Boeing Seals $6.5 Billion Order, and Things Could Get Worse for General Motors

If you've been following General Motors' recall bonanza over the past six weeks, it appears things could get even worse.

Apr 2, 2014 at 3:00PM

The Dow Jones Industrial Average (DJINDICES:^DJI) is searching for a direction today, having moved less than 0.1% as of 2:45 p.m. EDT. Private-sector payrolls in America increased by 191,000 in March, which was slightly short of expectations but still an improvement from February's level.

"The job market is coming out from its deep winter slumber," said Mark Zandi of Moody's Analytics. "Job gains are consistent with the pace prior to the brutal winter."

Investors will be looking for Friday's Bureau of Labor Statistics' March jobs report to confirm that conditions in the labor market have improved after the harsh winter weather subsided. With that in mind, here are some major companies making headlines today.


The 737 MAX 8 and MAX 9. Source: Boeing.

Aviation juggernaut Boeing (NYSE:BA) and Air Canada finalized an order yesterday for 33 737 MAX 8s and 28 737 MAX 9s. The order also has 18 options and 30 rights to purchase additional 737 MAX aircraft, according to Boeing. At list prices, Air Canada's order is valued at $6.5 billion.

Boeing's 737 MAX is designed to improve fleet fuel efficiency, which continues to grow as a percentage of airline costs. The 737 MAX is also designed to reduce carbon emissions by 14% and reduce operational noise footprint by 40% compared to today's aircraft, according to Boeing.

"Projected fuel and maintenance cost improvements of more than 20 percent per seat will generate an estimated CASM reduction of approximately 10 percent compared to our existing narrow-body fleet," said Calin Rovinescu, president and CEO of Air Canada. "In addition, the 737 MAX offers improvements to the environment, making this the best choice for Air Canada."

Outside of the Dow, the flurry of bad press for America's largest automaker, General Motors (NYSE:GM), could get worse in the coming weeks after senators hinted at a cover-up regarding one of its recent recalls.

"I think we need to hear from people who had the key positions at GM who perhaps had knowledge of this," said Sen. Dan Coats (R-Ind.) during a hearing of the Senate Commerce Committee's consumer protection panel, according to Automotive News.

Earlier this week General Motors announced another recall of more than 1.3 million vehicles that can apparently experience a sudden loss of electric power. If you haven't been keeping track of this recall debacle over the past six weeks, that brings the total to eight separate recalls covering nearly 6 million vehicles.

This gives current and potential GM investors plenty to chew on before the company announces its first-quarter results. GM originally expected to add a charge of $300 million to its first-quarter results, but that has now ballooned to about $750 million. That charge only accounts for recall-associated charges and doesn't include possible lawsuits or the damage done to the company's already battered brand image. 

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Daniel Miller owns shares of General Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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