"Re: I wouldn't want to hold their [airline] stocks though. Nor Boeing's.
"I used to work at Boeing, and although I don't currently hold any BA, it will be interesting to see what happens tomorrow. They'll probably take a hit because of the tragedy, but at the same time they will benefit immensely from the almost certain increase in defense spending."
Defense spending will take a while to increase. And the types of systems Boeing would be building for a defense build-up won't be part of the short-term situation. I'd guess the Advanced Fighter builds remain years in the future.
Meanwhile, the airlines are a lot like the dot coms and their suprlus servers and workstations: a lot of planes are about to be dumped on the market (Continental, Delta, American, US Air, all are cutting way back).
Boeing will be building to fulfill the signed contracts, but I'll bet even a lot of the signed contracts get cancelled. Both because business is way down, worldwide, and because of the number of 757 and 767 frames about to be dumped on the market in the upcoming bankruptcies.
(There may also be a second round of attacks coming soon. Using a Stinger on a 747 taking off could trigger even more paralysis. The CIA conveniently sold 118 Stingers to the Afghans, only 23 of which were ever used or accounted for. The solid propellants of the remaining 95 or so should be fireable indefinitely. Bin Laden has had close to 10 years to get some of these into the U.S.)
My hunch is that Boeing will be cutting back production dramatically, echoing the aerospace recession of the early 70s.
--Tim May |
