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Comment by ogre_codes | Hacker News Reader

I'm not so sure about the "Making Billions" bit. They are going to have to either do a massive 11 figure write down or spread out their losses on the Max over the next 10+ years. Either one is a pretty bitter pill to swallow.

I'm betting we'll see a huge write down when the new CEO takes over, that way they can push as much blame as possible on the old regime and move forward with a clean-ish slate.

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Which is ironic given they chose a board member to be the new CEO. It's not new leadership, he was part of the original leadership team as a member of the board.

I have no idea how the Boeing board works, but most boards aren't involved in the day-to-day operations of the corporation and would be considered separate from the "leadership team".

Still the purpose of a board is to have oversight, which is mostly about signing of company structures and signing of processes for large processes the process for creating and approving a major new product line.

And well, if they'd pick some lower manager the critique would be the same. And if they pick an outsider the critique would be about them not understanding the business ... critique is always the easy part.

It's entirely possible that there was dissent on the board and some faction that was pushing for more responsible practices was overruled. If so, the changing circumstances may have empowered that faction and/or a specific person on the board.

I mean, that's just one possible situation where someone coming from the board won't necessarily be more of the same, but I don't know why we should assume the board acts of one mind. That seems really unlikely to me.

A hyper-corporation like Boeing must make billions merely to operate. They will not be allowed to fail. They will therefore make billions, one way or another.

This is a pretty standard new CEO move. Big impairment, net income goes way down, next few years look a lot better. Meanwhile cash flow doesn’t change.

But the cash flow will definitely change. They are selling fewer planes in the near term.

That's exactly why the new CEO will push for a big impairment immediately. That way the very-terrible-bad results are attributed to the former execs. The new CEO is essentially resetting the baseline and can post growth from there.

If the 787 recovers eventually, it's a windfall and the new CEO looks like a hero for implementing revolutionary change.

How does cash flow not change when you have to scrap the whole lot of 737Max orders?

I meant the impairment itself does not impact cash flow (setting aside taxes, can’t comment there). See Verizon Oath write down. Of course this can happen to already distressed firms who are experiencing cash flow issues. It’s just a way of making things appear “even worse” in your books without materially impacting your day to day business.

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