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Insight Wednesday 18 December 2019: Uncertainty reigns after Boeing suspends MAX production

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News

The Boeing announcement that it is temporarily suspending production of the 737 MAX has resulted in uncertainty and confusion throughout the industry, as the lack of transparency that is the Boeing modus operandi has once again raised its ugly head.  The employees at its Renton plant first heard of the shutdown from the news media rather than the company itself, which reflects the arrogance of Boeing’s management team, and the supply chain is still awaiting word on what actions Boeing is going to take and when.  So much for partnering for success – as real partners talk to each other and know what’s going on.  In this case,  Boeing’s silence speaks volumes.

Meanwhile, an Irish-based aircraft lessor is now suing Boeing for damages, and the head of JetBlue spoke about the Boeing backlash in his forward look at 2020.  The news continues to get worse, with the typical Boeing

arrogance when it comes to their employees, suppliers, and the media – dead silence or press-releases that obfuscate more than inform.

Analysis

Boeing is in serious trouble.  It can’t seem to get new programs right, with its last two, the 787 and 737 MAX having each been grounded with massive costs.  One Wall St. analyst is currently estimate the MAX crisis will cost Boeing $14 billion by the time it is over.  That’s a substantial hit, impacting both cash flows and the needed future programs that the company desperately needs to maintain competitive balance with Airbus.  The 777X failed a key pressure test, with results much worse than Boeing initially let on.  The 767-based KC-46 tanker has had multiple problems, and was only awarded to Boeing because of political considerations, as it lost the competition to Airbus.

The Boeing announcement that it is temporarily suspending production of the 737 MAX has resulted in uncertainty and confusion throughout the industry, as the lack of transparency that is the Boeing modus operandi has once again raised its ugly head.  The employees at its Renton plant first heard of the shutdown from the news media rather than the company itself, which reflects the arrogance of Boeing’s management team, and the supply chain is still awaiting word on what actions Boeing is going to take and when.  So much for partnering for success – as real partners talk to each other and know what’s going on.  In this case,  Boeing’s silence speaks volumes.

Meanwhile, an Irish-based aircraft lessor is now suing Boeing for damages, and the head of JetBlue spoke about the Boeing backlash in his forward look at 2020.  The news continues to get worse, with the typical Boeing arrogance when it comes to their employees, suppliers, and the media – dead silence or press-releases that obfuscate more than inform.

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