Boeing HQ Moving to Virginia
#11
#12
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Joined APC: Dec 2019
Posts: 1,318
I think the execs at Boeing are embracing that the commercial side of the house has gotten so out of control with respect to cost overages, delays, and manufacturing issues that it can’t be revived into a profitable sector of their business. In my opinion this move to VA signals that going forward Boeing will be focused on contracts with their one customer who has buttonless pockets of “free money” and is willing to put up with years of delays and billions in over run costs.
What does Boeing have to replace the 737max, and how much will it cost in R&D alone? And that’s before the manufacturing issues begin. 787 program is 15 years on and they can’t even iron out those problems. The 777X? I’d be surprised is we ever see one in service, and launch customers are already threatening cancellations.
If you’re a number cruncher at Boeing and your one and only concern is the stock price, you’re looking at the commercial aircraft side as an impediment, not an asset. It’s not inconceivable that in 10-15 years, after the last Max and 787 order is filled, Boeing becomes a defense contractor.
What does Boeing have to replace the 737max, and how much will it cost in R&D alone? And that’s before the manufacturing issues begin. 787 program is 15 years on and they can’t even iron out those problems. The 777X? I’d be surprised is we ever see one in service, and launch customers are already threatening cancellations.
If you’re a number cruncher at Boeing and your one and only concern is the stock price, you’re looking at the commercial aircraft side as an impediment, not an asset. It’s not inconceivable that in 10-15 years, after the last Max and 787 order is filled, Boeing becomes a defense contractor.
#14
Gets Weekends Off
Joined APC: Aug 2016
Posts: 146
I think the execs at Boeing are embracing that the commercial side of the house has gotten so out of control with respect to cost overages, delays, and manufacturing issues that it can’t be revived into a profitable sector of their business. In my opinion this move to VA signals that going forward Boeing will be focused on contracts with their one customer who has buttonless pockets of “free money” and is willing to put up with years of delays and billions in over run costs.
If you’re a number cruncher at Boeing and your one and only concern is the stock price, you’re looking at the commercial aircraft side as an impediment, not an asset. It’s not inconceivable that in 10-15 years, after the last Max and 787 order is filled, Boeing becomes a defense contractor.
If you’re a number cruncher at Boeing and your one and only concern is the stock price, you’re looking at the commercial aircraft side as an impediment, not an asset. It’s not inconceivable that in 10-15 years, after the last Max and 787 order is filled, Boeing becomes a defense contractor.
For a long time, while the government side had the higher margins, the commercial side had the higher revenue, so overall the majority of your profits came from commercial. With all of challenges facing the MAX, 787, and other commercial programs, Boeing Defense and Space has taken over as the leader in profits for Boeing. Boeing has really transitioned from a "Commercial airplane company with a defense subsidiary," to a "Defense company with a commercial aircraft subsidiary."
So, it makes sense to be close to where you're best customers are. Defense companies have been slowly moving HQ's to DC for a long time. General Dynamics moved their HQ from St Louis to DC in 1991. When Lockheed and Martin Marietta merged in 1995, they chose Martin Marietta's HQ in DC over Lockheed's home in Los Angeles. Northrop Grumman moved their HQ from Los Angeles to DC in 2010. Boeing is a relative latecomer, but I think it reflects the shift in their overall focus from commercial to defense.
I can't find the quote now, but as McDonald Douglas' share of the commercial aircraft market shrank in the 80s and 90s, their CEO at the time remarked that they'd "either sell or merger their way our of the commercial aircraft business." Which, they eventually did with their 1997 merger with Boeing.
I don't know what the future holds for Boeing commercial aircraft. The MAX and 787 have the potential to print money for the company, if they can ever get the production issues under control. Maybe the 777X will join them in the stable of profit makers. Everything seems to point away from Boeing putting any kind of real effort into a clean sheet design anytime soon. Rather, I bet they just try to eke as much out of the MAX, 787, and 777X as they can, for as long as they can. Between all three fleets, I bet they'll be filling orders until sometime in the early 2040s.
After that, who knows.
#15
If you’re a number cruncher at Boeing and your one and only concern is the stock price, you’re looking at the commercial aircraft side as an impediment, not an asset. It’s not inconceivable that in 10-15 years, after the last Max and 787 order is filled, Boeing becomes a defense contractor.
#16
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Joined APC: Aug 2016
Posts: 146
Raytheon makes the move to DC.
https://www.washingtonpost.com/busin...ers-arlington/
Raytheon becomes the last of the Big Five defense contractors — alongside Lockheed Martin, Northrop Grumman, General Dynamics and, most recently, Boeing — to commit its corporate identity to the D.C. suburbs.
https://www.washingtonpost.com/busin...ers-arlington/
Raytheon becomes the last of the Big Five defense contractors — alongside Lockheed Martin, Northrop Grumman, General Dynamics and, most recently, Boeing — to commit its corporate identity to the D.C. suburbs.
#17
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Joined APC: Dec 2013
Posts: 2,236
There has to be someone somewhere at Boeing wondering if they timed this wrong. The uncontrollable debt spending of the US government is not sustainable, the markets will not support it forever and the US cannot continue to throw money it doesn't have at endless wars. The Feds moving up rates and stubbornly high inflation is only going to force the issue sooner. We are probably well on the path now to the end of reckless government spending and Boeing no doubt will have its contracts slashed. It isn't a matter of if but when.
#18
They're done with commercial aircraft. Too risky, with competition from Airbus, Brazil, and China (in that order).
Let us sit upon the ground, and tell sad tales of the death of kings. Sigh.
#20
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Joined APC: Aug 2016
Posts: 146
Do a ****ty job of designing/building and airliner, you lose orders and ultimately lose market share (737MAX, 787, etc).
Do a ****ty job of designing/building an aircraft or spacecraft for Uncle Sam, you still ultimately get paid. The US has paid Boeing billions for the Starliner program, and gotten all of two flights out of it.
Regardless of performance, Uncle Sam will always write the check. That's why any company with a mix of civil and defense business will always put the larger focus on defense.
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