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December 21, 2021December 21, 2021Loren B. Thompson, Ph.D

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Rebuilding Boeing: Why Washington Has A Role To Play (From Forbes)

December 21, 2021December 21, 2021Loren B. Thompson, Ph.D

Boeing’s recent setbacks in its commercial transport business are often attributed to excessive focus on generating profits at the expense of engineering and safety. However, the company’s margins have never been excessive, and to the extent management was obsessed with the bottom line that focus was largely driven by its competitive circumstances. Those circumstances were made worse, though, by federal policies that limited the company’s ability to compete with a heavily subsidized foreign rival. In particular, a high level of taxation reduced Boeing’s net profit margin to an average of 6% for much of the last decade, which is nobody’s idea of great returns on the kind of investment the enterprise demanded. If America is to fare better going forward in producing jetliners than it has in producing chips and ships, phones and pharma, Washington will need to rethink its approach to industrial policy–starting with how to help America’s sole surviving builder of jetliners climb out of its current trough. I have written a commentary for Forbes here.

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