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The domestic airline industry would have gone bankrupt because of covid-19, had the government not bailed them out. Now companies realize that much of the corporate travel (not all) can be reduced / eliminated and handled via Zoom. Corporate travel has always been the cash cow for airlines, and that cow is now low on milk.
The result: fairs for the John Q Public leisure travelers will sharply increase. It remains to be seen if Ma and Pa are willing to pay the higher costs.
Case in point. All it would take is another event as impactful to travel as COVID, and BOOM's hope of making profits from manufacturing aircraft could go boom.
Let's face it, BOOM's aircrafts, no matter how sophisticated they may be, are a luxury for many companies and not a necessity.
The domestic airline industry would have gone bankrupt because of covid-19, had the government not bailed them out. Now companies realize that much of the corporate travel (not all) can be reduced / eliminated and handled via Zoom. Corporate travel has always been the cash cow for airlines, and that cow is now low on milk.
The result: fairs for the John Q Public leisure travelers will sharply increase. It remains to be seen if Ma and Pa are willing to pay the higher costs.
Quick! Someone tell the ACC they don’t need to move to a city with a bigger airport, they can just use Zoom!
Quick! Someone tell the ACC they don’t need to move to a city with a bigger airport, they can just use Zoom!
Actually they could, but the egos wouldn't allow that. Most of the corporate travel reductions will affect the non-bigshots. And the "bigger airport" is a lame excuse for the ACC moving. They are looking for a "sexier" city.
No offense, but you KNOW this how, exactly? Obviously the building will be constructed for BOOM, but I don't believe you have any real, detailed and specific knowledge of the building, how its to be built, what could or would need to be modified in order for another company to use it, or how difficult it may or may not be for another company to make use of it. And even if we stipulate it could only be used for aircraft manufacturing/maintenance, there are already substantial companies in that field adjacent to this site. Not to mention the possibilty of other companies in the field that may be attracted to an existing building. That would be a huge draw to other companies in the industry.
Because that's generally how it works in manufacturing.
Now, whether it would take $1 million, $10 million, or $50 million to realign the building for a new company will depend on the new company's needs compared to what is built.
It is extremely rare in manufacturing for a different company to simply move in and take over operations... even in identical fields. In VA Beach for example, a brewery was built near my old place of work (with significant incentive money given). It went under within a year. Soon after, a new brewery moved in... but they needed six figures in incentives to mold the building to fit their needs.
In aerospace manufacturing, the stakes are much higher... and the needs are generally much more specific to the individual company. Again, I have no way of knowing HOW specific... but it's foolish to think that if BOOM fails that another company will waltz right in and simply take over as if nothing happened.... (and even then, they'd probably want some money to change the signage).
And then there's the possibility that no other company wants what is built.
Because that's generally how it works in manufacturing.
Now, whether it would take $1 million, $10 million, or $50 million to realign the building for a new company will depend on the new company's needs compared to what is built.
It is extremely rare in manufacturing for a different company to simply move in and take over operations... even in identical fields. In VA Beach for example, a brewery was built near my old place of work (with significant incentive money given). It went under within a year. Soon after, a new brewery moved in... but they needed six figures in incentives to mold the building to fit their needs.
Well of course the building would have to be retrofitted, but its done all the time. The Dell building in W-S for example. The old MillerCoors plant in Reidsville, etc., etc.
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Originally Posted by HRVT
then there's the possibility that no other company wants what is built.
Which is pretty low probability. Most companies have a strong preference for existing buildings.
Well of course the building would have to be retrofitted, but its done all the time. The Dell building in W-S for example. The old MillerCoors plant in Reidsville, etc., etc.
Then why did you ask? The point I made was that there could be yet more money poured into this building if BOOM busts but another company takes over and that money may not be a drop in the bucket either. At quick glance, $25 mil or so was paid by the state to incentivize Purina to take over the Miller-Coors site.
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Which is pretty low probability. Most companies have a strong preference for existing buildings.
Really? It depends on the company but i sure wouldnt claim that "most" prefer existing buildings. Of course, it does matter just how "niche" the specifications of this plant will be. The location could also narrow the list of interested suitors as well.
? It depends on the company but i sure wouldnt claim that "most" prefer existing buildings. Of course, it does matter just how "niche" the specifications of this plant will be. The location could also narrow the list of interested suitors as well.
I worked in econimic development for 30 years. 80% of companies are looking for an existing building when relocating or expanding. Having existing buildings is a huge plus when attracting new companies.
I worked in econimic development for 30 years. 80% of companies are looking for an existing building when relocating or expanding. Having existing buildings is a huge plus when attracting new companies.
Then I'll defer to you on that point.
Doesn't change the fact that this still a fairly risky deal with high cost that might be fruitless. It seems we're paying like this is a premium company and not accounting for the risk of a startup. I do think you're downplaying the possibility of this building sitting empty if this deal busts.
Doesn't change the fact that this still a fairly risky deal with high cost that might be fruitless. It seems we're paying like this is a premium company and not accounting for the risk of a startup. I do think you're downplaying the possibility of this building sitting empty if this deal busts.
Everything might be fruitless, but thats hardly a reason to do nothing.
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Originally Posted by HRVT
know more in a couple days though.
We won't know any answers to the feal questions for several years.
Everything might be fruitless, but thats hardly a reason to do nothing.
I never said "do nothing". There's a pretty wide range between doing nothing and offering 9 figures worth of incentives to an unproven startup with a spotty track record. It could work out as intended (1700 well-paying jobs here for the long haul). It could go bust before anything happens. Those are the two best case scenarios (the latter is a best case because it means the money doesn't end up wasted).
But anything in between could happen to. It could be Dell around for a few years until the incentives dry up. It could get build but never go any further.
I'm not saying it's a mistake. But the risk is VERY high.
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We won't know any answers to the feal questions for several years.
True. We will see. I hope this works out. And if it doesn't, I hope the failure happens early before money gets squandered.
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