4 ms·

Hard to think of a better case study on the perils of regulatory capture than Boeing.

ReGenGen 7y ago
Amazing how Boeing was restructured from an engineering & production organization into a political influence machine. Production was spread (and outsourced) from Seattle out to key influential states and HQ moved to Chicago.
- PaulHoule 7y ago
  Not just US influence but international influence. In the 777 and 787 eras, Boeing decentralized production all over the world, and it's hard to say that Airbus is really a European company because they've done the same. Back in the day so many countries had to have a fourth- or fifth-rate car industry, and to head that off, the Boeing-Airbus duopoly distributed production all over the place so politicians in most countries could point to some part in a Boeing or Airbus airliner that was made in their country to discourage the development of an indigenous industry.
  - dingaling 7y ago
    Which is why the safety cards in US airline cabins cleverly state "Country of final manufacture: ___"; another subtle win for Boeing.
- jorblumesea 7y ago
  It was the financialization of the company from just producing airplanes to a "global 100 company". Of course, with all of the problems and pressures that go with it.
jillesvangurp 7y ago
Ironically, the best way forward would be to let this spiral out of control a bit for Boeing and create some room for their competitors. Maybe cause some C level execs to be fired. Make the FAA do their job and hand out some fines, etc. The whole problem here is that Boeing has absorbed all their former US based competitors in the past decades and has only Airbus left as a main competitor and a few much smaller ones based in Russia, China, Japan, etc. This is a unhealthy situation for the market and for the US. It was fine when Boeing was cranking out innovative products that were clearly better but they seem to have a hard time keeping up with competition and are too dependent on government support currently. Easy fix: cut back that support a little. IMHO the 737 Max thing will probably blow over once Boeing implements some relatively simple technical changes. People seem to obsess over a lot of technical details with sensors and software processes. That criticism is well deserved but probably relatively easy to address by Boeing as well. The bottom line is that once they get their solution past certification, that will be the end of it. Their branding has obviously suffered and this is impacting short term sales and revenue. They'll probably have to do some rebranding and maybe ditch the 737 Max brand in favor for a new version. After that, it's likely back to business as usual. Short term this just means awesome deals for carriers brave enough to talk to their sales right now.
- skgoa 7y ago
  IMO you are vastly underestimating the long term damage this is doing to Boeing. In the short term, 737 user will have to keep using it and will have to buy more of those planes from Boeing, because switching to another single-aisle plane would cost too much and there simply isn't enough production capacity in the world to make this switch happen in the near future. However the 737Max is the last version of the 737. 737 users will have to transition away from this type in the medium term future. The current troubles force them to think hard about whether they will trust Boeing at that point or decide to go with a competing product. Of which there will be roughly half a dozen by that time. It gets even worse, if we look at the big picture. The 787, 747-8i and 737Max have all been expensive disappointments for the airlines that ordered them. Boeing has been losing market share to Airbus for decades now, this really isn't a good trend for them. That doesn't mean that Boeing will not find a certain level of success with their next airplanes, but the damage their brand has suffered does hurt their bottom line quite severely.
  - inferiorhuman 7y ago
    Think short-term. No American airlines ordered the 777X, which is due to fly next year. How much foreign scrutiny will the 777X get? What safety critical systems did Boeing lie about?
    - flosstop 7y ago
      Exactly, particularly with the folding wingtip which is a very novel approach for civilian aircraft.
  - dhimes 7y ago
    Are airlines really expecting passengers to fly in that plane in the future?
  - inferiorhuman 7y ago
    The 787, 747-8i and 737Max have all been expensive disappointments for the airlines that ordered them. Also, what? The 787, for all of its faults, has been extremely well received. The 747-8i was only ordered in small numbers because nobody wanted a quad jumbo (same reason the A380 is ending production) — the freight variant (8F) has been pretty popular (again for a niche market).

Amazing how Boeing was restructured from an engineering & production organization into a political influence machine. Production was spread (and outsourced) from Seattle out to key influential states and HQ moved to Chicago.

PaulHoule 7y ago
Not just US influence but international influence. In the 777 and 787 eras, Boeing decentralized production all over the world, and it's hard to say that Airbus is really a European company because they've done the same. Back in the day so many countries had to have a fourth- or fifth-rate car industry, and to head that off, the Boeing-Airbus duopoly distributed production all over the place so politicians in most countries could point to some part in a Boeing or Airbus airliner that was made in their country to discourage the development of an indigenous industry.
- dingaling 7y ago
  Which is why the safety cards in US airline cabins cleverly state "Country of final manufacture: ___"; another subtle win for Boeing.
jorblumesea 7y ago
It was the financialization of the company from just producing airplanes to a "global 100 company". Of course, with all of the problems and pressures that go with it.

jillesvangurp 7y ago

Ironically, the best way forward would be to let this spiral out of control a bit for Boeing and create some room for their competitors. Maybe cause some C level execs to be fired. Make the FAA do their job and hand out some fines, etc. The whole problem here is that Boeing has absorbed all their former US based competitors in the past decades and has only Airbus left as a main competitor and a few much smaller ones based in Russia, China, Japan, etc. This is a unhealthy situation for the market and for the US. It was fine when Boeing was cranking out innovative products that were clearly better but they seem to have a hard time keeping up with competition and are too dependent on government support currently. Easy fix: cut back that support a little. IMHO the 737 Max thing will probably blow over once Boeing implements some relatively simple technical changes. People seem to obsess over a lot of technical details with sensors and software processes. That criticism is well deserved but probably relatively easy to address by Boeing as well. The bottom line is that once they get their solution past certification, that will be the end of it. Their branding has obviously suffered and this is impacting short term sales and revenue. They'll probably have to do some rebranding and maybe ditch the 737 Max brand in favor for a new version. After that, it's likely back to business as usual. Short term this just means awesome deals for carriers brave enough to talk to their sales right now.

skgoa 7y ago
IMO you are vastly underestimating the long term damage this is doing to Boeing. In the short term, 737 user will have to keep using it and will have to buy more of those planes from Boeing, because switching to another single-aisle plane would cost too much and there simply isn't enough production capacity in the world to make this switch happen in the near future. However the 737Max is the last version of the 737. 737 users will have to transition away from this type in the medium term future. The current troubles force them to think hard about whether they will trust Boeing at that point or decide to go with a competing product. Of which there will be roughly half a dozen by that time. It gets even worse, if we look at the big picture. The 787, 747-8i and 737Max have all been expensive disappointments for the airlines that ordered them. Boeing has been losing market share to Airbus for decades now, this really isn't a good trend for them. That doesn't mean that Boeing will not find a certain level of success with their next airplanes, but the damage their brand has suffered does hurt their bottom line quite severely.
- inferiorhuman 7y ago
  Think short-term. No American airlines ordered the 777X, which is due to fly next year. How much foreign scrutiny will the 777X get? What safety critical systems did Boeing lie about?
  - flosstop 7y ago
    Exactly, particularly with the folding wingtip which is a very novel approach for civilian aircraft.
- dhimes 7y ago
  Are airlines really expecting passengers to fly in that plane in the future?
- inferiorhuman 7y ago
  The 787, 747-8i and 737Max have all been expensive disappointments for the airlines that ordered them. Also, what? The 787, for all of its faults, has been extremely well received. The 747-8i was only ordered in small numbers because nobody wanted a quad jumbo (same reason the A380 is ending production) — the freight variant (8F) has been pretty popular (again for a niche market).