Will Recent News Hurt Boeing’s Stock?
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Boeing is an aerospace company. It focuses primarily on engineering, information technology, research and development, test and evaluation, technology strategy development, environmental remediation management, and intellectual property management. The company operates in five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital Corp.
A train derailment in Montana this week damaged a shipment of jetliner fuselages and other large parts on its way to Boeing factories in Washington state from Spirit Aerosystems (NYSE:SPR), Boeing said on Saturday. It was not yet known if the accident might affect production of planes, the company said. Boeing’s production depends on a complex supply chain that deliver many parts just in time for assembly, but the company often has the ability to prevent minor problems in logistics from idling its factories. Boeing said a BNSF Railway train loaded with six 737 narrowbody fuselages and assemblies for its 777 and 747 widebody jets derailed in Montana while in route from Wichita on Thursday. A total of 19 cars in the 90-car train derailed in the incident about 18 miles (30 km) east of Superior, Montana, said Rail Link Montana. The rail company links with BNSF to carry freight from Billings in southern Montana through the state to Spokane, Washington where it links back to BNSF. Of the derailed cars, three cars carrying 737 plane fuselages went down an embankment and into the Clark Fork River.
Boeing declined to comment on whether it would seek a second source for the fuselages, as some industry experts have suggested. The cause of the derailment was not yet known, said Montana Rail Link spokesperson Lynda Frost, but added that speed was not considered to be an issue. There is a 35 mph (48 kph) speed limit on that section of the track, which is curvy as it tracks the Clark Fork, she said. The line was being reopened on Saturday afternoon, Frost said. There were no injuries in the accident. Boeing said it had experts at the scene “to begin a thorough assessment of the situation.” Montana Rail Link had called in three contractors to undertake the recovery of the derailed cars, Frost said, but she did not have details of the state of the freight in the derailed cars. Montana Rail Link, a privately-held company, is investigating the cause of the accident.