00:00So for Boeing, this is a very important step because ramping up 737 MAX production has been
00:05their key target since the FAA cap production back in 2024. So they've been talking about
00:11raising production from 38 to 42 last fall. Now they're looking at raising to 47 this summer
00:19and then getting to 52. And so as Boeing ramps up production, they can sort of deliver more planes
00:26and generate more cash for themselves. And that's sort of key to paying down their huge debt and
00:32also generating free cash flow for the company. And so this is one of the key steps for the company
00:37as it looks to sort of transition from its last few years of crisis to sort of a more
00:43cash generating profitable enterprise. Sid, Boeing has had so many victories since President Trump
00:49returned to the White House. This, you know, completion with the FAA, you also mentioned in
00:54your story, all of the orders that it's gotten from trade agreements. How much of this has to do
00:59with the fact that they have a favorable relationship with the administration?
01:03So Boeing has increasingly sort of, I mean, Boeing famously gave President Trump a salesman of the
01:09decade, the century award. And they basically sort of said that he's been key to unlocking lots of
01:17agreements and lots of sales. And Boeing has sort of won, including last week when they went to China,
01:24when President Trump went to China, and Boeing won that 200 plane commitment. It is smaller than what
01:30analysts were expecting. I mean, analysts were expecting over 500 planes. But the CEO today talked
01:36about how that the 200 plane order is a key step towards getting those bigger plane orders, because
01:42China's market is the world's second largest market, and Boeing has been shut out of it for the last
01:47decade. And so this is a sort of key step towards unlocking that market and getting that back again.
01:54Boeing CEO Kelly Ortberg, he's speaking at a Bernstein Strategic Decision Conference in New York.
02:00He says he met with President Trump on the need to ramp up weapons output, calling the demand for
02:04weapons system, quote, through the roof. Talk to us about, because we don't talk about the military side,
02:11the defense side of Boeing. Talk to us about that business for them.
02:14So Boeing has been focused on a number of, there's a number of pieces to it, including the F-15
02:20jet,
02:20the F-47, which is the new generation fighter jet, the KC-46 tankers. And so Boeing has been sort
02:29of
02:29trying to move away from those fixed price contracts that they were sort of famous for, to sort of more,
02:36the bigger sort of contracts that are more sort of freewheeling and allowing them to sort of
02:40ramp up costs if they sort of, the costs go up. The company is also sort of poised to gain
02:46from
02:46their replenishment of munitions and maintenance because of the war in Iran. So essentially the
02:53longer the war goes on, the more munitions they will sort of get, stand to gain from, as well as
02:58the aircraft that are being deployed will have to go through maintenance cycles and other sort of
03:05overhauls. And that will also unlock some cash. So for Boeing, the defense business,
03:10the CEO today talked about low, basically single digit margins and going back to those levels.
03:16And so that's again, a key turnaround for that defense unit.
03:20Boeing had been struggling with its reputation after a series of fatal crashes. Do you think that
03:25at this point, you know, people have kind of moved on from this in terms of public perception?
03:30Have they done enough to mitigate that?
03:34I mean, obviously there is still, Boeing still has to deal with the PR from those fatal crashes.
03:40At the same time, I mean, airlines have been ordering planes. I mean, Boeing's talking,
03:44today talked about how their decade, the backlog for the commercial aircraft stretches well into the
03:50next decade. So airlines seem to have moved on from that. Airlines are ordering lots of Boeing planes
03:56and are looking to get those Boeing planes. And the FAA has given more authority to Boeing.
04:02And so that's a sign that the FAA trusts the company more. And we look to see if that sort
04:08of
04:08continues, if that momentum continues. I mean, some crucial things we're looking out for
04:12is a certification of the smallest and the largest variants of the 737. So the MAX 7 and the MAX
04:1810,
04:19which are still uncertified, the long delayed. The company today talked about how
04:23we're in the final stages of certification of that jet and we will see deliveries to customers next
04:28year. And that, again, is a key step towards unlocking those orders because the MAX 10
04:34competes against the A321neo, which is basically Airbus's most profitable, best-selling plane.
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