8 ms·

Boeing engineer breaks silence on MAX 737

163 points by erentz 7y ago

breck 7y ago
Is there a link to the source/actual letter?
- mehrdadn 7y ago
  Haven't read it yet but I'm guessing it's this: https://www.seattletimes.com/opinion/what-will-it-be-boeing-great-airplanes-that-generate-cash-flow-or-great-cash-flow-period/ https://www.seattletimes.com/opinion/what-will-it-be-boeing-...
  - pcurve 7y ago
    "According to Boeing’s annual reports, in the last five years Boeing diverted 92% of operating cash flow to dividends and share buybacks to benefit investors. Since 1998, share buybacks have consumed $70 billion, adjusted for inflation. That could have financed several entire new airplane models, with money left over for handsome executive bonuses." So many punchlines, but this one is is just sad. 92%.
    - JMTQp8lwXL 7y ago
      Excessive buybacks are bound to doom companies. If you can't compete, if you can't innovate, if your destroy your brand's reputation in order to maximize share buybacks, you will no longer have the revenue to continue the buybacks. Like most things, a happy medium is good. Too few buybacks, you might be wasteful in your R&D spending. Too much, you get a Boeing situation. A middle ground optimizes for continuing to produce innovations, while maintaining (and hopefully growing) revenues.
      - JMTQp8lwXL 7y ago
        In the case of Boeing, it might be challenging to know how much you can cut costs before you materially impact the business. What exactly is essential? I'm certainly no expert in the aeronautical, but who really knows if trimming two sensors down to one has a good ROI? As an engineer, I typically know that redundancy is a good thing. But maybe their historical data showed that those sensors have very, very low chance of failing. Maybe they've never previously even encountered the situation where the second was remotely necessary. They could've backtested the impact of removing the sensor, and found no concerns. We could assume a more ominous intent here, but with Boeing's reputation on the line, I doubt they would've actually been interested in cutting costs at the expense of lives -- we can see the impact that had today on their reputation. Many little cost-cutting decisions are made, and many are probably likely to be inconsequential. It's easy for us to say, "obviously cutting 2 sensors to 1" was the wrong choice. But you could make the same argument for any other cost-cutting measure they employed, that had no safety impact. The difference here, is unfortunately this one brought a huge public eye on Boeing. It's good to cut costs (where reasonably possible), and it's good to return value to shareholders. Those are things expected of public companies. They probably compared themselves to their peers, realized that stock buybacks is the current metric to which public companies are being measured by, and over-optimized for it. A lot of people look at their peers to decide what to do themselves, even multi-national companies. This time, it didn't pan out.
      - jonahhorowitz 7y ago
        Before the 1980s, buybacks were illegal and seen as stock manipulation. We should get back to that. If you can't find a good use for the money, pay dividends.
        pcurve 7y ago
        I wonder what the short term and long term consequences of the buyback ban might be. It could probably an interesting debate topic over drinks that could go on for hours ;-) Short term, it will probably lead to equity market tanking, especially if it is not coordinated with the rest of the world capital market. I guess I'm more interested in long term impact on how companies operate, compensates executives, manages assets. Dividend will still be allowed.
        TimTheTinker 7y ago
        I strongly agree. I wonder if it would help for a new kind of union to arise - one that exists only to guarantee good wages for its members -- to force companies to direct more profits toward wages instead of towards stock buybacks.
    - Spooky23 7y ago
      Sounds like that big innovator IBM.
    - troydavis 7y ago
      Matt Levine has some food for thought on buybacks: https://www.bloomberg.com/opinion/articles/2019-06-24/would-corporate-america-be-better-without-stock-buybacks https://www.bloomberg.com/opinion/articles/2019-06-24/would-... To summarize his article: if you take issue with anything, take issue with the profitability and lack of reinvestment. Don't blame buybacks and dividends because in general, they're an outcome. As Levine says: "But in this story the buybacks are the residual, a result of a focus on profits rather than a cause."
      - pcurve 7y ago
        "take issue with the profitability and lack of reinvestment" The problem is lack of re-investment. 92% of Operating cash flow of being plowed into repurchase and dividend is high even more mature company like Boeing.
    - AnimalMuppet 7y ago
      What's the difference between "operating cash flow" and "profit"? Is it "operating profit", that is, without investing in R&D or capital expenditures? "Consumed" is kind of a loaded word. It's true that money spent that way can't be invested in capital improvements or R&D. But "consumed" kind of implies "wasted". That's hard to say without knowing what a normal number for an airplane manufacturer is. And, of course, money spent on "handsome executive bonuses" would also have drawn ire...
    - taurath 7y ago
      Its insanity to me that investors are that important within corporate charters. Not the people it employs, not the community it operates in, not the value it brings to society, not even the amount of money it makes. The returns to investors is 99.9% the reason a corporation exists. Its institutionalized sociopathy, and I'm pretty certain it wasn't always this way (or at least as widespread).
- 0xffff2 7y ago
  It's included at the end of the article.
  - dehrmann 7y ago
    "Article" is being generous.
pcurve 7y ago
Very interesting. 777 probably has the cleanest safety record. Basically zero incident stemming from design, engineering or manufacturing defect. 747 was exceedingly safe despite 3,000 deaths. Half of that was due to bombing, hijacking, missile. Seriously.
- john_moscow 7y ago
  Ironically, the biggest 747 crash (and, IIRC, the world's deadliest airline-related disaster) happened on the ground due to air traffic controller's fault, that directed 2 airplanes on a collision course in thick fog [0]. [0] https://en.wikipedia.org/wiki/Tenerife_airport_disaster https://en.wikipedia.org/wiki/Tenerife_airport_disaster
  - anamexis 7y ago
    Small correction: it was not the air traffic controller primarily at fault, but the captain of the KLM aircraft for taking off without explicit clearance.
    - john_moscow 7y ago
      IIRC, at that time there was no standard unambiguous way to communicate standard procedures and misunderstandings were often (albeit not fatal). It was after that crash when FAA introduced very strict rules on air traffic communication (e.g. the word "clearance" can only be said by the air traffic controller if the clearance is actually granted). Talk about rules written in blood.
      - sokoloff 7y ago
        "Clearance" is used in many ways to indicate that a clearance has not been granted yet (or has been revoked). From the ATC Job Order manual [0], examples include: “continue, expect landing clearance two mile final” and "CANCEL TAKEOFF CLEARANCE (reason)" What you might be thinking of is the guidance against using "takeoff", which is "Avoid using the term “takeoff” except to actually clear an aircraft for takeoff or to cancel a takeoff clearance. Use such terms as “depart,” “departure,” or “fly” in clearances when necessary" [0] - https://www.faa.gov/documentLibrary/media/Order/7110.65X_w_CHG1_CHG2_and_CHG_3.pdf https://www.faa.gov/documentLibrary/media/Order/7110.65X_w_C...
mpoteat 7y ago
Not that it detracts from the claims presented in the article, but the fact that the author is a seemingly high ranking person in his union adds a degree of politics to it.
- hugi 7y ago
  Why? Is this opinion rooted in the American hatred/demonization of unions? I come from a scandinavian country and it would be pretty normal for a union spokesman to comment on something like this. What would be his "political" point here?
  - cnnrro 7y ago
    Personally I didn't read it as having to do with hatred of unions, more just a reminder of political incentives. It's very much in a union's best interest to divert blame from the engineers it represents onto the companies "cost-cutting culture". It could very well be the truth that the cost-cutting culture is to blame. But it's always worth noting incentives of parties in cases like this.
    - hugi 7y ago
      Why would it be in the union's interest to "divert blame from engineers"? Does it benefit financially from it? Do their members somehow benefit from it? Are you saying that Boeing wants to blame their Engineers and this is now a fight between Boeing and it's employees? Serious questions, I'm not quite understanding that corporate culture.
      - AnimalMuppet 7y ago
        Boeing made changes that reduced the number of higher-paid engineers in the Seattle area, and moved some of the work to lower-paid and offshore engineers. That hurt this guy's union; it would help the union to get Boeing to reverse that.
      - sokoloff 7y ago
        SPEEA is a union representing (and collecting union dues from) Boeing's US engineers but not the $9/hr outsourced engineers. [0] That being the case, the motivation to ensure that the former are not blamed for the 737-Max issue and to call into question the quality of work of the latter is probably clear. [0] - http://www.speea.org/Join_Our_Union!/FAQ.html http://www.speea.org/Join_Our_Union!/FAQ.html ("Where do SPEEA members work?")
deckarep 7y ago
This quote is powerful and resonates: “The cost-cutting culture is the opposite of a culture built on productivity, innovation, safety or quality” I know investors must see a profit and business must keep moving but honoring the careful balance of these two ideas is a must or what are you really left with?
wrong_variable 7y ago
I am not sure why this is not talked about often enough. Prior to the 1980s, Japan's economy functioned as a sort of War economy. Companies would spend and invest to gain market share at the cost of margins. share prices were rarely something a company worried about, it was always about product. This was key to Japan's insane post WW2 success. Then came the 80s, with it US style shareholder capitalism. and within 10 years Japan's economy collapsed - never to recover. If you notice, China is following the same exact pattern, running a War economy with a razor focus on market share over profitability. It's what causes great fortunes to be made and lost in China. Coming back to Boeing, because of the monopolist dynamic here, nothing is going to change. Especially since the people who died were mostly foreign nationals. I doubt even if some unfortunate event like that happens in the EU,NA Boeing would go bankrupt - there would be a lot of noise for a few years, maybe some board members get fired. Too many pension plans and retirement plans depend on Boeing's survival.
- _bxg1 7y ago
  I don't think anyone wants Boeing itself to go bankrupt. We want the execs who established this culture to go to jail, and to be replaced with new ones who are now strongly incentivized to do things differently.
  - peteretep 7y ago
    > I don't think anyone wants Boeing itself to go bankrupt I do. Going bankrupt means the shareholders who benefited from this lose their shirt, the company goes into Chapter 11, and the market learns that airplane companies exist to make airplanes that don't fall out of the sky.
    - cloakandswagger 7y ago
      Both of you are proposing an emotionally charged witch hunt. As one of the top comments stated, embracing a punitive culture toward engineering accidents has no long-term benefits. In my work (and this is probably true in any successful organization) even the most severe screw up is examined honestly and without emotion so that it can be prevented from happening again. If the immediate response is to fire a bunch of people or throw them in jail, people are going to do everything they can to avoid responsibility and ultimately fixing the problem. If in the course of an investigation it comes out that Boeing execs were willfully negligent or malicious, then we can start discussing throwing people in jail and bankrupting companies, but that shouldn't be the first reflexive impulse.
ChuckMcM 7y ago
It reminds me of the adage "Workplace culture is what you do not what you say you do." I have met too many engineering managers over the years who thought they could cleverly have it both ways by exhorting quality is the highest priority while penalizing or criticizing engineers who objected based on quality or design metrics.
- a3n 7y ago
  I don't ever continue past the 3rd word of a corporate response for exactly this reason. What they say is always what they "should" say, in line with how things "should" be, rather than reality at the moment. The speaker doesn't even have to be familiar with the issue at hand beyond keywords.
  - tomjakubowski 7y ago
    What do you get out of reading the first two words of a corporate response?
    - a3n 7y ago
      A reminder that the rest of the statement will be bullshit and I never should have bothered starting.
    - spacedog11 7y ago
      I'm sure a3n didn't mean literally "the first two words." I think they meant it as a figure of speech.
thtthings 7y ago
I know the mistake was very costly and we are talking about lives here. But, come on.. is there a chance people are over analyzing. We can try hard and do everything right and still something can go wrong. They are humans and the airplanes from Boeing have been very very very reliable. It's not like every max 8 dropped from the air. A lot of them, most of them flew alright. I know the people who lost their lives paid a big price but, in hindsight everyone has an opinion.
- jdavis703 7y ago
  There was an article about ladders, tools and debris being left inside various parts like the tail. I’m sure management put the workers under extreme deadline pressure, but this kind of negligence isn’t simply a small human mistake. It shows there’s a systematic flaw in their quality assurance capability. Source: https://www.google.com/amp/s/www.nytimes.com/2019/04/20/business/boeing-dreamliner-production-problems.amp.html https://www.google.com/amp/s/www.nytimes.com/2019/04/20/busi...
  - aaronbrethorst 7y ago
    In case you want to hear directly from a former Boeing employee on this: https://www.nytimes.com/2019/04/23/podcasts/the-daily/boeing-dreamliner-charleston.html https://www.nytimes.com/2019/04/23/podcasts/the-daily/boeing...
- kelnos 7y ago
  > We can try hard and do everything right and still something can go wrong. Except they didn't do that. They did many things wrong, and it sounds like what they tried hard to do was cut costs, rush to production, and get a favorable regulatory/certification outcome via the cheapest route possible.
ltbarcly3 7y ago
This comment from a 'boeing engineer' has basically no information content. - He's not a Boeing engineer, he's 'a senior member of the union'. Apparently he was an engineer sometime in the past, now his job is to push anything that will benefit members of the union, which is what he is doing here. He has no specific information about the MAX to offer. - Cost savings is always the root cause of every engineering failure, so long as you have the benefit of hindsight. I mean once you know what the problem is you can spend money to fix it, and they should have spent that money right off the bat, right? I mean, if they knew there was a problem, which they must have or else there is nobody to blame. We need someone to blame! Of course projects that don't try to limit costs can't fail since they are canceled and never built. Except for the Space Shuttle, which went massively over budget again and again and still had a terrible safety record, which absurdly was blamed on cost cutting. https://www.wired.com/2016/01/to-cut-costs-and-save-time-nasas-taking-more-risks/ https://www.wired.com/2016/01/to-cut-costs-and-save-time-nas... So no matter how much money you spend, when something fails you are going to be blamed for not spending more. If you budget $1 Billion and then decide to spend $10 Billion to improve safety, whenever something goes wrong they'll say you should have spent $11 Billion. - Trying to vilify people and attempting to create an environment to produce massive punitive damages and lawsuits, or to bring political pressure to change staffing decisions dramatically decreases safety. The FAA has spent almost a hundred years building up an environment of cooperation with a shared responsibility to understand failures and enable the changing of the entire aviation industry whenever necessary to promote safety. This has been fabulously successful. Trying to place blame and attack people for past decisions will only lead to a closing of the culture and an attempt to hide information in the future. Compare aviation to the auto industry in how they adapt and improve safety, it's night and day for exactly this reason. Creating an environment where companies have to be afraid to admit mistakes does not help us find the root causes of problems and change the system to prevent those problems in the future.
- fj39dkf 7y ago
  > Trying to vilify people and attempting to create an environment to produce massive punitive damages and lawsuits, or to bring political pressure to change staffing decisions dramatically decreases safety. The FAA has spent almost a hundred years building up an environment of cooperation with a shared responsibility to understand failures and enable the changing of the entire aviation industry whenever necessary to promote safety. This has been fabulously successful. 346 dead passengers is definitely not successful or acceptable. You think the rating/MCAS problem doesn't merit further investigation?
a3n 7y ago
I worked at Boeing from '88 to '94, writing test software. I liked it. I liked the people and the atmosphere. I always thought that when Boeing moved its headquarters from Seattle to Chicago that that was the end of something special. They went from being legendary Boeing to just another hyper-corporation who happens to make money doing X or Y or Z. In my opinion.
- master-litty 7y ago
  Was there something special about the move that ended the era? That in itself doesn't seem harmful to a legendary status.
  - a3n 7y ago
    There was nothing "Boeing" in Chicago at the time. The only thing relevant there in Chicago was United Airlines. They moved top executives physically and culturally away from where everything was being done. In my opinion, that made the whole company abstract to the executives.
    - drcross 7y ago
      It's such a bad move to move senior ranking staff away from junior.
    - pfranz 7y ago
      Funny how the opposite can also be true. In 1985, Disney Animation was moved off the Burbank lot to a cluster of buildings about 2 miles away. After the success of Beauty and the Beast, The Little Mermaid, Aladdin, and the Lion King they moved back onto the lot. Their new building was literally next to where the executives are in the ABC Studios building. I've heard complaints that executives would walk over and make creative decisions whereas being 2 miles away they were mostly left alone.
      - AstralStorm 7y ago
        So, executives doing something other than their job and messing it up. Classic.
rinze 7y ago
No surprises here. It's called "crapitalism" for a reason.
- dang 7y ago
  Please don't post unsubstantive comments here. Especially not unsubstantive ideological battle comments. We're trying for a more thoughtful sort of discussion on this site. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
ereyes01 7y ago
> From a shareholder perspective, Boeing’s approach to its business has been wildly successful. The company is enduring its second worldwide grounding in recent memory. > However, worldwide demand for airplanes is riding a high. And Boeing has diverted cash flow into dividends and share buybacks that have helped boost the company’s stock. I started my career in IBM in the early 2000s, and this sounds incredibly familiar. As the years passed, company messaging and all-hands meetings increasingly celebrated the stock price, stock buy-backs, and later earnings per share. Meanwhile, the engineering teams and products around me felt more creaky and short-staffed, and the quality of many products (and, gradually, the technical leadership) seemed to be declining. Also, layoffs appeared to be picking up steam, and my salary was stagnant. I eventually left in 2010, giving myself a big raise in the process. Right after the time I left, IBM rocketed to all-time highs and became the darling of the Dow, while everything else all around was still in shambles from the recession. I had a hard time reconciling the macro performance of the company with the facts on the ground as I experienced them. It was only much later that I think I understood what was happening, after reading a Sam Palmisano interview (having a hard time finding it). The way I rationalize what I experienced at IBM is that the company leadership decided to raid the coffers and cash out on value the company had built up over the decades. It's like cashing in your chips at the casino after deciding you've played enough. The way they did this was to cut costs relentlessly and employ "financial engineering" to inflate the stock price. It was basically a transfer of wealth from the investment in the products and the people to the owners/shareholders in the form of higher share values and dividends. I suppose one can interpret this sort of company decision as a bet against future growth, and an admission that the investment to some degree had run its course. Also, a company like IBM (and Boeing) has built so much value over the decades, that even after raiding the coffers and cutting costs, the embers still burn hot and the business is still huge, though perhaps now hamstrung and unable to grow. Of course, this creates a pretty dismal situation for us grunts on the ground, and the work product undoubtedly suffers, while the brain drain picks up its pace. The difference of course between IBM and Boeing is that the cost cutting in Boeing has ended up costing many human lives, and the consequences are much much sharper in blood and reputation, and maybe in regulation as well.
- madiodio 7y ago
  That's a great analysis
viburnum 7y ago
I didn’t realize Boeing’s stock had done so well! Now that’s shareholder value.
lifeisstillgood 7y ago
"We Shall Build Good Ships Here; At A Profit If We Can, At A Loss If We Must, But Always Good Ships." Collis Potter Huntington. (Newport Shipyards, contractors to US Navy) http://www.alwaysgoodships.com/ http://www.alwaysgoodships.com/
deleted 7y ago
[deleted]
chvid 7y ago
Boeing is trading some 20-25% from its all time high. I find that amazing. The stock market is basically telling us that this is all just a bit of bad press that will pass. This story is very similar to a story here on hn from just a few days ago: https://news.ycombinator.com/item?id=20353342 https://news.ycombinator.com/item?id=20353342
- perl4ever 7y ago
  Compare BP with Tokyo Electric Power.

163 points by erentz 7y ago

breck 7y ago

Is there a link to the source/actual letter?

mehrdadn 7y ago
Haven't read it yet but I'm guessing it's this: https://www.seattletimes.com/opinion/what-will-it-be-boeing-great-airplanes-that-generate-cash-flow-or-great-cash-flow-period/ https://www.seattletimes.com/opinion/what-will-it-be-boeing-...
- pcurve 7y ago
  "According to Boeing’s annual reports, in the last five years Boeing diverted 92% of operating cash flow to dividends and share buybacks to benefit investors. Since 1998, share buybacks have consumed $70 billion, adjusted for inflation. That could have financed several entire new airplane models, with money left over for handsome executive bonuses." So many punchlines, but this one is is just sad. 92%.
  - JMTQp8lwXL 7y ago
    Excessive buybacks are bound to doom companies. If you can't compete, if you can't innovate, if your destroy your brand's reputation in order to maximize share buybacks, you will no longer have the revenue to continue the buybacks. Like most things, a happy medium is good. Too few buybacks, you might be wasteful in your R&D spending. Too much, you get a Boeing situation. A middle ground optimizes for continuing to produce innovations, while maintaining (and hopefully growing) revenues.
    - JMTQp8lwXL 7y ago
      In the case of Boeing, it might be challenging to know how much you can cut costs before you materially impact the business. What exactly is essential? I'm certainly no expert in the aeronautical, but who really knows if trimming two sensors down to one has a good ROI? As an engineer, I typically know that redundancy is a good thing. But maybe their historical data showed that those sensors have very, very low chance of failing. Maybe they've never previously even encountered the situation where the second was remotely necessary. They could've backtested the impact of removing the sensor, and found no concerns. We could assume a more ominous intent here, but with Boeing's reputation on the line, I doubt they would've actually been interested in cutting costs at the expense of lives -- we can see the impact that had today on their reputation. Many little cost-cutting decisions are made, and many are probably likely to be inconsequential. It's easy for us to say, "obviously cutting 2 sensors to 1" was the wrong choice. But you could make the same argument for any other cost-cutting measure they employed, that had no safety impact. The difference here, is unfortunately this one brought a huge public eye on Boeing. It's good to cut costs (where reasonably possible), and it's good to return value to shareholders. Those are things expected of public companies. They probably compared themselves to their peers, realized that stock buybacks is the current metric to which public companies are being measured by, and over-optimized for it. A lot of people look at their peers to decide what to do themselves, even multi-national companies. This time, it didn't pan out.
    - jonahhorowitz 7y ago
      Before the 1980s, buybacks were illegal and seen as stock manipulation. We should get back to that. If you can't find a good use for the money, pay dividends.
      - pcurve 7y ago
        I wonder what the short term and long term consequences of the buyback ban might be. It could probably an interesting debate topic over drinks that could go on for hours ;-) Short term, it will probably lead to equity market tanking, especially if it is not coordinated with the rest of the world capital market. I guess I'm more interested in long term impact on how companies operate, compensates executives, manages assets. Dividend will still be allowed.
      - TimTheTinker 7y ago
        I strongly agree. I wonder if it would help for a new kind of union to arise - one that exists only to guarantee good wages for its members -- to force companies to direct more profits toward wages instead of towards stock buybacks.
  - Spooky23 7y ago
    Sounds like that big innovator IBM.
  - troydavis 7y ago
    Matt Levine has some food for thought on buybacks: https://www.bloomberg.com/opinion/articles/2019-06-24/would-corporate-america-be-better-without-stock-buybacks https://www.bloomberg.com/opinion/articles/2019-06-24/would-... To summarize his article: if you take issue with anything, take issue with the profitability and lack of reinvestment. Don't blame buybacks and dividends because in general, they're an outcome. As Levine says: "But in this story the buybacks are the residual, a result of a focus on profits rather than a cause."
    - pcurve 7y ago
      "take issue with the profitability and lack of reinvestment" The problem is lack of re-investment. 92% of Operating cash flow of being plowed into repurchase and dividend is high even more mature company like Boeing.
  - AnimalMuppet 7y ago
    What's the difference between "operating cash flow" and "profit"? Is it "operating profit", that is, without investing in R&D or capital expenditures? "Consumed" is kind of a loaded word. It's true that money spent that way can't be invested in capital improvements or R&D. But "consumed" kind of implies "wasted". That's hard to say without knowing what a normal number for an airplane manufacturer is. And, of course, money spent on "handsome executive bonuses" would also have drawn ire...
  - taurath 7y ago
    Its insanity to me that investors are that important within corporate charters. Not the people it employs, not the community it operates in, not the value it brings to society, not even the amount of money it makes. The returns to investors is 99.9% the reason a corporation exists. Its institutionalized sociopathy, and I'm pretty certain it wasn't always this way (or at least as widespread).
0xffff2 7y ago
It's included at the end of the article.
- dehrmann 7y ago
  "Article" is being generous.

pcurve 7y ago

Very interesting. 777 probably has the cleanest safety record. Basically zero incident stemming from design, engineering or manufacturing defect. 747 was exceedingly safe despite 3,000 deaths. Half of that was due to bombing, hijacking, missile. Seriously.

john_moscow 7y ago
Ironically, the biggest 747 crash (and, IIRC, the world's deadliest airline-related disaster) happened on the ground due to air traffic controller's fault, that directed 2 airplanes on a collision course in thick fog [0]. [0] https://en.wikipedia.org/wiki/Tenerife_airport_disaster https://en.wikipedia.org/wiki/Tenerife_airport_disaster
- anamexis 7y ago
  Small correction: it was not the air traffic controller primarily at fault, but the captain of the KLM aircraft for taking off without explicit clearance.
  - john_moscow 7y ago
    IIRC, at that time there was no standard unambiguous way to communicate standard procedures and misunderstandings were often (albeit not fatal). It was after that crash when FAA introduced very strict rules on air traffic communication (e.g. the word "clearance" can only be said by the air traffic controller if the clearance is actually granted). Talk about rules written in blood.
    - sokoloff 7y ago
      "Clearance" is used in many ways to indicate that a clearance has not been granted yet (or has been revoked). From the ATC Job Order manual [0], examples include: “continue, expect landing clearance two mile final” and "CANCEL TAKEOFF CLEARANCE (reason)" What you might be thinking of is the guidance against using "takeoff", which is "Avoid using the term “takeoff” except to actually clear an aircraft for takeoff or to cancel a takeoff clearance. Use such terms as “depart,” “departure,” or “fly” in clearances when necessary" [0] - https://www.faa.gov/documentLibrary/media/Order/7110.65X_w_CHG1_CHG2_and_CHG_3.pdf https://www.faa.gov/documentLibrary/media/Order/7110.65X_w_C...

mpoteat 7y ago

Not that it detracts from the claims presented in the article, but the fact that the author is a seemingly high ranking person in his union adds a degree of politics to it.

hugi 7y ago
Why? Is this opinion rooted in the American hatred/demonization of unions? I come from a scandinavian country and it would be pretty normal for a union spokesman to comment on something like this. What would be his "political" point here?
- cnnrro 7y ago
  Personally I didn't read it as having to do with hatred of unions, more just a reminder of political incentives. It's very much in a union's best interest to divert blame from the engineers it represents onto the companies "cost-cutting culture". It could very well be the truth that the cost-cutting culture is to blame. But it's always worth noting incentives of parties in cases like this.
  - hugi 7y ago
    Why would it be in the union's interest to "divert blame from engineers"? Does it benefit financially from it? Do their members somehow benefit from it? Are you saying that Boeing wants to blame their Engineers and this is now a fight between Boeing and it's employees? Serious questions, I'm not quite understanding that corporate culture.
    - AnimalMuppet 7y ago
      Boeing made changes that reduced the number of higher-paid engineers in the Seattle area, and moved some of the work to lower-paid and offshore engineers. That hurt this guy's union; it would help the union to get Boeing to reverse that.
    - sokoloff 7y ago
      SPEEA is a union representing (and collecting union dues from) Boeing's US engineers but not the $9/hr outsourced engineers. [0] That being the case, the motivation to ensure that the former are not blamed for the 737-Max issue and to call into question the quality of work of the latter is probably clear. [0] - http://www.speea.org/Join_Our_Union!/FAQ.html http://www.speea.org/Join_Our_Union!/FAQ.html ("Where do SPEEA members work?")

deckarep 7y ago

This quote is powerful and resonates: “The cost-cutting culture is the opposite of a culture built on productivity, innovation, safety or quality” I know investors must see a profit and business must keep moving but honoring the careful balance of these two ideas is a must or what are you really left with?

wrong_variable 7y ago

I am not sure why this is not talked about often enough. Prior to the 1980s, Japan's economy functioned as a sort of War economy. Companies would spend and invest to gain market share at the cost of margins. share prices were rarely something a company worried about, it was always about product. This was key to Japan's insane post WW2 success. Then came the 80s, with it US style shareholder capitalism. and within 10 years Japan's economy collapsed - never to recover. If you notice, China is following the same exact pattern, running a War economy with a razor focus on market share over profitability. It's what causes great fortunes to be made and lost in China. Coming back to Boeing, because of the monopolist dynamic here, nothing is going to change. Especially since the people who died were mostly foreign nationals. I doubt even if some unfortunate event like that happens in the EU,NA Boeing would go bankrupt - there would be a lot of noise for a few years, maybe some board members get fired. Too many pension plans and retirement plans depend on Boeing's survival.

_bxg1 7y ago
I don't think anyone wants Boeing itself to go bankrupt. We want the execs who established this culture to go to jail, and to be replaced with new ones who are now strongly incentivized to do things differently.
- peteretep 7y ago
  > I don't think anyone wants Boeing itself to go bankrupt I do. Going bankrupt means the shareholders who benefited from this lose their shirt, the company goes into Chapter 11, and the market learns that airplane companies exist to make airplanes that don't fall out of the sky.
  - cloakandswagger 7y ago
    Both of you are proposing an emotionally charged witch hunt. As one of the top comments stated, embracing a punitive culture toward engineering accidents has no long-term benefits. In my work (and this is probably true in any successful organization) even the most severe screw up is examined honestly and without emotion so that it can be prevented from happening again. If the immediate response is to fire a bunch of people or throw them in jail, people are going to do everything they can to avoid responsibility and ultimately fixing the problem. If in the course of an investigation it comes out that Boeing execs were willfully negligent or malicious, then we can start discussing throwing people in jail and bankrupting companies, but that shouldn't be the first reflexive impulse.

ChuckMcM 7y ago

It reminds me of the adage "Workplace culture is what you do not what you say you do." I have met too many engineering managers over the years who thought they could cleverly have it both ways by exhorting quality is the highest priority while penalizing or criticizing engineers who objected based on quality or design metrics.

a3n 7y ago
I don't ever continue past the 3rd word of a corporate response for exactly this reason. What they say is always what they "should" say, in line with how things "should" be, rather than reality at the moment. The speaker doesn't even have to be familiar with the issue at hand beyond keywords.
- tomjakubowski 7y ago
  What do you get out of reading the first two words of a corporate response?
  - a3n 7y ago
    A reminder that the rest of the statement will be bullshit and I never should have bothered starting.
  - spacedog11 7y ago
    I'm sure a3n didn't mean literally "the first two words." I think they meant it as a figure of speech.

thtthings 7y ago

I know the mistake was very costly and we are talking about lives here. But, come on.. is there a chance people are over analyzing. We can try hard and do everything right and still something can go wrong. They are humans and the airplanes from Boeing have been very very very reliable. It's not like every max 8 dropped from the air. A lot of them, most of them flew alright. I know the people who lost their lives paid a big price but, in hindsight everyone has an opinion.

jdavis703 7y ago
There was an article about ladders, tools and debris being left inside various parts like the tail. I’m sure management put the workers under extreme deadline pressure, but this kind of negligence isn’t simply a small human mistake. It shows there’s a systematic flaw in their quality assurance capability. Source: https://www.google.com/amp/s/www.nytimes.com/2019/04/20/business/boeing-dreamliner-production-problems.amp.html https://www.google.com/amp/s/www.nytimes.com/2019/04/20/busi...
- aaronbrethorst 7y ago
  In case you want to hear directly from a former Boeing employee on this: https://www.nytimes.com/2019/04/23/podcasts/the-daily/boeing-dreamliner-charleston.html https://www.nytimes.com/2019/04/23/podcasts/the-daily/boeing...
kelnos 7y ago
> We can try hard and do everything right and still something can go wrong. Except they didn't do that. They did many things wrong, and it sounds like what they tried hard to do was cut costs, rush to production, and get a favorable regulatory/certification outcome via the cheapest route possible.

ltbarcly3 7y ago

This comment from a 'boeing engineer' has basically no information content. - He's not a Boeing engineer, he's 'a senior member of the union'. Apparently he was an engineer sometime in the past, now his job is to push anything that will benefit members of the union, which is what he is doing here. He has no specific information about the MAX to offer. - Cost savings is always the root cause of every engineering failure, so long as you have the benefit of hindsight. I mean once you know what the problem is you can spend money to fix it, and they should have spent that money right off the bat, right? I mean, if they knew there was a problem, which they must have or else there is nobody to blame. We need someone to blame! Of course projects that don't try to limit costs can't fail since they are canceled and never built. Except for the Space Shuttle, which went massively over budget again and again and still had a terrible safety record, which absurdly was blamed on cost cutting. https://www.wired.com/2016/01/to-cut-costs-and-save-time-nasas-taking-more-risks/ https://www.wired.com/2016/01/to-cut-costs-and-save-time-nas... So no matter how much money you spend, when something fails you are going to be blamed for not spending more. If you budget $1 Billion and then decide to spend $10 Billion to improve safety, whenever something goes wrong they'll say you should have spent $11 Billion. - Trying to vilify people and attempting to create an environment to produce massive punitive damages and lawsuits, or to bring political pressure to change staffing decisions dramatically decreases safety. The FAA has spent almost a hundred years building up an environment of cooperation with a shared responsibility to understand failures and enable the changing of the entire aviation industry whenever necessary to promote safety. This has been fabulously successful. Trying to place blame and attack people for past decisions will only lead to a closing of the culture and an attempt to hide information in the future. Compare aviation to the auto industry in how they adapt and improve safety, it's night and day for exactly this reason. Creating an environment where companies have to be afraid to admit mistakes does not help us find the root causes of problems and change the system to prevent those problems in the future.

fj39dkf 7y ago
> Trying to vilify people and attempting to create an environment to produce massive punitive damages and lawsuits, or to bring political pressure to change staffing decisions dramatically decreases safety. The FAA has spent almost a hundred years building up an environment of cooperation with a shared responsibility to understand failures and enable the changing of the entire aviation industry whenever necessary to promote safety. This has been fabulously successful. 346 dead passengers is definitely not successful or acceptable. You think the rating/MCAS problem doesn't merit further investigation?

a3n 7y ago

I worked at Boeing from '88 to '94, writing test software. I liked it. I liked the people and the atmosphere. I always thought that when Boeing moved its headquarters from Seattle to Chicago that that was the end of something special. They went from being legendary Boeing to just another hyper-corporation who happens to make money doing X or Y or Z. In my opinion.

master-litty 7y ago
Was there something special about the move that ended the era? That in itself doesn't seem harmful to a legendary status.
- a3n 7y ago
  There was nothing "Boeing" in Chicago at the time. The only thing relevant there in Chicago was United Airlines. They moved top executives physically and culturally away from where everything was being done. In my opinion, that made the whole company abstract to the executives.
  - drcross 7y ago
    It's such a bad move to move senior ranking staff away from junior.
  - pfranz 7y ago
    Funny how the opposite can also be true. In 1985, Disney Animation was moved off the Burbank lot to a cluster of buildings about 2 miles away. After the success of Beauty and the Beast, The Little Mermaid, Aladdin, and the Lion King they moved back onto the lot. Their new building was literally next to where the executives are in the ABC Studios building. I've heard complaints that executives would walk over and make creative decisions whereas being 2 miles away they were mostly left alone.
    - AstralStorm 7y ago
      So, executives doing something other than their job and messing it up. Classic.

rinze 7y ago

No surprises here. It's called "crapitalism" for a reason.

dang 7y ago
Please don't post unsubstantive comments here. Especially not unsubstantive ideological battle comments. We're trying for a more thoughtful sort of discussion on this site. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

ereyes01 7y ago

> From a shareholder perspective, Boeing’s approach to its business has been wildly successful. The company is enduring its second worldwide grounding in recent memory. > However, worldwide demand for airplanes is riding a high. And Boeing has diverted cash flow into dividends and share buybacks that have helped boost the company’s stock. I started my career in IBM in the early 2000s, and this sounds incredibly familiar. As the years passed, company messaging and all-hands meetings increasingly celebrated the stock price, stock buy-backs, and later earnings per share. Meanwhile, the engineering teams and products around me felt more creaky and short-staffed, and the quality of many products (and, gradually, the technical leadership) seemed to be declining. Also, layoffs appeared to be picking up steam, and my salary was stagnant. I eventually left in 2010, giving myself a big raise in the process. Right after the time I left, IBM rocketed to all-time highs and became the darling of the Dow, while everything else all around was still in shambles from the recession. I had a hard time reconciling the macro performance of the company with the facts on the ground as I experienced them. It was only much later that I think I understood what was happening, after reading a Sam Palmisano interview (having a hard time finding it). The way I rationalize what I experienced at IBM is that the company leadership decided to raid the coffers and cash out on value the company had built up over the decades. It's like cashing in your chips at the casino after deciding you've played enough. The way they did this was to cut costs relentlessly and employ "financial engineering" to inflate the stock price. It was basically a transfer of wealth from the investment in the products and the people to the owners/shareholders in the form of higher share values and dividends. I suppose one can interpret this sort of company decision as a bet against future growth, and an admission that the investment to some degree had run its course. Also, a company like IBM (and Boeing) has built so much value over the decades, that even after raiding the coffers and cutting costs, the embers still burn hot and the business is still huge, though perhaps now hamstrung and unable to grow. Of course, this creates a pretty dismal situation for us grunts on the ground, and the work product undoubtedly suffers, while the brain drain picks up its pace. The difference of course between IBM and Boeing is that the cost cutting in Boeing has ended up costing many human lives, and the consequences are much much sharper in blood and reputation, and maybe in regulation as well.

madiodio 7y ago
That's a great analysis

viburnum 7y ago

I didn’t realize Boeing’s stock had done so well! Now that’s shareholder value.

lifeisstillgood 7y ago

"We Shall Build Good Ships Here; At A Profit If We Can, At A Loss If We Must, But Always Good Ships." Collis Potter Huntington. (Newport Shipyards, contractors to US Navy) http://www.alwaysgoodships.com/ http://www.alwaysgoodships.com/

deleted 7y ago

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chvid 7y ago

Boeing is trading some 20-25% from its all time high. I find that amazing. The stock market is basically telling us that this is all just a bit of bad press that will pass. This story is very similar to a story here on hn from just a few days ago: https://news.ycombinator.com/item?id=20353342 https://news.ycombinator.com/item?id=20353342

perl4ever 7y ago
Compare BP with Tokyo Electric Power.