Business

Boeing’s leaders say they have charted a path forward to stamp out safety and manufacturing flaws on its best-selling planes.
Plans include better oversight, improved safety and manufacturing procedures, more robust worker training, and buying back a key supplier.
Industry watchers and insiders say a string of decisions stretching back decades led to the problems at the longtime touchstone of American manufacturing quality and innovation.

An American Airlines Boeing 737 MAX 8 flight from Los Angeles approaches for landing at Reagan National Airport shortly after an announcement was made by the FAA that the planes were being grounded by the United States in Washington, U.S. March 13, 2019. 
Joshua Roberts | Reuters

Boeing executives spent years after two fatal 737 Max crashes trying to convince Wall Street, regulators, airlines and the flying public that they had an eagle eye on quality, reliability and safety.
Then on Jan. 5, about six minutes and 16,000 feet into a packed flight out of Portland, Oregon, a door plug blew out of a nearly new Boeing 737 Max 9. The panel was missing key bolts that hold it in place, which the company had removed to fix damaged rivets, according to early accident reports.

No one was seriously injured, but the harrowing flight jolted Boeing’s leaders back into crisis mode. It also reignited scrutiny and skepticism from the same groups the iconic plane-maker spent years trying to win back after the two Max crashes.
Now Boeing’s leaders say they have charted a path forward to fix the company: Better oversight, improved safety and manufacturing procedures, and more robust training for workers, many of them new hires after pandemic-era buyouts and layoffs of thousands of employees.
Boeing this month unveiled a long-awaited deal to buy back its troubled fuselage supplier, Spirit AeroSystems, in a bid to help stamp out production flaws.
A week later, Boeing said it reached a deal with the Justice Department to plead guilty to a federal charge of conspiracy to defraud the U.S. government tied to the fatal 737 Max crashes. Attorneys representing crash victims’ families blasted the agreement as a “sweetheart” deal. If approved by a federal judge, it would allow Boeing to avoid a potentially lengthy and costly criminal trial, though it would also brand Boeing as a felon.
“This past January, the facade quite literally blew off the hollow shell that had been Boeing’s promises to the world,” Sen. Richard Blumenthal, D-Conn., said in testimony for a Senate panel hearing he called last month, where Boeing CEO Dave Calhoun was roasted by lawmakers.

The fuselage plug area of Alaska Airlines Flight 1282, Boeing 737 Max 9, which was forced to make an emergency landing with a gap in the fuselage, is seen during its investigation by the National Transportation Safety Board (NTSB) in Portland, Oregon, U.S. January 7, 2024.
NTSB | Via Reuters

Industry watchers and insiders say a string of decisions stretching back decades — from a 1997 merger to outsourcing — led to the problems at the longtime touchstone of American manufacturing quality and innovation. Boeing employs some 170,000 people, and its products have landed everywhere from the Maldives to the moon.
Even with its road map in hand, fixing its problems and restoring Boeing’s reputation will take years — and it won’t be cheap.
And Boeing still has plenty of people to convince.
Boeing hasn’t posted an annual profit since 2018, and the plane maker’s shares have tumbled about 30% this year while the broader market rallied. Its stock closed at a high of $440.62 in March 2019, days before the second Max crash. It now trades closer to $185 per share.

Boeing finance chief Brian West told investors in May that the company expects to burn, rather than generate, cash this year, some $8 billion in the first half of 2024. It reports quarterly results on July 31.
“This company is more important than a few quarters of Wall Street,” Aengus Kelly, CEO of aircraft leasing giant AerCap, a major Boeing customer, said in an interview in the spring. “It has to be nurtured and rebuilt.”
Boeing will be back on the global stage next week during the biennial Farnborough Airshow in the United Kingdom, one of the world’s largest aircraft shows. But the manufacturer will have a muted presence: It’s not sending its yet-to-be-certified 777X, 737 Max 7 or Max 10 planes as Boeing employees focus on the fixing problems at home rather than showcase its new planes as it did during past air shows.

Delayed deliveries

Boeing began 2024 fresh from a surge in annual jetliner sales and a jump in deliveries, welcome tallies that appeared to show the company was turning a corner after the fatal dives of two 737 Maxes in 2018 and 2019 that killed all 346 people on the flights.
But the Jan. 5 door plug blowout on Flight 1282, operated by Boeing’s crosstown customer Alaska Airlines, brought a swift response from regulators. The Federal Aviation Administration barred Boeing from increasing output of its Max planes and stepped up hands-on inspections at production plants. The FAA said in March that its audit found “non-compliance issues in Boeing’s manufacturing process control, parts handling and storage, and product control.”
Its production limitations have exacerbated delivery delays for Boeing customers, a slowdown that’s impacting its commercial jet business, as airlines pay the bulk of a plane’s price when they receive it. That division accounted for more than 43% of Boeing’s nearly $78 billion in revenue last year.
In the first half of 2024, Boeing delivered 175 airplanes, compared with the 323 aircraft that Airbus handed over during the same period. The two companies dominate the commercial jet market.

Leaders at the top of major airlines from Emirates to Southwest have aired their frustration with the jet maker as deliveries run behind schedule. Southwest, United and American have blamed slowdowns in hiring and changed flight plans on Boeing’s delays.
“Boeing needs to become a better company,” Southwest CEO Bob Jordan said at a JPMorgan industry conference in March, an uncharacteristically strong comment from the leader of the all-Boeing 737 airline.
Even if planes arrive late, compensation doesn’t often make up for the shortfall of jets.
“I’m not in the compensation business. I’m the airline business,” Etihad Airways CEO Antonoaldo Neves said in an interview.

Tight supply at both Boeing and Airbus makes shifting orders over to the European company nearly impossible. Both companies are sold out of narrow-body planes through almost the end of the decade. Boeing has an order book of more than 5,400 jetliners, after accounting adjustments, while Airbus has about 8,000 unfilled orders.
And Airbus isn’t on solid ground either, warning customers and investors last month that supply chain problems will slow its planned ramp up in production and slow deliveries.
Earlier this year as airline executives’ patience wore thin, they sought meetings with Boeing’s board chairman, people familiar with the matter said.
Shortly afterward, Boeing in March announced a leadership shake-up, with the head of its all-important commercial airplane unit replaced. CEO Calhoun, an alumnus of General Electric and Blackstone, said he would step down by the end of the year. Boeing replaced its chairman, too, installing ex-Qualcomm CEO Steve Mollenkopf.
Boeing hasn’t yet named a replacement for Calhoun. The CEO of Spirit AeroSystems, Pat Shanahan, who previously worked at Boeing and served as former deputy secretary and acting secretary of defense under former President Donald Trump, is considered a strong contender.
Across the airline industry, executives publicly and privately say they would rather Boeing take the time to fix problems than face prolonged uncertainty over when new planes will be delivered.

Long history

The 108-year old Boeing has a firm place in American history. Its bombers were crucial in World War II. It has built presidential aircraft. Former Presidents Barack Obama and Donald Trump have each held events Boeing 787 Dreamliner factories. And in space, a Boeing-built rocket propelled Apollo 11 to the moon in 1969.
Most of the general public knows Boeing as the company to usher in the jet age. It designed and launched four aircraft in just over a decade, including the first 737.
The narrow-body plane was soon dwarfed by Boeing’s groundbreaking and more glamorous jumbo jet, the 747, which could fit more than 500 people, and in some configurations, a piano bar. The 737 was dubbed “Baby Boeing” and went on to become the company’s bestseller, helping to make Boeing the largest U.S. exporter. It has built more than 11,000 of the 737s to date.
“Without Boeing, the world is a worse place,” AerCap’s Kelly said.

But within a five-month span in 2018 and 2019, two Max 8 planes crashed: one in Indonesia operated by Lion Air that plunged into the Java Sea, killing the 189 people on board; and one operated by Ethiopian Airlines that crashed shortly after takeoff from Addis Ababa, killing the 157 people on that flight.
Pilots in those Boeing planes fought against a flight-control system, the Maneuvering Characteristics Augmentation System, that pushed the nose of the planes downward repeatedly. The Department of Justice later alleged the company misled the FAA about the system, the charge to which Boeing ultimately agreed to plead guilty.

Rescuers work at the scene of an Ethiopian Airlines flight crash near Bishoftu, or Debre Zeit, south of Addis Ababa, Ethiopia, Monday, March 11, 2019.
Mulugeta Ayene | Reuters

Last year, it looked like Boeing was back on a better footing.
“I have heard those outside our company wondering if we’ve lost a step. I view it as quite the opposite,” Calhoun said in note to employees last October.
Months later, the powerful blast from the Alaska Airlines door plug blowout ripped off head rests, seatbacks and the first officer’s headset, leaving a gaping hole in row 26. The incident terrified passengers and exposed the most serious in a series of quality control issues on Boeing jets. Previous issues included mis-drilled holes and incorrect spacing on some of Boeing fuselages.
The manufacturer’s production portfolio includes a host of jets that are regularly flown commercially around the world: the workhorse 737, the wide-body 787 Dreamliner, and soon, once approved by regulators, the 777X.
And while production flaws make headlines, Boeing jets continue to carry travelers safely around the world, with more than 13,000 at the end of last year. The company has a 45% market share of commercial jets currently flying, according to AeroDynamic Advisory.
Across all of its divisions, its customers also include the U.S. and foreign militaries, and NASA — and some of those units haven’t been without issue either.
“Our airplanes have carried the equivalent of more than double the population of the planet,” Calhoun said in testimony to a Senate panel last month for a hearing titled “Boeing’s Broken Safety Culture.”
“Getting this right is critical for our company, for the customers who fly our planes every day, and for our country,” he said. He apologized during the hearing to the family members of the Lion Air and Ethiopian crash victims, as they held posters with pictures of lost loved ones.

Cost-cutting proves costly

Critics say a yearslong push to reward Boeing shareholders and lower costs came at the expense of building totally new aircraft, in favor of updating older models. Boeing also outsourced production of key parts to suppliers that it increasingly put under pressure to deliver, exposing the supply chain to potential flaws.
United CEO Scott Kirby told CNBC in January that he believes the issues date back to Boeing’s merger with competing airplane manufacturer McDonnell Douglas in 1997. The tie-up is often cited as a turning point for Boeing that replaced its once engineering-led culture with a greater focus on returns.
From 2010 to 2019, Boeing spent $68 billion on stock buybacks and dividends, according to Melius Research analyst Rob Spingarn.
“This is a long time building,” Kirby said.

BOZEMAN, MT – MARCH 12: Boeing 737 Max 8 fuselages manufactured by Spirit Aerosystems in Wichita, Kansas are transported on a BSNF train heading west over the Bozeman Pass March 12, 2019 in Bozeman, Montana. 
William Campbell | Corbis News | Getty Images

In 2001, Boeing moved its corporate headquarters from its original home in Seattle to Chicago, farther away from the factory floors where it had built aircraft since the early 20th century. In 2022, it moved headquarters again to Arlington, Virginia.
In 2005, Boeing sold its Wichita division that makes fuselages for many of its planes to a private equity firm for just under $1 billion. That spinoff would eventually become Spirit AeroSystems, which Boeing is now buying back for about $4.7 billion plus debt.
And in 2020, Boeing said it would consolidate 787 Dreamliner production in South Carolina, more than 2,400 miles away from its other manufacturing facilities in Washington state, including where the Dreamliners were previously built. It also outsourced parts production to a network of suppliers.
Those moves have been put under a microscope in recent years as Boeing disclosed recurring production flaws. Allegations from whistleblowers at the company and at Spirit have claimed Boeing was cutting corners in production.

Calhoun, when asked about outsourcing production to Spirit, told CNBC in January: “Did it go too far? Yeah … probably did, but now it’s here and now I gotta deal with it.”
Flaws on its planes have cost Boeing billions of dollars due to periods of production drops, delivery pauses and compensation to customers.

Turning a page

Boeing does say that it’s on the right track.
For one, it’s been forced to slow production of its planes. While painful in the near term because it drives up costs and deprives the company of new planes to hand over to customers, executives say it’s the way to make sure manufacturing flaws don’t reappear.
Jefferies estimates Boeing produced about 24 Max jets a month in the second quarter and could move to roughly 35 a month in the last three months of the year. Boeing has said it aims to increase rates to about 50 Max planes a month in the next few years.
It’s also brought employees into the recovery effort. The company has held so-called “stand-downs” at its factories to pause work and discuss problems on the line.
And its plea deal with the DOJ, if approved by a judge in the coming weeks, could allow the company to settle a federal probe with a roughly $244 million fine and a probationary period of three years, during which time an independent monitor would oversee quality control, and other conditions.

Boeing’s CEO Dave Calhoun and chief engineer Howard McKenzie turn to face those who lost loved ones in fatal crashes as they testify before a Senate Homeland Security and Governmental Affairs Committee Investigations Subcommittee hearing on the safety culture at Boeing, on Capitol Hill in Washington, U.S., June 18, 2024. 
Kevin Lamarque | Reuters

“We are taking comprehensive action today to strengthen safety and quality,” Calhoun said in his testimony before the Senate panel last month. “And, we know, as America’s premier aerospace manufacturer, this is what you and the flying public have every right to expect from us.”
Goldman Sachs aerospace analyst Noah Poponak said Boeing can “still make a product that’s a total marvel. If they can get their act together, I think their reputation can improve quickly.”
Promoting and building up the Boeing workforce will be key in the coming years, according to Alex Krutz, managing director of Patriot Industrial Partners, an aerospace consulting firm.
The company has more competition for new workers than in previous generations in the Seattle area, he said, because of rapid expansion of tech companies there in the past few decades, as well as engineering competition from the private space industry.
“Companies thrive or don’t based on leadership,” he said.

The International Association of Machinists and Aerospace Workers, District 751, which represents some 30,000 Boeing technicians in Washington State and Oregon, is currently in contract negotiations with company, seeking more than 40% raises and a seat on Boeing’s board.
“We have more leverage than we’ve ever had in our history,” said Jon Holden, president of IAM District 751. “There’s massive demand for new airplanes.”
Some analysts say designing a new plane could help attract talent and set the company up for years to come, a project that was largely set to the backburner after the crashes.
The advice of Richard Aboulafia, an longtime aerospace analyst and a managing director at AeroDynamic Advisory is simple: “Begin a new program, and say, ‘We’re a company with a future.'”

Don’t miss these insights from CNBC PRO More

United Airlines grew its second-quarter profit thanks to strong travel demand, especially in international markets.
United and Delta have been standouts in an airline industry awash in U.S. domestic capacity.

United Airlines planes at Denver International Airport.
Leslie Josephs | CNBC

United Airlines’ second-quarter profit rose more than 20% from last year as strong demand for international travel boosted the carrier’s results, but its third-quarter forecast came in shy of estimates as an oversupply of flights weighs on fares.
United said Wednesday that it expects to earn between $2.75 and $3.25 a share on an adjusted basis in the current quarter, lower than the $3.44 a share analysts polled by LSEG estimated.

Here’s what United reported for the second quarter compared with what Wall Street expected, based on average estimates compiled by LSEG:

Earnings per share: $4.14 adjusted vs. $3.93 expected
Revenue: $14.99 billion vs. $15.06 billion expected

United earned $1.32 billion, or $3.96 per share, in the three months ended June 30, up from $1.08 billion, or $3.24 per share, a year earlier. Adjusting for one-time items, it reported earnings of $4.14 a share, compared with $3.93 that analysts expected.
Revenue of $14.99 billion jumped 5.7% from the year-earlier period, though it was just shy of estimates.
United reiterated its full-year forecast for adjusted earnings of $9 to $11 a share.
United and Delta Air Lines, which also disappointed with its third-quarter guidance, have still been standouts in the U.S. airline industry. Most carriers have been struggling with an increase in domestic capacity that has weighed on airfares, despite record demand.

Both carriers have added international flights, which have been in high demand after the pandemic, and premium offerings, like bigger lounges and more spacious seats, capitalizing on travelers willing to pay more for a ticket.
United said on Wednesday that premium revenue grew more than 8% from last year, while sales from the most restrictive basic economy tickets rose 38%, as it works to cater to both ends of the market.
The company expanded domestic flying by more than 5% in the second quarter over last year, and unit revenues fell more than 1% over last year. Yields on flights to and from Europe, which is a smaller slice of United’s sales, rose more than 5%, compared with the second quarter of 2023.
United CEO Scott Kirby said airlines have been trimming their schedules and that there will be an inflection point to moderate the supply in mid-August.
“Looking forward, we see multiple airlines have begun to cancel loss-making capacity, and we expect leading unit revenue performance among our largest peers in the second half of the third quarter,” he said.
On Tuesday, Spirit Airlines cut its second-quarter forecast, citing weaker-than-expected revenue for fees like seating or luggage. Southwest Airlines and American Airlines, which report results on July 25, previously reduced their second-quarter estimates.

Read more CNBC airline news More

Darden agreed to acquire all outstanding shares of Chuy’s at $37.50 per share, according to a press release.
The Tex-Mex restaurant chain joins Darden’s portfolio that includes restaurants such as Olive Garden, LongHorn Steakhouse and Ruth’s Chris Steak House.

Igor Golovniov | Getty Images

Darden Restaurants will acquire Chuy’s Holdings for approximately $605 million in cash, the companies announced jointly on Wednesday.
Darden agreed to acquire all outstanding shares of Chuy’s at $37.50 per share, according to a press release. The Tex-Mex restaurant chain joins Darden’s portfolio that includes restaurants such as Olive Garden, LongHorn Steakhouse and Ruth’s Chris Steak House.

“Based on our criteria for adding a brand to the Darden portfolio, we believe Chuy’s is an excellent fit that supports our winning strategy,” Darden CEO Rick Cardenas said in a statement. “I am excited to welcome their 7,400 team members to Darden and diversify the Darden portfolio into a new dining category.”
Chuy’s generated total revenues of over $450 million in its latest 12 months ended March 31, according to the release. The company, founded in Austin, Texas, in 1982, has 101 restaurants in 15 states.
Cardenas said in the press release that Chuy’s has strong performance and growth potential. “Together we will accelerate our business goals and bring our authentic, made-from-scratch Tex-Mex to more guests and communities,” Chuy’s CEO Steven Hislop said in a statement.
Darden expects the transaction to be completed in their fiscal second quarter, according to the release.

Don’t miss these insights from CNBC PRO More

J.D. Vance’s life is full of twists and turns. His memoir from 2016, “Hillbilly Elegy”, chronicles how a boy from a drug-afflicted home in the Ohio rustbelt, who almost flunked high school, made it to Yale Law School. As a bestselling author, celebrated by liberals for his unflinching portrayal of left-behind people and places, he turned staunchly anti-establishment, attacking what he saw as business elites benefiting from moving factories abroad and paying low wages at home. As a venture capitalist, he was mentored in Silicon Valley by Peter Thiel, a conservative contrarian who then backed him for the Senate. Now he crusades against the very tech giants that, like Meta, owner of Facebook, made Mr Thiel billions as an early investor. He was once a “never-Trumper”. Now he is Donald Trump’s vice-presidential running-mate. More

International buyers bought 54,300 existing homes from April 2023 to March 2024 — a 36% drop from the year before, according to the National Association of Realtors.
That’s the lowest level of international investment since the NAR began tracking it in 2009.
Foreign buyers are facing high prices and tight supply in the housing market, and they’re also up against a strong U.S. dollar.

International buyers of U.S. residential real estate are running into the same hurdles as domestic buyers — namely high prices and tight supply — but they’re also up against a strong U.S. dollar, which makes the properties even more expensive for them. As a result, international buyers are pulling out.
They purchased 54,300 existing homes from April of last year to March of this year, a 36% drop from the year before, according to a new report from the National Association of Realtors. This is the lowest level of international investment since the NAR began tracking it in 2009.

The dollar volume, $42 billion, was also down 21% from the year before.
This comes as both the average ($780,300) and median ($475,000) purchase prices were the highest the NAR ever recorded for foreign buyers.
The top buyers by volume were from Canada, China, Mexico and India. Those buyers purchased the most properties in Florida, Texas, California and Arizona. Chinese buyers spent the most money, purchasing higher priced homes, according to the NAR.
The report only counts sales of existing homes, and foreign buyers are big in the new development space, which is not reflected in the data.
“The strong U.S. dollar makes international travel cheaper for Americans but makes U.S. homes much more expensive for foreigners,” said Lawrence Yun, chief economist for the NAR. “Therefore, it’s not surprising to see a pullback in U.S. home sales from foreign buyers.”

But foreign buyers also face additional hurdles.
“We don’t have a credit score, we have a weird name, we have a different passport,” said Yuval Golan, CEO of Waltz, a new company that aims to facilitate foreign purchases of U.S. residential real estate. “Then we need to wire money across two countries, that takes time. There’s additional foreign currency exchange that we need to deal with, a bunch of titles are things we don’t know, like a title company, and a mortgage broker and a lender that might not understand our history of credit and income.”
Golan said Waltz provides foreign investors with a simpler, remote experience to buy U.S. real estate in 30 days.
“We underwrite them in their home country, we help them to set up an LLC. Within seconds, we open for them a U.S. FDIC-insured bank account, we collect their money locally, and we’re able to do foreign currency exchanges within seconds,” Golan added.
Waltz is also acting as a mortgage lender, albeit at higher than market rates.
As it stands, international buyers make up just 1.3% of all U.S. home sales annually, according to the NAR, and half of international buyer sales were all-cash, compared with 28% of total existing-home sales.
More supply is coming onto the U.S. market, but it is still historically low, and prices remain stubbornly high.
And then there’s the upcoming presidential election. International buyers tend to pull back during times of political uncertainty. It is unlikely sales from foreign buyers will improve in the coming year unless several factors, both economic and political, improve. More

The Copa America soccer final between Argentina and Colombia on Sunday saw chaotic scenes at the Hard Rock Stadium in Miami.
It’s raising questions about the United States’ preparedness to co-host the 2026 World Cup.
The U.S. is set to host 78 out of the 104 World Cup matches as a co-host of the tournament in 2026, alongside Canada and Mexico.

Fans of Colombia and Argentina the CONMEBOL Copa America 2024 Final match between Argentina and Colombia at Hard Rock Stadium on July 14, 2024 in Miami Gardens, Florida. 
Maddie Meyer | Getty Images

The Copa America soccer final between Argentina and Colombia on Sunday saw chaotic scenes at the Hard Rock Stadium in Miami — and is raising questions about the United States’ preparedness to co-host the 2026 World Cup.
The stadium, home field of the NFL’s Miami Dolphins with a capacity of more than 65,000 spectators, was overwhelmed when non-ticketed fans rushed the gates, climbing through security railings and air vents to get in.

Facilities and barriers were damaged, ticketed fans were boxed out from their seats by non-paying crowds, and the game was ultimately delayed more than 80 minutes, ending after midnight with an Argentinian victory over Colombia. (A halftime show was also added this year in a first for the league, further extending the event.)
“It was, without a question, not just an embarrassment, it was absurd,” said Anjali Bal, Babson College associate professor of entertainment and sports marketing.
Miami-Dade Commissioner Oliver Gilbert said at a press conference Monday that law enforcement is working with promoters and the stadium to make sure the incident doesn’t happen again.
“We host big events. Well, I’ve never seen anything like I saw last night, and we’re not going to see that again,” Gilbert said.
A total of 27 arrests were made, including that of Colombia’s soccer federation president Ramón Jesurún and his son, who were accused of attacking three security guards who stopped them from accessing the field, according to the arrest form.

Miami-Dade Fire Rescue said it responded to a total of 120 incidents at the stadium and the surrounding area, 116 of which were for medical calls. 

Large crowds of fans try to enter the stadium amid disturbances prior the CONMEBOL Copa America 2024 Final match between Argentina and Colombia at Hard Rock Stadium on July 14, 2024 in Miami Gardens, Florida.
Megan Briggs | Getty Images

“The only thing that is fortunate here is that nobody died, but a lot of people look to be in very difficult shape, and it was perfectly avoidable,” Lee Berke, CEO of LHB Sports, Entertainment & Media, told CNBC. 
The debacle quickly drew questions about the United States’ preparedness for major soccer events, just two years ahead of a global showcase.
The U.S. is set to host 78 out of the 104 World Cup matches as a co-host of the tournament in 2026, alongside Canada and Mexico. The tournament final is slated for MetLife Stadium in New Jersey, and Hard Rock Stadium, where the Copa final turned chaotic, will host seven games, including the third-place match.
Chief among the criticisms is what some say was a lack of security checkpoints and an outer perimeter to stop the flow of traffic into the stadium.
“I think the organizers of the tournament didn’t prepare properly for handling large-scale crowds to be funneled into the stadium,” Berke said.
The South American Football Confederation, CONMEBOL, blasted Hard Rock Stadium in a press release on Monday, saying stadium officials had failed to account for the safety recommendations the confederation made.
Hard Rock, for its part, said it “implemented, and in many cases exceeded, CONMEBOL’s security recommendations.” 

World Cup warm-up

Although this isn’t the first Copa that the United States has hosted — the U.S. first took on hosting duties back in 2016 — for many, this championship was seen as a warm-up for the 2026 World Cup.
“Some of the fears are unfairly being placed on an event that will happen in two years, but that’s really the only nice thing I can say,” Bal said. “When you have this many problems at the dress rehearsal, that doesn’t bode well for the production.”
An estimated 5 million fans are expected to travel to the 16 host cities across the U.S., Canada and Mexico for the 38 days of the tournament, according to Sports Business Journal.
Berke said he thinks the United States is well equipped to handle that volume, and that FIFA will run the show well.
“This country has tremendous experience in event running; there’s probably no more skilled country on Earth, with the people in place, the organizations in place that know how to run games and keep fans safe,” Berke said. “If that expertise is tapped into, then I’m certain that the World Cup is going to be tremendously successful.”
Bal noted the mishaps in the Copa tournament could provide a road map to making the 2026 World Cup a success.
In addition to the final match security concerns, several American stadiums also came under fire for issues with the turf, which was installed in the American football stadiums that hosted the games ahead of the tournament. The coach of the Argentinian national team, Lionel Scaloni, told reporters at a post-match press conference last month that the fields were not in good condition and not apt for players.
“If we look at it as, we saw all of the problems and now we have teams who are going to deal with the turf and teams who are going to deal with the security … then I think you’re going to be able to fix that,” Bal said. More

The Mirage is closing its doors after 35 years to make way for Hard Rock’s new Guitar hotel. 
Resorts are leaning into luxury touch points, access to high-end dining, boast-worthy entertainment and high-priced sports packages. 
While Hard Rock’s entry to the Las Vegas Strip may provide stiff new competition when it reopens, its closure in the meantime could give its neighbors a boost. 

It’s the end of an era. The Mirage is closing its doors after 35 years to make way for Hard Rock’s new Guitar hotel. 
The latest turnover in Las Vegas marks a new chapter for the destination city, where sports and entertainment are a bigger draw than the gambling for tourists.

Hard Rock International Chairman Jim Allen told CNBC he’s humbled and feels fortunate to be remaking the legendary integrated resort. 
“When Steve and Elaine Wynn opened the Mirage in December of 1989, it changed not just Las Vegas, but it changed the way people look at gaming. It became a true destination,” Allen said.

The volcano attraction in front of The Mirage Hotel & Casino erupts on July 16, 2024, in Las Vegas, Nevada. Hard Rock International (HRI) will close the resort on July 17, 2024, to begin a construction project to transform the property into the Hard Rock Hotel & Casino and Guitar Hotel Las Vegas by 2027. 
Ethan Miller | Getty Images

The Mirage was the Wynns’ first megaresort, the largest hotel in the world at that point. This week, Steve Wynn wrote a tribute to the ground-breaking property, as reported in the Las Vegas Review-Journal.
“In the prior 16 years, no completely new hotel had been built in Las Vegas,” Wynn wrote. “However, in the next decade following the 1989 arrival of Mirage, we rushed into a virtual doubling of the town’s capacity and became the fastest growing city in America. To call The Mirage a catalyst would be an understatement.”
The themed resorts that followed hearken to another place and time. Excalibur, Luxor and New York-New York largely now cater to budget-minded visitors and families. 

Paris Las Vegas offers views of a replica Eiffel Tower. The Venetian attracts tourists with replica canals and gondolas. Caesars Palace with its replica of Michelangelo’s David set the early standard for themed resorts when it opened in 1966. 

A sign at The Mirage Hotel & Casino displays a message thanking their workers and the local community on July 16, 2024, in Las Vegas, Nevada. Hard Rock International (HRI) will close the resort on July 17, 2024, to begin a construction project to transform the property into the Hard Rock Hotel & Casino and Guitar Hotel Las Vegas by 2027.
Ethan Miller | Getty Images

But the future is in luxury touch points, access to high-end dining, boast-worthy entertainment and high-priced sports packages. 
And Hard Rock International has lots of experience providing it, in Florida; Atlantic City, New Jersey; New York; – and in 70 countries around the world. 
The gambling and entertainment company, owned by the Seminole Tribe of Florida, bought The Mirage from MGM Resorts in December 2022.
VICI Properties, a gaming real estate investment trust and the largest property owner on the Las Vegas Strip, owns The Mirage buildings and land, and says it will partner with Hard Rock to bring the new resort to life.

Rendering of proposed future Guitar-shaped hotel tower at the Hard Rock Hotel &Casino Las Vegas.
Credit: Renderings courtesy of Hard Rock International

Hard Rock will model its Las Vegas renovation on its highly successful Guitar Hotel at Seminole Hard Rock Hollywood in South Florida. Throughout the Sunshine State, Hard Rock enjoys a near monopoly on gambling. 
But in Las Vegas, competition is fierce. Staying relevant on the Strip requires frequent room renovations, facilities upgrades, and new amenities to attract not only bachelor parties and girls’ weekends, but also the midweek bread-and-butter convention crowd.   
On Monday Susquehanna gaming analyst Joe Stauff wrote, “It seems to us that MGM is stepping up its investment in Las Vegas to maximize the benefits of its portfolio positioning that surrounds all the sports venues.”    
In the same note, Stauff criticized Caesars for being stingy with its investments in Strip properties and downgraded Caesars stock from a neutral rating to negative.
Caesars is scheduled to post second-quarter earnings on July 30. MGM Resorts International reports a day later.
When the Mirage ceases operations Wednesday, 3,000 employees will lose their jobs.
Allen told CNBC he hopes to rehire many of them when the new resort launches. The company is scheduling a spring 2027 reopening.
“I think the world is going to be shocked at some of the artists that we’re already talking to for long-term residency,” Allen said.

Rendering of proposed future Guitar-shaped hotel tower at the Hard Rock Hotel &Casino Las Vegas.
Credit: Renderings courtesy of Hard Rock International

While Hard Rock’s entry to the Las Vegas Strip may provide stiff new competition when it reopens, its closure in the meantime could give its neighbors a boost. 
CBRE analyst John DeCree estimates the Mirage closure will take nearly a million room nights out of circulation annually.
The Strip lost another 400,000 room nights annually when the Tropicana closed in April and is slated for demolition to make way for a new integrated resort and baseball stadium to host the A’s of Major League Baseball.
In total, 4.9% of the available rooms temporarily disappear at a time when room rates and visitation continue to set records.

Don’t miss these insights from CNBC PRO More

General Motors is updating its flagship Cadillac Escalade with new looks and enhanced technologies for the 2025 model year.
The automaker also will increase production of a V-Series performance model, which currently tops out at more than $152,000, to better meet demand.
The Escalade is a crucial vehicle for Cadillac — as well as brand parent GM — as the highly profitable flagship of the company’s full-size SUV lineup.

2025 Cadillac Escalade V-Series SUV

DETROIT — General Motors will increase production of its Cadillac Escalade V-Series performance model as part of updates to the flagship SUV for the 2025 model year.
The new SUV features a standard 55-inch diagonal display across the dash, including a passenger-only screen; an “executive package” for the second row; power doors; large 24-inch wheels; and other enhancements.

“The Escalade has always been about bold American craftsmanship, technology and performance, and has continuously raised the standard of full-size SUV luxury since it was introduced 25 years ago,” said John Roth, vice president of Cadillac, in a release.
The Escalade is a crucial vehicle for Cadillac — as well as brand parent GM — as the highly profitable flagship of the company’s large SUV lineup. GM has led in U.S. market share of full-size SUVs for decades.

2025 Cadillac Escalade

Many of the design tweaks for the 2025 model year, including sleeker front lighting and larger interior screen, better align the gas-powered model with an upcoming all-electric version of the vehicle. It continues to feature a massive front grille and commanding on-road presence.
The gas-powered 2025 Escalade will continue to be powered by two 6.2-liter V-8 engines, including a supercharged V-Series performance model capable of 682 horsepower and 653 foot-pounds of torque.
Cadillac said it will increase production of the 2025 Escalade V-Series, which was introduced two years ago, after not being able to meet demand for the current model year. Officials declined to specify how much production will increase.

“We are increasing production to help meet customer demand for the pinnacle of Escalade performance, luxury and craftsmanship, while maintaining exclusivity,” a Cadillac spokeswoman told CNBC.

2025 Cadillac Escalade V-Series SUV

GM said pricing for the 2025 models will be available closer to the vehicle’s launch. Current pricing ranges from about $81,000 for an entry-level model to more than $152,000 for the V-Series. The all-electric Escalade IQ is expected to start around $130,000 when it goes on sale later this year.
The Detroit automaker revealed enhancements to the gas-powered 2025 Escalade online Wednesday ahead of production and sales beginning late this year.
The Escalade will continue to be produced at GM’s Arlington Assembly in Texas along with full-size SUVs from Chevrolet and GMC that share a vehicle platform and other components with the Cadillac model.

Don’t miss these insights from CNBC PRO More