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I think a fundamental concept that is relatively ignored in press (mainstream or non-fringe at least) is in business priorities. As the essay points out, Boein
by blunte 8y ago
I think a fundamental concept that is relatively ignored in press (mainstream or non-fringe at least) is in business priorities.
As the essay points out, Boeing made decisions based on market (financial) factors all along the way. Of course they did - almost all companies do. Because it's so common, we forget it's not a RULE that cost, shareholder value, profit, etc. must be the final judgement.
Certainly any company that might prioritize safety (as in the case of a people-carrier) or some other non financial focus may not be as attractive to investors, in some cases - particularly where human life is concerned - maybe that's ok.
I know this is a bit sensational of me to suggest, but Walmart could make an airplane. They have the funds to do so if they wanted (they would just buy a company; that's the quick way to get rolling). And if the Walmart airline charged half of what other airlines charged, you can be sure a whole lot of people would fly it. And sure, after enough flights, the fatalities per flight would become uncomfortable to most flyers.
The point is, it's a very long game. If people are not willing to consider the long game, they are basically gambling. I fly a lot. I almost always choose my flights based on cost/convenience. I didn't previously avoid 737 MAXs. (I would now, but they're all grounded anyway.) That said, if I know an airline cuts every corner to lower the price and increase the profits, I will certainly choose the next more expensive airline that doesn't behave so poorly. In this case it's the manufacturer, and the consumer has much less choice where that is involved.
But let's get back to the point. If Boeing were to fall behind Airbus in the 737/A320 race, would that really be such a terrible thing? Would the cost be human life, or might it be some stock price level? As an investor, do you really care about your shareholder value more than human life?
I like to fly. It can actually be fun. And I really like to visit lots of places in the world, eat lots of awesome food, and experience different cultures. I don't want to die because of some shareholder value goal (fuck you). I will die, and maybe it's tomorrow, but it shouldn't be for a stupid reason unless I choose it (here, hold my beer.)
- bumby 8y agoI agree that people often seem to miss that this may be rooted in a business decision. The problem is it isn't a risk-informed decision. I would doubt Boeing was accurately able to assess the actual risk of MCAS causing a catastrophic failure or else the decision to rush to market wouldn't have happened. I think just as large of a problem is mis-aligned incentives. Management is almost assuredly not singly focus on the extreme long term. The are graded quarter-by-quarter, year-by-year. This pushes uncertain risks to the periphery in favor of short term profits. I'm worried that unless the incentive structure is re-evaluated (by jail terms as an example) management will continue to make these types of decisions because schedule and cost will remain king
- linuxftw 8y ago> I would doubt Boeing was accurately able to assess the actual risk of MCAS causing a catastrophic failure or else the decision to rush to market wouldn't have happened. That's most likely because upper management has been cutting staff and not investing in their people. They should be sued and fined out of business. Whoever picks up the pieces will know: "Don't cut corners, or it's absolutely ruins."
- bumby 8y agoI have no clue about Boeing's staffing practices but it's often the case in large organizations that the people trying to prudently hold up a project because it's not ready are looked at less favorably by those with "go-fever". I agree they should be held accountable but there's also blowback from bankrupting one of a nation's major aerospace manufacturers
- linuxftw 8y ago> I agree they should be held accountable but there's also blowback from bankrupting one of a nation's major aerospace manufacturers So let there be blowback. Flight costs will go up if they have to, nbd. If there's too big to fail, then just nationalize them and get on with it.
- bumby 8y agoI meant blowback bigger than just consumers pocketbooks. Issues related to national security because the nation just lost one of it's primary aerospace contractors. The "too big to fail" issue is an important one, though many Americans tend to hate the idea of nationalization because in their minds it's a social evil.
- linuxftw 8y agoYeah, it's a tough lesson. We shouldn't put all of our eggs in one basket. We have other aerospace contractors anyway.
- xigency 8y ago> Certainly any company that might prioritize safety (as in the case of a people-carrier) or some other non financial focus may not be as attractive to investors, in some cases - particularly where human life is concerned - maybe that's ok. This reminds me of the Takata air bag recall. If your product is a life saving device, margins should not be the highest priority.