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The Boeing Company (NYSE: BA) has had significant problems meeting its schedule to deliver its new 787 Dreamliner. It has a nearly 900 aircraft backlog but it has delayed the delivery three times already. Now it looks poised to announce a fourth one -- as long as six months. This is making customers frustrated and is likely to cost shareholders.

The 787's delays have resulted from a variety of problems. The most significant was that Boeing outsourced some 70% of the design and manufacture of the 787 to suppliers around the world -- with the idea of snapping the pieces together in Washington state when the components were ready. But Boeing did not monitor the suppliers closely enough so it was surprised when some of them did not meet their production schedules.

Meanwhile, the strike by its machinists union has delayed by 10 weeks the delivery dates of the 3,734 jetliners in its order book. But the 787 is running into other problems such as still fixing bugs in the software that runs its systems, from the electric brakes to cockpit instruments. And with customers being frustrated by the missed delivery dates, Boeing is struggling with how much slack to build into the schedule so it can give them a truly firm date.

The family of Jdimytai Damour who was trampled to death in a Long Island Wal-Mart Stores (NYSE: WMT) on Black Friday is suing the retailer in New York State Supreme Court in the Bronx. The complaint alleges that Wal-Mart's advertising created the "environment of frenzy and mayhem" that caused Damour's horrible death.

Despite the death, Wal-Mart continued running the advertisement in question -- which the complaint alleges is intended to attract the kinds of large crowds that asphyxiated the 6-foot-5, 270-pound Damour after a crowd crushed him at 5 a.m. on Friday when it broke open electronic doors as the store opened. Four others, including a woman who was eight months pregnant, were also hospitalized.

I think Wal-Mart will pay for its share of the responsibility for this death. The legal theory here may not work though.

I'd welcome any thoughts from the legally trained among you. Sadly, none of this will bring back Damour. But his family should be compensated.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Wal-Mart securities.

I have not always agreed with your policies. But we're all human. You even apologized for the financial crisis and the Iraq War. This makes me think you've got legacy on your mind. If so, consider this: there is no way that pardoning Mike Milken, Bernie Ebbers and Conrad Black before you leave office will boost your legacy.

Granted, those pardons would be far less significant to historians than the things you've already apologized for, but why add to your post-presidential aggravation? Here are the reasons not to pardon these three:

• Milken - As i posted, Milken paid $650 million in fines and went to jail from March 1991 until January 1993 for securities law violations. He's a white-collar crook who's spent decades trying to burnish his image. It has not worked on me.
• Ebbers - Bernie Ebbers was convicted of orchestrating an $11 billion accounting fraud that brought WorldCom into bankruptcy, making it the second biggest in history. Lehman Brothers' recent $639 billion tops the list.
• Black - Black formerly headed Hollinger International Inc and was a member of Britain's House of Lords. He was found guilty of defrauding shareholders and entered prison in March 2008.

The automobile industry thought it could follow the successful sales pitch that George W. Bush used to sell the Iraq War and Hank Paulson used to sell the $892 billion Troubled Assets Relief Program (TARP) who kept repeating that the alternative to not giving them what they want would be catastrophe. But America may finally be wising up to the hollowness of that ploy. And the great news is that the auto industry is finally starting to adapt to this reality.

Rather than claiming that there is no Plan B and that a bankruptcy would lead to a depression, it is now considering a pre-packaged bankruptcy. As I posted last month, the options for the industry are Chapter 11 (wiping out common shareholders while restructuring and continuing to operate) or Chapter 7 (liquidation of the assets).

There is no reason that U.S. taxpayers owe the auto industry their money -- and in a free market economy the bankruptcy process is designed to help industries fix their problems. If the auto industry is now willing to consider using this process to spur a restructuring that will lead to a smaller, but viable industry, I believe this is how our economy should work.

Even though Black Friday sales were better than expected, most retailers saw their November sales plunge. As I posted in April, Wal-Mart Stores, Inc. (NYSE: WMT) would likely benefit from consumers' recession diet. That has proven to be a fairly safe bet, but the scary thing is that just about every other retailer is taking a hit.

A glimmer of good news is that for many of those that hurt, the results were not as bad as expected. Here are the actual results of five retailers (with expected results in parentheses):

• Wal-Mart +3.4%, (+2.1%)
• Costco Wholesale (NYSE: COST) -5%, (-2.4%)
• Limited Brands (NYSE: LTD) -8%, (-11.6%)
• Pacific Sunware (NASDAQ: PSUN) -10%, (-14.3%)
• Bon-Ton Stores (NASDAQ: BONT) -16%, (-14.5%)

An emerging theme is that expectations are so bad that retailers seem able to exceed them. However, there is no guarantee that such outcomes are likely to continue. If retailers do better than expected then forecasters may raise their estimates until retailers can't exceed them.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

There is fantastic news this morning for owner's of Barbie-maker, Mattel Inc. (NYSE: MAT). The Barbie-killer, Bratz line of dolls, is being pulled off the shelves by the end of the year. And Bratz-maker, MGA Entertainment has to pay Mattel $10 million for copyright infringement and $90 million for breach of contract after a trial starting with Mattel's 2004 lawsuit ended this August.

For those who are not familiar with Bratz, here's a brief tutorial. Bratz is a line of dolls -- with "huge lips, pug noses, almond-shaped eyes and coquettish figures," according to AP. Young girls loved them and in 2001 MGA took Bryant's original four dolls and created 40 characters, complete with accessories and related toys such as Bratz Boyz, Bratz Petz and Baby Bratz. Bratz generated as much as $778 million in profits and took market share from Barbie whose sales fell 15% in 2007.

Why are the Bratz dolls taking a walk down Dodo Lane? A jury found that Bratz designer Carter Bryant developed the concept for the dolls while working for Mattel. The jury ruled that MGA infringed on Mattel's copyright. The judge's injunction named all 40 Bratz dolls, including the four originals -- Yasmine, Chloe, Sasha and Jade. The judge also ordered MGA to reimburse its vendors and distributors for the cost of the dolls and shipping charges for sending them back.

Mattel stock is up 2% in pre-market.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

The recession, which officially began a year ago, is accelerating the pace of job loss. Since I began to notice the collapse of subprime back in the fall of 2006, watching the economy implode has been like a huge highway pileup in slow motion. And that crash is starting to create big economic injuries in the job market.

How so? Firing announcements rose 148% in November 2008 to 181,671 -- the most since January 2002 -- from 73,140 in November 2007. So far in 2008, the number of cuts has spiked 46% to 1,057,645, surpassing 1 million for the first time since 2005. And many of these cuts have come from financial services (91,356), computer and electronics (15,350), and retailing (11,073).

Having lived through two credit contractions, I could see this coming from miles away. But it happened far more slowly than I thought it would. And I did not foresee how the bad mortgages would cause a global financial crisis. But they have and here's how: $1.3 trillion in subprime mortgages were added to packages of complex securities, including $13 trillion of mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs).

Harvard reports that the value of its endowment has declined $8 billion between the end of June 2008 through October 2008. That would make Harvard's endowment worth 22% less than at the end of June, or $26.9 billion -- but it probably has further to fall thanks to illiquid assets like private equity interests. Meanwhile, Harvard and its peers could be in trouble because fewer people will be able to afford college given the market crash. That will mean college administrators are facing some tough choices.

Harvard is responding to the decline in its endowment by taking a "hard look" at staffing levels and compensation. It is forecasting a 30% drop for its endowment ending in June 2009, which would bring it to $25.8 billion, down another $1 billion. While this strikes me as optimistic, it does suggest the extent of the damage and the challenges Harvard and its peers face.

The options for universities are dwindling. A study suggests that tuition has risen 439% since 1982 while median family incomes have increased only 137% during that period. If tuition continues to rise at that rate, few families will be able to afford college. With the student loan market in dire straits and incomes likely to fall further due to layoffs, the only way for colleges to attract top students who can't pay will be to cut tuition even more on the lower income families while making up the difference by raising tuition for the wealthiest ones.

If executives from General Motors Corp. (NYSE: GM), Ford (NYSE: F) and Chrysler can make it from Detroit to Washington in their hybrid vehicles by tomorrow, they'll plead for $34 billion -- up $9 billion from two weeks ago. You should not give them what they want. Instead, I recommend you let GM and Chrysler merge -- if you can convince Nissan CEO, Carlos Ghosn, to run the combined company. Ford will be fine on its own -- you should grant it the line of credit it requests.

A few weeks ago, I proposed a six step restructuring plan that would save $16 billion and help a combined GM and Chrysler to survive. To put that plan into effect, there is no question that the managers of GM and Chrysler must be replaced by an auto executive with a track record for turning around an ailing competitor. That's what Ghosn did when he took over Nissan after it merged with Renault in 1999, where he was a VP. Ghosn won many small victories against an entrenched Nissan bureaucracy to revive the Japanese automaker. Ghosn is just what GM/Chrysler needs.

Make no mistake, this is not an industry to which it makes economic sense to lend money. Bankers need to get repaid from the cash flow that a business generates either from operations or by selling assets. With sales plunging -- GM's fell 41.3%, Ford's tumbled 30.5%, and Chrysler's crashed 47.1% -- there is no operating profit likely here. And demand for purchasing their assets -- such as GM's Saab or Ford's Volvo -- appears to be weak.

Hedge funds have had a lousy year, losing an average of 10.8%. But two hedge funds -- big winners in 2007 -- kept making money this year as well. Meanwhile, those two winners mask an awful lot of losers who will probably find their way into oblivion.

The winners for 2008 (at least through September) are run by James Simons (a math genius whose money-making techniques elude explanation) and John Paulson (who made so much money last year shorting subprime). Here are the details:

• Medallion Fund, run by Simons' Renaissance Technologies LLC, has $8 billion in assets and gained more than 58% -- or $1.43 billion in profits; and
• Advantage Plus fund, Paulson's $13 billion investor in takeovers, restructurings and other corporate events, returned 24.6% through September.

Meanwhile, investors are scrambling for the exit for the typical hedge fund, withdrawing $87.5 billion. Total industry assets fell 11% from the peak of $1.93 trillion in the second quarter of 2008 to $1.72 trillion at the end of the third. Hedge fund closures by the middle of 2008 were 15% ahead of 2007. And that may be only the beginning for the world's 10,000 funds.

Isn't capitalism great?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Remember how admired General Electric (NYSE: GE) used to be? After its stock has tumbled 71% from its all-time high in 2000 of $58.13, I don't think people admire it much anymore. You may have missed that GE got $139 billion in loan guarantees from the FDIC a few weeks ago but nobody blinked an eyelash. Meanwhile today, GE is reporting more disappointing earnings news.

GE is shrinking its GE Capital unit, which in 2007 accounted for about 50% of its profit and sales. Next year GE plans to earn $9 billion from GE Capital, excluding a potential charge of $1 billion to $1.4 billion to speed up cost cuts there. Meanwhile, GE Capital will have lots of bad loans -- its provision is expected to rise from $7.2 billion in 2008 to $9 billion in 2009.

As a result, GE cut its overall earnings forecast for the fourth quarter from between 50 cents to 65 cents a share down to a range of 50 cents to 52 cents -- which is in line with the 51-cents average of 14 analysts' estimates. These days it is very hard to admire almost any company, and stock prices are reflecting that lack of admiration.

Have central banks reached the limit of what they can do to fix the global economic crisis? The answer is yes, if you believe that the price of Credit Default Swaps (CDSs) is any indication. With CDS premiums for corporate bonds reaching a new high, investors in the thinly traded, unregulated and poorly-disclosed corner of our financial markets are signaling that central banks cannot fix what ails the global financial markets. That scares me.

How are these CDS premiums measured? By a couple of complex CDS indices in the U.S. and Europe. For example, there's the Markit iTraxx Crossover Index of 50 high-risk, high-yield credit ratings corporate bond issuers whose premium climbed 18 basis points (100 basis points is 1%) to 956 this morning. in London. And there's the Markit iTraxx Europe index of 125 investment-grade corporate bond issuers which climbed 3.5 basis points to 191.5 having earlier traded at a record 198. Similar indices in Australia and Japan are at record levels as well.

Central banks around the world have cut their short-term lending rates to near zero and yet things keep deteriorating. As I posted, the next step for central banks could be trying to lower the rates of longer-dated, e.g., two year, government securities. But none of these efforts will work because banks are so afraid to lend since it is so hard to find businesses and individuals who are safe bets to pay back the money. So absent global infrastructure programs by governments around the world, this crisis could continue to explode.

General Motors Corp. (NYSE: GM) and Ford (NYSE: F) are going in front of Congress today to ask for $25 billion worth of taxpayer money. (It seems they won't be flying in separate private jets.) GM will announce a reopening of its UAW contract and the winding down of its Hummer, Pontiac, Saab and Saturn brands. Ford will try to sell Volvo to the Swedish government. What's lacking from both plans at this stage is enough detail about cost savings to know whether taxpayers will get their money back.

As I posted, there is a $16 billion (in cost savings) six point restructuring plan which GM could have used, but it chose a different path. The six-point plan involved closing or selling the four brands and their related dealerships. GM's plan proposes to slowly wind down these brands and keep the dealers. It has been trying to sell Saab but no takers have emerged.

Moreover, GM workers remain higher paid than workers of its Japanese competitors. For example, UAW workers make an average of $76 an hour, including the cost of retiree benefits. Toyota Motor Co. (NYSE: TM) workers cost, all in, about $18 an hour less. It is unclear how much GM plans to cut from UAW pay by reopening the contract. Absent more details, today's GM restructuring plan does not provide a clear path to profitability.

Boeing Co. (NYSE: BA) and its engineering union have come to terms on a contract. This is good news for Boeing and its workers. Boeing can continue designing aircraft and its engineers can enjoy a raise. Considering the economic climate in which this contract was negotiated, it is a testimony to Boeing's financial prospects that it was able to increase their pay. With a $276 billion backlog, Boeing could be among the healthiest companies around.

What are the terms of the deal? Boeing employs 20,500 Society of Professional Engineering Employees in Aerospace (SPEEA) workers who are well paid already: 13,900 Boeing engineers average $88,000 annually and 6,600 technical workers make $67,000. The new contract offers 5% annual raises, higher pension payments and overtime rates, and gives workers more input concerning outsourcing decisions. But SPEEA members will pay $200 a year more for improved health care.

While this contract settlement is good news, it is less critical to Boeing's operations than the 52-day strike it settled last month with Boeing's machinists that cost $10 million a day. That's because the machinists were building aircraft before they went on strike, whereas the engineers are largely designing future ones. Nevertheless, both SPEEA and the machinists agreed to four year contracts -- a year longer than usual. This means that Boeing can now get back to work satisfying the prodigious demand for its products.

George W. Bush is beginning to realize he made some mighty big mistakes. He admitted today that he's sorry the stock market and economy have collapsed because it happened under his watch. And he thinks that there was an intelligence failure when it comes to those Iraqi WMDs.

He'd like us to believe that he was just a passive victim of all this bad stuff that happened around him. If he is really that clueless, I need help understanding how he got "elected" twice. In any case, there's plenty of evidence that Douglas Feith created the WMD evidence to please Dick Cheney.

And Bush repeatedly ignored warnings that subprime mortgages were being abused and that securitization was creating a huge risk for the economy. He also failed to apologize for two other memorable events during his presidency -- his August 2001 decision to ignore that President's Daily Brief called "Osama bin Laden determined to strike in U.S." and his famed New Orleans Katrina flyover, capped by his heck of a job Brownie comment.

Bush has left the U.S. in a sorry state -- and I'm sorry, but sorry won't cut it.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.