6 ms·

No, this is how Boeing has always operated. It's a cyclic industry. Google "boeing employment by year". The charts are practically a sine wave. "Hire 10,000

by ken 6y ago

No, this is how Boeing has always operated. It's a cyclic industry. Google "boeing employment by year". The charts are practically a sine wave. "Hire 10,000 when demand is high, lay off 10,000 when demand is low" has been how they've operating since WWII. There are many issues with Boeing management today (I used to work there so I love flaming them as much as anyone), but it's hard for me to imagine how any aircraft company could avoid this. All aerospace employers are laying off (or furloughing) workers by the thousands: Airbus: https://www.reuters.com/article/us-health-coronavirus-airbus/airbus-warns-staff-on-jobs-with-its-survival-at-stake-idUSKCN2280S3 https://www.reuters.com/article/us-health-coronavirus-airbus... Bombardier: https://www.huffingtonpost.ca/entry/bombardier-layoffs-quebec-ontario_ca_5e7a50b2c5b62f90bc526bc7 https://www.huffingtonpost.ca/entry/bombardier-layoffs-quebe... Gulfstream: https://www.wtoc.com/2020/05/04/gulfstream-lays-off-employees-notifies-labor-dept/ https://www.wtoc.com/2020/05/04/gulfstream-lays-off-employee... No word from Embraer yet, but since their deal with Boeing fell through, I imagine it's only a matter of time.

pcurve 6y ago
Embraer is cutting 4000 jobs too :(
jussij 6y ago
> No, this is how Boeing has always operated. While I have no doubt Boeings business has been cyclical, many of the problems they face today can also be attributed to bad management. These problems can be linked back to when Boeing merged with McDonnell Douglas, resulting in it's loss of engineering focus: https://www.msn.com/en-za/money/news/how-the-mcdonnell-douglas-boeing-merger-led-to-the-737-max-crisis/ar-BBYzJXz https://www.msn.com/en-za/money/news/how-the-mcdonnell-dougl... If you read the wiki page for McDonnell Douglas it reads a lot like the modern day Boeing: https://en.wikipedia.org/wiki/McDonnell_Douglas https://en.wikipedia.org/wiki/McDonnell_Douglas This gives a hint as to how that merger help to infect Boeing (no pun intended) with it's current bad management culture.
- bb88 6y ago
  > Boeing, which has been struggling for the past year with the safety of its 737 Max jet, has spent over $43 billion buying back stock over the past decade. https://www.newsweek.com/boeing-airlines-under-fire-90-billion-share-buybacks-stoke-controversy-bailout-pleas-least-1493934 https://www.newsweek.com/boeing-airlines-under-fire-90-billi... Step 1: Give billions in stock buy backs and ask for billions in tax cuts Step 2: Demand that taxpayers to bail you out in a recession Step 3: Repeat
  - craftinator 6y ago
    It's like a heat pump, but for moneys. It's a MONEY pump!
- jdc 6y ago
  Boeing's decay previously discussed here: https://news.ycombinator.com/item?id=20353342 https://news.ycombinator.com/item?id=20353342
- silviogutierrez 6y ago
  Off topic but it's killing me: what is the pun there? I just don't see it.
  - meowgoldie 6y ago
    "infect" Boeing
    - silviogutierrez 6y ago
      Am I crazy? I still don't see any word play. Is there a homonym, or specific phonetic reading I'm missing? Tried: - Infect-being - In fact being - Etc. Thanks for the help.
      - achow 6y ago
        Covid infected humans. McDonnell 'infected' Boeing.
VWWHFSfQ 6y ago
Airbus cut 2,500 jobs in February.. I don't know how many more they cut since then. The reality is that the commercial airline industry is in a freefall and it's nobody's fault. It's just the virus.
bogomipz 6y ago
No this is not how Boeing has always operated. Boeing had a great engineering culture for most of its' history. A fundamental shift happened around the time that the company merged with McDonnell Douglas, a merger that was shepherded largely by the Department of Defense. Around this time began the "Financialization" of Boeing. The following is a good read on the shift within the company and how that new culture enabled the Dreamliner and the 737 Max debacles. https://newrepublic.com/article/154944/boeing-737-max-investigation-indonesia-lion-air-ethiopian-airlines-managerial-revolution https://newrepublic.com/article/154944/boeing-737-max-invest... Matt Stoller also talked about this cultural shift that enabled Boeings problems in an article a year ago. https://mattstoller.substack.com/p/the-coming-boeing-bailout https://mattstoller.substack.com/p/the-coming-boeing-bailout
- awongh 6y ago
  Has anyone written about how exactly the acquired company (McDonnel Douglas) was able to take over the acquiring company? Sounds like it would be an interesting story. I also wonder if there are similar accounts of the same happening in other companies.
  - wahern 6y ago
    When a company seeks to acquire another company, the executives of the target company are sometimes promised and given a disproportionate share of management roles in the reorganized entity as enticement to grease the acquisition. The alternative is more expensive payouts. And of course, no matter which approach is taken, cash will be tight post merger so there'll naturally be an emphasis on cost cutting and "synergizing", which McDonnell Douglas executives were well practiced in, likely drawing favor from the board, despite that it was still 2/3rds Boeing post merger. Also, despite the narrative, it may very well have already been the case that Boeing's culture was going down the gutter, its acquisition of McDonnell Douglas a reflection of that rather than the root cause. EDIT: Here's a 2002 article that suggests it was all of these phenomena--disproportionate leadership roles, a claim to cost control expertise, a skittish board, and evolving business strategies. https://www.seattlepi.com/business/article/Hard-nosed-Stonecipher-retires-at-Boeing-1088528.php https://www.seattlepi.com/business/article/Hard-nosed-Stonec... Some former McDonnell Douglas executives, like Boeing President and COO Harry Stonecipher, were well placed to take control when the inevitable cash crunch happened. Stonecipher replaced the Boeing CFO with a GM executive. See also this contemporaneous 1998 article describing the same event: https://archive.seattletimes.com/archive/?date=19980715&slug=2761320 https://archive.seattletimes.com/archive/?date=19980715&slug... That article says it was Stonecipher and the board chairman, Phil Condit, who forced the CFO out for his overly conservative accounting. Condit, AFAIU, was also CEO at the time and had been CEO of Boeing prior to the McDonnell Douglas merger. In fact, Condit led multiple acquisitions before MD, which suggests to me he and Boeing were already following the "acquire rather than innovate" playbook.
karaterobot 6y ago
> No, this is how Boeing has always operated. It's a cyclic industry. Do the cyclic layoffs generally occur right when they're supposed to be building hundreds of planes? I think what's unusual about this round of layoffs is that it was caused by all their orders being cancelled. If Boeing isn't alarmed by this situation -- if they chalk it up to an historic pattern -- I think that in itself is a sign of bad management.
jedberg 6y ago
I mean, that kind of makes sense. But instead, why not hire 5,000 when times are good, stash away the rest of the cash, and then just keep all the great people you have when business is down? It seems like retaining people instead of hiring up a bunch of new people and possibly losing some of your best people would be a better approach. Sure, the other guys might get ahead of you a bit during the boom times, but you'll get a good jump during the bust and be much better positioned to take advantage of the next boom.
- HenryBemis 6y ago
  > get ahead of you You hit the nail in the head. When it rains, the moneyfolk want to hoard as much cash as they can (shareholders gotta buy that new Porsche). It's like temporary employment in hotels and restaurants during summer in touristic places. Only the cycle is 8y/2y (up/down) in the decade) of 4mo/8mo (up/down) in the year.

by ken 6y ago

pcurve 6y ago

Embraer is cutting 4000 jobs too :(

jussij 6y ago

> No, this is how Boeing has always operated. While I have no doubt Boeings business has been cyclical, many of the problems they face today can also be attributed to bad management. These problems can be linked back to when Boeing merged with McDonnell Douglas, resulting in it's loss of engineering focus: https://www.msn.com/en-za/money/news/how-the-mcdonnell-douglas-boeing-merger-led-to-the-737-max-crisis/ar-BBYzJXz https://www.msn.com/en-za/money/news/how-the-mcdonnell-dougl... If you read the wiki page for McDonnell Douglas it reads a lot like the modern day Boeing: https://en.wikipedia.org/wiki/McDonnell_Douglas https://en.wikipedia.org/wiki/McDonnell_Douglas This gives a hint as to how that merger help to infect Boeing (no pun intended) with it's current bad management culture.

bb88 6y ago
> Boeing, which has been struggling for the past year with the safety of its 737 Max jet, has spent over $43 billion buying back stock over the past decade. https://www.newsweek.com/boeing-airlines-under-fire-90-billion-share-buybacks-stoke-controversy-bailout-pleas-least-1493934 https://www.newsweek.com/boeing-airlines-under-fire-90-billi... Step 1: Give billions in stock buy backs and ask for billions in tax cuts Step 2: Demand that taxpayers to bail you out in a recession Step 3: Repeat
- craftinator 6y ago
  It's like a heat pump, but for moneys. It's a MONEY pump!
jdc 6y ago
Boeing's decay previously discussed here: https://news.ycombinator.com/item?id=20353342 https://news.ycombinator.com/item?id=20353342
silviogutierrez 6y ago
Off topic but it's killing me: what is the pun there? I just don't see it.
- meowgoldie 6y ago
  "infect" Boeing
  - silviogutierrez 6y ago
    Am I crazy? I still don't see any word play. Is there a homonym, or specific phonetic reading I'm missing? Tried: - Infect-being - In fact being - Etc. Thanks for the help.
    - achow 6y ago
      Covid infected humans. McDonnell 'infected' Boeing.

VWWHFSfQ 6y ago

Airbus cut 2,500 jobs in February.. I don't know how many more they cut since then. The reality is that the commercial airline industry is in a freefall and it's nobody's fault. It's just the virus.

bogomipz 6y ago

No this is not how Boeing has always operated. Boeing had a great engineering culture for most of its' history. A fundamental shift happened around the time that the company merged with McDonnell Douglas, a merger that was shepherded largely by the Department of Defense. Around this time began the "Financialization" of Boeing. The following is a good read on the shift within the company and how that new culture enabled the Dreamliner and the 737 Max debacles. https://newrepublic.com/article/154944/boeing-737-max-investigation-indonesia-lion-air-ethiopian-airlines-managerial-revolution https://newrepublic.com/article/154944/boeing-737-max-invest... Matt Stoller also talked about this cultural shift that enabled Boeings problems in an article a year ago. https://mattstoller.substack.com/p/the-coming-boeing-bailout https://mattstoller.substack.com/p/the-coming-boeing-bailout

awongh 6y ago
Has anyone written about how exactly the acquired company (McDonnel Douglas) was able to take over the acquiring company? Sounds like it would be an interesting story. I also wonder if there are similar accounts of the same happening in other companies.
- wahern 6y ago
  When a company seeks to acquire another company, the executives of the target company are sometimes promised and given a disproportionate share of management roles in the reorganized entity as enticement to grease the acquisition. The alternative is more expensive payouts. And of course, no matter which approach is taken, cash will be tight post merger so there'll naturally be an emphasis on cost cutting and "synergizing", which McDonnell Douglas executives were well practiced in, likely drawing favor from the board, despite that it was still 2/3rds Boeing post merger. Also, despite the narrative, it may very well have already been the case that Boeing's culture was going down the gutter, its acquisition of McDonnell Douglas a reflection of that rather than the root cause. EDIT: Here's a 2002 article that suggests it was all of these phenomena--disproportionate leadership roles, a claim to cost control expertise, a skittish board, and evolving business strategies. https://www.seattlepi.com/business/article/Hard-nosed-Stonecipher-retires-at-Boeing-1088528.php https://www.seattlepi.com/business/article/Hard-nosed-Stonec... Some former McDonnell Douglas executives, like Boeing President and COO Harry Stonecipher, were well placed to take control when the inevitable cash crunch happened. Stonecipher replaced the Boeing CFO with a GM executive. See also this contemporaneous 1998 article describing the same event: https://archive.seattletimes.com/archive/?date=19980715&slug=2761320 https://archive.seattletimes.com/archive/?date=19980715&slug... That article says it was Stonecipher and the board chairman, Phil Condit, who forced the CFO out for his overly conservative accounting. Condit, AFAIU, was also CEO at the time and had been CEO of Boeing prior to the McDonnell Douglas merger. In fact, Condit led multiple acquisitions before MD, which suggests to me he and Boeing were already following the "acquire rather than innovate" playbook.

karaterobot 6y ago

> No, this is how Boeing has always operated. It's a cyclic industry. Do the cyclic layoffs generally occur right when they're supposed to be building hundreds of planes? I think what's unusual about this round of layoffs is that it was caused by all their orders being cancelled. If Boeing isn't alarmed by this situation -- if they chalk it up to an historic pattern -- I think that in itself is a sign of bad management.

jedberg 6y ago

I mean, that kind of makes sense. But instead, why not hire 5,000 when times are good, stash away the rest of the cash, and then just keep all the great people you have when business is down? It seems like retaining people instead of hiring up a bunch of new people and possibly losing some of your best people would be a better approach. Sure, the other guys might get ahead of you a bit during the boom times, but you'll get a good jump during the bust and be much better positioned to take advantage of the next boom.

HenryBemis 6y ago
> get ahead of you You hit the nail in the head. When it rains, the moneyfolk want to hoard as much cash as they can (shareholders gotta buy that new Porsche). It's like temporary employment in hotels and restaurants during summer in touristic places. Only the cycle is 8y/2y (up/down) in the decade) of 4mo/8mo (up/down) in the year.