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Boeing charged with 737 Max fraud conspiracy and agrees to pay over $2.5B (justice.gov)
407 points by edward 9 days ago | hide | past | favorite | 253 comments





Boeing was once one of the country’s greatest companies and is now a national embarrassment. This is what you get when the MBAs and accountants take over and the lust for profit begins.

An engineering company should have engineers as managers from the bottom level all the way up to the CEO. Or at the very least, somebody who cares about product over profit.

Take a look at Apple’s functional organizational structure for an example of an engineering company done right.


I think this runs deeper than an “MBA vs Engineer” perspective. Having worked in the industry but no direct knowledge of how this project was run (outside of what’s been reported in the news) here my take:

If I were a betting person, my guess is they have created a culture of “schedule first”. Other orgs managed by engineers have been chastised for this in the past (looking at you, NASA). The problem is the risk/reward is asymmetrical managing these projects. Even though the severity can be extremely high, the probabilities of an error of this magnitude tend to be very small. This creates an incentive for ambitious souls to be aggressive and continually role the dice to meet schedule. As a former manager once told me when I was in a safety role, “you don’t want to get a reputation for slowing things down.”

To oversimplify things, say there’s a 1% chance any project can end in disaster. You can literally create an entire career ignoring that risk and still look like a star. Probability is on the individuals side. Meanwhile, the manager pushing to do things the right way to minimize that risk almost certainly will bear a higher cost/schedule burden. But in aggregate, that probability will catch up to the organization.

What makes me think this? There’s ample reporting Boeing didn’t follow their own procedures because they didn’t want to delay. Hazard analysis documentation wasn’t reflective of the design because the paperwork wasn’t getting updated. Their didn’t follow their own procedures regarding redundancy in design of items identified in the HA. I suspect they knew this was wrong which is why they obfuscated details in the investigation.

Culture matters, irrespective of academic degrees.


Surprisingly enough, it doesn't run deeper. Boeing was once an engineering center of excellence. Building bulletproof planes were what they did, and it showed. Then they decided to acquire McDonnell Douglas - who was run by accountants. For reasons I'm not sure anyone can explain, the MD executives somehow not only survived the merger, but took control of the company. The end result was a move to pinch pennies and maximize profit vs. a focus on quality and engineering.

https://www.theatlantic.com/ideas/archive/2019/11/how-boeing...

>With ethics now front and center, Condit was forced out and replaced with Stonecipher, who promptly affirmed: “When people say I changed the culture of Boeing, that was the intent, so that it’s run like a business rather than a great engineering firm.”


I wonder if the implication is that being run like an “engineering firm” is no longer able to produce a competitive company culture. What the MBA vs Engineer framing doesn’t do is explain why other organizations run by engineers have had the same type of mistakes. I think there’s a more general through line

I spent many years working very close to Boeing, though never for Boeing so I wasn't privy to meetings that may have included the alleged malfeasance you describe. What I did see was communication breakdown between major teams. Some interface features were mutually assumed to be owned by another team and fell through the cracks. MCAS in response to unstable thrust vector is commonly cited as an example of this.

But I think it's worth noting to the (mostly software oriented) HN crowd - aerospace projects have massive manufacturing cycle times. Some things literally take years to manufacture for the proof-of-concept stage, let alone production. You can't NOT be incredibly schedule-oriented in this environment. This can cause some perverse incentives for management (which must be mitigated), but there are always going to be somewhat risky last-minute changes that could seem ill-advised in hindsight if you want to deliver something.


Schedule matters, especially in long lead items. The problem becomes when schedule overrides good judgement regarding safety. My personal opinion is this is largely rooted in human cognitive biases that make us bad at objectively assessing risk. We just aren’t wired to think statistically and then we have multitudes of biases that undermine our ability to make judgement, especially about low probability events.

> human cognitive biases that make us bad at objectively assessing risk

I generally agree strongly (e.g. car vs air safety). Though this group is highly cognizant of KNOWN risks. It's the UNKNOWN risks (usually found at those interfaces I mentioned above) that get overlooked. Unknown risks definitely will be more problematic in a compressed-schedule environment.


they dlc'd the secondary/redundant AoA sensor, a critical safety feature and literally a direct cause of the crashes

True. But the hazard analysis reported in the Seattle Times showed Boeing listed it a hazardous failure item. Ignoring that it should have been classified as “catastrophic” because of its ability to cause a loss of aircraft, even at the “hazardous” level their procedures made a redundant element required.

Required, not optional if the customer pays enough.


Actually I wonder how having two sensors is a good idea, anyways. There is no quorum of two, if one of the sensors is off, what's the actual angle of attack?

I dont understand much of redundancy of sensors, yet '3' would allow to ignore the 'bogus' reading.


It seems such a weird thing to cut corners on.

The main new feature in a plane solving a problem that they knew was potentially dangerous which is why they had to install the auto-nose-down system in the first place.

How expensive could a couple of extra sensors even be compared to a whole plane?


Maybe the extra sensors added significant drag?

> Actually I wonder how having two sensors is a good idea, anyways. There is no quorum of two, if one of the sensors is off, what's the actual angle of attack?

Not knowing the angle of attack is miles better than not knowing that you don't know the angle of attack.


There’s usually guidelines based on the criticality of the equipment and the required reliability.

"dlc"? What does that mean

Downloadable content, a reference to large game studios' reputations for nickel-and-diming players on what should be core gameplay features of a video game.

They made it an optional extra that you had to pay more for.

This would be fine if we're talking about carpeting on the flight deck, but the AOC sensor is a critical feature.


They made it an optional feature you have to pay more for.

Just want to say I think your response is well articulated, and has been sitting with me for days. Reflecting on how "schedule first" is driving things in my org...

The CEO that Boeing fired at the end of 2019 was an aerospace engineer who had been with the company since 1985.

https://en.wikipedia.org/wiki/Dennis_Muilenburg


Sure but I’m not talking about just the CEO. I’m talking engineering managers all the way down. And I guess I’m not really talking about specific college degrees either, but a culture and mindset of engineering.

Here’s an interesting article about how engineers lost influence in Boeing: https://perell.com/essay/boeing-737-max/


>Sure but I’m not talking about just the CEO. I’m talking engineering managers all the way down. And I guess I’m not really talking about specific college degrees either, but a culture and mindset of engineering.

Many here have misunderstood you,conflating the the stereotypical MBA type ( who is a essentially a con man) with an MBA degree. A 'mindset' of engineering BTW has to to be explained to the non-engineering personalities. Besides the obvious inclination for technical things, the next best trait is perhaps that of integrity. You really cannot put together a working great product unless there is there is a commitment at several levels, all of which could be loosely lumped under the personality trait of integrity.


Incidentally, he was "the only engineer in the C-suites". [0] I think the problem ran much deeper than the CEO.

[0] https://newrepublic.com/article/154944/boeing-737-max-invest...


He only became CEO in 2015. His handling of the Max crashes was shameful, but you can't blame him for Boeing's long-term strategy faults.

It seems like the problem with Boeing is that they acquired a failing company (McDonnell-Douglas), but then kept all the executives and let them run Boeing, even though they'd just ruined the last company.

Maybe they preferred that over letting some pleb engineer into the executive aristocracy.


Oh, I don't blame him at all. A commercial airliner is a decade long project to undertake. However its clear he was not the leader to lead a company through a crisis.

So, is slick over here guilty of manslaughter?

I'm so tired of seeing this ridiculous "mba and accountants are evil" trope. You realize Tim Cook is one of those evil MBA people, right? And the CEO that oversaw Boeing during the launch of the MAX was a career aerospace engineer?

Those of us in the operations sides of buisnesses or doing research at universities really only see all the terrible hurtfull decisions these MBAs are making. Constant cost cutting and understaffing tend to lead to a lot of built up resentment. Maybe it is just a few bad eggs spoiling the broth, but to operations people it looks like the whole organisation is out to make their lives miserable.

I feel this.

Tim Cook is also an industrial engineer, and this is easily available information.

My point is more that you don’t want people focused on business and profits instead of people who have deep knowledge in the area and passion for the product.

Accountants and business majors are better at managing insurance companies, banks, etc, because they understand the space. Engineers are better at managing engineering companies for the same reason.


Tim Cook has a bachelor engineering degree but he hasn't been involved in engineering work since the 90s. He's been the head of operations, making business decisions like closing down factories and outsourcing production, since his days at IBM. He is a supply chain wonk, which is why he got an MBA (supply chain management is a core part of business school teachings). This is also easily available information. Cook has been "focused on business and profits" for decades, and yet you act like he is an example of a great "engineer" in charge.

Believe it or not, managing the supply chain is a specialty of industrial engineering.

https://en.wikipedia.org/wiki/Industrial_engineering#Sub-dis...


>Although it has the same goals as supply chain engineering, supply chain management is focused on a more traditional management and business based approach

gasp, there's that evil "business" word again


I've always been impressed with production engineers, cause they always find a way to explain to us (software/electric/electronic engineers) the issues with the marketing/commercial/supply chain side and explain to the executives/MBAs that, no, adding 10 people to a 5 people team won't make the team go 3 time faster. In big consortiums projects they are pretty much a glue imho.

Having a production engineer as an exec is probably the best way to run a successful team if you project involve multiple field of knowledge (as Apple probably does).

Tim Cooks understand tradeoffs, and this understanding should be expected of any top exec. Is it often the case?


Once upon I time I worked in a process engineering gig. Literally every problem started by trying to explain no, just adding more people to a bad process won’t magically fix things. And yet, that was always the knee-jerk reaction to those owning the process. I think it’s because a bad process has the people constantly reactively fire-fighting they naturally feel short-handed

You need both. I've worked at places that were all subject-matter and no business expertise. Companies like that fail.

> My point is more that you don’t want people focused on business and profits instead of people who have deep knowledge in the area and passion for the product.

But isn't focusing on business and profits also focusing on safety of your products since you want to make sure your planes don't crash and passengers come to their destination alive and unharmed.


(1) what is the timeframe you look at? (I want LOTS of money THIS year, because I NEED a yacht THIS year to have a party with celebrities. How do you convince person like me to invest money in developing safety solutions?)

(2) profit = selling price - production\development cost - expected downsides of accidents(penalties, tarnished image). "Expected downsides of accidents" can be reduced by reducing risk, but also in some other creative ways (blackmailing, lobying, promoting the right candidate, marketing, rebranding, migrating to different markets, insurance, coverups. And lets not forget deals with friends: If I can win 5billion, I can allow my self to split it 100 ways and still end up with a nice big yacht).


> But isn't focusing on business and profits also focusing on safety of your products ...

In practical terms, it doesn't appear to work out that way.


The culture of company is much more than its CEO though. And it's the culture of Boeing that changed from an engineering culture to a profit-driven culture. This shift is pretty well-documented. It occurred with Boeing’s reverse takeover of McDonnell Douglas in the late 1990s. This new direction was in no small part the influence of McDonnell Douglas CEO Harry Stonecipher. The following are good reads on what exactly happened:

https://newrepublic.com/article/154944/boeing-737-max-invest...

https://www.theatlantic.com/ideas/archive/2019/11/how-boeing...


The Max was developed under James McNerney who is an MBA with no engineering background.

The max was developed and launched by Dennis Muilenberg. Muilenberg was President and then CEO of Boeing for 7 of the 8 years that the MAX was under development and launch. McNerney was only there for 4 of those years.

You can argue all you want about who shoulders more responsibility, but Muilenberg was an executive throughout the entire program, and more importantly, was the CEO who oversaw the decision for the certification of the MAX prior to first flight, which was the critically faulty decision.


Miulenberg became CEO in July 2015. The 737 MAX went into production in 2014 and had its first flight in January 2016.

Muilenberg became president in 2013, and the 737 MAX certifications happened in 2017, when Muilenberg was CEO.

For large aerospace projects, the critical decisions are made years before first flight, and most often even years before experimental production start. Judging from the timeline Mullenberg clearly inherited the messy decisions from his predecessor.

Though of course he would have had the knowledge to understand something didn’t smell quite right after. Whether he had the sole authority to order a delay or redesign in the intervening time is questionable. It may have been that he couldn’t wrangle enough support from the board to do something dramatic.


Exactly. Apple, Google, Microsoft, Salesforce, YouTube are all led by these MBAs and seem to be doing just fine.

If Boeing's products went down that frequently, I wouldn't fly.

Moral Mazes describes in detail how this happens. The book explains how managers of all kinds "milked" chemical plants, i.e. deferred maintenance to meet schedules and pocket promos, and then jumped the ship right before the plant collapsed. Boeing was likely no different: a clique of quick-thinking managers figured that they could push for aggressive deadlines, pocket nice promos and bonuses, outsource responsibility via committes of all kinds and jump the ship when the wreck was imminent.

The book even had a solution. These quick-thinking managers avoid responsibility (blame ability) like vampires avoid the sunlight. The corporate could implement a system to track responsibility, so it would follow smart assess in other departments and even other companies, but it of course would never do this because such a system would expose shenanigans of senior management. In theory, a regulator could develop such a responsibility tracking system and enforce it in public companies and federal contractors. That system needs to account for the fact that senior managers are experts in diffusing responsibility.


You're probably right but also missing the giant elephant in the room which is regulatory capture. aka politics.

This being a partial byproduct of the mass centralization (aka conglomeration) of most every big industry that started in the 80s, accelerating in the 90s, when globalization became a hot thing. And [insert massive finance company's hackery here].

Tons of these conglomerates have strong legacy gov connections and are often the only shop in town for critical industries and are treated like special semi-national bodies. This puts plenty of natural pressure on regulatory bodies.

Boeing is not the only one. This is a phenomenon wide across the western world. Plenty of this exists in Europe too.


Well, if I remember right, consolidation across the entire economy is at a record high.

In every sector, there's more regulation, much fewer & larger players. If the rot at Boeing is a symptom of this, we're in for a bad time: every firm across the entire economy is now larger and has fewer competitors than previously.


The mainstream and most-politically-accepted economics of the day in western countries is state-capitalism (the levels of state vs capitalism is debatable in various countries and is obviously never stable). I think this is what the standard downside of that economic system looks like in practice... plenty of regulatory capture + moral hazards due to low punishments when 'caught' + little if any competition.

Like most things in economics the best route is looking for the least-bad option. We will find out over time if the state-capitalism balancing act really is the best, assuming there are any realistic alternatives and/or the scales/ratios of state vs capitalism are meaningfully measurable.

This experiment is only decades old in the modern technological era and one could argue it has only really peaked in the last two decades, with ever more industries getting merged to this day (which Corona will accelerate no doubt, just like 9/11 did with the US defense industry).

The state/nationalism part of this means these potentially poorly run companies could stay propped up for decades, despite the industry's potential in other forms.

I recently spent time reading about some chartered airline companies from the 70/80s and their stories is probably the best example of this sort of slow march towards industry conglomeration, with plenty of state involvement and protection. It probably provides a good timeline to base this stuff on and at a minimum plenty of analogies.

One example (see History): https://en.wikipedia.org/wiki/TUI_Airways


> Take a look at Apple’s functional organizational structure for an example of an engineering company done right.

I don't have an actual refutation here (and certainly don't want to start some kind of Apple flame war) but something about this doesn't seem quite right.


Here’s a great article about their organizational structure: https://hbr.org/2020/11/how-apple-is-organized-for-innovatio...

Like their products or not, Apple has been extraordinarily successful both in terms of sales and critical reception of their products compared to most companies.

They have flops too (Siri, HomePod, others), but are mostly successful. The recent buzz about the M1 chip is a perfect example of their industry-leading engineering.


Is the M1 that revolutionary? It seems more like the culmination of technology that has been around for years. Rosetta 2 is the most impressive part, and even that is kinda the most obvious method of x86 emulation that doesnt suck

It looks like an implementation of TSMC's process and similar chips will be available to everyone soon enough.

Think about the quality of their hardware products.

Do you mean the 2019 macbook pro that can't use the iGPU for multiple monitors so it overheats every time I plug in an external monitor? Or do you want the older macbooks that the keyboard would break from dust exposure requiring the entire laptop to be replaced?

Or the airpods with non-replaceable batteries so you have to get new airpods for $49+ a piece every couple years?

They aren't perfect and IMO haven't been in a long time. That said, the build quality is good, and I chose to get a macbook as my work computer as a software developer and don't regret it, but I wish people would stop putting apple on a pedestal as the example of perfection.


All products have defects, and the Apple hardware defect rates are some of the lowest in the industry. That doesn't change their commitment to product quality and service, and how it compares to their peers. Take a look at eBay and compare any Apple products resale values to any other (and no, it's not just about brand).

Three in a row for me. I experience the exact same problems OP describes with three MB Pro laptops since 2018. More than 7000 bucks down the drain not calculating the 2100 for repairs.

The company I work for had 1-2 percent of devices in repair every week.

Not sure if this is just a strange coincidence, but I know of at least one other company in our town with the same scope of the described problem.

I know this isn't a popular sentiment with some people, but from experience, I am done with Apple after 28 years of experience. My first was a beautiful Macintosh Classic I still have. Together with a SE 30. Somehow I miss my pre 2018 Macbook Pro.


What's your source for the low defect numbers?

Consumer Reports ~2015 (little dated and wouldn't include latest gen laptops) https://www.computerworld.com/article/3012211/apples-macbook...

This site includes a few different sources, and shows more or less the same reliability: https://www.geckoandfly.com/6311/the-most-reliable-laptop-su...


I wonder if theres a comparison of device by price point, because i bet apples advantage would be eaten up if they did

People still buy over a decade old thinkpads.

Apple has the highest customer satisfaction levels in the business.

Now the butterfly keyboard issues have hurt MBP customer sat levels, but not enough to fall to Lenova/IBM levels.


Are claiming the lack of replaceable batteries stopped the AirPods from becoming the biggest selling headphones in the world?

Because they are.


They prioritize form over function in their Lightning cables. Inadequate strain relief is a far more consequential problem in an airplane wing. I can't see Apple practices being applicable to mission critical fields like transport engineering (with high regulatory burden). They're different worlds. Apple also simply has a huge amount of money from hardware and software (App store etc.). I suspect they're far looser with resources for their teams than Boeing, whose mechanical/aerospace engineers have salaries a fraction of most Apple engineers.

Edit: Overarching point is that Apple has a focus on aesthetics that is far less important in aerospace engineering, and has no experience on ensuring human safety.


Apple isn’t perfect, no one is.

But it’s better than almost everyone else, including Boeing because it does one thing very well. It doesn’t ship products unless they meet a high bar. It never puts schedule first over product quality.

Example: original iPad was canceled by Steve Jobs because he didn’t think it was good enough. Instead he had the team enter the Apple phone competition, where it best out the iPod team with its design for the iPhone. Five years later they got to apply all their improvements to make and release a much better iPad.

Apple canceled their AirPower charging mat rather than release something that didn’t meet their standards, even after pre-announcing it.

When I ran an product development organization, I made it clear that QA wasn’t responsible for our schedules. Sure they needed to test well and quickly to ensure that Product Management had the necessary info to make good release decisions. But their job was journalistic, to fairly and honestly report all issues. It was up to the engineers to find ways to meet quality goals in our schedules.

Boeing had test pilots misleading regulators to hide known issues. That’s the exact opposite of a test Organisation should be run.


Yes, but they make consumer products and not airplanes. Why would you assume they’d build an airplane the same way they’d build a cheap cable?

> Think about the quality of their hardware products.

I thought about their butterfly keyboards and didn't want to think further.


I'm not sure if the years of poor and failing keyboards on the MacBook or the ongoing stage light screen failures due to the poor decision to permanently connect the ribbon to the screen (turning a $5 repair into a $500 repair) bare this out.

AMD has really shown the way in this aspect. They have a lady who was a PhD in a Semiconductor Electronics (I forgot what the exact name was) and she's worked as a techie and as a manager for a long time to get a grip of both. The results speak for themselves.

Modern MBAs (at least the one I'm doing) very much take care to focus on factors beyond solely profit. Examples are the concepts of business sustainability and the different levels of maturity organisations can occupy within that, and the 'triple bottom line' (taking into account impact on society and the environment, as well as economic impact).

Awareness of these factors can go from simply recognising them (lip service), to defining business performance by them (living and embracing them).


>Examples are the concepts of business sustainability and the different levels of maturity organisations can occupy within that, and the 'triple bottom line' (taking into account impact on society and the environment, as well as economic impact).

If someone doesn't pick these things growing up, a course in grad school isn't going to change their motivations.


As if MBA and accountants are specially prone to greed.

Greed can be found in any person regardless of his profession.


MBA programs self select for greed.

>Take a look at Apple’s functional organizational structure for an example of an engineering company done right.

Apple has to be one of the worst examples - both about not being run be MBAs and quality engineering.


There was an article about how, when Boeing bought out Mcdonnal Douglas, executives from the latter company took control and changed the culture to focus on profits over engineering.


> An engineering company should have engineers as managers from the bottom level all the way up to the CEO.

Sun Microsystems had this. Didn't work too well for them.

It's not at all as simple as this.


Disagree with solely the CEO but in general Boeing’s leadership seems to be somewhat disconnected from their actual product. Just take a look at Boeing’s HQ in relation to where they actually make things. Boeing’s c-suite is now in Chicago whereas their engineers/plant workers are on other ends of the country (Washington and South Carolina, mostly).

Considering how hard people on this website try to push remote work it's funny how a broad consensus has emerged that Boeing putting workers and management in different offices is responsible for their cultural failures.

One could argue there are differences between us mere code monkeys playing with fancy gadgets and a company in charge of the lives of thousands of people every single day.

There are code monkeys working on safety-critical systems too.

All things considered, there is a stark difference between a job whose primary focus is to build a physical thing and a job whose primary focus is to build a digital thing.

Boeing isn’t a remote company, so it’s not a contradiction.

If you read into most of the arguments for remote-friendly workplaces, step one is cultural changes.


>An engineering company should have engineers as managers from the bottom level all the way up to the CEO.

So should our government.


As technical people, we tend to have a bias that we're better equipped to understand things than anyone else, but that's often not the case. Many, many of the things out there don't just require the ability to use Google and do math, but also those things engineers are notoriously bad at like understanding human systems, compromising, and communication. We also don't have any particular advantages in knowing things outside our domain of expertise. An all-engineer government is definitely not an ideal.

I dont think that techies are outlier here. Despite the profession, most people think they can do their boss's job better.

One thing to keep in mind is a lot of engineers don't want to work in management and/or don't have management aspirations. Steve Wozniak is a pretty good example.

Personally, I work as a chem/materials engineer if I were to move into a management position I'd have to give up doing technical work and step into a more administrative role and that is something that does not really appeal to me.

I think similar thing for politics, there doesn't tend to be many scientist or engineers running for government because that sort of thing isn't very appealing to people like me.


“I’m smart enough to program a computer and that’s really hard so anything else would be easy for me to do.”

Are you trying to say that engineers are inherently more moral in their decisions?

The implication is that Engineers can manage an engineering product better than a career CEO. There are several examples of turnarounds such as AMD where technical CEO's delivered significant product and ultimately financial wins over organizations run by career managers.

Boeing's choice to pursue the Max vs. a new airframe was entirely motivated by perceived cost benefits and resulted in a flawed and delayed product. Had the decision makers had an aerospace background they may have made different decisions.


I was listening to an interview with AMD's CEO Dr. Lisa Su, and I was surprised at how casually she was using technical terminology while explaining complex industrial process optimization techniques her company was working on.

I was just so used to the top three or four tiers of corporate management having literally no idea what their company's engineering department actually does day to day. Hearing a CEO knowledgeable about their main product line was a bit of a shock.

But it shouldn't be a shock! It should be the norm.

I work for a small IT-only company. If I start using "technical" terms like "IP address" with our CEO, his eyes glaze over...


I've never met a CEO that doesn't understand their main product. Sometimes, the main product isn't what the employees and engineers think it is. Sometimes that product is the company itself.

> "Sometimes that product is the company itself."

I suspect there is a cause and effect relationship here, a CEO with an M&A background will always see the company this way. A CEO with a product background may make the companies customer's/product/team more valuable to an acquirer.

The M&A culture of the 80s was pretty toxic, businesses that financed their own expansion/revamp in lean times were looted for their bank accounts during deep recessions. The "survivors" now run with only a few months in the bank, making the whole economy more dependent on financial liquidity. We'll probably never know whether financially lean enterprises were more capital efficient or just riskier.


The motivation was not perceived cost benefits, but actual costs of their customers. Retraining pilots and qualifying them would have meant new operational costs for airlines operating the 737 Max negating the benefit of the more efficient bigger engines. That pushed Boeing to try to make the Max series fly "like" a regular 737. Problem is that they couldn't hide the fact that crappy software written by $7/hour coders is a poor substitute for an airframe scaled up to match the bigger engine size. Deaths were inevitable when they decided to lie to the pilots about what was actually going on. Done correctly, the software fix could have been workable, but the design of MCAS was piss poor.

The cost of retraining the pilots was something that's been shouldered dozens of times in the past. I'd imagine that an Engineering CEO making a bold bet that software could avoid the retraining need would have been both more ambitious and smarter about the change. Why not build the right airframe and give the plane flight modes to emulate the characteristics of various 7xx aircraft that pilots were familiar with?

Good point. I'm truly curious how far up the chain that decision went. Knowing how software gets written, I'd be willing to bet there were quite a few informal discussions about the various trade offs of the possible approaches taken to meet the design requirements.

I think he is saying engineers care more about engineering, just purely because they enjoy and take pride in their own work. Whereas MBAs don't have much to be proud of, except short term profit goals.

Training certainly influences execution and only one of these groups was trained for financial engineering.

No, but extra prod fires => unhappy engineers after and before the incident, vs unhappy managers only after.

The incentives just align better.


Engineers tend to look at technical, rather than business, considerations first.

The Volkswagen emissions scandal was done by engineers.

Er....?

The implementation sure was. As directed by company management + execs.


The management and executives were all engineers too.

They certainly don't go on counting pennies

I always wonder why executives earn so much money when there is no responsibility on them when things go wrong.

I'd like to see in jail those who make decisions, and earn salaries and bonuses accordingly to the responsibility they have.

Earning tons of money and having no responsibility when things go south makes total no sense to me.


"I always wonder why executives earn so much money when there is no responsibility on them when things go wrong."

Because they can get away with it, the political, cultural and legal environment they operate under allows it.

I also agree it makes no sense, either personally or from the standpoint of society at large.


I was going to say the same thing: "because they can".

> > wonder why executives earn so much money when there is no responsibility on them when things go wrong

It's not a logics based world we live in, but rather bipedal animals doing what they want and can :-/


> I always wonder why executives earn so much money when there is no responsibility on them when things go wrong.

The word you are looking for is "oligarchy".


> there is no responsibility on them when things go wrong

Legal responsibility? Other than that, I've seen executives held responsible just as much as non-executives in my career, from firings to demotions to "transfers". It's not a magical suit of protection +3.

> I'd like to see in jail those who make decisions

Then no one would want to make decisions, other than psychopaths. No thanks. It's unrealistic to think everyone can know the consequences of every decision they make.


> Then no one would want to make decisions

That's lazy. We hold individuals accountable for the choices they make. If you get behind the wheel of a car while drunk and get caught, you get in trouble. If you kill someone due to negligence or intentionally, you get in trouble.

These execs knowingly cut corners and then conspired to cover their asses when things went wrong. This is not an edge-case where something went horrifically wrong that no one saw coming. Warnings were raised and processes in place to protect consumers were ignored. They should be jailed.


"It's not a magical suit of protection"

I kind of think that just getting fired for being partially responsible for the deaths of 100s of people is definitely getting off easy. They got people killed and caused billions in losses for other companies. Someone that steals a car goes to jail for up to 10 years. Which person had a bigger negative impact on society?

"Then no one would want to make decisions, other than psychopaths. No thanks. It's unrealistic to think everyone can know the consequences of every decision they make."

They build aircraft that fly at 30k feet stuffed full of people. Without actual legal consequences beyond docking paychecks, it is a recipe for disaster. How exactly are we supposed to stop the literal gambling with peoples lives because of the potential for a large upside and with the only downside being that they won't make lots of money (so, they just end up even and don't actually lose anything). Las Vegas would go bust in a week with rules like that.


I know someone who worked in this field (managing executive pay). The answer is "because they can".

According to the report, upper management wasn’t at fault, the primary blame falls on two senior test pilots who lied to the FAA to keep MCAS documentation out of the manuals.

Now who pressured the pilots to act that way, who knows?


Could this be a side-effect of the concept of legal personhood of corporations? I wonder - shouldn't criminal liability always stop at the desk of a human person, preferably the person who signed off on the decision?

When I took engineering ethics in college, that was my understanding. You sign off on the bridge and it collapses, you are responsible for the bridge collapsing.

The legal personhood of corporations is a misleading myth. Corporations exist so groups if investors can invest funds in a venture without incurring liability fir its actions or incur indebtedness from its borrowings.

The employees, including execs, still have liability. Assuming prosecutors have the motivation and guts to charge them.


> I always wonder why executives earn so much money

Well connected?


You need a CEO to run a business with hundreds of billions in revenues, and tens of billions in annual profits, where every executive decision has hundreds of millions if not billions of dollars in impact to the companies value.

Are you going to cheap out and hire a lesser candidate to save a few million?


There are some very poorly run companies about the place ...

Pro sports teams spend millions every year to measure potential draft picks to the tiniest level in speed, strength, intelligence and mental qualities, and yet every year spend millions on picks that fail. But statistically, first round picks perform far better than second round picks, and second better than later round picks, so their analysis is doing far better than random selections.

That it’s not an exact science and frequently fails doesn’t mean you shouldn’t do your best to get your best candidate.


So you’re saying that senior management is selected based on meritocracy ... right ...

Whataboutism blah blah blah.

And like that, you whole argument folded like a wet paper napkin.

Stalin had that, turned out to not be very effective.

Because the job is to cash the checks, sign off on the bad decisions, squeeze the bottom line and then "resign shamefully" when things go wrong with a giant golden parachute.

> The department ultimately determined that an independent compliance monitor was unnecessary based on the following factors, among others: (i) the misconduct was neither pervasive across the organization, nor undertaken by a large number of employees, nor facilitated by senior management;

Are they for real?? Exactly whose decision was it to present the plane as another 737 to avoid a full recertification? Some junior guy decided the strategy instead of senior management?


Unless decision-makers go to jail, this means nothing. Execs should not be able to buy themselves out of jail.

We should probably consider charging and trying them first.

That's a great suggestion. Unfortunately, press releases like TFA are seldom followed by criminal charges against executives. This is the big announcement, right here.

First you need to find them. It's not like those in charge leave paper trail that could pin responsibility to them.

You’d be surprised how often they do.

How do you prevent the execs from delegating decision making (on paper) to engineering, and then forcing them to make certain decisions?

C-levels should be personally responsible for the decisions "made by the corp". They will need to obviously add checks and verification to what happens inside the company and could not claim anymore they "didn't know" because it would be explicit that their role is exactly to know and respond for it. Simple as that

"Knew or should have known". If you're a C-level exec, and you don't know, it's your fault that you don't know.

This already occurs with SOX, it's definitely a workable model for processes and decisions not just impacting the finical statements.

In theory SOX only has benefits, but in practice the compliance costs due to it are very high. I'm sure some of that is for the better (bad oversight before SOX) but I can't imagine the insane paper tigers that come out of it are a net positive in the end.

One delegates authority, not accountability.

Looking at chat records.

There are already enough laws to put top executives in jails, it's just that the laws aren't used.


Don't forget about the regulators. Homicidal negligence.

At the very least fine could a MUCH higher percentage of annual profit. That would at least give the company incentive to fire people.

The number here ($2.5 billion) seems to be ~20% of Boeing's 2016 EBITDA (earnings before interest, taxes, depreciation, amortization) and ~18% of their 2017 EBITDA. It's ~700% of their 2019 EBITDA (they had a pretty bad year revenue-wise in 2019) and I expect they will have a significantly negative EBITDA for 2020 (it's -$4.6 billion for the 12 months through 2020-09-30).

Looking at historical trends at https://www.macrotrends.net/stocks/charts/BA/boeing/ebitda it looks like it's something like 25% of an eyeballed "average year" for Boeing.

I suspect you're right that this is a little low given what was going on here.


Who would get fired though? It seems that it is more likely to affect those lower in the hierarchy.

And which executives are going to be criminally charged? Boeing has $77B in revenue, this is a negligible 3% fine. That's like the average American with a $36,000 revenue receiving a fine for $1,080.

I hate to note this, but... that 1k will hurt the average American more than BA losing 2.5bn

Are such fines anything more than standard operating expenses for these companies at this point? There was fraud, 2 planes crashed, hundreds of people died, and yet no one is facing any real consequences and these planes are already back in the air.

Corporations are safe havens for corrupt and greedy folks. They can do whatever they please (almost) and suffer no consequences. If corporations are people they should be treated as such; not just with comical fines but with prison sentence. I don't see this happening any time soon though, as they are usually in the pockets of politicians. Expect no change until it is beneficial to corporations and politicians alike.

Pretty much. I'd say that corporations are a lot like those bitcoin mixers that mix up many money streams to diffuse liability. Corporate managers are driven by greed and fear: greed is the active force that makes the company profitable and the fear of being found out keeps everyone in check.

Anyone know how this compares to the cost that Boeing would have paid for doing the 737 "the right way" - with real pilot training along with more testing and regulation? This fine is only a small part of the cost to the company of course.

Don't forget that's only the fine. There was also the cost of contract breaches/compensations, the public image damage, the costs for the victims, the cost for having multiple deliveries delayed, etc

In essence, doing the right way would have been cheaper.


The second paragraph of the article refutes your initial statement. It contains "Boeing will pay a total criminal monetary amount of over $2.5 billion, composed of a criminal monetary penalty of $243.6 million, compensation payments to Boeing’s 737 MAX airline customers of $1.77 billion, and the establishment of a $500 million crash-victim beneficiaries fund to compensate the heirs, relatives, and legal beneficiaries of the 346 passengers who died in the Boeing 737 MAX crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302."

Almost. This is not as clear cut as it seems.

Because it's saying "criminal monetary amount" but I'm not sure this refers to all compensations. Maybe it's only compensations in the US?

A lot of talks with customers were confidential and probably did not involve only monetary compensation


Considering this isn't a very high percentage of their revenue, it looks unfair. But this is almost the price of the MAX program as a whole (according to Wikipedia). That's not too far of a completely new plane, the Bombardier CS being $7B.

A text book example of money laundering, revolving door if you prefer the politically correct vocabulary, between elite individuals over the obfuscation of "corporation" and "administration". Similar to "high level" coding languages.

My question, are there still dumbstruck individuals to the point of not noticing?


Here's a company that has enjoyed the largesse of the US public for decades. And this is how they repaid us for making them 'too big to fail'? I recall a people that at least strived for a moral compass.

Now, if can only get the similar teeth to address online privacy violations.

Not exactly what you asked, but the neo revision of the A320 is set between one and two billions euros.

True, but the Neo program was a bargain for Airbus in some ways. The platform lends itself to such improvements.

It is possible the incoming Biden administration will use anti-trust against big tech and could implement laws to strip out the ability to do bulk data collection.

As if the victims havent been through enough their attorney also embezzled money to fund his/her lifestyle on real housewives of Beverly Hills.

https://www.ft.com/content/1afbf70b-752a-4a91-8e2a-afc74a8e3...


Just curious, are companies that conspire to fraud allowed to continue working on projects that require clearance?

So conspiracies do exist.

only those which get exposed.

BA has all the tell tale signs that it will go into decline. I see it as an company similar to IBM or GE that just slowly withered away as competitors took the market share.

Will any of this money go to the families of the dead?

" Under the terms of the DPA, Boeing will pay a total criminal monetary amount of over $2.5 billion, composed of a criminal monetary penalty of $243.6 million, compensation payments to Boeing’s 737 MAX airline customers of $1.77 billion, and the establishment of a $500 million crash-victim beneficiaries fund to compensate the heirs, relatives, and legal beneficiaries of the 346 passengers who died"

While the actuarial measure is cold and doesn't capture the unquantifiable loss, the crash-victim fund is only about 14% of what actuaries might assess.

https://www.npr.org/2020/04/23/843310123/how-government-agen...


Sadly, victims in poorer countries are considered worth less. See also: Union Carbide.

The Ethiopian Airlines flight had plenty of diplomats, UN staff etc on it.

https://en.wikipedia.org/wiki/Ethiopian_Airlines_Flight_302#...


How we value people in other countries is up to us.

SMH.... airline companies get more (for the "inconvenience", I guess) than the people who lost loved ones.

Is this for the first fraud or the second?

Boeing:

- Responsible for 2 plane crashes that killed 346 people

- Engaged in a government cover-up and was charged with criminal fraud conspiracy

- Fired CEO left with $81 million exit package

- No one went to jail

*Fined $2.5 billion - 2% of annual revenue


I feel like something the American Left and the American Right could agree on is that white collar criminals should face the same kind of tough law enforcement consequences as regular street criminals. How would one start pushing for such legislation?

Feel like left or right, most elected US officials are corporatists and not willing to bite (or even upset) the hand that feeds them. That said, the right is decidedly not in favor of stronger enforcement/regulation.

White-collar enforcement is at an all time low: https://www.bloomberg.com/news/articles/2020-08-10/trump-ove...


> most elected US officials are corporatists and not willing to bite (or even upset) the hand that feeds them

This seems like a clear fact, and yet many will call you a conspiracy theorist for pointing out the obvious. It's probably a symptom of the tribalist aspect of red vs blue. People need to be de-programmed of the team sports to finally realize that their "side" is beholden to corporations and not the people. Only then will we see real action to criminalize white collar behavior.


Ideal scenario for free market capitalist.

Low regulations AND low government involvement.

So lots of people can build widgets. Companies that do a bad job find they have no customers.

New companies pop up, do a better job and things get cheaper and or better.

High regulations means that new companies need massive capital to enter the market. So much so that no one bothers.

When only 1 company builds a widget. Well odds are it’s going to be low quality and expensive.

Now this all has to balanced that you don’t massive unsafe planes flying around by companies that have no reputation to preserve.

Whoops, we took out the Golden Gate Bridge, again. We will go out of business and company mark 3 will try again


747s != Widgets.

Huge natural barriers to competition.


For most people, white collar crime is relatively abstract. Something to be outraged about when you hear it on the news, but not something that you can feel affecting you personally. Blue collar crime, especially the kind that occurs at a personal level, is more visceral. People really want to see those people kept away from them, more than they want to see rehabilitation. Whether rehabilitation would lead to better long-term outcomes gets ignored.

The Boeing situation is a little different, of course, since it really did kill a bunch of people.


>since it really did kill a bunch of people.

No one can prove a specific Boeing executive's actions caused people to die. There would have to be an email from the executive stating

"I think we should cut costs here and here and I acknowledge this may cause x% of passengers to die".

And they're not going to put something like this in an email either:

"Meet with the guy that used to work for us who now works at the FAA and get him to waive or lower so and so standards so this plane can fly and we'll owe him".


Perhaps one of the risks that executives at a high level (i.e. named corporate officers) have to bear in return for their absurd salaries is criminal liability when the corporation commits a crime. This might help align the incentives.

I'm pretty sure that they don't actually agree on that.

If you ask an average American from either side they will probably agree that white collar criminals should face tougher consequences. If you ask an average politician from either side, they will probably agree on the opposite.

Or won't agree on the definition of white collar crime and if push comes to shove to implement a low they'll likely leave some loopholes, maybe not intentionally, maybe so and the big corporate criminals will find ways to come unscathed

This is the nature of our "democracy".

> How would one start pushing for such legislation?

Lessen the punishment of street criminals.


As long as we still punish them enough to make engaging in petty "crime with a victim" not worth it.

None of this SF bull-crap where we basically don't punish the bike thieves, shoplifters and porch pirates but still find people hundreds of dollars for doing donuts in empty parking lots or not obtaining a permit before building a deck on their own house.

I'm fine with not doing squat to deter victimless crime but we can't allow the punishments for crime with a victim to be so low that it's more lucrative than a real job even after being caught many times.


high prison sentences dont deter crime, people just assume they can get away with it

And what would that solve? White collar crime won't be affected at all

That would solve the problem of punishment disparity between street- and white-collar- crime.

I care more for a disparity between criminals and non criminals to be honest. White collar criminals dilapidate enormous amounts of money but street criminals could directly be violent towards whom they rob. (and being robbed, asides from the financial loss, it often leaves some psychological scars).

I see your point and it's hard to imagine that a person stealing say, some food, because they're starving may do time in prison and yet the author of a multimillion shenanigan goes scot-free, yes that's not fair at all, but lowering the punishment for street crime will make us average people even more miserable. The only rational thing to do is start punishing white crime seriously so it is a huge deterrent. Currently white criminals who get convicted stay in prisons whose conditions are better than the situation of a lot of struggling full time working Americans. I find that appalling


Politicians are unlikely to because they can better relate to white collar criminals than the poor.

The only solution to this is electing more people from diverse backgrounds (inc. class, race, gender, etc), but unfortunately money is extremely effective at winning democratic elections, and those who have it aren't from a diverse background.


>Politicians are unlikely to because they can better relate to white collar criminals than the poor.

It also has something to do with plausible deniability and inability to prove intent with white collar crimes.

How would you be able to prove someone intentionally mis-valued assets? Cut costs specifically to bolster one's own income and not benefit the other shareholders? Hired someone in exchange for a favor or possible future favor? Fired someone for stepping out of line?

Plausible deniability is also the reason for "productive" in person lunch meetings and golf outings. Not that there aren't other positive aspects of in person conversations, but lack of a permanent record is one of its aspects, and can easily be used to cause harm.


As someone recently described it to me: lawmakers vote for punishments they can't envision themselves ever receiving.

Too distracted fighting the other, "wrong" half of the working class :-)

Meanwhile the country is literally controlled by the companies in question.


By taking away presidential pardons.

For better context, Boeing's annual profits appear to typically be closer to $10B to $20B[0] - with 2019 and 2020 being anomalies for obvious reasons. $2.5B and no jail time still seems laughable in that context.

[0] https://www.macrotrends.net/stocks/charts/BA/boeing/gross-pr...


So, $7.2M per life lost.

For what it's worth, this is right in the middle of the "Value of Statistical Life" used in public policy decisions, $4M to $10M.

https://strata.org/pdf/2017/vsl-full-report.pdf

At least one of the states has a statutory value of a life, but I'm afraid I can't find it now (don't Google it, you will be fed into the intake funnel for wrongful death lawyers), but I think it is around $7M.

That said, $500M is for a victims' fund, about $1.4M/death, the rest appears to be a deterrent to deceiving regulators


I guess I could bear this point if there was a commitment to dedicate this money to something that can actually save orders of magnitude more lives - though even then it's highly debatable. Thing is, is there at least such a promise?

Those dead people are gonna be living it up on that!

Rather than fining the company, fine the individuals responsible.

Executives looted Boeing by cutting costs on everything, pumping short term profits, pocketing massive bonuses. Zero skin in the game for them, massive cost to their employees, shareholders, and the American public.

They've already laid off 26,000 people in recent months - after spending almost all of its available cash on stock buybacks over the prior decade.

Src: https://edition.cnn.com/2020/10/28/investing/boeing-job-cuts...


There's nothing wrong with buybacks, they're tax-friendly dividends. They shouldn't be shamed for returning value to shareholders which it seems you're implying.

What should be shamed is a tax code that differentiates dividends and buybacks.


I mean, they very much should be shamed for that when viewed in context with the rest of their awful management.

In a vacuum, sure, it's not a bad thing to return profits to shareholders, but that's only like 1/10th of the story here.


Alright. Then any company that participates in share buyback obviously shouldn't get any stimulus money, then right? Because if they have that much cash on hand, they should give it to shareholders instead of investing in the company or saving it for lean times.

Correct, the government should generally not hand out stimulus as free money. Forcing the company to issue new stock and sell it to the government at market rate achieves all of the positive effects of stimulus, while also eliminating the perverse incentive to operate with no safety margin in the hopes of a bailout.

Sadly, they aren't the first, and certainly won't be the last.

Silicon Valley isn't immune to the same virus.


> Silicon Valley isn't immune to the same virus.

I am not saying this to be snarky, but is it not the generally held belief that VC stands for Vulture Capital?

I realize not everybody shares this belief, but I think a lot of people do - maybe even most.


> is it not the generally held belief that VC stands for Vulture Capital?

For what it's worth, I've been reading HN for over a decade, and am a co-founder of a now almost decade old startup and have never seen this phrase

But maybe I'm just one of today's lucky 10,000

https://xkcd.com/1053/


I usually see Vulture Capitalism used more in reference to PE, where mature but distressed firms are purchased, with a focus on "cutting costs," and then chopped up and resold after being ravaged. Venture capital, on the other hand, is almost the opposite, as it cares little about costs in the pursuit of growth by any means possible.

There's something more tragic than the shareholder's losses: 346 people have died in two Boeing 737 MAX crashes.

Yeah, but how many of them were Americans?

I can't tell if this is a serious question or satire, but why in the ever-loving fuck does it matter their nationality?

Of course it is satire. The top comment is only talking about 'losses' of Americans.

All while ~350 people died. I find it a disgusting comment.


Definitely satire.

It's a serious satire. That number of citizens killed would definitely warrant jail time.

It just happened that they were non-Americans. Americans could have had the same fate on 737 MAX. It's not like those non-American pilots were stupid or anything. They were simply hidden some information about operating the plane.

Aren't shareholders responsible for this as well? In the end, the buck stops with the owners of the company. We feel bad blaming them, because in most cases "them" is "us"--various institutional investors we've delegated responsibility for handling our capital--but active investors could have defended against this kind of failure.

What was the massive cost to the American public?

USTR is basically Boeing's private agent, even though that's a USA government office. That has cost USA consumers billions. Also we used to have an FAA we could trust, and now we don't. Also as sibling comment observes they get vast portions of "defense" spending.

Perhaps it's yet-to-be-realized. Boeing is a major defence contractor and "too big to fail."

Ultimately they'd get a government bailout of some sort if push came to shove.


$2.5B could have paid for a lot of R&D on a clean sheet design that wasn’t fatally flawed.

True but the airlines don't seem to want a clean sheet design. They want to buy new airplanes without having to invest in retraining employees or updating infrastructure. FAA certification requirements also impose a major obstacle.

So, no jail time for the executives who made these decisions and "criminal misconduct"? Amazing.

It’s hard to put a company in jail... we still have to wait to see if there are charges against Boeing executives

I've never really understood why you can't put a company in jail. If a person can be removed from society and their ability to act freely can be removed, why can't you simply suspend their corporate charter for a period of time?

How would you suspend a company?

It would have to close all offices/manufacturing sites and fire all employees.

Suppliers and customers would have to be compensated, which would also probably result in lots of lawsuits.

It would mean bankruptcy for most companies out there.

Suspending is more or less equivalent to just shutting it down.

But yeah, a 2.5 billion fine is not much more than a slap on the wrist for a company with a revenue of 76 billion (2019).


>It would mean bankruptcy for most companies out there.

So not much different than when a person is imprisoned. Good luck not getting fired and having debts rack up.

Such an existential threat seems like a very good way of scaring corporations into compliance (well, among other things).


This was my thinking exactly. The point of establishing a formal punishment for criminal business activity is not to set up one that business aren't terrified of. Quite the opposite - it needs to be a very real, very scary source of motivation to do the right thing (since morality alone clearly isn't sufficient)

But a companies "imprisonment" affects many more people.

Employees out of a job , suppliers losing contracts, customers never getting what they might have already paid for, creditors losing the debt, share holders lose all their investment.

Especially with a huge corporation like Boeing with 160k employees and billions flowing in and out, the effect would be huge.

Like I said, I agree there needs to be some way to punish, but just shutting it down would punish a lot of parties that aren't not responsible.


I'm not the OP but ...

> Employees out of a job , suppliers losing contracts, customers never getting what they might have already paid for, creditors losing the debt, share holders lose all their investment.

This is what bankruptcy proceedings are for. A similar procedure can be made up for a "corporate death penalty".

>Especially with a huge corporation like Boeing with 160k employees and billions flowing in and out, the effect would be huge.

If the government was doing its job, corporations of this size should not even be allowed to exist for precisely the reasons you mention. But since anything goes in corporate America, here we are.

> Like I said, I agree there needs to be some way to punish, but just shutting it down would punish a lot of parties that aren't not responsible.

I would argue that people being indirectly hurt would be a good motivator (or reminder) for people being more picky who they do business with. If you don't learn your lesson the first time, then being burned multiple times will (hopefully) get the message across.


When a person is jailed it usually means they default on their lease, which may result in a lawsuit. They lose their job, sometimes their marriage. They can't see their children. When they come out, they often are left with no possessions and dim job prospects.

If we create limited liability entities that can be criminally charged, they should be treated analogously to a person, or their corporate officers or owners should stand in the company's stead. Right now, corporations have an unprecedented ability to simply pay a large fine for a murder conviction. That is not an option for an individual convicted of murder.


Perhaps transferring custody/ownership to the state?

A better option would be just to break up the company. Companies of this size probably should not be allowed to exist in the first place.

Which state officials would be competent to run a major avaition, defense, and aerospace company?

Perhaps forcing a new exectutive staff and/or board in some way, but don't see a literal state takeover ending well.

Oversight and managment/operations need to be separate. This mess happened partly because Boeing was given too much leeway in performing their own oversight.


> I've never really understood why you can't put a company in jail

Because...it's an abstraction that is not physically embodied and can't be imprisoned.

> a person can be removed from society and their ability to act freely can be removed, why can't you simply suspend their corporate charter for a period of time?

Suspending a corporate charter isn't equivalent to jail, it's equivalent to a reversible death penalty; the corporate charter is the source of legal existence of the corporation. Without a charter the corporation doesn't exist, can't be subject of legal action, can't own property, etc.

I'm not really convinced that that makes any sense as a punishment (or even that temporary impairment that would be more analogous to imprisonment would.)

People can be remediated by that kind of punishment, maybe, but abstractions like corporations probably cannot. Better to either dissolve them or exclude the bad individual actors from them and let them continue.


Well, "jailing" a company by suspending its operations is more like starving a living thing. That'd be more like a death penalty.

I do believe if we had any social imagination at all we could think of many many ways to materially punish bad actors. Like forcing a negative dividend, punishing/fining executives or board members personally, etc. People who own and control corporations need to have some skin in the game. Fines that are expended (or worse, appealed in court and subsequently never paid) are, evidently, too far removed.


Take a look at the defense fleet that Boeing supports: https://www.boeing.com/defense/

At the end of the day you have to punish a human. And following your suggestion would punish a lot of uninvolved humans.

Companies go bankrupt all the time and we don't worry about the workers (unless they are 'too big to fail' banks). It would change workers relationships with companies a lot and would likely encourage companies to break themselves up into parts. Might be good anti-monopoly move?

Innocent people are affected when almost anyone is sent to jail. Families and friends and dependants and so on.

The bigger and more important you are, the more people are affected by both you breaking the law and you being punished with imprisonment for doing so. A corporation is only different in scale.


And because jail is sometimes a bad thing that means we should keep doing the bad thing?

I have seen a couple cases of someone punished for a white collar crime sent to jail, effectively a vacation, while his family suffers terribly.

They punished the wrong person and I feel it's a travesty.

Jail is not the right punishment for nonviolent offenses.


You can put the executives into jails though. And the executives, not some low level manager as a scapegoat.

Certainly, but the person I was replying to suggested shutting down a company, rather than punishing execs.

It's doable too. The workers will lose job for sure, but many of them are going to find new ones, plus you extract as much $$ as possible from the company and exec to pay the workers.

> It’s hard to put a company in jail...

A "company" is a bunch of decisionmakers (execs). Start jailing them for this crap, and watch the rest of them fall in line. Losing your freedom for 15 years is a great motivator for good behavior.


You can actually, as long as you want to put a company out of business. You can revoke license, freeze accounts in banks, etc., like the US has done many times. But, it's Boeing, its own boy, so why bother?

Why can't we put the decision makers in jail? It happened with Lay, Skilling, Kopper, and Andersen. Hell, even Darby, Bermingham, and Mulgrew were extradited and imprisoned.

Take all the company's profits for 2 or 3 years. That's like a prison term. Or 50% of revenues, if they start playing funny games with income.

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