Should Boeing Buy GE?
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- Опубликовано: 28 сен 2024
- Could Boeing Go Bankrupt? • Why Hasn't Boeing Re-E...
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General Electric has long been a trusted name in commercial aviation. From building the most popular turbofan of all time, to developing the world’s largest and most powerful engine, the company’s fingerprints are all over the industry. But despite its strong legacy, it hasn’t been immune to the downturn that COVID 19 has induced. With the layoffs and losses piling up, it begs the question: What happens if GE goes belly up? Let me explain…
#GE #Boeing #Airbus #RR #Raytheon
GE is a Defense Contractor. They aren’t going anywhere.
Good point!!
Exactly. This speculation makes no sense because it just wouldn't be likely to happen if GE did get into serious financial trouble. The government would flood it with cash in a heat beat.
@@jonathanw11 LOL A heart Beat.
And EBITA of $16B.. All of the pain that GE has endured over the last 12 years is a directly related the highly leveraged GE Capital (which they have offloaded). Since 2008 they have clearly sold or written down a huge amount of assets. Just looking at the change in revenues has no context, and given the circumstances, is pretty meaningless. They have actually done a lot in that time to clean up their balance sheet and have a reasonable amount of cash on hand.. and are profitable again.
@@jonathanw11 Breach of WTO rules. Would have to split into 2 Companies. Commercial that is BUST! and Military that is Subsidised. Same fact with Boeing.
The idea of an airframes owning an engine maker is really unlikely
Also it would require a ton of money Boeing doesn't have or it will require to maintain itself afloat.
Also, an aircraft manufacturer can't even produce it's own engines in the us.
It is prohibited
De Havilland would beg to differ
@@roberts9095 De Havilland has been gone (asorbed IIRC) for decades.
GE is a defense is contractor they’re not going ANYWHERE
I'd say that in the event of a bankruptcy the engine technology of GE could be bought by Honeywell more so than by Raytheon.
I also thought Honeywell could be a good fit, Perhaps Siemens could work as well.
@@peterkotara Siemens wants to sell its gas and power division and expand its healthcare/windturbine division.
Alstom in France sold its powerplant division so they could merger with Bombardier to become the biggest railway stock company in the world.
Toyota in Japan is silently requiring other branches of hightech transport industries for years.
Toyota motor cars is just one (important) division.
They have the money and buy other companys for the long run.
So don't count them out.
@@obelic71 I did not know that. I suppose if Toyota have the cash then GE might make a fitting addition to the stable.
Pity though, I like the thought of Siemens/GE.
I must say a GE9X powered Prius mould be killer though.
@@peterkotara Toyota has the cash 2 years ago they had the biggest buy of a companny in History 12 Billion dollars.
thats the GDP of a small country!
Toyota is one the least known tech giants regarding industrial transport equipment.
But personally i think if GE is going to go belly up it will be bought by a consortium of US companies.
@@obelic71 _" i think if GE is going to go belly up it will be bought by a consortium of US companies"_
I would say you are correct there, But which companies?.
Which company did Toyota Group purchase for 12 Billion? are you sure it wasn't 12 billion yen?😁
Pratt & Whitney was originally a Boeing company. The government made Boeing sell it because they considered owning their own engine company was a monopoly.
They owned United Airlines as well..
@@ACPilot indeed
GE and PW is like Honda and GM. The design teams and management have to be from the right half, otherwise both brands will fall apart before our eyes. Boeing management came from the wrong half of the Boeing-MD merger, thus the 787 issues and MAX debacle, but what if Boeing kept their legacy management?
Boeing was having big problems long be for the MD merger jal 123 Us air 427 united 585 say it all
You should talk about Why The 787-9 has more range than the 787-8, even though it's a stretched variant, and why the 787-10 has the shortest range.
787-9 has larger tanks than the 787-8 and the 787-10 shares the exact same tank size as the 789 ,
@@mmm0404 I really think Boeing should introduce a HYBRID version of the 787-10 to increase the range. It will use both Jet fuel and an onboard battery to power the engine.
@@dennisthebrony2022 don't worry , Boeing is already working on improving the range of the 787-10. It will have a similar range to the 777-200ER/300Er. Using larger fuel tanks will do the trick
@@dennisthebrony2022 Any hybrid version would LOSE range, or LOSE load capacity.
Batteries weigh more *AND* store less energy than kerosene per pound or per kilogram.
Hello again, after a long time!
Air Canada's flight decks all look like they're wearing a pair of shades.
GE stock is worth over $100B. If they need cash, they can sell $10B worth of stock. That having been said, they made nearly $6B in 2020, so they're doing fine.
Excellent analysis!! Thank you for putting this together. My first thought was a purchase by a competitor rather than Boeing. May also see a spin off and a capital raise. Seems like the new CEO is getting GE moving in a better direction. It would be a shame to see one of the legacy US manufacturers go out of business.
I think it’s more likely GE would buy Boeing then the other way around.
Marc not sure why you thought GE would buy Boeing Jets have to have engines but GE Will Survive without Boeing. Cars and trucks obviously need tires but I don't think Goodyear has ever thought about buying GM or Ford. Although nothing would surprise me nowadays. As of late GE has had trouble developing the triple 7x engine admittedly it's huge but they've had trouble I don't know if they want to take on the problems of developing Jets the giant Boeing has flopped at it the last couple of years.
@@garyhughes9649 Hey Gary, I don’t think GE is going to buy Boeing necessarily, but I definitely don’t think Boeing would acquire GE, but like you said nothing would surprise me. There was a time GE was buying everything.
GE is not in a financial position to buy Boeing, GE has been divesting assets and business units for over 5 years as to works to get to a much smaller / leaner company.
Their engines are amongst the most reliable. Pratt and Witney's old engines are having their problems as was their geared turbofan. Rolls Royce had issues with the Trent 1000. Cfm seem to be doing OK and GE have a share. Covid will decide. I suspect that single aisle long haul planes will do well so good news for CFM and Pratt and Witney. Rolls Royce need to get the Ultrafan into single aisle planes ASAP.
I thought rolls royce would buy ge if they sell lol
anti trust : nah
Lol it’s too British to buy ge
RR isn't doing well now either
Nah
Rolls Royce is in bad financial shape too.
In terms of company structure, if the aviation arm of GE went insolvent, it would only be that arm, which is bound to be structured as a separate company to the remainder of GE.
GE suffered a financial indigestion in the 2008 financial crisis. Historically, was a "banker" to help its large customers finance large purchases (airplanes, nuclear plants etc). But it got drunk during 2000s and got into funky banking beyond its core business. I think most of that indigestion was sold in 2015.
Also, GE's silicon plant near Albany had severely polluyted the Hudson river for decades.GE spun off that company, but Courts rules GE was still responsible for billions in cleanup costs.
After the financial crisis, GE also eventually got rid of its shares in NBC/Uiversal. Sold off appliamces, lightbulbs and many other divisions.
GE recently sold off its locomotive division. But also bought the power generation division of ALstom. But it still has many divisiions it can sell off to avoid chapter 11.
Interestingly, despiote all those divestitures, it invested in oil/gas quite a bit and those are hurting real bad (and have no longer term fiuture with climate change). Those may be sold off over time, and even if at a loss, will still provide cash neede dto continue to make debt repayments.
GE will shrink. But somehow, I think GE's jet engine division will be one of the last to be let go.
A purchase by Boeing would be blocked by anti trust in USA and Europe. And airlines will not like a Boeing that has single engine choice for its airplanes.
GE may have ditched its funking banking, but now, GECAS will be a big question over next few years. How many aircraft will be returned to the lessor by failing airlines? How many paymenst are being skipped by airlines?
Those composite blades are 🤤
Being from Cincinnati, OH (their HQ) I definitely root for GE 😅
**I just wish they would instead of making GIANT ENGINES, they would focus more on SPEED OF TRAVEL....**
That was a stupid comment. It is not always about speed... The aviation industry doesnt go around, "I want to do this". They developed these giant engines for the giant 777 that required big engines. They do what the aircraft manufacturers need.
Speed is inherently inefficient, planes already fly at the edge of transonic flight so if they go faster they'll be transonic and kill their fuel efficiency, if they go supersonic they'll also kill fuel efficiency and capacity.
Not eveybody likes being cooped up in a tiny seat 12+ hours on end just to get somewhere. So Op gets my vote!
@@ifpstopmotions9720 You moron, an engines physical size has NOTHING to do with the size of the plane... the engines are bigger to allow for higher "AIR BYPASS RATIO"...... lol
@@ifpstopmotions9720 The bigger the diameter the more air is sucked in thus increasing the bypass ratio which then translates to more thrust.
You do realize that not all of the thrust created comes from the air that is used to mix with fuel???
And they definitely go around saying "I want to do this", why do you think there is RESEARCH AND DEVELOPMENT ? AND YOU JUST SAID THE 777 REQUIRES the bigger size engines so that means they went to engine maker and said "I WANT TO DO THIS"...
LOL You are such an idiot.
Very soon here, Btw a nice one
PW is lookin bad, first he PW1000, then the PW4000 on the 772 and 744 then days later a 757 from delta had engine problems with PW2000
Great analysis of this potential purchase ramifications; however, Boeing’s argument may reference Apple Silicon for utmost optimizations, safer operations and maintenance, and longevity support for in-house engine in relation to the aircraft. That will definitely boost sales due to airlines confidence in a more harmonious product and shorter delivery schedules. Plus Boeing does have a dominating influence that ironically led to manufacturing the latest A220 in the USA, and that’s how it could maneuver its way in court.
Perhaps the best approach for both the aircraft manufacturers and GE would be for each to create these new entities, as you state in the video, whereby both the aircraft manufacturer and GE benefit from this symbiosis by both assuming responsibility for the entity's P&L. It would diversify GE somewhat and would give each aircraft maker 'their own' engine building and design 'division'. I realize that this sounds simplistic but, at least conceptually, may be worth it to them.
Coby these videos are amazing and I love how you add multiple futures for companies. Btw can you please add more Tim DoD music. I also love everyday astronaut!!! :)
Absolutely NOT ! First, we don't want shady Boeing management crap driving GE. Second, most of GE engines sold and maintenanced are in partnership with French SNECMA (CFM International) or Safran (LEAP). Hence most of the business and revenue is linked to European engine companies and EU would not let a Boeing takeover of GE fly!
Lockheed Martin or Honeywell would be the most likely candidates
RR have a great history but also the RB211 also destoryed them through miss management. even their current problems with the trent were forwarned by engineers who pleaded bosses not to cut corners... i dont know how the ultra fan is going to address these problems. i have no idea what they plan to do better this time. GE invested in materials sciences. It was the right thing to do. the mid market segment is where the money is though.
Raytheon can't acquire GE since it owns P&W. If it does it would go against anti-trust regulation.
Any potential acquisition by Raytheon/PW of GE Aviation will almost certainly run into anti-trust/competition issues and whether the various regulators will give clearance for any such deal to go ahead at the moment seems uncertain. And not getting clearance would be a dealbreaker.
I would have taken a second to mention the history of "United Aircraft and Transport Corporation". The one company built the planes, the engines and also flew them back in the 30's.
But after some incidents, were broken up as a vertical monopoly and were the reason that we have many of the antitrust laws that we do now.
The companies that came out of it were United Technologies (Pratt and Whitney) (now Raytheon Technologies), Boeing and United Airlines.
In other words, Boeing did used to make its own engines and the government has already established that this is unacceptable. Precedents can be changed, but the likelihood is low.
Maybe this is a whole video topic.
This must be old video. GE stock has doubled.
I'd have to say: Safran ;)
Would choose GE. Rolls Royce has had many problems with their Trent 1000 from quality control issues to compressor fires. Rolls Royce had very reliable engines which included the only manufacturer offering a boost option when additional power was essential under emergency conditions. Once the very high thrust bypass were required they started having several reliability issues
It`s true RR T-1000 has had problems & it did cause inconvenience for Boeing & the airlines that chose it on B787, but it has to be remembered that RR did address the issue very quickly to the point that it`s been over a year since it cleared completely their planes on the ground situation. RR have a large range of engines in their portfolio, with some very interesting new tech prospects & not just aero but electric, gas, nuclear & more. RR has a terrific future & resolved T-1000 issues shouldn`t put in doubt this engineering`s ability to deliver excellence.
a combo of PW design and GE capability at mastering a cutting edge material could be very interesting. However after reading some thought in the comment I think it's better for GE to survive without being sold to Raytheon.
And if you ask me which one of three Jet engines makers to survive : I will choose GE all day. GE90 is a proof that they reserve to survive.
And the GENX. Though that engine is a little generic, it's proving to not causing a major headache for airlines, unlike the Trent 1000.
@@Blank00 yes, maybe GENx isn't the most advanced jet engine at that time but it prove to be reliable.
GE9X is also the same thing as GENx and GE90, not using the most cutting edge design at that time but they had no big issue as long as I remembered
Not to mention the most widely used engines are from CFM (a GE-SAFRAN joint venture). The CFM-56 and now LEAP provide for good business.
All of these mentioned companies have their issues. Through gross mismanagement, GE had a fire sale of their banking, appliance lightbulb, locomotive and other sectors in an effort to keep the last 3 afloat. The new CEO, Larry Culp, has been working to restructure internally in an effort to stop the bleeding. RR motors don't run without GE-built parts. PW's gear motors, after over 30 years of development by their head engineer, still don't work very well. It was an old idea from the 60's that has been dredged up and improved, but still not right.
History: William Boeing helped start a bunch of small airlines on the west coast of America in an effort to sell his products. Later, these small airlines were joined into one large unit as Boeing was more profitable...that airline was named, United. Now with antitrust laws, large mergers and acquisitions are far more complex...should GE Aviation slip further into trouble, my money would be on COMAC writing a check. The Chinese need the technology desperately.
I think the obvious buyer would be CFM, which is already a joint venture between GE and the French. That would also not be a monopoly and allows CFM (or whatever it would be called) to move into the larger engine size market which they don't currently occupy.
CFM is already 50% GE 50% Safran. So basically it would mean that Safran buys half of GE ?
@@EmilienGosselin The GE engines division, yes
GE is the one that I would choose to remain
Raytheon? Isn't that the company that make earbuds?
I think this is a nonstarter. Maybe PW should, or one of the other engine makers. Imagine the recent issue when the 787 had Trent issues but the engines were GE? BA got enough issues, get my drift? Heck they got blamed anyway.
The picture you show from the Denver incident is NOY an uncontainable failure the fan blade came out the front, not radialy
Nice video but IMO both RTX & Boeing have more than their own share of headaches w/o attempting to merge GE aircraft engines (and figure out how to pay for it) even if regulatory hurdles could be overcome...then again Wall Street bankers never advise against making a deal!
General Electric❗❗
Yes, I agree that Boeing should buy GE's engine manufacturing facility. Given a choice of the 3-main engine makers, GE would be my choice. In a random sampling of opinions of friends of mine who are airline pilots, ALL of them concurred that GE made the best engines. They were torn as to who was 2nd and 3rd (some felt Pratt & Whitney was 2nd, some felt Rolls Royce was 2nd and the other being 3rd. Additionally, several of the pilots stated that they felt that the Rolls Royce engines were "junk" compared to GE's. Opinions were mixed on Pratt and Whitney engines (some felt they were OK, others thought them to be inferior) but all seemed to agree that GE's engines were the best of the 3. Just my input.
I think Pratt & Whitney should have a bigger market share!
Boeing used to own an engine manufacturer, and an airline. They were forced to split the company by the US Gov't in the 1930's and the engine company became Pratt & Whitney. The airline that was split off from Boeing is United Airlines.
What about BMW? Are am i behind the curve? I thought threre were Four Manufacturers making Engines, (In no particular order), BMW, GE*, Pratt and Whitney, and Rolls Royce.
* As an aside, were such a sell off to hapen, what do you think would happen to there Electromotive (i.e. Diesel Locomotives), Division?
RR has the Ultra Fan on the horizon. GE has the 9X which is a great engine, but it may not be as good as the Ultra Fan. I would go with RR
Now whats wrong with the jt9d
80% of GE aviation profit is from the aftermarket.... And when planes sit, they don't need to be repaired and when the engines on those planes still flying do hit their time to be overhauled, the engines don't get overhauled, the get pulled, and get replaced by engines of grounded aircraft.... So then GE doesn't sell highly profitable parts to large airlines and highly profitable MRO services to smaller airlines... Pratt and rolls Royce are suffering too
Didn't the GP7200 power the A380?
I also was first thinking pratt and whitney, the thing is that would spell a expansion into the civilian market and raytheon just is too good at military. Boeing can get away with its dual arms of BCA and BDS because of the years it took to get those pains worked out, were one supports the other. The more interesting move would be Muilenburg, who has the experience of being a CEO (granted with a bad reputation now), but one who isn't afraid of new technology. He is seeking $200million for a new company to create, and while that isn't enough to make the move on GE aviation, if he could get some big backers (cough Boeing and Raytheon) that would be enough to make the move. This would make it easier for Boeing to separate themselves and make the lawsuits much easier. It would also give them a market advantage via a backdoor into one of their suppliers. Raytheon and similar defense focused companies would benefit by having Boeing in the game, because they are used to managing a combination of defense and commercial markets, which companies like Raytheon can now more easily study. This would also make Raytheon more competitive to, without stepping on each others game, but purely benefiting each other, all while side stepping many legal challenges that Airbus could try to file against them.
GE takeover??? Market cap is at close to 110 billion and GE already has a debt-to-equity ratio of more than 2! I'd have my doubts that anyone from the aviation industry can bring that up, nor that anyone would finance such a deal. Especially if Boeing (with quick ratio already at .46!) is at the helm, most of whose revenue streams are strategically outmaneuvered and their program accounting bubble not even burst, would you trust such a construct to return your investment? The DTI and DTE would make me cringe...
Dude, it's not the late 1990s/early 2000s anymore....
I think there are a lot of reasons why Boeing and Airbus are not in the engine building business.
amazing!!
I do not think that Boeing will ever be in a position to acquire an Engine company. There are just too much legal issues to deal with as you mentioned. My best guess will be L3Harris, Ratheyon or Honeywell would acquire the rights of the Engines.
Pretty good analysis! Highly unlikely but always possibly
Good content 👌 I subbed
Immelt practically ran the company into the ground as well as Welch and sent all manufacturing offshore,
Very good , thanks.
Raytheon all ready owns Pratt & Whitney. If you though that a Boeing purchase of GE would attract lawyers, you ain't seen nothing yet.
Other than the joint venture with Safran as CFM, GE produces few engines for the A330 since Airbus offered the A330 neo verses the A330 ceo. Rolls Royce has a lock on Airbus business.
By the way, the gp7000 powered the A380, not the a350.
Why would GE Aviation sell to Boeing when they have a crazy backlog for both commercial and military customers.
Since the major share holders in GE and Boeing are the same companies by (Vanguard Group, BlackRock etc.) and other financial institutions, it is out of the question, that GE could be bough Boeing or Raytheon. The financial powerhouses own the aviation industry and players like Boeing have no say in what is actually happening.
If I were to choose, I would choose GE to survive
Rolls-Royce!! We supply them, but work for Collins so a Raytheon buyout would not be good.
lets just hope it does not happen
9:54 a380?
GE's aircraft engine manufacturing division would survive any GE bankruptcy - somewhere.
I GE were to be bought, I think P&W would be the most likely buyer. It would make the most sesne. There would be too many things standing in the way for Boeing to buy them.
That would likely cause anti-trust issues.
I would hate it if they buy GE, they would stop doing stuff with amtrak and a bunch of household items etc, boeing would just make it for planes it would suck.
They will be given 25 billion dollars next month. That's in the stimulus package
According to Markopolis GE should have went bankrupt over a year ago! And when he said it almost everyone thought he was genius. We're is he now anyway?
GE
GE would get bailed out by the government. It is too important to defense.
Why you are not frequent now days
You must be living under a rock, GE book has been improving much over the last 2 years. 2020 FCF is doing exceptional well.
I think you are the one living under a rock. GE is about to go bankrupt. Read the news.
Lol how does Boeing have the cash to buy GE? Okay good job Coby...I was about to say this smells of some kind of LMT/RTX P&W deal
Honeywell, Raytheon or Lockheed would be more likely partners for GE Aviation than Boeing.
If that happened the 777x would be doomed. If Rolls Royce bought them Rolls Royce would probably prioritize the a350 engines over the 777x engines. If the company just went away the 777x would have the same delays the L1011 had when Rolls Royce went bankrupt in the 1960s. As we know the DC10 outsold the L1011 after the delays.
They should not be sold. They should loan GE long term cash with Gov guarantee !
P & W !!!
I'd chose GE any day!
Boeing will not buy GE. They've faced the antitrust act when they spun off PW in 1934. And also, If Boeing bought GE and GE comes out with a bad engine after that, then it would be Boeing's fault. However, given that Boeing does not own any engine makers in the likes of the Trent 1000 issues and PW4000 issues, Boeing can have an argument on why engine issues are not Boeing's fault: Boeing doesn't own any engine makers, the engine is a separate company's patent, the third party is the one that inspects the engines, and Boeing can't legally design engines in-house, etc. Even though GE is the best, GE isn't perfect, and if Boeing acquires GE, they acquire blame for any problem surrounding GE engines.
Whats to stop GE and Rolls Royce getting in bed together?
Cody, Boeing and Pratt and Whitney were once the same company. The government broke them up for antitrust competition reasons. Therefore it is unlikely that Boeing would be allowed to own GE.
You are one of the few that even know this fact…..the rest seem like babbling folks with very little knowledge about…..anything aviation.
Lockheed Martin can be a serious contender for GE takeover
Similar issue to what Colby stated for Boeing except the anti trust issue would be with Boeing for military engines vs LM, plus LM's military lineup is very heavy Pratt and Whitney .
CFM International (the manufacturer of the LEAP and CFM56) is 50% GE and 50% Safran. It's not that easy for GE to be bought...
And also I think this is where too big to fail comes in I mean the consequences will be too harsh to bear
Dont forget the GE and Safran partnership company CFM
Yup they both make up cfm, I’ll say cfm 56 is more Safran and the Leap series is more GE.
Boeing has a huge competency problem as it is, building "cheap outsourced " jet engines is not the best plan for success
To answer the question, I would prefer GE to survive, I have always been a fan of this company.
Why haven’t you been posting as much :(
Pratt and Whitney
As an ex air force engine guy, let GE survive, their reliability is legendary. Rolls-Royce use to be the same, but not as much recently.
RR went bust in the 1970s with the RB211 program. engineers forwarned of the trent issues if it was rushed. so suits did just that. sped to market. we all know how that turned out. ultra fan sounds awesome, but RR have not been percieved to be in the cutting edge of engine design for a while.
YEA
More likely float the GE aviation separately.
You must be living under a rock, GE book has been improving much over the last 2 years. 2020 FCF is doing exceptional well.
thanks for a very interesting video. As I live in the U.K I would suggest Rolls Royce, but RR has made some losses as well; so I doubt they want to buy GE.
Well... If Boeing take over...Than the Join venture with Safran will be dead, And RR as well PW will move more aggressively....Airbus, Embraer, Comac will see differently.... Like all Carriers around the world. Best option Safran take over GE Aviation
**You guys wanna know how GE took care of an employee WHO MADE GE WHAT IT IS AND MADE IT BILLIONS??? GE gave said employee a $100 BOND VOUCHER........**
I'm sure RR would have a word to say if Boeing wanted to take over GE haha
its funny how you used so many clips from the swiss 777-300 er launch video! otherwise great job making this video and you got yourself a new sub