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How China Should Screw Over Trump and Gradually Destroy Boeing

May 23, 2019 4 comments

As most of you know by now, the orange buffoon and some of his old white advisers think they can “win” a trade war against China- which is darkly comic because China’s economy surpassed USA in real terms almost a decade ago. Their latest sad attempt to “win” against China involves sanctioning its telecom giants such as ZTE and Huawei. The Chinese, being no fools, have been prepared for this contingency for about five years, because the first rumblings of such american behavior were heard as early as 2012, during the Obama presidency. While they probably did not expect a total idiot such as Trump to preside over the 2nd act of american collapse, that is where we are now. Before moving on to the main topic, a quick prediction about how the Huawei ban story is likely to unfold. Long story short, USA will lose because China is not France or Japan.

While many racist idiots on the internet and american think-tanks seem to think that China might retaliate by freezing imports of rare earth elements, dumping american treasuries or stopping the production of iPhones and pretty much every other smartphone brand, I think they may use a much more interesting tactic. Destroying Boeing is a far better way to retaliate because airliners and CPU chips are pretty much the only two important non-weapon related products made in USA. And ya, China should go after Intel too- but via a different and somewhat longer route. The advantage of being a very large and competently run one-party system is that you can afford to play the long game unlike dying delusional losers who pretend to be the “most democratic and humanitarian” system in the world. Here is how they can fuck Trump over and destroy Boeing- in a manner which advances their cause and is profitable.

As you might have also heard, airliners of new Boeing 737Max series has been grounded because they used shitty software and failure-prone hardware to fix serious flaws in airframe design. It is my opinion that this ongoing fiasco has potential to break Boeing’s back and ruin its share in the international airliner market. While the company could still survive on defense contracts from USA, China should use this perfect storm of circumstances to start the process of gradually destroying Boeing as a viable maker of commercial airplanes. As luck would have it, a large number of the nearly 5,000 odd orders for that series come from East-Asia, specifically China. This leverage gives China an almost unique pathway to break Boeing’s back. Sure.. tens of thousands of Americans will lose their jobs, but guess what- who gives a shit?

Step 1: Given the stakes and desired outcome, there is no no need to rush the final outcome. China could start by demanding compensation for grounded 737Max aircraft, order more equivalent Airbus aircraft and not order any more of them– in the short term. As luck would have it, again, this is exactly what is happening right now- which sets up the next step.

Step 2: Once Boeing comes out with what it considers to be an adequate fix, China should examine it thoroughly and then declare it inadequate. They should say that it is a fragile fix for a design that is fundamentally flawed. They can then pretend to be reasonable by letting Boeing fill a small fraction (around 20% ?) of their 737MAX orders with the older and tested 737NG series.

Step 3: China should then ban 737MAX aircraft from flying in Chinese airspace (even during transit) as safety precaution. This will make it much harder for other Asian carriers, who either have tons of flights to China or overfly it, to buy them. But don’t say anything negative about, or restrict, other Boeing products like the 777 and 787 series, yet.

Step 4: Transfer bulk of orders for that airliner class to Airbus. If they express concerns about their ability to fill those orders on time, offer financial and other help to setup more assembly lines in China and Europe. This step will make it easier to reverse engineer indigenous airliners in future as well as start cutting into Boeing’s income stream.

Step 5: Boeing makes a profit on a new airplane series only after net sales finally surpass the cumulative cost of development, testing, interest on debt and building cost per airplane. Banning the 737MAX series from China achieves two things. First, it pushes Boeing to spend billions on developing a new replacement series. Secondly, loss of potential future income from that series (its main source of income in next decade) fucks up the balance sheets.

Step 6: American corporations are run by ivy-league frauds, greedy MBAs and obsessive bean-counters for the sole benefit of major shareholders. A major shortfall in the income stream translates into much lower dividends, share prices and a rapidly increasing amounts of debt- which leads to “right-sizing” aka firing people who actually work.

Step 7: Firing workers and operating with a significantly smaller, demotivated and poorly paid workforce results in poorer quality control- and we have already seen something like this occur with the 787 series. China can keep inspecting other Boeing aircraft series for poor build quality and they will get the proof they want within a year or two. This can then be used to further humiliate Boeing and enforce further bans against its other airliners.

Step 8: Some of you might wonder whether banning banning 737MAXes from East-Asian skies could truly hurt Boeing. Wouldn’t the markets in North and South America + Europe make up for China? Well.. no, because North America and Europe are saturated low-growth markets while Latin America is a pipsqueak compared to China and East Asia. Banning 737MAXes from Eastern Asia is, therefore, sufficient to initiate Boeing’s death spiral.

Step 9: Increased production of Airbus airliners in China will achieve two ends. Firstly, it will prevent any global shortage of short-to-medium haul airliners. Secondly, the experience gained building those aircraft will be useful for their indigenous airliner programs. Did I mention that it will start the process of making Boeing noncompetitive in the commercial airliner sector.

Sure.. Boeing will still be around five years from now. However it will now derive most of its revenue from selling shitty military aircraft, expensive but worthless missiles and other military paraphernalia to USA and its vassal states. A fitting end for that company.

What do you think? Comments?