Could Boeing sell the commercial aircraft division? It doesn’t deliver a dime to the all-important shareholders in its current form, with no turnaround in sight. But imagine the payday if they sold it. And that would leave Boeing free to concentrate on Pentagon pork. Let’s face it the latter is the reason why they’ve moved to DC.

And new ownership, the moribund division might flourish. Could be sold to investors to create a new company, or to an existing aerospace giant such as Lockheed Martin or Raytheon who are looking to expand out of the purely military field. New energy, new vision, new money, it might be just what’s needed for the United States to regain its footing in civil aviation.

Crazy fever dream or actual possibility?

Boeing is a household name in most of the world.

Boeing Commercial Airplanes also manufactures some of the aircraft for the United States military.

The Boeing Defense, Space & Security division is dependent on the Boeing Commercial Airplanes division for some of its aircraft engineering and manufacturing.

The Boeing Commercial Airplanes division should continue to have the legal rights to manufacture commercial aircraft under the Boeing brand, even if it is sold off.

I think Boeing would be more successful in selling off portions of their defense/space businesses. Perhaps they might be tempted to do like General Dynamics did years ago where they sold the F-16 program and Ft. Worth ops to Lockheed. The St. Louis fighter/advanced trainer ops would be attractive to Northrop Grumman, who have been on the fringe of that market for over 40 years trying to go it alone (see the F-20). Lockheed Martin would also love to have the St. Louis ops, but I don't think the Pentagon would be too keen to sole-source all the key fighter & advanced trainer programs.

If Boeing tried to spin off the commercial aircraft side it would be more problematic. I don't think any of the Big 3 defense contractors, Lockheed Martin, Northrop Grumman, or Raytheon Technologies, would be willing to add a troubled commercial aircraft operation, which would be an instant drag on their balance sheets. They also likely aren't willing because they have management structures and techniques that are optimized for running large defense programs, which operate much differently than the commercial airliner business. About the only player I could think of who might have a fighting chance of successfully running Boeing could be Textron, but I'm afraid they are too small a player in financial terms.

To Bombardier or Mitsubishi?

cedarjet wrote:

Could Boeing sell the commercial aircraft division? It doesn’t deliver a dime to the all-important shareholders in its current form, with no turnaround in sight. But imagine the payday if they sold it.

If the commercial division doesn't deliver any value to shareholders and shows no sign of any turn around, they wouldn't be getting much of a payday as the division would be worthless.

This is the kind of short term think that should have no place in aircraft manufacturing.

If Airbus had when this kind of mentality when introduced the A300 they would not have lasted very long.

Boeing's already cleared the highest hurdle in getting the MAX back into service.

Sooner or later they'll be delivering dreamliners again.

What happens with the MAX 7 and 10 remains to be seen.
Even if the worst happens and they cannot get them certified in their current iteration.

Then Boeing will either have to introduce EICAS or sell as many MAX 8s and 9s whilst they work on a replacement.

Management should have the mentally of facing challenges and fixing problems. Not running away from them.

hz747300 wrote:

To Bombardier or Mitsubishi?

I was waiting exactly for that one!

cedarjet wrote:

Could Boeing sell the commercial aircraft division? It doesn’t deliver a dime to the all-important shareholders in its current form, with no turnaround in sight. But imagine the payday if they sold it. And that would leave Boeing free to concentrate on Pentagon pork. Let’s face it the latter is the reason why they’ve moved to DC.

And new ownership, the moribund division might flourish. Could be sold to investors to create a new company, or to an existing aerospace giant such as Lockheed Martin or Raytheon who are looking to expand out of the purely military field. New energy, new vision, new money, it might be just what’s needed for the United States to regain its footing in civil aviatrazy fever dream or actual possibility?

So? To exactly whom would they sell it TO? Lockheed/Martin? Northrop/Grumman? Much of their Technology can't be transferred out of the USA. and Certainly not to Asia or Europe with maybe the exception of the United Kingdom if even there. And?? Exactly Why would they even contemplate such foolishness?? Boeing is American "Exceptionalism" Because they hit a bad stretch of road? is no reason for them to fold up their tent. Boeing will return! and when they get their minds right and get down to business? There is no other company in the world that can beat them.. And I'll make BOOK on that!

Sell it to Elon.

He seems bored lately.

The last thing the DoD wants is further consolidation amongst an already small defense contractor field...

Babyshark wrote:

Sell it to Elon.

He seems bored lately.

Fail fast and fail hard doesn't work with civil airliners

I could see Tesla buying Boeing commercial in 2-4 years if the 737-10 can't be certified and half of the 777X order book cancels.

Tesla would also have deliver and grow flawlessly to be able to afford such a large purchase.
1) Tesla and Berlin are at full capacity.
2) Robotaxi network comes online.
3) Tesla robot performs basic labour tasks.

Tesla would easily have $5 trillion market cap at that point and they could then simply buy Boeing commercial aviation. A large electric VTOL passenger aircraft would get launched to revolutionise short haul aviation. Tesla can then provide the recharging infrastructure at the airports. As the aircraft would have short range it could simply stop for a 30 minute recharge or airlines could simply plan their network like trains with say 5 recharge stops between New York and Los Angeles. Passengers can get on and off etc.

Maybe a dumb question but what's going on with the max 10? Delays in FAA certification?

Babyshark wrote:

Sell it to Elon.

He seems bored lately.

We will find out most of their “unidentified customers” in the order book are bots…

9w748capt wrote:

Maybe a dumb question but what's going on with the max 10? Delays in FAA certification?

There is a deadline to certify by 31 DEC 2022 or face significant changes to the cockpit (or get the law changed to extend the deadline).

737-7 was supposed to be a quick approval - and here we are months and months later and even that is not approved.

See viewtopic.php?f=3&t=1472717 for much more detail.

ADent wrote:

9w748capt wrote:

Maybe a dumb question but what's going on with the max 10? Delays in FAA certification?

There is a deadline to certify by 31 DEC 2022 or face significant changes to the cockpit (or get the law changed to extend the deadline).

737-7 was supposed to be a quick approval - and here we are months and months later and even that is not approved.

See viewtopic.php?f=3&t=1472717 for much more detail.

With building permit certification you are bound by the laws in effect when you apply, not when they get around to approving unless you make significant changes. Corrections don’t have to follow new laws either.

hz747300 wrote:

To Bombardier or Mitsubishi?

I would be laughing so hard if Boeing sold BCA to Bombardier after all of the CSeries (err... A220) drama.

Really, to sell within the US, their options would be Lockheed Martin, Northrop Grumman, Raytheon, Textron, and General Dynamics.

Babyshark wrote:

Sell it to Elon.

He seems bored lately.

We know how well Tesla's autopilot works!!!!

They could sell it to Embraer i think

Sure, Boeing could sell their Commercial Aircraft Division. But, I have to ask, why would they?

Granted that division has been somewhat of an albatross in the past 3-4 years. However, if you look long term, that certainly isn't the case! If you take a long-term outlook, I would say selling the Commercial business would be a really bad idea. Boeing will get their act together.

cedarjet wrote:

Could Boeing sell the commercial aircraft division? It doesn’t deliver a dime to the all-important shareholders in its current form, with no turnaround in sight. But imagine the payday if they sold it. And that would leave Boeing free to concentrate on Pentagon pork. Let’s face it the latter is the reason why they’ve moved to DC.

And new ownership, the moribund division might flourish. Could be sold to investors to create a new company, or to an existing aerospace giant such as Lockheed Martin or Raytheon who are looking to expand out of the purely military field. New energy, new vision, new money, it might be just what’s needed for the United States to regain its footing in civil aviation.

Crazy fever dream or actual possibility?

"Unlocking shareholder value" is a hype for some time now. So yeah, it could be something Wall Street types could want.

You wouldn't get a good price if you sell BCA outright. I gather the only realistic ways are stock split, or an IPO.
An IPO tends to generate a laser focus on the company being floated. It would expose a lot of dirty laundry. Like balance sheet horrors. (do Boeing liabilities still exceed assets?)

A stock split would focus the Wall Street on relative merits of each of the companies created, rather than dig for dirty laundry.

Of course, any split is painful as Defense and BCA are interconnected via several programs, regardless.

Reading phrases like "Unlocking shareholder value" gives me images of money wolves, borrowing money to cut up the company, fire people, sell assets, overcharge customers, underpay long term suppliers, cash and run away to the next project. Leaving behind an shiny casing with a few good people inside trying to save the company.

Not the best for US aerospace IMO. Maybe good HQ moves to Washington, so they can keep an eye on the rich Boeing executives and their short term interests.
https://www.forbes.com/sites/lorenthomp ... a6e470424e

I think some honesty is required on where Boeing really stands and must go from here.
Boldly leaving out patriotism, flag waving, envy and irrelevant historical perspectives.

Boeings portfolio is second to one & they've been beaten. Short term capitalism & greed are at least partially to blame IMO.
I think Boeing needs to accept reality, create a realistic longer term plan to recover and regain market share.

Ask help (protection, financing, preferential supplier position, R&D support, export financing, customers needing dual source) & start moving.
Splitting off the company will only reduce mass and technology flow over (from heavily subsidized defense R&D to civil).

Babyshark wrote:

Sell it to Elon.
.

Test program would be interesting.

SpaceX tests are pretty much a go if they think they have a 50% chance of suceeding. Still learn plenty from failures.

The only thing Boeing can realistically sell of is Boeing Global Services.

The Military Arm will be hard because the DoD does not want to concentrate the suppliers even more.
BCA is "stuck" because who actually can do anything with it? Realistically only Airbus can and that would not be allowed
Boeing Capital is needed to support BCA and provide funding for airlines to buy aircraft (very shortly explained).

So if Boeing tilts towards a cash shortage that can not be solved, they can soll of Boeing Global Services. There are enough possible buyers. It is profitable and would net some cash to bolter up the company.

Anything else is not really a possibility.

I think that you can say that in 10 years that there will no Boeing Commercial division. It can either be sold off or collapse under its own weight. I believe that there is definitely a chance that if Airbus steps up production, that they can Boeing out of its misery. 20 years ago who thought both Sears and Kmart would be gone. Either Boeing CHANGES or it dies, just my opinion

I vote for Textron. Entrepreneurial, customer focused, quality. Midwest work ethic.
Hasn't developed that bloated, cocky management style so many big companies have.

If Boeing is smart they use the expected defence cash flow coming in from arming up against Russia and China to recover their commercial business. It's a growth market if they believe their own predictions. The commercial product pipeline is empty. This must be changed with a variety of smart products.
If they don't do this, it might all be intentional and a long term exit, MDD style. I hope not.

Noshow wrote:

If Boeing is smart they use the expected defence cash flow coming in from arming up against Russia and China to recover their commercial business. It's a growth market if they believe their own predictions. The commercial product pipeline is empty. This must be changed with a variety of smart products.
If they don't do this, it might all be intentional and a long term exit, MDD style. I hope not.

Boeing's leadership drastically needs to change. The fact they've been milking a "glorified RJ" for almost 60 years has shown their lack of vision and doing the bare minimum to keep stock prices up to please the shareholders thanks to a duopoly. Say what you want about Lockheed's exiting the market after the debacle with the L1011, but at least they took a shot and created a revolutionary aircraft with groundbreaking developments in avionics and systems. But, then again this was also the time Boeing "bet the farm" on the 747 and it paid off. Sadly, I think those days are over.

Boeing has the 787 to start with. This can be used for the NSA and NMA. Separating commercial airplanes from the military business by selling it doesn't make sense from my point of view.

Selling it to a foreign entity is a none starter on Nation Security grounds. The more likely option for Boeing is not to sell the Commercial but spinning off or selling the old McDonnell military division. Lockeed or Northrup would love to get their hands on that.

Noshow wrote:

If Boeing is smart they use the expected defence cash flow coming in from arming up against Russia and China to recover their commercial business. It's a growth market if they believe their own predictions. The commercial product pipeline is empty. This must be changed with a variety of smart products.
If they don't do this, it might all be intentional and a long term exit, MDD style. I hope not.

The Apache, F15, F18, Chinook are also 50-60 yr old programs. The same avoid investment / maximize cashing decease ?

https://fighterjetsworld.com/air/why-countries-are-still-buying-a-nearly-five-decades-old-f-15-eagle-fighter-jet/13854/

Look at Boeing Defense, Space & Security, most are based on real old cash-cows / dogs
Lack of vision and innovation isn't just on the civil site.. https://www.boeing.com/defense/#/products-services

keesje wrote:

Not the best for US aerospace IMO. Maybe good HQ moves to Washington, so they can keep an eye on the rich Boeing executives and their short term interests.
https://www.forbes.com/sites/lorenthomp ... a6e470424e

Like the politicians really care!

jfk777 wrote:

Selling it to a foreign entity is a none starter on Nation Security grounds. The more likely option for Boeing is not to sell the Commercial but spinning off or selling the old McDonnell military division. Lockeed or Northrup would love to get their hands on that.

Perhaps a demerger of the business would be better, perhaps they could name the demerged commericial aviation business as McDonald Douglas, after all in reality, MD did takeover Boeing right?

cedarjet wrote:

Could Boeing sell the commercial aircraft division? It doesn’t deliver a dime to the all-important shareholders in its current form, with no turnaround in sight. But imagine the payday if they sold it. And that would leave Boeing free to concentrate on Pentagon pork. Let’s face it the latter is the reason why they’ve moved to DC.

And new ownership, the moribund division might flourish. Could be sold to investors to create a new company, or to an existing aerospace giant such as Lockheed Martin or Raytheon who are looking to expand out of the purely military field. New energy, new vision, new money, it might be just what’s needed for the United States to regain its footing in civil aviation.

Crazy fever dream or actual possibility?

Why the hate for the move to Virginia, it's not like Illinois was this bastion of Aviation. The move is not about being close to the Pentagon and Capitol Hill, although that doesn't hurt. The Maryland, Northern Virginia region is full of young, highly educated workforce. My friend's daughter just Graduated from University of Maryland Aero Space engineering program. She was doing an internship with Boeing and now has accepted a full time position with the Company in Seattle. Between recent college grads like her, civilians and service members leaving the military looking for a career, and even recruiting tech industry workers I don't think you can find a better location.

I don’t think being merged or acquired by another aerospace company would be either possible or desirable.

What might make sense would be the acquisition of BCA by a Hedge Fund(s), who could overhaul the dreadful top heavy unresponsive management structure.

That might unlock a lot of value in the enterprise and allow it to go public again after several years.

A quote from the Forbes article from an earlier post:

"At the turn of the century, following a merger with McDonnell Douglas, Boeing Chief Operating Officer Harry Stonecipher pressed executives to expand the company’s military offerings because he doubted the company’s commercial operations could compete successfully with a surging Airbus."

I have repeatedly mentioned these things but no one seems to pick up on it. Boeing has to meet the demands of Wall Street quarterly reports (for a variety of reasons good and bad). Airbus has major ownership by European countries who have charged it with building great planes, hiring great employees at good wages, doing most of it in Europe and making some profit to boot. There is nothing nefarious about what Europe has done. The US with its bankrupt lack of effective industrial policy has let the race to the bottom kill Boeing Commercial. This all in the name of 'free market fundamentalism' which in fact does not, did not, and never will produce anything but failure.

Free markets are a good thing to keep in view, but cannot and will not ever be pure. Industrial policy, denied by current Republicans at least in their propaganda, always happens. The question is whether or not that industrial policy is functional or dysfunctional.

It is probably not going to happen. But Boeing is distracted from the commercial aircraft business. A de-merger from the military business would be very positive.

Perhaps Rostec, if it wants to expand its commercial sector business.

Avatar2go wrote:

keesje wrote:

The Apache, F15, F18, Chinook are also 50-60 yr old programs. The same avoid investment / maximize cashing decease ?

Look at Boeing Defense, Space & Security, most are based on real old cash-cows / dogs
Lack of vision and innovation isn't just on the civil site.. https://www.boeing.com/defense/#/products-services

Boeing Defense has the T-7 which is an entirely new digitally designed platform. Also the X-39 which is the only flying space-plane at present. Also the Orca autonomous undersea vehicle, which is the first of it kind. Also Starliner which is fairly innovative in its design.

It's true that Boeing continues to leverage legacy defense products that continue to sell well. Those products are all updated to modern standards of avionics. Nothing whatever wrong with that. But the idea that they represent lack of vision and innovation is pure nonsense, peddled by those hoping Boeing will fail. The defense business remains strong.

I remember reading somewhere that someone let slip that the NGAD is a Boeing aircraft. Haven't been able to find that quote.

Avatar2go wrote:

It's true that Boeing continues to leverage legacy defense products that continue to sell well. Those products are all updated to modern standards of avionics. Nothing whatever wrong with that. But the idea that they represent lack of vision and innovation is pure nonsense, peddled by those hoping Boeing will fail. The defense business remains strong.

And this has nothing to do with Boeing, but rather just how DoD program works. Defense contractor once they win a major program expect those programs to be around for 30 years minimum anyway...

STT757 wrote:

Why the hate for the move to Virginia, it's not like Illinois was this bastion of Aviation. The move is not about being close to the Pentagon and Capitol Hill, although that doesn't hurt. The Maryland, Northern Virginia region is full of young, highly educated workforce. My friend's daughter just Graduated from University of Maryland Aero Space engineering program. She was doing an internship with Boeing and now has accepted a full time position with the Company in Seattle. Between recent college grads like her, civilians and service members leaving the military looking for a career, and even recruiting tech industry workers I don't think you can find a better location.

Probably just somebody who's pissed that Boeing is not moving its HQ back to Seattle.

But even Raytheon just recently announced they will moved their HQ to Arlington to be closer to Pentagon (albeit it's more or less a change of official address).

As far as selling BCA - just no...no...no. The max that will happen is Boeing splitting into 3-4 separate companies, but who has the money to buy BCA alone anyway? Airbus?

EDIT:

DaCubbyBearBar wrote:

I think that you can say that in 10 years that there will no Boeing Commercial division. It can either be sold off or collapse under its own weight. I believe that there is definitely a chance that if Airbus steps up production, that they can Boeing out of its misery. 20 years ago who thought both Sears and Kmart would be gone. Either Boeing CHANGES or it dies, just my opinion

Apples and Oranges. Airbus and Boeing essentially has a duopoly in larger civilian aviation industry. Sears/Kmart faces a LOT more competitions and their presence are certainly not missed.

RJMAZ wrote:

I could see Tesla buying Boeing commercial in 2-4 years if the 737-10 can't be certified and half of the 777X order book cancels.

Tesla would also have deliver and grow flawlessly to be able to afford such a large purchase.
1) Tesla and Berlin are at full capacity.
2) Robotaxi network comes online.
3) Tesla robot performs basic labour tasks.

Tesla would easily have $5 trillion market cap at that point and they could then simply buy Boeing commercial aviation. A large electric VTOL passenger aircraft would get launched to revolutionise short haul aviation. Tesla can then provide the recharging infrastructure at the airports. As the aircraft would have short range it could simply stop for a 30 minute recharge or airlines could simply plan their network like trains with say 5 recharge stops between New York and Los Angeles. Passengers can get on and off etc.

Why would Tesla have to buy Boeing in order to develop the aircraft you suggest? Couldn't they just do it on their own? Why not spend the money that would be used to buy Boeing on R&D and facilities for design and construction?

ER757 wrote:

RJMAZ wrote:

I could see Tesla buying Boeing commercial in 2-4 years if the 737-10 can't be certified and half of the 777X order book cancels.

Tesla would also have deliver and grow flawlessly to be able to afford such a large purchase.
1) Tesla and Berlin are at full capacity.
2) Robotaxi network comes online.
3) Tesla robot performs basic labour tasks.

Tesla would easily have $5 trillion market cap at that point and they could then simply buy Boeing commercial aviation. A large electric VTOL passenger aircraft would get launched to revolutionise short haul aviation. Tesla can then provide the recharging infrastructure at the airports. As the aircraft would have short range it could simply stop for a 30 minute recharge or airlines could simply plan their network like trains with say 5 recharge stops between New York and Los Angeles. Passengers can get on and off etc.

Why would Tesla have to buy Boeing in order to develop the aircraft you suggest? Couldn't they just do it on their own? Why not spend the money that would be used to buy Boeing on R&D and facilities for design and construction?

This. Intentional hollowing out of expertise, manifested by the whole MAX debacle, and other recent problems, basically reduce the case to invest into Boeing, if you are innovator in aerospace.
You would get a very expensive badge, huge accounting goodwill, high costs and legacy issues.

In the meantime, a lot of stuff is done by subcontractors. They eventually might become the repositories of a lot of institutional wisdom, more so than the OEM.
Why buy the OEM, if his supply chain is up for grabs?

This is an interesting topic indeed. Having worked for BCA awhile back in Seattle, IMHO one (1) of the main issues with BCA are the unions, with their stifling contracts. BCA management stuck a dagger into the unions when they moved production to SC. Yes, there are some issues with the final assembly of the 787s but to management, it is worth the short-term pain. BCA is entrenched in WA with their Renton and Everett facilities and that maybe a blessing on why a sale would never go thru.

I'm sure Antonov is looking to diversify it's portfolio and manufacturing locations...

Splintering off of BCA wouldn't happen due to anti-trust laws.Perhaps what is needed is to still be one company but a restructuring of management with top BCA side in Seattle and military and the very top overall management in DC. The BCA side would still have some overlap with the military side but with separate day to day management, the BCA side would be in better control of development, engineering, less penny pinching and closer to the main production sites.