Are management decisions to blame for Boeing’s current problems?
- Debate over whether management or engineering is to blame for Boeing’s troubles
- Numbers suggest strong management is critical in the aerospace industry
- Boeing has spent less on research and development compared to Airbus
- Boeing has invested more in returning cash to shareholders than Airbus
- Airbus has a larger share of the total backlog for 737-size jets
- Boeing stock has performed worse than Airbus stock since 2018
The recent issues with Boeing’s 737 MAX have sparked a debate about whether management or engineering is responsible for the company’s troubles. Analysts and investors have differing opinions, but the numbers seem to support the importance of strong management in the aerospace industry. Boeing’s spending on research and development and new plants and equipment has been lower than its rival Airbus, indicating a potential lack of strategic choices. Additionally, Boeing has prioritized returning cash to shareholders, while Airbus has focused on maintaining its market share. This has resulted in Airbus having a larger share of the total backlog for 737-size jets. Furthermore, Boeing’s stock performance has been worse than Airbus’ since 2018. To overcome its current problems, Boeing may need to increase its spending to align with Airbus and make strategic decisions to replace its 737 lineup. Ultimately, the management’s choices will play a crucial role in Boeing’s future success.
Public Companies: Boeing (BA), Airbus (AIR), General Electric (GE)
Private Companies:
Key People: Rob Stallard (Vertical Research Partners analyst), Larry Culp (General Electric CEO)
Factuality Level: 7
Justification: The article provides information about the debate surrounding who should run a global commercial aerospace company and the importance of strong management. It also includes data on Boeing’s spending on research and development compared to Airbus, as well as their spending on returning cash to shareholders. The article presents these facts without any obvious bias or misleading information. However, it does not provide a comprehensive analysis of all factors contributing to Boeing’s current problems or potential solutions.
Noise Level: 6
Justification: The article provides some analysis of the problems with Boeing’s 737 MAX and the debate about who should run a global commercial aerospace company. It mentions the importance of strong management in the aerospace business and compares Boeing’s spending on research and development to that of Airbus. The article also discusses the decisions made by Boeing and Airbus regarding returns of capital and investment spending. However, the article lacks in-depth analysis and does not provide actionable insights or solutions.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the financial implications of Boeing’s 737 MAX problems and the management decisions that have affected the company’s stock performance.
Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article focuses on the financial aspects of Boeing’s management decisions and their impact on the company’s stock performance. It does not mention any extreme events.
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