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It's Time to Nationalize and Then Break Up Boeing
- yyyfb 3y agoWhy, would US govt run it any better?! If you think financial types can't run an engineering and manufacturing business, wait until you see the politicians try.
- tenebrisalietum 3y agoYou trust the gov to run the military, which is literally essential to the nation's survival, so why not?
- anovikov 3y agoMaybe that's the problem actually. We have to wait till Elon Musk turns his eye on the military and starts running it no matter what the states think of it.
- soupfordummies 3y agoWell there’s a nice horrifying thought on a Saturday morning :D
- 303uru 3y ago[flagged]
- the_only_law 3y ago[flagged]
- jvanderbot 3y agoGp made a bait and switch, equating government ownership with Congress in the board room. The implication doesn't ring true
- crystaln 3y agoThe military is not a business. It doesn’t have a revenue model that tries to maintain solvency.
- grecy 3y agoGiven large companies get bailouts whenever they need them, I would argue the same is true of many companies in the US.
- abduhl 3y agoName the last large company to receive a bailout. This question is important to see where you draw the line on something being a “bailout.”
- grecy 3y agohttps://projects.propublica.org/bailout/list https://projects.propublica.org/bailout/list 991 times for a total of $635B
- abduhl 3y agoThis list includes companies that received <$10,000 (and which was paid back entirely, for example the one below). It sounds like any amount of money from the government is a bailout by your metric. Or perhaps your definition is more narrow since the list only includes financial institutions and automakers, so maybe it's only banks or automakers that receive money from the government? To be less charitable, I'm pretty sure you're just reciting some stupid Twitter/Reddit talking point that you agree with and that you have no principled stance on this beyond "Arghhhhh I hate big corps! The system sucks! Corporations privatize profits and socialize losses!" https://projects.propublica.org/bailout/entities/927-east-end-baptist-tabernacle-federal-credit-union https://projects.propublica.org/bailout/entities/927-east-en...
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- crystaln 3y agoI’m not sure it you’re aware of the inefficiencies and corruption of the military, or the fact that - it’s a cost center. It’s also something we are able to spend unlimited funds on because it is existential. And privatizing the military would be a terrible idea. We definitely can’t afford to operate other industries the way we operate the military, which consumes 15% of the annual budget.
- the_snooze 3y agoEfficiency can be a problem in and of itself. Efficiency is a fine enough goal, though too often companies pursue it to the point that other important values like safety, resiliency, and long-term stability fall by the wayside. They'll also pursue efficiency by externalizing costs and risks to other parties. That's basically what you see in the rail shipping industry [1]. Companies will naturally pursue effiency. Nationalizing a company may be going too far, but we need something else (i.e., government) to pressure them to maintain other values too. [1] https://www.propublica.org/article/train-derailment-long-trains https://www.propublica.org/article/train-derailment-long-tra...
- yyyfb 3y agoTrust by default. The difference is, I don't trust anyone else to run the military.
- paxys 3y agoThe US military isn't exactly the picture of efficiency. Let Boeing lose a trillion dollars every year and don't subject it to audits or any other oversight then yeah, I'm sure the government will run it great.
- peterfirefly 3y agoAnd the military is horribly inefficient. So why not privatize it? Because that would almost certainly lead to other, very bad, outcomes...
- TheOtherHobbes 3y agoMilitary procurement in the US is already privatised in everything but name. The brass get a place at the top table in matters of national policy and critical event response, but procurement is essentially privatised, with an open door between senior military figures, politicians, senior contractors/consultants, and C-Suite. Boeing is one the poster children for that. Costs would definitely be saved if there were more defence and aerospace bidders and engineering cultures, and Boeing couldn't rely on military pork to keeps its enshitified commercial arm in the air. In fact if I were in some kind of gov procurement position I'd be looking very hard at the quality, costs, and reliability of Boeing's military projects right now.
- CPLX 3y agoRead the article. It proposes breaking it up into competitive firms, not having the government run it. Its premise is actually that it’s essentially a government run entity now, and that’s what needs to change.
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- crop_rotation 3y agoWouldn't that make it much harder for Boeing to compete with Airbus due to the size disparity? One interesting observation I have is that in Europe, a career at Airbus is competitive with the other industries for talent, due to the relatively lower salaries at big tech and even lower at others. Whereas if you are in the United States, a job at Boeing or in Airspace is mostly not competitive with the tech options (even for a non tech job). SpaceX is doing well, but SpaceX compensation is better due to stock options and hiring is easier due to the Elon cult of personality/or the SpaceX mission.
- chrisco255 3y agoThere's fairly low overlap between aerospace engineers and software developers. People that want to build jets and rockets don't tend to transition to enterprise SaaS development, regardless of the pay gap. At any rate the biggest reason Boeing salaries are lower is because they are the only competitor. The reason why silicon valley companies pay so much is because they're all competing for talent and the talent has optionality to go down the street and get paid more. SpaceX is a private company so no, the stock options are not the biggest pull there. Hiring may be easier due to strong leadership but that goes without saying.
- prlambert 3y agoThis is true in mid and late career, but not early. Lots of mathematically and engineering minded college students consider both CS and mech/aerospace as majors. Of course career prospects are a major influence. Also fwiw my wife left a 10 year aerospace career, moving from NASA to Google, largely for comp reasons. She was a structural aerospace engineer, now she’s a data scientist.
- crop_rotation 3y agoIt's not just about software developers. All the program product management roles, as well as other similar non SWE roles are common across companies. Also as the other commenter said young people going to university will be totally not inclined to choose aerospace in US. Whether Boeing has competition or not is not relevant if Airbus salaries give their employees a better life and help them to recruit better in the european talent market. SpaceX does a private company version of stock options though, and Elon frequently cites this in his mails to employees on why they are not hurt by the company not being public.
- fl0ki 3y agoRegulation can raise the floor of company quality, but nationalization also lowers the ceiling, especially if it means no competitors are ever viable. This needs more regulation, not nationalization.
- MaxBarraclough 3y ago> nationalization also lowers the ceiling on how good it can be How's that? What private company outshines, say, NASA (especially in its glory days)?
- abduhl 3y agoIn what metric? SpaceX outshines them on launches. In fact, NASA has consistently outsourced design and construction to the private sector. The space shuttle? Privately built by Rockwell. Hubble? Lockheed. ISS module 1? Boeing.
- geoffreypoirier 3y agoHow about humans on the moon? NASA's still crushing SpaceX. (Glory days.)
- tekla 3y agoWhat does NASA build?
- dotnet00 3y agoIf we're leaning on an excuse like glory days, why do anything to Boeing either? After all, no one yet outshines their glory days of building classic planes and building the SaturnV?
- MaxBarraclough 3y agoI was responding to the suggestion that nationalization imposes a ceiling on quality.
- obblekk 3y agoI agree with the sentiment more than the solution. In the American system, the gov should assess punitive fines for regulatory failures, revoke self regulation privileges, and impose consent decrees on company behaviors. The combined impact of these actions would cost Boeing billions which would result in shareholder action to replace management. Perhaps the gov should also investigate willful neglect on the part of management. If it’s found that engineers complained about policies for reasonable safety concerns and management ignored them, then personal liability, perhaps even criminal, would extend to the directors and executives. I don’t know how much of this would happen, or be found guilty in court. But I do hope this isn’t just another administrative slap on the wrist like 2019.
- ToucanLoucan 3y agoIt's difficult to imagine any meaningful consequences for any of these massive corporations. Their brass rotates in and out of the same regulatory agencies meant to be overseeing them. Conflict of interest, as a concept, is a joke in these spaces: these people all know each other and work together extremely closely. Better jobs in industry get you better jobs in regulation get you better jobs in industry and round and round they go, practically waving as they pass in the hallways.
- 3327 3y ago[dead]
- anigbrowl 3y agoHow has that approach been working out? It's become common for CEOs to massively cut corners in pursuit of profits and then fail up or retire in comfort unless. Occasionally one goes to prison for fraud if they've directly lied to stockholders, but 'looking the other way' and hiding behind bland assurances generally pays great. We have one political party that reliable decries any sort of regulatory action as interference with the free market or outright communism; the American system is infested with bad faith actors.
- Andrex 3y agoThe entire airline industry was nationalized at one time. I wonder how safe things were during this period versus today.
- dudeinjapan 3y agoBoeing can be broken up without being nationalized in the process.
- 4ggr0 3y agosocialize losses, privatize profits
- Synaesthesia 3y agoWell that's been the modus operandi of American capitalism. Boeing is a fine example. It has existed and profited largely thanks to government funds, military contracts, bailouts etc. But the profits go to the owners. If it were actually nationalized that would be an improvement. But then there would be no need to break it up.
- 4ggr0 3y ago> Well that's been the modus operandi of American capitalism Sadly, yes.
- amadeuspagel 3y ago> [Airbus] was incorporated as the European Aeronautic Defence and Space Company (EADS) in the year 2000 through the merger of the French Aérospatiale and the German DASA, and later acquired full ownership of Airbus, a collaboration of European aerospace companies originally incorporated in 1970 to develop and produce a wide-body aircraft to compete with American-built airliners, which would later merge together. https://en.wikipedia.org/wiki/Airbus https://en.wikipedia.org/wiki/Airbus Europe created Airbus by merging different companies, but the US should break up its only competitor?
- NickC25 3y ago>Europe created Airbus by merging different companies, but the US should break up its only competitor? If that said competitor is not behaving, and abusing its status as a de-facto monopoly, than yes, the US should break up that competitor. It's not like Boeing is a book store or a video game developer which has little risk to society if things go belly up - it produces critical transportation infrastructure that can kill people if something goes wrong. That's a responsibility to not be taken lightly, and a track record of Boeing management ignoring safety checks and guidelines because it would cause shareholders to lose a bit in the short-term is just is irresponsible.
- amadeuspagel 3y ago> It's not like Boeing is a book store or a video game developer which has little risk to society if things go belly up - it produces critical transportation infrastructure that can kill people if something goes wrong. I completely agree, I just don't think that more competition is necessarily the solution here, and that's the point of my example. Airbus is a trusted company, and it was created through merging different companies, through removing competition.
- vlovich123 3y agoAren’t we capitalists here? Capitalism would suggest that more competition is indeed good and actually should outcompete a larger behemoth provided you ensure the larger one can’t do things like flooding the market or otherwise pushing out the smaller players. But given government contracts keep these players fed and happy (very lucrative military contracts), I’m not sure what the answer.
- georgeplusplus 3y agoIts Boeings cozy relationship with the FAA that is leading to these engineering problems. If the FAA cannot do its job what makes people think nationalizing the whole thing will make it any better?
- eastbound 3y agoYes, the FAA should also be tried for willful negligence.
- dehrmann 3y agoThe door plug was likely an assembly issue, not an engineering one. The problem with both is there's too much for a regulator to effectively oversee.
- pydry 3y agoAccountability to citizens at the ballot box is a step above 0 accountability. Even if it's not as efficient as accountability to informed customers in a competitive market. It's the same reason that the telco duopoly is worse than municipal telcos.
- testfoobar 3y agoPerhaps it should be something else - there should be an upper limit to the size of companies. The problem is that successful companies converge towards regulatory capture to maintain their advantage - this includes buying up all competitors in order to maintain cartel/monopolistic market positioning. Look at Ma Bell. It was broken up. It slowly reconstituted its old self - albeit in a more competitive, less monopolistic landscape. Boeing, like the too big too fail banks, like the airlines during Covid is already quasi-nationalized. Perhaps we should make that relationship explicit and demand divesture of business units in order to increase competition and transparency. https://en.wikipedia.org/wiki/Bell_System https://en.wikipedia.org/wiki/Bell_System https://en.wikipedia.org/wiki/AT%26T https://en.wikipedia.org/wiki/AT%26T
- crop_rotation 3y agoIn a single nation world yes, but in a multi country world, if the US limits size of it's companies the world will be simply dominated by Chinese/European companies and the QoL of life for ordinary citizens would nosedive.
- jampekka 3y agoThis is the reason why there used to be barriers of trade and capital controls.
- xxpor 3y ago> if the US limits size of it's companies the world will be simply dominated by Chinese/European companies and the QoL of life for ordinary citizens would nosedive The conclusion does not follow from the premise. Has the QoL nosedived in NJ because the tech industry is dominated by California?
- crop_rotation 3y agoThis doesn't make any sense. NJ and California exist under a single nation with a common treasury. You are basically agreeing with my point. If the world was a single nation then sure.
- PaulKeeble 3y agoWe live in deeply corrupt times where corporations have taken over large chunks of the mechanisms of state that are meant to regulate them. Nationalising it or asking for regulatory intervention isn't going to solve it because its one big club. This isn't just about Boeing, there are criminal corporations openly abusing customers, their staff and buying the government avoiding consequences every day. The electoral system ensures its nearly impossible to fix especially since this collective interest runs the media too. I do not see a way to fix such widespread corruption of democracy especially since its happened throughout the western world and dawned a new age of Feudalism and populism.
- jampekka 3y ago> I do not see a way to fix such widespread corruption Maybe check out e.g. years 1688, 1775, 1779, 1848, 1917, 1947, 1953 and 1989 for some ideas?
- gruez 3y agoThe coup belt is basically perpetually in revolt. How's their corruption doing?
- paulryanrogers 3y agoMake private financing of campaigns illegal. Require same day primary elections. Outlaw professional lobbying.
- aweiland 3y agoWithout a constitutional amendment the current supreme court has made all of this impossible.
- dehrmann 3y agoDid the article really make this argument without mentioning Spirit? It's not the same as being broken up, but a lot of the work has already been outsourced.
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- nightski 3y agoWe should not be nationalizing anything, sorry. The government should not be running companies as it takes away all natural market forces. While private ownership can be corrupt, market forces / competition can keep it in check. If anything we have seen the government's corruption fail us by allowing too much M&A destroying competition.
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- nostrademons 3y agoNeed to have competition and actual market forces for that to actually work. A private monopoly has all of the downsides of the government with none of the oversight.
- nightski 3y agoThat's my entire point. The government created this situation. It wasn't always like this in aviation/aerospace.
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- manmal 3y ago> as it takes away all natural market forces What are those forces exactly, in a defacto monopoly? Building huge jets takes so much money and know how buildup that only nations and maybe the top 5 or so companies could pull it off.
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- double0jimb0 3y agoThey said the same thing about rockets.
- gessha 3y agoI see a lot of comments about nationalization but I don’t think that is the American way. There should be a range of regulatory/policy actions that could be taken with nationalization being the most extreme. Just like the banks are regulated by FDIC so can be Boeing. They’ve done great things before and they can do it again. You “just” need to figure out the right incentive structure. If regulating it doesn’t help, throw some billions into establishing a new Boeing, the US has a history of establishing new industries based on national priorities- most recently with the space industry, before that was the semiconductor industry, etc.
- notatoad 3y ago>Just like the banks are regulated by FDIC so can be Boeing that's a good example, because when the FDIC runs out of regulatory measures it can apply to correct a problem, they have the option of nationalizing a bank to reduce the harm that can be caused. like we saw happen this spring with SVB. In that case nationalization isn't like argentina, which everybody in this thread seems ot be jumping to. it's a corrective measure to prevent a collapse, where the government takes over keeps things running until the assets can be sold or otherwise transitioned to owners who will handle them better.
- roenxi 3y agoThis seems like an overreaction. According to Wikipedia [0] the rate of fatal crashes has gone from 0.2 per million to 4 per million. That isn't a change that requires a crisis response. Even grounding the planes is probably overdoing it. Aircraft travel is already safer than makes sense for it to be. [0] https://en.wikipedia.org/wiki/Boeing_737_MAX https://en.wikipedia.org/wiki/Boeing_737_MAX
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- beAbU 3y agoAre you kidding? That's an order of magnitude increase!
- roenxi 3y agoAn order of magnitude from approximately 0 to approximately 0. If I fly somewhere on a 737 Max, I've got great odds of it being a normal plane flight. And it'd be reasonable to assume the odds are getting better as pilots get used to the plane and remediations are put in place. If 1 in a million odds are going to scare you off a plane, you shouldn't be flying anyway. The response by the regulators is a waste of time and money. Let alone trying to remake an entire company as this article title calls for. Maybe a call for people to get a $ discount when flying on a 737 Max as hazard pay would be reasonable.
- Tainnor 3y agoThe reason why it's only such a "small" increase is precisely because planes are being grounded. Imagine that after the 737 Max incidents in 2018, they hadn't grounded the airplanes. How many people might have died then? You're also ignoring how humans react to such things. If people learn that a specific make of planes is much less safe, they're going to refuse flying that plane. I sure as hell wouldn't want to fly the "more dangerous" plane just to save some money.
- wg0 3y agoUnless Americans want America to look like Argentina. Nationalization has a not a great story almost anywhere. Regulatory measures are what can force bean counters to respond.
- peter-m80 3y agoArgentina is an American country. Perhaps you want to say United States instead of America.
- jagged-chisel 3y agoEh. A large part of the world simply calls the USA “America” and then refers to other North and South American countries by name. It’s a known convention.
- panarky 3y agoIs that how Argentines speak?
- jagged-chisel 3y agoI do not have knowledge about whether they are in the set “large part of the world” or outside of it.
- Andrex 3y ago> Unless Americans want America to look like Argentina. Nationalization has a not a great story almost anywhere. The airline industry has already been nationalized once before. I don't think it was the end of USA. "Just look at <X> country" is also a really poor, unintelligent argument to make.
- irusensei 3y agoJust look at Y continent then? South America is rich with all degrees of Argentina.
- Lammy 3y agoMeta: I would love to see “It’s Time To…” added to HN’s list of automatically-edited-at-submission title clichés, like “How…” and “The Story of…”
- MilStdJunkie 3y agoOh yeah, let's tie what might be an actual ongoing crime scene to political ideology. No. That's a Ninja Smoke Bomb trick. Maybe chunks of BDS, later, after people are actually for-real prosecuted, you know, instead of yet another tax[1] on the shareholders who have absolutely zero power in the organization. Yet. Another. But talking about this right now? No. I have a Wierd Al style parody of Bowie's "Starman" in my head, except it's called Straw . .MAAAAAAAN . . [1] That's all the big fines are, incidentally. Moves the risk of bad behavior to the lowest tier of stockholder. Very often lower-tier Boeing employees.
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- RagnarD 3y agoTranslation: advocating that DC steal $131.7 BILLION from a large number of investors who hold Boeing stock.