
Boeing's safety vs. cost-control culture may be what sent out fatal aircraft - pseudolus
https://www.cbc.ca/news/business/boeing-fifth-estate-costs-safety-1.5426571
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aqsalose
This sounds damning:

>At the climax of the hearing, however, he had trouble explaining what was
done about an internal FAA study showing that there would be over 15 crashes
of 737 Max aircraft with 2,920 likely fatalities if the MCAS system was not
fixed. That study was completed over three months before the Ethiopian
airliner crashed.

>In his appearances before Congress, then-Boeing chief executive Dennis
Muilenburg couldn't explain other internal documents that showed the company
was aware long before either crash of the flaws in the MCAS system that lead
to the tragedies.

>One engineering study showed that pilots would have only four seconds to
recognize a problem with the flight-control system, and only 10 seconds to
respond to it, otherwise there would be a "catastrophic" crash.

Where are the criminal charges, and if this is not a crime, why it is not?

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praptak
Because CEOs decide who gets campaign donations?

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api
This but also something else: Boeing and its suppliers are huge employers and
a major part of America's industrial base.

It's the same rationale behind bailing out the banks and letting their bad
behavior slide: "national security." It's believed by many that it's better to
let our own failures slide than to potentially lose dominance in a sector.

~~~
nugget
I understand the logic behind wanting to preserve Boeing as a company due to
it's economic importance. But I don't understand the need to preserve any
ownership by the current stock or bond holders. When the CEO has such
negligent disregard for human life on an industrial scale, as may have
occurred in this case, it seems that the stock holders at the very least
should be exposed to more serious losses.

~~~
api
Expertise is power. The people who own, control, and operate Boeing are...
well... the ones who run Boeing. It's extremely difficult to clean house at
the top without losing the entire structure. It's like how it's hard to fire
the one IT guy who knows how everything is configured.

Look for example at what happened to Venezuela's oil industry when the Chavez
regime tried to eliminate its current heads and nationalize it. Oil production
crashed. The new people running the system didn't know how to run it, and
there is a substantial learning curve. This was part of what set the stage for
Venezuela's current economic and political disaster.

Corruption aside (and I do think corruption is a factor) this is the most
likely rational explanation for this behavior.

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rectang
> _The revelations are just the latest in a parade of evidence pointing to the
> decade-long civil-war inside Boeing, pitting its famed "safety culture"
> against financial performance of the kind that pushes the stock price higher
> and provides big bonuses for senior executives._

As far as those senior executives are concerned, said strategy was a financial
_success_. They got their big bonuses. What happens to the company years later
doesn't matter.

~~~
JumpCrisscross
> _What happens to the company years later doesn 't matter_

In finance, bonuses are now subject to claw backs.

Is this true for Boeing?

~~~
rectang
In Wells Fargo's case, even after clawbacks, John Stumpf and Carrie Tolstedt
ended up tens of millions of dollars ahead.

The idea that clawbacks _could_ be used seems to be a justification to keep
executive pay at present levels. Even though executives who destroy their
companies clearly are not worth what they are being paid.

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toss1
>>"McDonnell Douglas managers were more cutthroat, and it was all about the
bottom line — cut those costs!" she told CBC's The Fifth Estate. "They didn't
follow a good capitalist model. They followed greed and putting people in the
upper echelon, putting their interest first above the workers and the product
and just society as a whole."

This type of financialization of a business works great -- right up to the
moment when it doesn't.

All the numbers just keep looking better and better

Then, even without disasters that kill hundreds of people, the business starts
to become sick, and there is often no cure for it.

The core product or service has been so long neglected, and the the know-how
to continuously develop it has become so diluted, that there is nothing left
but the long death spiral.

In this case, that death spiral may be halted by the govt due to Boeing's
large defense role, but...

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psadri
The idea of free market is that public companies have financial incentives to
produce safe products. If they produce an unsafe product, their market capital
should suffer. This hasn’t happened to the extent I expected with Boeing. Is
the market working as intended?

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salawat
Of course it hasn't happened to Boeing. There's no one else in their Civil Air
Transport niche, and you'd be a fool to bet against a company with as much
established Government business as Boeing.

Overconsolidation has neutered the competitive landscape for airliner design
and manufacture.

Thino of a Government contract as a big fat insurance policy against free
market forces. Add in a multiplier for being the only shop left in the country
in certain verticals, and you'll find Adam Smith turning over in his grave as
the market is paralyzed at the thought of putting down it's golden goose that
has taken to laying hand grenades.

