New plane orders at Boeing (NYSE:BA) are the lowest since 2005 and deliveries the lowest since 2005. Blame the Boeing 737 Max.
Due to never-ending 737 Max issues, plane orders at Airbus have soared while Boeing orders fall to a 16-year low.
Quick Comparison Facts
- Boeing New Orders: 246 new orders for commercial jets of all types before cancellations and model swaps is the lowest tally since 2003.
- Airbus (PA:AIR)New Orders: 1,131 new orders last year for a net total of 768 counting cancellations.
- Boeing (NYSE:BA) Deliveries: 380 aircraft, including military versions of its jetliners, a 14-year-low that compares.
- Airbus Deliveries: Airbus had 863 deliveries, a record high.
- Boeing Backlog: 4,500.
- Airbus Backlog: The A320, Airbus’s rival to the Boeing 737 family, is currently sold out until late 2024.
- Airbus new orders were boosted by the launch of a A320 variant that boasts more range. The bigger A321 XLR has been eating into the potential market that Boeing envisions for its first all-new aircraft model in a decade.
- American Airlines (NASDAQ:AAL) said Tuesday that it would remove the MAX from its schedules until June, two months longer than previously planned.
Layoffs Tensions Spread
The 737 Max woes are starting to impact Boeing suppliers like Spirit AeroSystems. A couple of weeks ago, Spirit announced it would shift its workforce around to work Airbus production.
On January 10, Spirit AeroSystems announced a 2,800 worker lay off.
The biggest Boeing 737 MAX supplier said it is planning an initial 2,800 layoffs, the first announced job cuts since the grounding of a plane that is rippling through the broader aerospace industry.
Spirit AeroSystems Holdings Inc. makes the fuselage and engine parts for the MAX and had been producing enough for 52 jets a month before Boeing said it would freeze assembling the planes in January for a “temporary” time.
Spirit Chief Executive Tom Gentile said the decision was a “necessary step” given the uncertainty with MAX production. The company said it could have to cut more workers.
Internal Comments Released
Also on January 10,Boeing released internal documents showing some employees mocking the aircraft and another bragging about tricking the FAA into certification.
Trump Will Drag Airbus Into the Crisis at Boeing
Also, recall the opinion of Leeham regarding a tariff spillover. Analysts at Leeham commented:
"Airbus is almost certain to become a target for higher tariffs. I won’t rule out adding the Mobile (AL) final assembly line to sanctions despite Alabama being the No. 1 supporter of Trump. There is no way Alabama will vote for a Democratic challenger to Trump; it’s a completely safe state"
Meanwhile, Airbus to expand in UK after Brexit.
Manufacturing Already Weak
The latest ISM report was a disaster: Manufacturing ISM is own for the 5th month to the lowest since June 2009.
Following the GM strike, there was a job recovery that lasted precisely one month. Manufacturing jobs unexpectedly declined by 12,000.
Expect another 2,800 or so layoffs from Spirit.
Trump and China will Sign a Trade War ceasefire, but that will not restore any jobs.