Report: Boeing 'Put Wall Street First, Safety Second', Creating 'Yearslong Decline of Safety Standards' (seattletimes.com) 231
The Seattle Times has a Pulitzer Prize-winning aerospace journalist named Dominic Gates. Sunday he published an expose on "a yearslong decline of safety standards" at Boeing.
After a 1997 merger, its new executive leaders "treated experienced engineers and machinists as expendable, ignoring the potential damage to Boeing's essential mission of designing and building high-quality airplanes...." The arc of Boeing's fall can be traced back a quarter century, to when its leaders elevated the interests of shareholders above all others, said Richard Aboulafia, industry analyst with AeroDynamic Advisory. "Crush the workers. Share price. Share price. Share price. Financial moves and metrics come first," was Boeing's philosophy, he said. It was, he said, "a ruthless effort to cut costs without any realization of what it could do to capabilities...." Its leaders outsourced work, sold off whole divisions and discarded key capabilities such as developing avionics, machining parts and building fuselages. On the 787, they even outsourced the jet's wings to Japan. They moved work away from Boeing's highly skilled, unionized base in the Puget Sound region. They weakened unions and extorted state government with repeated threats to build future airplanes elsewhere. They squeezed suppliers by demanding price cuts every year that in turn forced the suppliers into ruinous cost-cutting and left them vulnerable to collapse during shocks like the COVID-19 pandemic....
Belatedly, Boeing's current leaders, overwhelmed by criticism, mockery and outrage since January, have finally admitted publicly that some key strategies they pursued for decades were flawed. "Boeing, more than 20 years ago, probably got a little too far ahead of itself on the topic of outsourcing," Chief Financial Officer Brian West said last month. And in January, on CNBC, Boeing Chief Executive Dave Calhoun conceded: "Did it go too far? Yeah, probably did."
Both were speaking about major supplier Spirit AeroSystems of Wichita, Kan., part of Boeing until it was sold off two decades ago, part of a broad divestment of assets to please Wall Street and boost the stock. Following a litany of quality lapses in Wichita, Boeing is now admitting a mistake and trying to buy Spirit back — "for safety and for quality," said West. Another mistake belatedly recognized: With annual bonuses for Boeing's factory managers based largely on meeting cost and schedule targets, it was long a cardinal sin to stop the assembly line. That meant unfinished jobs piled up on aircraft as they moved forward down the line, what Boeing calls "traveled work." Done out of sequence, this work is more difficult and takes much longer. If too much traveled work piles up, it creates chaos. That's what happened in Renton on the 737 assembly line. "For years, we prioritized the movement of the airplane through the factory over getting it done right, and that's got to change," West said. "Once you reduce traveled work, your quality gets better...."
Speaking of how Spirit might be fixed, West said: "It's really about focus and running it, not as a business, as a factory. Run it as a factory and stay focused on safety and quality and stability."
Phil Chandler, a highly skilled Boeing machinist for more than 42 years (retiring in 2020), saw a "dictatorial" approach on the factory floor, according to the article. "Whereas in the past, first-level and even second-level managers in the factory had come up through the ranks as mechanics and had deep knowledge of the work, after [Boeing president Harry] Stonecipher came in those jobs shifted to white-collar people with degrees, often with MBAs."
And a former Boeing physicist also complains about the "shoot-the-messenger" management approach when developing their 787, according to the article: "Engineers who raised technical doubts were told: 'Follow the plan. If you can't do your job, I'll fire you and get someone who can.'"
After a 1997 merger, its new executive leaders "treated experienced engineers and machinists as expendable, ignoring the potential damage to Boeing's essential mission of designing and building high-quality airplanes...." The arc of Boeing's fall can be traced back a quarter century, to when its leaders elevated the interests of shareholders above all others, said Richard Aboulafia, industry analyst with AeroDynamic Advisory. "Crush the workers. Share price. Share price. Share price. Financial moves and metrics come first," was Boeing's philosophy, he said. It was, he said, "a ruthless effort to cut costs without any realization of what it could do to capabilities...." Its leaders outsourced work, sold off whole divisions and discarded key capabilities such as developing avionics, machining parts and building fuselages. On the 787, they even outsourced the jet's wings to Japan. They moved work away from Boeing's highly skilled, unionized base in the Puget Sound region. They weakened unions and extorted state government with repeated threats to build future airplanes elsewhere. They squeezed suppliers by demanding price cuts every year that in turn forced the suppliers into ruinous cost-cutting and left them vulnerable to collapse during shocks like the COVID-19 pandemic....
Belatedly, Boeing's current leaders, overwhelmed by criticism, mockery and outrage since January, have finally admitted publicly that some key strategies they pursued for decades were flawed. "Boeing, more than 20 years ago, probably got a little too far ahead of itself on the topic of outsourcing," Chief Financial Officer Brian West said last month. And in January, on CNBC, Boeing Chief Executive Dave Calhoun conceded: "Did it go too far? Yeah, probably did."
Both were speaking about major supplier Spirit AeroSystems of Wichita, Kan., part of Boeing until it was sold off two decades ago, part of a broad divestment of assets to please Wall Street and boost the stock. Following a litany of quality lapses in Wichita, Boeing is now admitting a mistake and trying to buy Spirit back — "for safety and for quality," said West. Another mistake belatedly recognized: With annual bonuses for Boeing's factory managers based largely on meeting cost and schedule targets, it was long a cardinal sin to stop the assembly line. That meant unfinished jobs piled up on aircraft as they moved forward down the line, what Boeing calls "traveled work." Done out of sequence, this work is more difficult and takes much longer. If too much traveled work piles up, it creates chaos. That's what happened in Renton on the 737 assembly line. "For years, we prioritized the movement of the airplane through the factory over getting it done right, and that's got to change," West said. "Once you reduce traveled work, your quality gets better...."
Speaking of how Spirit might be fixed, West said: "It's really about focus and running it, not as a business, as a factory. Run it as a factory and stay focused on safety and quality and stability."
Phil Chandler, a highly skilled Boeing machinist for more than 42 years (retiring in 2020), saw a "dictatorial" approach on the factory floor, according to the article. "Whereas in the past, first-level and even second-level managers in the factory had come up through the ranks as mechanics and had deep knowledge of the work, after [Boeing president Harry] Stonecipher came in those jobs shifted to white-collar people with degrees, often with MBAs."
And a former Boeing physicist also complains about the "shoot-the-messenger" management approach when developing their 787, according to the article: "Engineers who raised technical doubts were told: 'Follow the plan. If you can't do your job, I'll fire you and get someone who can.'"
Predictable (Score:5, Insightful)
Leadership will maximise shareholder value because that's their job, and that's what will earn them bonuses. Long term will be someone else's problem because those who make such decisions will have collected their bonuses and left before there's any fallout.
The current system is set up to prioritise short term profit above all else, so there was never going to be any other outcome.
Re:Predictable (Score:5, Insightful)
Leadership will maximise shareholder value because that's their job, and that's what will earn them bonuses. Long term will be someone else's problem because those who make such decisions will have collected their bonuses and left before there's any fallout.
The current system is set up to prioritise short term profit above all else, so there was never going to be any other outcome.
100% this^. I’m not even in aerospace and it was shocking to me the level of ignorance present in corporations because of how undervalued competence is. When you think you can just slap the wine bottle from the hand of the guy living outside on the street and put him in a technical position at half the cost it’s amazing anything works at all in this world.
Re:Predictable (Score:5, Insightful)
this is not only in the Airline industry.
it's happen all over, it's just more visible when a brand new 737 Max 9 falls out of the sky because of this. (or a supposedly bolted down bulkhead door)
Re: (Score:3)
There's intense focus on each and every quarterly report. There pressure at all times to cut corners, cut labor costs, and even to cheat. Long term company viability is put on the back burner, until the company ends up on the front pages.
I was at a company trying to go public, but there would always be one quarter out of four that wasn't so good, and the banks would balk. Because our product was bought when customers had the budget, which meant right after their got their annual budget was good, better
Re:Predictable (Score:5, Interesting)
I call it "the MBA Disease", they go directly from high school to college and graduate with their shiny new MBA and six figures of debt to manage companies about which they know nothing, never having actually worked a day in their life. This was the key sector of the entire summary, and probably the whole article:
"Whereas in the past, first-level and even second-level managers in the factory had come up through the ranks as mechanics and had deep knowledge of the work, after [Boeing president Harry] Stonecipher came in those jobs shifted to white-collar people with degrees, often with MBAs."
Henry Ford even made Edsel work on the assembly line for a year before letting him into management (and apparently whined incessantly about having to pay union dues). That's long gone, now having actually worked for a living is seen as some sort of stain on a prospective manager.
Re: (Score:3)
Re: (Score:2)
Re:Predictable (Score:5, Insightful)
We see this in many companies. I have worked in several major banks where they have efficiently outsourced software development, usually to India.
Considering the most critical part of a bank is its software, you’d think ending up with all the knowledge of said software being with people in another company, another country, and indeed, with people you never meet, this sounds foolish in the extreme.
But it does save a little money (actually surprisingly little) in the short term.
It used to be that managers, even owners, of companies knew the business they were in. They were engineers, chemists, or cobblers, perhaps. But now they know “business”. Which often seems to be about cutting costs and boosting the share price. For a while
Re: (Score:2)
Stock BuyBacks (Score:2, Troll)
We need to restore common sense laws. Ban stock BuyBacks. A company shouldn't be able to buy its own stock anymore than a casino should be able to gamble on its own tables.
Re: Stock BuyBacks (Score:4, Interesting)
A company being able to buy back its own stock doesn't hurt anyone and seems utterly ridiculous given they can acquire the stock of another company to buy it out. The people who have the ultimate authority to decide what should be done with any profit are the very same people who own the stock in the first place. Does it matter if they pay out dividends and the profit is split evenly amongst shareholders or if they buy back the stock allowing any current holders who want to sell the opportunity to do so?
The only argument against the practice is the potential for price manipulation, but that can be done by companies without buying back their stock and at much greater harm to investors.
Re: (Score:2)
Re: (Score:2, Insightful)
Isn't capitalism great!
Corporations are required to maximize shareholder profit over safety, environment, etc.
Re: (Score:2)
Yeah, because there's never any market reaction when your company does something stupid and kills hundreds of people. Nope, those stock prices just keep chugging along!
Except, of course, every single time there's a problem with a Boeing aircraft, they take a huge stock hit, and the management has already announced that they're stepping down because it was "either announce a sunset date or we give you a sunset date of right now" from the board of directors.
Where does that fit into your thesis?
Re: (Score:2)
The problem is the lack of long term investors. The day traders are perfectly fine with it if a company destroys itself as long as the start of that is a nice bump in stock price. They will have sold by the time the results of that announcement result in hundreds of deaths and a long spiral down the toilet.
The day traders themselves are just an extension of the '80s corporate raiders.
Re: (Score:2)
I'm pretty sure that making a product that doesn't have parts falling off of it while 12,000 feet above the city you just took off from is part of their job too; as having door plugs blow out of brand new aircraft and having 737s loaded with passengers playing "lawn dart" due to terrible design choices probably doesn't "maximize shareholder value".
Re: (Score:2)
It maximized it for a while when they realized all of the savings. Those shareholders sold it off well before the inevitable bad results made themselves known.
If buying meant you had to hold for a few years, you'd see a much different idea of shareholder value in the boardroom.
Too Big To Fail, will need bailout (Score:2)
Almost every preventable foul-up with anything complex I've seen is due to putting short-term concerns over long-term. Maybe start-ups do need "move fast and break things", but transportation and infrastructure CANNOT break without hurting people.
However, that's water under the bridge. Boeing can't fix itself overnight, it will take a complete review of everything. Boeing will probably bleed money during this restructure, and probably need a bailout from Uncle Sam.
It's unfortunate we have to bail out greed-
Re: (Score:3, Insightful)
Sure sure, the problem is what you say it is and not what most of the experts are saying or what insiders were saying years ago.
Re:Predictable (Score:5, Insightful)
Government contracts of the size that Boeing gets (~30% of annual revenue) do NOT in any way reward mediocrity- they reward predictability of performance, and try to make costs predictable, but performance is paramount. No company in the production stage gets a contract that is not already well reviewed for the costs involved (except, perhaps when bribery is involved) and that it can be done at that level, though not everything is so predictable. I worked in government contracting, and we had 2 types "firm fixed price" and "cost plus" - it was far more difficult to get a cost plus contract, as they were more open ended.
As to "Government Insiders" and pet projects, IME those were all elected officials or served at the whim of elected officials.
Re: (Score:2)
And since bribery is assured under the guise of "campaign contributions", that system is always going to be flawed.
Re: (Score:3)
No. The government is not the buyer of all those new 737s. The problem here is that long term investors who care about a company's long term prospects have been replaced by day traders who barely care how the company will be doing next week. Our economy is being run by casino based "logic".
Re: (Score:3)
Hire only if they have been bodybuilding world champions before.
Pension funds also play a role (Score:5, Interesting)
Re:Pension funds also play a role (Score:5, Insightful)
Re:Pension funds also play a role (Score:4, Insightful)
Re: (Score:2)
The usual way to do it these days is that while you might have a single "fund", you actually have "bands".
IE: Retired, Retiring in the 2030s, 2040s, 2050s, 2060s, etc...
Retired is in "safe" constant return investments (mostly). 2030s is in the process of transitioning to that. The 2060 band is where the risky stuff is.
Re: (Score:2)
That seems a little exaggerated. A pension fund has investors who are 30, 40, 50 years old and have many decades before they retire. Those investors want capital appreciation and for there to still be a high quality company to pay out dividends once they retire.
Turns out to not always be the case.
The pension fund manager wants to buy a stock that is going up NOW. If whatever it took to make it rise in value now cuts the dividends of the stock in the future, they just sell the stock before that future get here, taking the profit and buying a stock that is going up then.
Re: (Score:3)
Pension fund managers aren't looking at individual stock issues. They spread the pension fund across several hedge funds in order to diversify. And then those hedge funds manage the actual transactional bit, putting that money where they think it's going to get the best returns, because that's why the pension fund gave them a few hundred million dollars - and if they do better than the other hedge fund traders, then they can sell a bigger piece to the pension fund manager and get a few more hundred millio
Re: (Score:2)
Nitpick: While hedge funds may be a portion of the investment, more regular funds will generally be the majority of it.
You invest in the hedge funds in the sense that "hedge" is in the context of "hedge your bet", IE take actions so that the loss won't be as big if you lose. Hedge funds are supposed to do good in declining markets.
And who says that a pension fund manager with billions to invest can't have their own team?
Re: (Score:2)
The indirection makes no difference. It just moves the day trading from the 401K administrator to the hedge fund managers.
Re:Pension funds also play a role (Score:4, Interesting)
Take a giant step back and realize that; they is true of the natural state. You don't even need to have money enter the picture.
Granpa's bread comes from Junior's effort in the wheat field, he is to old sow and reap. He is living off the dividends of his investment in Junior as youth.
The traditional defined benefit scheme is really different in terms of incentives as 401k its just leaves pensioners without a such a loud voice at the table because they a relegated to an 'expense' on the balance sheet rather than powerful voting block of share holders. So those incentives are less likely to prevail. We have seen what happens to the those defined benefit plans too; current leadership has a tendency to gamble with the assets needed to make good on them, for use in implementing their own vision, they are after all young enough to move-on if it does not bear fruit.
Here is a thought - flying is very safe, even flying on a recently build Boeing, statistically speaking. Maybe the safety standard is just higher than what the market is really demanding? Its not like the airlines really could have been unaware, they have a small army of maintenance and inspection people - none of these noticed any changes in QC? Right the airlines kept placing orders, and the public is still buying tickets to fill every seat. Maybe its time to let airlines and manufactures compete on safety and see if passengers will really pay more for a seat on a notionally safer airbus plane..
Re: (Score:2)
flying is very safe, even flying on a recently build Boeing, statistically speaking. Maybe the safety standard is just higher than what the market is really demanding?
Well, Boeing is going to find out what the market thinks.
If a significant number of people will pay extra to avoid flying on Boeing, then that's going to make airline companies want to avoid buying Boeing.
And if airline companies also see the value of an aging Boeing fleet depreciate noticeable faster than an Airbus fleet, then it's going to make selling Boeing planes at a profit to be more difficult.
Re: (Score:2)
It's amazing how the TCO figures change when you get sued for a billion dollars because an aircraft you operate had parts fall off of it while in operation, and children almost get sucked out the side 20 minutes after takeoff.
Even most dipshit MBAs will be able to figure that out with their beloved Excel spreadsheets.
Re: (Score:3)
My dad was a comptroller before retiring. IE "Management Accountant". He got his work to hire a dedicated safety person by proving that the guy would easily save the company the cost of hiring him through avoided accidents, and then backed it up in subsequent years.
Of course, dad isn't an MBA, and knows how to spreadsheet properly.
Accidents are expensive. Best to avoid them.
Re: (Score:2)
Maybe the safety standard is just higher than what the market is really demanding? Its not like the airlines really could have been unaware, they have a small army of maintenance and inspection people - none of these noticed any changes in QC?
The QC department doesn't generate any revenue. Chances are it suffered severe budget cuts and whoever is left is too busy or isn't paid enough to care. I predicted that Boeing would either lose the paperwork or it never even existed and I was right. https://www.npr.org/2024/03/09... [npr.org]
Now there's no one to blame and no one can be punished. Pretty convenient.
Re: (Score:2)
You get to choose what is in your 401k.
If you don't want large cap companies, don't include large cap funds in your portfolio.
There's a reason why they post all the prospectuses on your 401k provider's web site. Go with international funds, mid-market, small cap, ETFs, etc. Stop trying to pass the buck when you have control.
By the way, if you want to take a principled stand, be aware that your returns may suffer. But that's what being principled requires, rather than just mouthing off on the Internet.
Re: (Score:2)
Unfortunately, most people in the workforce barely know what a 401K is or where the money comes from. They just understand that it's for their retirement and take whatever defaults their employer sets.
That shouldn't be all that surprising. If they understood all of that, they'd be making a lot more money in finance rather than barely more than minimum in retail sales.
Oh they could have realized.. (Score:5, Insightful)
without any realization of what it could do to capabilities....
More like they wouldn't have cared. In all these cases, the business leaders know that short term, millions of more dollars in their pockets and longer term? Not their problem. Even the executives who catch the hot potato still have a nice payday, and no personal accountability. Being a cheapskate is not a crime and they're compensation is already paid off. Sure the guy stuck holding the bag "loses out" in millions worth of unvested stock, but they console themselves with the millions they made prior to that.
It is supremely rare for passion for long term viability of a successful business to survive a leadership transition. The people with intrinsic passion for the job are outcompeted by vultures.
Re:Oh they could have realized.. (Score:5, Informative)
It is supremely rare for passion for long term viability of a successful business to survive a leadership transition. The people with intrinsic passion for the job are outcompeted by vultures.
It's even worse and more immediate than that. The board decided on a direction for the merged company and all of the principled execs (who worked for Boeing) refused and quit, and management of the corporation was taken over by the execs from McDonnell Douglas who as we know from McDD's history have no principles. It was not a long process, it was pretty much all at once.
Re: (Score:2)
More like they wouldn't have cared. In all these cases, the business leaders know that short term, millions of more dollars in their pockets and longer term? Not their problem. Even the executives who catch the hot potato still have a nice payday, and no personal accountability. Being a cheapskate is not a crime and they're compensation is already paid off. Sure the guy stuck holding the bag "loses out" in millions worth of unvested stock, but they console themselves with the millions they made prior to that.
It is supremely rare for passion for long term viability of a successful business to survive a leadership transition. The people with intrinsic passion for the job are outcompeted by vultures.
Would not have been a problem if the majority of the golden parachute or bonuses were paid as a deferred compensation, maybe some in 3 years and some in 5 years time. Or even longer period later. With the lion's share of the payment being the last payment. And part of the deal should be if they screwed up the future of the company, they don't get the deferred compensation. If they don't agree to deferred compensation, they can't be a senior exec in your company cos you can't trust them not to think about t
Re: (Score:2)
And part of the deal should be if they screwed up the future of the company, they don't get the deferred compensation. If they don't agree to deferred compensation, they can't be a senior exec in your company cos you can't trust them not to think about the company on a long term basis.
You would have to make that the law because the board does not want long term thinking. They want short term profit. If they wanted long term profit then they could have set direction for the execs that would preserve the company long term. Instead they asked for the opposite, which is how the McDonnell-Douglas execs wound up running the show. And since they have worked for one of the merged corporations for a long time, they would already be vested anyway, and it would not help here even if it was the law.
MBA's vs. The Mob (Score:5, Insightful)
In movies, when the mob takes over a business, they replace the top leader(s), suck all the profits out it, run up the credit cards, and eventually leave a worthless, indebted carcass in their wake. They'll even burn it down to collect the insurance.
Watching Boeing spiral downwards for the last 20 years has been like watching that mob movie. MBA's took over leadership, drove out the knowledgeable, and hoovered up every dime possible hand over to shareholders, and bonus themselves all the way to the Caymans and back. Is it now a worthless carcass, or worth saving?
Re: (Score:2)
The fiction inherent in your story is that there's an ethical difference between MBAs and the mob.
unless you're talking cola or fruit (Score:2)
Typically.
Re: (Score:2)
MBAs don't typically hire someone to shoot people in the head.
Typically.
They definitely hire marketing drones to write promotional materials which lack even a tenuous connection to reality, while remaining within the legal framework which allows them to disclaim any liability. They actively seek, hire and fund people to write ad-copy for "influencers" and other media tools to parrot their talking points to convince people that products are safe, effective and well engineered even with the knowledge that these things are not true. They hire and fund people to bully, cajole or ot
Re: (Score:2)
Watching Boeing spiral downwards for the last 20 years has been like watching that mob movie. MBA's took over leadership, drove out the knowledgeable, and hoovered up every dime possible hand over to shareholders, and bonus themselves all the way to the Caymans and back. Is it now a worthless carcass, or worth saving?
It's a carcass. They've outsourced almost everything, so they don't really directly produce anything anymore. The engineers are disillusioned, and would probably leave the second they see an opportunity. And they seem to be accumulating liability at an alarming rate. The only things of value they have left are the designs/patents, and their bought regulators and legislators.
Re: (Score:2)
And the cost to keep the regulators and legislators bought is going to be skyrocketing. As either, it's easy to be "bought" when nothing is rocking the boat. When people are screaming because there's holes in the boat, well, the cost to stay bought increases for them, so they charge more.
Where is the story link? (Score:4, Interesting)
Re:Where is the story link? (Score:5, Informative)
Well, of course (Score:5, Insightful)
It's always Wall Street first, customer second. Sure, this time customers die, but otherwise, same deal. As long as it's cheaper to kill off customers than to invest in their safety, this also will not change.
Human lives only matter if they cut too deeply into profits.
Re: (Score:2)
It's always Wall Street first, customer second.
That's only because the executives/board are incentivized through stock options to care about wall street. If their incentives changed, then their priorities would change.
Re: (Score:2)
Sure, mission is first. But second should be safety. If it's not, well, this happens.
My job is in security. And of course, the only way to secure a system is to pull the plug on it while having perfect at-rest encryption in place. That's one hell of a secure system. And a very useless one, too.
The point is to have security despite doing what you're supposed to do.
Boeing should not exist. (Score:3, Interesting)
Re: (Score:2)
It should have been broken up for parts very long ago. .
The opposite happened: Aerospace corporations merged, rather than broke up. All of the aerospace companies today are mergers of a dozen older companies. "Boeing" is actually Boeing-McDonnell-Douglas-Hughes-Rockwell....
The other aerospace companies as well, of course.
Sooner or later, somebody will pay (Score:3)
I'm afraid it's only a matter of time before real consequences ensue after a plane goes down due to defective parts, or a self-driving car plows through a crowd of children, or some other catastrophe happens because a corporation's upper management chose profits over safety. I do not believe those consequences will be delivered by government or the legal system. Instead, some fairly average dude who lost loved ones will track down the actual decision makers and make them pay.
I understand this has been the plot for any number of action movies, always involving a hero with superhuman skills and physical gifts. But is that kind of expertise really necessary? Over the whole arc of our civilization we have become more efficient at killing: the body count a single average person can run up has continued to increase. I see no indication this trend is going to change, and we're getting to the point where if a whole yacht club goes into the books as "collateral damage", very few f^cks will be given.
Consequences of winner-takes-all (Score:2)
The US government needs reckless growth, thus losing quality, happiness and even honesty. That's winner-take-all capitalism and the consequences are more than "Too big to jail". It's a cancer that spreads failure to all manufacturing services: It means; there's no surplus supply, the concentration of wealth, factories and technology eliminates competition, the loss of social values encourages monetary reward for cannibalizing past wealth and for selfishness.
Standard American business practice. (Score:3)
Headline might as well be:
"American business practices put Wall Street first, everything else second, creating years long decline of safety and quality standards."
So that's who... (Score:3)
"after [Boeing president Harry] Stonecipher came in those jobs shifted to white-collar people with degrees, often with MBAs."
Remember that name. He was president of McDonnell-Douglas before the merger. Then he became president of Boeing. He retired in 2005, so he made his wad and got out.
Re: (Score:2)
The crushing blow to libertarian ideals. (Score:5, Insightful)
Here is a prime example of an obvious phenomenon which cause me to largely reject libertarian philosophy even from an early age when I would have been most susceptible. Reading Heinlein novels and such.
The theory is that consequences will cause businesses to do the "right thing" because otherwise society and the market will turn against them. They will die and be replaced by businesses that will behave knowing their reputation is at stake. It is in their self interest.
Exhibit Boeing. There is always and I mean always someone with wealth around that is not only willing but eager to trade your long term interests for their short term interests. Slash costs, disregard expensive safety procedures, build stockholder value. Hire lots of MBAs to justify everything. Get the cash. They hang on as for as long as they can because they also get the golden parachute as they are eased out the door.
Want to sue? Sure go ahead. Here's the number of their $2K/hour attorneys in Manhattan who will tie up the case in "discovery" for about 5 years and come to a settlement that will claw back maybe 15% of what they got. They might or might not notice, being occupied in Barbados with their cool cigarette boat and new trophy mistresses. So much for "self interest."
Re: (Score:2)
I believe you have confused capitalism with corporatism.
Granted, corporatism is indeed what capitalism can deform into in the absence of rule of law (which would hold decisionmakers absolutely accountable for avoidable deaths, injuries, and other losses caused by their decisions).
Re: (Score:2)
Re: (Score:3, Interesting)
I hate being pessimistic, but I'm not sure there's a fix
Probably not, in a society that values only self, and not others, and certainly not rule of natural law.
In a society in which people actually gave a shit, I'd say progress would be not only possible, but inevitable.
For a bit of perspective (Score:3)
http://www.airsafe.com/events/... [airsafe.com]
The 737 max doesn’t look great in comparison, but it’s not exactly like they’re falling out of the sky everyday. And it’s the most popular commercial jet, ever (I think). And it’s new, which means that the craft could plausibly get more reliable over time. Look up “bathtub reliability curve”. Personally I’d fly on any commercial jet that’s currently cleared for flight. Especially if the alternative is to drive a long distance. The roadways are a literal bloodbath in comparison.
For the people who are griping that Boeing is capitalist, my response is “boo hoo”. If you think capitalism is bad, go ahead and fly on Russian-built aircraft. Or North-Korean airlines. It’s capitalism or the alternatives, and the alternatives absolutely suuuuuucccckkkkkkkkkk.
But it does seem that maybe they’ve allowed quality to lapse too much, which is a problem in this particular industry. Apple thrived after Jobs died, partly because the next leader still had engineering chops and was a supply-chain guy. MBAs and accountants are important, but so are the technical experts. Time for Boeing to rebalance their leadership and restructure their operations, I think. Better sooner than later.
Re: (Score:3)
Check this actual data out:
http://www.airsafe.com/events/... [airsafe.com]
The 737 max doesn’t look great in comparison, but it’s not exactly like they’re falling out of the sky everyday. And it’s the most popular commercial jet, ever (I think). And it’s new, which means that the craft could plausibly get more reliable over time.
Air plane crashes are rare enough that fatalities are a poor way to judge quality (or even safety). I mean they literally forgot to bolt a door in and that still counted for zero fatalities.
For the people who are griping that Boeing is capitalist, my response is “boo hoo”. If you think capitalism is bad, go ahead and fly on Russian-built aircraft. Or North-Korean airlines. It’s capitalism or the alternatives, and the alternatives absolutely suuuuuucccckkkkkkkkkk.
The problem isn't that Boeing is capitalist, the problem it's run by MBAs who are practising a bastardized form of stock market capitalism. The trouble with the stock market is even sophisticated investors are fairly low information. They can't tell if those cost savings are from efficiency or cutting corners, so you nee
Re: (Score:2)
Many crashes are maintenance related. This issue is about quality control at the factory. And the MAX isn't very new. It is just a slightly modified 737 with new engines (which is related to one reason they were crashing). I wouldn't have a problem flying on a 737 built before the McDonnell Douglas managers took over Boeing. It became the most popular commercial jet back when it was a great and reliable jet.
Re: (Score:3)
In this case, the 737MAX data is 2 lethal events, both attributed to the MCAS design.
The 'door plug' incident didn't count, by luck of no one going out. So the fatal crash rates are useful, but 'near misses' should also be examined, since mere luck can be the difference between a problem in an aircraft being fatal or not.
We need more cops walking the beat (Score:2)
Imagine if we had as many TV shows about the law enforcement that protects you from Wall Street as we do about the ones that arrest shoplifters...
No Value for Institutional Knowledge (Score:5, Interesting)
The CEO has Left (Score:2)
Article? (Score:3)
How fucking difficult can it be to provide a link to the article?
In short (Score:2)
....they're a canary in the coal mine for ALL American manufacturing businesses I'm acquainted with.
I've been in industrial logistics for coming up on 35 years now and this is 100% the example of pretty much every AA or AAA company I've dealt with, including corporate elements of my own firm. Boeing maybe was slightly more aggressive (or the results of their shitty, short term strategies are unfortunately vastly more consequential and obvious).
Would love to see some sort of contract clause for senior manag
We want shareholder equity but then at what cost (Score:2)
We used to be patient, companies like GE, Union Pacific, and Boeing were good long-term investments. Now it's "What did you do last quarter."
This puts us on a losing trajectory favoring large institutional investors who sit on boards yelling for profits.
Must have been Russia (Score:3, Interesting)
Re: (Score:2)
The really hard question is to know how to get the balance better
You sound as if Boeing did society a favour.
Re: (Score:2)
The really hard question is to know how to get the balance better; how to get road safety taken a lot more seriously.
That's a real and important question, although you probably won't like the best answer, which is to stop trying and shift to something on rails.
But it's NOT the only hard question; The other important and difficult question is "How do we stop corporatism from making air travel no safer than driving is now" because that is the obvious eventual result of our failure to regulate meaningfully.
Relax (Score:4, Informative)
Air travel is and remains ridiculously safe compared with other forms of transport
https://injuryfacts.nsc.org/ho... [nsc.org]
Re: (Score:3)
Air travel is and remains ridiculously safe compared with other forms of transport
You did not in any way address the points raised in my comment, so posting that as a reply to my comment seems disingenuous.
Re: (Score:2)
Air travel is and remains ridiculously safe compared with other forms of transport
You did not in any way address the points raised in my comment, so posting that as a reply to my comment seems disingenuous.
The point was that if you're worried about safety, Boeing really isn't what you should be focused on.
Re: (Score:2)
The point was that if you're worried about safety, Boeing really isn't what you should be focused on.
If you're worried about declining air safety, Boeing is absolutely one of the places you have to focus.
Re: (Score:2)
We shouldn't focus on the manufacturer that has parts falling off of brand new aircraft - which resulted in a sweatshirt being sucked off of a child who thankfully was wearing their seat belt when a gaping hole suddenly appeared in the side of the aircraft - if we want to worry about safety?
I'm sorry, what? Seems like that's exactly what we should be focusing on.
It didn't happen on an Airbus aircraft.
It didn't happen on a Bombardier aircraft.
It didn't happen on an Embraer aircraft.
It didn't happen on Lock
Re:Some perspective here (Score:4, Interesting)
nice misdirection there. the reality is that most other manufacturers' planes don't regularly dive into the ground because of an undocumented mechanism nor lose parts of the fuselage in midair, because those other manufacturers aren't former first class engineering shops that were taken over by a bunch of reckless and greedy psychopaths.
Re: (Score:2)
There's also something about the principle of rewarding or at least protecting or honouring the people who have skills and dedication, rather than treating them as an annoyance.
Re: (Score:2)
The people who can improve road safety and the people who can improve airline safety are two separate groups of people. You're suggesting that one of those groups just sit around and do nothing because the other group isn't doing as much as you want.
You have an MBA, don't you.
Corrupting the FAA (Score:3)
At this point it's common knowledge that Boeing has been corrupted to it's core by MBAs doing "Value" and don't care one little bit about Safety.
The problem is that it corrupts the FAA also.
Re: (Score:3)
I was in an MBA course 20 years ago, and we were discussing issues with 787 outsourcing. MBAs are interesting. Sometimes they know they are screwing up, but can't admit / recover / change direction. In the case of Boeing, it looks like it took 20 years and a string of disasters for them to admit:
The problem is culture. (Score:2)
The problem is not outsourcing at all.
The problem is company culture about caring for quality and safety.
When you start to rush to get the damn products out the door, knowingly covering mistakes and giving specific incentives only for cost-cutting above all, you have screwed yourself...
Re: (Score:2)
The article merely states what we already know.
Re:A reporter claims this, it must be true. (Score:5, Informative)
From the first sentence we see ONE persons opinion. This person who is out to make a bigger name and get more money
This opinion is well supported and broadly shared, so your characterization is false on all levels. If you had anything of value to say in conflict with this article, you would have written a dissenting article, not a slashdot comment with a logically fallacious basis.
Re: (Score:2)
There are quotes from Boeing's Chief Financial Officer and Chief Executive admitting that Boeing made mistakes that made things less safe. They're right there in the summary as well as in the article.
It's not "One persons [sic] opinion" by any stretch of the imagination.
You just stopped reading after the first sentence and made up a strawman argument in your haste to submit a post.
Re: (Score:2)
Or, they were naming his credentials in order to show that he's not just a newspaper hack looking to move up to a more prestigious newspaper, because he already has journalistic bonafides due to his previous work on aerospace journalism that was credited for making material change within the industry.
I mean, you know what the Pulitzer prize is about, right?
Re: (Score:2)
It appears that this scenario is precisely a demonstration of how objectivism comes up short in reality.
Objectivism suggest to worship those business leaders for their awesomeness and they would do no wrong.
The reality is they are more likely to damage things to enrich themselves.
I would think this is the *last* scenario an Ayn Rand adherent would want to face.
Re: (Score:2)
I mean, you could have also consulted Wikipedia to get that same take away. And the crux of the problem is right in your LLM result:
individuals have the right to pursue their own self-interest without interference from the state or other individuals, provided they respect the rights of others to do the same.
upholds rational self-interest as the proper guiding principle for human behavior.
Stay out of their way, don't regulate them, and the best result will come out in the end. Boeing being afforded much of that (they largely got privilege to self-regulate) has not produced the best result in the end.
Re: (Score:3)
I was wondering how long someone would come along to assert "It can't be greedy business leaders that don't care about long term viability, it must be the fault of those women and minorities!"
Everyone with specific knowledge describing the timeline has consistently supported the short-term financial behavior over long-term quality explanation. Meanwhile those wanting to blame DEI can only point to data and policies well after the MAX program had already made a number of the documented mistakes.
You may one
Re: (Score:3)
The question assumes that the only distraction from merit based employment is DEI. However, the real factor interfering with merit based employment is "how cheaply can I get away with someone that vaguely seems credible?"
If DEI is causing a drain on focus and expertise in industries that involves hurling people through the sky, don't you think it's worth checking if it's having a negative effect?
Again, the even hypothetical scope of the DEI "focus" is not until well after the mistakes were already being made. In the case of Boeing it is easily ruled out as a primary factor, due to the timeline and overwhelming descriptions of those close to the actual goings on.
If you want to "jus
Re: (Score:2)
Yes, clearly, DEI is the issue at Boeing [boeing.com].
I wonder how many of those white men got their high level position without having the requisite merits. We can see the results.
Re: (Score:2, Informative)
The sole source for all of the claims in OP is Seattle times. So anything being taken out of Seattle area is automatically negative.
I had the same reaction when reading this comment and then seeing who posted it.
Re: (Score:3)
Re: (Score:2)
It's a top 5 most useless degree.