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The "funny" thing to me is that I'm old enough to remember when the merger occurred that people were predicting exactly what came to pass. It just took 25 years
by HeyLaughingBoy 3y ago
The "funny" thing to me is that I'm old enough to remember when the merger occurred that people were predicting exactly what came to pass. It just took 25 years to finally happen.
- FrustratedMonky 3y agoYes, large companies take a lot longer to fail than I ever imagined. A lot of time can pass riding on past excellence before the cracks start showing.
- Rinzler89 3y agoIt's not about the size of the company, it's about the barrier to entry of the market they're in, how much competition they have and the amount of vendor lock-in. And civil aviation in general scores top marks in all those fields. It's a duopoly with an insane barrier to entry both technical, legal and financial with very long and complex vendor lock-in.
- kelp 3y agoI wonder if this opens up an opportunity for Bombardier and Embraer to move up market into the 737s space.
- shiroiushi 3y agoExactly: look how fast the values of companies like MySpace and Yahoo tanked when they became irrelevant. They were highly valuable at some point, but they had serious competition and not much keeping their users locked-in.
- juancb 3y agoImagine how that scales and then how that might scale to nation states.
- _yb2s 3y agoYep… I wish it were possible to easily invest in the downfall of obviously poorly run companies coughSirius XMcough, but things like puts and shorts really only work if you know when it will fail, and that it will be very soon.
- krisoft 3y agoSo what you are saying is that twitter, oh sorry x, is going to break down completely in around 2048? :)
- deleted 3y ago[deleted]
- masklinn 3y agoI doubt xitter has as much quality buffer as Boeing had in '97, and Elon's brutalisation of it was a lot less gradual.
- YeBanKo 3y agoDoes quality matter as much for X as it does for Boeing? A closer example to Boeing is Tesla and SpaceX. Tesla is a mixed bag of good and bad stuff. But SpaceX is a marvel and essentially has no competitors. Compare X to media. Since the bridge collapse in the Baltimore I have read interesting analysis on X and reddit, not the best medium, but yet did not come across a single decent article about it in the media.
- ethbr1 3y agoSpaceX is a much better analogy than Tesla. Tesla accepts that there will be some accidents at the cost of progress. SpaceX does not. (Or specifically lines up launches so that accidents have negligible consequences)
- YeBanKo 3y agoTesla can cause injuries and casualties to general public, so can Boeing. SpaceX much less likely.
- shiroiushi 3y ago>Does quality matter as much for X as it does for Boeing? If Xitter returns 404s for 5 minutes, it's not the end of the world. Its users will come back after going to the bathroom. If Xitter spews garbage "news" stories, it doesn't really matter: its users will stick around anyway, and the people who think the stuff on Xitter is garbage are already gone anyway, or not paying attention to those channels anyway.
- masklinn 3y ago> It just took 25 years to finally happen. "Quality inertia" is one thing which allows for giant amounts of damage to be done long before the wheels visibly come off, as deviance gets normalised (and even mandated in cases such as Boeing) and the company eats its reserve of quality and goodwill, it starts going off-track in small ways before it falls off a cliff. It took closer to 20 years than 25 for the wheels to come off of Boeing. Lion Air 610 crashed on October 29, 2018, the MDD merger was on August 1, 1997. And that crash was the first major externally visible symptom[0], the decisions which led to it happened years earlier (2014-2015). [0] unless you count the dreamliner's joke of a rollout, which probably should have been the warning shot that things were getting unwell
- tacocataco 3y agoAnalog enshitification
- hammock 3y agoWhere can I read more about quality inertia , find other case studies, etc?
- jgeada 3y agoThere was a recent discussion right here on HN about "trading trust": https://news.ycombinator.com/item?id=39394990 https://news.ycombinator.com/item?id=39394990 Basically, many of these companies took decades to reach these positions where they're trusted. A bunch of managers rightfully figured out this was an asset that could be easily traded away for increased profits and they'd be gone by the time anyone noticed the devastation they left behind.
- FooBarBizBazz 3y agoAlso called "brand harvesting". (If you built the brand yourself and did this all intentionally, I think it could also simply be called "the long con".)
- 3y ago
- MilStdJunkie 3y agoRemember the big rollout of the Dreamliner in 2014 to show it was all done, but it was actually an empty metal tube with landing gear duct taped on it? And remember the venom that people got for bringing up the fact that, you know, you could see the sky from the wheel wells? Or the second rollout, when they had to strap the fuse segments together because no one knew where the fasteners were? Oh we could go on and on, for pages and pages. This story's not anything new. I think a lot of people in the industry have just been waiting for the thud, but everyone underestimated just how good A&P mechanics are[1], and how tight aircrew is. As we approach the days when aircrew have to punch a de-ice button every five minutes, we're hitting the limits of those staff. Something to think about: name a commercially successful Boeing-designed product from the 21st century. Something that can legitimately be called "Successful", and "Boeing" [1] Who are not required in the Boeing fab - oh no - they are far too expensive. But wait, you might ask . . what credentials are required in the plant? Heh heh heh heh heh . . . oh that is a fun question.
- masklinn 3y ago> Remember the big rollout of the Dreamliner in 2014 to show it was all done, but it was actually an empty metal tube with landing gear duct taped on it? It was in 2007 (on July 8th, a date obviously picked for the memes). Maiden flight was supposed to be two months or so away with introduction in 2008. Maiden flight was on December 15, 2009. Commercial service started October 2011. > name a commercially successful Boeing-designed product from the 21st century The MAX was commercially successful before it started falling out the sky. Orders even picked back up after the dip and cancellations from the MCAS crisis. It's not like customers have much of a choice if they need a new frame, there are 7000 outstanding orders for the A320neo family and in 2023 Airbus built 45 a month, with plans to eventually reach 75 a month (and stabilise there) circa 2026.
- shiroiushi 3y agoIt seems like Airbus should be a good investment opportunity: if investors poured billions of dollars into the company to help it rapidly expand production capacity, they'd have no trouble selling every plane they can make.
- pdonis 3y ago> It just took 25 years to finally happen. To me the big question is, why did it take 25 years for this to become common knowledge? Why is our system of evaluating public corporations so messed up that a public company, and one with huge government contracts to boot, could get away with this for that long?
- baggy_trough 3y agoBoeing, and the United States as a whole, have been very richly endowed with capital. When you decide to stop adding to your seed corn and start to eat it down, but you began with an enormous mountain of it, you can eat well for a very long period of time.
- pdonis 3y agoI'm not asking why Boeing continued to make money. I'm asking why the system as a whole didn't spot much sooner that their engineering had been trashed, and some kind of intervention wasn't made before two fatal airline accidents and other near misses happened. The point of the oversight we have is supposed to be to spot problems before they reach that level. If your answer is that not just Boeing, but our whole system is in fact that corrupt...well, that's not a very comforting answer, is it?
- FredPret 3y agoThe oversight we have into public companies is only financial. There's no annual third-party safety audit for engineering (yet).
- dgoldstein0 3y agoWell there's the FAA oversight... Which has also hollowed out. NTSB is still an amazing accident investigator but better to prevent these things than wait for NTSB to step in
- 3y ago
- mooreds 3y agoDo you remember any specific newspaper or trade mag articles? Or was the conversation more in private/back channel?
- HeyLaughingBoy 3y agoFrom 25 years ago? No.
- golergka 3y agoIs it feasible to hold a short position on a stock for 25 years?
- josephg 3y agoSure. Just hold a small short position. As they say, you’ve gotta be careful. The market can stay crazy longer than you can stay solvent.
- zmgsabst 3y agoIndexes of SP500 without Boeing should outperform ones including Boeing, if you’re predicting that Boeing will underperform in 25 years. You don’t have to short; you can use the knowledge to tune your retirement holdings. You could even weight the index ratios by how self-cannibalizing you believe each company will be. Requires a broker that does fractional shares or a lot of money, though.
- imperfect_light 3y agoYou can buy options (puts and calls) for three years out. Shorting a stock for that long would be a recipe for disaster, at some point it's going to go up and you're going to lose it all. Remember when you buy long your positive upside is infinite and your downside limited to 100%, when you short it's the opposite.
- imperfect_light 3y agoMore broadly, what percentage of mergers are successful? I'd guess less than 20% if compared to the analyses that make them attractive to companies. I've been involved (at the worker bee level) in multiple mergers and in every case where they attempted to merge systems it easily took 5-10X the estimated time, cost and resources. The most successful mergers were the ones where they either left the companies separate (minimizing the ability to reduce costs) or the ones where they just threw away one of the company's systems, got rid of most of their employees, most of their products, and just acquired their customers.
- jorisboris 3y agoWhy were people predicting this? What were the indicators?
- papaver-somnamb 3y ago> It just took 25 years to finally happen. This is the Systems Thinking concept of systems delay, the time lapse between cause and effect, of an action and its downstream effects. Someone applying this cognitive skill, when informed of material changes like that fact that Boeing usurped some of the FAA's oversight, merged with with MD with its colorful history, etc., is bound to come to think of the effects of such changes and when their effects may start manifesting downstream, especially externally. In the case of Boeing, that means the safety of their aircraft. When it comes to orgs that make essential contributions to society such as in commercial passenger aviation, I strongly prefer thorough and effective oversight by a competent and impartial body of that org's inner workings and output. Boeing had earlier established a strong reputation for safety and engineering competence. I have no problem with profits; that is what motivates capitalists in the system we have today, but I do have a problem with risking the lives and welfare of the uninformed public. With recent events, we learned the situation changed to foxes guarding the hen house. Trust but verify indeed. That Boeing was able to so rampantly cut quality in the pursuit of revenues under the cloak of their sterling reputation seems in part to be a condemnation of greater society. That is what oversight is supposed to be for, the delegation of trust so that we need not overwhelm ourselves in general life.