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General Electric Biggest Problem: Boeing 737 Max Grounding

Yesterday, General Electric posted its quarterly earnings and it clearly says its graph of profits has turned negative. The company announced that if the Boeing 737 Max remains grounded it will put down an enormous financial strain on the company.

GE manufactures engines of the popular planes which has not felt the “fresh air” since March. Boeing 737 Max has been grounded after two fatal crashes in the period of five months. The two fatal crashes have claimed 346 lives. This has halted the production and sales to one-fifth of the expected numbers.

The automobile maker who makes the Leap-1B engines with French aerospace company Safran prompted that the grounding has cost $600 Million in cash flow. While if the grounding for the next full year, it will get hit by $400 Million cash flow every following quarter.

Meanwhile, the fastest-selling plane of the plane is not up for fly, Boeing has been slumped with one more problem for its new long haul 777x jetliner. The company has blamed GE for engine problem for their plane. It said that it will redesign the engine and make sure that it won’t wear faster than expected.

The 127 years old, NewYork based company has $2.1 Billion in assets tied with Boeing 737 but did not show any impairment charges with it. “We continue to monitor these developments with our airline customers, lessees, and Boeing,” GE said in a securities filing.

GE is looking over the brighter side of this halt. The company says that this halt will help them to improve the quality, efficiency, and supply chain health of the company.

General Electric reported revenue of $28.83 Billion which was lower than a year but beating the expectation of analysts. “We made steady progress on our strategic priorities in the second quarter. Our top-line growth was solid, and Power made meaningful improvements on fixed cost reduction and project execution,” GE Chairman and CEO Larry Culp said in a statement.


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Julie Halpert
My goal is to fill my days writing and editing, either on a freelance, project or full-time basis. I also co-teach a journalism course and would be delighted to expand the time I devote to instruction on the craft of journalism, either in the classroom or as a media coach. I'm always eagerly looking for new opportunities in writing, editing and public speaking