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Muilenburg had an engineering background and he was at the helm for the MCAS issues with the 737 Max.

dralley 3y ago
And Jack Welch came from an engineering background. As much as I sympathize with the notion that engineers make better CEOs, they're not immune to the same influences as everyone else.
- paulryanrogers 3y ago
  No one is arguing it's a guarantee engineers are always good executives. Also looks like Welch was a chemical engineer before GE, so not sure how much of that knowledge transfers.
- dylan604 3y ago
  I highly doubt that an engineer would make a great CEO, but a CEO with no engineering background isn't going to know when what the engineers are saying that goes against what the business people are saying will matter. The bean counters will always be against anything cutting into the profit margin even if that extra expense the engineers are pushing for will actually make or break the thing.
  - tivert 3y ago
    > The bean counters will always be against anything cutting into the profit margin even if that extra expense the engineers are pushing for will actually make or break the thing. I think they key point is: you can't competently make a tradeoff between two domains if you don't understand both of those domains. Engineers want to make the best engineered thing, and have a harder time prioritizing costs. Accountants/business types want to make some money number go up this quarter, and will reject good engineering ideas to penny-pinch. Someone needs to be able to (competently) keep both groups aligned.
    - dylan604 3y ago
      The biggest issue with what you just said is "this quarter". The shortsightedness of "this quarter" is the downfall. It is possible that for the greatest good in "number go up" measurement, that this quarter "number not go up" is acceptable if it means "number go up" is possible for longer later.
      - tivert 3y ago
        > The biggest issue with what you just said is "this quarter". The shortsightedness of "this quarter" is the downfall. It is possible that for the greatest good in "number go up" measurement, that this quarter "number not go up" is acceptable if it means "number go up" is possible for longer later. Another problem is the shortsightedness of "this quarter" can actually work for a long time, until it doesn't. People who kick the can down the road don't always realize what they're doing, because they never stuck around to pay the piper for that decision they made. Then problems are easy to excuse as the incompetence of the last guy(s), and the can-kicker can imagine themselves as some great business leader.
  - ebiester 3y ago
    I think this is a mass generalization of accountants. Accountants are a wide varying type but the attention to detail is the key distinguishing factor. The only distinguishing feature of an accountant is that they care deeply that left column = right column. They care that you can track where your money goes, not that every budget is squeezed for profit. In truth, the right accountant might be a boon because she will listen to the engineers rather than think she knows better because she was an engineer decades ago. She may end up being a terrible CEO, but let's consider our biases here.
  - dreamcompiler 3y ago
    Most of these "bean counters" don't even work for Boeing. They're institutional investors and hedge funds who only care about share price. In other words, Wall Street. Boeing's mistake was in listening only to these folks and using share price as their sole success metric. Goodheart's Law took over. https://en.wikipedia.org/wiki/Goodhart's_law https://en.wikipedia.org/wiki/Goodhart's_law Capitalism before the late 20th century had as its mantra "Build a quality product. Keep the customers and workers happy and the share price will take care of itself." Around 1980 that changed to "Bump the share price and to hell with everything else."
jvans 3y ago
Not all engineers care about engineering or quality. Boeing self selects for those that don't
smallmancontrov 3y ago
An engineering background doesn't protect from the incentive to squeeeeeeze -- the best you can hope for is that it calibrates the C-suite instincts for having squeezed too far to a level more sensitive than "doors are literally falling off." But that's just hope, and hope vs incentives is a game that, well, has a favored player.
- cft 3y ago
  Only meaningful competition does. For example, competition with Comac is not meaningful due to politics, but competition withing the country with Douglas and Lockheed was.
  - smallmancontrov 3y ago
    Yep. The Boeing/Douglas merger didn't just put the wrong people in charge, it removed competition. US antitrust is in a sorry state and we are seeing the consequences.
    - ethbr1 3y ago
      It's a worldwide game nowadays though. For civilian aircraft manufacturing... Boeing (US), Airbus (EU), and Comac (China). All of which have varying degrees of state capture. Maybe that's the nature of highly-compled and -refined products? You only have meaningful competition at the internal level?
layer8 3y ago
GP didn’t imply that an engineering background guarantees success, just that the lack of an engineering background is detrimental to success (which one could argue against, but you didn’t).
nothercastle 3y ago
Yeah he was at the helm but the engineering occurred before him and he navigated it ok all things considering. He was the most competent of their ceos in the last 2 decades probably
- galleywest200 3y ago
  Boeing has declined in quality over the last two decades. They used to be considered great. How could he be the best if their tailspin started around 20 years ago?
  - nothercastle 3y ago
    All things are relative. A -2 is better than a -10.
fiftyfifty 3y ago
In some ways this whole industry creates it's own problems because airlines don't want to get pay to get their pilots certified for new planes. So Boeing tried to engineer their way out of the problem and hack in some changes to make an entirely new design fly like an old 737-800. Southwest Airlines was a major contributor to this as the largest purchaser of 737s in the world, because you know, god forbid Southwest's pilots had to get certified to fly a new plane once every 50 years.
- seanmcdirmid 3y ago
  Airline customers don't want pay more for tickets, its not like airlines are swimming in money to take that on themselves.
  - jlbooker 3y ago
    They make millions of dollars every year. They can afford the training, they'd just rather have better metrics and not pay for expensive training, just to make the stock look better.
    - seanmcdirmid 3y ago
      The also spend millions of dollars every year. I don't think many airline companies are actually very profitable right now. Take a look at any airline stock for the last 10 years, they were at a plateau before the pandemic, they are just at a lower plateau after.
      - robjan 3y ago
        I don't know much about US airlines but Cathay Pacific made a record breaking profit this year and they aren't even at full capacity https://www.bloomberg.com/news/articles/2024-03-13/cathay-pacific-2023-operating-profit-hits-record-1-9-billion https://www.bloomberg.com/news/articles/2024-03-13/cathay-pa...
        3y ago

And Jack Welch came from an engineering background. As much as I sympathize with the notion that engineers make better CEOs, they're not immune to the same influences as everyone else.

paulryanrogers 3y ago
No one is arguing it's a guarantee engineers are always good executives. Also looks like Welch was a chemical engineer before GE, so not sure how much of that knowledge transfers.
dylan604 3y ago
I highly doubt that an engineer would make a great CEO, but a CEO with no engineering background isn't going to know when what the engineers are saying that goes against what the business people are saying will matter. The bean counters will always be against anything cutting into the profit margin even if that extra expense the engineers are pushing for will actually make or break the thing.
- tivert 3y ago
  > The bean counters will always be against anything cutting into the profit margin even if that extra expense the engineers are pushing for will actually make or break the thing. I think they key point is: you can't competently make a tradeoff between two domains if you don't understand both of those domains. Engineers want to make the best engineered thing, and have a harder time prioritizing costs. Accountants/business types want to make some money number go up this quarter, and will reject good engineering ideas to penny-pinch. Someone needs to be able to (competently) keep both groups aligned.
  - dylan604 3y ago
    The biggest issue with what you just said is "this quarter". The shortsightedness of "this quarter" is the downfall. It is possible that for the greatest good in "number go up" measurement, that this quarter "number not go up" is acceptable if it means "number go up" is possible for longer later.
    - tivert 3y ago
      > The biggest issue with what you just said is "this quarter". The shortsightedness of "this quarter" is the downfall. It is possible that for the greatest good in "number go up" measurement, that this quarter "number not go up" is acceptable if it means "number go up" is possible for longer later. Another problem is the shortsightedness of "this quarter" can actually work for a long time, until it doesn't. People who kick the can down the road don't always realize what they're doing, because they never stuck around to pay the piper for that decision they made. Then problems are easy to excuse as the incompetence of the last guy(s), and the can-kicker can imagine themselves as some great business leader.
- ebiester 3y ago
  I think this is a mass generalization of accountants. Accountants are a wide varying type but the attention to detail is the key distinguishing factor. The only distinguishing feature of an accountant is that they care deeply that left column = right column. They care that you can track where your money goes, not that every budget is squeezed for profit. In truth, the right accountant might be a boon because she will listen to the engineers rather than think she knows better because she was an engineer decades ago. She may end up being a terrible CEO, but let's consider our biases here.
- dreamcompiler 3y ago
  Most of these "bean counters" don't even work for Boeing. They're institutional investors and hedge funds who only care about share price. In other words, Wall Street. Boeing's mistake was in listening only to these folks and using share price as their sole success metric. Goodheart's Law took over. https://en.wikipedia.org/wiki/Goodhart's_law https://en.wikipedia.org/wiki/Goodhart's_law Capitalism before the late 20th century had as its mantra "Build a quality product. Keep the customers and workers happy and the share price will take care of itself." Around 1980 that changed to "Bump the share price and to hell with everything else."

jvans 3y ago

Not all engineers care about engineering or quality. Boeing self selects for those that don't

smallmancontrov 3y ago

An engineering background doesn't protect from the incentive to squeeeeeeze -- the best you can hope for is that it calibrates the C-suite instincts for having squeezed too far to a level more sensitive than "doors are literally falling off." But that's just hope, and hope vs incentives is a game that, well, has a favored player.

cft 3y ago
Only meaningful competition does. For example, competition with Comac is not meaningful due to politics, but competition withing the country with Douglas and Lockheed was.
- smallmancontrov 3y ago
  Yep. The Boeing/Douglas merger didn't just put the wrong people in charge, it removed competition. US antitrust is in a sorry state and we are seeing the consequences.
  - ethbr1 3y ago
    It's a worldwide game nowadays though. For civilian aircraft manufacturing... Boeing (US), Airbus (EU), and Comac (China). All of which have varying degrees of state capture. Maybe that's the nature of highly-compled and -refined products? You only have meaningful competition at the internal level?

layer8 3y ago

GP didn’t imply that an engineering background guarantees success, just that the lack of an engineering background is detrimental to success (which one could argue against, but you didn’t).

nothercastle 3y ago

Yeah he was at the helm but the engineering occurred before him and he navigated it ok all things considering. He was the most competent of their ceos in the last 2 decades probably

galleywest200 3y ago
Boeing has declined in quality over the last two decades. They used to be considered great. How could he be the best if their tailspin started around 20 years ago?
- nothercastle 3y ago
  All things are relative. A -2 is better than a -10.

fiftyfifty 3y ago

In some ways this whole industry creates it's own problems because airlines don't want to get pay to get their pilots certified for new planes. So Boeing tried to engineer their way out of the problem and hack in some changes to make an entirely new design fly like an old 737-800. Southwest Airlines was a major contributor to this as the largest purchaser of 737s in the world, because you know, god forbid Southwest's pilots had to get certified to fly a new plane once every 50 years.

seanmcdirmid 3y ago
Airline customers don't want pay more for tickets, its not like airlines are swimming in money to take that on themselves.
- jlbooker 3y ago
  They make millions of dollars every year. They can afford the training, they'd just rather have better metrics and not pay for expensive training, just to make the stock look better.
  - seanmcdirmid 3y ago
    The also spend millions of dollars every year. I don't think many airline companies are actually very profitable right now. Take a look at any airline stock for the last 10 years, they were at a plateau before the pandemic, they are just at a lower plateau after.
    - robjan 3y ago
      I don't know much about US airlines but Cathay Pacific made a record breaking profit this year and they aren't even at full capacity https://www.bloomberg.com/news/articles/2024-03-13/cathay-pacific-2023-operating-profit-hits-record-1-9-billion https://www.bloomberg.com/news/articles/2024-03-13/cathay-pa...
      - 3y ago