Boeing should be kicked out of the Dow

The Dow Jones Industrial Average is supposed to represent the 30 companies that are cornerstones of the US economy, those whose success makes them stand out from their peers on the New York Stock Exchange and Nasdaq. For most of the last five years, that has not described Boeing.

The Dow Jones Industrial Average is supposed to represent the 30 companies that are cornerstones of the US economy, those whose success makes them stand out from their peers on the New York Stock Exchange and Nasdaq. For most of the last five years, that has not described Boeing (BA). And so it’s a legitimate question if the aircraft maker still belongs in the blue-chip index. And it’s a question with only one correct answer: No. “If you want bellwether, strong balance sheet companies, they don’t check those boxes any longer,” said Ron Epstein, aerospace analyst for Bank of America. “I don’t think Boeing has to be there.” The name “industrial” that makes up the Dow’s full name is something of an anachronism, left over from when the Dow was created at the end of the 19th century, as the industrial revolution was changing the US and world economy. The United States is no longer primarily an industrial economy, and the changes in the index over the last 126 years reflect that evolution. Iconic US Steel was replaced by Disney in 1991, an indication of the shift in the US economy from manufacturing to information and services. Since then, representatives from a number of key manufacturing sectors — including autos, steel and other primary metals — have also been shown the door as banks, tech companies and pharmaceuticals have taken their place. So, if there were no aircraft manufacturer left in the Dow, it wouldn’t be shocking. There are many problems at Boeing that make its continued presence in the index perplexing.