Like competing on price, depending on subsidies is a game at which someone else can always beat you.
Boeing is probably the #1 welfare queen in the USA, perhaps the world. The subsidies, EXIM support, government contracts, tax exemptions, and so on constitute such malinvestment and distortion of its organization that the company could not survive on its own. Whatever Mitt Romney said about one 47% of Americans, can also be said about another 47%, the Republican welfare queens.
When it comes to subsidies, lean manufacturing, cheap management, the Chinese can always go lower. It has orders for 330 planes, but orders are not sales. China still has to build these planes, and then they must fly, something Boeing has found challenging of late.
A standing military needs a steady stream of supplies. Boeing designs for the military, and then tries to adapt for the commercial market. The 747 was designed as a military freighter, and some 25% of the world fleet carries freight only. Boeing built a hydrofoil for the military, but its commercial application (as well as military) went bust. (I rode one from Hong Kong to Macau once, noisy and you cannot see anything.)
With no standing military, Boeing might have been pursuing other business, like mag lev or some other transportation marvels. But USA's fed policies, tax code and leveraged make-work regulations make outsourcing profitable. This leads to a disastrous results over time.
USA's advantage is creativity and in order to protect the Boeings of the USA, the rest of us have to stand down. Government policies pick winners and losers, and it is Government policy to support the losers and punish to productive. Get big or get out, as they say.
Who knows how things are going to turn out. The best lifeboat is self-employment.
Feel free to forward this by email to three of your friends.
Boeing is probably the #1 welfare queen in the USA, perhaps the world. The subsidies, EXIM support, government contracts, tax exemptions, and so on constitute such malinvestment and distortion of its organization that the company could not survive on its own. Whatever Mitt Romney said about one 47% of Americans, can also be said about another 47%, the Republican welfare queens.
When it comes to subsidies, lean manufacturing, cheap management, the Chinese can always go lower. It has orders for 330 planes, but orders are not sales. China still has to build these planes, and then they must fly, something Boeing has found challenging of late.
A standing military needs a steady stream of supplies. Boeing designs for the military, and then tries to adapt for the commercial market. The 747 was designed as a military freighter, and some 25% of the world fleet carries freight only. Boeing built a hydrofoil for the military, but its commercial application (as well as military) went bust. (I rode one from Hong Kong to Macau once, noisy and you cannot see anything.)
With no standing military, Boeing might have been pursuing other business, like mag lev or some other transportation marvels. But USA's fed policies, tax code and leveraged make-work regulations make outsourcing profitable. This leads to a disastrous results over time.
USA's advantage is creativity and in order to protect the Boeings of the USA, the rest of us have to stand down. Government policies pick winners and losers, and it is Government policy to support the losers and punish to productive. Get big or get out, as they say.
Who knows how things are going to turn out. The best lifeboat is self-employment.
Feel free to forward this by email to three of your friends.
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