Re: XB-70 a prototype for Mach 3 SST?
- From: Willie.Mookie@xxxxxxxxx
- Date: Fri, 31 Aug 2007 22:03:15 -0700
On Aug 31, 8:14 am, me <oconn...@xxxxxxxxxxxxxxxx> wrote:
On Aug 30, 9:23 pm, Willie.Moo...@xxxxxxxxx wrote:
On Aug 30, 9:00 pm, me <oconn...@xxxxxxxxxxxxxxxx> wrote:
On Aug 30, 4:36 pm, Willie.Moo...@xxxxxxxxx wrote:
[snip]
So, while Boeing may have better uses for $10 billion than to build 5
mach 3 SSTs, a specialty company may contract with Boeing and make the
kind of returns mentioned in this niche market case. The niche market
players would also be well situated should there be a change in the
fundamental cost of energy in society due to a break through in
nuclear powered chemosynthesis or low-cost solar power and so forth.
However, anyone who could raise that kind of capital to develope such
an aircraft, could make vastly larger sums investing in other markets/
products.
Really? You're the guy who said that Boeing doesn't invest in Mach 3
cruisers because it finds investing in 747s more profitable. Fact is,
Boeing earns less than 6% on equity while the project I outlined above
earns 12%. Boeing doesn't have $18 billion and if it could arrange
financing for $18 billion it would be sinking the company. So, by all
rational measures, Boeing cannot reaonsably be expected to take the
risk for this project alone. But it reasonably could arrange this as
a private project and seek financing throgh a project financing model.
I could probably dig it up, but when the current CEO of Boeing
took over, one of the comments he made was that financing, in the
open market, of new planes was very difficult to do.
That's true.
The paybacks
are long and the costs can be high. The reason that they need
a certain amount of orders prior to beginning full development is
because they need those orders to attract the financing.
Also true. But what does this have to do with the project I've
outlined? Fact is, airplane manufacturers sell airplanes. Airlines
sell services. Where does this project I outline live? Obviously NOT
as an aircraft manufacturer, even though it causes a new line of
aircraft to be built.
I agree
that IF an consortium could be assembled to directly finance
the project outside of the market could be assembled, Boeing
would be far more attracted to the project.
Duh!
It's basically a way of
spreading the risk.
Anyone that approached Boeing with $18 billion and wanted something
reasonable made, that afforded them greater profit than they could
make doing what they're doing today, and used their skill sets, and
spread their costs - I will say again duh!
I do know that developing the L-1011 just about sunk Lockheed
and that was a relatively successful plane.
Yes. Which is why it is foolish for aircraaft manufacturers to take
that sort of risk given their margins.
Greed is a powerful incentive.
It ismy experience that people who have more than $1 billion cash
available have a hard time earning more than 3% after taxes with it.
They invest in companies like Boeing, and Walmart, but those folks
have a hard time earning more than 6%. That's why people with over $1
billion to invest seek special projects that might earn 12% or more.
This is how off-shore drilling platforms get built for $7 billion for
example. There's no reason that a fleet of Mach 3 super-concordes
couldn't get built the same way.
[snip]
No reason other than the risk is vastly higher than an off shore
drilling platform for which the products thereof have a well
established
What risks are you talking about? Are you saying that the risk of
building a Mach 3 super concorde around the XB70 airframe and engine
set is greater than the risk of developing an off-shore drilling
platform or two? Where are your numbers? What risks? Execution
risk? I think that's pretty well nil in both cases. We know
companies and vendors who can execute on the task. Regulatory risk?
Again, pretty much nil in both cases. There are air routes and oil
leases already in place. The only thing I can see is a comparison of
market risk with discovery risk - so which is higher? Show me the
numbers? We know the demand for Concorde already - to a greater
degree than a geologist can assure us of the existence of oil beneath
the waves where we might plan to put an off shore platform. So, I
would say any real comparison of numbers would tend to favor the Mach
3 transport.
market. If such a consortium could be created, I'd suspect it
would need players with other vested interests.
Not really. There are 9.5 million people in the world that control a
total of $32 trillion - most of it liquid. That's an average of
nearly $30 million per person. If 1% of them could be persuaded to
invest in this project, that's 100,000 investors - $180,000 each - a
little more than 2% of their net holdings - you'd have $18 billion.
And this could be structured in any number of ways so that they
actually make money the day they sign the paperwork.
Countries that
thought they'd gain with the existence of such aircraft, airlines
that thought they could get a market advantage, component vendors
that thought they could get a market advantage from contributing to
such an aircraft.
These are not the folks with the money!! Get that out of your head.
These are folks who are working for a living. And anyone who works
for a living knows you can't make money doing your own laundry.
You've got to have a customer a qualified customer who is willing to
pay you to do the work you know how to do.
I just also suspect that the deck is currently
stacked
against such an affiliation being formed because of the current
market issues with the airline industry.
Your belief that such an affiliation is needed to raise money is
fundamentally flawed. All these folks work for a living. They have
nothing to do with the people who have the capital to invest in
projects like this.
Buffet for example has
little if any interest in the airline industry.-
Yeah, that's why he's a major investor in NetJets! lol.
Look, if I had an appropriately structured offer that took into
account the issues and concerns facing most high net worth individuals
where they live, and gave them the opportunity to make 12% ROI doing
something like making a super-concorde - I could easily raise $25
billion in a few months for the project - given the condition of the
market, and the need for folks in China and India, where most new
wealth is these days - to put some of their assets to work, in low
risk ventures like this one.
..
.
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