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PepeTheFrog
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Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 1:35 pm

The 2019 figures are out:

- $636 million loss for the year, first annual net loss since 1997
- Revenue $76.6 billion, down from $101.1 billion in 2018
- Total charges and costs for the 737 MAX raise to $19 billion
- Further 787 production rate cut, 10 per month in early 2021
- Still $10 billion in cash, down from $10.9 billion

The 737 MAX will not be rebranded. David Calhoun believes the brand name is still strong.

https://www.reuters.com/article/us-boei ... SKBN1ZS1L9
https://www.bloomberg.com/news/articles ... ium-europe
https://boeing.mediaroom.com/2020-01-29 ... er-Results
https://leehamnews.com/2020/01/29/boein ... ges-costs/

Approximately $4 billion further costs related to the MAX are expected in 2020.
Last edited by PepeTheFrog on Wed Jan 29, 2020 1:44 pm, edited 4 times in total.
Good moaning!
 
slider
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 1:37 pm

Wow- didn't expect it to be that sizable, but not surprised when you start to delve into it.

I think not renaming the MAX is a major blunder.

Boeing has bigger problems though--leadership, culture, and creating a market vision.
 
Arion640
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 1:57 pm

They are stuck between a rock and a hard place with a potential rebranding. It will look like they are trying to deceive people if they do, and if they don’t, people remember the name anyway.
 
WaywardMemphian
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 1:57 pm

slider wrote:
Wow- didn't expect it to be that sizable, but not surprised when you start to delve into it.

I think not renaming the MAX is a major blunder.

Boeing has bigger problems though--leadership, culture, and creating a market vision.


Wr are suffering the effects if a duopoly, Both got kinda lazy (AB is doing the same with A320s that Boeing has done) Bombardier offered some hope but AB guy a gift laid in their lap that was for Boeing's taking first. Eventually someone will have to clean sheet something for the mid to large single aisle market or more MAX blunders are on the horizon.
 
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 1:59 pm

I agree with not rebranding it. Rebranding it in my opinion will make the public trust it less. Trying to rebrand the aircraft can be viewed as a cover up by some and that can make it even harder to regain trust at that point.
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flyinghippo
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 2:12 pm

I've said it years ago and I'll say it again - Not developing a new design for 737 replacement was a big mistake. I know Boeing was pressured to come up with a competitor for A320NEO quicky, but they went for quick profit instead of long term vision. If they did a clean design (797?), it would probably go into EIS around now with thousands of orders since I'd expect it will perform better than A320NEO.

Now Boeing got to reap what they sow.
 
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ACCS300
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 2:13 pm

I think some airlines will re-brand the MAX independently similar to what Ryanair has done with the 737-8200. Still a deception in my opinion.
 
cruiseshipcrew
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 2:21 pm

Even with Boeing not re-branding/de-branding the MAX name I'd bet money that just about every airline will drop the name from everything just like what ACCS300 says about what Ryanair did. You won't see it printed on anything that faces the general public.
 
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BroadwayLimited
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 2:25 pm

Valuejet rebranded when they bought AirTran. Worked out pretty good for them.
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 2:26 pm

787 down to rate 10, that is going to further impact cash flow, with 737 out, 777 transitioning
 
Sokes
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 2:33 pm

" The estimated costs to produce 737 aircraft included in the accounting quantity increased by $2.6bn during the quarter, primarily to reflect updated production and delivery assumptions. "
(I quoted from the leeham article.)

I first read the Boeing link and wondered what accounting quantity means.
Does "deferred production cost" have a bad name now? Or was it always called "accounting quantity"?
How much is the deferred production cost for the MAX now? (On paper, without the 4 billion $).

Under "consolidated statement of cash flow" accrued liabilities increased from 1,117 billion $ to 7,781 billion $. Meaning what?

I think I have some faulty idea of cash flow. I didn't expect depreciation and amortization to appear in cash flow. Can somebody explain?
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Gremlinzzzz
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 2:53 pm

WaywardMemphian wrote:
slider wrote:
Wow- didn't expect it to be that sizable, but not surprised when you start to delve into it.

I think not renaming the MAX is a major blunder.

Boeing has bigger problems though--leadership, culture, and creating a market vision.


Wr are suffering the effects if a duopoly, Both got kinda lazy (AB is doing the same with A320s that Boeing has done) Bombardier offered some hope but AB guy a gift laid in their lap that was for Boeing's taking first. Eventually someone will have to clean sheet something for the mid to large single aisle market or more MAX blunders are on the horizon.
Market conditions and dynamic is what influences these companies. Plus there is only so much cash to go around in a world where dividends and stock buy backs are the norm in the stock market.

Boeing was already looking towards a clean sheet design when the A320 Neo was revealed, and in what is the most competitive segment in terms of sales and deliveries. They ought to have done the right thing and come up with a narrow body jet sooner, that much is not debatable. However, the moment they left it late, they were under market pressure.
 
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ojjunior
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 2:58 pm

Well, the arrogance and egocentrism bill has just arrived.

- Put it into 737Max cost center, please.
 
Sightseer
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 3:15 pm

Sokes wrote:
I think I have some faulty idea of cash flow. I didn't expect depreciation and amortization to appear in cash flow. Can somebody explain?

Companies are required to reconcile their net income to their net operating cash flows. Since depreciation and amortization reduce net income but don't affect operating cash flow (since you're right, they're non-cash expenses), they need to be added back to net income during the reconciliation. Costs incurred to actually acquire the items being depreciated or amortized show up in investing cash flows.
Last edited by Sightseer on Wed Jan 29, 2020 3:17 pm, edited 1 time in total.
 
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 3:16 pm

There is a general weakness in the airline market right now, and with too many planes being ordered. Perhaps its a good opportunity for Boeing to clean its house both in terms of management and in terms of removing dubious orders, it will enable them to restart with a clearer view of the market, and therefore put them in a stronger position.

I'm going to be criticized for this, but expect Airbus to do the same soon in terms of clearing their dubious orders and announcing rate cuts, especially to the A350 line. There is no better time to do it than now.
 
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 3:19 pm

They’re going to need strong leadership to get through this (think TA Wilson).
 
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Re: Boeing announces first annual net loss since 1997

Wed Jan 29, 2020 3:23 pm

Speaking of renaming - didn't Lockheed call the fixed Electra the Electra II? Ironic that it had a long career as a ASW aircraft. So will the P-8.
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 3:32 pm

    Boeing bought this, every bit of it. A dose of suffering might be the only thing that wises the management up to becoming an engineering company again. A technology company needs a technology focus, everything else follows from that.
     
    flilot
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 4:09 pm

    PepeTheFrog wrote:
    The 737 MAX will not be rebranded. David Calhoun believes the brand name is still strong.


    And so the clowns continue to run the circus. Skulls thicker than a 737 fuselage.
     
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    zkojq
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 4:15 pm

    zackary747 wrote:
    I agree with not rebranding it. Rebranding it in my opinion will make the public trust it less. Trying to rebrand the aircraft can be viewed as a cover up by some and that can make it even harder to regain trust at that point.


    I agree entirely. Rebranding the MAX would mean that they're trying to cover up or hide it's past. After the Max debacle the company will want to disassociate itself with that kind of behaviour. In my opinion not rebranding signals a more open and honest corporate culture.

    And anyway I guarantee that if they had rebranded it, the media wouldn't exactly keep it secret and I'm sure there'd be multiple websites dedicated to helping people identify if they're on a MAX or not.
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    scbriml
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 5:00 pm

    morrisond wrote:
    They recorded a loss as they recognized Future Concessions of $2.6B in the current quarter. If they recognized them as they incurred in the future they would have shown a profit of about $2B for 2019


    That sounds a bit like rearranging the deckchairs on the Titanic! Given this is the 'Civil Aviation' forum, maybe we should look at Boeing Commercial Airplanes rather than Boeing as a whole?

    BCA made a far from insignificant loss of $6.657billion. That's $14.5billion down on 2018.

    Then there's another estimated $4billion to pay for "future abnormal costs" associated with restarting MAX production in 2020. There's also an additional $2.6billion added to the MAX deferred costs. With a slow ramp-up of MAX this year and 787 production planned to drop to 10/month in a year's time, the picture isn't quite as rosy as you suggest.
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    sgbroimp
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 5:07 pm

    flilot wrote:
    PepeTheFrog wrote:
    The 737 MAX will not be rebranded. David Calhoun believes the brand name is still strong.


    And so the clowns continue to run the circus. Skulls thicker than a 737 fuselage.


    It's really the flying consumer that would be the concern. Is it not the airlines' call as to whether the aircraft model is printed on the fuselage? Doubt we will see the word "max" on many as a description and maybe not even 737. As for what we see on our booking engines, also no actual words "max" right? So maybe that is why Ms. Calhoun is clinging to it.
     
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 5:10 pm

    ojjunior wrote:
    Well, the arrogance and egocentrism bill has just arrived.

    Here's a thread on a similar situation: viewtopic.php?t=1439955
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 5:11 pm

    morrisond wrote:
    I have no idea on the 737 but on the 787 Program accounting is now actually hurting them for if they weren't paying off deferred production costs right now reported earnings would be higher.


    Boeing provides the figures for you.
    http://www.boeing.com/investors/account ... ions.page/
    Scroll down to "Commercial Airplanes Unit Cost vs. Program". We see that unit accounting would have increased BCA profits in 2018 by over 12.7%, and it would have also reduced BCA losses in 2019 by over 47%

    Program accounting allowed BCA to report profits in the early days of the 787 program rather than multiple years of losses. The payback is lower profits and higher losses now compared to unit accounting.

    It's swings and roundabouts.
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    Prost
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 5:12 pm

    I think the closest analogy is the DC-10 never rebranded after it’s grounding. Of course as crew members, we had to listen to comments from customers about the Death-Cruiser for the rest of it’s life.
     
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    Boeing: How to stop the bleeding?

    Wed Jan 29, 2020 5:43 pm

    Based on FY2019 numbers and annual report, Boeing is bleeding. Badly.

    Here is a question for all of you management consultants, business leaders, etc. out there. We must have a few on this forum. Here is your chance to play (Arm)chairman of the Board at Boeing. What would you do?

    What would I do?

    1. Hire a CEO who has a proven track record of "righting the ship" in a complex manufacturing setting. Mulally comes to mind.
    2. Fire the entire C-suite, including marketing and communications. If the recent live broadcast of the 77X first flight is any indicator, they ALL have to go.
    3. Stop the bleeding that is the MAX. Better to cut the arm off than to let it infect the entire body.
    4. Hire or re-hire a bunch of QA officials and place them all over Everett and Charleston and empower them with the authority to "stop the presses" should they need to. Quality and safety must be job #1 throughout the culture and must be communicated and demonstrated through actions and quality output. The stream of press from whistleblowers needs to stop but only because quality has returned, not because they have been silenced in any way.
    5. Get stock price and earnings out of the picture, at least temporarily. What happens next is going to cost a lot. Bite the bullet for the future.
    6. Leverage Boeing Brasil to build a Y1 competitor that competes with the A22X up to the A320.
    7. Launch NMA - manufactured in the US - to compete with A321neo/A321XLR/A322/B753/B762. This is Y2.
    8. Work with GE and RR on the "NG" 787, focusing on the B789NG and B78JNG and possibly a B787-12NG. This is Y3. Besides, RR owes them for the current fiasco and GE is learning a lot from the GE9X.
    9. The 77X is now more or less a sunk cost. Keep it going until sales dry up. Leverage it to keep Airbus from growing too much in the freighter space.
    10: Keep winning the Freighter contracts.
    11. By 2040, if the market is there, consider a 787+77X double-decker, twin-engine, derivative. This is Y4.

    I consider the above to be the "minimum" Boeing should be doing. Additionally, issues surrounding pilot training, streamlining training, cockpit automation, etc. as well as climate change should also be influencing future Boeing product design, as well as that of its suppliers, especially engine suppliers.
    © 2020. All statements are my own. The use of my statements, including by journalists, YouTube vloggers like "DJ's Aviation", etc. without my written consent is strictly prohibited.
     
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    Re: Boeing: How to stop the bleeding?

    Wed Jan 29, 2020 5:48 pm

    Flatten the hierarchy.
     
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    Re: Boeing: How to stop the bleeding?

    Wed Jan 29, 2020 5:53 pm

    GEUltraFan9XGTF wrote:
    Based on FY2019 numbers and annual report, Boeing is bleeding. Badly.

    Here is a question for all of you management consultants, business leaders, etc. out there. We must have a few on this forum. Here is your chance to play (Arm)chairman of the Board at Boeing. What would you do?

    Boeing is bleeding but you are being a bit hyperbolic. How do you stop the bleeding? Get the 737Max back in service and start making deliveries of their highest volume product again.
     
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 5:57 pm

    scbriml wrote:
    morrisond wrote:
    I have no idea on the 737 but on the 787 Program accounting is now actually hurting them for if they weren't paying off deferred production costs right now reported earnings would be higher.


    Boeing provides the figures for you.
    http://www.boeing.com/investors/account ... ions.page/
    Scroll down to "Commercial Airplanes Unit Cost vs. Program". We see that unit accounting would have increased BCA profits in 2018 by over 12.7%, and it would have also reduced BCA losses in 2019 by over 47%

    Program accounting allowed BCA to report profits in the early days of the 787 program rather than multiple years of losses. The payback is lower profits and higher losses now compared to unit accounting.

    It's swings and roundabouts.


    That's what I said.
     
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    PepeTheFrog
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    Re: Boeing: How to stop the bleeding?

    Wed Jan 29, 2020 5:58 pm

    GEUltraFan9XGTF wrote:
    Based on FY2019 numbers and annual report, Boeing is bleeding. Badly.

    Here is a question for all of you management consultants, business leaders, etc. out there. We must have a few on this forum. Here is your chance to play (Arm)chairman of the Board at Boeing. What would you do?

    What would I do?

    1. Hire a CEO who has a proven track record of "righting the ship" in a complex manufacturing setting. Mulally comes to mind.
    2. Fire the entire C-suite, including marketing and communications. If the recent live broadcast of the 77X first flight is any indicator, they ALL have to go.
    3. Stop the bleeding that is the MAX. Better to cut the arm off than to let it infect the entire body.
    4. Hire or re-hire a bunch of QA officials and place them all over Everett and Charleston and empower them with the authority to "stop the presses" should they need to. Quality and safety must be job #1 throughout the culture and must be communicated and demonstrated through actions and quality output. The stream of press from whistleblowers needs to stop but only because quality has returned, not because they have been silenced in any way.
    5. Get stock price and earnings out of the picture, at least temporarily. What happens next is going to cost a lot. Bite the bullet for the future.
    6. Leverage Boeing Brasil to build a Y1 competitor that competes with the A22X up to the A320.
    7. Launch NMA - manufactured in the US - to compete with A321neo/A321XLR/A322/B753/B762. This is Y2.
    8. Work with GE and RR on the "NG" 787, focusing on the B789NG and B78JNG and possibly a B787-12NG. This is Y3. Besides, RR owes them for the current fiasco and GE is learning a lot from the GE9X.
    9. The 77X is now more or less a sunk cost. Keep it going until sales dry up. Leverage it to keep Airbus from growing too much in the freighter space.
    10: Keep winning the Freighter contracts.
    11. By 2040, if the market is there, consider a 787+77X double-decker, twin-engine, derivative. This is Y4.

    I consider the above to be the "minimum" Boeing should be doing. Additionally, issues surrounding pilot training, streamlining training, cockpit automation, etc. as well as climate change should also be influencing future Boeing product design, as well as that of its suppliers, especially engine suppliers.


    There is no reason to be so dramatic. There's a much easier solution:

    Boeing Board needs major shake-up

    Replacing the Wall Street suits with people that have aerospace experience would be enough.
    Last edited by PepeTheFrog on Wed Jan 29, 2020 5:59 pm, edited 1 time in total.
    Good moaning!
     
    Sokes
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 5:58 pm

    Sightseer wrote:
    Sokes wrote:
    I think I have some faulty idea of cash flow. I didn't expect depreciation and amortization to appear in cash flow. Can somebody explain?

    ... Costs incurred to actually acquire the items being depreciated or amortized show up in investing cash flows.


    When I depreciate I reduce the asset (on paper) and at the same time the liability by paying back part of the credit.
    But that's for "assets = (liabilities + equity)" and to calculate earnings.

    I have to pay for a machine when I buy it, not when I depreciate it.
    Moreover "depreciation and amortisation" shows in "cash flow-operating activities" and not in "cash flow-investing activities"
    https://boeing.mediaroom.com/2020-01-29 ... er-Results

    But as I have to pay when I get the machine I still don't understand how depreciation affects cash flow. Unless depreciation has to be a separate entry as credit paid back to banks. But should such an entry not be under "cash flow-financing activities"?
    I find "new borrowings" and "debt repayment" sufficient to describe cash flow with banks. More differentiation I get somewhere else.

    Obviously I'm wrong. Who can help me?

    Finally some good news: in the last quarter from deferred production cost B787 1,1 billion $ was repaid. Only 18,7 billion $ is left.
    https://www.boeing.com/investors/accoun ... ions.page/
    Last edited by Sokes on Wed Jan 29, 2020 6:11 pm, edited 1 time in total.
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    TVNWZ
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 6:01 pm

    flilot wrote:
    PepeTheFrog wrote:
    The 737 MAX will not be rebranded. David Calhoun believes the brand name is still strong.


    And so the clowns continue to run the circus. Skulls thicker than a 737 fuselage.


    I am sure Boeing has done considerable market testing and they have found the name of the plane will have little effect. They just don't arbitrarily decide this.
     
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    crimsonchin
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 6:28 pm

    Pity. All this could have been avoided if they'd simply let the superior NG compete with the NEO like Boeing assured us it could.
     
    morrisond
    Posts: 2660
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    Re: Boeing: How to stop the bleeding?

    Wed Jan 29, 2020 6:28 pm

    GEUltraFan9XGTF wrote:
    Based on FY2019 numbers and annual report, Boeing is bleeding. Badly.

    Here is a question for all of you management consultants, business leaders, etc. out there. We must have a few on this forum. Here is your chance to play (Arm)chairman of the Board at Boeing. What would you do?

    What would I do?

    1. Hire a CEO who has a proven track record of "righting the ship" in a complex manufacturing setting. Mulally comes to mind.
    2. Fire the entire C-suite, including marketing and communications. If the recent live broadcast of the 77X first flight is any indicator, they ALL have to go.
    3. Stop the bleeding that is the MAX. Better to cut the arm off than to let it infect the entire body.
    4. Hire or re-hire a bunch of QA officials and place them all over Everett and Charleston and empower them with the authority to "stop the presses" should they need to. Quality and safety must be job #1 throughout the culture and must be communicated and demonstrated through actions and quality output. The stream of press from whistleblowers needs to stop but only because quality has returned, not because they have been silenced in any way.
    5. Get stock price and earnings out of the picture, at least temporarily. What happens next is going to cost a lot. Bite the bullet for the future.
    6. Leverage Boeing Brasil to build a Y1 competitor that competes with the A22X up to the A320.
    7. Launch NMA - manufactured in the US - to compete with A321neo/A321XLR/A322/B753/B762. This is Y2.
    8. Work with GE and RR on the "NG" 787, focusing on the B789NG and B78JNG and possibly a B787-12NG. This is Y3. Besides, RR owes them for the current fiasco and GE is learning a lot from the GE9X.
    9. The 77X is now more or less a sunk cost. Keep it going until sales dry up. Leverage it to keep Airbus from growing too much in the freighter space.
    10: Keep winning the Freighter contracts.
    11. By 2040, if the market is there, consider a 787+77X double-decker, twin-engine, derivative. This is Y4.

    I consider the above to be the "minimum" Boeing should be doing. Additionally, issues surrounding pilot training, streamlining training, cockpit automation, etc. as well as climate change should also be influencing future Boeing product design, as well as that of its suppliers, especially engine suppliers.


    Although I disagree on the Boeing is bleeding badly part.

    I would agree with you on points 6-10.

    At this point it is looking like MAX will probably make a comeback, although things can change of course.

    They can always do a smaller Wing/shorter version of NMA as a very efficient short range people mover to replace 738/731 under 3,000NM. No need for a big wing NMA version on the Majority of Single Aisle sized routes.
     
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    scbriml
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 6:31 pm

    morrisond wrote:
    scbriml wrote:
    morrisond wrote:
    I have no idea on the 737 but on the 787 Program accounting is now actually hurting them for if they weren't paying off deferred production costs right now reported earnings would be higher.


    Boeing provides the figures for you.
    http://www.boeing.com/investors/account ... ions.page/
    Scroll down to "Commercial Airplanes Unit Cost vs. Program". We see that unit accounting would have increased BCA profits in 2018 by over 12.7%, and it would have also reduced BCA losses in 2019 by over 47%

    Program accounting allowed BCA to report profits in the early days of the 787 program rather than multiple years of losses. The payback is lower profits and higher losses now compared to unit accounting.

    It's swings and roundabouts.


    That's what I said.


    Yes, I was agreeing with you and pointing to actual numbers.
    Time flies like an arrow. Fruit flies like a banana!
    There are 10 types of people in the World - those that understand binary and those that don't.
     
    morrisond
    Posts: 2660
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    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 6:31 pm

    crimsonchin wrote:
    Pity. All this could have been avoided if they'd simply let the superior NG compete with the NEO like Boeing assured us it could.


    The smartest thing they should have done is just used LEAP tech with NG fan diameter as a short term bridge to NSA/NMA with no need for MCAS and give them the time they needed to do the new programs right.

    They would probably just be in test flights now.

    Then keep the LEAP-NG in production as a low cost alternative until Demand waned.
     
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    par13del
    Posts: 10260
    Joined: Sun Dec 18, 2005 9:14 pm

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 6:33 pm

    So in hindsight, if the previous nut-job at the helm had halted production of the MAX when the FAA introduced the bit flip requirements, the company may have bled a bit less versus the additional 6 months of production which has tied up higher price inventory?
    If the thought of such a halt would have hurt other vendors and citizens in the USA, remember that this report is about Boeing and its financial performance, and based on what is being shown, they lost money continuing to produce the MAX at 40+ per month, a, earlier halt or greater reduction would have saved money. So that can go in the column of a lost opportunity.
     
    morrisond
    Posts: 2660
    Joined: Thu Jan 07, 2010 12:22 am

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 6:35 pm

    scbriml wrote:
    morrisond wrote:
    scbriml wrote:

    Boeing provides the figures for you.
    http://www.boeing.com/investors/account ... ions.page/
    Scroll down to "Commercial Airplanes Unit Cost vs. Program". We see that unit accounting would have increased BCA profits in 2018 by over 12.7%, and it would have also reduced BCA losses in 2019 by over 47%

    Program accounting allowed BCA to report profits in the early days of the 787 program rather than multiple years of losses. The payback is lower profits and higher losses now compared to unit accounting.

    It's swings and roundabouts.


    That's what I said.


    Yes, I was agreeing with you and pointing to actual numbers.


    Thank you
     
    cledaybuck
    Posts: 1689
    Joined: Thu Aug 18, 2016 6:07 pm

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 6:39 pm

    morrisond wrote:
    crimsonchin wrote:
    Pity. All this could have been avoided if they'd simply let the superior NG compete with the NEO like Boeing assured us it could.


    The smartest thing they should have done is just used LEAP tech with NG fan diameter as a short term bridge to NSA/NMA with no need for MCAS and give them the time they needed to do the new programs right.

    They would probably just be in test flights now.

    Then keep the LEAP-NG in production as a low cost alternative until Demand waned.

    The smartest thing they could have done was not screw the MAX up in the first place. There is nothing wrong with the MAX if they had done it correctly.
    As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
     
    777Mech
    Posts: 920
    Joined: Sun Sep 11, 2016 10:54 pm

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 6:44 pm

    TVNWZ wrote:
    flilot wrote:
    PepeTheFrog wrote:
    The 737 MAX will not be rebranded. David Calhoun believes the brand name is still strong.


    And so the clowns continue to run the circus. Skulls thicker than a 737 fuselage.


    I am sure Boeing has done considerable market testing and they have found the name of the plane will have little effect. They just don't arbitrarily decide this.


    Well they supposedly did considerable testing on the MAX, and yet here they are.
     
    Sightseer
    Posts: 995
    Joined: Mon Jan 12, 2015 6:04 am

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 6:50 pm

    Sokes wrote:
    But as I have to pay when I get the machine I still don't understand how depreciation affects cash flow.

    It doesn't affect cash flow, but it does affect net income, specifically operating income since it's an operating expense. And since the statement of cash flows requires the differences between net income and operating cash flows to be highlighted, that is why you see depreciation and amortization listed there, because they're non-cash expenses and therefore create a difference between net income and operating cash flow. And those differences are required to be reconciled on the cash flow statement.

    Edit: you can message me about it if you have more questions, and I'll do my best to answer them.
     
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    africawings
    Posts: 106
    Joined: Tue Dec 14, 2004 4:47 am

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 7:02 pm

    I think Boeing has learned its lesson, time to get the Boeing 737 Max (or whatever it is eventually called) back in the air.
    Hopefully, some of the cost expenditures goes directly towards the crash victims families.
    I'm now starting to worry that if this 737 Max program doesn't get back up and running very soon, it could kill the company and that wasn't the intent as I understand it.

    Safety first!
     
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    Revelation
    Posts: 23891
    Joined: Wed Feb 09, 2005 9:37 pm

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 7:38 pm

    cledaybuck wrote:
    The smartest thing they could have done was not screw the MAX up in the first place. There is nothing wrong with the MAX if they had done it correctly.

    This. Many people in the loop made many dubious decisions such as saying MCAS was proven via K46 and thus did not need detailed scrutiny, MCAS was a add-on to STS so didn't need detailed scrutiny, etc. They decided to game the system, and have found the hard way that the system is set up the way it is for good reasons. They didn't respect the process, and now countless people are paying the price for their mistakes. Luckily for Boeing they found a good scapegoat and the public has a short attention span.

    par13del wrote:
    So in hindsight, if the previous nut-job at the helm had halted production of the MAX when the FAA introduced the bit flip requirements, the company may have bled a bit less versus the additional 6 months of production which has tied up higher price inventory?
    If the thought of such a halt would have hurt other vendors and citizens in the USA, remember that this report is about Boeing and its financial performance, and based on what is being shown, they lost money continuing to produce the MAX at 40+ per month, a, earlier halt or greater reduction would have saved money. So that can go in the column of a lost opportunity.

    The previous nut job decided on a strategy of bravado and evasion long before the bit flip came along, and kept doubling down each step of the way. There's no reason to think the bit flip was the point to re-evaluate the strategy any more than the second crash was.
    Wake up to find out that you are the eyes of the world
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    Wake now, discover that you are the song that the morning brings
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    musman9853
    Posts: 961
    Joined: Mon May 14, 2018 12:30 pm

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 7:45 pm

    it's unfortunate that 300 people had to die for boeing to learn its lesson. hopefully going forward they can right the ship. and considering boeing just got a 12B credit line, theyll be fine in the long run.
    Welcome to the City Beautiful.
     
    Sokes
    Posts: 1226
    Joined: Sat Mar 09, 2019 4:48 pm

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 7:54 pm

    Sightseer wrote:
    And since the statement of cash flows requires the differences between net income and operating cash flows to be highlighted, that is why you see depreciation and amortization listed there, because they're non-cash expenses and therefore create a difference between net income and operating cash flow. And those differences are required to be reconciled on the cash flow statement.


    I googled what "cash flow" is in German. If I translate that back to English I get "capital flow". It's not about cash. I got confused. I understand now. Thanks for your effort.
    Why can't the world be a little bit more autistic?
     
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    Aesma
    Posts: 13020
    Joined: Sat Nov 14, 2009 6:14 am

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 8:10 pm

    People not in the know have kept in mind the "MAX" name. Fortunately for Boeing, the aircraft's real name isn't that. So customers will simply forget the MAX and tell people they're flying on a 737, or on a 737-8/9/10, and people will be none the wiser.
    New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
     
    WN732
    Posts: 755
    Joined: Sat Feb 26, 2011 12:49 am

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 8:13 pm

    Prost wrote:
    I think the closest analogy is the DC-10 never rebranded after it’s grounding. Of course as crew members, we had to listen to comments from customers about the Death-Cruiser for the rest of it’s life.


    And there are still plenty of nearly 50 year old ones at FedEx. A rocky start indeed but it turned out to be a great airplane.
     
    Cdydatzigs
    Posts: 56
    Joined: Mon May 16, 2016 3:31 pm

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 8:49 pm

    PepeTheFrog wrote:
    The 737 MAX will not be rebranded. David Calhoun believes the brand name is still strong.


    Strong in every wrong possible way.
     
    crjflyboy
    Posts: 457
    Joined: Thu Jun 06, 2019 10:54 pm

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 8:51 pm

    Prost wrote:
    I think the closest analogy is the DC-10 never rebranded after it’s grounding. Of course as crew members, we had to listen to comments from customers about the Death-Cruiser for the rest of it’s life.


    Northwest pilots called it that as well ... my neighbor piloted one
     
    Checklist787
    Posts: 566
    Joined: Sat Jun 01, 2019 2:37 am

    Re: Boeing announces first annual net loss since 1997

    Wed Jan 29, 2020 9:06 pm

    scbriml wrote:
    morrisond wrote:
    They recorded a loss as they recognized Future Concessions of $2.6B in the current quarter. If they recognized them as they incurred in the future they would have shown a profit of about $2B for 2019


    That sounds a bit like rearranging the deckchairs on the Titanic! Given this is the 'Civil Aviation' forum, maybe we should look at Boeing Commercial Airplanes rather than Boeing as a whole?

    BCA made a far from insignificant loss of $6.657billion. That's $14.5billion down on 2018.

    Then there's another estimated $4billion to pay for "future abnormal costs" associated with restarting MAX production in 2020. There's also an additional $2.6billion added to the MAX deferred costs. With a slow ramp-up of MAX this year and 787 production planned to drop to 10/month in a year's time, the picture isn't quite as rosy as you suggest.


    There are also the 767 tanker and the 747-8 program which provide money and the Boeing Global Service, It won't be rosy but it will be better around 2021
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