[strong_silent_t]

I think if the government is going to subsidize something, politically aerospace makes a lot of sense. It has jobs for engineering, technicians, and high-skill trades. It has a long planning horizon and lots of regulation (meaning less short term competitive forces at play). It has defense applications. The downside is that everyone else is also subsidizing it, so it is still hard to compete.

[WalterBright]

The 747 was not subsidized.

[Someone1234]

Boeing as a company is massively subsidized. People often like to play this game where they specifically mention a model number and make the claim that that specific model wasn't, while ignoring that the entire company, infrastructure, and apparatus is.

The US subsidizes Boeing, European countries subsidize Airbus, and Canada subsidizes Bombardier. Playing semantic games doesn't alter that reality.

[WalterBright]

Boeing bought the land and built an entirely new plant and factory for the 747 (the Everett plant). No government funds were received for it.

Boeing lost money for the first 10 years on the 747, but then it started making massive amounts of money off of it. Those profits funded the 757, 767, etc.

[toweringgoat]

https://www.heraldnet.com/news/boeings-washington-tax-break-...

Tax breaks for companies are a subsidy. (Aside from the military cross-subsidisation.)

[WalterBright]

1. Your article is about 2016, 50 years after the 747 was developed.

2. Having the government take less of your money is not a subsidy.

3. Boeing 2016 revenue was $95.5 billion. The tax break is about a quarter of a percent of that.

4. I'm curious what you consider military technology that makes up the 747.

5. I'm curious what part of the Everett plant, which was built from scratch to build the 747, was built with government/military funding.

[rbanffy]

Every government dollar (over)spent in Boeing-branded thing is a subsidy for every other Boeing-branded thing. The same way every dollar NASA spends with SpaceX's Falcon 9/Dragon systems subsidizes the development of further generations of Falcon/Dragon/BFR systems. It's really hard to assume this money is not spent thinking about the strategic side effects.

[WalterBright]

You'll need better evidence for comingling of funds than that. I'd have a better case for saying that the immense profits from BCAC are what enables Boeing to even bid on defense contracts.

[somecontext]

This page makes the case that Boeing's large commercial aircraft division is subsidized in some detail: http://trade.ec.europa.eu/doclib/html/146484.htm

[mc32]

I guess the question if it could be answered would be can the profits and losses of civ vs military programmes be sussed out somehow? That would shed some light on whether subsidies play a role, discounting “pollination” from skunkworks.

[WalterBright]

It would be illegal for Boeing to funnel money for military contracts to the civil aviation side. In fact, BCAC (Boeing Commercial Airplane Company) and BMAC (Boeing Military Airplane Company) are separate accounting entities for this reason.

If there's a belief that BCAC is actually a money-losing operation propped up by money funneled from BMAC, there needs to be some strong evidence for this. BCAC is massively profitable.

[mc32]

Interesting, so does that mean there is no merit to the accusation made by euros that Boeing commercial is subsidized by Boeing military? I mean, I keep hearing people say that as received knowledge, but perhaps they are just thinking about technological cross pollination which while important, doesn’t help that much in bringing new products to market.

[WalterBright]

There's not any merit in the accusation. The government did subsidize Boeing's SST program, but the technology developed for that wasn't usable for the subsonic jets. (For example, Boeing airliners use 3000 psi hydraulics, while the SST used 4500 psi to save weight. Such required a totally redesigned hydraulic system. 4500 psi is very dangerous, spray from a pinhole leak will cut right through you.)

[toweringgoat]

But Boeing is - majorly. Cross-subsidisation essentially.

[WalterBright]

Military stuff, sure. The civil aviation stuff, no. Boeing did try to sell the military the 747 as a tanker, but that went nowhere and Boeing did not receive any government dev funding for it.

The 707 did have a tanker version, the KC-135, but that happened after the 707 was flying. The 707 was funded entirely out of profits.

[samatman]

Walter, you didn't say the 747 wasn't profitable, you said it wasn't subsidized.

Boeing is subsidized by the USG, there's no realistic debate on that. That subsidy applies across their product line.

[WalterBright]

I'd appreciate it if you could be specific about government funding for the 747.

[_Codemonkeyism]

I'd appreciate if you could show how the credit rating, stocks, employee training and business management of the civilian part and the military part of Boeing are two things. Additionally it would be nice to show the R&D firewall between the military and civilian parts of Boeing.

[vkou]

The 747 only exists because of subsidies and defense contracts. If the US government were not heavily involved in the industry, we'd all be flying in Airbus jets.

These subsidies made the development of the 747 possible.

[WalterBright]

You'll need some evidence for that.

[vkou]

Look at the history of Boeing [1]. It's all government contracts, with the technologies and designs developed for them being re-used in their commercial offerings.

Without cost-plus contracting paying for cutting-edge R&D, they would have been about as capable of building airplanes as I am, in my garage. Their entire business is built on millions of hours of engineering experience in building planes for the military, applied to the commercial sector.

[1] https://en.wikipedia.org/wiki/Boeing#1930s_and_1940s

[WalterBright]

> It's all government contracts ... Their entire business

That's not what your source says at all. Boeing, for example, developed the first modern airliner in the 1930's. Pretty much all airliners derive from that. In fact, you can reasonably argue the other way - Boeing's military designs derived from their airliners. This is certainly the case for the B-17 and the KC-135.

Please identify the military technology and subsidy in the 747, and where the money came from to build the Everett plant.

[_Codemonkeyism]

The money came from corporate debt which was on very favorable terms because of the government cash flow for military contracts. The other part came from investors who invested into Boeing because of growing stock prices due to military contracts.