Due to never-ending 737 Max issues, plane orders at Airbus have soared while Boeing Orders Fall to 16-Year Low.
Quick Comparison Facts
- Boeing New Orders: 246 new orders for commercial jets of all types before cancellations and model swaps is the lowest tally since 2003.
- Airbus New Orders: 1,131 new orders last year for a net total of 768 counting cancellations.
- Boeing Deliveries: 380 aircraft, including military versions of its jetliners, a 14-year-low that compares.
- Airbus Deliveries: Airbus had 863 deliveries, a record high.
- Boeing Backlog: 4,500.
- Airbus Backlog: The A320, Airbus’s rival to the Boeing 737 family, is currently sold out until late 2024.
- Airbus new orders were boosted by the launch of a A320 variant that boasts more range. The bigger A321 XLR has been eating into the potential market that Boeing envisions for its first all-new aircraft model in a decade.
- American Airlines Group Inc. said Tuesday that it would remove the MAX from its schedules until June, two months longer than previously planned.
Layoffs Tensions Spread
The 737 Max woes are starting to impact Boeing suppliers like Spirit AeroSystems. A couple weeks ago, Spirit announced it would shift its workforce around to work Airbus production.
On January 10, Spirit AeroSystems announced a 2,800 Worker Lay Off.
The biggest Boeing Co. 737 MAX supplier said it is planning an initial 2,800 layoffs, the first announced job cuts since the grounding of a plane that is rippling through the broader aerospace industry.
Spirit AeroSystems Holdings Inc. makes the fuselage and engine parts for the MAX and had been producing enough for 52 jets a month before Boeing said it would freeze assembling the planes in January for a “temporary” time.
Spirit Chief Executive Tom Gentile said the decision was a “necessary step” given the uncertainty with MAX production. The company said it could have to cut more workers.
Internal Comments Released
Also on January 10, Boeing Released Internal Documents showing some employees mocking the aircraft and other bragging about tricking the FAA into certification.
- “Would you put your family on a MAX simulator trained aircraft? I wouldn’t”
- “This airplane is designed by clowns, who in turn are supervised by monkeys.”
- Mark Forkner, then chief technical pilot for the 737 MAX, in the messages released earlier described “Jedi mind tricking” regulators and said he had unknowingly lied to the FAA. Mr. Forkner’s name was redacted from the messages, but his title, 737 chief technical pilot, wasn’t.
Trump Will Suck Airbus Into the Crisis at Boeing
Also recall the opinion of Leeham regarding a tariff spillover: Trump Will Suck Airbus Into the Crisis at Boeing.
“Airbus is almost certain to become a target for higher tariffs. I won’t rule out adding the Mobile (AL) final assembly line to sanctions despite Alabama being the No. 1 supporter of Trump. There is no way Alabama will vote for a Democratic challenger to Trump; it’s a completely safe state,” commented analysts at Leeham.
Meanwhile, Airbus to Expand in UK After Brexit
Manufacturing Already Weak
The latest ISM report was a disaster: Manufacturing ISM Down 5th Month to Lowest Since June 2009
Following the GM strike there was a job recovery that lasted precisely one month: Manufacturing One Hit Wonder is Over, Jobs Up a Modest 145,000 in December. Manufacturing jobs unexpectedly declined by 12,000.
Expect another 2,800 or so layoffs from Spirit.
Tomorrow, Trump and China to Sign Trade War Ceasefire, but that will not restore any jobs.
Mike “Mish” Shedlock
Well, in some ways, it’s funny.
BOEING CLARIFIES: 737 MAX WAS DESIGNED BY MONKEYS, WHO WERE SUPERVISED BY CLOWNS
Boeing has reacted strongly to the emails, saying that they are from “obvious idiots who shouldn’t have been hired,” who, “had the situational awareness of braindead gibbons.”
Durable goods orders will take (major) hit as this reverberates thru the supply chain … couple this with rising auto loan delinquencies (highest since 2011) and likely cutback in auto sector …
….Boeing still up 300% since 2016….Insanity obviously has no limits in a Central Banks driven financial system !
Think about this, the stock price at $320 is still $100 more than in 2017. Something is wrong with this image…
Boeing is a large company. It is bound to have unhappy employees who disagree with management. This email in of itself proves little.
The actual documented problems with the MAX, on the other hand, could destroy the company. Sending execs to jail will not suffice to undo the damage.
While that particular email in and of itself doesn’t “prove” anything; in any economy where management is hired and retained based on share price performance, and share price performance is driven almost entirely by actions undertaken by The Fed to reward connected incompetents by robbing productive competents; over time all organizations will be staffed by clowns supervised by monkeys. Boeing just gets more attention, since planes falling out of the sky are harder to cover up with simple money printing, than similar failures at other equally inept organizations.
We’re late stage Soviet Union by now. Just with the Politburo rebranded The Fed. In order to make dumb people wearing Adam Smith ties feel better about only being dumb people wearing Adam Smith ties.
Please remember that bad news is good news. Boeing’s trouble deserve a cut in FED rate, and the pension world is expecting that debt issue priced 0.5% above ZIRP.
It’s not just the Max. Internal reports and conflicts are coming out about quality issues with other models, QA guys who tell their family to avoid the 787, etc.
Dreamliner is apparently a nightmareliner.
I had my worries about he 787, but no data to back that thus far.
Hopefully, I was worries were misplaced.
Keeping public trust established by a corporation costs 20% of what it costs to re-establish that trust.
I have a great idea. The Federal Reserve should implement a special QE program where they buy 737 Max’s from Boeing and add these planes to its balance sheet. The Fed can pay full retail price. This will alleviate Boeing from the ill effects of poor management decisions surrounding the 737 Max program. Kind of like how the Fed saved the big banks via QE 1, 2, 3 & 4 from their stupid business decisions. Additionally, the Boeing QE program will allow Boeing to continue stock buy-back programs. A few years down the road when Boeing is back on its feet the Fed can sell these airplanes into the market, but if it is too disruptive to the commercial aircraft market then the Fed can keep these planes on its balance sheet forever!
They wont buy the planes but they are the lender of last resort. Expect some acronym like TSLF which will be a revolving credit line at 0% interest as if Boeing were a bank.
“Kind of like how the Fed saved the big banks via QE 1, 2, 3 & 4 from their stupid business decisions.”
Don’t forget the banks criminal business decisions. William Black said the Banking scandal was 70 times bigger than the savings and loan scandal. Bernanke never referred anyone for prosecution.
Boeing could become a bank. Isn’t it?
The poor management decisions at Boeing, and everywhere else in The West and beyond, are, to quite an extent, direct results of The Fed.
Boeing’s share price has made a head and shoulders pattern over the last couple of years. With the right shoulder complete and the neckline being tested, look out below.
Also Uranus is aligned with Saturn so Boeing share price is sure to crash
“This airplane is designed by clowns, who in turn are supervised by monkeys.” Talk about hitting the nail on the head. Who would fly on a Max aircraft after this? I’d rather walk.
No one. No one will fly the MAX. It is dead.
They’ll rename it. Problem solved!
If you think that’s a joke, just wait and see.
A 737MAX by any other name will still be empty.
Not good for a company with negative shareholder equity and looking to issue even more debt. Does anybody look at balance sheets anymore?
9.7B in cash, 14.8B in receivables. How much of the receivables are Max aircraft? (That’s the least of their issues.)
Here is the killer, 87.4B in accounts payable. 4Bin short term debt, 20B in long term debt. I checked the accounts payable twice. That number is enormous.
This is a terrible position to be in and these numbers were September 2019.
Somebody please, tell me I’m wrong.
Companies such as Boeing normally make money in the aftersales market. It is that business which is all but sure to come in and which has a value is my guess as to what isn’t on the balance sheet as there is no easy way to put it on there.
The world needs Boeing to come back from this. A duopoly is bad but a monopoly is even badder than my English.
Asian, specifically Chinese, manufacturers will solve the mono-duopoly conundrum. They’ll literally have no choice, given the sheer pace of decline in The West’s ability to solve real problem of any complexity.
The 737-MAX fiasco could do the company. More accurately, lead to major restructuring. I’d take 10 years before they regain reasonable reputation.
Boeing simply following the lead of virtually every US industry,ie offshore to take advantage of slave labor…..and they’re fate is the same as GM,Black & Decker,Whirlpool,move to China,pay them a dollar an hour (if that),ship the cheap ass crap back to Walmart,dump it on US consumer .Might work for a while,but it’ll catch up to you and bite you ass.
by then, the bonus checks will have long cleared, the stock options exercised and their executive recipients will have moved on to their next “opportunity”. lather, rinse, repeat.
Sorry LOL that’s really not Boeing’s problem…it takes 5 years to certify and engineer to work on an aircraft “unsupervised” this is not a problem of low salaries for the workers — it is in fact a management decision to NOT invest in aircraft, to CUT corners (with a unstable platform) and then browbeating everyone (including test flight crews — which is the whole simulator issue) to agree that the aircraft is good to go. Lastly, the federal government’s annual cut in the FAA’s budget so that all inspections and certifications were done by Boeing and not the FAA
Airplane business effectively is a zero sum game globally. However it negatively affects growth in the US, the EU will pick up the growth lost in the US via Airbus order growth. This is actually a net positive for the world as the US had a larger share of global GDP in recent years.