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stlgph
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More On Boeing Job Cuts

Wed Mar 30, 2016 1:39 am

Per the Seattle Times
Could see an final tally of 8,000 cut.

http://www.seattletimes.com/business...=twitter&utm_campaign=owned_buffer
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MaverickM11
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 1:41 am

This will pair well with their beautiful ads they've been running celebrating their 100 year commitment to the US o' A 
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stlgph
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 2:34 am

Quoting MaverickM11 (Reply 1):
This will pair well with their beautiful ads they've been running celebrating their 100 year commitment to the US o' A 

  
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nikeherc
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 3:46 am

If you can't sell your products and make a profit, you can't stay in business. If you have to charge too much, you can't sell your product. If you can't sell your products and stay in business, you can't keep people on your payroll.
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seahawk
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 5:02 am

If you don´t need the workers and they would reduce the dividends, you need to fire them. Good move and it should keep Boeing in a very strong position and make shareholders happy.
 
Aither
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 5:08 am

Quoting nikeherc (Reply 3):

If you can't sell your products and make a profit, you can't stay in business. If you have to charge too much, you can't sell your product. If you can't sell your products and stay in business, you can't keep people on your payroll

yeah right... and what about the share buybacks ? money made by Boeing should have been kept for investment, not distributed to please bankers asking enormous amounts of return on investment with almost no risk in this industry.

I don't want to downplay some obvious difficulties but the 737 backlog is huge and it continues to sell in massive numbers. They have money & time to invest to make it better or to launch a new narrowbody. But I guess it's just quicker to make money by reducing costs than doing the necessary investments.

Boeing looks like a company managing the past and does not prepare the future. Who would want to do business with them?

[Edited 2016-03-29 22:13:54]
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Prost
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 5:54 am

Quoting Aither (Reply 5):
Boeing looks like a company managing the past and does not prepare the future. Who would want to do business with them

Emirates, British Airways, Etihad, Qatar, American Airlines, United Airlines, ANA, Cathay Pacific, Japan Airlines, ANA...
 
scotron11
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 7:57 am

Quoting seahawk (Reply 4):
If you don´t need the workers and they would reduce the dividends, you need to fire them. Good move and it should keep Boeing in a very strong position and make shareholders happy.

I guess you are a shareholder then? So far they haven't imposed mandatory job cuts....most will come through attriction.

Interesting to note "significant cutbacks on business travel". Not sure what kind of message that sends to their customers.
 
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scbriml
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 8:19 am

Quoting Aither (Reply 5):
yeah right... and what about the share buybacks ? money made by Boeing should have been kept for investment, not distributed to please bankers asking enormous amounts of return on investment with almost no risk in this industry.

Boeing is run purely for the benefit of its shareholders.

Quoting scotron11 (Reply 7):
Interesting to note "significant cutbacks on business travel". Not sure what kind of message that sends to their customers.

Shouldn't affect customers at all.   

In any large, global business there's a not-insignificant amount of discretionary travel that happens when the company is doing well. When harder times arrive, that discretionary travel is an easy target for savings. Always happened at the company I worked for - suddenly all non-essential travel is stopped and even essential travel has to be justified and approved at a senior level. It's pretty standard in any large corporation trying to reduce costs.
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HAL
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 8:36 am

Quoting scbriml (Reply 8):
Boeing is run purely for the benefit of its shareholders.

That, right there, is the reason so many people distrust corporations, hate Wall Street, and cry for change. This idea that corporations are solely responsible to shareholders is why the middle class in the U.S. is crumbling. In years past - the years so often held up as 'the golden age we're striving for' - corporations looked at their employees as assets, not liabilities that should be cut, pared, and tossed away.

There should always be a balance. Shareholders are important as they provide capital for operation. Employees are important as they provide the energy for production, innovation, and expansion. The local community is important as they offer a place for employees to enjoy, live and a place for the business to prosper. Lose focus on any of those, and it affects all the others.

HAL
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scbriml
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 11:35 am

Quoting HAL (Reply 9):
That, right there, is the reason so many people distrust corporations, hate Wall Street, and cry for change.

But that's how it's always been for the big, public corporations.

I worked for a large, global American company for nearly 34 years. Their number one goal was always safety, but the second goal was always "Maximise shareholder value".

Quoting HAL (Reply 9):
In years past - the years so often held up as 'the golden age we're striving for' - corporations looked at their employees as assets, not liabilities that should be cut, pared, and tossed away.

I don't know that those days ever really existed for the big corporations. Smaller, "family run business", maybe.

Quoting HAL (Reply 9):
There should always be a balance. Shareholders are important as they provide capital for operation. Employees are important as they provide the energy for production, innovation, and expansion.

And progressive companies, like the one I worked for, will make their employees shareholders and provide share incentives for employees. Nothing encourages the employees to do their best than having a stake (however small) in the company. But, at the end of the day, if things go south, it's always the employees that will lose out.
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r2rho
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 8:48 pm

Quoting scbriml (Reply 8):
When harder times arrive
Quoting nikeherc (Reply 3):
If you have to charge too much, you can't sell your product. If you can't sell your products and stay in business, you can't keep people on your payroll.

Harder times? No profits? As if Boeing were doing poorly...
the only problem here is that some shareholders are demanding a disproportionate return on investment. As for harder times, it's a perfect duopoly in a highly conservative and rather low risk business. You can't really do anything wrong unless you screw it up yourself.

Quoting scbriml (Reply 10):
But that's how it's always been for the big, public corporations.

Not really, or certainly not to the extent of today. Shareholders have never wielded so much power or held so much influence over individual companies' strategies as they do today.
 
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par13del
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 8:57 pm

Quoting r2rho (Reply 11):
Harder times? No profits? As if Boeing were doing poorly...
the only problem here is that some shareholders are demanding a disproportionate return on investment. As for harder times, it's a perfect duopoly in a highly conservative and rather low risk business. You can't really do anything wrong unless you screw it up yourself.

Realy, so all the talk that Airbus is out-selling Boeing, able to price their products lower because they have lower cost, have better a/c that more customers desire, only show profits because they use Programming Accounting and if they did like the rest of the world they would have reported losses makes never no mind?

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Ruscoe
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RE: More On Boeing Job Cuts

Wed Mar 30, 2016 11:05 pm

Airbus are clearly under cutting Boeing on price. Boeing have responded to this and have been on a cost cutting drive, for years, using more efficient production methods, more supplier risk taking, and much more, and now these are in place, they are starting on employee benefits and numbers. The fact that they have left large scale redundancy options to last indicates to me that for a large company they do have a bit of heart and sense of community.

Whether you use program accounting or contract accounting or some other method, it makes no difference, because the money has to be found and spent,, regardless of how the figures are presented . Personally, I think the Boeing method of program accounting is very use full, transparent,honest and straight forward, Money which is written out of a program as it is spent, is easy to forget about, in your pricing, where as, the deferred costs in program accounting, are effectively added back as a cost of sales, therefore adding to selling price over the length of the program.
However both Airbus and Boeing do both, but at different points on the spectrum. All costs have to be paid for over a time frame much shorter than a typical aircraft program, and costs have to be covered some how, out of profit, by borrowings, advances, by bonds by equity and so on and so on.

I suspect that Boeings share buy back program, is to reduce risk for those investors using equities, or covering debt investments by buying shares. Airbus has a substantial share buy back program also. If you want to get a good idea of how a Company is going look to see if their borrowings, or issued Equity, bonds, advances etc are doing over time.

So Boeing cutting it's workforce is a sign of a well run company, meeting the challenges, and by so doing, making the jobs of those who are not made redundant, more secure.

Ruscoe
 
dc10lover
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 12:05 am

KOMO TV did say up to 8,000 cut. Probably more on the way.
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sxf24
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 12:11 am

Quoting dc10lover (Reply 14):
KOMO TV did say up to 8,000 cut. Probably more on the way.

The 8,000 number is based on a Seattle Times article where Dominic Gates concluded that because one Boeing unit (Test and Evaluation) was cutting 10% of staff, all Boeing units must be cutting 10% of staff. The article has been updated several times online, each time softening the language. This leads me to conclude that Dominic Gates did not have a good source and is trying to walk his inflammatory language backwards. Par for Dominic Gates.
 
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Erebus
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 12:38 am

I like this.

Quote:
While the 737s had once been much better than the A320s, Airbus has narrowed the gap and the A321neo is now “a very competitive machine against the MAX 9,” Conner acknowledged

So, the A321 has finally 'caught up' with the 739 according to him.  
 
Okie
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 1:59 am

About the only thing that really grabbed my attention was that powers that be are looking for dollar figure. We will assume the powers that be know by what percentage Boeing is being out bid.

They indicate that can come from supplier, manufacturing efficiencies, or layoffs.
The article indicate loss of hundreds of managerial, whatever number hundreds is, and 1,000 or so buyouts.
That indicates to me they are not anywhere close to 10% or 8,000.



Okie
 
nikeherc
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 2:51 am

There are many stakeholders in a corporation: the shareholders; the employees; the customers; the community and its suppliers. The corporation has a moral and an economic duty to all of them.

To the shareholders, it owes sound financial soundness and a fair return on investment.

To the employees, it owes fair wages, a safe and healthy work environment, respect and honest and direct communications.

To the customers, it owes a product that meets agreed upon specifications and quality. It also owes honest communications whenever there are problems and safety concerns with the product.

To the community, it owes environmental awareness and protection; responsible management of its facilities and general good neighborliness.

To its suppliers, it owes honest feedback and reliable planning information.

Of course there is more to it, but it all boils down to ethics and fairness.
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MarcoPoloWorld
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 3:14 am

Wow... Hard to believe. With a Boeing order book that is bursting at the seams... cutbacks?

Then executives just enriching themselves with stock performance tied bonuses, quick share buybacks instead of long-term investments in their product and community will tick their metric up. Don't ya' love it.

Then, GDP growth just being translated into inefficient waste by the 1%. Nice....

Perhaps Alaska Airlines' (which by the way, isn't based in Alaska) slogan from now on should be "shamefully all Boeing".
 
frmrCapCadet
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 3:27 am

If corporations are run solely for the benefit of their shareholders, then legislatures have every reason to ensure that the laws governing corporations lead to the benefit of our citizens.
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seahawk
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 5:26 am

The better question is why Airbus is able to undercut Boeing on price.
 
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BlueSky1976
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 6:26 am

...why not? Boeing does not own the market. The more competition it has, the better.
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HAL
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 7:19 am

Quoting scbriml (Reply 10):
But that's how it's always been for the big, public corporations.

From a view of economic history, I disagree. Before the early 1970s most (not all, of course) corporations struck a balance between shareholder profit, employee support and community engagement. The policies of the government changed then, drifting more toward the famous 'trickle down theory' espoused by more conservative economists and put into practice by many politicians, especially during the Reagan presidency. The laws guided policy toward focusing benefits more toward the smaller number of investors & shareholders instead of employees or the community.

It only takes a little time studying the economic history of the last half century to see how this has played out.

HAL
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StTim
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 7:58 am

Interesting item on Leeham on this topic. It states Boeing wants a profit margin in the mid teens. That is an incredible figure for a mature industry. Current figure is 9%.

http://leehamnews.com/2016/03/31/air..._source=dlvr.it&utm_medium=twitter
 
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enzo011
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 11:05 am

Quoting StTim (Reply 24):
Interesting item on Leeham on this topic. It states Boeing wants a profit margin in the mid teens. That is an incredible figure for a mature industry. Current figure is 9%.

For a company that is in great financial health it is chasing some aggressive figures for some reason. I guess it has to be in the mid teens to keep up the projected profits for all of their programs.
 
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seahawk
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 11:20 am

Shows how wat a good company Boeing is.

"The corporate priority is shareholder buyback and dividends, at the rate of some $6bn a year. Costs need to be cut to help support this commitment."

and a BCA of 15%, this is what shareholders want to hear. I am happy about the focus and foresight of the management to make this happen.
 
dare100em
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 11:42 am

Quoting StTim (Reply 24):
Interesting item on Leeham on this topic. It states Boeing wants a profit margin in the mid teens. That is an incredible figure for a mature industry. Current figure is 9%

This is insane and IMO a main threat for Boeing in the long run. 15% is a good value for a IT-company but for a big industrie OEM it's very hard to achieve. Even BMW or Mercedes only have about 10% and don't redispute more than 1/3 to shareholders.

It is clear while Boeing likes to achieve it, they clearly wan't to spill out billions every years to shareholders.

If they just would go for e.g. 10% and dump about 3-4% per year to shareholders it would be more than fine. Who get's 4% interest these days? With that, the MOM could easily be financed and the long-term outlook would be better IMO.

But I know it's good to be greedy these days....
 
coolian2
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 11:48 am

Quoting dare100em (Reply 27):
But I know it's good to be greedy these days....

The shareholders win and the people that make the actual product get the shaft.

God, I LOVE trickle down economics.
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seahawk
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 12:00 pm

Quoting coolian2 (Reply 28):
The shareholders win and the people that make the actual product get the shaft.

God, I LOVE trickle down economics.

You are free to buy shares and share the risk ad the reward.
 
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Stitch
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 12:31 pm

Quoting scbriml (Reply 10):
I worked for a large, global American company for nearly 34 years. Their number one goal was always safety, but the second goal was always "Maximise shareholder value".

It's grown far worse once senior executive compensation was tied directly to "shareholder value" - in other words, the stock price - because "shareholder value" now equals their own value.

Quoting seahawk (Reply 29):
You are free to buy shares and share the risk ad the reward.

Pretty much what I did. I've been a Boeing shareholder since the mid-1990s and when I was culled in the post-9/11 drawdown, I just bought more shares. I've been fortunate enough to make as much (or more) since leaving Boeing and my shares have appreciated nicely in value.
 
Flyglobal
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 12:35 pm

"The pitcher goes often to the well, but is broken at last!"

So what will be better long term?

30 more years with 10%
15 more years with 15%
5 more years with 25%

What is the best long term?

Wonder why Vehicle Startup Tesla can make losses year after year and gets shareholders standing ovations, while Boeing gets smacked if they fall below 10% and can't afford a year with less money.
Good old Amerika will kill the latest industrial compnies that way I beleive.

Hope all the best for Boeing

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threeifbyair
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 12:37 pm

Quoting Ruscoe (Reply 13):
Airbus are clearly under cutting Boeing on price.

Sort of. You could also say the ECB is undercutting the Fed.

The strong USD is very bad for Boeing. Airbus earns revenues for its aircraft in USD, but pays most of its workers in relatively cheap EUR. Meanwhile, Boeing has nearly 100% of its costs in USD. Compared to 2 years ago, Airbus's costs in USD terms have declined ~20%
 
r2rho
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 12:55 pm

Quoting StTim (Reply 24):
Interesting item on Leeham on this topic. It states Boeing wants a profit margin in the mid teens. That is an incredible figure for a mature industry. Current figure is 9%.

That is more than incredible - it is ridiculous and unrealistic for a manufacturing company. If the shareholders want such an ROI, they are free to invest their money in silicon valley startups instead.

Quoting seahawk (Reply 26):
"The corporate priority is shareholder buyback and dividends, at the rate of some $6bn a year. Costs need to be cut to help support this commitment."

and a BCA of 15%, this is what shareholders want to hear. I am happy about the focus and foresight of the management to make this happen.

It is not foresight, but shortsight. Boeing is potentially jeopardizing the future in exchange for short term ROI for its shareholders. Oh but wait, current management won't be around anymore by then anyway...
 
MaverickM11
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 1:01 pm

Quoting nikeherc (Reply 3):
you have to charge too much, you can't sell your product. If you can't sell your products and stay in business, you can't keep people on your payroll.
Quoting seahawk (Reply 4):
Good move and it should keep Boeing in a very strong position and make shareholders happy.
Quoting scbriml (Reply 8):
Boeing is run purely for the benefit of its shareholders.

I'm fine with that. But shareholders should be demanding better leadership. Boeing is essentially a duopoly with a practically guaranteed government pipeline of revenue. And yet it seems their only strategy is to move into an ivory tower in Chicago, split labor and play it off each other, outsource everything, and absolve themselves of responsibility when it all goes to pot, and then claim poverty.

Quoting r2rho (Reply 33):
Oh but wait, current management won't be around anymore by then anyway...

  
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scotron11
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 2:20 pm

Quoting r2rho (Reply 33):
Oh but wait, current management won't be around anymore by then anyway...

McNerney retires on a pension of $3.9M per year..........not bad if you can get it hah??
 
nry
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 2:32 pm

Quoting StTim (Reply 24):
Before the early 1970s most (not all, of course) corporations struck a balance between shareholder profit, employee support and community engagement.

That was a completely different world, with since-discredited business concepts like conglomerates and lack of real global competition. American companies could be fat, dumb and happy then. The world is moving much faster these days and the "trickle down" you so really despise actually has occurred. Worldwide, poverty has decreased, technology that only big evil corporations could get is now in your pocket and access to inexpensive goods is prevalent.

You're telling me that living in 1974 is better than living in 2016? Give me a break.
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frmrCapCadet
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 2:33 pm

Dominic Gates has provided reliable reporting on the aircraft industry for a long time. If he has sources saying all over cuts in the Seattle area that is likely what will happen.
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Stitch
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 3:13 pm

Quoting MaverickM11 (Reply 34):
I'm fine with that. But shareholders should be demanding better leadership.

As long as the current leadership is running the stock up (i.e. - "returning value"), that is good enough for them.

It's when they fail to do so that the shareholders demand "better leadership" - witness the current Board of Directors fight going on at YAHOO, where the hedge fund Starboard Value LP is trying to toss the current BoD because they feel the current Board is not working hard enough to improve the stock price.
 
PHX787
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 3:18 pm

Quoting Prost (Reply 6):
Japan Airlines,

They've been going to Airbus recently though.

Quoting MaverickM11 (Reply 34):
Boeing is essentially a duopoly with a practically guaranteed government pipeline of revenue

Hmmm, makes sense but i dont think you're gonna see any new aircraft startups from Silicon valley anytime soon   

We will see how much of an impact Bombardier, Mitsubishi, et al., have on the market. Until then, you're right on the nose.
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nry
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 5:06 pm

Quoting PHX787 (Reply 39):
Hmmm, makes sense but i dont think you're gonna see any new aircraft startups from Silicon valley anytime soon

Not for commercial, but don't be so sure about that with general aviation....
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Stitch
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 5:11 pm

Quoting Prost (Reply 6):
Japan Airlines
Quoting PHX787 (Reply 39):
They've been going to Airbus recently though.

To diversify suppliers, however, not because they do not approve of Boeing Commercial's management.  
 
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enzo011
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RE: More On Boeing Job Cuts

Thu Mar 31, 2016 5:52 pm

Quoting Stitch (Reply 41):
To diversify suppliers, however, not because they do not approve of Boeing Commercial's management.

You could argue it is due to the management failures that they went to Airbus. If there was no 787 delays I doubt they would have ordered the A350. So while they haven't been shouting for the removal of the management, their actions on the orders surely have been a clue...  
 
F9Animal
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RE: More On Boeing Job Cuts

Fri Apr 01, 2016 12:35 am

Boeing execs in Chicago are evil. Boeing also should lose every tax break in the state of Washington. There are several politicians pushing to rescind Boeing's tax breaks. Corporate greed is running rampant. All executive pay at Boeing should also be slashed in half.

We have witnessed idiots at the control of this company, including McNerney. That idiot knew tape and glue, and royally screwed the pooch on the 787. He is and was the most evil SOB ever. What he and his crooked Chicago crew did to the workers was outright terrible.

Boeing execs are today's modern day mafia. Pure criminals, liars, and thiefs. They actually cried foul when they learned of the potential rescind of the tax breaks. They lied, broke the agreement, and should be forced to pay them taxes. I am sick of corporate welfare on the tax payers back. Boeing signed and agreed to keep a threshold of jobs, and turned around the next day, and outsourced. Enough is enough.

For those that say Boeing is leaving Seattle? Good. Maybe we could get Airbus in here. I still won't fly on the 787, especially those built in Charleston.
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Aither
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RE: More On Boeing Job Cuts

Fri Apr 01, 2016 5:25 am

Quoting scbriml (Reply 8):
Boeing is run purely for the benefit of its shareholders.

And that's why COMAC will take over Boeing if things don't change.

Airbus undercutting on price is laughable when you know how much taxes European citizens and companies have to pay versus the US.

Boeing was also benefiting from a weak dollar versus the Euro but FX is now back to a more normal situation.

The real explanation is that they want a 15% return on investment for their shareholders friends. And at a time of low interest rates, for an almost medium term risk free company, 15% is absolutely not justified : Boeing could find tons of investors at even 5% ROI. All of this is about current shareholders stealing company's money. It has nothing to do with financing, investment capacity etc.
It's stealing company's money, employee's revenues, jeorpardizing the future of next generations. Rather than blaming their competitors they should blame their top management.

[Edited 2016-03-31 22:42:22]
Never trust the obvious
 
StTim
Posts: 3685
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RE: More On Boeing Job Cuts

Fri Apr 01, 2016 7:19 am

I find myself in a qunadry on this. Boeing is run for the benefit of it's shareholders. That is how public companies are run. The issue is that shareholders no longer seem to be in anything for the long haul. Short term is everything. That short termism can cause many issues. We see many at Boeing with the need to pull profits forward, almost at any cost.

Secondly the distancing of senior management from the day to day operation of the companies. The rewards they are assigned (I use assigned rather than earned is on purpose) is out line with their staff. They are immune to the hardships they force on their companies in their focus on reducing costs (not their costs mind). The fact that a lot of their pay is based on shares or share price growth gives an almost fanatical focus on the short term.

Now any well run company should always be looking at how they can do things better, with lower costs for higher quality. It should never be hell we are in a hole how can we do things cheaper. It should always be how can we do it better (and cost is part of that, time is another and the final part of the triangle is quality). If they are not doing this then they should not be in managemenbt.

To consider that they can acheive 15% profitability is crazy. Airbus will happily say we can live on 8 to 10% in this market. We can focus on doing things better and still undercut those crazy numbnuts at Boeing. If so Boeing then get into another round of cost focussed changes.
 
sxf24
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RE: More On Boeing Job Cuts

Fri Apr 01, 2016 12:46 pm

Quoting Aither (Reply 44):
The real explanation is that they want a 15% return on investment for their shareholders friends. And at a time of low interest rates, for an almost medium term risk free company, 15% is absolutely not justified : Boeing could find tons of investors at even 5% ROI. All of this is about current shareholders stealing company's money. It has nothing to do with financing, investment capacity etc.

The 15% is pretax margin, not ROI, but the real issue is that investors won't settle for something lower. The people that own Boeing stock are looking to allocate their investments between Boeing and other large industrial companies, like GE, or even Delta, that are making much better margins. Boeing has probably gotten some leeway over the past decade due to the number of development programs. Posting lower margins is not sustainable. If Boeing can't attract or retain investors, it's ability to borrow and find its own growth with disappear: that's the reality of being a public company.

It sucks that anyone is loosing their job, but in some ways, it's better that Boeing is taking a bit of a offensive position and reducing costs when times are good, rather than waiting until it's too late and they're desperate.
 
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RayChuang
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Joined: Sat Jun 24, 2000 7:43 am

RE: More On Boeing Job Cuts

Fri Apr 01, 2016 1:20 pm

Actually, I think what is really happening is Boeing moving more and more 787 production to its South Carolina facility. As such, it needs less workers in the Seattle area.
 
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tlecam
Posts: 1498
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RE: More On Boeing Job Cuts

Fri Apr 01, 2016 1:46 pm

In Ostrower's article in the WSJ, there's quite a bit of discussion about the erosion of a price per plane premium that Boeing used to command over Airbus, and how that was the impetus of the workforce reductions.

I really don't know much about airplane pricing. However, at a macro level, that would seem to make sense. I would ugess that Boeing won't command as much of premium for the 737MAX over the 32x NEO as it may have commanded int he past.

I'm less clear on the 787/777X vs 338/9 and 350 XWB price implications, but it would seem that the leverage to command a premium isn't as clear.
BOS-LGA-JFK | A:319/20/21, 332/3, 346 || B:717, 735, 737, 738, 739, 752, 753, 762, 763, 764, 787, 772, 744 || MD80, MD90
 
PHX787
Posts: 7892
Joined: Thu Mar 15, 2012 7:46 pm

RE: More On Boeing Job Cuts

Fri Apr 01, 2016 4:08 pm

Quoting Stitch (Reply 41):
To diversify suppliers, however, not because they do not approve of Boeing Commercial's management.
Quoting enzo011 (Reply 42):
If there was no 787 delays I doubt they would have ordered the A350.

I dont know, after their BK they really shook up how they conducted business and from what I've seen in the last 3 years with JL, they have really tried to differentiate themselves from NH as much as they could.

I guess going to Airbus is one way to diversify their fleet and differentiate but then again isn't NH making plans too? I haven't been following the aviation industry here much recently though.
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