How Bad Is The Boeing Death Spiral? Muilenburg Bad!

Boeing just fired Dennis Muilenburg, Its CEO. It was bad when Dennis took the top chair and now he bears the brunt of a sloppy corporate philosophy. Jump out with Boeing money and damn the torpedoes. Now Boeing lets him go and thinks it needs a change before it gets SERIOUS.

CNN Business Reports:

Orlando Sentinal Muilenburg Fall from grace

"Boeing CEO Dennis Muilenburg was ousted on Monday after a tumultuous period in which the company faced a series of setbacks, including two fatal crashes, delays and numerous issues with its 737 Max airplane. Boeing continues to struggle to get its most important product back in the air.

Chairman David Calhoun will take over as CEO, effective January 13, 2020."

Boeing is falling on its sward and this admits to its folly when canning Muilenburg.

Please review prior Winging It news opinion.

When Will The F35 Fight?

A prediction of a first fight against the F-35 is set in the next ten years. It will involve the F-35 against Russian technology in the Middle East. Look to see the Russian missile system compromised during this type of conflict in the region and then using a Naval contingent back-dooring Israel from the Mediterranean and using supporting Russian players from Muslim nations as the means for its end of battle.

Israel's Adair will need a fleet of 35 units and neutralize adversarial ground assets to counter an assortment those same adversarial combatants and its equipment. Like most of Israel's wars it will be not elongated in time because it has mostly a first punch take the high ground philosophy. If Israel cannot get it mitigated in a fortnight the US will have to deploy within the region on its own behalf. The fortnight could look like this. A mass of all muslim assets in the region with a Russian game changing involvement. Particular a liberal use of Russia's S-400 missile system on Turkey's behalf. 

Israel will keep a short game within five hundred miles of its borders. Tactical nukes cannot be ignored in this scenario. The conflict battle minutes are as if they were days comparing from past conflicts like WWII. The five year conflict will compress into less than a month of time to exhaust military resources before more can be brought into a regional conflict. If this spreads to hemispheric conflict then it will last six months because military productivity is slower than a battle progress and destruction. War efficiency will name the winner.

In other words, how fast can a super power get to the battle space and commit will affect war duration and outcome. In a week three phase of battle Israel will be reduced to ancillary role using its self defense assets to preserve itself if it cannot deliver a capitchulating blow within the first 14 days. Outer Space becomes a new and crucial factor. Push button technology will determine the final outcome. Those nations with the best military toys and most will prevail. The world will be reshaped at the end of this cyclic escapade as measured through history of wars and how often. It is periodic and predictable and China will stay out unless it sees opportunity to rule over weakened powers.

The F-35 will fight until there are no more. In this prediction it bring almost a thousand to the front. It will harness all military assets from ground to orbit to defeat an adversary in an overarching display of technological dominance.

Turkey In The Short Straw

What is Turkey's play? The S-400 Russian Missile or the American made F-35? There are many talking points for both systems such as cost, management and military functionality for the nation but it appears Turkey has drawn the short straw for its military position by buying the S-400 missile instead of the F-35.

That tells me the complexity of the US system is much more affecting the Turkey's defense strategy from the costs, training and maintaining of the Lockheed F-35 system than the S-400 Russian system. It seems Turkey went the cheaper route when stumbling NATO over its own S-400 purchase. It will be soon where Turkey's S-400 buy-in will be nullified by a combination of drone, special forces and various aviation tools including the F-35 for disabling those same Russian made Turkish systems. Turkey is taking a big risk on the missile system doing by what is reported about it. It can and will be neutralized by NATO assets and Turkey will find itself well beyond  the political intrigue Erdogan is now levering against its allies in NATO by buying military weapons from Russia. The current solution is to cut the cancer out today by blocking any sales, then chemo the political will Erdogan holds over Turkey before eradicating the region with radiation before the patient is pronounced dead.

Turkey is drawing the short straw on bad advice at this time in history and its people are unaware of what is happening to its home.

Profit Dollar Crashes Both Governance And Max

Long after the two Max crashes it has trickled down there is an imperfection in what makes modern jets stay flying. Is it from the factory floor where assemblers are tired of build process and leave workmanship for the next shift. Is it execs who love floating about in Golden parachutes, or is it government governance overwhelmed to even check it twice and then depend on Golden parachutes and workmanship to take care of  air devastation? A good question is raised from those with clipboards walking about asking who is responsible for the broom leaning up in the corner of a big production floor building?

FAA is overwhelmed, execs search for profit dollars and workers seek how efficiently they hid the dirty parts and saved the corporation from spending money on due diligence once the production floor. Passengers want a cheap ticket and airlines too want a fat paycheck after discount fares are offered. The spiral down is complete waiting for planet earth to gather up another airplane. Airbus is not exempt from a catastrophe. Airbus is just lucky, it too has a multitude of near misses from crashing. In a perfect world, craftsmen and women catch engineering errors. Execs look for the best pathway forward and sometimes it cost more to be safe than sorry. The US government must not spend billions of dollars every day until it can properly staff the FAA with leading experts in the field of aviation. All problems cannot be solved all the time but it can mitigate the sloppy nature aircraft are made and delivered to the various profit makers.

2019, Meh!

Boeing is doing over the year 2019 during 2020. It will re engage the Max to service and fly the 777X to Farnborough on a big hop across the Atlantic. Sales for its 787 have slowed but expect a few 787 order surprises at Farnborough aviation show. Boeing wants to show off safety and technology as its theme but it wants to secretly  demonstrate market strength as its devoted single aisle customers re energizes the 737 Max offering thus blunting an Airbus order rout during the last 12 months from Farnborough's show date. 

Boeing is quietly clearing the mishap cobwebs and fixing its 777X problems at it has already taken a delivery on GE9X engine fixes. So tweeks were needed on the 777X program development.  Where that is now completed and where it remains to fly and fly a 777X all the way to Farnborough. It will carry "testing bodies" along with that endeavor. It's not too early to say Boeing is quickly coming back in 2020 and putting 2019 aviation news pundits to bed by year's end.

Deferred Costs And Boeing's Dreams

Deferred cost is a noted Boeing contrived concept in program accounting. It takes so many billion to develop an airplane. In Boeing's case it spent about $30 Billion more developing the 787 than it had, so it programmed how many 787's it needed to build in order to pay-off that 30 $$ billion debt it had incurred. It also adjusts the number of production models it needs to build to pay for an ever expanding production debt as technology is developed and introduced to that aircraft. Kind of like a line of credit on its credit card.

Boeing needed about 1,100 of its 787 delivered to pay off this deferral of debt. Where each airplane it delivered was more efficiently built thus allowing more money available to pay down deferred 787 cost with each airplane it had built. However, the 787 incurred more debt greater than its production efficiency, so it had to increase the projected 787's it needed to deliver to reduced the deferred cost to a theoretical zero balance when delivering oh let's say 1,200-1,300, or 1600 hundred 787s. 

Each of those deferred costs broken down into units delivered while its benchmark kept increasing as the aircraft matured as the production cost increased because technology improvements were added as its development costs increased for those improvements. It's like a dog chasing its costs tail. Is 1,600 units the ultimate deferred cost benchmark? That answer remains to seen as Boeing has not yet sold 1,600 units and for what price going forward. I would speculate to say Boeing will sell enough 787 to past 1600 units but it will also take another five years to extinguish its 787 deferred development cost for the 787. The year 2025 is a more doable time frame for investors unless Boeing gets more significant breakthroughs on build costs through material efficiencies or equipment development.

Always improving is a cost factor that can be derived from from historical data. It can be a cost component factor turned into a quantifiable number as a forecasting component. Also sales or commitments is a number in the same position. It can be factored in a forward looking estimation from global history and commercial trends. Somewhere in between lies the fact. So a computer guess is needed to surmise where Boeing will reach its deferred costs nervana of zero balance after the (nth number) of units are delivered and revenue is realized for each unit against its actual current production cost.

There are two costs before the margin is establish. One portion goes towards the deferred balance and one towards the actual production of an aircraft. Once the aircraft is delivered, the accounting flows can continue through the accounting programs at an actual rate where deferred costs are actually reduced and a profit margin outside the deferred cost is applied. It becomes a tangled view of when
real value is recognized for the 787 program by investors. It is probably safe to say, investors must make money with Boeing during the near term investment cycles of stock values and during value increases or decreases. Investors may wait another five years for making money on the long term program completion from program Investment cycles. 

I am not a stock analyst and do not make recommendations for stock purchasing. I only guess like the next person what may happened in the "market place". So invest at your own capability, means or risk. 

Boeing Oust Muilenburg As Chairman

Another Max crash at the top of Boeing is a long awaited Max purge has begun, Muilenburg is no longer board chairman but has been relegated to CEO. Boeing must reinvent itself as a renaissance kind of corporation and build something flawless and immune from the critics looking for dust balls floating about Boeing fortunes.

Dennis Muilenburg looks ahead

Chairman to CEO is a preliminary round to spending more time with "your family" rather than "spending more money in time". Boeing has finally cried "UNCLE"! The time has come to start the journey down the beanstalk picking off golden parachutes hanging like low hanging fruit off its limbs. Boeing is making a turn away from headwinds and now will run with the aviation surge if one can be found.

Boeing must have one keystone aircraft to build a new perception about its ability to provide an aircraft everyone desires. Two crashes of the Max has brought Boeing in a face to face confrontation with its maker. Its customer and not the stockholder. Boeing is to big to succeed! It must reach for its trim control and now fly its aircraft like a seasoned pilot before it too crashes.

Boeing Blinks: Reengine Recycle 767

The US military chose the 767 for it tanker model going against the A330 so there was something in the sauce Boeing provided the US Military tanker program that goes beyond the A330 than just money and convenience the A330 couldn't offer.

The 767 is a good airframe. Now it is considering rengining the 767 with GenX type engines leaving PW behind to sort out what happens next. The PW engine is listed Two Pratt & Whitney PW 4062 with 62,000 lbs. However, GE has been developing its own class of engine for the 777X and 747 8 projects thus pumping billions into R&D into its behemoths for sometime far outpacing PW expenditures on similar class jet engine like the PW4062.

Now come the 797 proposition from scratch white paper. It's too expensive and late to compete with the A321 class of extended range gap filler. Boeing sees something out of the Airbus playbook that has quickly made it more powerful than Boeing's marketing effort. The NEO is working in the market as we speak. Boeing may divert using the 767 frame and attaching GE engine technology to its frame. It would use the 767-400 configuration and perhaps call it the 767-8i and 8F. It would be bigger than the 797 and fly further but could fit into continental market places well when flying to LA to NY as an example. Boeing needs to make it efficient for 1,000 - 5000 mile range and it will compete with the A330 and buy time for the 797 concept to evolve monetarily. 

What must Boeing do: 

• Improve 767 build technology. Done that! 767, (KC-46 program)

• New GEX engine. Done that!  (GE can provide a scalable engine  from its GEX program

• Have a short development cycle for minimal costs. Set up for that!

• New 767 wings. Done That! (It has a new wing plant in Everett, Washington awaiting more work in its space and a 767 wing could be slotted in in a short amount of time. It already has wing designs ready to go based from its 787 and 777X programs.)

• Plane Size: Done that!

• Passenger amenities. Done that! (from all its family of programs and supporting suppliers eager for expanded business.)

• Commonality. You complete me theme from its family of aircraft.

• Customers. A Works in progress! It is the tipping point for making this business case. Does Boeing have a strong and risk-averse business case for its customers? Can Boeing make 1,000 orders from the NEO 767 idea? That all remains to be seen.

Job one. (Win customer trust back and kill the Boeing Golden Parachute mentality.)

Best Fighter Worst Fight The F-35 Argument Continues

I'm in no position to take a side until a war is fought using the F-35. Most military heads think the F-35 out flies sliced bread which is our culture's best invention. We are all watching how the F-35I Adair fares against the Su-35 and S-400 combo in the Middle East. this proxy demonstration is watched by all talking heads of consequence having some military expertise. Can the F-35 beat the S-400 Russian missile battery Turkey opted for instead of a 100 F-35's it had on order? Turkey's F-35 order was canceled because the F-35 was too secret and advance to let the Russians have a crack at its technology when delivering the S-400 missile Turkey had bought. I'll say the S-400 is a poor man's answer to the F-35 capability.

What about the Russian Su-35 which will show up on a regional radar? Can the F-35 take it out? Yes and no and that is a financial answer. If users can guarantee an outcome then it will risk a 100 million F-35 against 40 million Su-35. However, if the Su-35 has a slim chance a nation will fall back when a SU-35 arrives in F-35 airspace as Israel has demonstrated. Short of all-out war the risk is too much to for an F-35 to strike the SU-35 with an S-400 missile battery within two hundred miles. Israel has rightly become prudent with its 18 F-35's on hand. Even with an Israel Adair load out and strategy an all-out war will bring on its F-35 beast mode which could decide how good the F-35 can be used against advanced adversary counter-strategy. 

Somebody has an educated guess how a conflict would turn out but there is a chance there would be losses on both sides. It all depends on how the military hand is played. Israel needs a full contingent to guarantee a win with 50 F-35's flying out of Israel's Nevatim airbase. The S-400 systems need neutralization early suggesting covert actions in play. Without the S-400 the Su-35 does not have a chance against the F-35 in a conflict. The risk factor of 100 million per airplane is mitigated. Israel's 5 billion American investment will have another 100 F-35 in play during an extended action thus guaranteeing an outcome is America's favor. I suspect S-400 secrets are now known at this time by western intel.

When Pigs Fly

The electric airplane will be an indicator that the battery has arrived for ground transportation. If a commercial airplane can fly 500 miles on a battery then a car can travel the same distance on the same battery. Technology creep is making a better storage battery for electrical motors with a quick recharge cycle making the battery a competitive alternative to fossil fuel engines. The world is only about 20 years away from an electrical storage solution for electric motors. Needed is a significant weight reduction in that battery and a short charging cycle for storing electrical power. The chemistry in theory has been found but the practicality  of making the alternative cheap enough has not been found. But a promise has been made it can be done so a forward push for an all electric powered aircraft goes forward.

The electric plane isn't just a far fetched idea it is what is needed to come and the necessity is the mother of the electric power travel. Elon Musk and Tesla is pushing this need in a awe inspiring journey but has it advanced far enough to entice "others" to try a concept at Universities across the world?

Cambridge start-up claims breakthrough electric car battery that can charge in 6 minutes

We’re working on methods to make powders that are scalable and where 1,000 tonnes could be made quite easily in factories. We have a prototype now, and are moving toward commercialization early next year. The tests have to be validated beforehand.

It's a matter of time and 20 years seems about right to drop fossil fuels from the Scheme of Things (SoT).

The SoT gauntlet has been thrown down and that is where we are today. Many ideas are pouring fourth and the solar system's sun is the key to unlimited electrical energy to power the planet in its endeavors.

The earth only has to supply plant based lubricants/plastics to make it all work. I'll be dead by the year 2040 but you may enjoy the change to save the planet from global warming.