The problem for Boeing is that this wasn't a one time thing. Two weeks ago it came out that they were using counterfeit titanium, then a few days later the CEO testifies that they had in fact retaliated against whistleblowers, then a few days later it comes out that they actually hid faulty parts from FAA regulators and then lost them. Every apple that gets pulled from the bushel is rotten and there are a lot of apples left.
"counterfeit" in this instance doesn't seem to mean that it wasn't titanium, or that it was the wrong kind of titanium, but that the origin of the titanium was falsified.
Can you read the author's mind? How do you know what they know?
It seems to me that perhaps all those things considered, they still think Boeing is at fault. It's not like you told us what the industry standard is, or any of that stuff.
The idea that an operation of Boeing’s size would not have the resources or wherewithal to spot check their suppliers on this sort of thing is just silly. The folks squeezing Boeing’s margins should know their suppliers are doing the same thing, and be suspicious of them. Either those folks were in on it with the suppliers or they just didn’t care about their own product’s quality. I’m not sure which I think is more likely. But either explanation is criminal negligence for this type of product.
Companies like Boeing generally can trace every material they get back to the mine or recycling center it came from. They won't buy if a slave was in the mine. Sure there are 7 layers of company between the mine and the company, but you still trace all those layers. This ensures not only do they not use things like slave labor, but also that the correct environmental controls are in place all down the line, and other such things.
If Boeing isn't doing the above they are at fault for the mistakes. No pushing this off on a supplier the buck stops at Boeing who could have solved this. There are other companies that do this correctly for the things they care about.
Of course you will not that many things use slave labor or don't have environmental control. The key is what companies care about.
I don't think anyone's contending that Boeing didn't have the resources. Like tons of once respectable titans of their given industry, they have had a rash of a new management structure that was of the "corporate pirate" variety, that shows up, acquires control, slashes costs across the board, does stock buybacks and bonuses regularly, makes products worse but continues trading on the name of the business for as long as possible, preferably for good but they're also quite happy to run a business firmly into the ground then sail away with their ill-gotten gains. And people contend that most of these issues, in one way or another, were down to that cost cutting. And I absolutely think it's criminal negligence but I also have severe doubts they will see any meaningful consequences. More line-item fines and firm finger wagging from the judiciary that they better not do it again, and I mean it this time.
Criminal negligence on the behalf of Boeing sounds like a stretch. If you have to verify the details of the work you outsource then everything would have to be done in house, and there would be no benefit to it. Are you criminally liable if your supplier commits fraud ?
> If you have to verify the details of the work you outsource
Yes, they have to verify. Verification is necessary whether or not the component is sourced through a supplier or in-house. Verification happens after the sourcing step. And yes, you are criminally liable in the supplier case if your supplier commits fraud and you knew about it, as is the implication here.
Are they legally bound to do the verification themselves ? Seems like it would be more cost efficient to outsource that as well, which would just be prone to fraud.
I did not see it mentioned where they were aware that their suppliers were committing fraud. At these large companies the executives only look at the spreadsheets and take the contracts as fact, regardless if a third party can deliver.
It would only make sense that they would do it. We test materials randomly at one place I went to randomly. It wasn’t every piece or every batch, but we definitely sent off materials to labs to get tested. We weren’t under the eye of anything like the FAA either, we were doing it to just ensure QA that out gearing was made with quality materials and not junk. It’s not cheap but it’s not outrageously expensive either to get metallurgy checked to make sure it’s meeting your requirements as per the mechanical design.
You are (or should be) if you took no effort to avoid the fraud for something this important. In IT, if you hire a company to handle your SSO, but don’t check that they have the required certifications verified by independent auditors for their own security you may well be on the hook when they expose your customers’ data.
I agree you should be. I don’t think our economic system enforces those checks. In practice auditing and pen testing are just farmed to the lowest cost place that says they will do everything. The system has no proper checks or balances against fraud.
You can’t outsource liability to a random Chinese supplier with no significant presence in US. Small Chinese company will sign whatever agreement you want and promise to do whatever checks you need - and then do absolutely nothing. What are you gonna do if something goes wrong? Sue them in Chinese court? Good luck.
If you want actual compliance, you have to send actual person (that you trust - it’s another big problem as that person can get bribed) in flesh and blood to verify everything and essentially be part of supplier team. That’s the only way.
I don’t believe you can do that outsourcing in good faith. However, assuming they did and were lied to, does that constitute liability I would see them arguing they are the victim.
Identifying material on receipt is trivial. There is a handheld scanner that you point at a piece of metal and it will tell you what the metal is, which spec it falls into, and the specific chemical makeup of the material when you pull the trigger. Using this equipment (it's called Positive Material Identification) for verifying material on receipt is part of every quality manual I have ever seen.
In other words, if Boeing was using counterfeit material, it was either deliberately ignored or deliberately hidden by falsifying records. It is not uncommon to get material that has a Material Test Record that is within spec (because not all suppliers are scrupulous), but a PMI result that is out of spec. If that was what was happening here (which is what I suspect), then those PMI results were thrown out and whatever was written on the MTR were transferred to the receipt report or accepted as-is.
"counterfeit" can mean many things, and in this instance it doesn't necessarily mean "the material was wrong" so much as "they lied about where they got it on the provenance paperwork"
In an industry where you are supposed to use QA and one of the most basic things is your material then it’s only common sense that you would randomly batch test the metallurgy on a supposed titanium shipment when it takes minutes to hours to check and “trust but verify” should be the basic SOP. I’m sure the details will come out. It’s a batch of 10 versus 10000 “widgets”. I’m not saying that’s what happened but if it becomes clear they skip critical QA tests like this then they are criminally negligent.
"So depending on the incentives and short term nature of the person deciding, there are a lot of incentives to not look too hard."
This gets at what has been reported as the fundamental problem at Boeing: It used to have a safety culture, when it was run by engineers. Now it's run by finance people, and it has a short-term profit culture. Instead of asking "will this plane be safe to operate for the next 30 years" it becomes "will this plane be slightly more profitable to sell next quarter". This is a major problem where safety is paramount.
Though in this case it was discovered because of corrosion problems on the parts that should not have been possible if they were made correctly. And they probably looked okay enough to not trigger any obvious ‘someone bought this off alibaba’ gut check.
To your point though, the material itself was correct to a rough level at least chemically. So most likely it was a problem with the forgings being contaminated or the forging process itself being slightly wrong (assuming it was a forged part, which it seems to be).
There is an old saw in manufacturing that “the only way to guarantee quality is to do it from the very start”.
The challenge is if you do that it is usually expensive.
Aerospace does all that paperwork nominally to try to guarantee that, and point the finger at anyone who tries to game the system.
But it is also eventually impossible to actually optimize cost without compromising the quality. So it has actual (usually visible) limitations in scale from a cost perspective. And if someone knows that what they are doing is wrong, of course they are going to try to stop a finger from pointing back to them.
so it’s inevitable when there is a lot of competition that suppliers run out of room to legitimately optimize, and they try to cut corners.
Shitty suppliers will try to cut corners right off the bat of course. Chinese manufacturers are notorious for almost immediately starting to put fake or out of spec components into things they make for folks once the initial ‘proof’ run is done and people stop paying as much attention. That is why Apple watches their manufacturers like hawks, including folks who work for them being onsite.
And there are a nearly infinite number of non-obvious ways to screw up the quality of something if someone is trying to cut corners, and from personal experience - Chinese manufacturers are uncommonly clever at it.
Same with wholesalers, subcontractors, and any other middlemen.
If the buyer is under similar pressure, they try to make up for it with ‘QA’. After all, even if the bag might be fake Gucci, if no one can tell, does it matter? Especially if it is half the cost?
Really lazy post-facto inspections or performatively checking paperwork are also a part of it, instead of actually verifying everything was done correctly from the start of course. Because having others believe it too is important for everyone.
That is inevitable in a ‘race to the bottom’, enshittification, etc. type scenario. As actually verifying quality is expensive.
As things get crazier, inevitably that QA gets looser and looser, and more and more corners get cut - until something breaks.
This is all due to the excessive low interest rate environment going on for so long, and the rising rates combined with a need to keep increasing stock prices causing a huge squeeze. Plus corporate idiocy and incompetence.
It’s no surprise the larger corporations are more visibly being screwed here, due to scale.
They aren’t allowed to be smart in the same way that small companies can, because they have to comply with all the other rules too even when they’re dumb.
In many cases a smaller company can actually produce a higher quality product for less, because they can hire people who are very competent but couldn’t pass a corporate hiring filter, or that hates the corp world, or that wants/needs something that the corp world can’t handle (like a competent boss, or flexible vacation).
They can also have folks like anal retentive asshole supervisors that would never make it in a Corp world, but could produce a better product. Or a chill supervisor that can enable creativity that the Corp world is currently squashing with anal retentive asshole supervisors.
Made worse by massive BS being normalized (political + advertising situation right) emboldening predators and scammers, and post COVID burnout.
Not that small companies are panaceas, they suffer from their own problems. But they do tend to be different - like capitalization issues.
It’s quite the perfect storm of factors. It’s actually pretty amazing Boeing is going through this - though this is a repeated pattern for them frankly - because they already have such a well protected and near monopoly position. Near as I can tell, they don’t really need to be shaving pennies.
And to answer the prior post - I doubt Boeing ‘knew’ (as documented) about the counterfeit parts, because that would require exceptional corporate stupidity. So definitely not impossible.
But there were definitely folks in key positions that knew it was a risk and was likely going on at some level, and chose to ignore the risk due to other pressures/concerns. Good luck nailing them on it, however, as I’m sure some scapegoats are being found as we speak. That’s why they’re going after whistleblowers too.
Personally, I imagine it’s even worse elsewhere, it just isn’t getting the press because it is at a smaller scale.
This is all part of so many folks doing the wil-e-coyote run off the cliff but don’t look down maneuver. Boeing is being forced to look down.
Others will too, sooner or later. No one wants to.
>> Every apple that gets pulled from the bushel is rotten and there are a lot of apples left.
This is part of a larger degradation of rules-based order. Companies do not fear regulators and certainly have no moral or ethical qualms about violating established rules. Ignoring rules is now an expected part of business. It is rewarded. We champion "disrupter" leaders who openly defy authorities and tear apart established norms of behavior. That needs to change. Shareholders need to stop rewarding such activity.
> Shareholders need to stop rewarding such activity.
And how, exactly, do you expect that to work? Shareholders are going to pay attention to what's profitable, and basically nothing else.
No; the government needs to stop turning a blind eye to such activity. We need the relevant enforcement departments to be better funded, the policies to be in favor of cracking down on violations of all types, and a mandate from the highest levels not to be shy about seeking the heaviest penalties even from the biggest, most lobbyist-endowed offenders.
There was never a rules-based order on the whole. Something like that has existed for various brief moments in time in various industries throughout the 20th century, but it has never been the norm. We as human society are fighting the same fight that we have been fighting since the beginning of the industrial revolution. Progress is measured on the scale of decades at best.
I agree with what you think needs to change, but I don't think anyone should be confused about corporations in the past somehow being more ethical than they are today.
> Every apple that gets pulled from the bushel is rotten and there are a lot of apples left.
Yes, that's what happens. If you leave a couple of bad apples in a barrel they off gas ethylene and spoil every apple in the barrel. You have to regularly get rid of bad apples before they spoil the bunch.
It's such a great metaphor, it's too bad it's so widely misused and misunderstood.
And importantly, when viewed with this understanding of "organizational ethylene", it's obvious that anyone who resists, obstruct, or disagrees with routine removal of bad apples is probably themselves a bad apple.
Ok, but usually, as we've seen, *gestures around*, the problem with the American justice system is if _theres a lot of crooks_, it absolutely just tries to normalize what the crooks are doing.
There's obviously no scape goat in Boeing. IT's systemically corrupt, which means Americans will happily try to make it look like that's normal and reasonable and "the best we can do". If not outright find the most dull, corrupt white guy and hold him up as a paragon of the perfect saint.
Right, but everyone from the individual prosecutor to the bureaucrats at the DOJ to the regulators at the FAA to members of Congress HAVE to be thinking "what if the next fuckup involves a plane falling out of the air and 200+ deaths, then it's my ass on the line" at this point.
FAA is probably thinking that since they're the ideal scapegoat in such a situation, but I don't think any member of Congress gives a shit about how many Boeing kills, as long as Boeing continues to pay them off.
Congress cares about votes more than payoff from Boeing. So long as voters don't care about how many Boeing kills congress wants the Boeing payoff. As soon as congress thinks voters care about Boeing congress will turn on Boeing.
Do you care about "Elevance Health" - they larger than Boeing according to the fortune 500 list (20 vs 52 in 2024) - but I hadn't even heard of them until I looked up the list just now. I have no clue what the company is up to (health informs my guess, but it is a guess). Companies like them can continue to do whatever and voters won't care.
Congress will do the usual: accept Boeing's money and overlook the issue on one hand, and pretend to the public that they're doing otherwise on the other.
Unfortunately, Americans and the peoples of many democratic countries have given up on verifying if their elected officials are actually doing what they say they are, so taking a ~~bribe~~ campaign contribution and lying about it is a medium-high gain and low risk activity.
As a bonus, you can then use those contributions to market yourself and your lies to the same voters even harder!
But voters care about a multitude of issues. People care much more about things like abortion, immigration, healthcare, gun rights (or control), and yet none of those are seeing any movement or chance of causing meaningful threat to their voter base.
It'll take much much worse than a couple more crashes for the Boeing issue to eclipse all those things to become an issue people actually change their voting over.
If a plane full of Americans falls out of the sky and kills everyone on board, and it turns out to be because of negligence at Boeing, and it happens close to an election, that will definitely be used against any incumbent politician who could be portrayed as responsible.
Politicians want to avoid a scenario like that. But it does require several things to line up for that scenario to unfold, so they have no incentive to care beyond what is necessary to prevent it.
How many of those leaders are steeped in the old ways of airlines, back in the 70s/80s/90s when 1000+ deaths a year was the norm? I wonder how many of them believe air travel has become too safe, that there is profit to be made by backing off the recent improvements.
Well, these "plane falling out of the sky" fuckups have already happened[1] and the culture there still has obviously not changed. Maybe it's going to take a "plane full of Americans falling out of the sky" fuckup event.
I don't think the problem is crooks in the justice system, but crooks throughout the system, which is a monster that feeds itself - with money you buy power with power you can make more money.
This is what you get in a society in which money is the only thing that matters. This is a stupid idea to even write here let alone build a society upon.
This is why people love to hate Elon Musk. Having a despicable character at the head of Tesla is the only thing that makes it possible for people to care about anything that Tesla or his other companies does.
Boeing would be huge news, and would be in much worse trouble, if there was a flamboyant bad guy to hold people's attention. Being dull is an important quality for corporate leadership for exactly this reason.
