Saturday, October 25, 2014

Bears Overview Boeing With Reoccurring 787 Issues

The list on Boeing's reoccurring 787 issues plague the bottom line towards profitability. The 787 program has amassed over 25 billion in charges beyond its original break-even point from program glitches starting with the battery on. You name it Boeing's got it on the 787. Cracked windshields, failing systems, and parts or misapplied fabrications from contributing suppliers in the larger body works; just to name a few. The Boeing 911 crew spares no expense in chasing down those pesky glitches with its oft referred new 787 aircraft.

The cost of "chase down those problems" accumulates to the 25 billion in the hole level as earlier reported on this blog. Boeing strategy is to mitigate everything until perfected. So far they have spent the bank in doing so. The financial set recognizes that Boeing can't just keep delivering 777's and 737's to keep cash pace as it will soon run lean or  exhaust those resources, as it transitions to the MAX and the 777X. Both those new projects will need an infusion of cash in two years, while the 787 sucks the production cash buffers up before those project get rolling. The sketch artist can draw a bleak picture of lost stock value with Boeing's under performing cash flows, as more super glue and technology band-aids are applied to the 787 Hull.

The 787 must fly free of encumbered problems by next spring. The battery should be a hindsight proposition. The "in-service" glitching on the many issues list are starting to slow down as resolutions are installed, but not as part replacement in a re installed part. A better widget is Boeing's salvation faulting parts, not being just another replacement part. The Billions spent in an over-the-top 787 effort is the "all new technology" penalty. Boeing thought it could slough through without any mishap. It didn't, and its paying for it now on the back end and the market Bears have taken notice rolling out its new observations on  Boeing prospects of not halting the 787 financial erosion.

The Bears will soon have its rule over with, concerning the 787. The Bull will play in greener pasture by 2015 and start eroding the 25 Billion cash back log found on Boeing's book, when money making orders are gained.