Comment by s1artibartfast
13 hours ago
Speaking abstractly,Why would that be any better?
Why keep the cash on hand when you can raise cash.
I get that people have an emotional reaction to Boeing, but it's not like owning 10 billion dollars of Treasury bonds would have prevented a door plug blowout
> it's not like owning 10 billion dollars of Treasury bonds would have prevented a door plug blowout
I doubt today's announcement is any kind of endorsement by the company about its past foolishness.
I think the assumption here is that, in the past, more money should have been dedicated to ensuring high airplane reliability instead of company profits. And if that had been done, the door plug blowout wouldn't have happened.
P.S.: I'll call it how I see it: it wasn't merely foolishness, it was evil. They prioritized their own profits over the public safety with which they were entrusted.
I find it interesting how people tend to reduce everything to money, as if it is a solution to everything. Not all problems are financial problems that can be fixed with more funds. It matters how you spend those funds.
One of the big problems with Boeing is that they had two parallel quality systems with imperfect and overlapping reporting. I'm sure they could have spent twice as much and had four overlapping quality systems, but I'm not confident that would improve reliability opposed to reduce it.
If the solution to everything was money, companies like wework, quibi, or theranos would just need more investment.
Not everything is a money problem
In case you're getting that from my GP post, let me clarify.
I believe that in this particular situation, Boeing intentionally cut some safety corners to improve their profitability:
1) Pushed their airplane production rate so high that many of their workers didn't believe they were producing safe airplanes.
2) Took various steps to convince the FAA to allow the 737 MAX to fly with the same type rating as other 737s, despite it being pretty clear to outsiders that MCAS warranted additional training.
3) Fired QA staff / whistle-blowers for raising legitimate concerns.
4) Chose to not halt production to address safety concerns that had been raised.
I'm arguing that every one of those choices was ultimately made to maximize Boeing profits.
Certainly there are some situations where money can't magically fix a problem. But in my judgement this isn't one of them.
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It's not an emotional reaction to Boeing, it's a logical reaction to the fact that stock buybacks are a blatant form of market manipulation that were illegal for most of the 20th century. Nobody should be doing them, it's nothing to do with Boeing specifically. Buybacks are almost always bad for employees, customers, and if you're a big enough corporation, the world.
Negative reaction to stock BuyBacks are also emotional and irrational. I've never heard anyone articulate a cogent argument why they are worse than paying a dividend.
You're not supposed to use the $10B to buy treasury bonds.. you're supposed to use it on R&D, manufacturing, QC, etc...
The parents said cash on hand.
You are proposing a third hypothetical. Would Boeing being a better position today if they had spent 10 billion dollars yesterday? Maybe, maybe not.
Who decided that's what they were supposed to do with it?
The fact that they are having to sell these shares to try to right the ship means the market decided. Otherwise they could just keep extracting as much profit as possible.
Oddly enough people that fly on planes want to be confident that the planes will work.