Boeing’s 737 MAX, other troubles could make a mess of greater Northwest economy
Odds and ends, bits and pieces, follow-ups and some reader commentary are on your Sunday business-column brunch this week:
▪ Boeing has jettisoned the head of its commercial airplane division, having earlier removed the chairman’s title from chief executive Dennis Muilenburg. At some point down the line we’ll ruminate at greater length about executive leadership and whether, in times of crisis, such changes are cosmetic or meaningful, as well as whether such firings go too far or not far enough.
But there are more immediate concerns at and about Boeing, not just for executives, employees and shareholders of the company but for the entire regional aerospace ecosystem and the economy that lives off it.
The third-quarter earnings release, issued last week, did not make for happy reading. For example: “Given the current global trade environment, the 787 production rate will be reduced to 12 airplanes per month for approximately two years beginning in late 2020.”
The 777X, meanwhile, won’t have its first delivery until early 2021; that had been expected for next summer (i.e., 2020).
Then there was this: “For purposes of the third-quarter results, the company has assumed that regulatory approval of the 737 MAX return to service begins in the fourth quarter of 2019 and that it will gradually increase the 737 production rate from 42 per month to 57 per month by late 2020.”
That’s a huge assumption, given the seriousness of the 737 Max situation (two fatal crashes), recent revelations about decisions Boeing made in changes to systems on the plane, the scrutiny regulators are giving the company and the jet, the scrutiny the regulators themselves are under, the skepticism Boeing and U.S. regulators are facing overseas and the reluctance on the part of some airlines and passengers to fly on it, even if it does eventually win approval to return to service.
If that assumption proves to be too much of a reach, and Boeing winds up cutting instead of increasing production because of delays and lost orders, that’s going to make a hash of production schedules, employment and revenue for everyone in the supply chain, and that will in turn mean disruption for the broader economy.
Trying to plan for 2020? Good luck figuring out what even the remaining two-months-and-change of 2019 are going to look like.
▪ Last week’s column on the launch of a new motorsports complex in Kitsap County, and the crowded regional market for sports-entertainment venues, turned up another entrant: Ridge Motorsports Park, a 300-acre facility near Shelton that includes a 2.47-mile road course.
Like its soon-to-be-nearby neighbor, Circuit of the Northwest at the Port of Bremerton, Ridge Motorsports is designed to host a variety of racing circuits and just announced it is a three-day stop for the MotoAmerica motorcycle series next June.
Like other racing venues, Ridge Motorsports has been expanding and investing; it has added a building to serve as an event and training center.
Is the region’s motorsports community big enough to support those two, and Pacific Raceways in Kent, and Evergreen Speedway in Monroe, and any others we missed? Is there enough of an audience among casual fans and the merely curious to supplement the core base of motorsports enthusiasts?
Those are the questions to be asked of hockey once an NHL-level Seattle-based team is added to a market with lower-level teams already in Kent and Everett. And those are questions to be asked of all sports teams and venues should the economy go a bit wobbly, putting a crimp in income available to be spent on leisure, recreation and entertainment.
▪ A number of readers took the bait on our recent invitation to comment on ads, and thank you for doing so. Since the focus of the column was on insurance advertising, that’s what the comments focused on, sometimes on the specific (one reader loves the Allstate “Mayhem” series, while another loathes it), sometimes on broader topics such as the financial structure of the industry with so much money going to marketing.
A sampling:
“The most recent Geico ad with the woman who turns into a cat is the creepiest ad that I have seen in a long, long time. It’s for renter’s insurance but I really do not see the connection between that ad and a call to action to purchase insurance. That being said, the Geico ad with the kids in the horror movie cracks me up every time I see it. I love the look on the face of the Jason character when he sees the kids hide behind the wall of chain saws! But, again, I am not sure exactly how this ad will cause anyone to make the move to buy insurance.”
Insurance ads “are going for the funny response, which might happen the first once or twice you see the ad. However when that same ad runs multiple times in one show, it gets old quick.”
“As a general rule I mute commercials or record shows and fast forward thru them. They insult our intelligence and I for one have better ways to use my mind then to watch silly stuff.”
“I do not pay any attention to any of the ads! I hate the interruptions and would not purchase any of the folderol that is offered. Too bad it costs so much to provide content to the viewing public that these unfortunate commercials have to be purchased. So close to just leaving TV off and just reading my newspapers and books or knitting and crocheting! SO CLOSE.”
By the way, in our listing of insurance companies that advertised on one afternoon of college-football broadcast viewing we missed one — Liberty Mutual, which has some sort of ad campaign going involving emus. No, we don’t know what that has to do with insurance, either.
This story was originally published October 26, 2019 at 6:00 AM.