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Why Boeing Keeps Losing Money on Each 787 DreamlinerAmid all the fine financial news Boeing (BA) can tout—a record order backlog, robust profit margins, a higher profit outlook—one of the airplane maker’s dreariest performers continues to be its highest-tech, most fuel-efficient product: the 787 Dreamliner. (www.businessweek.com) More...
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Where in the article did they actually say WHY Boeing keeps losing money?
Well, we did not have the instantaneous scrutiny in the mid 90's for the 777 nor in the late 60's for the 747 but it was there as were these same issues. Cost on any new aircraft have to be put out there somewhere and a breakeven date of next year has long been out there. The 787 is running a little higher due to outsourcing and the battery deal but it is now on track. Wall street and the media will just have to keep there pants on.
(Income - Expenses) < 0, and other accounting tricks.
Gillette had a saying, "Give away the razor so you can sell them the blades".....Boeing taking a loss on the build to lock customers into purchasing proprietary parts is hardly a fool's errand. Boeing dictates the price, they understand the costs and since this isn't their first rodeo, it's a sure bet they understand the long term income that will come from selling these at a price appeal too hard to refute.......
Smart buyers will set parts pricing standards in the contract for the plane. Like Boeing probably did with all their suppliers of parts around the World. Or did they??? Ken
One more time, I did no have time to check for gramma !