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I wonder if there are books or articles that analyze how and why Boeing declined so fast and so spectacularly. Boeing used to be able to build 747 under budget

I wonder if there are books or articles that analyze how and why Boeing declined so fast and so spectacularly. Boeing used to be able to build 747 under budget and ahead of schedule, just like Lockheed could dazzle the world by creating U2 ahead of schedule and under budget with fewer than 200 people (or < 100?) in 15 months with the cost of a few millions. It can't be just the change of geopolitics post Cold War, right? It can't be just that the fixed-margin structure imposed by the government, right? It can't be just the mismanagement or the greed of the leadership, right? It can't just be that Boeing is in the phase of accelerated decline as any old-enough company, right? I'm curious about such questions because on a larger scheme of the things, I really hope that Boeing is not a miniature reflection of the US - an empire in its twilight that got entangled in irreconcilable interests, doomed to watch its own inevitable decline.

lysace 2y ago
> I wonder if there are books or articles that analyze how and why Boeing declined so fast and so spectacularly. I'm sure there's a number of books on the topic in the publishing pipeline. > It can't be just the mismanagement or the greed of the leadership, right? It can.
dylan604 2y ago
Wasn't the U2 a skunkworks project where they just did it vs opening it up for input from committee whether from corporate or bureaucratic? Starliner was far far from that. From day one, everyone's fingers were in the pie.
- deleted 2y ago
  [deleted]
- CoastalCoder 2y ago
  Tangent, but I've seen a U2 at the Air Force Museum in Dayton. It's amazing how small that thing is, given its capabilities.
- hedgehog 2y ago
  U2 was Skunkworks, they started with an existing airframe (F-104?) and worked from there. Significant compromises, for example the wings droop so much they skid on the ground on landing and it's use was limited by the improved anti-aircraft missiles that became available around the same time.
Jtsummers 2y ago
https://www.theatlantic.com/ideas/archive/2024/01/boeing-737-max-corporate-culture/677120/ https://www.theatlantic.com/ideas/archive/2024/01/boeing-737... - Gift Link: https://www.theatlantic.com/ideas/archive/2024/01/boeing-737-max-corporate-culture/677120/?gift=LuC6nXerkXTLQWoEoNhRFUJewT2zwhXzVGCTMl4P_JM&utm_source=copy-link&utm_medium=social&utm_campaign=share https://www.theatlantic.com/ideas/archive/2024/01/boeing-737... (good for 14 days from today) 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... - 2020 article on the topic I'm trying to find an article from circa 2007 on the changes at Boeing but I can't find it right now. Read those two and follow their various links and you'll get more information. The long story short version is that post McDonnell Douglas merger, Boeing's management culture was replaced with MD's management culture and things have only declined since.
- hintymad 2y ago
  Thanks! A follow-up question would be why MD's management won, even though it wreaked havoc. Or it was really just the hindsight...
  - crop_rotation 2y ago
    In almost all mergers the management of the worse comapny ends up winning, provided there was no loopsided difference in size. The thing is, since those executive were not good at creating product, they are more likely to be good at politics and hence they end up overtaking management of the new combined company, even if their company was the smaller one.
    - robbomacrae 2y ago
      I’m curious to know of similar examples happening or references that back this up if you or anyone has them.
      - crop_rotation 2y ago
        A good series of examples is in the book "Barbarians at the Gate", chronicling the career of F Ross Johnson. His company would get acquired and then he and his folks would outmanoeuvre the acquiring company management.
adsims2001 2y ago
Flying Blind by Peter Robison isn't exactly the book you have in mind, but I did enjoy it and it's the closest I know of
- theGnuMe 2y ago
  I’ll check it out… my guess is that it is a systems and silos problem.
idiotsecant 2y ago
Aggressively incompetent MBA micromanagement.
- cqqxo4zV46cp 2y ago
  I think that they’re looking for intelligent, insightful analysis. As opposed to the myriad parroted HN comments on the subject, written by developers that pretend that their expertise is somehow transferable.
  - ksenzee 2y ago
    Except that in this case, the consensus HN view is also the wider consensus. Boeing engineers have been yelling about this as loudly as they can, for many years now, and the public is finally listening.
gfosco 2y ago
[flagged]
- HumblyTossed 2y ago
  They decided to diversify and include a bunch of managers who didn't understand the engineering culture.
cube2222 2y ago
There is a very nice episode of Last Week Tonight by John Oliver diving into it, accessible on YouTube[0]. [0]: https://youtu.be/Q8oCilY4szc?si=q4iv_SlqoHlXuJod https://youtu.be/Q8oCilY4szc?si=q4iv_SlqoHlXuJod
- atrettel 2y ago
  I also recommend Mentour's excellent series of videos [1] on this subject too if you want more detail from an aviation perspective. [1] https://www.youtube.com/watch?v=nCbHpJShoXk https://www.youtube.com/watch?v=nCbHpJShoXk
trompetenaccoun 2y ago
Last paragraph is a bit melodramatic. Here's what's publicly known: - Boeing is a 'too big to fail' corporation with a significant source of revenue coming from the government. 40% in 2024¹, billions of dollars of public funds! Just a bit more and it would be mostly state-funded. - They're the 4th biggest American defense contractor, so they're likely seen as vital for securing state power by many in the government. - The government is not a good allocator of funds, free market competition works a lot better for creating the best product. Using Ockham's razor, here's my guess what happened: To get in this position in the first place, there will have been a fair bit of lobbying and "greasing the wheels" involved. Boeing eventually found themselves in a position where they got government contracts, no matter what. Leadership got complacent, they didn't really compete anymore because they didn't have to. This was when Musk came in and disrupted the space industry. But at that point, company culture was likely already too far down the drain for quick fixes. The situation would already be much worse for their space division, if not for the fact that they have such good relations with NASA and the government. NASA basically covered for them and played down the seriousness of the issues for weeks. And even now, they're not having SpaceX rescue the astronauts immediately, which would be even more embarrassing for Boeing. Instead they're bringing them back together with the already planned SpaceX Crew-9 flight next year. Boeing keeps getting away with black eyes, there aren't enough consequences despite all the serious issues. ¹ https://www.seattletimes.com/business/boeing-aerospace/why-u-s-government-may-still-do-business-with-boeing-even-as-a-felon https://www.seattletimes.com/business/boeing-aerospace/why-u...
- philistine 2y ago
  The fact that SpaceX demonstrated, without a doubt, that reuse of a first stage was viable in December 2015, and that we still do not have any clearly reusable first stage from anyone else tells you the whole industry is complacent and juiced up on the fat margins of launching a first stage up, then chucking it in the ocean, and then asking for money for another first stage.
  - throwaway81523 2y ago
    Erm the Space Shuttle had a reusable first stage 40+ years ago.
Sevii 2y ago
'Lessons from the Titans' has a great chapter on Boeing.
Arainach 2y ago
>It can't be just the mismanagement or the greed of the leadership, righ ....no, that does in fact explain everything that led to the decline of American manufacturing and engineering.
ulfw 2y ago
Companies serving the military and companies serving the population at large should generally be separated. Boeing's fall (thanks to the reverse McDonell Douglas takeover) was mostly as their defense arm grew. Huge margins, a very different type of working. Boeing stopped giving a damn about it's civil aviation business, as is exemplified by moving their HQ from civil manufacturing hub Seattle first to Chicago and now to Arlington County, Virginia literally to suck up to Washington and lobby 24/7. That's a very different type of business. If Boeing was forced to make money with a successful civil aviation business alone it would be run very very differently.
valianteffort 2y ago
[flagged]
- sidcool 2y ago
  This is a mildly racist comment. MBAs in general could be the cause but saying Indian MBAs is not fine.
  - valianteffort 2y ago
    [flagged]
    - sidcool 2y ago
      Sad to see such comments on HN.
      - valianteffort 2y ago
        [flagged]
- ajcp 2y ago
  > Was hilarious in one case to be called a racist by a white fella for pointing out how indians only hire indians, and then later seeing him get laid off by said indians. Maybe I'm missing something but is this antidote to show you're not racist? What were the other cases this was hilarious?
  - valianteffort 2y ago
    My best friend, basically my brother of 15+ years is indian. I don't really care that you think I'm racist. This case in particular was just great because it was some liberal white guy calling me (a minority) racist for pointing out something clear as day. And then he got his karma.
    - 2y ago
NotSammyHagar 2y ago
1. MD merging with Boeing and taking over management, basically. Management gurus hate this being pointed out 2. Moving headquarters to Chicago - part of the MBAs taking over 3. Losing the engineering first mindset - this is really the core of what happened there. When the company kept focusing on stock returns and "financializing" the company, and did things like spinning off Spirt airplane assembly company, that was the real visible symbol of the problem. In the past few months they gave up and rebought them to join with Boeing. The solution for being will be a multiple year transition of the company into being much more technology and engineering focused. They will have to eject the MBA type "reducing cost is the goal" type leaders. The problem is those are completely the leaders of the company today.
- SV_BubbleTime 2y ago
  Absolutely MBAification. But also complexity crisis. My two most major issues with the world today. Boeing got some but worse, and also made their products so complex that humans can’t understand it as a whole let alone communicate it to others. It’s not just Boeing. It’s everyone, everywhere. All systems in every market require so much extra “stuff” that we’re on a spiral. Compound that with MBAs that insist things “run lean” and “the core competency group you aren’t in found X, so meet your target of Y or find somewhere else to work” to “We need that BlackRock money, so do whatever the govs of NY, IL, and CA say to do because their trillion dollars speaks”. No one is ready to address either issue.
  - zifpanachr23 2y ago
    Software is unfortunately a big part of the complexity crisis. What you are describing is an investible consequence of abstraction (not that abstraction cannot be handled sensibly at some level, but it at any point you reach a situation where nobody is capable of understanding the entire software stack, then we are in trouble. We are almost certainly at that point now in most industries). There was an interesting lecture Jonathon Blow gave a while back that addressed this issue but it was predictably panned as the ramblings of an insane game developer, I think wrongly. A lot of the points made were true.
  - 2y ago
weswilson 2y ago
There was an internal whitepaper written by a Boeing engineer back in 2001 that warns against the dangers of excessive outsourcing. https://www.documentcloud.org/documents/69746-hart-smith-on-outsourcing.html https://www.documentcloud.org/documents/69746-hart-smith-on-... It reads like a plea to not turn into McDonnell Douglas (this was only a few years after the MD and Boeing merger), which we all know it essentially has. The last couple of sentences fire shots at Douglas Aircraft directly: "The fate of the former Douglas Aircraft Company, which was reduced to a systems integrator in the early 1970s by excessive outsourcing of DC-10 production, is a clear indicator of what will happen to other companies which fail to sustain the conditions under which it is possible to launch new products. It is hoped that this sacrifice can save the new and expanded Boeing from a similar fate."
- nickff 2y ago
  The trouble is that government contracts always strongly incentivize ‘excessive outsourcing’, and Boeing’s absorption of MD increased the dependence on government contracts, though Boeing was already on that road (especially after taking on Rockwell). Government oversight (almost) always discourages large profit margins, which makes increasing low-risk costs very appealing. In addition to that, there are strong political incentives for ‘distributing’ contracts widely, with the Space Shuttle being a famous example of this, having parts made or assembled in 48 different states.
  - Rhinobird 2y ago
    >In addition to that, there are strong political incentives for ‘distributing’ contracts widely, Government/Defense contractors can track their suppliers and tell Congress exactly how many jobs are in which districts per project.
    - dmix 2y ago
      Yes making the actual product is very very secondary to successfully appeasing Congress, produce 'jobs', and follow the litany of rules in place about now the money is used and paperwork after to check boxes. These aren't businesses operating in a competitive market with pressure to produce the best things quickly. Their goal is simply to be the best gov lapdog vs the only 1 or 2 other gov lapdogs. Being extremely late and extremely over budget is standard practice in that world and worst case is usually the project gets cancelled for budget reasons then restarted 5yrs later doing the same thing. This is the environment the gov fostered, they made Boeing etc critical to national security and industry while having a total aversion to risk, and zero forethought into long term investment in legitimate competition. All we get is the same growing monster that becomes the living embodiment of The Iron Law of Bureaucracy https://www.jerrypournelle.com/reports/jerryp/iron.html https://www.jerrypournelle.com/reports/jerryp/iron.html
justinclift 2y ago
This book probably has some interesting insights: "You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing" - December 26, 2008 https://www.amazon.com/You-Cant-Order-Change-Turnaround/dp/1591842395 https://www.amazon.com/You-Cant-Order-Change-Turnaround/dp/1... Probably mostly of the "do the opposite of whatever this guy says" variety. ;) The top review on this book says: The author credits James McNerney for turning around Boeing. He neglected to say which way they were turning. For example, he credits JN for outsourcing so much of the 787 -- which included the wings, perhaps the thing Boeing did best. The 787 ended up way over budget and three years late. That's good management? This seems like a good follow up book too: https://www.amazon.ca/Man-Who-Broke-Capitalism-America_and/dp/1982176423 https://www.amazon.ca/Man-Who-Broke-Capitalism-America_and/d...
randmeerkat 2y ago
> I'm curious about such questions because on a larger scheme of the things, I really hope that Boeing is not a miniature reflection of the US - an empire in its twilight that got entangled in irreconcilable interests, doomed to watch its own inevitable decline. I’m tired of this hyperbolic, melodramatic angst about the general decline of the U.S. Did you not read the part about the crew being returned by SpaceX? A company that just made landing rockets a reality only 9 years ago, not even 10 years has passed and reusable rockets are as boring as smartphones. NASA identified an issue on the Boeing Starliner, and a cutting edge company (SpaceX) stepped up for a non-emergency rescue mission. There was no loss of life, or equipment, there’s been no injuries, just mild inconveniences. This isn’t a nation in decline, this is a nation that has even begun to peak yet.
- hintymad 2y ago
  I'd be extremely happy to be wrong, as I invest my life and my family's in the US. As for the concern, it's not about this one particular incident, but about the pattern that other countries have experienced: the government and the society has so many entangled interest that no one knows how to move things forward. As a result, the country perishes. I'm not saying that the US is in that trajectory, but I did see some aspects of institutional decay, like the cost of canon shells is 6X of Russian's, despite that Russia is a much more corrupt country, or like the country is so divided and many people simply accept that election is about telling stories and personal attacks instead of logical discussion of policies. Like it would take billions to build the next-gen battleships or planes, and we couldn't have good enough supply chain in the US. Like our medical system is so much more expensive than other developed countries, and the list can go on.
  - randmeerkat 2y ago
    > I'd be extremely happy to be wrong, as I invest my life and my family's in the US. Spend less time reading the news and more time enjoying your family. The world has been “ending” for decades now, the U.S. isn’t going anywhere and will continue to get some things right while getting other things wrong. “Until such time as the world ends, we will act as though it intends to spin on.” ~ Nick Fury
helpfulContrib 2y ago
[dead]
Scarblac 2y ago
How many of the US brightest go work in aerospace engineering these days? Edit: and to those that do, SpaceX probably looks a lot more attractive.
- Glawen 2y ago
  Probably not a lot when in the same city you have two huge tech companies. You would be crazy to go to Boeing
  - black_13 2y ago
    [dead]
gmerc 2y ago
Stock buyback for investor gratification enabled the most optimal way for executives to keep meeting kpis in the short term rather than long term investments
cjblomqvist 2y ago
There's a lot of theory about this. Look into strategy theory. A few well know concepts as entry points; Feedback loops, path dependency, disruptive innovation, group thinking. Other related concepts needed to analyze the Boeing story completely to understand their strategic position and defensibility could be; Core competence, Blue Ocean, Porter's Five Forces. More macro and fundamentally I'd look into Austrian school if thought and "destructive innovation", and core concepts such as division of labor. Without knowing the details it makes a lot of sense that Boeing ended where they did (Boeing/SpaceX fits a lot of theories above). What may save the US is not the ability to save companies like Boeing - that would more likely hinder progress on a mid to long term scale - it's the ability to come up with new companies/innovators to overtake the incumbents. In my interpretation. Fundamentally it goes all the way to the quality of institutions and culture. Time will tell, but I'm feeling more worried about those than the current ability to innovate.
Leftium 2y ago
How Boeing Lost Its Way: https://youtu.be/URoVKPVDKPU https://youtu.be/URoVKPVDKPU
csomar 2y ago
> I'm curious about such questions because on a larger scheme of the things, I really hope that Boeing is not a miniature reflection of the US - an empire in its twilight that got entangled in irreconcilable interests, doomed to watch its own inevitable decline. Markets cycle. Companies cycle. People cycle (actually just die unless you consider their offspring their continuation). All systems do cycle; including the USA. It doesn't mean it's the end. If China doesn't rise and crashes it, there isn't really any other serious challenger and it will likely be the "rising" empire again.
- christophilus 2y ago
  Eh. Maybe. My money’s somewhere in between. The US is an empire in decline, but it isn’t clear that China is the replacement. If China can somehow survive demographic collapse, then I’d put my money on them, but that’s a big if.
kabdib 2y ago
"McDonnell Douglas bought Boeing with Boeing's money" is how it was explained to me
simonh 2y ago
SpaceX is a US company too. The government has to be comfortable letting the incumbents fail, so that companies like SpaceX and Anduril can take their place.
Glawen 2y ago
I read the book on GE, Lights Out: Pride, Delusion, and the Fall of General Electric. I guess many things apply to Boeing too.
merman 2y ago
Any organization that seemingly operates poorly typically just has bad incentives. Congressional funding for space became a feedback loop of pork for states (jobs program) from Apollo, continuing to today with SLS. Commercial crew demonstrates how stunningly dystopian over-specific congressional funding is. The solution is simple: Congress should take a giant step back from NASA involvement so NASA can have more commercial programs like commercial crew.
- dwallin 2y ago
  Unfortunately, the way we structure, fund, and manage modern corporations creates tons of poor incentives all on its own, no legislative influence needed. (unless your goal is to maximize short term profit signals at all costs)
Bluestein 2y ago
> can't just be that Boeing is in the phase of accelerated decline Peak air-travel.-
talldatethrow 2y ago
I know two MIT grads that then went on to work at Boeing as mechanical engineers. They are not impressive at all on almost any subject you talk to them about. Not for Boeing engineers and definitely not as MIT grads. I don't think they could handle the coursework at Cal IMO, and I thought MIT was even more difficult. They do seem like a very good example of diversity DEI type admission and hiring. And these kinds of Boeing problems might be the result.
browningstreet 2y ago
Wendover made a pretty good video on the topic. https://youtu.be/URoVKPVDKPU?si=XAJggvhaCwbyPcZF https://youtu.be/URoVKPVDKPU?si=XAJggvhaCwbyPcZF

lysace 2y ago

> I wonder if there are books or articles that analyze how and why Boeing declined so fast and so spectacularly. I'm sure there's a number of books on the topic in the publishing pipeline. > It can't be just the mismanagement or the greed of the leadership, right? It can.

dylan604 2y ago

Wasn't the U2 a skunkworks project where they just did it vs opening it up for input from committee whether from corporate or bureaucratic? Starliner was far far from that. From day one, everyone's fingers were in the pie.

deleted 2y ago
[deleted]
CoastalCoder 2y ago
Tangent, but I've seen a U2 at the Air Force Museum in Dayton. It's amazing how small that thing is, given its capabilities.
hedgehog 2y ago
U2 was Skunkworks, they started with an existing airframe (F-104?) and worked from there. Significant compromises, for example the wings droop so much they skid on the ground on landing and it's use was limited by the improved anti-aircraft missiles that became available around the same time.

Jtsummers 2y ago

https://www.theatlantic.com/ideas/archive/2024/01/boeing-737-max-corporate-culture/677120/ https://www.theatlantic.com/ideas/archive/2024/01/boeing-737... - Gift Link: https://www.theatlantic.com/ideas/archive/2024/01/boeing-737-max-corporate-culture/677120/?gift=LuC6nXerkXTLQWoEoNhRFUJewT2zwhXzVGCTMl4P_JM&utm_source=copy-link&utm_medium=social&utm_campaign=share https://www.theatlantic.com/ideas/archive/2024/01/boeing-737... (good for 14 days from today) 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... - 2020 article on the topic I'm trying to find an article from circa 2007 on the changes at Boeing but I can't find it right now. Read those two and follow their various links and you'll get more information. The long story short version is that post McDonnell Douglas merger, Boeing's management culture was replaced with MD's management culture and things have only declined since.

hintymad 2y ago
Thanks! A follow-up question would be why MD's management won, even though it wreaked havoc. Or it was really just the hindsight...
- crop_rotation 2y ago
  In almost all mergers the management of the worse comapny ends up winning, provided there was no loopsided difference in size. The thing is, since those executive were not good at creating product, they are more likely to be good at politics and hence they end up overtaking management of the new combined company, even if their company was the smaller one.
  - robbomacrae 2y ago
    I’m curious to know of similar examples happening or references that back this up if you or anyone has them.
    - crop_rotation 2y ago
      A good series of examples is in the book "Barbarians at the Gate", chronicling the career of F Ross Johnson. His company would get acquired and then he and his folks would outmanoeuvre the acquiring company management.

adsims2001 2y ago

Flying Blind by Peter Robison isn't exactly the book you have in mind, but I did enjoy it and it's the closest I know of

theGnuMe 2y ago
I’ll check it out… my guess is that it is a systems and silos problem.

idiotsecant 2y ago

Aggressively incompetent MBA micromanagement.

cqqxo4zV46cp 2y ago
I think that they’re looking for intelligent, insightful analysis. As opposed to the myriad parroted HN comments on the subject, written by developers that pretend that their expertise is somehow transferable.
- ksenzee 2y ago
  Except that in this case, the consensus HN view is also the wider consensus. Boeing engineers have been yelling about this as loudly as they can, for many years now, and the public is finally listening.

gfosco 2y ago

[flagged]

HumblyTossed 2y ago
They decided to diversify and include a bunch of managers who didn't understand the engineering culture.

cube2222 2y ago

There is a very nice episode of Last Week Tonight by John Oliver diving into it, accessible on YouTube[0]. [0]: https://youtu.be/Q8oCilY4szc?si=q4iv_SlqoHlXuJod https://youtu.be/Q8oCilY4szc?si=q4iv_SlqoHlXuJod

atrettel 2y ago
I also recommend Mentour's excellent series of videos [1] on this subject too if you want more detail from an aviation perspective. [1] https://www.youtube.com/watch?v=nCbHpJShoXk https://www.youtube.com/watch?v=nCbHpJShoXk

trompetenaccoun 2y ago

Last paragraph is a bit melodramatic. Here's what's publicly known: - Boeing is a 'too big to fail' corporation with a significant source of revenue coming from the government. 40% in 2024¹, billions of dollars of public funds! Just a bit more and it would be mostly state-funded. - They're the 4th biggest American defense contractor, so they're likely seen as vital for securing state power by many in the government. - The government is not a good allocator of funds, free market competition works a lot better for creating the best product. Using Ockham's razor, here's my guess what happened: To get in this position in the first place, there will have been a fair bit of lobbying and "greasing the wheels" involved. Boeing eventually found themselves in a position where they got government contracts, no matter what. Leadership got complacent, they didn't really compete anymore because they didn't have to. This was when Musk came in and disrupted the space industry. But at that point, company culture was likely already too far down the drain for quick fixes. The situation would already be much worse for their space division, if not for the fact that they have such good relations with NASA and the government. NASA basically covered for them and played down the seriousness of the issues for weeks. And even now, they're not having SpaceX rescue the astronauts immediately, which would be even more embarrassing for Boeing. Instead they're bringing them back together with the already planned SpaceX Crew-9 flight next year. Boeing keeps getting away with black eyes, there aren't enough consequences despite all the serious issues. ¹ https://www.seattletimes.com/business/boeing-aerospace/why-u-s-government-may-still-do-business-with-boeing-even-as-a-felon https://www.seattletimes.com/business/boeing-aerospace/why-u...

philistine 2y ago
The fact that SpaceX demonstrated, without a doubt, that reuse of a first stage was viable in December 2015, and that we still do not have any clearly reusable first stage from anyone else tells you the whole industry is complacent and juiced up on the fat margins of launching a first stage up, then chucking it in the ocean, and then asking for money for another first stage.
- throwaway81523 2y ago
  Erm the Space Shuttle had a reusable first stage 40+ years ago.

Sevii 2y ago

'Lessons from the Titans' has a great chapter on Boeing.

Arainach 2y ago

>It can't be just the mismanagement or the greed of the leadership, righ ....no, that does in fact explain everything that led to the decline of American manufacturing and engineering.

ulfw 2y ago

Companies serving the military and companies serving the population at large should generally be separated. Boeing's fall (thanks to the reverse McDonell Douglas takeover) was mostly as their defense arm grew. Huge margins, a very different type of working. Boeing stopped giving a damn about it's civil aviation business, as is exemplified by moving their HQ from civil manufacturing hub Seattle first to Chicago and now to Arlington County, Virginia literally to suck up to Washington and lobby 24/7. That's a very different type of business. If Boeing was forced to make money with a successful civil aviation business alone it would be run very very differently.

valianteffort 2y ago

[flagged]

sidcool 2y ago
This is a mildly racist comment. MBAs in general could be the cause but saying Indian MBAs is not fine.
- valianteffort 2y ago
  [flagged]
  - sidcool 2y ago
    Sad to see such comments on HN.
    - valianteffort 2y ago
      [flagged]
ajcp 2y ago
> Was hilarious in one case to be called a racist by a white fella for pointing out how indians only hire indians, and then later seeing him get laid off by said indians. Maybe I'm missing something but is this antidote to show you're not racist? What were the other cases this was hilarious?
- valianteffort 2y ago
  My best friend, basically my brother of 15+ years is indian. I don't really care that you think I'm racist. This case in particular was just great because it was some liberal white guy calling me (a minority) racist for pointing out something clear as day. And then he got his karma.
  - 2y ago

NotSammyHagar 2y ago

1. MD merging with Boeing and taking over management, basically. Management gurus hate this being pointed out 2. Moving headquarters to Chicago - part of the MBAs taking over 3. Losing the engineering first mindset - this is really the core of what happened there. When the company kept focusing on stock returns and "financializing" the company, and did things like spinning off Spirt airplane assembly company, that was the real visible symbol of the problem. In the past few months they gave up and rebought them to join with Boeing. The solution for being will be a multiple year transition of the company into being much more technology and engineering focused. They will have to eject the MBA type "reducing cost is the goal" type leaders. The problem is those are completely the leaders of the company today.

SV_BubbleTime 2y ago
Absolutely MBAification. But also complexity crisis. My two most major issues with the world today. Boeing got some but worse, and also made their products so complex that humans can’t understand it as a whole let alone communicate it to others. It’s not just Boeing. It’s everyone, everywhere. All systems in every market require so much extra “stuff” that we’re on a spiral. Compound that with MBAs that insist things “run lean” and “the core competency group you aren’t in found X, so meet your target of Y or find somewhere else to work” to “We need that BlackRock money, so do whatever the govs of NY, IL, and CA say to do because their trillion dollars speaks”. No one is ready to address either issue.
- zifpanachr23 2y ago
  Software is unfortunately a big part of the complexity crisis. What you are describing is an investible consequence of abstraction (not that abstraction cannot be handled sensibly at some level, but it at any point you reach a situation where nobody is capable of understanding the entire software stack, then we are in trouble. We are almost certainly at that point now in most industries). There was an interesting lecture Jonathon Blow gave a while back that addressed this issue but it was predictably panned as the ramblings of an insane game developer, I think wrongly. A lot of the points made were true.
- 2y ago

weswilson 2y ago

There was an internal whitepaper written by a Boeing engineer back in 2001 that warns against the dangers of excessive outsourcing. https://www.documentcloud.org/documents/69746-hart-smith-on-outsourcing.html https://www.documentcloud.org/documents/69746-hart-smith-on-... It reads like a plea to not turn into McDonnell Douglas (this was only a few years after the MD and Boeing merger), which we all know it essentially has. The last couple of sentences fire shots at Douglas Aircraft directly: "The fate of the former Douglas Aircraft Company, which was reduced to a systems integrator in the early 1970s by excessive outsourcing of DC-10 production, is a clear indicator of what will happen to other companies which fail to sustain the conditions under which it is possible to launch new products. It is hoped that this sacrifice can save the new and expanded Boeing from a similar fate."

nickff 2y ago
The trouble is that government contracts always strongly incentivize ‘excessive outsourcing’, and Boeing’s absorption of MD increased the dependence on government contracts, though Boeing was already on that road (especially after taking on Rockwell). Government oversight (almost) always discourages large profit margins, which makes increasing low-risk costs very appealing. In addition to that, there are strong political incentives for ‘distributing’ contracts widely, with the Space Shuttle being a famous example of this, having parts made or assembled in 48 different states.
- Rhinobird 2y ago
  >In addition to that, there are strong political incentives for ‘distributing’ contracts widely, Government/Defense contractors can track their suppliers and tell Congress exactly how many jobs are in which districts per project.
  - dmix 2y ago
    Yes making the actual product is very very secondary to successfully appeasing Congress, produce 'jobs', and follow the litany of rules in place about now the money is used and paperwork after to check boxes. These aren't businesses operating in a competitive market with pressure to produce the best things quickly. Their goal is simply to be the best gov lapdog vs the only 1 or 2 other gov lapdogs. Being extremely late and extremely over budget is standard practice in that world and worst case is usually the project gets cancelled for budget reasons then restarted 5yrs later doing the same thing. This is the environment the gov fostered, they made Boeing etc critical to national security and industry while having a total aversion to risk, and zero forethought into long term investment in legitimate competition. All we get is the same growing monster that becomes the living embodiment of The Iron Law of Bureaucracy https://www.jerrypournelle.com/reports/jerryp/iron.html https://www.jerrypournelle.com/reports/jerryp/iron.html

justinclift 2y ago

This book probably has some interesting insights: "You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing" - December 26, 2008 https://www.amazon.com/You-Cant-Order-Change-Turnaround/dp/1591842395 https://www.amazon.com/You-Cant-Order-Change-Turnaround/dp/1... Probably mostly of the "do the opposite of whatever this guy says" variety. ;) The top review on this book says: The author credits James McNerney for turning around Boeing. He neglected to say which way they were turning. For example, he credits JN for outsourcing so much of the 787 -- which included the wings, perhaps the thing Boeing did best. The 787 ended up way over budget and three years late. That's good management? This seems like a good follow up book too: https://www.amazon.ca/Man-Who-Broke-Capitalism-America_and/dp/1982176423 https://www.amazon.ca/Man-Who-Broke-Capitalism-America_and/d...

randmeerkat 2y ago

> I'm curious about such questions because on a larger scheme of the things, I really hope that Boeing is not a miniature reflection of the US - an empire in its twilight that got entangled in irreconcilable interests, doomed to watch its own inevitable decline. I’m tired of this hyperbolic, melodramatic angst about the general decline of the U.S. Did you not read the part about the crew being returned by SpaceX? A company that just made landing rockets a reality only 9 years ago, not even 10 years has passed and reusable rockets are as boring as smartphones. NASA identified an issue on the Boeing Starliner, and a cutting edge company (SpaceX) stepped up for a non-emergency rescue mission. There was no loss of life, or equipment, there’s been no injuries, just mild inconveniences. This isn’t a nation in decline, this is a nation that has even begun to peak yet.

hintymad 2y ago
I'd be extremely happy to be wrong, as I invest my life and my family's in the US. As for the concern, it's not about this one particular incident, but about the pattern that other countries have experienced: the government and the society has so many entangled interest that no one knows how to move things forward. As a result, the country perishes. I'm not saying that the US is in that trajectory, but I did see some aspects of institutional decay, like the cost of canon shells is 6X of Russian's, despite that Russia is a much more corrupt country, or like the country is so divided and many people simply accept that election is about telling stories and personal attacks instead of logical discussion of policies. Like it would take billions to build the next-gen battleships or planes, and we couldn't have good enough supply chain in the US. Like our medical system is so much more expensive than other developed countries, and the list can go on.
- randmeerkat 2y ago
  > I'd be extremely happy to be wrong, as I invest my life and my family's in the US. Spend less time reading the news and more time enjoying your family. The world has been “ending” for decades now, the U.S. isn’t going anywhere and will continue to get some things right while getting other things wrong. “Until such time as the world ends, we will act as though it intends to spin on.” ~ Nick Fury

helpfulContrib 2y ago

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Scarblac 2y ago

How many of the US brightest go work in aerospace engineering these days? Edit: and to those that do, SpaceX probably looks a lot more attractive.

Glawen 2y ago
Probably not a lot when in the same city you have two huge tech companies. You would be crazy to go to Boeing
- black_13 2y ago
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gmerc 2y ago

Stock buyback for investor gratification enabled the most optimal way for executives to keep meeting kpis in the short term rather than long term investments

cjblomqvist 2y ago

There's a lot of theory about this. Look into strategy theory. A few well know concepts as entry points; Feedback loops, path dependency, disruptive innovation, group thinking. Other related concepts needed to analyze the Boeing story completely to understand their strategic position and defensibility could be; Core competence, Blue Ocean, Porter's Five Forces. More macro and fundamentally I'd look into Austrian school if thought and "destructive innovation", and core concepts such as division of labor. Without knowing the details it makes a lot of sense that Boeing ended where they did (Boeing/SpaceX fits a lot of theories above). What may save the US is not the ability to save companies like Boeing - that would more likely hinder progress on a mid to long term scale - it's the ability to come up with new companies/innovators to overtake the incumbents. In my interpretation. Fundamentally it goes all the way to the quality of institutions and culture. Time will tell, but I'm feeling more worried about those than the current ability to innovate.

Leftium 2y ago

How Boeing Lost Its Way: https://youtu.be/URoVKPVDKPU https://youtu.be/URoVKPVDKPU

csomar 2y ago

christophilus 2y ago
Eh. Maybe. My money’s somewhere in between. The US is an empire in decline, but it isn’t clear that China is the replacement. If China can somehow survive demographic collapse, then I’d put my money on them, but that’s a big if.

kabdib 2y ago

"McDonnell Douglas bought Boeing with Boeing's money" is how it was explained to me

simonh 2y ago

SpaceX is a US company too. The government has to be comfortable letting the incumbents fail, so that companies like SpaceX and Anduril can take their place.

Glawen 2y ago

I read the book on GE, Lights Out: Pride, Delusion, and the Fall of General Electric. I guess many things apply to Boeing too.

merman 2y ago

Any organization that seemingly operates poorly typically just has bad incentives. Congressional funding for space became a feedback loop of pork for states (jobs program) from Apollo, continuing to today with SLS. Commercial crew demonstrates how stunningly dystopian over-specific congressional funding is. The solution is simple: Congress should take a giant step back from NASA involvement so NASA can have more commercial programs like commercial crew.

dwallin 2y ago
Unfortunately, the way we structure, fund, and manage modern corporations creates tons of poor incentives all on its own, no legislative influence needed. (unless your goal is to maximize short term profit signals at all costs)

Bluestein 2y ago

> can't just be that Boeing is in the phase of accelerated decline Peak air-travel.-

talldatethrow 2y ago

I know two MIT grads that then went on to work at Boeing as mechanical engineers. They are not impressive at all on almost any subject you talk to them about. Not for Boeing engineers and definitely not as MIT grads. I don't think they could handle the coursework at Cal IMO, and I thought MIT was even more difficult. They do seem like a very good example of diversity DEI type admission and hiring. And these kinds of Boeing problems might be the result.

browningstreet 2y ago

Wendover made a pretty good video on the topic. https://youtu.be/URoVKPVDKPU?si=XAJggvhaCwbyPcZF https://youtu.be/URoVKPVDKPU?si=XAJggvhaCwbyPcZF