Boeing needs to emerge smarter from the 737 MAX grounding

The dark chapter of Boeing’s history can finally be closed. Morality is that business works best when finance and technology are in creative tension.

On Wednesday, the Federal Aviation Administration approved the Boeing 737 MAX jet for passenger aircraft more than 20 months after landing. The company’s stock price initially rose, but later gave up as a sign that many investors had invested after the announcement. Stock prices in November are still up 45%. Airplane manufacturers are currently facing a difficult battle to provide a stored 450MAX jet. CEO David Calhoun admits that Covid-19 has upset plans to ship most of them within a year of being “grounded”. This puts MAX’s planned production rate at risk.

What can investors and analysts learn from this blunder now that industry leadership has been transferred to European rival Airbus?

First, the first impression of 2019 that the plane crash, including MAX, was only a slight setback for Boeing was false. It did not take into account the unpredictable disasters of the aviation industry, such as the earlier Covid-19 and 9/11. He also overlooked that MAX-related accidents were a sign of deep-seated problems such as the increased capacity of bean counters for Boeing engineers and the dangerous lack of regulatory oversight such as the FAA.

But the apocalypse who claimed that MAX would never fly was also wrong. As an example of the company’s excessive financial focus, many analysts have blamed the decision to update the 53-year-old 737 instead of launching a brand new model. This is also suspicious.

Boeing needs to emerge smarter from the 737 MAX grounding

Source link Boeing needs to emerge smarter from the 737 MAX grounding

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