Here’s why you’re not making credible statements about finance and accounting:
- Business is not the difference between money in and money out, that’s cash flow.
- The end game for a business is not to accumulate, but to provide returns to the owners. A business sitting on a pile of assets provides no value to anyone.
- There are plenty of non-cash journal entries in business. Have you ever heard of intangible assets?
- Innovation is one way to make money, but not the only way. There are plenty of businesses that make loads of money from good execution on mature products and technologies.
- HOW you account for pensions makes a huge difference. If you assume low interest rates forever, your pension liability will look large and be inconsistent with what you may actually need to pay.
This statement reflects loads of emotion and a real myopic perspective. It’s clear that in your eyes, there’s nothing Boeing could do right.
1. Business is taking risk to try and gain a profit. Businesses that cannot make money generally close shop. So it is what I said it is.
2. The end game of every business is to accumulate. Always. This is why businesses grow in an organic fashion and why they buyout other companies. Kill or lessen competition. In this accumulation, more value can be returned to shareholders.
3. Intangible assets can be sold. They are IP that can be licensed, traded, sold off. There is money backing their development and the cost is not an asset, the IP is. They may not be physical in nature but they are what make the most money today.
4. To get to a mature product or technology, some innovation would have been done previously.
5. I do not lack emotion or let it dictate what my beliefs are. I see things for what they are. How many times have you read of how Boeing employees felt they were being maligned by McDonnell Douglas staff that came in? How many times have you read that money that they had traditionally used to better their processes was now going to shareholder value? How many times have you read that old engineers would have rather built the 787 in-house but the people making decisions decided trying to do it the cheapest was the best way to go? How much have you read of engineers warning that some things were wrong or processes in the factory floor did not meet safety standards? How many times have you seen this company make a poor design and then blame pilots? How many times have you read that Boeing was a great engineering company and not a great business and it needed to behave more like a business and less like an engineering entity?
I cannot suffer fools. There are a good amount of people working for Boeing that want nothing more than to see a good product out and then you have the people that head the company that see it as a tool to enrich themselves. I have been in an organization where this happened and people lost jobs; I know first hand what damage myopic management does to people that depend on a company for a living. I have seen first hand at another company that not keeping the best talent you have leads to under-performance. I have seen how a lack of planning and foresight leads to problems that take years to resolve.
People that run companies are custodians and the current lot at Boeing do not behave as such, and it is the same with the airlines, and the unions that represent employees. I learnt a long time ago that if you want good results, get good leadership and if you want to turn things around, make the hard decisions.
Last edited by Gremlinzzzz
on Sat May 01, 2021 4:20 pm, edited 2 times in total.