One way to look at Boeing is that it's two businesses—a defense and aerospace business that sells to governments, and a commercial airplane business that sells to airlines.
An argument for keeping them in the same company is that the two businesses are complementary. Some of the technology is the same—a civilian airliner and a military cargo jet aren't that different. The sales of commercial airliners to foreign, frequently state-owned or state-controlled carriers rely heavily on diplomatic pressure, so the government-relations function supports both the defense contracts and the civilian sales. And while commercial aviation orders are cyclical depending on the economy, the defense business varies more depending on geopolitics, so having the two in one company helps balance some of the volatility.
The weekend's blowout of a 737 may start to change people's thinking about whether it make sense to keep the commercial and defense businesses together in a single company. Sure, the issue with the 737 may be related to a subcontractor, Spirit AeroSystems. And sure, it may be a different issue than what led to the deadly crashes of 737 Max planes flown by Ethiopian and Indonesian airlines.
But right now, there are two different possible stories about why to own Boeing. One is a defense industry story about continuing conflict around the Middle East, Ukraine, and China increasing demand for arms. And the other is a safety-regulation-litigation-product liability risk story about the 737 Max and how much of the threat it does or doesn't pose to Boeing's overall commercial aviation business, where is competes mainly with Airbus for large plane sales. You can overlay on that an ESG (environmental, social, governance) story about how some funds won't invest in the defense industry for (in my view deeply misguided) moral reasons but would invest in commercial aviation. At a certain point it might make more sense for shareholders to be able to separate these two companies. It might make less sense for management, which typically wants as large an empire as possible, in part so problems look relatively smaller in the scheme of the whole.
Pressure tends to build for moves like these when a company is undervalued, which it's not clear Boeing is. But a breakup could help clarify which of Boeing's two main businesses is creating more of the value.
