Another deadly 737 Max control bug just found!

[Domagoj T]

They are crying to Congress for a $60 billion bailout package for the industry 

I wonder who would be getting the larges cut of that industry wide bailout package.

[Gyro]

I would have thought it would have given them a bit of breathing space to get their act together. It takes the pressure off the grounded 737Max's a bit when the airlines haven't actually got any passengers to fly in them!

Still, any excuse for a handout! 

[Domagoj T]

Of course it would help them, but the question is should they be helped?
Sounds awfully like socialism, which of course is a big no no.

Also, what about 101 other niche industry that is affected just as much?

[tom66]

Whenever companies cry for a bailout because they are facing hard times, but lobby for tax cuts and reduction worker/union rights, and refuse to increase the pay of their employees, I can't help but think: socialism for the rich, capitalism for the poor.

[SiliconWizard]

They'll just rename it.

If they do, the info will spread in a matter of a few hours on all media and social networks. Everyone will know it's just the same.

Unlikely. i think you are making the assumption that the general public care about stuff the way engineers do.
They would wait a little while and do a strategic re-brand.  Now would be the perfect time to do it, while the news is all just coronavirus.

Uh huh. The Boeing disaster has been on all media for months. Even if you don't care about that, you're very likely to have heard about it. You probably also underestimate the "power" of social networks these days. Sure the attention is currently on the virus, but since it's very unlikely at this point Boeing is going to get approval before the end of the year, by then it'll make a lot of fuss again IMO.

Heck, we don't even know whether Boeing is going to stay alive at this point. And you're like it will just be a matter of a name change? I have no clue what is going to happen exactly, but it's time for a reality check IMO. No one expected the situation to get this bad.

As to airlines - it's obvious this causes a big problem. Those that placed large orders are basically trapped. Even if they wanted to cancel the orders - which they would have all ground to do IMO - they probably just could not, due to the very long lead times, so I can see why they would try and stick to it the longest they can as long as they are reasonably sure that the 737 MAX will be able to fly again before they could get a chance to have an equivalent order to a competitor get delivered. So yeah, they are basically screwed up, and if it ever happened that Boeing was eventually unable to deliver, said airlines would likely be in big trouble as well for lack of planes.

So yeah, I'm not sure how it's going to end up exactly, but I'm just seeing a possible scenario in which it won't end well. Meanwhile, others are more optimistic.

[BravoV]

Life was, is and will be really good at Boeing's management and share holders.

-> Boeing calls for $60 billion lifeline for U.S. aerospace industry

Quotes ...

Congressional officials are reviewing Boeing’s cash needs as Congress considers a stimulus and rescue package that could top $1 trillion.  

[SilverSolder]

Life was, is and will be really good at Boeing's management and share holders.

-> Boeing calls for $60 billion lifeline for U.S. aerospace industry

Quotes ...

Congressional officials are reviewing Boeing’s cash needs as Congress considers a stimulus and rescue package that could top $1 trillion.  

Boeing can ask...   but in an environment where so many industries will need a bailout...   will they get everything they ask for?

[SiliconWizard]

I'm all for saving the US aerospace industry, but 1/ the US aerospace is not just all about Boeing (or is it? if it is, it's a big problem), and 2/ Boeing is trying to mix up the difficulties it has gone through with the Coronavirus - not saying it won't damage things further, of course, but that almost sounds "convenient" here.

[BravoV]

Life was, is and will be really good at Boeing's management and share holders.

-> Boeing calls for $60 billion lifeline for U.S. aerospace industry

Quotes ...

Congressional officials are reviewing Boeing’s cash needs as Congress considers a stimulus and rescue package that could top $1 trillion.  

Boeing can ask...   but in an environment where so many industries will need a bailout...   will they get everything they ask for?

Of course, I guess you are too young to understand on what happened in 2008 crisis.

Here what was happening on a phone conversation .... "... mark up your number will ya ? So that leaves me/us a leeway and save our faces when we finally make a discounted figure on it, say it will end up just 10% (100B   ) ? How bout that sounds ? Ok, deal, and make sure do not forget my/our cut will ya ... " .... phone hang up ... done deal. 

Thats the reality.

[TerminalJack505]

There's a lot of grumbling about how Boeing and the airlines spent a huge chunk of their free cash on stock buybacks.

Article

As a group, the six airlines spent 96% of their free cash flow on stock buybacks over the past 10 full years through 2019.

Boeing’s free cash flow for 10 years totaled $58.37 billion, while the company spent $43.44 billion, or 74% of free cash flow, on stock repurchases.

So, basically, that money artificially propped-up share prices and made investors and executives handsome profits.  They blew their wads and are now having liquidity problems and need a handout.  They saved nothing for a "rainy day."

I don't know if the airlines are worth saving.  Someone from the private sector could likely give Boeing a big cash injection--in exchange for preferred-stock.

...such as the one Berkshire did with Goldman Sachs GS during the 2008 financial crisis. Berkshire had $125 billion in cash and short-term investments in U.S. Treasury bills as of Dec. 31

[TerminalJack505]

Oh, and stock buybacks should be illegal again...

Article

Share buybacks were considered a form of market manipulation and were illegal under SEC rules until 1982, when the SEC issued Rule 10b-18 which provided corporations a “safe harbor” to buy back their own shares under certain conditions. Once corporations figured out that no one cared about those conditions, and that no one was auditing anything, share buybacks exploded. And they’ve have been hyped endlessly by Wall Street.

[Psi]

Uh huh. The Boeing disaster has been on all media for months. Even if you don't care about that, you're very likely to have heard about it. You probably also underestimate the "power" of social networks these days. Sure the attention is currently on the virus, but since it's very unlikely at this point Boeing is going to get approval before the end of the year, by then it'll make a lot of fuss again IMO.

Heck, we don't even know whether Boeing is going to stay alive at this point. And you're like it will just be a matter of a name change? I have no clue what is going to happen exactly, but it's time for a reality check IMO. No one expected the situation to get this bad.

As to airlines - it's obvious this causes a big problem. Those that placed large orders are basically trapped. Even if they wanted to cancel the orders - which they would have all ground to do IMO - they probably just could not, due to the very long lead times, so I can see why they would try and stick to it the longest they can as long as they are reasonably sure that the 737 MAX will be able to fly again before they could get a chance to have an equivalent order to a competitor get delivered. So yeah, they are basically screwed up, and if it ever happened that Boeing was eventually unable to deliver, said airlines would likely be in big trouble as well for lack of planes.

So yeah, I'm not sure how it's going to end up exactly, but I'm just seeing a possible scenario in which it won't end well. Meanwhile, others are more optimistic.

I don't disagree with anything you said.

I agree that most people will have heard of the issue but if you asked 100 random people in the street what company it was and what plane it was i don't think you'd get over 20% knowing even one answer.

Most people don't fly much, if at all, and don't care enough about the issue to remember the details.
Once it dies down in mainstream news they forget it in a week.

You could argue that if these people never fly then they don't count because they're not part of the system.
But, if they're a big percentage of the general pubic then they dilute the issue in the public eye and less people talk about it.

[Gyro]

I was listening to a radio interview with the boss of Easyjet this morning...

We need government assistance, Covid, blah blah

... but you're about to hand out a £180M dividend to your shareholders!

Oh yes, but we're legally obliged to do that...   

[SiliconWizard]

Uh huh. The Boeing disaster has been on all media for months. Even if you don't care about that, you're very likely to have heard about it. You probably also underestimate the "power" of social networks these days. Sure the attention is currently on the virus, but since it's very unlikely at this point Boeing is going to get approval before the end of the year, by then it'll make a lot of fuss again IMO.

Heck, we don't even know whether Boeing is going to stay alive at this point. And you're like it will just be a matter of a name change? I have no clue what is going to happen exactly, but it's time for a reality check IMO. No one expected the situation to get this bad.

As to airlines - it's obvious this causes a big problem. Those that placed large orders are basically trapped. Even if they wanted to cancel the orders - which they would have all ground to do IMO - they probably just could not, due to the very long lead times, so I can see why they would try and stick to it the longest they can as long as they are reasonably sure that the 737 MAX will be able to fly again before they could get a chance to have an equivalent order to a competitor get delivered. So yeah, they are basically screwed up, and if it ever happened that Boeing was eventually unable to deliver, said airlines would likely be in big trouble as well for lack of planes.

So yeah, I'm not sure how it's going to end up exactly, but I'm just seeing a possible scenario in which it won't end well. Meanwhile, others are more optimistic.

(...)
I agree that most people will have heard of the issue but if you asked 100 random people in the street what company it was and what plane it was i don't think you'd get over 20% knowing even one answer.

Most people don't fly much, if at all, and don't care enough about the issue to remember the details.
(...)

Many people fly these days thanks to low-cost companies. Air trafic has increased tremendously. And many of these airlines ordered a lot of 737MAX planes due to the promised lowered operating cost, so there is a direct impact here. I don't know what you mean in terms of figures by "most people don't fly much", but the very existence of all the low-cost airlines shows something else. A lot of flights and a lot of people.

We'll see. I'm much less optimistic than some of you guys are. See ya by the time the 737MAX gets approved, if it ever does, and we'll talk again.

[SiliconWizard]

I was listening to a radio interview with the boss of Easyjet this morning...

We need government assistance, Covid, blah blah

... but you're about to hand out a £180M dividend to your shareholders!

Oh yes, but we're legally obliged to do that...   

Ah well, that sucks, but yes they are.
Unless maybe there was an exceptional law voted in emergency to prevent that temporarily - which would have a major impact on the world's economy (think about it, but it could lead to a crash in no time.)

[Domagoj T]

Aren't dividends paid out of profit?

[SiliconWizard]

Aren't dividends paid out of profit?

On profit ALREADY made. It has to be evaluated through a rather complex accounting process (yuck I don't like it), so current and future losses can't determine what the current dividends are at any given time.

[Domagoj T]

I don't like accounting either, so I'll just accept that dividends must be paid, as much as I don't like it. Doesn't change the sentiment that I wouldn't give them a penny for bailout.

In other news, Boeing somehow managed to do it again. This time it's not 737 related, but 787. Potentially just as deadly, though.
https://www.flightglobal.com/systems-and-interiors/faa-addresses-potential-data-display-fault-in-787-avionics/137403.article
If you leave the 787 (8, 9 and 10 variants) turned on for more than 51 days they will start to display, what FAA mildly puts, "misleading attitude, altitude, airspeed and engine operation data". Basically, the fundamental flight data the pilots (and autopilot) see is wrong.
Now, it might seem like an edge case, after all who leaves the plane turned on for more than 51 days, right? Well, it does actually happen, but regardless, the bug should not have been there more so because that exact type of bug has been encountered (in aviation) at least twice before.
First time I'm aware it was encountered was in 2004 when air traffic control lost radio communication with all 400 of the planes in southwestern USA. Luckily no one died that day.
https://spectrum.ieee.org/aerospace/aviation/lost-radio-contact-leaves-pilots-on-their-own
The second time is the doozy, though. If you left your airplane turned on for 248 days, you would lose all electrical power, regardless of what was the plane doing at the time (that is you could lose power mid flight). It's the same time keeping overflow mishandling. Now would you care to guess what airplane was afflicted with this bug? If your guess is Boeing 787, you get a cookie.
https://www.theregister.co.uk/2015/05/01/787_software_bug_can_shut_down_planes_generators/

[BravoV]

So they use windoze ? Also watch the article's date ... 

https://www.cnet.com/news/windows-may-crash-after-49-7-days/

[SiliconWizard]

Doesn't change the sentiment that I wouldn't give them a penny for bailout.

I understand the frustration, but I'm not sure I quite agree here. The purpose of private companies is to make profits - and distribute them.
If there's an exceptional situation in which some companies' future is at stake, I don't think the fact they made profit before it happened justifies not helping them in times of big trouble like this. It has almost nothing to do.

The only way you could discuss this IMHO is if a company makes large profits AND doesn't invest enough when it would be needed (meaning, net result is "artificially" high as the company cuts on investments). But you can't blame a company here for not making investments - they are just losing money for sudden lack of activity. Completely different thing.

[Domagoj T]

Let me try to explain then.
I, as a private individual, have a job that provides me with certain income. That income is nowhere near the amount needed to cover all my desires, so I have to budget it. After I pay for my food, clothes, electricity bills and housing, I have some left over that I can either spend on fun stuff, or tuck away in some sort of savings (stocks, socks, doesn't matter). It's usually a bit of both fun and savings. That savings is used for times when I need to buy a new washing machine, fix the car or I lose a job. I need to cut back on my pleasure spending so I have a safety net during the rainy days, because the government will not bail me out. With businesses, it's the same thing. No one will help a business overcome sudden loss of activity.

Unless they are a huge corporation that is just "too big to fail". Boeing will happily pay out hundreds of millions in bonuses per year to their senior management, but will not set aside anything for rainy days. When those rains come, they expect others to pull them out of the muck. I certainly can blame the management for prioritizing their private interests over the interests of the business and the employees.

[SilverSolder]

Let me try to explain then.
I, as a private individual, have a job that provides me with certain income. That income is nowhere near the amount needed to cover all my desires, so I have to budget it. After I pay for my food, clothes, electricity bills and housing, I have some left over that I can either spend on fun stuff, or tuck away in some sort of savings (stocks, socks, doesn't matter). It's usually a bit of both fun and savings. That savings is used for times when I need to buy a new washing machine, fix the car or I lose a job. I need to cut back on my pleasure spending so I have a safety net during the rainy days, because the government will not bail me out. With businesses, it's the same thing. No one will help a business overcome sudden loss of activity.

Unless they are a huge corporation that is just "too big to fail". Boeing will happily pay out hundreds of millions in bonuses per year to their senior management, but will not set aside anything for rainy days. When those rains come, they expect others to pull them out of the muck. I certainly can blame the management for prioritizing their private interests over the interests of the business and the employees.

As a private individual, you have social insurance (unemployment insurance) and health care, nobody is going to be left starving.   

Not that I disagree with you, though, when corporations go down because of mismanagement (e.g. the Boeing Max scandal).  They might try to sweep that little booboo up under cover of the corona thing.

[SiliconWizard]

Let me try to explain then.
I, as a private individual, have a job that provides me with certain income. That income is nowhere near the amount needed to cover all my desires, so I have to budget it. After I pay for my food, clothes, electricity bills and housing, I have some left over that I can either spend on fun stuff, or tuck away in some sort of savings (stocks, socks, doesn't matter). It's usually a bit of both fun and savings. That savings is used for times when I need to buy a new washing machine, fix the car or I lose a job. I need to cut back on my pleasure spending so I have a safety net during the rainy days, because the government will not bail me out. With businesses, it's the same thing. No one will help a business overcome sudden loss of activity.

As SilverSolder said, in many countries you have some kind of social insurance.

What you're saying here is that you are blaming some companies not to build enough "cushion" (I think this is the proper financial term). Thing is, first, you'd always have to determine how much - and in case of a major downtime, any amount you have decided on will probably not be enough to save much. Second, once a private company goes public, major decisions like this can't be made by the company's executives only. Major shareholders will get to eventually decide on things like this. Shareholders will usually prevent any company from building up too much cushion - because this is just "sleeping" cash.

You're probably hoping for a complete change of system here...

[Domagoj T]

As a private individual, you have social insurance (unemployment insurance) and health care, nobody is going to be left starving.

As SilverSolder said, in many countries you have some kind of social insurance.

Sure, but since we're talking about Boeing and USA bailout, let's take a look at US numbers. There are 34 million people in US that live below poverty line. There were more than half a million people that were homeless in 2018.
Social insurance does exist in theory, but it's not nearly as farm and fuzzy as the bailouts for big companies, which are sized to produced "business as usual" effect. Personal social insurance is of much lower quality.
Boeing is asking for "a minimum of 60 billion for aerospace manufacturing industry", of course they are the biggest player.

Not that I disagree with you, though, when corporations go down because of mismanagement (e.g. the Boeing Max scandal).  They might try to sweep that little booboo up under cover of the corona thing.

Seems like, for Boeing, corona is the best thing that happened since sliced bread. Thousand new airplanes are grounded, but airlines are not, or barely, operating anyway, so no pressure.

What you're saying here is that you are blaming some companies not to build enough "cushion" (I think this is the proper financial term). Thing is, first, you'd always have to determine how much - and in case of a major downtime, any amount you have decided on will probably not be enough to save much.

About three months worth of operation should do it.

Second, once a private company goes public, major decisions like this can't be made by the company's executives only. Major shareholders will get to eventually decide on things like this. Shareholders will usually prevent any company from building up too much cushion - because this is just "sleeping" cash.

Open market will regulate that. If your company doesn't prepare for an unforeseen event as well as competition, you'll be taken over. If you prepare better than competition, you can take them over.

You're probably hoping for a complete change of system here...

Sure. I'd like to see some changes.

[EEVblog]

Seems like, for Boeing, corona is the best thing that happened since sliced bread. Thousand new airplanes are grounded, but airlines are not, or barely, operating anyway, so no pressure.

Yep 
Well, at least for those involved in the 737MAX.
Uncle Sam will helicopter drop in some free cash, and they get oodles more time to solve the problems.