Between 2013 and the end of the first quarter of this year, Boeing retired a net 200m shares, spending $43 billion. The number outstanding shares came down by 25 per cent.
One reason it could was because of savings on the company’s latest aircraft program, the now notorious 737 Max, grounded after two recent crashes killed 346 people. Instead of building a wholly new aircraft, Boeing simply bolted new fuel-efficient engines on to a modified existing airframe. That significantly reduced the airframe development costs of the project, according to company insiders. Boeing was able to redirect some of those “savings” to repurchase stock instead
The program for the 787 Dreamliner, for instance, lasted eight years and cost $32 billion.
Since the crashes of the 737 Max, Boeing’s market capitalization has dropped approx. $55 billion dollars, thus wiping out for shareholders all the gains Boeing spent on re-purchasing its own stock.
Exactly. Imagine if they had just built a wholly new pretty aircraft instead! That was in fact their original plan circa 2010 I believe— when the economy was weaker. They felt rushed by competition from Airbus plus shareholder demands...
It is also my understanding that signs of shoddier-than-normal rush manufacturing are showing up on newly built existing models and even in some military craft. Wing issues, cracks, debris, and things. The head of their South Carolina plant was forced to leave his post. 🤦♀️