Investors regain confidence in Boeing; Others do not

Boeing Co. and the Federal Aviation Administration have tried this week to regain control of the speech on the 737 Max ground. As far as equities are concerned, there is a lot of success: Boeing shares ended up 5% this week, investors are proud of the company's progress in launching a software update. anti-stall flight control which would have played a decisive role in two fatal accidents. In order to restore confidence in the aircraft and thwart the monitoring of the warm relationship between Boeing and the FAA, the aircraft has collapsed.

The update proposed by Boeing will allow pilots to more easily replace the maneuvering feature augmentation system, and the software will now compare the readings of two sensors before pushing the aircraft into a dive. Boeing will also add additional explanations of the system to the manuals and offer additional training using tablets. A Boeing official told the Wall Street Journal that the changes made do not necessarily indicate that the original design was inadequate, but will make the system "more robust." This is a surprisingly dumb statement given the facts: 346 people died; pilots complained that they were not properly informed about the new feature and that it was impossible to badume that routine training would have been enough in the chaos; and the use of a single sensor seems to go against the practice of the industry. A Boeing executive told Bloomberg that the upgrade was more complicated than expected, which is why it was not deployed when the Ethiopian Airlines jet crashed this month. This raises more questions as to why society has not adopted a more cautious and conciliatory attitude before. "We did not rush, because rushing is not the right thing to do in a situation like this," said a Boeing official at the newspaper about the software update, apparently ironic in the face of criticism that MCAS Heart was a tool of choice to avoid a more dramatic overhaul of the 737.

Boeing insists that simulator training is not necessary. Avoiding this would help get the planes back into the air faster and, according to a former engineer, would let Boeing evade a $ 1 million fine from Southwest Airlines Co. Regulators were appointed by the Senate this week While the National Transportation Safety Board and the National Transportation Safety Board highlighted past attempts to signal shortcomings in the FAA program outsourcing work to planners, Boeing largely avoided pointing finger. FAA interim administrator Daniel Elwell confirmed Boeing's argument that the Max badpit is quite similar to previous models, which did not require any additional training or manual updates, indicating that the agency could be considered that the software update, relatively easy and inexpensive, was sufficient. The rest of the world is a different question. China suspended a certificate of airworthiness for the Max, stating that it would act according to its own schedule when reviewing the safety of the aircraft. It also announced a $ 35 billion order for Airbus SE jets, nearly double what it had announced a year ago. Garuda Indonesia says its pbadengers do not trust Max. He canceled a $ 4.8 billion order and bought older Boeing models. Vietnamese airline Bamboo Airways orders Airbus jets a month after announcing that it was considering a Max order; Kenya Airways has not yet launched an appeal, but CEO Sebastian Mikosz said it needed "a very detailed and very detailed communication exercise to explain what was wrong and what was corrected. ". I do not think we have that yet.

SIDELINEDGeneral Electric Co. announced this week its intention to partner with Rockwell Automation Inc. to provide automation and connectivity tools to drug manufacturers. This is the latest example of GE's outsourcing and progressive dilution in its digital aspirations; The company has worked with technology giants to push for the adoption of its oversized Predix software platform, but the idea of ​​partnering with an established rival in this way would have been anathema to the vision of the former CEO Jeff Immelt to become the digital industrial company. Recall that Emerson Electric Co. acquired GE's Intelligent Platform Automation business last month. The reality is that no one, and certainly not GE in its state of financial exhaustion, has the ability to be the ultimate supplier of industrial software; GE's over-sized initial ambitions could ultimately prevent it from being competitive. PTC Inc., a provider of connectivity and augmented reality solutions, initially partnered with GE Digital. CEO Jim Heppelmann described the company as a "pioneering partner" in 2016. PTC sold Rockwell a $ 1 billion stake in 2006, and Heppelmann was quoted as saying that the collaboration was "much more important." for us that the partnership GE ". Analysts once said that if GE could negotiate an agreement with a manufacturer, it would legitimize its digital activity. Well, Volkswagen AG announced this week that it would create its own industrial cloud with the help of Amazon.com Inc. and make it available to suppliers and other partners. GE's German competitor, Siemens AG, will connect the applications of its MindSphere Internet of Things system to Volkswagen's industrial cloud to help it extract data from original equipment made by various manufacturers and suppliers. to understand what it means. Siemens also talks about being sidelined, Siemens announced this week an expanded cooperation agreement with State Power Investment Corp. in China to jointly develop gas to electricity conversion projects around the world, including the digitization of facilities. This alliance, combined with Siemens' stated efforts to consolidate its operations in large gas turbines with Mitsubishi Heavy Industries Ltd., could adversely affect GE Power's competitive position in Asia. This market is expected to be one of the main drivers of weak demand for new gas turbine orders.

TOUGH SELLDowDuPont Inc., the Frankenstein chemical created by the merger of Dow Chemical Co. and DuPont Co. with the intention of parting, reduced its profit forecast for the first quarter on Thursday night. A delayed planting season due to widespread flooding in the Midwest has been a factor, but most of these need to be recovered. More worryingly, DowDuPont announced that its commodities business for commodities would produce $ 100 million less Ebitda than expected due to reduced margins in its packaging and plastics operations. The company, dubbed Dow Inc., should be officially split next week. It will be an unglamorous start. The activist investor Dan Loeb, who was instrumental in orchestrating the split, would have lowered his short-term estimate of what DowDuPont should be worth based on the sum of its parts. This is likely a reflection of the poor confidence in the chemicals commodity unit as a result of trade tensions, weaker macroeconomic prospects and overcapacity in the plastics market. It should be noted that New York legislators have agreed to ban most types of single-use plastic bags, which is in line with a downward trend in material that threatens long-term demand. The ability to isolate this trail from the chemical industry for agriculture and a specialized product unit that focuses on silicones, pharmaceutical ingredients and resins. valid engineering in a certain way the idea of ​​breaking. But the arm of materials science is not exactly a company that investors will let themselves be caught. They may not be pleased to own shares of LyondellBasell Industries NV, of Westlake Chemical Corp. and FMC Corp., which could experience similar setbacks in the first quarter. UPDATES, ACTIVISTS AND GOVERNANCE UPDATEWabco Holdings Inc. announced the conclusion of a $ 7 billion ZF Friedrichshafen AG contract and its shares have quickly dropped by 10%. The problem was that investors 'expectations, fueled by badysts' sound estimates of the appropriate takeover valuation, had risen too high since the announcement in February of the announcement of trading negotiations. ZF's cash offer of $ 136.50 is actually a 6.5% discount on Wabco's share price the day before the announcement of the transaction. On the one hand, a company is worth what someone is willing to pay for it. In the absence of other bidders and low probabilities that Wabco will obtain a higher valuation of itself in the short term, because the high costs of R & D weigh on its margins, this could to be as good as he would have. On the other hand, the logic of this combination is that by combining resources and technologies, ZF and Wabco will be a driving force in the booming field of autonomous trucks, with Piper Jaffray Cos. Noting that it will be difficult for truck builders to avoid doing business. with them. ZF has no share currency that would allow Wabco holders to continue this momentum. I do not blame them for wanting a little more advance to compensate them for the contributions of their company. The question is different. Inmarsat Plc has agreed to sell to a consortium of private equity firms, including Apax Partners and Warburg Pincus, for $ 3.4 billion. The British satellite operator rejected an offer from EchoStar Corp. last year. from Charlie Ergen at the similar price, as she underestimated the prospects of the company. Inmarsat's change of attitude may reflect the loss of patience of investors who are heavily invested in modernizing its shipping networks and in providing high-speed Internet access to airline pbadengers. My colleague Chris Hughes thinks, however, that private equity firms are getting the best deal. At least on the aerospace side, it looks as if we are heading towards an increasingly connected world and that the demand for connectivity can force more airlines to improve their WiFi offerings. It should be noted that Honeywell International Inc. manufactures JetWave hardware that connects to Inmarsat's broadband services and sells access to that connection through distribution agreements. At the moment, Inmarsat does not have an obvious alternative. This could therefore limit the valuation, which is very suitable for private equity firms.

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