Another Delay From Boeing (BA) As Company Loses Credibility

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No wonder the Air Force rewarded its tanker contract to Northrop Grumman (NOC) and EADS instead of Boeing (BA). The US airplane maker can’t deliver products on time. According to the FT Boeing said that "it would have to redesign parts of its troubled 787 Dreamliner, raising the prospect of a third delay in recent months to delivery of the new aircraft."

A another delay in the launch of the plane would trigger penalty payments from some carriers and might also cause some cancellations as buyers begin to look at alternatives from Airbus.

Boeing is making a bid to be the worst managed company in the US this year. Just a few months ago, the company had everything going for it. Delays in some Airbus products allowed it to be aggressive marketing the 787 and a new version of the 747. Boeing’s share price was almost $107 in early October. It is now at $73.45 and news of another product delay are likely to take it lower.

The bad news about the 787 can be added to one of the company’s excuses for losing the Air Force contract. Boeing said if it knew the government wanted a larger tanker, it would have pitched its 777 instead of the smaller 767. The people at the company may have forgotten to read the driver’s manual before getting behind the wheel for that bid.

Over the course of less than six months, Boeing has blown advantages which most companies could only dream about. Shareholders are going to pay an increasingly dear price for that.

Douglas A. McIntyre