If you look around in the community you travel through often times there is a large employer which affects the area. Sometimes that is educational such as college or university; sometimes that is a service center of government – state or regional government; and sometimes a manufacturing facilities and every combination of the above. It is often thought the longer a company is operating the more stability they provide for the area and the better the stability of the economy. One large manufacturing company is Boeing.

In an article by Rajesh Kumar Singh and Allison Lampert of Reuters, Boeing is one of the large institutional manufacturers and because it has a duopoly with Airbus, it can be taken for granted it will continue to operate the way it always has.

Boeing is the largest US exporter and employs nearly 150,000 people domestically. It supports millions more through a supply chain that includes thousands of business big and small around the world.

Economist Joseph Brusuelas estimates it contributes $1 trillion a year to the US economy and supports more than 5 million jobs.

A door fell off in flight in mid January, the plane landed safely. The fallout meant a slowdown in deliveries of Max 737. One of the fallouts is Southwest Airlines was expecting to replace planes in their fleet with Max 737s, the planes are slowly coming and Southwest had to adjust their flights by cancelling some and slowing pilot hiring.

Boeing expects to get back to a Max production of 38 a month in the back half of the year. This year Boeing delivered 175 jets in the first half of 2024, which is down 34% from a year ago. The slowdown ripples to suppliers such as GE Aerospace which has slow downed engine production as most supply lines are just in time to save money on inventory costs.

Similar to a person buy a new vehicle and there are fewer costs to run it, airlines which depend on Boeing to continually upgrade their planes are flying on older planes with a higher costs to run which affects their bottom line. Allegiant Air says that amounts to $30 million a year. Southwest the number is larger because it was expecting 85 new planes and have only received 20 planes. Fewer planes translates into less routes and greater concentration on profitable routes, which means some smaller airports lose flights.

Linking to dividend paying stocks, often times when you purchase these stocks you expect the stock to be slow and steady and that often wins the race in the long run. The companies can face the changes economies and cycles bring and as a shareholder you are better off for being a shareholder. We are seeing that a small event can cascade in bigger implications which is why after you read the slogans of the company, ask are they doing it?

There are more questions than answers, till the next time – to raising questions.