Friday, December 18, 2015

787-9 Production Cash 2016 Propels Boeing Forward

Boeing, in a startling move, will replace the 757 through announcing a new type, filling a gap it created during the last ten years of having no 757 replacement. Production efficiency will also make the 787 family of aircraft profitable after paring down production cost by sending excess cost to the development debt. These values were moved over as a long term program liability, totaling about a $28 billion dollar sideline movement of accumulated development cost, away from the 787 production stream. Cash comes aboard for Boeing and becomes a financial source for its new and predicted gap filler in 2016. Therefore, profits are finally recognized for the 787 during 2016. This also propels the 787-10 development, and an all-new 757 replacement model decision, which reaches its announcement epitome in 2016 ("As a 757 Global Dream"). 

The Max program cost are already identified and assigned its financial sources for the project. It will be SOP for Boeing building the Max as its many experimented and developed technologies from the 787 program, can be used for the Max program. The cost of making the Max can be recovered faster from its high end delivery repetitions, during the first five years of production. The Boeing strategy for other programs wraps in the 787-9 synergy.  

Boeing will pivot towards a 757 replacement from a robust 787-9 cash flow during 2016. It has set itself up for managing profitability and cash when adding one more program next year, if only announcing it during 2016, it will change the game one more time.