Lots More on the Ongoing Mess That Is Boeing

SPEAKER_1 (0:03)

Bloomberg Audio Studios, podcasts, radio, news.

Tracy Alloway (0:10)

Feel like we might have made a mistake recording this episode on Wednesday, October 23rd, which is the day that we're awaiting the strike vote over at Boeing.

Joe Weisenthal (0:19)

Oh, yeah. But you know, yes, that's right, that's annoying timing. But on the other hand, what I would say is that Boeing's issues seem so deep. Et cetera, that the strike is only one angle.

Tracy Alloway (0:33)

It's just another trouble.

Joe Weisenthal (0:34)

So even if there were, you know, even if there were all the, you know, by the time people listen to this and there's some resolution, I don't think there's going to be some resolution to the issues at Boeing writ large.

Tracy Alloway (0:45)

Well, the good news, I guess, in terms of timing, is also that we had Boeing earnings just yesterday. So you can kind of see a lot of those issues that you are alluding to directly on the balance sheet. Do you want to know some good news from my personal life?

Joe Weisenthal (1:00)

Yeah, please.

Tracy Alloway (1:01)

Okay. The correlation between Boeing and Southwest, their biggest customer, is finally breaking down. So Southwest shares are up. Boeing is still pretty depressed. My dad used to fly for Southwest, so he still has a lot of Southwest stock.

Joe Weisenthal (1:17)

So this is a disclaimer. This is a financial disclaimer.

Tracy Alloway (1:20)

That's right.

Joe Weisenthal (1:21)

This is important.

Tracy Alloway (1:22)

Also, this is what constitutes good news for me nowadays.

Joe Weisenthal (1:28)

I did a deadlift. One, two, three.

Tracy Alloway (1:30)

Hegemony. Okay, go. Hegemony. Barges.

Joe Weisenthal (1:35)

This is an after school special, except.

Tracy Alloway (1:37)

I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the US.

Joe Weisenthal (1:43)

Where's the best squid in pasta?

Tracy Alloway (1:45)

These are the important questions. Is it robots taking over the world?

Joe Weisenthal (1:48)

No, I think that in a couple of years, the AI will do a really good job of making the Odd Lots podcast. And people will think, I don't really need to listen to Joe and Tracy anymore. We do have...

Tracy Alloway (2:00)

Cha-ching. The perfect guest. You're listening to Lots More, where we catch up with friends about what's going on right now.

Joe Weisenthal (2:08)

Because even when the Odd Lots is over, there's always Lots More.

Tracy Alloway (2:11)

And we really do have the perfect guest.

Joe Weisenthal (2:17)

We did an episode, I don't know, maybe three or four weeks ago, and the title of that one was The Ongoing Mess That Is Intel. And this one, I think we're going to title The Ongoing Mess That Is Boeing. But it's interesting, I don't know if you saw earlier this week, I think it might have been Monday, Greg Ip over at the Wall Street Journal wrote this column.

Tracy Alloway (2:33)

Oh yeah, I saw that.

Joe Weisenthal (2:34)

That is basically like, the crises at Intel and Boeing are a national emergency. And this is something that I've thought specifically, sometimes random people who know that I cover stuff like this for work, they'll say, what are you worried about these days? And this is usually what I go to first, that we're in an era of we're trying to revitalize US manufacturing, and yet the two defining flagship US manufacturers are deeply struggling. And what does that say about institutional operations and the nature of US capitalism? These are the companies that I think about first when I worry.

Tracy Alloway (3:10)

You know who else thinks about them a lot? Richard Aboulafia, who is, of course, a managing director at AeroDynamic Advisory. We've had him on before talking about both Boeing and Embraer.

Joe Weisenthal (3:21)

One day we're going to talk and it'll be good news. We're going to talk about something going really right. But I don't think I don't think today is that day yet.

Richard Aboulafia (3:30)

Yeah. Jetliner is delivered to happy customers and waiting for members.

Joe Weisenthal (3:34)

That would be doors and doors staying on planes, things like that.

Richard Aboulafia (3:38)

Well, that's asking a lot.

SPEAKER_1 (3:39)

But yeah.

Tracy Alloway (3:42)

So in terms of what you're watching at Boeing, I just mentioned the strike vote is coming later today. But what is the next catalyst for you in terms of the future of this company?

Joe Weisenthal (3:54)

Yeah.

Richard Aboulafia (3:56)

Obviously, getting the strike settled is just so enormous. But quite frankly, once you get it back, get work going again, getting to the rate they want is really the key to everything. The 737 is, they're only really big profitability driver. So if you ever get to that halcyon place where they're delivering 50-something per month, cash ceases to be a problem. It's just that simple. They've been stuck in first or second gear for years now at 20-something or zero in the aftermath of the two crashes.