD 5 million they were adding last quarter. And that might really reflect the hit from the "Teens" being delivered each quarter, because they have to be deep into the red. But Boeing is finally clearing them out.

787-10 production should be no more difficult than 787-9 production considering they share everything but a longer Section 46. And CHS appears to be producing 787-9s without issue so they should be able to do the same with the 787-10.

Re: Boeing takes $2bn in charges

Posted: Thu Jul 28, 2016 12:38 am
by L-188
glbltrvlr wrote:
speedbored wrote:
GCT64 wrote:
a Boeing spokeswoman said the company is "in the process of adjusting the payment terms of suppliers"

So, reading between the lines, I'm guessing that events went something like this:

Rockwells payment terms are 30 days
Boeing asked Rockwell to extend those terms to 90 or 120 days
Rockwell refused
Boeing just did it anyway


Yep. That's exactly how it works.


Pretty much, saw that a lot when I was purchasing for the oil industry. The big fish gets their way. We could boss our smaller suppliers around, but we didn't have the clout to pull that on a GE or similar.

Re: Boeing takes $2bn in charges

Posted: Thu Jul 28, 2016 12:39 am
by L-188
Stitch wrote:
Credit Suisse calculates that Boeing is adding around USD 1 million to deferred production cost with each delivery, which is a significant drop from the USD 5 million they were adding last quarter. And that might really reflect the hit from the "Teens" being delivered each quarter, because they have to be deep into the red. But Boeing is finally clearing them out.

787-10 production should be no more difficult than 787-9 production considering they share everything but a longer Section 46. And CHS appears to be producing 787-9s without issue so they should be able to do the same with the 787-10.



Add to that Boeing is learning how to be more efficient in building these aircraft so that have the last few years of experience doing that to build on.