4 ms·

I guess it all comes down to thinking outsourcing is magic. Get same thing done at 1/4th the cost with virtually no downside. Hopefully C suites get what they d

by geodel 3y ago

I guess it all comes down to thinking outsourcing is magic. Get same thing done at 1/4th the cost with virtually no downside. Hopefully C suites get what they deserve or at least get fired. But at any point do these consultants like at McKinseys, BCG, AT Kerney etc who advise these money saving tactics get what they deserve?

dheera 3y ago
[flagged]
- KptMarchewa 3y ago
  It's not SEC whim, but Dodge v. Ford Motor Co. ruling
  - dheera 3y ago
    [flagged]
    - AlbertCory 3y ago
      I don't doubt that it's possible to find out what kind of car the jury members drove, but is there actually a public record of it? If so, please show the link.
      - kristjansson 3y ago
        Finding BMW owners in 1919 would be a treat. Lots of biplane pilots!
  - bbanyc 3y ago
    That overblamed decision was (a) specific to Michigan corporate law, and a reason why Ford reincorporated in Delaware shortly afterwards and (b) a finding that Ford had to pay dividends to its shareholders rather than reinvesting profits in expansion, which no modern court would require. Warren Buffett and Steve Jobs both cancelled dividends and nobody objected. The story behind the lawsuit was that the Dodge brothers had just left Ford (then a private company) and they planned to use their dividends to start a competitor - which Ford suspected and which is the reason why the dividend was canceled.
- maxbond 3y ago
  The SEC's mandate is to enforce the accuracy of financial disclosures. It's not their mandate to ensure that a business model is appropriate. Only that it is transparent to investors. From their perspective, it would be management, investors, and the FAA who had the responsibility to ensure Boeing was behaving appropriately.
  - dheera 3y ago
    Well their perspective causes accidents. Financial disclosure is NOT more important than safety. Even if it involves all kinds of financial non-transparency and even financial crimes to ensure that lives are safe, at the impact of Wall Street billionaires' profits, I'm in support of it. I'd like to get to my destination alive. If a plane can be made twice as safe, I'll buy Boeing stock at twice the price. Then when the plane is 3X as safe I'll sell it at 3X the price. Their financials don't matter to me. As a non-billionaire without a private jet, safety is how I "value" a transportation company.
    - maxbond 3y ago
      I'm not saying financial disclosure is more important than safety (and I certainly don't believe that), I'm saying their bailiwick ends and making sure the financials are reported accurately. It's like blaming the referee because a player dropped the ball, they're not responsible for making good decisions based on that information, they're responsible for making sure we have the information we need to make good decisions. Which is not to say they're even doing a good job at that, just that this particular thing isn't on them. It's not like they're being accused of cooking the books. I didn't see a charge in the article, but I would assume they're being investigated for negligence.
mglz 3y ago
We need "leadership" people in companies to aign off on decisions like how engineers need to sign off on designs. That signature needs to make them accountable for future issues.
- bumby 3y ago
  Ie an engineering equivalent of the Sarbanes-Oxley Act
doubloon 3y ago
First amendment loophole. You can't legally tell someone to commit negligent homicide, but if you tell them the engineering process efficiency management program has passed mandatory quality and safety checks by an accredited third party auditor, then the law can't touch you. Much like computer science, every problem (like how to avoid being charged for homicide) can be solved by layers of indirection.
- aeternum 3y ago
  This is why regulation is rarely the answer. Corporate lawyers are ultimately more clever and better-paid than the congressional staffers that are writing the laws. It's also much easier to find a loophole than it is to predict and avoid all loopholes, especially with all the compromise required to pass a law.
  - PopePompus 3y ago
    They don't have to be more clever. They just have to be faster to adapt, which is trivial given the glacial pace at which legislation is passed in the US.
    - toss1 3y ago
      Which also means that the regulatory agency most be structured to remain un-captured by the corporate interests it regulates, and empowered to react and adapt rapidly to the 'clever' legal hacks.
    - Andrex 3y ago
      They also have to make an example out of cases which they know they can win dead-to-rights. The chilling effect can be a societal good if used correctly.
  - tycho-newman 3y ago
    No lawyers are dumb enough to want less safe commercial planes.
cscurmudgeon 3y ago
Any evidence outsourcing is the issue?
- mnau 3y ago
  Whole 787 program that relied on subcontractors. Wiki: > development budget estimated at US$7 billion as Boeing management claimed that they would "require subcontractors to foot the majority of costs" > The accumulated losses for the 787 totaled almost $27 billion (~$32.8 billion in 2022) by May 2015.
  - cscurmudgeon 3y ago
    Did outsourcing increase recently?
- chmod775 3y ago
  Everyone including Boeing officially and internally since admitted it was a dumb idea, however it's a lot to recap in a HN comment. Maybe someone else will feel like it. The short version is that it's hard making things fit together and meet your standards when you're dealing with dozens of different suppliers and suppliers of suppliers who aren't necessarily aligned with your goals. The full story is a cautionary tale about letting business school types displace people who know how to build planes. I recommend seeking out one of the many retellings of Boeings struggles since the McDonnell Douglas merger. Instead of a retelling, I'll point you to the latest chapter: Boeing trying to re-acquire ownership of Spirit AeroSystems. It's a substantial indictment of past policy to do a full reversal in the name of "strengthening safety". https://www.nytimes.com/2024/03/01/business/boeing-spirit-aerosystems.html https://www.nytimes.com/2024/03/01/business/boeing-spirit-ae...
- stevenwoo 3y ago
  It’s aimed at entertainment but the latest Last Week Tonight covered this and is on YouTube. Hope this links works from my phone https://m.youtube.com/watch?v=Q8oCilY4szc https://m.youtube.com/watch?v=Q8oCilY4szc
  - 3y ago
kqr2 3y ago
Obligatory internal Boeing critique on the limits of outsourcing in 2001 : https://www.documentcloud.org/documents/69746-hart-smith-on-outsourcing https://www.documentcloud.org/documents/69746-hart-smith-on-...
deleted 3y ago
[deleted]

by geodel 3y ago

dheera 3y ago

[flagged]

KptMarchewa 3y ago
It's not SEC whim, but Dodge v. Ford Motor Co. ruling
- dheera 3y ago
  [flagged]
  - AlbertCory 3y ago
    I don't doubt that it's possible to find out what kind of car the jury members drove, but is there actually a public record of it? If so, please show the link.
    - kristjansson 3y ago
      Finding BMW owners in 1919 would be a treat. Lots of biplane pilots!
- bbanyc 3y ago
  That overblamed decision was (a) specific to Michigan corporate law, and a reason why Ford reincorporated in Delaware shortly afterwards and (b) a finding that Ford had to pay dividends to its shareholders rather than reinvesting profits in expansion, which no modern court would require. Warren Buffett and Steve Jobs both cancelled dividends and nobody objected. The story behind the lawsuit was that the Dodge brothers had just left Ford (then a private company) and they planned to use their dividends to start a competitor - which Ford suspected and which is the reason why the dividend was canceled.
maxbond 3y ago
The SEC's mandate is to enforce the accuracy of financial disclosures. It's not their mandate to ensure that a business model is appropriate. Only that it is transparent to investors. From their perspective, it would be management, investors, and the FAA who had the responsibility to ensure Boeing was behaving appropriately.
- dheera 3y ago
  Well their perspective causes accidents. Financial disclosure is NOT more important than safety. Even if it involves all kinds of financial non-transparency and even financial crimes to ensure that lives are safe, at the impact of Wall Street billionaires' profits, I'm in support of it. I'd like to get to my destination alive. If a plane can be made twice as safe, I'll buy Boeing stock at twice the price. Then when the plane is 3X as safe I'll sell it at 3X the price. Their financials don't matter to me. As a non-billionaire without a private jet, safety is how I "value" a transportation company.
  - maxbond 3y ago
    I'm not saying financial disclosure is more important than safety (and I certainly don't believe that), I'm saying their bailiwick ends and making sure the financials are reported accurately. It's like blaming the referee because a player dropped the ball, they're not responsible for making good decisions based on that information, they're responsible for making sure we have the information we need to make good decisions. Which is not to say they're even doing a good job at that, just that this particular thing isn't on them. It's not like they're being accused of cooking the books. I didn't see a charge in the article, but I would assume they're being investigated for negligence.

mglz 3y ago

We need "leadership" people in companies to aign off on decisions like how engineers need to sign off on designs. That signature needs to make them accountable for future issues.

bumby 3y ago
Ie an engineering equivalent of the Sarbanes-Oxley Act

doubloon 3y ago

First amendment loophole. You can't legally tell someone to commit negligent homicide, but if you tell them the engineering process efficiency management program has passed mandatory quality and safety checks by an accredited third party auditor, then the law can't touch you. Much like computer science, every problem (like how to avoid being charged for homicide) can be solved by layers of indirection.

aeternum 3y ago
This is why regulation is rarely the answer. Corporate lawyers are ultimately more clever and better-paid than the congressional staffers that are writing the laws. It's also much easier to find a loophole than it is to predict and avoid all loopholes, especially with all the compromise required to pass a law.
- PopePompus 3y ago
  They don't have to be more clever. They just have to be faster to adapt, which is trivial given the glacial pace at which legislation is passed in the US.
  - toss1 3y ago
    Which also means that the regulatory agency most be structured to remain un-captured by the corporate interests it regulates, and empowered to react and adapt rapidly to the 'clever' legal hacks.
  - Andrex 3y ago
    They also have to make an example out of cases which they know they can win dead-to-rights. The chilling effect can be a societal good if used correctly.
- tycho-newman 3y ago
  No lawyers are dumb enough to want less safe commercial planes.

cscurmudgeon 3y ago

Any evidence outsourcing is the issue?

mnau 3y ago
Whole 787 program that relied on subcontractors. Wiki: > development budget estimated at US$7 billion as Boeing management claimed that they would "require subcontractors to foot the majority of costs" > The accumulated losses for the 787 totaled almost $27 billion (~$32.8 billion in 2022) by May 2015.
- cscurmudgeon 3y ago
  Did outsourcing increase recently?
chmod775 3y ago
Everyone including Boeing officially and internally since admitted it was a dumb idea, however it's a lot to recap in a HN comment. Maybe someone else will feel like it. The short version is that it's hard making things fit together and meet your standards when you're dealing with dozens of different suppliers and suppliers of suppliers who aren't necessarily aligned with your goals. The full story is a cautionary tale about letting business school types displace people who know how to build planes. I recommend seeking out one of the many retellings of Boeings struggles since the McDonnell Douglas merger. Instead of a retelling, I'll point you to the latest chapter: Boeing trying to re-acquire ownership of Spirit AeroSystems. It's a substantial indictment of past policy to do a full reversal in the name of "strengthening safety". https://www.nytimes.com/2024/03/01/business/boeing-spirit-aerosystems.html https://www.nytimes.com/2024/03/01/business/boeing-spirit-ae...
stevenwoo 3y ago
It’s aimed at entertainment but the latest Last Week Tonight covered this and is on YouTube. Hope this links works from my phone https://m.youtube.com/watch?v=Q8oCilY4szc https://m.youtube.com/watch?v=Q8oCilY4szc
- 3y ago

kqr2 3y ago

Obligatory internal Boeing critique on the limits of outsourcing in 2001 : https://www.documentcloud.org/documents/69746-hart-smith-on-outsourcing https://www.documentcloud.org/documents/69746-hart-smith-on-...

deleted 3y ago

[deleted]