00:00So President Trump leaving today for China, he's got a plane full of executives, including
00:04an executive for Boeing. And boy, when you think about a company that's leveraged to China,
00:10A, I always think of Apple, but Boeing's right there. And we want to talk to Sid
00:14Phillip about that, Bloomberg chief correspondent for Global Aviation, because this could be
00:20one of those trips where somebody, you know, China announces a gajillion plane deal and,
00:25you know, it's actually something that the CEO has kind of hinted at already saying that,
00:31you know, Trump's visit would be, quote, a meaningful opportunity for us.
00:35Yeah. Sid Phillip, he does all this stuff for Bloomberg News. What are you expecting here
00:39on this trip for Boeing? What do you think Boeing wants to get out of this?
00:42So Boeing's looking to secure its first big order from China in almost a decade. And so
00:48we understand it's going to be 500 737 MAXs and a large number of whitebody planes. And that would
00:56be significant because the Chinese airlines haven't really ordered any Boeing planes in a while.
01:02Is that just because they're mad at us?
01:04They were mad at us. And there was COVID in the middle of it. And so the Chinese airlines actually
01:10need those planes because they don't really have a supply of Boeing. I mean, they operate both Airbus
01:15and Boeing planes, and they don't really have a supply of planes beyond the 2030s. And so if they
01:21want to keep expanding, if they want to keep adding more service, they need those planes.
01:25And this order is a way to get that.
01:28Okay. So this order is a way to get that. I guess if you're an airliner, you're thinking,
01:34what's the next thing Boeing is selling that I want to get my hands on? I mean, you know,
01:38not tomorrow, not next month, but down the road as I plan my fleet. Does Boeing have an answer to
01:43that?
01:43Because it feels like the company has spent so much time writing itself that it hasn't really put
01:47as much, at least outward energy into innovating the next jet.
01:53So that's the really big question that the CEO, Kelly Ortberg, is really looking at. So while
01:57obviously you have the short term and the immediate issues that they have to ramp up production,
02:03they have to ramp up cash, like cash generation, reduce that debt pile. The bigger question for
02:08Boeing is where do they go from here? And the 737 is basically a long derivative of a 1960s jet.
02:17And so for Boeing, they need to decide what they do next. And that will be crucial in the sort
02:22of
02:22duopoly that they have with Airbus. And Airbus has been talking about how they are working on the next
02:28generation of product that they're aiming to get out in the middle of next decade. And that would
02:33basically allow airlines to get something that's more fuel efficient, and allows them to fly greater
02:39distances with more passengers on them. And so what we understand is that Boeing is working on
02:45something that's more evolutionary rather than revolutionary, because the last thing airlines
02:51need is uncertainty. And when you have a product that's revolutionary, it always comes with teething
02:57issues, it comes with all sorts of complications with new technology, and how that whole meshes together
03:03with existing infrastructure.
03:05Yeah, we've seen that play out before.
03:06Exactly. And so for the airlines, they want something that's stable, allows them to sort of keep going as
03:11usual, and not sort of rocking the boat too much. And that's really key for Boeing. So how do you
03:16derive more
03:17fuel efficiency using evolutionary technology? And that's where we see Boeing sort of going in terms of their
03:25next products.
03:2710 seconds. If I get a big order today from China, they can't even make the planes Boeing. I mean,
03:33they have to build another factory or two.
03:35So Boeing is in the process of opening a new factory for the 737. And they are looking at
03:40ramping up production. And they've been talking about how they've got these short term goals. So
03:45they're currently looking at 42 a month, they're going to ramp up to 47 a month, then 52 a month,
03:50then 60. So essentially, for Boeing, they have a sort of stepped up plan to ramp up production,
03:56depending on how the FAA sort of signs off on it.
03:59The production will be in the US?
04:00It will be in the US. So Boeing produces all its planes in the US.
Comments