Those problems are systemic. It is the whole system called "Boeing" that is now rotten - and the rot can have extended anywhere and everywhere now.
The executive don't care. They earned enough to live rich until the end of their lives. Like locusts, they ate through Boeing's real value (its engineering, its reputation) and can now fly away their bellies full, leaving behind a devastated company.
Boeing's a weapons company that makes airplanes on the side. Commercial airplane revenue is now down to 32% of their total. [1] They've just honed in a bit too much on their primary money maker - killing people.
[1] - https://www.investopedia.com/articles/markets/032715/how-boe...
This kind of degeneracy (normalisation of deviance[0]) is systemic.
Expect problems to crop up in Boeing's weapons too sooner or later. I hope the US air force didn't let Boeing self-certify its products as much as the FAA did.
[0]https://en.m.wikipedia.org/wiki/Normalization_of_deviance
By law, Boeing must pay the USG for the USG to test and certify equipment produced for the government at one of many test ranges throughout the country. Exactly because companies can't be trusted to meet their contractual obligations. See https://www.test-evaluation.osd.mil for more info.
Same is true of their non-government products; planes have to be inspected and certified by the FAA for the same reason. Unfortunately, regulatory capture is preventing some of the proper checks and balances.
Regulatory capture generally refers to putting up onerous and unnecessary regulations as a moat around a product or service.
I think you're referring to the weakening/dismantling of regulatory requirements and enforcement favored by libertarians.
Please correct me if I've misunderstood.
Edit: Personally I think valid and helpful regulatory frameworks can easily drift into capture territory, so they must be vigilantly maintained. Also to keep incentives in alignment, the regulators shouldn't be able to jump back and forth between industry and regulation. Dismantling them, however, is worse. Like a long standing code base there's a lot of useful but misunderstood parts.
I’m not familiar with the meaning you’ve suggested. Can you provide supporting evidence for that definition?
The only meaning I know for the phrase “Regulatory Capture” refers to the corruption of regulatory oversight by special interests.
https://en.m.wikipedia.org/wiki/Regulatory_capture
https://www.investopedia.com/terms/r/regulatory-capture.asp
https://study.com/academy/lesson/regulatory-capture-definiti...
https://www.oxfordreference.com/display/10.1093/oi/authority...
Eh Boeing has been having issues delivering Air Force contracts already. They fucked up QC on KC-46s so bad that the air force was basically getting free planes after fines were levied. The Air Force is different than airlines in the fact they basically tear down the plane after receiving it to inspect it. They found all kinds of shit like fucking wrenches left in the wall.
It's gotten so bad that Boeing announced they will no longer accept fixed price contracts from the military because they are that broken as a company and no longer able to manage anything.
Thought you were joking about the wrenches part but apparently it's true?
https://www.airforcetimes.com/news/your-air-force/2019/04/02...
“B company” ;) Similar story: Bombardier trains in Switzerland. The defects required Bombardier to not only fix, but deliver several extra trains for free.
Luckily for them (military) dying of their own is more of a common thing than in passenger traffic. As well as secrecy of troublesome matters (e.g. weaknesses and vulnerability). Business as usual may carry on.
... observing the few downvotes I have the feeling that I offended the sensitive patriotic hearts believing I had negative words on the beloved military. While in fact I had negative words on Boeing management, that they can abuse the inherent nature of military customers further and can carry on building crappy products blaming faults on the risky profession of home protecting soldiers. I felt like I had to clarify this before causing too much damage with my carelessly phrased sentences...
Enshitification
McDonaldification rather. After their management took over Boeing, it went downhill.
Obligatory youtube video on the normalization of deviance:
https://www.youtube.com/watch?v=Ljzj9Msli5o
I don't think this is an honest assessment. From your own source, Boeing's "Defense, Space, and Security" segment draw 39% of the company's revenue, while it's "Commercial Airplanes" segment accounted for 32% of its revenue.
I don't think that there is a single company on earth that would describe the source of a third of its whole revenue as something they do "on the side". Moreso when the top segment is barely over 5% larger, and is comprised of a coarse agglomeration of activities that may or may not be all related.
Which direction are those figures trending though?
In 2008, commercial airplanes were 40.6% and defense was 52.5% of revenues.
I’m no fan of Boeing, but they’ve been focusing on the military for a very long time.
But it feels like they aren't succeeding. Didn't Boeing lose out on all the advanced fighter competitions to Lockheed, so all their fighters are last generation and headed for obsolescence? I'm also under the impression that the ULA is losing to SpaceX pretty badly (but maybe the government is pumping money into it for reasons, I don't really follow too closely).
I also don’t follow that stuff too closely, but yeah, those examples are exactly why Boeing doesn’t stop making commercial airplanes and completely pivot to defense contracting.
You _can_ make money hand over fist working with the US military, but winning giant money printing contracts is easier said than done. It’s a super volatile industry that Boeing unsurprisingly limits their exposure to.
Discussing anything related to the US military on HN can be frustrating, and the recent surge of “Boeing only really cares about their cash cow, defense” comments is no different.
As Boeing's 737 MAX problems started in 2018 and all 737 MAX were grounded in 2019, I'd be surprised if these figures are already reflecting a considerable drop in Boeing's revenue from commercial planes.
I'm sorry, but the 737 MAX problems started well before 2018. The results of those problems were spectacularly made public in 2018.
Depends on what global services is
Article says it's comprised of "supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, data analytics, and digital services."
I don't fully understand the breakdown, looks like they're doing some finance BS to push costs into the commercial and military segments (which report losses) and list global services as pure profit for some MBA reason. How else does the segment grow 180% year-over-year?
BGS is a combination of relatively random acquisitions, such as Aviall (aircraft parts and consumables wholesale) and Jeppesen (charts and training materials). Some military contracts in there, but mostly commercial.
But in the top third of the business, you listed Space, and they are not doing well there either. When was Starliner scheduled to launch, and when did it actually? Oh, it hasn't? Hmm...
Seems their primary business is leaking into their secondary business
Do not doubt the quality of their secondary business has leaked into their primary business.
I think that was a joke.
If they're smart, on an Airbus.
What's that joke about Software Managers being told to imagine they're on a plane on the ground and then asked if they would remain knowing their teams developed the plane software...
I heard it as an engineering class is on a plane and the pilot announces that the plane they're flying is one designed by the class. All the students run in terror, but the professor stays on the plane. The flight attendant asks, "you have a lot of confidence in your students, don't you?" He says, "no, I know my students, this thing will never get off the ground."
They're rich. They fly on private jets.
So long as it's not a BBJ!
Probably on a private plane of some sort.
I’d wager it would be an Embraer or Bombardier, they make nice private machines
This comment was interesting until it's weirdly specific anti-executive rant at the end. Is there a specific executive you'd like to name? Do non-executives care more or do they also have full bellies?
On average, executive priorities are different from non-executives.
If one hires a plane engineer, one’s filter will be: person who is capable and motivated to engineer a plane.
If one hires an executive, return on investment is the metric in focus.
So it is safe to say that, on average, non-executives will care slightly more about the safety of the plane. (please notice words “on average” and “slightly”).
Since we are spitballing without any statistics, I could take the position that the underpaid (and presumably empty bellied) engineer has little motivation to do excellent work or, indeed, any work at all. The executive needs to focus on producing good products since they sell better.
But I won't take that position since making up hypothetical arguments isn't a good use of anybody's time.
Well if we're spitballing, I think a business savvy executive would see a great opportunity cashing in on the good name Boeing built when it was run by engineers. The product will continue to sell for years even as they cut costs, cut corners, and extract as much wealth out of the organization as they can.
Said another way, vampires sucking out the blood and leaving an exsanguinated corpse behind.
It’s not just Boeing. Their supplier Spirit is a private equity holding.
That Boeing created
Spirit is just their bad bank and now they will sacrifice it.
The McKinsey syndrome
One of my managers once said “No one ever got fired for following McKinsey advice” and I’m not sure that it has the positive implications he meant it with at the time.
It's a really easy way of justifying a bad decision. "These smart McKinsey people gave me that advice!"
Usually the negative consequences of these decisions happen too far down the line for these managers to be held accountable.
I was thinking about the golden parachutes as well.
They are in effect an incentive for execs to take bigger and bigger risks to deliver profits.
If their gamble pays off, they profit, if their gamble doesn't pay off they profit.
My understanding is that prior to the 70s most CEOs were effectively ceo for life. They were strongly incentivized to preserve the business, even if that meant keeping it at a low/no growth state.
When the MBA and Private Equity craze kicked in, we had golden parachutes and other instruments which pushed companies into growth mode.
It is not immediately clear to me that incentivizing short term growth is a wise business strategy for the long term.
Exactly. They care to the extent that they are liable and face the risk of being held accountable, which in corporate America is minimal.
"When people say I changed the culture of Boeing, that was the intent, so that it’s run like a business rather than a great engineering firm."
Yes, because I'd rather fly in a plane made by a "business" rather than "a great engineering firm." Why in the f*ck isn't this scumbag in prison? When you take a firm that produces a product that must ensure the safety of its users because the consequences are dire and you purposely subvert that, and then people die, you need a long stint of FPMIA prison. Also, cheated on his wife in their Golden Anniversary year. Lowest of the low.
And no one is gonna dare to hurt Boeing in an election year.