Maybe Boeing (BA) should just stop selling airplanes and leave the market to Airbus. At least once a month, the US company says it will have to delay deliveries to customers. Not only does this hurt earnings, it also gives unhappy clients a chance to ask for compensation.
According to The Wall Street Journal, "Boeing Co. is reworking its entire production schedule, adding as much as 10 weeks to the original delivery date for all 3,734 jetliners in its order backlog."
Boeing and its shareholders are now feeling the effects of the firm’s remarkably poor decision to allow its machinists to strike for two months instead of giving them a reasonable contract. Boeing stands to make so much on the delivery of 3,000 aircraft that it is hard to imagine why it would push back or completely risk those sales.
But, Boeing management did show poor judgment. It gave its major competitor Airbus a chance to improve its relationship with customers at the world’s largest airlines and, in the process, hurt is own image in the world aviation market and on Wall St.
Boeing shares trade under $40, well below their 52-week high of $94.60. Management probably blames that on the recession and stock market crash. In other words, the delay of getting out that huge order book has nothing to do with it.
Douglas A. McIntyre
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