Boeing (BA) stock has fallen more than 30% in 2024 as the company experienced a tumultuous few months that began with the Boeing 737 MAX mid-air crash. This incident led to a Federal Aviation Administration (FAA) audit that revealed multiple deficiencies in non-compliance with manufacturing quality control requirements.
Mike Boyd, president of Boyd Group International, joins Yahoo Finance to discuss how Boeing will fare in competition with Airbus (AIR.PA) and what the acquisition of Spirit AeroSystems means for the manufacturer. discuss.
Mr. Boyd outlined the key priorities of Boeing's new leadership. “The first priority of the day is to clean up what's going on on the manufacturing floor. You know, as I pointed out, in airlines, if you fix a plane, the mechanics have to fix it, too. No, you have to.'' “I know who it is. He signs off…Then the inspector comes in and signs off. Now I know.'' That's not what Boeing was doing. They won't tell Alaska Airlines (ALK) who worked on that plane.”
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Editor's note: This article was written by Nicholas Jacobino
video transcript
Sheena Smith: With regulators, airlines, and passengers all in the midst of a storm, where does Boeing go next? Here's how the stock reacts. That's because Boeing is clearly under some pressure, with its stock price down only about 30% since the beginning of the year. We can see a downward trend here. It currently trades at just over $182 per share.
Therefore, we would like to invite Mr. Mike Boyd, President of Boyd Group International. So Mike, where does Boeing go from here? Talk about the fact that the stock is under tremendous pressure, 30% off. Do you see further downside risks for Boeing in the near term?
Mike Boyd: absolutely. The Max fiasco dropped Boeing to second place behind Airbus. This has been going on for four or five years now.
And again, a lot of it is due to oversight. We are not supervised by the FAA. So we need to build this into the program, but right now Airbus probably has about 350 units that they wouldn't have had before, just because Boeing can't manufacture them and Boeing can't really sustain the reliability. It will have a fleet of over 400 aircraft. Aviation industry now.
The top of the organization must completely change. Because right now, I mean, Airbus, I guarantee you, they're looking at taking over 70 acres of land that they had in Mobile and expanding their factory. Because in the next five to six years, the only Dash 10 that won't be introduced to an airline will be the A321. They will need that production capacity.
Brad Smith: Mike, Boeing has begun its acquisition of Spirit AeroSystems. Would that solve a short-term problem and bring at least some production entirely in-house after Boeing effectively spun off its group and became an independent entity years ago? ?
Mike Boyd: Now, who really cares who owns Spirit stock? In fact, Boeing is not only the company's main company, but also its main customer. Boeing should have considered this whether or not they owned the company. So this is just like a placebo.
The truth is, we need to stop kicking the tires here and realize that Boeing's problem is more than just one company. This is our biggest exporter. And now it has been relegated to second place behind Airbus, the only game in town.
So it makes no difference whether they buy AeroSystems or not. We have to fix it, and we also have to fix the oversight. The FAA was on the scene this whole time, so it's not particularly clean on this point either. And they have to move their game forward as well.
Brad Smith: And thank you very much for understanding my typo in the conversational format of airlines and aviation systems. There are two different spirits there, Mike, and I appreciate that. You know, what are the new Max responsibilities stepping into this role, what's the first priority for them that day?
Mike Boyd: The first priority of the day is to clean up what's going on in manufacturing. As I pointed out, in airlines, if you repair a plane, the mechanics have to repair it. I need to know if he signs off or she signs off. Then the inspector comes and signs it.
What we now know is that that's not what Boeing was doing. They won't tell us who was on the plane that caused Alaska's problems. That's outrageous. Airlines will be shut down because of this.
So what we have to have now is very strong oversight and the people at the top have to be held accountable. And it hasn't actually been done yet. Throwing people under the bus won't solve the problem.
