In Industrials, Boeing (NYSE:BA) posted a double-digit gain in the first quarter despite a sharp decline in March on concerns about its 737 Max jet in the wake of two recent crashes. Flights of the aircraft have been suspended pending clear identification of the cause of the accidents and appropriate remediation. If the issues are related to maneuvering characteristics augmentation software (MCAS), as preliminary data suggests, they could likely be addressed through software changes and pilot training. Given manufacturing and supply-chain complexities, production continues, although at a moderated pace, with an express intent to incorporate remedies before future deliveries. Chances of mass order cancellations seem minimal given the high costs of switching out. Our long-term fundamental expectations of the company remain intact.
From Spiros Segalas (Trades, Portfolio)' first-quarter 2019 Harbor Capital Appreciation Fund commentary.
