Dear Fellow Industry Interpreters,
There’s a lot of concern over Boeing’s future. On Wednesday (of the week I’m writing this), Boeing management will present its full-year results. This letter sets out what you’ll likely hear from Boeing, and from the key people impacted by Boeing’s performance. Oh, and what these people should be saying.
What we’ll likely hear from Boeing management: We again apologize for mistakes made. We’ll appoint another submariner or two to lead a special committee studying aircraft manufacturing processes, for some reason. Yes, those billions of dollars in defense losses are pretty bad, but we’ll return to profitability in a few years, despite the awful fixed-price contracts and terrible performance thus far. Ditto for commercial jetliners. When the FAA lets us resume our 737 ramp, we’ve got plenty of jets to deliver, even if MAX7 and 10 certifications are at risk. Once cash flow resumes, we’ll return it to shareholders, because that’s all we can think of to do with the stuff. It’s not like we want to create new products or invest in the company at all. [Subtext: we might not care if MAX7 and 10 certifications are at risk; we just want our MAX8 cashflow, followed by our golden parachute exits.]
What we should hear from Boeing management: We are ashamed. We should not be presenting carefully curated financial abstractions and meaningless promises while one of the world’s great companies is gradually destroyed. Those financial projections we provide have been about as useful as a check postdated to 2026. Even our stock price, which seems to have been our sole focus, is suffering. Instead of this foolishness, all of us will be doing what we should have been doing all along: getting out there and visiting factories, both in our company and at our suppliers. We will be talking with as many people as possible, making sure they have the resources and procedures in place to do their jobs safely. We will be leading from the front, not the distant rear. We also promise to promote actual aircraft people – with technical and program management experience – to senior executive positions. That way, we won’t need to rely on outsiders for help. Meanwhile, we will tell our investors to wait patiently while we focus on our people and our products. When we have done that, and restored the company to health, maybe then we can get back to talking about money.
What we’ll likely hear from Boeing’s Board:
What we should hear from Boeing’s Board: We’ve been incredibly, impossibly negligent. Our job is governance oversight and we’ve been taking fiddle lessons, or something. This changes now. This company is falling apart, to the point where public safety may have been jeopardized. We are very belatedly demanding that the company’s leadership either completely changes course or resigns. If the latter, we’ll replace them with people who actually care about Boeing’s core businesses. Maybe if we insist on change Boeing can be nursed back to health, and public confidence can be restored. We hope that our good names can be redeemed in the eyes of the public and the aviation industry.
What we’ll likely hear from Boeing’s strategy department: Kidding! They no longer have a strategy department.
What we hear from Boeing’s airline and lessor customers: We are angry and appalled. You are screwing up our businesses with your grotesque incompetence, too. We’ll be talking to Airbus about fitting us in to their production schedule.
What we should hear from Boeing’s airline and lessor customers: We are angry and appalled. You are screwing up our businesses with your grotesque incompetence, too. We’ll be talking to Airbus about fitting us in to their production schedule.
What we hear from DoD: [fingers in ears] lalalalalalalalalalalalalalalalalalalalalala!
What we should hear from DoD: We just released our first ever National Defense Industrial Strategy. We have studied the important issues associated with the future of the defense industrial base, which is essential in creating innovative technologies and systems for deterrence and, if needed, to provide for high volume weapons and munitions production in the event of a prolonged conflict. Yet somehow this industrial strategy document doesn’t mention the elephant in the corner even once. That’s our bad. Boeing – one of our largest suppliers and one of three US large platform primes – may be approaching the point of total unreliability as a contractor for anything more complex than a license-produced stapler. It may no longer be reliable for a high-tech platform like LRS-B (and soon, NGAD and F/A-XX). We need to deal with this – it’s not a question of too big to fail; it’s a question of malpractice. There are serious national security risks to losing Boeing as a competitor. We’ll insist on changes in how this company spends its taxpayer-provided dollars. We’ll insist on more management oversight. We’ll even have a contingency plan in case Boeing management tries to spike its share price (and exit) by selling off its defense units, at once, or in pieces.
What we hear from politicians, such as Senator JD Vance: This is an outrage! I am calling for hearings on 737MAX safety and for the FAA to step up its work and determine “the quality of oversight provided by the FAA and other relevant government agencies.”
What we should hear from politicians, such as Senator JD Vance: Oh boy. I have a lot to answer for. My beloved Tea Party, with its emphasis on “starving the beast,” might have badly under-resourced public safety agencies like the FAA. These inadequate government resources might also have led to an unwarranted level of industry control over things that should be regulated by the government, such as air travel safety. Specifically, I will reconsider my promise to “reduce the size and power of government” and determine whether that has resulted in inadequate oversight for the 737MAXs that I’m bellyaching about. Or, for that matter, kids drinking unhealthy water in Flint, Michigan. Again, it seems that demonizing and de-funding government has consequences. Who knew?
Yours, Until Radio Shack And Boeing Merge,
Richard Aboulafia