41 ms·
Did a 1997 merger ruin Boeing?
- moose_man 3y agoJack Welch style management and shareholder capitalism are some of the most destructive forces in the US economy.
- refurb 3y agoMeh... it's trendy to blame Jack Welch, but it's not like companies have always chased money and always will. Many will cut corners, and it often works out just fine, others crater their business.
- skyyler 3y agoWhat can reasonably be done to combat it? Leadership at all the biggest firms is on board with shareholder capitalism. To them, Welch style management just means line goes up...
- moose_man 3y agoIt's going to take a long time, but first is to destroy the myth that corporations have one purpose they need to fulfill: Generate revenue and ensure things are profitable for shareholders. This myth artificially took root in the 1970s. Business schools have to stop teaching this.
- ameister14 3y agoIt took root in 1919, so I don't think that's actually the issue. The problem is short-term thinking based on financial markets and the ability of corporations to reinvest their capital freely. Regulating stock buybacks and the ability of corporations to invest in markets will cut down on corporate fissure.
- kazen44 3y agowhy 1919 specifically? in my opinion, it seeems to have been enormously on the rise since the end of world war 2 and especially after the end of the cold war.
- dinero_rojo 3y agoFairly certain he’s referring to Dodge v. Ford Motor Company, where it was established that a company needs to operate in the best interests of shareholders above all else. https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.?wprov=sfti1# https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.?wprov=...
- euroderf 3y agoAlso IIRC there was a case before the Supreme Court where the dispute was whether shareholder value was the sole & supreme goal, or there could be other factors involved from other stakeholders (such as workers, the community, ...). The Supremes ruled for shareholder value. However I forget details of ths case. If anyone here happens to know what case I am referring to, please chime in.
- dragonwriter 3y agoYou are probably thinking of the case described in GP, which is the decision of the Michigan Supreme Court on this issue.
- euroderf 3y agoI should have added, this was a case back in the 1980s.
- ameister14 3y agoI don't know of a case where the Court affirmed shareholder primacy - as far as I am aware it's a state by state thing though since Delaware has it in their code it impacts a massive number of corporations.
- jgeada 3y agoThat will only happen if we change laws to make boards and executives criminally liable for these types of problems. We need to pierce the corporate veil and directly go after the responsible individuals when they, either directly or by deliberate ignorance, cause problems that lead to people dying etc. No shielding behind a corporation if your decisions to make lots more bucks led to avoidable deaths.
- RandomLensman 3y agoThat isn't the corporate veil unless you mean to go after the owners/shareholders. Considering changes to what limited liability corporations can and cannot do is a potential avenue.
- digging 3y agoThe problem with this assertion is that focusing on profit for the shareholders no longer has any downsides because the public is numb to it. So it's the winning play. We need regulations that sufficiently disincentive such behavior in order to approach equilibrium (that being a state where businesses exist to serve customers).
- jamesdhutton 3y agoIt's not a myth. It's a fact. The whole point of any for-profit company is to generate a return for the company's owners. Companies which fail to do so go out of business. It has always been thus. As for the notion that Boeing has prioritized shareholder value over safety: just look at their share price over the last few days. It tanked by 10% since this accident occurred. Clearly, making safe planes is a prerequisite for generating shareholder value. There is no conflict there.
- Aeolun 3y agoIt’ll tank for a few days, maybe even weeks before it resumes it’s upward trend.
- ip26 3y agoOk, suppose the myth is destroyed and companies change their ways. Then a small group of activist investors demands a return to "shareholder value", the company refuses, and the investors orchestrate a takeover with other people who have not yet learned the myth was dispelled. What next?
- postingawayonhn 3y agoWorking in the best interests of shareholders is fine. The problem is that because Boeing has a US monopoly and global duopoly on large jets neither the regulators or customers are willing to punish them when they under perform. Boeing has become too big to fail.
- PontifexMinimus 3y agoChanging what is taught in business schools will make little difference. You have to change what incentives operate on people.
- RandomLensman 3y agoYou need the owners to actually care.
- kazen44 3y agoAlso, we need the state to act in the best interest of the people it serves, instead of in being held hostage by a few with much economic weight. The state should wield power it derives from the mandate given to it by it's people, and it should defend the capability to influence the economy with that. This fact seems to have been forgotten since the end of the cold war, when neoliberal theory seems to have been the defacto "truth" in economics.
- drewcoo 3y ago> What can reasonably be done to combat it? It was enabled by deregulation, so regulation seems important. That was enabled by more overt bribery of politicians (PACs, super PACs, etc.). So stop the bribes. That happened simultaneously with changes in how business was depicted by media, whether news or entertainment. So . . . convince the heads of that small handful of companies to change their representations. And so far that's just the US. All of these things are global. My point is that just combating the existing problems is akin to whack-a-mole. A new pervasive philosophy will replace neoliberalism, though. Maybe put effort into pushing whichever of those seems best?
- MilStdJunkie 3y agoIf leadership gets stock as part of their compensation, they don't get to sell it off until long after their tenure in leadership is ended. The time horizon of these jokers is too short. If they had a 10 or even a 5 year risk horizon, they would not make these short-sighted decisions. The Welchian approach isn't just value destruction, over a longer time horizon it's quantifiably unprofitable for the business as a whole. Forgive me a tangent here, particularly relevant with the 737, about how leaders regularly mistake economies of scope for economies of scale. Scale and Scope are fundamentally different things, but M&A specialists and related finbros often treat them as equivalent. This is unfortunate. Scalar efficiencies are largely functions of density - more people buying the same thing over a given space. Scope involves equivalence - more people buying things that are just similar enough. This is a trap. In order to evaluate equivalence, you need domain knowledge, but in order to consolidate operations, you've already jettisoned that same domain knowledge. Also known as "Why do I need fuselage experts in three different places? It's just a tube! Let's just hire one outsourced Fuselage Expert". Economy of Scope takes a truly heroic amount of domain knowledge among the M&A team to make it work, but if you're already convinced that finance contains the secrets of the universe, you're probably going to be dismissing domain knowledge as a basic concept. Again - not for the first time - I marvel at the structural similarities of end-stage Soviet industry and our own late-stage financier capitalism.
- drowntoge 3y ago> Again - not for the first time - I marvel at the structural similarities of end-stage Soviet industry and our own late-stage financier capitalism. Concerning.
- o11c 3y agoWe can't ignore the fact that everybody's retirement is now stockmarket-based ...
- astrange 3y agoExcept for when they say they aren't. https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans https://www.businessroundtable.org/business-roundtable-redef...
- refurb 3y agoNothing. As long as human run companies, you'll always have people cutting corners for short-term gain. Hell, people will commit financial crimes that result in significant prison terms and they still do it. Change humans and maybe you can solve the problem.
- jewayne 3y agoWow, a whole lot of people in this thread don't know about Jack Welch and his outsized influence on the current state of US business. No, US businesses did not always focus exclusively on current quarter's earnings, nor did they lay people off every year to juice the share price. In fact, before Jack Welch, many US corporations openly said that their mission was to "build/provide X", and that dividends to shareholders were just another bill to pay on their way to providing X. Although he wasn't the only one, Jack Welch was probably the biggest figurehead of the "shareholder value" movement, and was given deity status by the business press back in the 80s. The revelation that his amazing numbers at GE were based upon deceptive accounting practices, hasn't seemed to dampen his influence one bit.
- themadturk 3y agoAnd look where G.E. is now...
- shiroiuma 3y agoI wonder what things would be like now if someone went back in time and assassinated Jack Welch as a child....
- shiroiuma 3y agoI wonder why I'm being down-voted for this. Obviously I'm not advocating murder unless you really believe in time travel; it's a thought experiment about how the present would be different if this individual had not gotten to the position he did in the corporate world, similar to the questions about the effects of murdering Hitler before he joined the Nazis. My thought is that taking out baby Jack Welch probably wouldn't have that much effect, and someone very similar would have come along not much later. I think a big part of the reason many big American companies were able to function the way they did (basically not worrying so much about profits) was because America got rich by being the one untouched industrial power at the end of WWII, and this gave them the luxury of building these companies into powerhouses that didn't have much competition to worry about and that could be idealistic and also wasteful. But this advantage eroded after several decades so it eventually became more important to maximize profitability and this required (or facilitated) someone like Welch.
- thot_experiment 3y agoYes.
- cratermoon 3y agoA rare exception to Betteridge's Law.
- sneak 3y agoThis is the “everybody knows” narrative that seems to get trotted out whenever modern Boeing has problems. I’m curious - how much of it is true? Is it really systemic, or has it manifested only with one specific model plane? It seems to fit very well with the “financialization is bad” narrative, too, but is there any other data to support the claims? It’s possible that engineer-driven Boeing could have fucked up the Max, too. I am skeptical of simple, tidy explanations regarding actions and arcs of any organizations as large as Boeing.
- moose_man 3y agoBoeing had an amazing engineering record, then it merged with a company known for having a terrible engineering record. The executives who ran the shoddy company basically took over Boeing from the old management. Now Boeing is a company with a terrible engineering record. Look at what happened to GE, it was the same style of management that ruined Boeing.
- operatingthetan 3y agoAnswering the question by repeating the myth doesn't really seem to be what they are asking for.
- moose_man 3y agoWell it's the way GE was run and look what happened to them. Caring only about your share price is a great way to ruin a company. The share price should be the result of a well run business not the true north of the company. By making the metric into the goal it totally defeats the purpose of the metric.
- Kim_Bruning 3y agoSo basically Goodhart's law in action then? https://en.wikipedia.org/wiki/Goodhart%27s_law https://en.wikipedia.org/wiki/Goodhart%27s_law
- 3y ago
- meepmorp 3y agoOne of those cases where Betteridge’s law fails - the answer is yes.
- TurkishPoptart 3y ago[flagged]
- stephenitis 3y agoSounds like your parroting Elon's twitter talking points.
- hobotime 3y agoThe current DEI nonsense is a symptom of shitty management. Chasing the appearance of something rather than doing the real work behind it.
- bitcurious 3y agoThat doesn't make sense, the decisions which lead to the 737 MAX debacles were made well before the now receding wave of corporate DEI efforts. 737 Max was announced in 2011, work (likely) started a few years prior to that. DEI started gaining traction around 2014, really took off in 2020, if you trust google trends. A Boeing with chutzpah would have committed to a new plane in the last decade. Their real failure was a failure to aim high. Long before DEI. https://trends.google.com/trends/explore?date=all&geo=US&q=diversity%20equity%20inclusion&hl=en https://trends.google.com/trends/explore?date=all&geo=US&q=d...
- portobell0 3y agoThe Netflix documentary "Downfall: The Case Against Boeing" follows this line of reasoning exactly and in detail.
- Archelaos 3y agoIn what way is Airbus different? (Honest question of someone who has no knowledge about this industry.)
- kazen44 3y agoairbus was made as a very deliberate political project from various european countries to stay competitive in the airline bussiness. Mind you this happened around the same time many foundations of a lot of european institutions where formed, and airbus is the primary example of a intra-european company in both its bussiness form (being an S.E[0]) aswell as in the way its products get build across different member states. Airbus has done the thing that the EU aims to do on a political scale, merge many different smaller european entities to stay competitive against both the US and China on the global scale. [0]: https://en.wikipedia.org/wiki/Societas_Europaea https://en.wikipedia.org/wiki/Societas_Europaea
- yongjik 3y agoWhich makes Airbus even more impressive, TBH. How many "deliberate political project from various countries to stay competitive in the X business" can you think of that actually became successful?
- truculent 3y agoBoeing feels interesting through this lens, too - tracking the rise and decline of American business culture
- midland_trucker 3y agoArianespace of course a huge success for a brief period, until it wasn't.
- fomine3 3y agoInteresting question. ASML?
- 3y ago
- cromulent 3y ago> And it even stumbled in its quest to build the US President’s new Air Force One. Technically of course, Air Force One is a call sign, not an aircraft. The quote is from an FT article which indicates the Boeing bill for retrofitting two custom 747-8s was $3.9B USD, marked down from 5B after Trump called the price "ridiculous". I agree with him. https://www.ft.com/content/d2bd472b-0e5d-459f-8503-04633aefeb87 https://www.ft.com/content/d2bd472b-0e5d-459f-8503-04633aefe...
- mcv 3y agoHere's what I don't understand: the 737 MAX was introduced in 2017. In 2018, two of them dropped out of the sky, the grounded for a while, it turned out Boeing had lost its engineering culture and its priority for safety, and it became clear that the 737 MAX had some serious design problems that they had tried to fix in software. And according to this article, the 737 MAX is Boeing's best selling plane ever. Why? Why are airlines so eager to buy such a compromised model from a company that destroyed its reputation? Is it really that cheap?
- jltsiren 3y agoThe world is very small, and it can't support that many companies making passenger aircraft. If you want aircraft of that size, you have to buy Boeing or Airbus. Both are sold out until the 2030s. And if you are already operating Boeing aircraft, it's more cost-effective to buy more of them instead of switching to Airbus. China spent ~15 years developing the C919, and it's finally entering mass production. But it also appears to be sold out until the 2030s.
- stcredzero 3y agoThe world is very small, and it can't support that many companies making passenger aircraft. If you want aircraft of that size, you have to buy Boeing or Airbus. Both are sold out until the 2030s. There's an apparent contradiction here. China spent ~15 years developing the C919, and it's finally entering mass production. But it also appears to be sold out until the 2030s. And here.
- jltsiren 3y agoWhile there is a growing demand for passenger aircraft, the fixed costs of getting into the business are so high that the market cannot support that many manufacturers. Not on a commercial basis, anyway. Airbus and Boeing are commercially viable, and they have customers all around the world. Comac is more of a political project, as China tries to reduce their dependence on Western technology. There are 1000+ orders for the C919, but effectively all of them are Chinese. Similarly, the USSR had domestic passenger aircraft industry, and Russia retains some capability to manufacture them. Their latest model is the Irkut MC-21, which has a few hundred orders. Again, effectively all of the orders are Russian. Then there is Embraer, which is the biggest manufacturer of regional jets. They have been decades in the business, but they have not made any attempt to build a competitor for the A320 and B737.
- Vicinity9635 3y ago[flagged]
- rqtwteye 3y agoMatt Walsh is an idiot.
- Vicinity9635 3y ago[flagged]
- operatingthetan 3y agoRequires someone to say they are wrong because of the character attack.
- Vicinity9635 3y agofalse
- operatingthetan 3y agofalse
- Vicinity9635 3y agoNo. Ad hominem literaly means "to the man". Attacking the speaker instead of the substance of what they said is a textbook ad hominem. You just don't like what he said because it's true.
- operatingthetan 3y agoThe other poster wasn't participating in an argument with Matt Walsh. You don't seem to understand the basics of logic. >You just don't like what he said because it's true. Cute following up with a fallacy of your own.
- daedrdev 3y agoOne of the big signs of Boeings decline is that they don't make much of their planes directly, instead relying on large subcontractors to assemble most pieces of a plane and install the pieces. This was all done to reduce costs by squeezing suppliers, yet when the suppliers only work for Boeing, my theory is that eventually the cost cutting started to hit engineering and quality control. Additionally, it hilarious that the MAX was made to save money and avoid a new airframe, yet this decision is probably one of the most costly moves they have ever made.
- pwthornton 3y agoIt's cost-cutting turtles all the way down. Any subcontractor without multiple clients is going to do the same kind of cost-cutting that the main company does.
- truculent 3y agoDid that outsourcing start with the merger? OP seems to suggest so?
- euroderf 3y ago> MAX was made to save money and avoid a new airframe, yet this decision is probably one of the most costly moves they have ever made. Punitive damages, take a bow.
- atleastoptimal 3y agoI feel like this pattern occurs in too many companies across all sectors: 1. Company is product-quality focused 2. Beats competition and creates mini-monopoly 3. Sales becomes somewhat inelastic to changes in quality 4. This leads "cost-cutting" and marketing focused execs/decision making to beat out product quality execs/decision making 5. Company's product quality takes predictable linear path to the bottom
- vincent-manis 3y agoHewlett-Packard
- agumonkey 3y ago90s Apple ?
- Aeolun 3y agoI feel like this is ameliorated somewhat by having the original founder at the helm? Of course that’s not a guarantee either as they’re liable to take a few billion and run off into the sunset.
- sjfjsjdjwvwvc 3y agoEnshittification?
- rjbwork 3y agoSeems like if you do this over and over and over again under different brands - say on like a staggered Decade schedule - you optimize your profits, milking as much out of your market as possible while severely cutting cost and quality and competence.
- brazzy 3y agoCompletely different thing. The gist of the Boeing theory is that it was ruined by a finance-driven culture that resulted in cost-cutting away quality and safety. "Enshittification" is not based on cost-cutting or optimizing for profits. It's when a product that's already "perfect" and widely used, has lots of money/effort invested in it to chase further growth, and the changes end up making the product worse for its existing userbase.
- joe_the_user 3y agoThe article seems really thin. I'd be curious what decision-making process went into the situation where "McDonnell Douglas bought Boeing with Boeing’s money". Was the MD management team just savy about mergers? Were consultants pushing for "value creation" involved? Or what? Anyone have a better link?
- Aeolun 3y agoI imagine it follows the same lines as Musk buying Twitter with Twitters money?
- iisan7 3y agoI remember some good stories after the last MAX scandal, like https://qz.com/1776080/how-the-mcdonnell-douglas-boeing-merger-led-to-the-737-max-crisis https://qz.com/1776080/how-the-mcdonnell-douglas-boeing-merg.... It's not clear whether Stonecipher simply outmaneuvered Condit, or perhaps McDonnell Douglas execs were knowingly elevated because Condit didn't trust others, who might also have resented his decisons.
- joe_the_user 3y agoInteresting article: "An ambitious program of cost-cutting, outsourcing, and digitalization had already begun (before the merger)". It seems like Boeing may wanted MD executives "expertise" at cost-cutting based management.
- mewse-hn 3y agoThis article doesn't cite sources but it seems to be just repeating every point made in the netflix doc Downfall - including the joke about McDonnell Douglas buying Boeing with Boeing's money. My friend also recommends the book Flying Blind which I haven't read yet, but both seem like better info sources than the linked article.
- dan_quixote 3y ago> the joke about McDonnell Douglas buying Boeing with Boeing's money I used to work in aerospace adjacent to Boeing and their competitors and suppliers. This joke was oft repeated by everyone in the industry 10-15 years ago, maybe longer.
- bcantrill 3y agoThe answer to this is "yes" -- and for details, I would recommend Peter Robison's excellent Flying Blind. (Selfishly, I would also recommend the conversation that we had with Robison on Oxide and Friends shortly after the book was published.[0]) For insight into the deep roots of the broken McDonnell Douglas culture, I would recommend an older book, John Godson's Rise and Fall of the DC-10. [0] https://oxide-and-friends.transistor.fm/episodes/flying-blind-with-peter-robison-2022-01-10 https://oxide-and-friends.transistor.fm/episodes/flying-blin...
- code_biologist 3y agoActual interview begins around the 5 minute mark. Edit: these twitter space voice cutouts are brutal. Probably pass on this one if you like tight interviews.
- paulcole 3y agoWhat happens during minutes 1-4?
- deleted 3y ago[deleted]
- bcantrill 3y agoYeah, sorry -- Twitter Spaces were absolutely awful, and this particular space was so bad with respect to audio that we made fun of it ourselves in our roundup of Oxide and Friends for On the Metal.[0] We moved to Discord over a year ago, and the audio issues went away. But I thought the content of this conversation was great nonetheless -- with my apologies for the audio snafus! [0] https://oxide.computer/podcasts/on-the-metal/oxide-and-friends https://oxide.computer/podcasts/on-the-metal/oxide-and-frien...
- kerouac999 3y agoI grew up in the Seattle area, and Boeing's move of all the executives to Chicago always seemed crazy. You have these massive manufacturing plants, including the worlds largest building, and tons of aircraft engineering talent built over 100 years in Everett. On the other hand, all of the executives are 2000 miles away? How on earth do they keep an eye on what's going on? The answer apparently is that they don't! Also, they have been trying to move more manufacturing to South Carolina to avoid paying union wages... but again, there's over a century of experience building aircraft in the Puget Sound, and you can't easily replicate that elsewhere. There were constant stories of aircraft assembled in South Carolina being shipped to Everett where all of the work had to be redone, because everything was done wrong the first time. Would you feel safe flying in a plane like that? You just have to hope the Everett workers caught everything the South Carolina workers screwed up.
- goda90 3y agoThis is probably just confirmation bias on my part, but it seems like M&As and going public almost always make things worse for non-shareholders in the long run. Be that employees, customers, or the community around a company.
- globalnode 3y agoseems like a bit of blame game to me -- i doubt its the merger, its just the evolution of business as we have it today. having people in charge whose top priority is financial efficiency will destroy any org (looking at you too universities). i think the end result will be fragmentation as the rest of us flee.
- rgmerk 3y agoRuined or not, Boeing is too big to fail. No way in the world will airlines, or the US government, accept a world where Airbus is the only company able to sell you a passenger airliner. Nor would they accept a word where the alternative to Airbus was Comac.
- zw123456 3y agoI know ahead of time that what I am about to say, will result in me getting yelled at by the HN crowd that what I am saying is anecdotal and all that. But, after refraining for a while, I guess I have to say something so, I know you will down vote me because this is not based on a scientific A-B test blah blah. Cool. People's lives are at risk. And No, I DO NOT work for Boeing and never have. I work for a company that makes a product that does not involve any risk to people's lives, we make a dumb thing. I live in Seattle, and yeah, I know a lot of people who currently do, or have worked for Boeing. So, yes, this is not a scientific study, again, down vote button is in the lower left over there. Have fun with that. But from what I have heard, there is something "wrong" at Boeing. And yeah, this is not scientific, got it. But, from my, unscientific study, that plant in Renton seems to be especially problematic and it sounds like from what I have heard, the Renton operation where the Max 9 and all the other Max N's are were made, there is something especially "wrong:' there. I just cannot NOT say something. It seems like there is a pattern here, I know this is all anecdotal and all that. But it seems like that particular operation has a management problem that is putting peoples lives at risk.
- zw123456 3y ago[dead]
- kelnos 3y agoI suspect you were downvoted because 80% of your post was about how you expect to be downvoted (when HN guidelines ask that we not talk/complain about downvoting), and then other 20% was "there is something wrong at the plant", but you didn't elaborate on that at all. I didn't learn anything useful or interesting from your post, and I'm not getting that time back.
- wglb 3y agoThe guidlines ask you not to comment about downvoting.
- evondale 3y ago
- evondale 3y ago[flagged]
- stg22 3y agoThe role of McDonnell-Douglas is exaggerated. Boeing had achieved pretty close to a monopoly in the mid-1970s, but things had changed by the mid-1990s. 1. Domestic airlines protected by regulation had been effective monopolies and Boeing's engineer-led culture thrived in an environment where airlines didn't care about costs. But that environment died with airline deregulation in 1978 and an engineer-led culture made it more difficult to compete in a cost sensitive environment. 2. Airbus' rise put Boeing on the defensive for the first time in many decades. By 1996, Boeing's market share was less than twice Airbus' and falling rapidly enough that people could foresee the day when Airbus would overtake them. Although Airbus had good aircraft, their key advantage was they could sell them for lower prices than Boeing could. 3. Shareholders had become increasingly activist, quick to overthrow management when they weren't getting enough dividends and share price increases, and willing to install new management who would give them what they wanted. Outsourcing, cost-cutting, and a move to an accountancy-led culture were the obvious responses to these challenges and Boeing's then CEO, Phil Condit, had already started the ball rolling on them before buying McDonnell-Douglas.
- AniseAbyss 3y agoWhat's happening to Boeing isn't really remarkable lots of dinosaur conglomerates rise and fall. I'm just a casual follower but it seems their glory days are from the 60s and 70s and they've been coasting along since then.
- quink 3y ago> glory days 1971: Will the Last Person Leaving SEATTLE — Turn Out the Lights I’d argue the 757, 767 and 737 Classic (i.e. -300 to -500), all of which much more 80s than 70s were much more glorious. And the 90s brought us the 737NG and 777 which continue to carry more than everything else today and for that matter anything else ever, other than maybe the A320ceo.
- rob74 3y agoI would say even the 787 is a good plane, if it didn't have major build quality issues because of Boeing wanting to reduce manufacturing costs (it was initially built at two plants, Everett WA and North Charleston SC, and it got to a point when airlines only wanted to have 787s manufactured in Everett, but ultimately the production in Everett was discontinued). And now the same major build quality issues start popping up with the 737 MAX (whose fuselage is being manufactured by Spirit Aerosystems, which was originally a division of Boeing but was outsourced in 2005).
- SubiculumCode 3y agoThat we tolerate such monopolies in our generally capitalist nation really demands re-evaluation. Efficiency of scale does not tend to benefit consumers that monopolistic rent extraction detracts. Moreover, I think that any National Security arguments for monopoly control is such sectors is, on its face, weak.
- deleted 3y ago[deleted]
- kelnos 3y agoI was pretty disappointed in this article; I was expecting a deep dive into the merger and its effects, but I all I got was the surface-level stuff that everyone repeats over and over, without any verification that any of it is really the reason. As other sibling posters have mentioned, it feels like there was a lot more to it. Sure, the McDonnell Douglas executives taking over Boeing after the merger certainly didn't help, but the regulatory, competitive, and economic environment had changed drastically by that time. I do wonder if the causality is a little reversed: the McD-D CEO taking the reigns at Boeing may have been more the effect of these shifts, a reaction to the relatively new shareholder pressure to control costs.
- MikePlacid 3y agoWell, speaking of airplane industry one thing is obvious - you can’t build great airplanes without money and you can’t get large sums of money without building great airplanes. The survival/prosperity question is of balance, not of preference of one to another. I do not know why the author decided to “simplify” things. In my field of experience such simplifications end very badly. I guess if someone decided to really just build great airplanes no matter the costs - his enterprise would have ended very badly too. Now, the question of finding a proper balance, as each engineer knows - this is the question of real pain and real beauty. But - is it possible to write an article about a struggle to find a proper balance in something? anything? Will anyone read such an article? Imagine, how many things should be explained before the problem becomes clear…
- salynchnew 3y agoFunny how someone rewrites this Atlantic article every couple of years: https://www.theatlantic.com/ideas/archive/2019/11/how-boeing-lost-its-bearings/602188/ https://www.theatlantic.com/ideas/archive/2019/11/how-boeing.... For those who can't get past the paywall, you can read the raw text here: https://marcellus.in/story/the-long-forgotten-flight-that-sent-boeing-off-course/ https://marcellus.in/story/the-long-forgotten-flight-that-se...
- CodeWriter23 3y agoNah. Letting the McDonnel execs take over Boeing after being swallowed by Boeing is what did the trick.
- spacecadet 3y agoUnfortunate trend across the board, we have discussed it all too many times here. Profits over quality, short term thinking, fragility.
- eschaton 3y agoBetteridge’s Law says “no.” Also any sort of real analysis can lay the blame squarely at capitalism itself, demanding ever increasing profit with ever decreasing margins ad infinitum.
- quangv 3y agoJesus
- David_FF 3y ago1997 was 27 years ago This article is not compelling to me at all They're seriously trying to blame the problems of Boeing on a merger from nearly 3 decades ago. The culture of the company surely should have evolved radically over 3 decades At some point, the past is the past
- euroderf 3y agoOther comments make the point that in the airframe industry, development and production timeframes are looong.
- p_l 3y agoRegarding costs of switching to different aircraft model - the type ratings themselves might not be that expensive, similarly parts and other preparations when looked in isolation. Which is fine for privately-owned company, but not for publicly traded company that is going to take a pounding for the expenses over multiple quarters. And similarly Boeing wanted to have a happy path over designing and certifying a completely new plane, which is frankly what they should have done - the 737 design could not be enhanced further without at least major recertification part (for example, going full fly by wire).
- black_13 3y ago[dead]