View Full Version : Boeing announces MAX production has been stopped
grizzled
21st Jan 2020, 17:11
https://www.cnn.com/2020/01/21/business/boeing-737-max-production-halt/index.html
The impact on the US economy will be hard to predict at this point but certainly some major Boeing suppliers (such as Spirit in Wichita) could be in very big trouble.
Grizz
Twitter
21st Jan 2020, 18:19
https://www.cnn.com/2020/01/21/business/boeing-737-max-production-halt/index.html
The impact on the US economy will be hard to predict at this point but certainly some major Boeing suppliers (such as Spirit in Wichita) could be in very big trouble.
Grizz
Now Boeing share dealing has been stopped - DOW not happy at present
slf99
21st Jan 2020, 19:20
Wall Street Journal just reported that Boeing says that return of the Max will be at least the middle of the year for regulator approval. Boeing shares fell by 5%.
slf99
21st Jan 2020, 19:26
More detail:
https://www.cnbc.com/2020/01/21/boeing-doesnt-expect-regulators-to-sign-off-on-737-max-until-june-or-july.html
vlieger
21st Jan 2020, 20:32
Prediction: it will never fly again. Nor should it, a design stretched too far.
Longtimer
21st Jan 2020, 20:36
Almost 200 aircraft were mothballed in March of 2019, so if approval is given by all governing bodies for them to return to service, I wonder what the lag time will be to service the aircraft, train / retrain the crews (pilots and all support staff) etc.
Nil by mouth
21st Jan 2020, 20:40
"Wedge" thin end of!
NWSRG
21st Jan 2020, 21:09
You really have to wonder where Boeing go with this. Over a year lost 737 cashflow, massive penalties to customers, and the pain and cost of fixing it. But what option do they have? A clean sheet now wouldn't see light until 2025...what to do in the meantime? I can't see any option other than persevere...MAXs will be going very cheap by the time this is all over. Surely the clean sheet has to be on the way though...
CW247
21st Jan 2020, 21:44
I predict a war, to keep Boeing in business and the American economy going.
OldnGrounded
21st Jan 2020, 22:35
Now Boeing share dealing has been stopped - DOW not happy at present
Yup. From NBC:Boeing halts shares trading after stock plunges by almost 6 percent (https://www.nbcnews.com/business/business-news/boeing-halts-shares-trading-after-stock-plunges-almost-6-percent-n1119586)
jantar99
21st Jan 2020, 23:00
Yup. From NBC:Boeing halts shares trading after stock plunges by almost 6 percent (https://www.nbcnews.com/business/business-news/boeing-halts-shares-trading-after-stock-plunges-almost-6-percent-n1119586)
The first part of the title is much inflated relative to the contents. Trading was temporary suspended as FAA had to make an announcement during trading hours. Suspension was necessary to make sure nobody could profit by say getting the info 4 seconds earlier. Then the trading was resumed.
Normally such official announcements potentially impacting share prices are released outside trading hours.
OldnGrounded
22nd Jan 2020, 00:01
The first part of the title is much inflated relative to the contents. Trading was temporary suspended as FAA had to make an announcement during trading hours. Suspension was necessary to make sure nobody could profit by say getting the info 4 seconds earlier. Then the trading was resumed.
Normally such official announcements potentially impacting share prices are released outside trading hours.
The headline simply says what happened. The financial media are full of headlines equally or more alarming. Investor's Business Daily was running this:
"Boeing Dives to Crisis Low on 737 MAX Delay"
Bloomberg says:
"Boeing’s Max Ruined Christmas. Next Up, Summer."
IBD again:
"Boeing Stock Dives As 737 Max Return Slips Further; Rival Airbus Jet Gains"
Boeing news is genuinely bad. The share price, this evening, is not very far from its 52-week low. I don't think the headlines are particularly exaggerated.
Lake1952
22nd Jan 2020, 01:53
The first part of the title is much inflated relative to the contents. Trading was temporary suspended as FAA had to make an announcement during trading hours. Suspension was necessary to make sure nobody could profit by say getting the info 4 seconds earlier. Then the trading was resumed.
Normally such official announcements potentially impacting share prices are released outside trading hours.
I fairly certain that Boeing shares trade 24 hours a day. Certainly they trade outside of NYSE hours.
You really have to wonder where Boeing go with this. Over a year lost 737 cashflow, massive penalties to customers, and the pain and cost of fixing it. But what option do they have? A clean sheet now wouldn't see light until 2025...what to do in the meantime? I can't see any option other than persevere...MAXs will be going very cheap by the time this is all over. Surely the clean sheet has to be on the way though...
If there is enough money in the pot for R&D costs in the budget for a new frame.
Momoe
22nd Jan 2020, 06:04
It's contingency planning, Boeing knew that the Max was the last throw of the dice for the 737.
797 had been looked at and rejected as "Grandfathering" the Max was a better option in their opinion (and not without outside influence).
797 will come along a little earlier than planned, how early is up to Boeing.
I would like to think that Boeing will endeavour to make the 797 the best plane they've ever produced.
tdracer
22nd Jan 2020, 06:52
Not exactly 'new news' that MAX production was stopped - Boeing announced it a month ago. The stock price had much more to do with the expected return to service being delayed until mid-year.
krismiler
22nd Jan 2020, 07:30
The MAX is like owning an old car which keeps requiring repairs, eventually you realise you are throwing good money after bad and you would be better of junking it and buying a new one.
DaveReidUK
22nd Jan 2020, 07:47
Not exactly 'new news' that MAX production was stopped - Boeing announced it a month ago.
Indeed so.
WSJ 16th December: Boeing to Suspend 737 MAX Production in January (https://www.wsj.com/articles/boeing-to-suspend-737-max-production-in-january-11576532032)
Not exactly 'new news' that MAX production was stopped - Boeing announced it a month ago. The stock price had much more to do with the expected return to service being delayed until mid-year.
As I understand it they announced they were going to do so, at that time. It takes a little while to organise this efficiently. Now they are stating that they have done so.
I can't see how this announcement can have any more credibility than any of the previous Boeing announcements about when the aircraft would re-enter service, none of which have been met, and presumably a significant aspect of Muhlenburg's departure, making a series of statements that proved to be inaccurate.
Boeing is now having to look for USD 10bn of a loan, first sign of them running out of cash
https://www.cnbc.com/2020/01/20/737-max-crisis-boeing-seeks-to-borrow-10-billion-or-more.html
I wonder how the two are connected, that they need to be pretty honest to borrow that much. I wonder what the risk assessment and interest rate on it is.
Could they obtain a licence and start building A320s in Renton? I guess that depends on how hard it is to build the tooling. Or AB pays BA to build A320 to cover demand?
This kind of thing is not unheard of in the electronics and semiconductor industry, that powerful customers forcing a temporarily single source to work with the failing second source to meet market demand.
jantar99
22nd Jan 2020, 12:12
Could they obtain a licence and start building A320s in Renton? I guess that depends on how hard it is to build the tooling. Or AB pays BA to build A320 to cover demand?
This kind of thing is not unheard of in the electronics and semiconductor industry, that powerful customers forcing a temporarily single source to work with the failing second source to meet market demand.
I'm afraid that way some know-hows would ineviably leak from A to B which is unacceptable. Though protected by patents etc. themselves, they would allow A's rival gain valuable insights. So, no way this might happen.
I'm afraid that way some know-hows would ineviably leak from A to B which is unacceptable. Though protected by patents etc. themselves, they would allow A's rival gain valuable insights. So, no way this might happen.
Which is why AB have allowed the plane to be built in China, right? And its not like most big maintenance shops service both anyway, and the maintenance info is for practical purposes public?
esscee
22nd Jan 2020, 13:02
Why would any manufacturer allow a competitor to use its facilities under licence? When one is struggling don't feed it a bone!
Clandestino
22nd Jan 2020, 13:14
The MAX is like owning an old car which keeps requiring repairsAt least with an old car one knows what to fix and it can be used between repairs.
Why would any manufacturer allow a competitor to use its facilities under licence? When one is struggling don't feed it a bone!
Because they can't fill the demand and the whole airline industry has a problem. As I said, it happens in other industries. The most famous example is that AMD used to make 8086 microprocessors to fill demand Intel couldn't. Interestingly, they retained the licence which allowed them to later enter the market with their own designs.
Rwy in Sight
22nd Jan 2020, 14:32
What is the difference between the two announcements on the production line (halting vs stopping). Does stopping the production means contracts with supplies are cancelled, tooling removed or stopping is more formal than stopping?
WillFlyForCheese
22nd Jan 2020, 14:58
The headline simply says what happened. The financial media are full of headlines equally or more alarming. Investor's Business Daily was running this:
"Boeing Dives to Crisis Low on 737 MAX Delay"
Bloomberg says:
"Boeing’s Max Ruined Christmas. Next Up, Summer."
IBD again:
"Boeing Stock Dives As 737 Max Return Slips Further; Rival Airbus Jet Gains"
Boeing news is genuinely bad. The share price, this evening, is not very far from its 52-week low. I don't think the headlines are particularly exaggerated.
Boeing notified the markets that significant news was coming and the markets instituted a "pending news" halt to stock trading. It’s a market requirement. Trading wasn’t halted because the stock was sliding - it was halted so Boeing could share news that was likely to significantly affect the stock price.
Perhaps the news media should endeavor to understand why trading was halted . . . Or just continue with sensational headlines.
Don’t any of you trade on the market? This is stuff any reasonably savvy investor should know. here’s the SEC’s explanation of trading halts including for pending news: https://www.sec.gov/fast-answers/answerstradinghalthtm.html