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Boeing May Halt 737 Max Production
- DuskStar 7y agoI really, really hope this isn't necessary. We're currently in one of the longest (if not the longest) periods of continued economic growth in US history, and the knock-on effects from a halt to 737 production could help put an end to that. (not just from the direct hit which was estimated at of 0.6% of GDP, but the confidence hit that would cause) EDIT: To be clear, I think the best outcome is for the 737 Max to be made safe and to fly again. If it can't be made safe, obviously cancelling production of useless planes is a good idea.
- allengeorge 7y agoAlternatively, I’d like to see companies like Boeing feel the effects of cutting corners recklessly.
- backtobecks 7y agoI am a sharerholder, but I think management is at fault and should be sacked with no severancee
- btmiller 7y agoThat'd be a good start. One thing, however, that bothers me lately is the pursuit shareholder value above all else. The commentary always arrives at that end (shareholder value) in order to justify the means every time a company's direction might not translate so nicely for customers: YouTube ads, Uber rate increases, Boeing cutting corners, etc. Being a profitable company is one thing, but I can't help but watch and think, I don't feel any sense of compassion for shareholders losing a few bucks because they were impatient or made a bad investment. Of course Boeing's shareholders want <insert new Boeing thing> delivered yesterday, but the "bloody ROI"[1] can't be what drives Boeing development. [1] https://www.forbes.com/sites/stevedenning/2014/03/07/why-tim-cook-doesnt-care-about-the-bloody-roi https://www.forbes.com/sites/stevedenning/2014/03/07/why-tim...
- TheOtherHobbes 7y agoThis should be easy to change. Make shareholders culpable for management failures. Balance this with an oversight structure that gives shareholders a direct influence on corporate ethics, with the power to investigate and terminate management malpractice and systemic abuse. Of course the whole point of public share ownership is profit without responsibility. The distancing of benefit from external consequences is considered sacrosanct. So this suggestion is the the worst kind of heresy. But why should share ownership somehow magically excuse consequences that would be considered criminal in other contexts? If management has to justify its actions to people who share the risk and the blame, it's going to pay a lot more attention to consequences.
- neffy 7y agoTwo additional datapoints - shares are used as part of the incentive structure for senior management, and can dwarf salary. Share gains are also taxed less. It's a simple feedback loop. It gets pretty silly when you look at the share buyback plans many companies operate, huge sums are "invested" in the company's shares for a relatively small - a few million - return to individual management.
- markdown 7y agoWas the current leadership in charge throughout the development of the MAX?
- schrodinger 7y agoIt doesn’t matter; they allowed it to be released.
- kevin_b_er 7y agoPierce the corporate veil and go after the management. When there are consequences for their beancounting at the expense of human lives, maybe they'll think twice about profit over people.
- dhbanes 7y agoIf the plane isn't safe and can't be made safe then it's necessary. Also, the claim that Boeing halting 737 Max production will cause a recession seems like FUD to me.
- spookthesunset 7y ago> Also, the claim that Boeing halting 737 Max production will cause a recession seems like FUD to me. Aerospace is a sizable part of the US economy. It really isn't FUD at all.
- Bjartr 7y agoThere's more to the aerospace industry than Boeing alone. Aerospace is 1.8% of the GDP, whereas Boeing is 0.6% of the GDP. Damn impressive to be sure, but considering hundreds or thousands of lives lost are the cost to avoid a slump in that area, I'm pretty sure it's the right choice.
- WrtCdEvrydy 7y ago> Boeing halting 737 Max production will cause a recession Oh shit, let's bail them out!
- aaronbrethorst 7y agoNationalize them.
- seltzered_ 7y agoThis has been recently discussed: https://mattstoller.substack.com/p/the-coming-boeing-bailout https://mattstoller.substack.com/p/the-coming-boeing-bailout https://news.ycombinator.com/item?id=20353342 https://news.ycombinator.com/item?id=20353342
- DuskStar 7y agoThe US's economy is projected to grow 2.1% in 2019 - reducing that by 0.6% would wipe out a major portion of that. And I am inclined to believe that number - 52 planes / month for 12 months at $100m is $62.4 billion directly, and the US economy is ~$20T - 0.6% of that is $120 billion. (so with knock-on effects, I find 0.6% a very reasonable estimate for the cancellation of a year's production. Probably not so reasonable for the 5 months left in 2019, though)
- draw_down 7y agoCome on.
- downrightmike 7y agoThis feels more like the issue we had in the 80's, where companies would source from the lowest cost regardless. And then they paid for that in the 90's, NEC is a good example of this. The companies that can improve quality without cutting corners should be the winners. Airbus should really push on their advantage.
- spookthesunset 7y ago> Airbus should really push on their advantage. This is assuming that airbus isn't doing the same things that Boeing was doing....
- abc_lisper 7y agoWait, I remember hearing this before. “Too big to fail”, more like “too big to fly!”
- slenk 7y agoI don't care if Boeing gets hurt for their reckless decisions - I just worry this will pressure the FAA putting the Max back into service to protect Boeing (as they seem wont to do)
- the_duke 7y ago0.6% of the growth rate, which is very different from 0.6% of GDP...
- DuskStar 7y agoBoeing's 2018 revenue was ~0.5% of US GDP. Assuming that the 737 Max is a sizable percentage of that revenue, and that there's a decent GDP multiplier (Boeing pays employees who themselves spend money, etc) it could very easily be 0.6% of GDP, not of the growth rate. Impacts to GDP growth are almost always measured relative to total GDP, not to expected growth.
- downrightmike 7y agoProbably just trying some way to justify the plane, until they can't. The way they slapped the bigger engines onto the old design should not continue. Neither should their complete outsourcing of plane production. Quality counts and they're missing it.
- illirik 7y agoThere is also an issue with the 777X engines, as reported by the Seattle Times. This could cause a lot of pain for a lot of people in Renton and Everett. https://www.seattletimes.com/business/boeing-aerospace/boeing-says-737-max-crisis-could-temporarily-shut-down-renton-production/ https://www.seattletimes.com/business/boeing-aerospace/boein...
- blackflame7000 7y agoFrom my understanding, the issue with the GE-9x is a durability problem with a component in the compressor that GE itself is manufacturing. It's not good news but it shouldn't be a showstopper.
- hodgesrm 7y agoHere's the best link I could find on the problem: https://thepointsguy.com/news/boeings-777x-delays-engine-issues/ https://thepointsguy.com/news/boeings-777x-delays-engine-iss.... High-bypass turbofans are finicky things. It seems likely there will be more teething problems in that area. The GE-9x increases the bypass ratio by 11% from 9 to 10 over the GE-90 based on comparison of specs published in wikipedia. [1,2] So the interesting question for launch is what else pops up. [1] https://en.wikipedia.org/wiki/General_Electric_GE9X https://en.wikipedia.org/wiki/General_Electric_GE9X [2] https://en.wikipedia.org/wiki/General_Electric_GE90#Specifications https://en.wikipedia.org/wiki/General_Electric_GE90#Specific...
- blackflame7000 7y agoIf you are interested in turbine engines, I highly recommend this guy's youtube channel as he will teach you everything you ever wanted to know and more about how turbines work. This video is about the compressor and it's actually a very simple component. Pretty much the only thing that can go wrong is that metal fatigue starts to form where the fan blades meet the hub. I suspect that the size of the compressor is resulting in larger centrifugal forces causing fatigue to occur quicker. https://www.youtube.com/watch?v=CXSi4GXUojo https://www.youtube.com/watch?v=CXSi4GXUojo
- mjevans 7y agoMaybe if we want safety first we should be engineering lead, and only have sales/customer desires as inputs that are considered when creating a design that fulfills market needs. That includes all stages of engineering knowing the big picture, even if they don't happen to be acting upon it, so that there are safety checks possible at every stage of design and implementation.
- maltalex 7y agoSafety is never actually first. First, you need an economically viable product. Otherwise, there is no reason for it or any if the processes behind it to exist.
- std_throwaway 7y agoSafety IS first. If it's not safe it won't fly no matter how cheap it is. This is clearly a case where engineers were proposing an inferior solution that allowed a lower price point. They mislead the whole company and let their colleagues down.
- maltalex 7y ago“Safe” is a relative term. For example, it would have been safer for the plane to have 2 more engines. But there are only 2 engines since it’s safe enough and much more economically viable. It doesn’t matter how safe something is if no one is going to buy it.
- TheOtherHobbes 7y agoSafe is not a relative term in mass transport aerospace. Safe means "not a death trap." That level of safety is a hard prerequisite for a viable product. There is no ambiguity about this.
- spookthesunset 7y ago“Not a death trap” is a relative term. Safety is a feature and like any other feature it gets prioritized according to need, budget, ROI, and many other factors.
- annachronistic 7y agoI can’t be the only one who’s more surprised that they’ve been making new ones this whole time.
- std_throwaway 7y agoThey have a lot of orders to fulfill.
- cmurf 7y agoOver 4400 units, 80% of their total backlog, representing 7 years of production value at the present production capacity.
- blendo 7y agoThanks for adding this -- I can see the total economic impact of this could be huge. Until April, they were producing 52 planes per month. Then they reduced to 42/mo. Now maybe zero for some while. At $100 million per plane, that's $5.2bil/mo! And over $400 billion in 7 years. Can their defense business cover that? Can the employee 401k's survive?
- dbg31415 7y agoBlown away they wouldn’t pause production until they knew the design issues were fixed... rather than build new planes that beat case had to be immediately retrofitted. “Let’s just do the wrong thing again, it’ll work this time.” Seems very risky.
- farisjarrah 7y agoHalting production wouldn't necessarily be a prudent financial thing to do. The reported problems were with small physical sensors and software. It would be much easier and cheaper to retrofit finished planes with fixes after the fact, rather then halting all production then rush to fill orders when the plane design is given the all clear
- allengeorge 7y agoMy (conspiratorial) take is that they’re making noises about this so that politicians can step in and pressure the FAA into approving their modifications. Talking about blue-collar job losses and economic impacts has the amazing effect of cutting through politicians’ radar on both sides of the aisle.
- std_throwaway 7y agoIf you think they could pressure the FAA, do you also think they could pressure the EASA and CAAC?
- tropo 7y agoAt this level of international politics, sure. Airbus just had an excessive pitch problem in the A321neo, nearly the same as the 737-MAX troubles. https://simpleflying.com/airbus-a321neo-pitch-problem/ https://simpleflying.com/airbus-a321neo-pitch-problem/ Suddenly, the FAA might take aggressive action to ban that aircraft. Maybe the EASA doesn't really object to the 737-MAX as much as they thought they did. CAAC would like smooth approvals for Chinese aircraft. Huawei is also having issues. Things could suddenly change after a day of golf at Mar-a-Lago. Lots of things could change, some quietly and some publicly.
- the_duke 7y agoThe article you linked does not suggest "nearly as bad as the 737-MAX".
- tropo 7y agoI didn't say that either, and it doesn't matter. The problem is of the same general type. It's more than close enough. The FAA should be extra-careful, so maybe the A321neo will get banned. If the EASA wants to take a hard line on safety, they can hardly object. After a bit of high-level discussion using that leverage, things may change. These decisions, in all countries, are being made with consideration for international economic implications. The resulting decisions will be given technical justification as required.
- outside1234 7y agoAt the very least they are going to have to rebrand it - 737 Ultimate Edition perhaps? :)
- deleted 7y ago[deleted]
- idrae 7y agoApparently they are already selling them to RyanAir under the name 737-8200 to get rid of the MAX naming
- ohazi 7y agoGood!
- auvi 7y agosometimes I wonder, will Boeing end up like de Havilland? too early to say now.
- the_duke 7y agoThis is an incredibly weird article. It's basically a prolonged sob-story about how terrible a production halt would be. No doubt there would be an economic impact but the writing is just full of hyperbole and doesn't name any sources for it's claims (like 0.6% of GDP growth rate - note the growth rate, not 0.6% of GDP or 0.6% of GDP growth ...). It also fails to differentiate between the impact of existing planes not able to fly and continued production. This smells like a PR campaign to put pressure on regulators. Only, in this instance, the FAA probably won't risk further embarrassment by declaring the plane safe while EASA is holding out. Most of the world will wait for them rather than go with the FAA.
- wrs 7y agoIf anything, this should be pressure for more regulation, in that arguably it's the transfer of knowledge and responsibility for safety regulation from the FAA to the manufacturers that put us in this "disastrous" situation in the first place.
- allana 7y agoBoeing has been left to oversee themselves, resulting in serious safety issues with their planes. Both Seattle and Charleston production faculties have caustic cultures that have enabled management to cover up poorly done assembly work, its no wonder the same behaviour occurred when Boeing wrote software: https://www.nytimes.com/2019/04/20/business/boeing-dreamliner-production-problems.html https://www.nytimes.com/2019/04/20/business/boeing-dreamline...
- JMTQp8lwXL 7y agoThere seems to be a lack of objectivity in the article. Is a reduction of 0.6% of the growth rate (which, again, is 0.6% of probably a percentage like 2% of 3%-- a very small percentage indeed) a small price for the safety of air travel? There's zero discussion of the downsides of letting these planes fly. Or, stated in other words, are we willing to accept a third plane's worth of casualties over an already known systemic error, for a miniscule improvement to the growth rate? This strong-arming is not what Boeing needs right now.
- Theodores 7y agoWhat if it costs too much to fix? Anything can be made to fly if you spend enough money on it. But Boeing are in the business of making money. So they can't just get the 737 Max to fly at all costs. Even if they went all out the reputational harm is very much deHavilland Comet. They fixed the Comet and it was a lovely plane, but nobody wanted it. With the 737 it needs a full redesign, otherwise it is just an exercise in polishing a turd. Even if the MCAS works perfectly it is still an ugly hack. To Boeing the decision to be selling single aisle short-hop planes might be something they get completely out of. They can finish orders for 737 oeo (old engine option) and just shut the whole thing down. After 2008 the US auto sector was pared down a bit, GM getting rid of Pontiac to shutter it for good was needed to solve the bigger GM venture, similarly 737 MAX might be best closed in order to save the company. Much like how quick they were with the Dreamliner, in 5-10 years time Boeing could be back with another Ryanair grade offering. Ford, GM and FCA decided to give up on making saloons for the domestic market, they let the Germans fill that niche. Similarly, with the 737 it might be better to be realistic about the competition, not just from Airbus but China, Russia and anywhere else. If China has a good plane to rival the 737 in 2-3 years time then it would be hard for Boeing's unionised workers to compete with their robots.
- selimthegrim 7y agoWhich Germans? VW and Audi? Sedan numbers have gotten that low?
- cmurf 7y agoAnyone old enough to second guess that McDonnell Douglas and Boeing merger? And 30 years before that, the McDonnell and Douglas merger? Are these really natural monopolies?
- tracer4201 7y agoToo big to fail. Not sure if America learned any lessons the last time.
- jaclaz 7y agoI personally find odd the wording: >... if the grounding of its most popular plane persists ... as if the grounding was an uncontrollable event, like - say - weather. I would have written it as: "if we (Boeing) cannot soon find a solution that is considered safe enough by the relevant Authorities ..."
- shdh 7y agoRebranding to a different name would be a simple solution.