Actions have consequences. Boeing decided they wanted to focus on maximizing profits rather than allowing organic growth to follow on continued high quality engineering and services. In regulated industries, especially where safety is of utmost importance, this is exceptionally risky. They F'd around and found out, and imho the only solution is leadership and strategy changes to shrink their business and refocus on becoming an engineering-led firm cranking out superior products & services.
If we're being honest, I think the same is true of Google/Alphabet.
> Boeing decided they wanted to focus on maximizing profits
> The shareholders/board decided to gut the company so they can get richer with stock buybacks
Are you not saying the exact same thing, just being more explicit about the implicit "short-term" profits?
The shareholders/board (e.g. Boeing...the decision makers) decided to gut the company so they can get richer (e.g. maximize [short-term] profits, since the profits accrue to the shareholders/board) with stock buybacks.
that's ridiculous. it's like saying i separate myself the employee from the private individual receiving the salary. the two are the same. Just because the catholic church can get away with separating the same entity into multiple parts doesn't mean anyone can or should
I can connect to the sentiment of that, but it's a ridiculous thought in practice. The board, which can come and go, is not a personal guarantor. They have a fiduciary duty, of course, but they're not individually bringing in the billions of dollars of public investment in the public company they serve. And so why should they be personally liable for its debt? And even if they should, how could they be?
If a company goes bankrupt and it owes creditors, say, $10 billion, but together the board members have, say, $5 million in their accounts, creditors are still short $9.99+ billion. What value is there in that, apart from the moralizing?
> We would probably live in a better world, if it did.
The separation of 'natural' person [1] from legal persons[2] dates back to the Middle Ages and perhaps even Ancient Rome.[3]
It is how town/city charters were structured (the town is a legal person made of its inhabitants), as well as Medieval guilds (modern unions), universities,[4] etc.
Breaking down the legal separation could effect all of these legal entities.
Perhaps but there would probably be a lot less people starting companies if that was the case. LLCs were created for a reason and are effectively what this commenter [1] described.
No, it's like saying you the employee are a separate entity from the company you work for. To say that Boeing is increasing profits suggests that they are raising prices, doing more business, and/or cutting costs. The article linked by the person you're replying to posits that airlines are actively weakening their own financial positions to increase leverage for shareholders, which is a different thing.
They're separate, but one owns and controls the other. I'm not seeing how pointing out that they're separate (a point on which I don't believe anyone here was confused in the first place) adds anything material to this exchange. "Boeing decided something", in a business strategy context, is just shorthand for "the people who control Boeing decided something", because Boeing doesn't ever decide anything. It can't.
> because Boeing doesn't ever decide anything. It can't.
Something tells me the board & shareholders will disagree if any criminal investigations are open on these failures. When companies break the law the shareholders never claim its impossible decisions were made without them. [1] [2]
They didn‘t maximize profits at all. Why do people operate on the principle „if it is bad it had to be because of maximizing profits“? This seems to be much more about corruption and misaligned incentives as well as bigcorp bullshit-job rot. There is really only one thing that can cure this and that is more fierce competition
You're not wrong, but I would say it differently - the C suite has been focused on financialization - how to make their operations more tax efficient and make their SEC filings and shareholder meetings look good.
So they spin off core manufacturing to a supplier and then squeeze them for pennies instead of concentrating on operational excellence and quality.
They whip their test engineers until they pass a product instead of learning lessons.
Wait what. I'm sympathetic to the notion that not every Bad Thing is because of "maximizing profits", but in this case you can point to incredibly specific things, done to maximize profits, that directly caused this crisis.
After acquiring McDonnell, Boeing went on a spree of divestments where parts plants that supplied them were spun off into independent vendors. One of the biggest of these is Spirit Aerosystems, which provides the fuselage assembly for the 737.
The divestments were specifically motivated by improving short-term profitability of the company, in the classic "sell it and rent it back" mode that's particularly in mode with private equity.
By all accounts quality control at Spirit Aerosystems has suffered since, with Boeing having relatively little leverage in improving this state of affairs (one may argue that it's not terribly interested in improving the state of affairs).
As far as we know the aircraft that kicked off this crisis was delivered from Spirit with an incorrectly installed plug door (more specifically, the bolts that secured it from opening were not installed at all)
Sure, not everything is corporate greed, but there's a really bright and direct line here between the financialization of Boeing in the mid-00s and this specific crisis.
>After acquiring McDonnell, Boeing went on a spree of divestments where parts plants that supplied them were spun off into independent vendors.
This isn't default bad. Do you build everything at your company, or buy some things? Specialization can be a boon.
>with Boeing having relatively little leverage in improving this state of affairs (one may argue that it's not terribly interested in improving the state of affairs).
One might argue that Boeing isn't interested making sure their planes are safe? Absurd.
There is something different that happens in a vertically integrated engineering firms. In the event of a critical defect - very senior engineers will find out the specific people who caused the defect, and vet that the appropriate corrective actions have taken place. Likewise, if you do your job well on sub-assembly 529ca - you have the opportunity to be noticed and move up to bigger projects without changing firms. These records are persistent in the company, and it can be highly embarrassing and impactful to have caused the issue many years later.
When you've outsourced the supply chain, personal responsibility is washed in a sea of lawyers, managers, buyers, and other personnel - the incentive to do your job to the 80-90% of completion and no more is extremely strong as it makes everything look better over the next 2-3 years.
You raise a very good point. If you join a company with the goal of retiring in the same company after a a 40-year career, the incentives are much better aligned than with contractors. Maybe the demise of the 40-year career in modern companies is one of the bigger elephants in the room
I'm not sure you even need a 40 year career. In my current (Tech/Software) shop, the Distinguished Engineer (Lead engineer for a group of ~2-5k engineers). Can very quickly learn your name from your successes and failures. The highest priority projects will pull talent from these successes. In the span of 2-4 years you can go from sub-assembly 1234 to lead of (biggest project).
In theory, you can pivot the entire knowledge "supply chain" to a different problem in 1-2 years in this manner. Shifting a contracted supply chain could take decades if it was even possible.
> "This isn't default bad. Do you build everything at your company, or buy some things? Specialization can be a boon."
You seem to be under the impression I'm arguing a point that isn't in the text of my post. It's not material whether this is "default bad" - what matters is that it was bad in this specific instance.
The claim isn't "all outsourcing bad", the claim is a very specific "Boeing's outsourcing of these specific parts directly led to the safety crisis the company is facing now".
This is particularly salient as pre-divestment, what is now Spirit, did not have a notable QC problem. Boeing has in the past faced safety crises over the design of its aircraft, but not their manufacture.
Not everything is a proxy argument. If I mean my argument to be generalizable, I will state it clearly rather than leave it up to others to impute.
The build-or-buy debate makes sense with some context:
* There's a meaningful market for the components you buy
Does Spirit contract out to Airbus and Tupolev to build THEIR fuselages too? Are there other companies that could reasonably bid for the 737 contract? It feels like there isn't a real market here; they just divested a captive supplier for paperwork reasons.
* The stuff you're buying isn't your core competence
Sure: buy the fabric for the seat covers from a supplier. Hell, buy the whole seat. But airframes are sort of Boeing's core competency-- too much of the business rides on them to put them at arm's length.
and between the end of Apollo and the emergence of "new space" companies like SpaceX, we saw them get taken for a ride by those very subcontractors with absurdly overpriced cost-plus projects that were always over budget, late and did the bare minimum to meet requirements.
Funnily, even with NASA's example, we have several instances of Boeing screwing up everything in favor of short term gains. ULA had to be 'forced' into existence by the government, because Boeing was caught conducting espionage on Lockheed Martin and was at risk of getting barred from government rocket launches (which would've left the US with only one launch service provider). They also tried to amend their bid on the Artemis lander competition, potentially after having info on others' bids leaked to them by a NASA insider. They forced ULA to severely limit the capabilities of Vulcan to not make SLS unnecessary (even tried to get people fired for it). Then, of course, we have the ongoing engineering disasters of SLS and Starliner.
I'm also not really sure how NASA fits considering that they have no monetary profit motive. They subcontract everything because that's just how the government does most of its procurement.
> we saw them get taken for a ride by those very subcontractors with absurdly overpriced cost-plus projects that were always over budget, late and did the bare minimum to meet requirements.
What is the evidence of that?
Certainly there's every reason to believe that they exceeded requirements by a lot: NASA not only has an astounding successs rate (in the most challenging engineering and manufacturing challenges in human history) but their missions tend to last far longer than the specifications. Voyager 1 and 2 are still flying, and so is that helicopter.
In fact, is there any organization ever that is a worse fit for the description, "did the bare minimum to meet requirements".
For an interesting description of how NASA engineering and budgeting actually work, here's someone from JPL (for a bit more, see other comments from the same user):
I'm talking about the contractors. Most of the rovers, orbiters etc which we think of when we think of NASA overperforming, like Curiosity, Spirit, Voyager, Cassini, were built by JPL, not Boeing, Lockmart or NG.
* The Space Shuttle - a death trap and reusable in no practical sense. Refurbishment involved near rebuild of large components. Often used as proof about how reusable rockets were not financially viable prior to F9's reliability.
* SLS (ie the rocket to nowhere) - too expensive and too slow to build to be worth using unless literally mandated by law. Is too rough of a ride, Orion's screens had to be modified to flicker in sync with the vibrations so that they would be readable. Congress (in blatant bias towards Boeing) attempted to mandate Europa Clipper to launch on it instead of Falcon Heavy, only backing down when told that they'd have to give Clipper an extra $1B (in addition to the $3B for an SLS launch) to make it able to handle the conditions imposed by SLS. Continues to be a burden on NASA's budget by eating up funding for other projects.
* Vulcan being forcibly neutered down to the bare minimum functionality needed to sell national security launches, because the original proposal would've reduced costs and removed the one existing need for SLS. They were proposing an upgraded second stage which would be able to be refueled in orbit and would've been able to carry Orion. Boeing tried to get the designer of that component fired. Also has the bare minimum to be 'reusable' by having an eventual goal of detaching the first stage engines from the body and splashing them down via inflatable heat shield. Basically does just enough to be a minimum viable competitor to F9 in national security launches and nothing more.
* Starliner with its initially poor software, stuck valves, fire resistance system that actually catches fire and parachute issues. Here Boeing got NASA to pay them extra money on top of the agreed upon fixed-price contract, holding domestic access to the ISS over them. Also tried to get SpaceX's contract cancelled and that money also awarded to themselves for no additional changes. The vehicle is designed for the bare minimum required for the contract (only 2 being built), with no interest in separate commercial activity the way Dragon is used in.
* JWST (ie the telescope that ate astronomy) - massive delays, budget overruns and serious failures in testing which caused another ~5 year delay. It was nicknamed "the telescope that ate astronomy" due to the budget overruns, which harmed several other telescope projects.
* Hubble - the work done directly by NASA was mostly fine, but contractors had large cost and schedule overruns, with the mirror issue due to a failing contractor and Lockmart facing cost overruns + not taking the initiative with designing the spacecraft for the telescope.
There is a heavy Boeing bias here since the main culprit in half of these examples is Boeing. But at the moment these were the main cases that came to mind.
The sad thing about these cases is that the early excuse for not taking risks with new companies like SpaceX was that they didn't have spaceflight "heritage" and couldn't be trusted to not cut corners in important places, with the implication that the established companies would be charging less if they could without compromising safety/quality.
Being "Musk's talking points" doesn't make them not true... you can literally look all those up. Starliner still hasn't carried a crew to the ISS, every time a launch window approaches we find out about a new issue causing a delay. The SLS and Vulcan points are also very well documented.
I'll concede on JWST, but with Hubble there was a whole investigation that found the contractor's poor internal management was at fault.
The point they're making though is that subcontracting in the way that Boeing did is part of the problem. Not all subcontracting involves stripping off core components of your company to pay them rent instead.
Honestly, Boeing makes the case for returning certain companies to elite control. Mullenberg, an engineer, burned down Boeing for tens of millions today. A family that controls it wouldn’t rationally do that.
Good point but Mullenberg was only CEO from 2015 to 2020. The MAX first flew in 2016. Before that was James McNerney a literal Jack Welch-ian MBA who actually oversaw the development of the 737 MAX, the divestment of Spirit, and was Boeing’s first CEO without aerospace experience.
Just skimming the wikis for Boeing, the 737 MAX, and the A320neo it looks like Boeing’s downfall should largely be attributed to McNerney. Mullenberg is guilty of shipping a doomed product and botching the response to the subsequent crashes.
The worst part is the 737 MAX development went way over-budget.
The idiots cut corners and didn't even save money!
It is genuinely important for big corporations to have owners with a very long investment horizon who are involved in corporate management. People who are planning for their great-grandchildren are essentially trying their best to set up a company that can last forever.
They thought re-engining the 737 would cost 2bn and a new plane would cost 10bn for a savings of 8bn. The actual development cost for the MAX was 4bn so their estimates were off by a factor of two. Naively the MAX saved Boeing 16bn (20bn - 4bn) in development costs. They saved “double” (by failing upwards) on development and it only cost them the future of the company.
I would argue that relocating their HQ away from their engineering hub was done to "maximize" profits by colocating close to lawmakers & lobbyists. This goes hand in hand with corruption in what is a semi-nationalized industry worldwide. Just like American air carriers being uncompetitive on international routes, Boeing risked becoming uncompetitive against Airbus, which is still ~25% owned by France, Germany & Spain.
Competition in the airline manufacturing industry is difficult and not for lack of trying; Bombardier and Embraer have found it tough, to say nothing of the poor results of state-sponsored competition like in Japan, Russia and China.
Aircraft development is hideously expensive. 787 development cost Boeing $32B, and is part of the reason why airlines pushed Boeing not to replace the 737 wholesale.
>Why do people operate on the principle „if it is bad it had to be because of maximizing profits“?
HackerNews seems to hate companies maximizing profits, but loves when people like Elon run roughshod over shareholders. I don't get it, either.
It's galaxy-brain stuff to believe that Boeing's biggest holders decided to make a few extra bucks in one year, and sink the 100+ year-old company the next. Versus, say, your theory that it's a multitude of issues relating to corporate rot.
Boeing was working on a "clean redesign" new airliner to replace the 737. They shopped it around and nobody wanted it. They did not want to train mechanics and pilots on a new type. They wanted a "better 737." Then Airbus came out with the A320neo and that also pushed Boeing towards another incremental rework of the 737 since a brand new airliner takes 10 years to get designed, built, and certified.
The A220 seems fairly popular though, and that's a completely new type, although it's admittedly in a different class than the A320/737.
Many airlines use both A320 and 737s in their fleets too, so they already have pilots rated for two different types. Trading one of these entirely for a 737 successor doesn't seem completely infeasible.
I think that individual pilots fly one type or the other, even if the airline operates multiple types. Flying is flying to a certain extent but the details, procedures, checklists, and emergency memory items are different particularly between Airbus and Boeing. I doubt there are many/any pilots that are hopping back and forth between 737s and A320s day to day.
Yes, that's what I mean: The downside of having to juggle multiple shift rosters, needing effectively two sets of operational guidances, engineers trained on respective models etc. is balanced out by the significant upside of having more than one supplier and being able to negotiate accordingly when ordering new airframes.
But returns are probably quickly diminishing on the latter compared to the increasing scheduling, training etc. complexity of the former, and having two effectively similar classes of plane from the same vendor completely negates the benefit of supply competition.
That probably makes it very hard for a manufacturer to sell a new type of the same class to an existing exclusive customer: Short-term, the downsides largely outweigh the benefits.
In 2022, Calhoun received $22.5 million from Boeing. In February 2023, Boeing awarded Calhoun an incentive of about $5.29 million in restricted stock units to "induce him to stay throughout the company's recovery." In March 2023, Boeing announced Calhoun was being given shares worth $15 million that will vest in installments over three years.
They also have a captive market which is why they can get away with this. Switching plane manufacturers is a long process around pilot and maintenance retraining. Additionally orders for planes go out years and years in advance and you can't just call Airbus and ask for new planes next week. I think it's inevitable consequence of no competition in the market.
Boeing is the stadium food of planes, poor quality & expensive, but if you're hungry you still eat it.
You know, when a company this big does this kind of things it always makes me think: are they really the only ones?
It could be, or it could be that these are the guys that know how to navigate through these risks that you mention - until something bad happens and the world is then bashing them. How many things happen and we don't see them? And they get f** rich thanks to that lack of information (which they can rely on thanks to us employees, who normally keep an eye closed or complain and "just create the Jira ticket, we will handle it later"). If this can happen in such a regulated industry, there are loopholes, and they can't be the only smart guys to exploit them to "accelerate, simplify, streamline profits" and all that.
It reminds me of the VW scandal. A lot of other companies did that artwork (using a defeat device) to pass the tests. One company got the blame - no problem there, but finally, it was like a wake up call for everyone else.
It’s not clear to me that this is the case here. The people responsible for ruining Boeing are all still fabulously wealthy and will be for generations. I guess you could call only having 20 lifetimes of wealth instead of 100 a consequence, but I certainly don’t see it that way.
Very likely everyone is dumbing down a complex issue by projecting their own biases on Boeing.
Boeing is an incredible cash cow and is likely to be a duopoly (along with Airbus) for at least around 50 years or so. I don't see why anyone burn their house down for temporary warmth.
Also, the kind of issues we are seeing do not point out to any short term profiteering.
Boeing does not have much competition in a real sense for a long time, and when that happens, MBAs quickly take over the world. It is just in Flight industry this is too much to mess with and we see some consequences. But if we are comparing just messiness in terms of R&D to operations, probably none of FANG or something like AT&T are better than Boeing.
Boeing should move the its HQ back to Washington state. They need to show the public that things are going to change and it starts with the executive team being next to the engineers. Microsoft had the same problem when Balmer was in charge, focus around sales and not engineering.
> Boeing should move the its HQ back to Washington state...Microsoft had the same problem when Balmer was in charge, focus around sales and not engineering.
While Balmer was CEO the HQ was in Washington state :-)
More seriously, Balmer is an excellent example, because I believe the Boeing case is more mendacious, yet more banal.
Balmer seemed to have the right idea, yet utterly the wrong intuition. It's especially strange in that he was there pretty much from the very beginning, and influenced the growth of the business, yet fatally he never learned what the business actually was.
When Balmer took over MS, the business rested on several pillars:
1 - A captive client base based on CIOs and IT departments
2 - A dedicated and committed employee base
3 - A huge army of outside developers who benefited when MS succeeded, so helped the latter happen.
4 - A consumer business ultimately driven by the size of #1
He was over focused on #1 (in the classic "The Innovator's Dilemma" style) which is why the iphone not only nuked their phone business but opened up a BYOD movement which eroded IT's power (ironically Apple had done the same with the Apple II+Visicalc, which Microsoft shrewedly took advantage of and rode to domination...while Balmer was there).
2 - Picayune things like replacing free snacks with vending machines told the staff that he didn't give a shit about them, rather thought of them simply like a resource.
You can see from the "developers developers developers" video that he really did value #3, and much as I dislike him as a businessman I loved him for that. But eventually it became clear he understood its importance to the business but didn't understand why.
4 - this pillar flailed due to neglect under him, including Xbox, Skype etc.
He grew up with the car business, but grew up when the industry was in the shitter, surviving on momentum, and got his MBA in the intellectually (in regards to business) terrible 1970s. He appears to have learned nothing from his long time at MS before becoming CEO and ran the business like a shitty 1970s car company.
Note that the US car industry only got its act together after 1 - getting their clock cleaned and 2 - going back having gearheads as CEOs.
The Boeing case is similar, but worse. I never believed that Ballmer was subject to lazy or misaligned incentives; he was simply wrongheaded. I do thing the MCDD guys who took over Boeing were incentivised by their comp plans to optimize for the wrong things, all in the short term. The same thing destroyed HP.
> fatally he never learned what the business actually was
What I find fascinating about this post is that it mirrors the same behavior I saw in a small tech company of < 10 employees after the founder sold it to a small group of investors.
Amazing to see a $1M company (1990's dollars) making the same mistakes as a multi-$Bn one.
At this point, it’s quite pertinent how many corners Boeing has cut over and over again—the company’s culture and management is obviously poisonous.
I’m probably a minority of folks, but at this point I’m flying on airlines with the fewest Boeing Max generation planes in their fleet. I also don’t really trust the FAA to properly regulate Boeing after years of a close relationship—the recent groundings are the bare minimum.
It is somewhat sad to see. Like, I don't see how modern manager culture of punishing loyalty, high worker attrition, short term profits, etc, can turn Boeing around.
Once the elite got rotten they need to be ousted, and the workers don't care (why would they?) and most shareholders have a voters' dilemma of caring at all due to too low stakes.
The only ones that care and can do something is the government, congress etc. Boeing need to be split up and sold off, and the management fired. But I don't see that happening anytime soon.
In contrast, the relatively recent Boeing 787 has an impeccable track record and has become the most comfortable long distance aircraft. Is it a matter of separate teams, managerial era, or something else?
The models with issues appear to be the older ones with retrofits. Perhaps there are failure vulnerabilities when mixing today's computer-reliant design into past institutional-knowledge-reliant human design.
The 787 is absolutely plagued with quality control issues.
In particular, deliveries were stopped for almost two full years from September 2020 to August 2022, with more issues found recently. The Charleston plant is considered the worse one compared to Everett.
Hard disagree on most comfortable long distance aircraft.
It's one of them, but not the only (and I'd argue not the most). The A350 beats it for me, plus, it doesn't have that pesky range issue that is causing Europe to Asia carriers to adopt the A350 (detours around Ukrainian and Russian air space).
“Impeccable” is doing a lot of work there! The maiden flight was 2 years late, a series of failures caused the first delivery to take another 2 years, fractures were found in wings… I could go on, this article has a timeline of just the things which went wrong up to 2014: https://www.ibtimes.com/boeing-787-complete-timeline-dreamli...
I haven't tried to avoid MAX, but I have two friends who tried very hard to change flights or only get flights that are not MAX. So you are not alone. You just need to spend more money and time
Same here, I'd love to fly on an A380. I've flow plenty 747s as a kid, and I have great memories of them. The last one I flew was an A330-neo that I thought was really nice as well. Looking forward to fly the new Embraer E190 at some point.
Last time I was on an Embraer, the emergency exit door alarm was buzzing until the plane left the ground and the fuselage flexed enough to get a seal. The fight itself was fine but that left a questionable impression.
My last flight on an Embraer was in turbulent weather and at one point the plane dropped a good bit in a downdraft and when the wings caught us there was a tremendous bang that went through the entire plane. Suddenly I wanted to be on the ground in the worst way, it wasn't a sound I like to hear an airplane make when I'm riding in it...
I had high hopes for the A380, but it turned out less comfortable than I hoped. It may be an artifact of the sheer size, or the choice of engines, or the programming for those engines, but the cruising surges aren't comfortable for me.
So far the 787 has been the nicest long distance plane I've flown in (though I never did get a chance to fly in a 747).
My experiences on the A380 have been particularly quiet and (in the configurations I’ve flown, if there are multiple) comfortable and spacious as well.
In fact it might the only aircraft model that my wife knows by its designation, due to how good her experiences on it have been.
So what are your thoughts on people who won't take the vaccine because they don't trust pharma companies and the FDA?
Also, what are your thoughts on the EASA and why they haven't banned the Max?
I find it hilarious how many people who mock people who "don't trust the experts" and "do their own research" suddenly engage in the same thing when it comes to other domains. Make no mistake: anti-Maxxers are kinfolk to anti-vaxxers, even if you don't want to admit it.
If your aim is to travel there are arguably safer alternatives to flying in a 737-MAX that fulfill the same purpose, namely flying in a pre-MAX 737 model or on any Airbus model. If you have no alternatives available and you are so scared of the 737-MAX that you choose not to travel it may be irrationally overcautious, but there is arguably a minuscule increase in safety nonetheless.
If your aim is to improve your immunity to an infectious disease, the only alternative to vaccination that fulfills the same purpose is to catch the disease, which is definitely not safer. If you are so afraid of FDA corruption in favour of pharma companies (or of needles) that you choose to avoid improving your immunity altogether, you're still at risk of catching the disease anyway, which is clearly less safe than any purported risk of getting vaccinated (that is, unless you make huge changes in your lifestyle to avoid human contact).
That is absolutely not the same thing. If I don't fly on a plane, the worst thing that happens is the company doesn't get my money. If I don't take a vaccine the worst thing that could happen becomes a potential loss of vital senses or even death(s).
Your ending statement could hardly be further from the truth. There's no evidence that these groups of people are related.
> If I don't fly on a plane, the worst thing that happens is the company doesn't get my money.
There are people that state they'd rather drive than fly on a Max.
The worst that can happen is a statistically much higher likelihood of dying. On the other hand, if you don't take the vaccine, the worst that happens is Pfizer doesn't get your money.
You're right, in one situation you have people rejecting a product with years of research vetted by regulators around the world because they don't like the business practices and politics of the organizations behind it. On the other, you have... the same exact thing.
Assuming you're not being intentionally obtuse: the FDA makes some decisions purely out of politics (e.g. many schedule 1 drugs) and they make other decisions based on higher tolerance of risk in certain situations. Perhaps the FAA should slap a black box warning on the 737 to regain credibility.
You're arguing my point. Both anti-vaxxers and anti-Maxers believe the regulatory agencies are corrupt and politicking, therefore they substitute their own scientific opinions where they feel like it.
Nah. The FDA offers a nuanced approach making criticism far less reasonable. The FAA presents the flying public with an all or nothing approach. It's entirely reasonable to criticize the regulatory capture that got us here. It's also quite reasonable to be dissatisfied with the status quo at the FAA for the time being.
If we'd seen more thalidomide babies, or if people were being harmed en masse by vaccines perhaps things would be more comparable. But they're not so they're not. Besides, the FAA is explicitly tasked with promoting the business interests of American companies while also promoting safety. That's quite different than the FDA, and a more reasonable comparison would be between the FDA and NTSB.
Nah. If we'd seen more Max deaths you'd be right, but the hundreds of thousands dead from the opioid crisis or the millions of lives destroyed from the war in drugs due to marijuana being on schedule one shows the FDA is beholden to the pharma and prison industries. Not trustworthy.
Medicine isn't science, it's a discipline. Flying is science. There is no "this will fly in my opinion". As ridiculous as saying I trust one organization so all are fine.
This whole fiasco represents a leadership f$&* up of existential scale. A lot of this started when Boeing moved its HQ away from a core production hub. Leaders tucked way in offices make a lot worse decisions than leaders close to the literal nuts and bolts of a company.
Boeing’s reputation was on the quality of its engineering and production. “If it ain’t Boeing I ain’t going” was a real phrase. The current Boeing leadership has turned the company’s image of quality into the punchline of bad jokes. The only viable fix is a serious reset and sacking of most of the senior ranks to bring leadership back that understands the difference between short term profit and long term gain. This has all been sad to watch, but the flying public deserves better.
It's not about physical distance but social distance, i.e who talks to whom, and how many degrees of separation there is there between who's making the decisions and who's doing the company's core work (for Boeing that's building & designing planes).
In a company with offices, social networks will mirror the physical layout because people will tend to talk to people nearby them in the building and not people in different buildings. By moving management further away physically, they also moved them further away socially.
But in a fully remote company it's not so clear, and more about the org chart and who's in the same Slack/Teams rooms or meetings.
Also for historical context, United traces its name back to Boeing itself. “United Air and Transport Corporation” was a company that came out of operations founded by Mr Boeing. Thus for anyone that knows their aviation industry history, United saying they’ve lost faith in Boeing airplanes is a big ouch.
DAMAGE CONTROL means protect the stock price, not the passengers.
Contrast "CEO says: Every plane is being completely inspected, every nut and bolt and nothing is more important to United than passenger safety and confidence."
Surely stock price is directly linked to demand from airlines, and airlines are successful because of customer confidence, convenience, and price. If an airline bails on Boeing because customers refuse to fly Boeing fleets, then damage control/stock price is an abstraction of passenger's requirements.
The airline that stands to lose the most with the downfall of Boeing is actually Southwest - whose fleet is entirely composed of 737s. Not MAX's yet, but that was at least the plan before more of these problems were exposed. I can't imagine how nervous the C-suite at Southwest is feeling.
Also - I wonder if Boeing even has the capability to build a new commercial airliner from scratch. The 787 was insanely expensive and had its own problems (remember the burning batteries?).
A better question is what will Southwest Airlines do? They exclusively run 737s as I understand it and they effectively have no choice here to beta test Boeing's garbage.
I think United CEO's comment is at best a renegotiation attempt.
No, Boeing's garbage is a result of shit tier engineering and maybe their own lack of confidence. Southwest had a challenging customer requirement to hit, and Boeing failed to deliver.
Consider if Boeing refused to build the MAX to be type rating identical. Southwest would -have- to buy and retrain. Sure, maybe Southwest would go to Airbus to spite Boeing, but I don't think that would happen if Boeing provided a better product. Airlines typically aren't that petty about these types of strategic decisions.
The MCAS fix themselves showed that MCAS wasn't fundamentally a bad idea - just that they had awful implementation (use both AOA sensors? Fail-safe if AOA sensors disagree? Provide proper limits and overrides?). And now after the entire kurfuffle and fixes, 737 MAX still has the same type rating as 737 NG in USA, Canada and Europe (that's just the ones that I checked).
it has everything to do with it. the current issues are a symptom of shortcuts and cost cutting at the expense of long-term growth and continued success. 737 MAX MCAS was the result of MBAs cutting costs when the right thing was to spend more and develop a new plane. Aircraft doors blowing open mid-flight is the result of MBAs cutting costs and outsourcing safety device manufacturing and install to ultra-cheap low quality vendors like malaysian spirit aerosystems.
But "just create a new plane instead of the MAX" doesn't address the other deficiencies that you point out. Spirit would be just as shitty at putting together 737-900s as 737-MAX9's (and in fact they're finding QC issues in 737-900s now)
Could have been the Bombardier C-Series but they have been effectively shut out by a combination of aggressive competition by both majors and "anti-dumping" action when Boeing chose to pursue regulatory relief instead of competing on price. Now the C-Series are the Airbus A220, competition successfully averted.
I'm really disgusted at what's happened at Boeing over the years to lead to this situation. But it's systemic in the boardrooms across the country that profits come before anything else.
In a more ideal world, the people in management responsible for this mess would be brought up on criminal charges and forced to disgorge their performance-based pay that was based on fraudulent practices that harmed passengers, the workers of the company, and the economic growth of the USA. But, I'm afraid the best we can hope for is civil lawsuits brought by shareholders that will settle for a fraction of the economic damage wrought.
Undoubtably the FAA will be increasing its scrutiny of the company. But that will probably fall by the wayside if the Republican Party regains control of the government. The decrepit management team will probably pursue a sale of the assets at fire sale prices so that they can prop up their stock price and retire to a golf courses in "anonymity".
"Kirby wasn’t specific about what planes the airline could acquire instead of the Max 10, but he noted that there is only one other global manufacturer of such large planes — Boeing’s European rival Airbus."
Is it just me or is every player in the dramatis personae dancing around this and/or burying the lede? If they were ordering regional jets, sure, you could buy Embraer or Bombardier, I guess. But as it stands it's like everyone's saying "we're considering alternatives to turning left"
> I think this is a major shot across the bow of Boeing management.
> To me, the fact that there really aren't timely alternatives doesn't take away from the gravity of a major airline CEO saying this.
What's to worry about? United has no real alternatives. A shot across the bow implies that the next shot will be with intent to kill but united is stuck with boeing for at least a decade....
What? United does have some alternatives. I thought the article was quite clear that United was considering/planning on cancelling their MAX 10 orders.
Sure, United might still be flying a bunch of Boeings, and maybe some other orders might still go through, but there are alternatives for United.
Do you think this is good news for Boom? Honestly they could pivot from supersonic to just "small airplanes at scale made well" and they could grow into a new American industrial giant
They would need to take over Boeing's factories. You don't just spin something like that up.
But this made me think of something funny... maybe Boeing could buy Boom, and Boom management could take over Boeing like McDonnell Douglas management has previously done, when Boeing bought them?
I agree with this, my (possibly incorrect) line of thinking is that the same was sort of true for electric cars. At the high end there were options, but there weren't good mass market options (Tesla helped change that)
You could sort of imagine that airlines use this as an opportunity to fund promising smaller companies that want to scale (I'm not sure if Boom is more excited to become a major manufacturer or for the flight speed change)
Regardless, given the friction in training pilots to fly new aircraft, airlines losing faith in Boeing should make them more likely to consider it which removes a huge moat
> At the high end there were options, but there weren't good mass market options (Tesla helped change that)
Eh? No, that’s not right; it’s almost the opposite of what happened. Before the last decade, there was ~nothing. Around 2010, the Tesla Model S (high end), the Nissan Leaf (mass-market), Renault Zoe (mass-market), VW eGolf and eUp (mass-market) all showed up within a year of each other. The first Tesla mass-market car launched in 2017… kind of; realistically, 2019 (that’s when the ‘standard trim’, ie affordable, Model 3 showed up). In 2019/2020, the first high-end electric cars from conventional manufacturers also start showing up (e-Tron, Polestar etc).
Boeing is considered a strategically important business to the U.S. - they supply everything from airliners to bombers to spacecraft to cruise missiles. They also create jobs all over the place - taxpayer dollars are funnelled via the pork barrel to jobs programs.
The government cannot allow it to fail, and if Boeing looks bad, the government looks bad. Therefore anyone who makes Boeing look bad is an enemy of the government.
So - you end up with these noncommittal pieces. If they outright said “we are thinking of airbus”, you get the government banning the purchase of airbus aircraft, as that would endanger Boeing, and then you’re stuck with Boeing and the government wants to audit your everything and know why you aren’t standing in line behind the flag.
So the safe option is to make some noncommittal rumblings, and change nothing.
You realise that there are already Airbus-only US airlines?
> If they outright said “we are thinking of airbus”, you get the government banning the purchase of airbus aircraft, as that would endanger Boeing
Er... if anything, the US government banning Airbus aircraft would endanger Boeing more than the alternative; this would absolutely beg for retaliation, and not just from Europe (China, remember, has its own 737-class plane, now).
> government cannot allow it to fail, and if Boeing looks bad, the government looks bad
This is a myth. GM and Chrysler are also strategically important firms. They were allowed to look bad. And while they were bailed out, it was done so through bankruptcy.
FTC should consider splitting the commercial and military branches of Boeing. The military part is hopelessly entangled in lobbyism etc. but the commercial branch should be as removed from the gov as possible
They don't need to comply as other countries have then the right to implement punitive import dutys and they already did so with regards of Airbus/Boeing
Bombardier isn't even in the business any more after a trade complaint from Boeing. They ended up selling the CS300 and the business to Airbus (which became the A220).
There's a dogma that regulation is de facto inefficient and bad generally, and I think it's almost universally accepted that that's the case for the self-interest of businesses. But like any dogma, any prejudice, it's wrong:
Businesses have self-interest; it's overwhelming and they can't escape it and its biases (though they can and should moderate it, and some businesses do that much better than others). Regulation provides an independent, expert power structure with great value where self-interest, or multiple self-interests, fail. It allows competitors to coordinate; to act with enlightened self-interest and (gasp) in the public interest - lawlessness is bad for business.
For example, in financial markets, unregulated self-interest leads to mountains of fraud, and a place where nobody wants to invest - that hurts everyone. A safe, fair marketplace attracts everyone.
For airplane manufacturers, self-interest drives manufacturers to cut corners. If you've ever advocated against cutting corners because of an over-the-horizon, non-specific risk (meaning, the consequences won't be tomorrow, and we can't say exactly what and when they will be), you know that you are violating social norms and can be very unpopular. But if you can say, 'this violates FAA regulations', then it's a clear and specific risk.
Hum... Regulators are inefficient. Regulations exist for stopping society from getting stuck into suboptimal Pareto equilibria.
So you don't want regulators to do things that are not their minimum job, but anybody with a general argument against regulation is just trying to rob you.
The theory goes that the regulation organization has no reason to run at its best performance. Because it's necessarily a monopoly (works best when it's the government itself), and because there's a lot of pressure into its continued survival. So, as a rule, the work of regulators aren't optimized at all.
Of course, the real world is much noisier than that. But the most that free market advocates can claim is that regulators are inefficient, never that regulations are. Unless they are talking about some specific regulation.
> the most that free market advocates can claim is that regulators are inefficient
Beware of buying into their language. Regulations are necessary to free markets; unregulated markets can turn into monopolies or similar, making them very un-free.
If we stop using some word just because some con-man said them, we'd run out of words much faster than we could agree on new ones.
And worse yet, we'd give the con-man the power to decide what gets discussed or not, and would legitimize the behavior of switching words like they were fashion accessories, that is one of their main strategies.
>And just when Boeing needed experienced employees the most, it suffered a brain drain. In late 2022 many Boeing engineers started heading for the door to lock in pension payouts (which could be hurt by rising interest rates) they had accumulated. When full airframe production returned after the pandemic, a lot of the talent didn’t.
One thing I worry about with complex products like aircraft in general, is what if we just forget how to do this stuff correctly? I mean the entire aviation industry was built in a single human lifetime. All of this was conceived and designed by our parents and grandparents. There's really no guarantee or precedent whatsoever in human history for that kind of knowledge transfer to occur between generations. I've been plagued by this feeling my whole life, that our generation (millenials and below) simply might just not be up to the task of keeping things going. It feels like we're starting to see those cracks.
I think that Boeing is less than half the problem. The US-FAA has sold the whole country down the river with the lack of oversight. How that happened is the problem. We expect Boeing to try to draw outside the lines. The FAA helping them do that is the problem.
This, I think this IS the real problem. In a capitalist society, there are markets that need to be heavily regulated. Health is one of them and aviation is another.
Private companies are going to do what they are supposed to do: Maximize shareholder value. So they are going to cut corners, minimize spending and maximize returns by EVERY MEAN. It is the job of the regulator to establish strict regulations and ensure that they are followed; otherwise, to REALLY execute punishments.
The fact that the FAA has been lax with Boeing is what has enabled them to cut corners to this point.
Chinese COMAC seems to be on the verge of selling meaningful numbers to chinese airlines. Wont be surprised if they are a very viable competitor in ~20 years which isn’t much in the aviation world where backlogs span a decade
> Chinese COMAC seems to be on the verge of selling meaningful numbers to chinese airlines.
That's easy when the PRC is mandating it, but given the hard earned safety record of say... Airbus, people are not in a rush to stake their lives and businesses on Chinese built aircraft. They're not exactly known for the transparency and integrity. In 20 years COMAC is likely to suffer multiple deadly crashes.
Does it matter though that the numbers are because of PRC tipping the scales? It worked for chinese internet and auto companies. Also, chinese manufacturing is obviously capable of high standards of manufacturing if they decide to. People forget how tenuous airbus once looked or how fast they scaled up
I'm sketical, there are single digit numbers in service and I would be surprised if 差不多 culture doesn't result in a service record worse than the MAX once we have appreciable flight hours to look at. A lot can happen in 20 years but I can't see myself ever flying an MC-21 or C-919, though I won't fly on a MAX either.
Yeah. I could see a possible future Boeing split where BCA gets bought by COMAC or otherwise there's a some sort of new commercial aircraft org made from a hybrid of the two. Not a likely future, but a possible one.
Why don‘t they scale up? They seem to have all the regulatory capabilities to get a commercial jet on the market already. I also never understood why e.g. China doesnm‘t just buy Embraer (or take over all their employees) and builds out from a functioning product?
Scaling up would be hard. I think the E2 is a 4 seat across aircraft. It's maximum capacity configuration is already quite long (42m) with ~120-150 seats. A320 is like 38m long with ~200 seats (6 seat across).
Scaling into the A320/737 range would need a brand new design with wider fuselage probably. I'm not saying that Embraer could not do that, but sticking with the E2/A220 size range seems to be a winning combo - until recently (A220), they had no real competition from the big two. Maybe with the more recent weakness from Boeing, Embraer might want to consider a 737/A320 class design, but these things take time.
Also, as much as BRICs is a thing, I don't think Brazil would be too fond of selling Embraer to China.
Scaling the E2 is not the answer, but there is nothing stopping Embraer from developing a six across airframe to compete with the B737 or A320. They have the engineering talent and the supply chain network in place. They have the capital. If they see a market opening, who knows… they just may go ahead.
I think companies should be punished by the free market. Actions should have consequences. Yes, thousands of flights and millions of people travel on Boeing aircraft without problems, but that doesn't mean you should continue to support companies who are careless when there's an equally viable option available (given that Airbus is a competitor to Boeing, Airbus has an alternative for every type of plane in Boeing's fleet)
Boeings military buisness is in for a nosedive to. It's in parts "allies" buying equipment as part of the package and another isolationist trumpel period will end that. Then there is the military, financed by lending and spending. And it doesn't lend from the American people, it lends from the we which does its trade in dollar and which will vote with its feet if the trade route protection falters and fails.
I wonder how this will play out in practice. Their reasons to ditch Boeing are valid. Airbus though has a decade long backlog for the A32x series. How are they going to get that many in time?
Embraer exist for many of the short hop trips United also covers.
edit: to add some elucidation, United operate 40 737-700s that they may consider replacing soon, the E195 would be an option against the A320 or 737-MAX7 options.
I mean it would be dumb not too, there was no reason to say anything else. Since the company actively runs Airbus planes already it's not even as if there's a barrier to entry there.
Even if they had no intention of cancelling any ongoing orders, it'd be ridiculous to not strive for some compensation with this current Boeing hostile climate.
Boeing is already down 19% for the month - on news of the latest MAX issues. Investors have already hit the stock hard, and an operator saying they'll think about other options won't move the needle in the face of the REAL news that has already hurt the stock. If United announces they are cancelling their 200 Max 10 and Max 8s on order, then you can expect to see the stock dip further.
>If United announces they are cancelling their 200 Max 10 and Max 8s on order, then you can expect to see the stock dip further.
Seeing as the CEO stated they are "going to at least build a plan that doesn’t have the Max 10 in it", they damn well better follow through and cancel those MAX 10 orders.
I didn't mind flying on a 737 Max once they figured out the MCAS stuff, but now I see it's an institutional problem I don't know if I could accept a ticket on a Boeing aircraft manufactured in the past ~10 years.
Is different from moving away from Boeing planes...
United is one of the largest operators of Boeing planes in the world, they have plenty of room to shed Boeing and purchase Airbus.
United is the largest operator of 737 MAX 9s.
They operate 80 MAX 8s, with another 50 ordered.
They have ordered 150 MAX 10s (which have yet to be delivered nor begin operating).
The article points out that they have 79 planes from Boeing that are grounded. That it's impacting their ability to fly and finances. They may have Airbus planes but their whole fleet isn't Airbus.
What is the point of your comment about United exploring other options being meaningless b/c they operate a small percentage of airbus'?
This article is signaling that operators are exploring alternatives to Boeing, and revenue could shift from Boeing to Airbus in the future. That's the point of the article.
This kind of enshitification is ultimately an emergent property of public market ownership. You can see the result of a controlled experiment by eating at McDonalds then at In-n-out Burger (one is public, the other private). I'd include PE under the public ownership category, despite the name.
Try as I might, I cannot see any upside for an airline chief executive to make this kind of statements publicly. Sometimes a CEO needs to know that they don't have to publicly announce their internal deliberations. Well...unless he was drunk when interviewed, or wanted to divert attention from bad financial results, or both.
- showing his employees and the public where the blame belongs. No doubt United has some angry passengers given the flights they had to cancel due to the grounding of their Max 9 fleet. Also consider SNL’s sketch about Alaska… airline execs over there are no doubt fuming at Boeing.
2. Managing fallout from obvious losses from groundings
3. Showing investors that they can continue without Boeing should it regress further.
4. Kicking off bidding war between Boeing and Airbus. Boeing will give them an insanely good deal, especially if they announce their PO soon. Airbus is obviously also very keen on getting a foot in the door with United.
5. Sending a message to Boeing that they have had enough of this shit and it will really hit the fan if they don't get their act together.
If we're being honest, I think the same is true of Google/Alphabet.