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DOJ fines Boeing over $2.5B, charges it with fraud conspiracy (cnbc.com)
305 points by Lapz 9 days ago | hide | past | favorite | 120 comments





Corporations in the USA have the same legal rights as individuals in matters such as free speech, political lobbying, and so on. But when it comes to criminal liability, the people in charge are not held accountable and can buy their way out of jail with corporate funds. What a great country.

> Corporations in the USA have the same legal rights as individuals...

They don't. For example, 5th Amendment protections against self-incrimination do not apply to corporations. Also, corporations have a right to an attorney but one is not provided to them free of charge by the government.

> But when it comes to criminal liability, the people in charge are not held accountable...

Bernie Madoff, Jeffrey Skilling, Martha Stewart, and others put in jail for corporate crimes would disagree with you.


Name one CEO of massive company with good relationship with US government that ever went to jail for things like 2008 financial crisis, or similar moral failures and criminal acts.

As much as those names you named are important, they are peasants compared to power wielded by the big guys.


Bernie Madoff was no peasant. He started the NASDAQ, and apart from not meeting your requirement of being a massive company CEO, ticked off all the boxes. He got 150 years in prison.

Bernie's mistake was stealing from other rich people. Much safer to steal from the taxpayer.

Can buy their way out with government funds. The Government is the largest spender on Boeing products.

Hypothetically, let's say you had perfect access to all internal communications, emails, etc. And after all of this, you never found a smoking gun - not anyone to blame directly for this. The Max issue was caused by a culture of stupidity, greed, cronyism, etc. etc.

What then? Should we shut Boeing down? Should we arrest the executive team out of principle?

I think a lot of enormous fuckups like this are not directed by individuals, but more likely a miasma of incompetence that cannot be directly associated with any one person. It's more like we should arrest Harvard Business School professors for teaching MBA strategy wrong.


Isn't this why we pay the executive team the big bucks?

It’s one thing to fire the exec team. It’s another to charge them with criminal responsibility, especially when the shareholders will ultimately fund their defense one way or another. I don’t think it would be proven.

My comment was a broader point about why corporations never seem to have employees get charged. It’s because they usually aren’t liable and won’t get convicted by a jury, and the government subpoenas all the records and determined it won’t fly.

If you disagree with my assessment, you must think there is a conspiracy in which government lawyers collude with corporate leaders to protect them. That’s a very strong conspiracy. I’m not saying you are wrong, but recognize what you are asserting.


Professional engineers can be held criminally responsible if a building they sign off on fails. Chartered accountants can be held criminally liable if they sign off on fudged books. I don't see why an executive can't be held responsible for creating a culture under which illegal activity is the only viable option for their employees.

> It’s one thing to fire the exec team. It’s another to charge them with criminal responsibility

What is their role, their contribution to the company, if not "taking responsibility"?

And if that is not part of their task, how much cheaper can this role be fulfilled with sufficient impact by someone else?


> Should we arrest the executive team out of principle?

How about prohibiting them from holding executive positions in the future?


Good luck hiring anyone for a struggling company. Can't turn it around? You get punished.

Well, if the company is struggling to NOT kill people...

The upside of your proposal is that it'll create a very strong disincentive for this kind of behavior.

But if we really can't attribute blame to specific individuals, your proposal is effectively collective punishment where individuals that are genuinely innocent are punished because of wrongdoings of other members of the group. From a justice perspective, we're in murky moral waters. An analogy would be to punish everyone in a shared household if we know that one member of that household committed a crime but we can't determine which one specifically (and let's assume that the innocent members of the household don't know and aren't hiding information). This would be a state of affairs that everyone would rightly protest. So we need to think carefully as to whether we want to enact your proposal.


Your comparison is incredibly exaggerated. Being a highly-paid C-level exec of a $120B corporation that holds people's lives in its hand isn't exactly a human right like living in a household. It's as much a privilege as anything can be. And it can and absolutely should be revocable when you show your leadership allows people to people die under your authority, your awareness notwithstanding. When hundreds of people die under your watch, it isn't about you anymore. It's about the rest of society. You can tweak it if you feel it prohibits things like being a CEO of a self-proprietorship or a small family business or whatever; I don't care if you want to do that. Just draw a line that ensures they would get nowhere near a position like this in the future.

The ultimate point being: you can still let them make decisions about their own lives if you want, but that doesn't imply you have to let them make decisions that affect other people's lives.


I absolutely agree that leadership at Boeing was responsible for the deaths but the fact that we can’t get it right for (comparatively) petty crimes means we are unable to get out right for the big ones. I’m of course referring to the sheriff in California who has not been charged for corruption and has not been forced to resign:

Previously on HN

https://news.ycombinator.com/item?id=25193699

They didn't even touch the Sheriff.

> Sheriff Laurie Smith, who has the authority to issue CCW permits, has not been charged with a crime.

Either i. the sheriff knew about/was in on this scheme and must be put in prison or ii. the sheriff didn't know about how her number two was soliciting bribes using her authority to grant/deny licenses and must resign because that is just gross negligence.

Which one is it?


This is how tithings used to work. Ten men would be grouped into a tithing, and if any of those men were suspected of a crime, then the rest of the group either had to prove their innocence or had to condemn the guilty party. If they did neither, all were equally punished for the crime.

In principal, it strikes me as a good idea - it promotes collective good behaviour, and responsibility for ones peers.


It's collective guilt. Are you sure this is a good idea? It might be great in pre-Norman England.

By using the US intellectual property system, corporations can also patent and own DNA.

Boeing's fine is essentially nothing more than a one-time 10% rebate to their largest customer.

(Reference: In 2017, Boeing booked over $22 BILLION in revenue from the US government. https://www.forbes.com/sites/greatspeculations/2020/01/02/ho... )


> Boeing booked over $22 BILLION in revenue from the US government.

Which, by the way, is totally not state support, especially if anyone from Airbus is within hearing distance...


Does it bar the EU and China from conducting their own criminal investigation, ask for extradition of the management team and/or impose their own fines?

Well, at the level they're at, and considering the strategic and military considerations, everybody does it. I'm reasonably sure EU countries do the same with Airbus, and I'm European.

Indeed, they do.

We should just drop the pretense this playing field is level...


They do, but Boeing gets about double the military activity of Airbus.

Per another source, the $2.5 billion mostly goes to other major corporations:

* 243.6 million fine

* $500 million into a fund for the families of passengers who were killed in the crashes

* $1.77 billion in compensation to airlines that were unable to use their Max jets while they were grounded

https://abcnews.go.com/Politics/wireStory/boeing-pay-25-bill...

For the most part, the U.S. Department of Justice saved some Fortune 500 companies from civil litigation costs.


"No individuals have been criminally charged in the government’s investigation into Boeing, which was led by the FBI and the Department of Transportation’s Office of the Inspector General. Dennis Muilenburg, who was CEO when the crashes happened, was ousted in late 2019. He left with more than $60 million in stock options and other assets, though Boeing did not give him a severance."

What a cruel joke


"CEOs have to be compensated as much as they are because they shoulder such huge responsibilities." say the apologists for why American CEOs "need" to be paid 500x as much as a typical worker.

How about this: I'll shoulder that grave responsibility for a mere 50x the typical worker, and I'll settle for a golden parachute of just $6M. That's a bargain!


What does $60m in stock options mean? Can they be exercised at profit?

So anyone at Boeing going to jail for killing 346 people?

Who do you think should? An engineer who worked on the system? A manager? What law was broken? If you were in their position, how would you know you were breaking the law?

Diffuse responsibility is a real problem. 'Teaching to the test' is a real problem. Normalizing risk is a real problem.

Blaming individuals is very satisfying, and it's very easy to do with hindsight, but if you want large complex systems to work better, you have to get over individual blame. I'm not saying it's easy, and I'm not saying that we should stop looking for law-breakers, but I am saying that punishment will not lead to better outcomes in the absence of other positive actions.


> Blaming individuals is very satisfying

"Responsibility is a unique concept... You may share it with others, but your portion is not diminished. You may delegate it, but it is still with you... If responsibility is rightfully yours, no evasion, or ignorance or passing the blame can shift the burden to someone else. Unless you can point your finger at the man who is responsible when something goes wrong, then you have never had anyone really responsible."

Hyman G. Rickover, father of the US nuclear navy


This is the best context I can find:

https://www.google.com/books/edition/Hearings/IcO0QpCJdQYC?h...

I strongly agree with his comments in their original context.


>I strongly agree with his comments in their original context.

is the implication that you do not agree within this context?


You used the quote in reply to my statement

> Blaming individuals is very satisfying

I was not sure how you intended it, as you did not provide any other comment, so I went looking for the original context.

Here's how I understood the original context: Congress was looking for who to blame nuclear incidents on. Adm Rickover pointed out that for Thresher, very many of the responsible people in the production and development process changed multiple times during the process. He also pointed out that Congress, as the funding body still maintained some responsibility.

In the context of Boeing, I think it does apply, in the sense that the development project was faulty, albeit in a different way than the development of Thresher. It also applies in the fact that the funding body bears responsibility (Boeing shareholders and management). This is my interpretation. Everyone is free to make their own.


Rental roommates are jointly and severally liable, but in a corporation everybody gets to pass the buck

The CEO for starters.

Post-Enron accounting rules via Sarbanes-Oxley made it so that the CEO had to sign off on and certify the financial statements. The buck stopped there. [0]

Why not here as well?

Unless you are thinking about putting the system that incentivizes a CEO and company to do this on trial.

[0] https://www.sec.gov/news/press-release/2014-152


Top management definitely should lose their high salaries in such a case. The worst that seems to happen to them is to have to resign and get a huge severance package. That's not punishment.

The DOJ certainly seems to think a law was broken. As I see it you charge the most obvious person and let them try to blame someone else. Eventually you either find people you can blame and if you can't go up a level until you reach the CEO.

If the CEO goes to prison, other CEOs will care more than this one, if some compliance officer does, the next one won't be as willing to bend to implied pressure from leadership.


> The DOJ certainly seems to think a law was broken.

And they charged the corporation. They also have a consent decree. You can be sure that under the consent decree both the corporation and everyone in it are under a microscope. A consent decree is, among other things, like probation. If they mess up again, the DOJ will drop the hammer.

A lot of people seem to think that punishment makes people care more somehow, but punishment is always a distant possibility at the time of the wrongdoing. People don't generally think they are committing serious wrongdoing, humans are really good at rationalizing our actions, especially when each individual action is a small step.


that just leads the blame onto a scapegoat. It doesn't fix the problem at heart - which is that the responsibility for safety has to be taken at the org at every level.

The CEO is the one who has the more power to avoid it and they have incredibly high salary often justified because they are "risk takers". They take the money, so they can take the responsibility with it. And for information, the law is like that in other countries I know.

>which is that the responsibility for safety has to be taken at the org at every level.

The CEO has enough power to prevent such a thing from ever happening (by that I mean he can easily create a morally corrupt company culture) and there is a very big profit motive to do so.


Things like company culture and focus on either shipping products fast to get as much cash as quickly as possible vs building quality products definitely comes from the top management. But this support needs to be something more than empty phrases in come corporate emails. Same principles as say in software development.

If middle managers and top engineers see that there is no reward in doing things right and taking time, in fact its shooting one's foot, then most folks +-align with this policy and move on. At the end almost everybody is in for the paycheck.


> The DOJ certainly seems to think a law was broken.

That fortunately doesn't matter.

To send someone to jail, you need to convince a jury they committed a serious crime.


I don't understand this comment. The DOJ bringing charges has to be step one towards that end. The same exact thing is happening with Boeing, we just didn't hear about it until after they negotiated a settlement. This happens all the time with plea deals. If they can't agree it goes to trial.

> The DOJ bringing charges has to be step one towards that end.

Sure. My point is that it's quite different from a conviction.


I'd start with any one who decided not to ground the planes and deflected responsibility a soon as the first crash happened. They have direct responsibility over the second crash.

The I'd go over all the certification process. Any person who concealed information or misled in an official capacity goes to jail. That's the whole point of requiring titled engineers signatures. The buck stops with them.


They were very likely assured by their program managers that the crash was a fluke, presented with convincing test data, and pressured by their bosses, the board, etc etc.

These things rarely happen by individual malfeasance. They are part of a system of small mistaken assumptions that compound into big lies.


I agree with you but out of curiosity what do you suggest as a solution ? You believe all we need is the fine and then the company goes under ? If that's true then all the individuals who failed could just as easily go to another company and repeat their failures.

For doctors a failure can make their license get revoked (even tho it doesn't seem to happen very often in practice). Wonder if there could be something similar but indeed it is very hard to find "a person to blame", maybe the CEO? CTO? :)


> You believe all we need is the fine and then the company goes under ?

No I don't believe that. There will be firings, demotions, lost bonuses, etc. Maybe there should be more of that, maybe not. A CEO may step down and have trouble finding a similar position, etc.

I don't actually have a suggestion of a better way, I just agree that you can't automatically throw one person into jail.


wouldn't it be the engineers the get the test data though? (at least directly) instead of the program manager?

I agree to a point. But clucking your tongue and ignoring it is also not the answer.

The way to get less of an undesirable behavior is to make it lead to undesirable outcomes. Unless there is some other operative reason, you're right in another way - we don't have to care where that (dis)incentive comes from.

The firm owners are ultimately responsible - they are responsible for hiring the execs responsible for the firms' actions. Fine the criminal company so hard that shareholders of their future potential employers will think twice about the risks they might impose on their savings.

Of course, this is a national security concern, and so TBTF. Man, isn't the US a great place, if you're filthy rich?


From the article:

>Boeing admitted that two of its 737 Max flight technical pilots “deceived” the FAA about the capabilities of a flight-control system on the planes, software that was later implicated in the two crashes, the Justice Department said.

...what exactly does that mean when "deceived" is in quotation marks? Seems like deceiving regulators would be a straightforward crime. Unless "deceived" means something other than the usual definition.


In context, the quotation marks mean that Boeing literally used the word "deceived".

It's a bit of a bug in the language that real quotes and "scare quotes" are delimited with the same symbols. But we're stuck with it.


How about the guy who is handsomely compensated in assets, who's supposed to be ultimately responsible for the company and its operations?

"Volkswagen’s CEO Herbert Diess, chairman Hans Dieter Poetsch, and former CEO Martin Winterkorn are being hit with criminal charges for allegedly waiting to tell investors about the automaker’s rampant emissions cheating, German prosecutors announced on Tuesday."

Last time I checked neither of these individuals programmed the ECU of VWAG diesel engines to cheat emissions tests although some engineers were blamed and fired.

It all starts at the top.


At a minimum put a fine on them that's high so they really want to avoid it. Seems most fines are only large enough to not cause the company too much pain.

Or another way would be to temporarily send the company to "jail" meaning to suspend its operations for a while.

When you look at this example or what happens to banks when they support criminal activity like money laundering or tax evasion the fines are simply way too low for them to stop doing bad stuff.


> Who do you think should?

Boeing should be forced to publish all trade secrets that were used in their planes which contributed to the deaths of these people (so basically all IP that Boeing owns), and they should have all their patents annulled.


> What law was broken?

The above comment is very, very uninformed. Aviation is a heavily regulated industry, totally unlike IT.

There's several legal avenues for individual prosecution:

1) False certification documents about MCAS performance were submitted to the FAA, so it would be very easy to find out who those people were, and who their managers were. The US government has no problem prosecuting people for fraud in the aviation world. (FAA certification is almost totally dependent on paperwork, both in mfg. and operations.)

2) The manager of the test pilots who wrote the critical SMS messages was fired, so that is another easily traceable route related to the above.

3) Southwest asked for a penalty of $1 million per airplane if type-specific traning was required, so both Southwest and Boeing negotiators agreed in a reckless manner to disregard airliner safety with that perverse incentive. (Reckless is a catchall in the FARs for pilots, but could be applied to companies and mfgs.)

https://www.law.cornell.edu/cfr/text/14/91.13

To give Congress credit, they are re-visiting the ODA delegation process because of MCAS, which Boeing abuses by having managers pressure ODAs:

https://www.aviationpros.com/aircraft/commercial-airline/new...

Boeing is the US' largest exporter, so should face intense government scrutiny as it affects not just passengers and suppliers, but all Americans.

Source: commercially-rated airplane pilot who has followed MCAS very closely, far more closely than anybody else on HN.


To quote myself:

> I'm not saying it's easy, and I'm not saying that we should stop looking for law-breakers, but I am saying that punishment will not lead to better outcomes in the absence of other positive actions.

If laws were broken, by all means, use the justice system to pursue those lawbreaker; but do not expect that to solve everything.


No one who has $2.5B is going to jail for anything.

Fines like this typically punish shareholders and lower level employees (via restructuring in response to a need to find budget for the fine).

> Fines like this typically punish shareholders

Good.

That should motivate shareholders to assure that they can hold management of firms they invest in accountable.

> and lower level employees

Which is regrettable, but I’m not sure how any form of corporate sanction could avoid that.


You could have the fines be "heavily" pulled out of compensation packages for the higher ups who actually have the power to change the organization... but then they'd probably just leave and screw up some other place?

Do boards generally try to claw back compensation in these sorts of situations? (Just as they have been doing in some of the recent cases involving financial shenanigans.)


Boeing belongs to the USA, so US citizens will take the punishment then. Am I right?

Boeing is a publicly traded company based in the USA. That is different from being owned by the USA. Amtrak (which provided passenger rail service in the USA) is owned by the US Federal Government. Boeing on the other hand is owned by a multitude of individuals like you and me and probably a good number hedgefunds.

Meanwhile, Airbus... I've always heard the French Government supports it, but it's hard to see exactly how.

and something interesting I just noticed:

"In 2015, Airbus Group said it was establishing an R&D center and venture capital fund in Silicon Valley."


Martha Stewart? But that was securities fraud, the only true crime.

"The charge is bank robbery. Now, my caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested. Therefore, robbing a bank is tantamount to that most heinous of crimes, theft of money."

>In March 2004, Stewart was found guilty of conspiracy, obstruction of justice, and two counts of lying to a federal investigator. Her securities fraud charge was dismissed.

https://www.thestreet.com/lifestyle/martha-stewart-net-worth...


> Martha Stewart? But that was securities fraud, the only true crime.

I don't think Martha Stewart is a billionaire.


She's > 600 million.

At that level, I'm not sure there's a useful distinction between her level & billionaire


that was lying to the FBI actually

The one thing that will absolutely send you straight to jail 100% of the time is playing games with rich people's money.

Constant news around this bothered me deeply. Someone admits they committed fraud and 346 people died but pays a small sum to get out of the mess without jail time for anyone ? A lot of people say this is bad and these corporations are too powerful and we need someone like Bernie sanders to teach them a lesson.

A closer scrutiny reveals exactly the opposite. It is the government that is too powerful, government tries to open an investigation with an explicit objective of jailing the executive. At some point Boeing has to ask how much it stands to lose if the executive goes to jail. Even though the probability is low, the DOJ has long arms and more resources to harass Boeing. $2.5B is not a fine but a bribe that an all powerful DOJ has extracted from Boeing.

$2.5B is still lot of money and 346 deaths is even bigger disaster for Boeing. Boeing did not benefit from 346 deaths on other hand it suffered massive losses. A selfish and greedy company like Boeing have far greater incentives to course correct rather than DOJ or US government. Remember how USA bombed countries while making completely fraudulent claims about WMD ? Who went to jail for that ?


> It is the government that is too powerful, government tries to open an investigation with an explicit objective of jailing the executive.

"It is the government that is too powerful, government tries to open an investigation with an explicit objective of jailing the [person responsible]."

Oh no. Just wait until you learn what the job of the police is in a civil society.

> Boeing did not benefit from 346 deaths on other hand it suffered massive losses.

It absolutely did. It benefited up front from not having to redesign the 737 MAX to conform to global aviation standards. This allowed it to go to market faster, reduced development costs, and gave it an edge in sales against its competitor, the A320 family on the order books. You know, the one that didn't fall from the sky spontaneously. Boeing achieved this through lying and deception.

All this fine did was attenuate the benefit.

> Remember how USA bombed countries while making completely fraudulent claims about WMD ? Who went to jail for that ?

One unprosecuted crime doesn't mean all crime should no longer be prosecuted. Whataboutism is never a good look.


You're basically saying the fact that the government can investigate a thing is proof that the government is too powerful.

I'm not sure where you get the idea that an investigation was opened with the specific purpose of jailing an executive: I don't see any indication that was the case, and just about anyone in or outside of government could have predicted before the investigation that no executive would go to jail over this.


> You're basically saying the fact that the government can investigate a thing is proof that the government is too powerful.

Not at all. If government could actually investigate and prove charges and jail Boeing CEO would be the sign of an effective government.

The fact that it simple files charges, does a phony investigation and settles for a very low bribe for the deaths of my loved ones is the proof that we are dealing with a mafia and not a government of people.


$500 million fund for crash victims family members (346 human lives) and $1.77 billion for its airline customers. Justice served. Now Boeing can rinse and repeat not to mention bail out from tax payers if there is a need to be. So who went to jail for this ? I know that if I steal from Walmart, I will be arrested and possibly get jail time.

Is $1.77 billion enough, when companies had to ground 700 airframes for more than a year, only to reopen during the Covid lockdowns? It feels like it is not 100% served, although justice cases are never 100% satisfying.

Don’t worry, Boeing gave 19 million dollars in lobbying. They will make this back with sweet sweet new contracts from the DoD and NASA, especially now that Bridenstein is gone and won’t fire their corrupt cronies at the agency.

Boeing being banned from lobbying would have a good clause to include in the agreement but that would be a bridge too far.

Compare this to the fine which volkswagen got (6 times more) and prison term for the top managers, having killed 0 people.

Unfortunately US justice is very unfair against foreign corporations.


This is a really interesting comparison.

We can’t know the small or incremental damage that VW’s emissions did to people’s health... but at face value, it feels like Boeing’s punishment is an order of magnitude or two too low.


It has been estimated VW caused 59 early deaths in the US and probably a lot more people got sick etc... so not exactly negligible. However, I agree with the general point of your comment.

https://iopscience.iop.org/article/10.1088/1748-9326/10/11/1...


So the fine is about the cost of twenty-five 737 Max planes.

>Boeing had around 450 Boeing 737 MAX aircraft built and awaiting delivery.

>Boeing has unfilled orders for over 4,000 737 MAX jets.

https://simpleflying.com/737-max-deliveries-december/


You should probably see it in terms of bottom line rather than top line, i.e. the operating margin gained on each sale is about $12M according to wikipedia, so they would need to sell 200 maxes to obtain the net cash they will use to pay the fines.

You're telling me the fine is something like 5% of the profit collected from making the 737MAX?

Sounds like the real punishment should have been the abolishment of the 737 MAX. All the R&D money would be lost and they'd have to start over with a new model.


The people doing perpetrating these crimes don't care. Their paycheques don't change. If they aren't afraid of jail time and real accountability, then this will happen again. Instead they pushed through whatever they needed, and probably got well paid for those "successes".

There is a notion that Boeing is/was a company with an insanely great engineering culture and their engineers lived in an idyllic culture of building great and safe products. This great culture was all lost as a result of the merger with McDonnell Douglas [1], [2], [3].

This argument is frequently put forth by ex-Boeing engineers. This is an apologia for Boeing's behavior which killed 346 people and endangered the lives of 1000s more and destroyed jobs/wealth around the world. These apologists want you to think that the unholy trinity of the McDonnell Douglas culture which infected Boeing, the decisions of Harry C. Stonecipher, CEO of McDonnell Douglas at the time of the merger and Dennis Muilenburg, the last CEO of Boeing who greenlighted the 737 MAX are responsible for this outcome.

So strong is the apologists conviction in the purity of Boeing's engineering culture that they ignore the fact that thousands of engineers worked on the 737 Max. Not a single engineer raised issues with the engineering of the aircraft. Not a single engineer wrote a blistering memo calling out its failing or quit in protest. They were all held in thrall, paralyzed and forced to go against their ethics, professionalism, decency by the power of this unholy trinity!

Eventually, all stellar organizations, public or private, become complacent (e.g. Israeli Intelligence Failure, 1973). Boeing made an unstable plane with a dangerous MCAS to get it to market fast. They then topped it off by making it rely on a single sensor. They then made the dual-sensor an upgrade. An undergraduate engineering student with a basic course on probability can see that this is tailor-made for disaster. Boeing made an essential safety feature an upgrade!! But wait there is more. They then proceeded to hide this monstrosity from every regulator and airline on the planet and insisted that the plane was no different in every aspect of its flight behavior than its predecessor which was over 30 years old and did not require additional safety training.

Boeing had become so criminally blatant that the head of airline training at Lion Air inquired about extra training for the 737 Max and they rebuffed him. After the Lion Air crash, Boeing proceeded to cast aspersion on the safety practices of Lion Air. Lion Air does have a spotty safety record but in this case, Boeing rebuffed their requests for additional training because it would set a precedent for other airlines in SE Asia. When that lack of training was a factor in the crash, Boeing proceeded to blame Lion Air. Chutzpah!

Released transcripts of messages show how Boeing employees worked in unison to ensure no extra simulator training was required. Great engineering culture obsessed with safety, this aint!

We need to start accepting that whatever stellar engineering culture existed at Boeing is dead. We as a society need to stop scapegoating imaginary forces in the past and giving Boeing engineers a pass. Let's agree that strong regulation is necessary to ensure the safety of Boeing Products.

[1] https://qz.com/1776080/how-the-mcdonnell-douglas-boeing-merg...

[2] https://fortune.com/longform/boeing-737-max-crisis-sharehold...

[3] https://www.perell.com/blog/boeing-737-max


You fully and entirely misunderstand the argument. The argument is that after the McDonnel Douglas merger, the "idyllic culture of building great and safe products" was pillaged and destroyed by greedy corporate overlords. At this point (so goes the argument) all the "good engineers" who would have most certainly spoken up were laid off and were replaced with dime-a-dozen engineers who were overworked, underpaid, and didn't know what they were doing.

In essence, the great engineering culture at Boeing was dead at the time of the 737 MAX debacle and the death of Boeing's previously near perfect engineering culture was directly responsible for the failure of the 737 MAX.


Side note, there is a definite trend of blaming this on McDonnel Douglas. Growing up in St. Louis and now living in Seattle I notice it all the time.

I do think the way you said it may be more true (with no evidence) that a management culture which had switched more to acquisition choked out good engineering culture. You are essentially correlating it with the acquisition in timeline.

Note I'm in no way attacking you, just adding what I've seen online and heard in bars.


Sigh. The mythmaking contines. In the theory of causation, we distinguish between proximate vs. ultimate causality. Every proximate event can plausibly be claimed to be the cause for a subsequent event. As they say for want of a nail the war was lost. We don't say the war was lost because the nail was missing because 20 years ago they changed the way they cataloged the nails in the hardware store which sold the nails because the owner of the store changed their inventory system.

What is plausibly the cause for the engineering fiasco of the 737 Max? Why go back to the merger in 1997 and why not blame the 9/11 attacks or the election of G.W Bush or Obama's for this disaster?

Why go back to the 1997 merger with McDonnell Douglas? Because it allows Boeing engineers to deflect blame for the terrible product they built and foisted on the flying public by coasting on their past reputations.


This is uninteresting as the engineers are only making a limited point that the superior character of the engineering organization has been lost, relative to the demands of buyers and the FAA. It’s not a novel theory to suggest a merger or acquisition can cause this to happen more obviously than a national or world event.

The theory is just that - a theory and a convenient one at that since it exonerates Boeing engineers.

The is no evidence supporting the theory (verification) and more interesting it is not falsifiable. It is just a narrative.


It is falsifiable, given access to the record of management decisions and hiring data and some agreement on what a consequential company decision would look like.

Whether some people think it “exonerates” current engineers doesn’t matter. I don’t think it does, personally.


The evidence for the theory is that there are many Boeing 'apologists' as OP states - he is trying to debate them, not people that don't care if Boeing ever had a good engineering culture.

> In the theory of causation, we distinguish between proximate vs. ultimate causality.

Yes, and you have them backwards. "The engineers failed to raise the issue" is a proximate cause, not an ultimate cause. If engineers in your company are failing to raise obvious technical issues, then either you're hiring incompetent engineers, or your corporate culture discourages engineers from speaking up and punishes those who do. Either way, the ultimate cause is a failure of the organization as a whole, which ultimately means its top management, not a failure of the engineers.


How do I have them backwards? The theory attributes ultimate cause to something that is way way in the past. The event is chosen to maximize narrative plausibility. There is no way to verify the narrative or better falsify it.

The theory conveniently exonerates Boeing engineers without any supporting evidence, forget falsification.


> The theory attributes ultimate cause to something that is way way in the past.

Yes, that's what "ultimate" cause means. Not necessarily way back in the past, but way back in the causal chain. Basically, you keep on asking "what caused that?" until you get to an answer that looks like a reasonable stopping point. Saying "the engineers failed" isn't a reasonable stopping point because the engineers weren't acting in isolation or on their own; they were acting as part of a larger organization that was not just an organization of engineers. So if they failed, it means the larger organization failed, and you have to look at why that happened to find the ultimate cause.

> The theory conveniently exonerates Boeing engineers

It does no such thing. It is perfectly possible for the engineers to be at fault and for the larger organization of the Boeing corporation to also be at fault. The reason for looking beyond the engineers is not to "exonerate" the engineers, but to make sure that "blame the engineers" does not get used as an excuse to exonerate others who also contributed to the failure and who should be held accountable.


> Not a single engineer raised issues with the engineering of the aircraft. Not a single engineer wrote a blistering memo calling out its failing or quit in protest.

I don't think this is true. There was an HN thread some time ago on an article describing how one senior production manager, who was an engineer by background and had previously worked at Boeing as an engineer, looked at the design specs, talked to people he knew in engineering, realized there were problems coming, and did exactly what you describe: wrote a blistering memo, found it wasn't going to get listened to, and quit in protest.


I would appreciate the citation, not doubting but would love to read it since I have not seen anything like it in the public domain.

> I would appreciate the citation

Unfortunately I haven't been able to find it. If I do I'll post a link here.


>So strong is the apologists conviction in the purity of Boeing's engineering culture that they ignore the fact that thousands of engineers worked on the 737 Max. Not a single engineer raised issues with the engineering of the aircraft. Not a single engineer wrote a blistering memo calling out its failing or quit in protest. They were all held in thrall, paralyzed and forced to go against their ethics, professionalism, decency by the power of this unholy trinity!

Why would this matter? The MCAS software is the only thing that failed. It probably only involved a dozen engineers and they did their job to a reasonable extent. What if none of them were told that the pilots are not trained to be aware of the MCAS?

The real failure is that there was a pseudo autopilot software that completely overrode pilot control. Why did it override pilot input? Because managers wanted to sell it as a 737 upgrade with 0 training required. Making the 737 MAX safe does not neccesarily require better engineering, pilot training alone would be more than enough.


> The company said it already accounted for a bulk of those costs in prior quarters and expects to take a $743.6 million charge in its fourth-quarter 2020 earnings to cover the rest.

Sounds a bit like a like a fight club math answer. I wonder what a recall would have cost.


No, I don't think so. Boeing lost a lot more than this just to market forces -- the cost of lost business, the cost of repairs, the loss of future good will. There is no way a recall coordinator with a global view of the company's welfare in mind would have made the decision to go forward.

I agree it probably would have been less expensive, but I'm not sold on the company necessarily believing that at the time.

> There is no way a recall coordinator with a global view of the company's welfare in mind would have made the decision to go forward.

When the information about the sensors and software first emerged everyone was saying there was no way any one engineer would have not spoken up about it... It was later relieved they outsourced the software development to $9/hr engineers. It wouldn't be surprising if their "recall coordinator" did not speak up for one reason or another.


Those $9 an hour engineers did not work on MCAS. They worked on one of the MFD's (Multi-Function Displays).

> Boeing lost a lot more than this just to market forces -- the cost of lost business, the cost of repairs, the loss of future good will.

How much did they actually lose? I mean, excluding coronavirus essentially destroying passenger airflight... Boeing does not have competition in many areas. The US military won't buy Airbus, Dassault or Saab planes, the NASA won't exclusively shift to SpaceX because ULA space flight is actually a job program. On the passenger airflight side the only competition is Airbus who have limited capacity.


People at the top need to go to jail for life. This is no punishment.

If I am found criminally responsible for crashing a couple of planes, I'm pretty sure I'd get life. Just sayin'.

I bought as much as I could on Margin at $150.

Boeing is a national asset and has hundreds of marketing vendors in India.

Gonna boom under spaceforce and India vs. CCP.

Boeing is a national asset and it's gonna be institutionally owned heavily or dismantled and sold off into different units.

Gonna be wild to watch.


Just wondering is FAA getting away with it?

Down 0.6% in after hours trading. Does this mean investors consider this a win?

It has already been factored into the share price. This is very very common. See 1MDB-Goldman announcement. Share price was up on the day Goldman pleaded guilty and agreed to pay billions in fines.

One thing the Chinese get right: high-level executions. When the blood cries out, I doubt it's to send a paltry $2.5B to the feds.



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