6 ms·

Executives looted Boeing by cutting costs on everything, pumping short term profits, pocketing massive bonuses. Zero skin in the game for them, massive cost to

Executives looted Boeing by cutting costs on everything, pumping short term profits, pocketing massive bonuses. Zero skin in the game for them, massive cost to their employees, shareholders, and the American public.

LordFast 6y ago
Sadly, they aren't the first, and certainly won't be the last. Silicon Valley isn't immune to the same virus.
- Judgmentality 6y ago
  > Silicon Valley isn't immune to the same virus. I am not saying this to be snarky, but is it not the generally held belief that VC stands for Vulture Capital? I realize not everybody shares this belief, but I think a lot of people do - maybe even most.
  - Bjartr 6y ago
    > is it not the generally held belief that VC stands for Vulture Capital? For what it's worth, I've been reading HN for over a decade, and am a co-founder of a now almost decade old startup and have never seen this phrase But maybe I'm just one of today's lucky 10,000 https://xkcd.com/1053/ https://xkcd.com/1053/
  - scarmig 6y ago
    I usually see Vulture Capitalism used more in reference to PE, where mature but distressed firms are purchased, with a focus on "cutting costs," and then chopped up and resold after being ravaged. Venture capital, on the other hand, is almost the opposite, as it cares little about costs in the pursuit of growth by any means possible.
dietsprite 6y ago
They've already laid off 26,000 people in recent months - after spending almost all of its available cash on stock buybacks over the prior decade. Src: https://edition.cnn.com/2020/10/28/investing/boeing-job-cuts-losses-earnings/index.html https://edition.cnn.com/2020/10/28/investing/boeing-job-cuts...
- hctaw 6y ago
  There's nothing wrong with buybacks, they're tax-friendly dividends. They shouldn't be shamed for returning value to shareholders which it seems you're implying. What should be shamed is a tax code that differentiates dividends and buybacks.
  - shakezula 6y ago
    I mean, they very much should be shamed for that when viewed in context with the rest of their awful management. In a vacuum, sure, it's not a bad thing to return profits to shareholders, but that's only like 1/10th of the story here.
  - fuzzer37 6y ago
    Alright. Then any company that participates in share buyback obviously shouldn't get any stimulus money, then right? Because if they have that much cash on hand, they should give it to shareholders instead of investing in the company or saving it for lean times.
    - dodobirdlord 6y ago
      Correct, the government should generally not hand out stimulus as free money. Forcing the company to issue new stock and sell it to the government at market rate achieves all of the positive effects of stimulus, while also eliminating the perverse incentive to operate with no safety margin in the hopes of a bailout.
the-dude 6y ago
What was the massive cost to the American public?
- throwaway201103 6y ago
  Perhaps it's yet-to-be-realized. Boeing is a major defence contractor and "too big to fail." Ultimately they'd get a government bailout of some sort if push came to shove.
- jessaustin 6y ago
  USTR is basically Boeing's private agent, even though that's a USA government office. That has cost USA consumers billions. Also we used to have an FAA we could trust, and now we don't. Also as sibling comment observes they get vast portions of "defense" spending.
dessant 6y ago
There's something more tragic than the shareholder's losses: 346 people have died in two Boeing 737 MAX crashes.
- NullPrefix 6y ago
  Yeah, but how many of them were Americans?
  - shakezula 6y ago
    I can't tell if this is a serious question or satire, but why in the ever-loving fuck does it matter their nationality?
    - wussboy 6y ago
      Definitely satire.
    - the-dude 6y ago
      Of course it is satire. The top comment is only talking about 'losses' of Americans. All while ~350 people died. I find it a disgusting comment.
    - NullPrefix 6y ago
      It's a serious satire. That number of citizens killed would definitely warrant jail time.
  - tartoran 6y ago
    It just happened that they were non-Americans. Americans could have had the same fate on 737 MAX. It's not like those non-American pilots were stupid or anything. They were simply hidden some information about operating the plane.
scarmig 6y ago
Aren't shareholders responsible for this as well? In the end, the buck stops with the owners of the company. We feel bad blaming them, because in most cases "them" is "us"--various institutional investors we've delegated responsibility for handling our capital--but active investors could have defended against this kind of failure.

LordFast 6y ago

Sadly, they aren't the first, and certainly won't be the last. Silicon Valley isn't immune to the same virus.

Judgmentality 6y ago
> Silicon Valley isn't immune to the same virus. I am not saying this to be snarky, but is it not the generally held belief that VC stands for Vulture Capital? I realize not everybody shares this belief, but I think a lot of people do - maybe even most.
- Bjartr 6y ago
  > is it not the generally held belief that VC stands for Vulture Capital? For what it's worth, I've been reading HN for over a decade, and am a co-founder of a now almost decade old startup and have never seen this phrase But maybe I'm just one of today's lucky 10,000 https://xkcd.com/1053/ https://xkcd.com/1053/
- scarmig 6y ago
  I usually see Vulture Capitalism used more in reference to PE, where mature but distressed firms are purchased, with a focus on "cutting costs," and then chopped up and resold after being ravaged. Venture capital, on the other hand, is almost the opposite, as it cares little about costs in the pursuit of growth by any means possible.

dietsprite 6y ago

They've already laid off 26,000 people in recent months - after spending almost all of its available cash on stock buybacks over the prior decade. Src: https://edition.cnn.com/2020/10/28/investing/boeing-job-cuts-losses-earnings/index.html https://edition.cnn.com/2020/10/28/investing/boeing-job-cuts...

hctaw 6y ago
There's nothing wrong with buybacks, they're tax-friendly dividends. They shouldn't be shamed for returning value to shareholders which it seems you're implying. What should be shamed is a tax code that differentiates dividends and buybacks.
- shakezula 6y ago
  I mean, they very much should be shamed for that when viewed in context with the rest of their awful management. In a vacuum, sure, it's not a bad thing to return profits to shareholders, but that's only like 1/10th of the story here.
- fuzzer37 6y ago
  Alright. Then any company that participates in share buyback obviously shouldn't get any stimulus money, then right? Because if they have that much cash on hand, they should give it to shareholders instead of investing in the company or saving it for lean times.
  - dodobirdlord 6y ago
    Correct, the government should generally not hand out stimulus as free money. Forcing the company to issue new stock and sell it to the government at market rate achieves all of the positive effects of stimulus, while also eliminating the perverse incentive to operate with no safety margin in the hopes of a bailout.

the-dude 6y ago

What was the massive cost to the American public?

throwaway201103 6y ago
Perhaps it's yet-to-be-realized. Boeing is a major defence contractor and "too big to fail." Ultimately they'd get a government bailout of some sort if push came to shove.
jessaustin 6y ago
USTR is basically Boeing's private agent, even though that's a USA government office. That has cost USA consumers billions. Also we used to have an FAA we could trust, and now we don't. Also as sibling comment observes they get vast portions of "defense" spending.

dessant 6y ago

There's something more tragic than the shareholder's losses: 346 people have died in two Boeing 737 MAX crashes.

NullPrefix 6y ago
Yeah, but how many of them were Americans?
- shakezula 6y ago
  I can't tell if this is a serious question or satire, but why in the ever-loving fuck does it matter their nationality?
  - wussboy 6y ago
    Definitely satire.
  - the-dude 6y ago
    Of course it is satire. The top comment is only talking about 'losses' of Americans. All while ~350 people died. I find it a disgusting comment.
  - NullPrefix 6y ago
    It's a serious satire. That number of citizens killed would definitely warrant jail time.
- tartoran 6y ago
  It just happened that they were non-Americans. Americans could have had the same fate on 737 MAX. It's not like those non-American pilots were stupid or anything. They were simply hidden some information about operating the plane.

scarmig 6y ago

Aren't shareholders responsible for this as well? In the end, the buck stops with the owners of the company. We feel bad blaming them, because in most cases "them" is "us"--various institutional investors we've delegated responsibility for handling our capital--but active investors could have defended against this kind of failure.