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  • Boeing: Free Cash Flow Machine [View article]
    Really?! Ever since Airbus/EADS discovered they could magnify their perceived success by beating Boeing's order numbers, the generally reported order numbers have been less than useful, certainly for comparing Airbus and Boeing. I believe Airbus persuaded their customers to put in orders for delivery further out than Boeing is comfortable with. That's supported by the delivery numbers, as although Airbus has had the larger "claimed" order backlog, Boeing has been delivering more planes since 2012 and the margins been growing. Last year it was 94 and it'll be larger this year.

    So, the problem with the order numbers is that the normal business significance doesn't apply in this business. To generate their coveted "leader" image by winning the orders race, Airbus has created a order backlog that, on average, has a later delivery schedule.

    Now, if analysts have the delivery schedule for the respective order backlogs, than I could see the significance of the order numbers. But, although Boeing and Airbus certainly have those numbers, I've not seen any publication of them. And, it seems to me, that without that info, the order numbers are a very imprecise measure of success, at best.
    Oct 2, 2015. 04:42 PM | Likes Like |Link to Comment
  • Iran looks to buy up to 90 Boeing, Airbus planes a year [View news story]
    Well, the IAM was certain that Boeing wouldn't / couldn't move any 787 work to SC, and, yes it was a struggle, and the IAM said, "see, I told you so", every time there was a problem. But Boeing worked through them all and now is producing 3 787s per month in SC.

    Businesses are always looking for ways to reduce costs and increase their competitiveness. Nothing personal, just business, you know? If the business environment is such that moving to another location makes sense, then that's what will happen.

    Not to get another EX/IM band discussion going, but that's an area where Airbus has an advantage, now, thanks to congress. Maybe Boehner will get it done before he leaves, since the Tea Party caucus no longer has a gun to his head! ;-)
    Sep 28, 2015. 04:36 PM | Likes Like |Link to Comment
  • Boeing: The Order Battle In August [View article]
    Normally, orders are very relevant, but "normally" does not apply to the Boeing/Airbus competition! ;-) "Normally" doesn't take orders for billions of dollars to be received 5-10 years in the future (or never), as is the case for Boeing and Airbus.

    As I've noted many times, Airbus has had a larger backlog than Boeing for many years now. "Normally" in that situation, that results in more revenue and product shipped. But, not so, here. Boeing has been delivering more planes than Airbus since 2012; last year Boeing delivered 94 more planes than Airbus and the margin will be larger this year. And, Boeing's average revenues per plane is larger than Airbus's.

    The problem with the order numbers, aside from the fact that they are not independent numbers and the wide variation in order types, is that there is no "public" tabulation of how many deliveries will be made this year, next year, etc., based on the backlog. It is totally possible that Airbus could forever have a larger backlog than Boeing while delivering fewer planes than Boeing! After all, Airbus is addicted to winning the orders race; it's been a very successful public relations marketing tactic for them. I'm sure many casual readers of the business press would think Airbus is the larger company, by a wide margin! ;-)

    It would be very interesting, and I think very revealing, to see a tabulation of scheduled deliveries each year for the orders in the backlog. Obviously, Airbus has more of their deliveries scheduled for a later delivery than Boeing, as I'm not seeing any stories about missed schedules. And, a larger order backlog does not mean you can deliver more planes this year or next year, because there is a schedule for when the planes are to be delivered, a certain number this year and a certain number next year, etc. So, producing more planes than you're scheduled to deliver is not a good idea.
    Sep 28, 2015. 03:20 PM | Likes Like |Link to Comment
  • Airbus orders surged in August [View news story]
    When are those planes scheduled to be delivered? In the Boeing/Airbus business, an order is merely a possibility of a sale. After all, Airbus has had a larger backlog than Boeing for a number of years but since 2012 has been delivering fewer planes; last year, Boeing delivered 94 more planes than Airbus and that margin will be larger this year.

    Airbus is doing quite well but not as well, relative to Boeing, as the order numbers would imply. Airbus has successfully used the order numbers as a marketing tactic. Airbus, obviously, is comfortable with taking orders with a later delivery schedule, than Boeing is. How else could it be that with a larger order backlog, they are delivering fewer planes than Boeing. Normally, orders are reflected in deliveries, but not in this business.

    Sep 23, 2015. 12:50 PM | Likes Like |Link to Comment
  • Airbus opens plant in Alabama [View news story]
    I think it's pretty obvious the labor needs unions, but they need smart unions. "Business" has clearly gained the upper hand. Unions seem stuck in the past, or as the saying goes, "to be stuck on stupid"!

    I don't know how this'll get turned around, but unions will have to come to grips with the reality and equal the leadership corporate America has. This is a political problem and the unions are very unpopular, which is a killer for unions. The ridiculous benefits the UAW got from "Detroit" prevented adjustments to the new environment, namely foreign auto manufacturers moving into the Right to Work South. And, the teacher's unions are also very unpopular. Unless unions figure out how to "upgrade" their image, things will not change. Some of that bad image has been earned!
    Sep 15, 2015. 09:21 PM | 2 Likes Like |Link to Comment
  • Sell Boeing first and ask questions later, analyst says [View news story]
    One thing's for sure, not all the analysts following Boeing are right?! ;-) The range of analyst estimates, on NASDAQ, IS $104 TO $196. Now, obviously more than one of those "BA experts" is going to seriously miss the mark. I sure would like to see the history for these experts; such a wide variation, almost 100%, is just rediculous. How can there resonably be that much disagreement?!
    Sep 4, 2015. 03:19 AM | 2 Likes Like |Link to Comment
  • Reuters: Boeing delivers 14 Dreamliners in August, again beating target [View news story]
    You may be conflating program accounting numbers with cash flow numbers? A lot of the "cost over-runs" were paid for with profits, in the past, as we long term investors know, having suffered through many bad quarterly reports. But no employees or suppliers went unpaid and Boeing does not have a large debt. The 787 will add to the cash flow number long before the program accounting numbers show a profit.

    Same, with the tanker program; all employees and suppliers are being paid now, with current profits.

    On another post, I once asked how there could be a loss of $30M per 787 without it showing up in the quarterly results, as that would have added $3.5B in losses for the year. The response was, "well, it's on paper", which I assume means, it's a program accounting number not related to the quarterly CF numbers!

    I'm not an accountant - not even close - but the bottom line numbers have to add up and using the huge loss numbers, cited repeatedly in article after article, don't add up! ;-)
    Sep 2, 2015. 11:11 PM | 1 Like Like |Link to Comment
  • Cause of 2013 Dreamliner fire discovered [View news story]
    Actually, I believe this was known early on; I remember that being the early conclusion. This is just to official "final report"; it takes a long time, generally, for these investigations to be closed. The lawyers wouldn't have any other way! ;-)
    Aug 19, 2015. 04:27 PM | 5 Likes Like |Link to Comment
  • Boeing's 757 Replacement - Part II [View article]
    I see references to market share, based on orders. Airbus has, quite successfully, made the order numbers a marketing tactic; Airbus regularly beats Boeing's order numbers, to great fanfare in the press, but then delivers fewer planes. Using the order numbers, Airbus has a huge lead over Boeing in the A320/737 numbers, but look at the deliveries and you see a very different picture - there's just a small difference.

    The problem with the order backlog numbers, aside from the fact that they are not independent numbers, is that there is no tabulation of how many of those orders are to be delivered this year, next year, etc., other than internally, I'm sure Airbus and Boeing have those numbers but they are not sharing them! ;-) Since Airbus has had a larger order backlog than Boeing for a number of years now but has been delivering fewer planes since 2012, 94 fewer in 2014 and that margin looks to be larger for 2015, it's obvious that the orders in their backlog have a later delivery date, on average, than Boeing's smaller backlog.

    Airbus has had great success taking orders, but it has not ramped up production to match what those order numbers imply. They are doing quite well, but I do not see that the concern about Boeing falling far behind Airbus as a valid concern.
    Aug 18, 2015. 06:32 PM | 3 Likes Like |Link to Comment
  • Airbus confirms largest airplane order by number [View news story]
    OOPS, I meant to say, "in 2014, Boeing delivered 94 more planes than Airbus" not 2012.
    Aug 17, 2015. 04:25 PM | Likes Like |Link to Comment
  • Airbus confirms largest airplane order by number [View news story]
    When are those planes to be delivered? Airbus has a lot of fun with the order numbers and uses them as a marketing tactic. But, when it comes to the delivery numbers; it's a different story. Since 2012, Boeing has delivered more planes than Airbus every year. In 2012, Boeing delivered 94 more planes than Airbus and that margin looks to be larger this year.

    Strange, isn't it, that the company that routinely claims more orders, delivers fewer planes?! ;-) Well, not if you know this business and the fact that Airbus has successfully inflated their success vs. Boeing, with order numbers. Since planes are not paid for until they are delivered, without the delivery dates for an order you can not gage the importance of an order. For example, lets say that order for 250 planes is for delivery starting in 2050 - totally different significance than if the deliveries are to be completed by 2020 (not likely). Neither Boeing or Airbus reveals how many of the planes in their order back log are to be delivered this year, next year, etc. other than a general estimate of the total deliveries for the current year (Boeings estimate is much larger than Airbus's for this year). But, how many of each model in those order backlogs, info not available. And the thing is, without that info, that order for 250 planes isn't very meaningful, other than as a great marketing tactic! ;-)

    Disagree? OK, then tell me what the significance is. It can't be that Airbus will deliver more planes than Boeing this year (or last year etc.), all years where Airbus had a larger order back log than Boeing. And, it's not that Airbus revenue will be larger than Boeing. So, business wise (markets), what is the significance?

    The way these order numbers work, Airbus could forever have a larger order backlog than Boeing while Boeing forever delivers more planes, because there is no tabulation of when the ordered planes are to be delivered. Obviously, Airbus's average delivery date for their order backlog is further out than Boeing's.
    Aug 17, 2015. 02:28 PM | 5 Likes Like |Link to Comment
  • Boeing considers moving work overseas due to Export-Import uncertainty [View news story]
    Actually, the main driver for the S.C plant was the IAM's refusal to agree to a 10 year contract, which was a pretty nice offer. It was the IAM that was absolutely sure that Boeing would never do such a thing.

    After that, Boeing got some more concessions from the state (and the IAM) to keep the 777X work in WA. The IAM union leadership still tried to persuade their membership that Boeing was bluffing, but the membership didn't fall for it a 2nd time! ;-) Maybe the membership will finally get the message and elect smarter leadership, the next time around?
    Aug 13, 2015. 05:52 PM | Likes Like |Link to Comment
  • Boeing, Airbus net order statistics [View news story]
    It's all to common to see Boeing & Airbus orders conflated with sales, two very different things, in this business. Consider that zero A350s were delivered for that 2007 order for 70 A350s; the whole order was cancelled in 2014. And planes are paid for when they are delivered, not when they are ordered. Obviously, no-one's going to pay for a plane today (or 10 or 20 or???) that aren't going to be delivered until sometime after 2020.

    The fatal flaw in the order numbers is that there is no tabulation of when the planes in the order will be delivered, i.e. how many this year, how many next year etc. Boeing and Airbus know those numbers but are not making them public. And, since Airbus has made their order numbers part of their marketing strategy, I'm sure they would not even consider doing that.

    Although, Airbus has had a larger order back log than Boeing for a number of years now, Boeing has been delivering more planes than Airbus since 2012. Last year, the margin was 94 and this year, that margin will increase. Airbus has claimed the victory in orders 11 out of the last 14 years.

    Obviously, deliveries have not been tracking orders. It's time the business press noticed that fact. Boeing always announces their order total for the year first and then Airbus does their magic and comes up with a bigger number! ;-) Same tactic with the big airshows.
    Aug 6, 2015. 07:43 PM | 4 Likes Like |Link to Comment
  • Boeing considers moving work overseas due to Export-Import uncertainty [View news story]
    Well, I think the fallacy in your thinking and others who are against "Crony Capitalism" (EX/IM bank), is that the 59 foreign EX/IM banks, generally referred to as agencies, derive no benefit to their country's businesses who compete with US export businesses. Business Week had an article on this issue you might find interesting, "Ex-Im Bank's Bad Rap for Crony Capitalism":

    Most Republicans are in favor of reauthorizing the EX/IM bank (it would easily pass, if it were brought up for a vote) but the so called Tea Party folks are virulently against it and, so far, have ruled the day, lastly with Ted Cruz's rant against the Senate majority leader, Mitch McConnell.

    Ignoring how other countries, who obviously don't have a problem with what's called Crony Capitalism in this country, operate, is a recipe for disaster. So the Tea Party folks rail against companies exporting American jobs all the while pushing policies that increase the incentive for doing just that!

    I rather doubt that Boeing would relocate to a foreign country, over this, but then the IAM thought Boeing was bluffing about moving work out of WA, and Boeing wound up doing just that! That's not the worry; the worry is that there will be fewer very good jobs in the US because Boeing gets fewer orders. Airbus has to be loving this American lunacy; they probably would've lobbied for dropping our EX/IM bank if they thought they had a chance to get it done. But, they didn't have to do anything to get their wish. Airbus and Boeing have a fierce completion and every advantage for one or the other, can have big payoffs.
    Aug 3, 2015. 02:43 PM | 1 Like Like |Link to Comment
  • Boeing considers moving work overseas due to Export-Import uncertainty [View news story]
    OK, I'm ready - where is he-where is he? ;-)
    Aug 3, 2015. 02:26 PM | Likes Like |Link to Comment