I don’t want to company charged. I want the actual humans responsible charged. Can’t put a company in jail.
Expropriate the company, at least 51%, take control and let public officials (knowing the US way, it will be some army general) set up checks and controls where necessary, then sell the shares (maybe keep an 'oversight' part, like 10% to keep a state official on the board).
Current stock owners will loose half their value (which is a good enough punishment for this lack of oversight), the state will have access to privileged company information which will allow the prosecution of human responsibles, top executives will be sacked (and their comp reduced by half since their comp is in stocks) and maybe the company will start on good base again.
> Current stock owners will loose half their value (which is a good enough punishment for this lack of oversight)
I'm not opposed to this. But I think our corporations should be regulated by the government, not by shareholder oversight.
After all, shareholders are essentially powerless in the current system. Each individual shareholder's power is far too dilute, many people owning shares through pension funds don't even know they're shareholders, the minority shareholders have no way to contact each other to coordinate, and it's completely normal for the likes of Apple to spend billions on secret projects and the shareholders to only find out after the fact.
Hell, Google even has three classes of shares - one with no voting rights, one with 1x voting rights, and a special class with 10x voting rights for Larry and Sergei ensuring they have a majority of the votes even without majority ownership.
If we think shareholders are supposed to be providing oversight to companies, they need vastly more power to do so.
The way I read GP's argument, the (yes, very diluted, but real) "oversight" would come from the fact that every shareholder would have to base their bidding price for e.g. Boeing shares on, among other things, the probability of this company being devalued by 51% following a scandal like this.
If (and I understand this is a huge "if") this kind of action was more common, you might think twice before investing into any companies that run a serious risk of direct government interaction to protect the public.
The thing is:
Imagine there are two planemakers, each has a computer system to record when they removed the door bolts. One company uses it 95% of the time while the other uses it 100% of the time.
For the market to assign a different price to those companies, shareholders have to be able to tell which is which.
Investors cannot tell. The official reports don't include anything that wasn't officially reported. People who know first-hand have insider information, and are forbidden from trading on it. Shareholders have no power to enter the assembly floor and carry out spot checks. And "independent" auditors like Accenture are even bigger clowns than Boeing themselves.
I think that however flawed, capitalism might prevail here. If enough money was on the line, institutional investors might get actual permission to [hire experts to] enter the assembly floor and do spot checks. Not welcoming such a thing would cause a huge stock hit. etc.
I’m not sure what we should be waiting for. The time for the free market to fix Boeing and “capitalism” (read: don’t regulate us please) to save the day would have been before Boeing killed 400 people in plane crashes.
I get that the idea of self-correcting markets are very appealing. But there are a ton of situations where they don’t work or don’t fix all of the problems they cause. Those situations are under the general umbrella of market failures. This particular market failure would probably be classified as adverse selection or more general information asymmetry.
I'm not advocating for less regulation in the slightest.
I'm saying that when a corpo breaks laws (don't follow regulations and lie about it), the fines need to substantially hit their shareholders, so that shareholders are generally aligned with following regulations and will demand additional diligence. Otherwise the game will be as it is - commercial aviation is highly regulated, but Boeing is so big that the fines don't matter to them or their owners (i.e. shareholders).
If you step back a bit, and look at the problem more broadly, it becomes clear that a major cause is the current level of consolidation, across the board.
In particular, just in your comment, you name the planemakers—Airbus and Boeing—and the "independent" auditors.
If there were two dozen different companies manufacturing planes, all of which were required to comply with the same regulations, and two dozen different major auditing companies, the chances of any given manufacturer getting away with this level of illegal corner-cutting for any length of time drop precipitously. At the same time, the costs of doing so rise, as it becomes much, much easier for the US government and various airlines to cut a manufacturer out of their contracts the next time they come up.
Might work in a world where only america exists.
What you are suggesting will instead lead to a downward spiral of investor confidence in investing in American companies, and letting other world powers dominate in key tech areas of strategic interest where investors have more confidence and dont have to worry about gov punishing shareholders with no voting rights by taking away their shares
These kinda ideas often seem to originate from a place of revenge or vengeance on someone folks feel is responsible (here its ‘shareholders’)
Better to just install more government oversight (instead of more regulation) improve transparency, amend whistleblower laws to prevent retaliations that boeing did, etc.
Those are much more important and useful for this country.
After all, shareholders are essentially powerless in the current system...
Not exactly true. And both the institutional shareholders and ultra-rich shareholders have the experience, resources, and connections to police corporate behavior far more tightly than they usually do...
But why should they bother policing behavior, when the maximum penalty for malfeasance has been wrist-slaps? (And similar for the banks and bond markets which large corporations rely upon.)
Vs. if the major investors knew that major corporate malfeasance could and likely would cost them $billions - they might very quickly grow more active and assertive, the Boards which they elected would not be passive rubber-stampers, and corporate executives would face regular hard scrutiny.
But all that would be real work. Vs. hiring lobbyists and schmoozing politicians, to make sure the maximum penalty is "wrist slap", is far easier.
And both the institutional shareholders and ultra-rich shareholders have the experience, resources, and connections to police corporate behavior far more tightly than they usually do...
They really don't, at least not in the case of index fund investors like Vanguard and BlackRock. Have you ever read about their operations? They run a very lean ship. The only reason you're able to invest in index funds with 0.005% fees is because they have essentially nobody on staff, at least compared with the number of companies they invest in. They definitely can't do the kind of investigation and policing you're talking about without radically changing their pricing
(and if they did do that, a competitor would come in offering to skip the inspections and go back to 0.005% fees, the money would flow there in droves, and we'd be right back where we started. The fundamental issue here is that passive investors don't care and you can't make them care.)
Neither Index funds nor ETF's are likely to do the research & oversight stuff themselves, true.
But that is quite different that saying that the Indexes & ETF's would for-sure sit on the sidelines if some more-active large shareholders were pushing a credible plan to force better behavior down the throats of a major corporation's C-suite. And the Indexes & EFT's backing such a measure - which effectively costs them 0.00000% to do - would likely prove the critical thumb sign from the Imperial Box.
Shareholders have the power to not buy the stock.
I don’t think millionaires losing some money is sufficient punishment for hundreds of lives lost. What’s so crazy about prosecuting individuals?
It's not crazy, but many company divisions are set up in such a way to dilute guilt, and make people feel helpless about fixing issues near them. It will often be difficult to follow a paper trail and find that yes, X Y and Z were the people that decided on a criminally negligent tradeoff.
Just like the unread targets in Wells Fargo, nobody asks for the fraudulent behavior by name, but the incentives often make it inevitable.
many company divisions are set up in such a way to dilute guilt
not only the internal structure of the firm, but the legal framework in which firms operate, not to mention the cultural mythology situating it all
diffusion of responsibility as one of the defining characteristics of the modern era
Likewise.
In olden times, the monarch's wealth was the state's wealth, and vice-versa.
CEOs being shareholders has a similar problem, in that the only monetary punishment possible against the collective necessarily also harms those with no power to prevent the actions which were punished because it's not a democracy.
(One dollar one vote != one person one vote; also the workforce generally, not sure about Boeing in particular, have minimal to zero shares/votes).
For this reason, I favour a degree of personal responsibility for management all the way from line managers to the board… and for government officials all the way from parking inspectors to presidents.
The details of such a system to make it fair and balanced are an entire constitution, not something I'd be qualified to write, and definitely to big to fit into this comment.
In olden times, the monarch's wealth was the state's wealth, and vice-versa
Most monarchies at least pretended to separate the state and privy purses, FYI.
Why not both? Punish those making the decisions with prison time, and those turning a blind eye because it was profitable with at least some of that profit.
Expropriate
Fifth Amendment says no. I'm not even an American and I know that will never fly. The US is not China, which very much can and does do this.
It's not actually necessary either! There's plenty of scope for fines and compliance orders. Heck, the US government could even ban them as a supplier, putting them out of business .. if there was another plane company in the US.
The whole fiasco is the fault of wrongly approving the creation of a US plane monopoly in the merger with McDonnell-Douglas.
...Fifth? (right to non-self-incrimination) Are you sure you don't mean Fourth? (right to security from unlawful search and seizure)
https://constitutioncenter.org/the-constitution/amendments/a...
"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."
Final clause.
(this is why unrelated sub-clauses should be numbered, not just appended with semicolons)
Would it not be a possible resolution via court order as a punishment for conviction of crimes? I mean, they killed hundreds, that's a capital crime in most places for individuals, I think collectively killing half the company, or even literally in case of executives and board members might be appropriate.
Hm, interesting. I probably knew about that sub-clause in the past, but had forgotten.
I 100% agree about numbering them.
Expropriate the company, at least 51%, take control and let public officials (knowing the US way, it will be some army general) set up checks and controls where necessary
Why? Just criminally charge and fine them into bankruptcy. This wipes out shareholders and lets the creditors—the government would be a big one, on account of the fine—reorganise the company and review all the books and records in a legally precedents venue.
Everyone keeps trying to invent new mechanisms for what fines and bankruptcy already do.
It looks like you misspelled the word fines. Its spelled the following way: "acceptable cost of operations"
See the tiny fine the government handed the cellular providers for selling user data
JumpCrissCross said "fine them into bankruptcy".
This and criminal proceedings is really the only way corruption and malicious behavior can be stopped.
Even though it will harm shareholders, they still have a responsibility in attempting to limit the behavior. (Although from the boards perspective they'll claim they can do anything as long as they're there)
That sounds like the right thing to do. And that's why it's never going to happen
Or like slap them on the wrist, fine them a few million and act as if nothing has happened, like every time before.
Considering how tight boeing is with the government, which scenario is more realistic? :)
Current stock owners will loose half their value (which is a good enough punishment for this lack of oversight)
Generally speaking, I don't think it is. If you own a significant stake, you should be worried about jailtime. It's no different than if your dog bites someone.
"In May, officials determined the company breached a 2021 agreement that had shielded Boeing from a criminal charge of conspiracy to commit fraud arising from two fatal crashes in 2018 and 2019 involving the 737 MAX jet.
Under the 2021 deal, the Justice Department agreed not to prosecute Boeing over allegations it defrauded the Federal Aviation Administration so long as the company overhauled its compliance practices and submitted regular reports. Boeing also agreed to pay $2.5 billion to settle the investigation"
The 2.5 billion sound like a bribe to me, to avoid criminal charges. And Boeing thought that was enough, but it seems they did not assume that the FAA was also serious, that they still need to "overhaul its compliance practices and submitted regular reports".
edit: we are talking about potential manslaughter in hundreds of cases here, because this is what a criminal investigation could lead to, not a fine for violating arbitary regulations
We regularly use fines to punish businesses, usually in combination with conditions for regulatory or legal compliance. I don't recall people calling it a bribe in these cases. This happens in the EU a lot.
Fines for murder cases are not that common. Boring killed those passengers, a criminal investigation would have looked into that. Sure looks like a bribe.
This isn’t a murder case, it’s a fraud case. There’s zero chance of conviction on murder.
Those people are dead because of Boeing. Corporate manslaughter is a thing in UK.
And let’s not be under illusion that if my actions accidentally resulted in deaths of hundreds of people I would see any fresh air ever again
Manslaughter != murder, thats a difference between 3 years and 15-to-life in prison (not in Norway though).
Also, don't fall under the spell of some absolute fairness of our current societies, of course ultra rich are treated differently than regular Joe (or ie former presidents, prime ministers, olympic gold medalists etc), at least until mass media gets in. And Boeing is a strategic military provider not only to US, more a typical 'too-big-to-fail' category.
I would be happy for them to be charged with manslaughter, but that’s not happening either right?
Probably not. _3u10 is right, this is only a fraud case. And Boeing is also providing military hardware, so under full government protection. Trump would pardon them directly, Biden just not foster a DOJ the investigation, while the three letter agencies will do their usual work to keep the civilians at bay. At least that's what I would suspect.
This is what happened in Canada when SNC Lavalin paid millions in bribes to Gadaffi in Libya. They fired the attorney general who wanted to prosecute them.
In Germany, there was a murder case of someone driving a car with over 100km/h through a city and killing a pedestrian. Not manslaughter, murder. Who conspires to maximise profit when putting a new plane design in the air by circumventing safety rules, lying to regulators and pilots, shutting up whistle blowers and in general ignoring safety during construction, aims at killing people. That's premeditated. That's murder.
But if it would be 3 years per manslaughter, it would add up to life in prison, since we are talking about hundreds of dead people. (but no idea if this is how it would work, I know it is like this with other cases).
And surely we know that society is not fair. That does not mean, we have to accept that.
They also straight up killed a whistleblower or two, apparently
They may well have, but the government hasn't proven it.
That is right. It is not murder, but it would be something that could lead to manslaughter charges.
A certain nation has a lot of earthquakes. They also have a notoriously corrupt construction industry. Bad combination.
Whenever they have a temblor, buildings fall down, and people die.
There’s usually one or two high-profile prosecutions, with a lot of saber-rattling, but the hubbub dies down, pretty quickly, and it happens again, the next time there’s an earthquake.
Gees I wonder if the federal government would offer Joe Public a second chance if he defrauded them.
That happens all the time. You find a good lawyer, the lawyer goes to the prosecutor and says "this is going to end with a fine of about x, why don't we save ourselves work and my client just pays x straight away?" If the assessment is sound and the prosecutor would rather do something else...
That never happens after an indictment without a plea.
I'm not aware of it ever happening before an indictment, either. People don't always know that they're under investigation, and, even if you know that you're being investigated, many (if not most) investigations don't end with indictments -- they're quietly dropped -- so it can be quite dangerous to do what you suggest, as it makes an indictment far more likely.
I know about it happening in several jurisdictions. A nice big donation to the Red Cross and a quiet chat with a contrite attitude.
Every course of action is risky if you've done something illegal and the relevant authority is aware of it.
If he paid 2.5 billion then most probably yes.
Also, if the government depended on Joe Public for all sorts of military and civilian projects, that would help.
The 2.5 billion sound like a bribe to me, to avoid criminal charges. And Boeing thought that was enough, but it seems they did not assume that the FAA was also serious, that they still need to "overhaul its compliance practices and submitted regular reports".
To be honest it might have been just enough, since nothing was done. If they had been serious before, they would have planned some sort of check or control as a follow up to that 2021 decision, but they didn't.
But then doors started falling from the skies and people started to have questions about what kind of shoddy plane building they were allowing.
That's when the FAA started their investigations.
Doors started falling from US based airlines.
Boeing got unlucky in that sense. Had it been a flight out of Africa or Asia then I suspect regulators would still be turning a blind eye.
It's not a bribe, or even like a bribe, unless the individuals on the government side of this deal were personally enriched from this settlement (they weren't.) That 2.5 billion was paid to the government, not to the justice department personnel.
It is definitely possible to also bribe organisations.
The individual members will profit and some members even more.
Also note, that I did not claim it is a bribe, but that it sounds to me like this (as a non lawyer).
Because we are talking about potential manslaughter here.
I think it's a stretch to say that a written deal in which a party pays damages is a bribe by that party.
If this payment avoids potential criminal charges about manslaughter, I think it is not.
Criminal charges maybe on the government side too?
If the executives where smart they would have left after getting the deferred prosecution agreement. That way they could claim that it wasn't in their hands anymore and therefore they are not responsible.
Deferred prosecution should be eliminated and if a company is too big to fail then it should be nationalized and the execs should face prosecution.
Indeed. For a very good book on the subject, read "The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives" (2017)
The problem for Boeing is that this wasn't a one time thing. Two weeks ago it came out that they were using counterfeit titanium, then a few days later the CEO testifies that they had in fact retaliated against whistleblowers, then a few days later it comes out that they actually hid faulty parts from FAA regulators and then lost them. Every apple that gets pulled from the bushel is rotten and there are a lot of apples left.
Ok, but usually, as we've seen, *gestures around*, the problem with the American justice system is if _theres a lot of crooks_, it absolutely just tries to normalize what the crooks are doing.
There's obviously no scape goat in Boeing. IT's systemically corrupt, which means Americans will happily try to make it look like that's normal and reasonable and "the best we can do". If not outright find the most dull, corrupt white guy and hold him up as a paragon of the perfect saint.
Right, but everyone from the individual prosecutor to the bureaucrats at the DOJ to the regulators at the FAA to members of Congress HAVE to be thinking "what if the next fuckup involves a plane falling out of the air and 200+ deaths, then it's my ass on the line" at this point.
FAA is probably thinking that since they're the ideal scapegoat in such a situation, but I don't think any member of Congress gives a shit about how many Boeing kills, as long as Boeing continues to pay them off.
Congress cares about votes more than payoff from Boeing. So long as voters don't care about how many Boeing kills congress wants the Boeing payoff. As soon as congress thinks voters care about Boeing congress will turn on Boeing.
Do you care about "Elevance Health" - they larger than Boeing according to the fortune 500 list (20 vs 52 in 2024) - but I hadn't even heard of them until I looked up the list just now. I have no clue what the company is up to (health informs my guess, but it is a guess). Companies like them can continue to do whatever and voters won't care.
But voters care about a multitude of issues. People care much more about things like abortion, immigration, healthcare, gun rights (or control), and yet none of those are seeing any movement or chance of causing meaningful threat to their voter base.
It'll take much much worse than a couple more crashes for the Boeing issue to eclipse all those things to become an issue people actually change their voting over.
Acute current events affect people differently.
If a plane full of Americans falls out of the sky and kills everyone on board, and it turns out to be because of negligence at Boeing, and it happens close to an election, that will definitely be used against any incumbent politician who could be portrayed as responsible.
Politicians want to avoid a scenario like that. But it does require several things to line up for that scenario to unfold, so they have no incentive to care beyond what is necessary to prevent it.
Congress will do the usual: accept Boeing's money and overlook the issue on one hand, and pretend to the public that they're doing otherwise on the other.
Unfortunately, Americans and the peoples of many democratic countries have given up on verifying if their elected officials are actually doing what they say they are, so taking a ~~bribe~~ campaign contribution and lying about it is a medium-high gain and low risk activity.
As a bonus, you can then use those contributions to market yourself and your lies to the same voters even harder!
It's crazy how close that door blowout was to being just that kind of disaster. If it happens later/higher it's a much different outcome.
How many of those leaders are steeped in the old ways of airlines, back in the 70s/80s/90s when 1000+ deaths a year was the norm? I wonder how many of them believe air travel has become too safe, that there is profit to be made by backing off the recent improvements.
Well, these "plane falling out of the sky" fuckups have already happened[1] and the culture there still has obviously not changed. Maybe it's going to take a "plane full of Americans falling out of the sky" fuckup event.
Because that's clearly been happening the last 40 years?
Can you name someone whose been scapegoated for 200+ deaths recently?
I don't think the problem is crooks in the justice system, but crooks throughout the system, which is a monster that feeds itself - with money you buy power with power you can make more money.
This is what you get in a society in which money is the only thing that matters. This is a stupid idea to even write here let alone build a society upon.
This is why people love to hate Elon Musk. Having a despicable character at the head of Tesla is the only thing that makes it possible for people to care about anything that Tesla or his other companies does.
Boeing would be huge news, and would be in much worse trouble, if there was a flamboyant bad guy to hold people's attention. Being dull is an important quality for corporate leadership for exactly this reason.
"if _theres a lot of crooks_, it absolutely just tries to normalize what the crooks are doing."
Correction - a lot of rich and powerful crooks,
> Every apple that gets pulled from the bushel is rotten and there are a lot of apples left.
This is part of a larger degradation of rules-based order. Companies do not fear regulators and certainly have no moral or ethical qualms about violating established rules. Ignoring rules is now an expected part of business. It is rewarded. We champion "disrupter" leaders who openly defy authorities and tear apart established norms of behavior. That needs to change. Shareholders need to stop rewarding such activity.
There was never a rules-based order on the whole. Something like that has existed for various brief moments in time in various industries throughout the 20th century, but it has never been the norm. We as human society are fighting the same fight that we have been fighting since the beginning of the industrial revolution. Progress is measured on the scale of decades at best.
I agree with what you think needs to change, but I don't think anyone should be confused about corporations in the past somehow being more ethical than they are today.
Shareholders need to stop rewarding such activity.
And how, exactly, do you expect that to work? Shareholders are going to pay attention to what's profitable, and basically nothing else.
No; the government needs to stop turning a blind eye to such activity. We need the relevant enforcement departments to be better funded, the policies to be in favor of cracking down on violations of all types, and a mandate from the highest levels not to be shy about seeking the heaviest penalties even from the biggest, most lobbyist-endowed offenders.
Every apple that gets pulled from the bushel is rotten and there are a lot of apples left.
Yes, that's what happens. If you leave a couple of bad apples in a barrel they off gas ethylene and spoil every apple in the barrel. You have to regularly get rid of bad apples before they spoil the bunch.
It's such a great metaphor, it's too bad it's so widely misused and misunderstood.
And importantly, when viewed with this understanding of "organizational ethylene", it's obvious that anyone who resists, obstruct, or disagrees with routine removal of bad apples is probably themselves a bad apple.
To be fair the titanium thing isn’t just Boeing. Airbus used the same supplier
By retaliated you mean probably murdered?
This is a huge self-own. Would this ever happen to a Chinese manufacturer?
China is not what I'd call... Lax when it comes to corporate malfeasance. https://www.theguardian.com/world/2009/nov/24/china-executes...
How lax they are is more a function of closeness to the powerful factions of the CCP than the scale of malfeasance.
Closeness to power generally seems to be a source of laxness, across many different societies.
With the Boeing 737 MAX, it was actually the Chinese Civil Aviation Administration that first decided to ground the plane. The American FAA was reluctant to ground the plane, and only did so after most of the rest of the world had done so.
This is a case of American regulators putting an American company's business interests above safety. If it had been a foreign aircraft manufacturer, I doubt the FAA would have waited to ground the planes.
I regularly see this kind of logic, that in order to face off China we should let our leaders/corporations exploit workers, pollute, commit crimes and behave even worse than China.
I don’t know what is the name for this faulty programming but it is very disturbing. I guess this is some kind of default behaviour of nationalism?
It's called leveling the playing field. Done by either raising the low parts, or shaving the high parts. Not everybody agrees about the "fairness" of either approach, especially when the goal is to make the playing field "fair".
How is levelling free market if it de-levels the playing field between me and Boeing
It's a manipulation technique. Not for US citizens, but citizens of other corrupt countries.
Imagine that you live in a country where everyone is corrupt and everyone lies. If you don't lie you're an idiot.
Then you read news about horrible US government failures. If the problems are so large that they cannot possibly keep lying and they openly admit to their failures, then what fucked up things still are there that they don't admit to doing? China at least manages to keep it shush. Therefore, whatever they do, shit at least doesn't hit the fan.
It's very difficult to imagine that a different society might have different standards regarding things such as transparency.
In China the CEO would be executed by firing squad.
https://en.wikipedia.org/wiki/Sanlu_Group
"On 22 January 2009, Tian was sentenced to life imprisonment, while other Sanlu executives received sentences of five to fifteen years. Two other men were sentenced to death"
Changsheng Biotech Vaccine Scandal (2018): The chairwoman of Changsheng Biotech, Gao Junfang, was sentenced to 12 years in prison.
Kanghui Pharmaceutical Case (2007): The general manager, Ni Chunlin, was sentenced to life imprisonment.
Qiqihar No. 2 Pharmaceutical Case (2006): The factory director received a 7-year prison sentence.
Shanghai Hualian Pharmaceutical Case (2007): Two executives were sentenced to death (later commuted to life imprisonment).
Those are much more serious cases though.
They aren't death sentences due to messing up airplanes due to mismanagement or cost cutting, but actually poisoning people on a mass scale or knowingly making bad drugs.
It's not comparable. Those things are more like the Sackler opioid case.
It is comparable. Boeing intentionally and criminally withheld information from regulators. They knew that MCAS would not be approved by regulators, intentionally ignored safety and quality concerns, then released it to the public. It was a criminal act which caused the death of hundreds of people and destroyed the reputation of the largest exporter in the US. If the equivalent happened in China there would be severe consequences. The CCP would not tolerate losing the reputation of their largest export industry. China is run by the CCP, not company executives. The executives would be thrown under the bus without hesitation.
Ask Jack Ma what happens when Chinese CEOs fuck around.
Even though in this case "fucking around" meant not potential manslaughter, but not being 100% under control of the party.
If the US does not get Boeing under control, trust in all US companies will go down further. It makes a ton of sense, just from a self interested financial point of view, for the US to fix Boeing with compulsion - even if it means breaking it up and putting executives in prison.
While my sense of justice would be tickled by executives in prison, it is probably not a required condition to improve Boring situation.
Do you know what happens to Chinese citizens who displease the government/party?
https://www.si.com/tennis/2023/03/29/peng-shuai-wta-principl...
https://www.thehindu.com/news/international/chinas-sacked-fo...
I’d feel better if they start by grounding everything with a Boeing logo first, and then went through whatever years-long legal process this will certainly be.
I might have missed something, but the issue is that Airbus can’t meet demand, and the other alternatives don’t seem to be better than Boeing.
The problem is that a few crashed Boeings could lead to massive distrust of airline travel across the globe. Is that a larger long-term economic drain than grounding Boeings for a year? I'm not even sure how you'd begin to model that. Heck, I'm not sure we collectively know how to evaluate the risk of any given Boeing falling apart mid-air. It's probably still very, very low, but it might not take much to put people off flying completely.
Yes, it's almost like the penalties should be severe
I’d rather not fly, or have to pay more for a ticket on a fully reliable plane, than fly in a Boeing.
If non-Boeing tickets were an optional upgrade when booking, I’d take it.
Boeing is the worlds leading supplier of bombs to states that use them to annihilate innocent people. For decades. Every twenty minutes.
There is more to the rot in this company than just domestic customers falling out of the sky.
I would wager that there is a great deal of actual, very real misanthropy throughout the executive structure.
No they aren’t
Which states are that?
what do you even do at this point?
so much of US flight infrastructure is based around boeing and they're literally falling apart in the sky
nasa wanted competition with spacex so badly that they've pushed boeing to strand two of their astronauts in space
companies that fail due to inherent internal structural and corruption issues need to be broken down and sold off, but we can't even do that because the US is somehow reliant on it
why must we write out our own downfall through corruption with failing companies? i bet there's thousands of upstarts that would take 1/1000th the funding given to boeing for a lot of their important projects that would come up with genuinely innovative solutions to problems we never knew we had if there were actual competition in aerospace
This is what happens when you eliminate consequences for bad behaviour in any industry private or public You can only kick the can down the road for so long.
It’s only going to get worse and in 10yrs we’ll be wondering why it’s even worse than it is in 2024 while people will still defend how necessary it is to national security to prop up a half useless megacorporation, when it’s actually harming it
Let them face risk, let the good/important parts be sold to better leaders, there’s plenty of money floating around to dump into the market to let competition take over the second there’s an opportunity for a new lively major business sector.
It would be less of a problem if the industry had not consolidated into literally two major companies in the entire world.
You want incentives for a corporations to follow rules? Ensure that there is more than one or two of them.
The US military needs to absorb the military side of the business as a state owned enterprise
Trillions spent on defense, and there isn't a factory just sitting around waiting to spin up and crank out artillery shells for ukraine?
That sounds like a good idea until you realize that the military does is state owned anyway. The private sector supplies everything. But it's not like the military makes any of its own stuff. They buy all their trucks, guns, body armor, ammunition, radios, helicopters, boats, etc. etc. from private companies.
If corporations are people we should be able to give them the death penalty.
Revoke their charter permanently?
Sounds good, but what's to stop those responsible spinning up another company?
I can certainly happen, but it’s highly unlikely with Boeing. They are “too big to fail”, government taking over for a while isn’t out of the question though if this gets much worse. A court appointed CEO whose primary goal is to get QA and QC back into the corporate structure rather than as being looked as only an unnecessary expense.
The real info in this thread is in the flagged and dead comments that were removed by moderation "for your safety". To see those you need to be both logged in and have showdead set to "yes" in your settings.
Let me guess, conspiracy theories?
conspiracy theories?
Not even fun ones.
CEOs often justify their large pay packets by the massive responsibility they shoulder. I wonder if this would extend to going to prison.
Of course not. That "massive responsibility" is just baloney. Short of very obvious and egregious fraud (and even then, only if you piss off the wrong prosecutor or Congressperson), there's no penalty for being a criminally negligent CEO beyond losing the job (which usually comes with some sort of buy-out, so boo-fucking-hoo).
Okay, sure, prosecute the company. Better yet, zero out the investors and nationalize it. But more importantly, prosecute the executives who made these decisions.
Nationalizing Boeing will never happen in today’s federal courts. Temporary oversight like with the banking disaster? Probably. I think court will require a clean sweep of the board and new executives who “promise” put quality back as a goal for the company. Boeing was fine before it can happen again. I don’t know why this the end of western civilization for so many on HN.
"Show me the incentives, and I'll show you the results." - Charlie Munger
It used to be that companies existed to transfer value to shareholders by doing something. In the case of Boeing it was making airplanes. They build you an airplane, you pay them for it, they had a list of rules to play by in order to reduce the costs of making that plane in order to make a profit.
Boeing's incentives are to transfer as much value as humanly possible to its shareholders. They've made sure that large parts of their C-Suite, managers, executives, etc. are in on this by giving them shares.
Those people have decided they don't want to play by the rules anymore. There's little incentive for them not to. If the Biden administration gets voted out in November, most of these regulatory and law enforcement pushes you've seen here of late (Adobe, TicketMaster, etc.) are going to go away because the people in charge at companies like Boeing have participated in regulatory capture. Thus, there are no more rules.
You have to start throwing those people in prison (or worse) for the rest of their lives and make compensation in unrealized gains illegal if you want this to stop.
I agree, but I think we need to distinguish between the people and the corporation, and stop thinking that the way we treat people (such as the Boeing executives) will solve the system problem. We absolutely need to stop treating corporations like people -- and I'm not talking about taxation. I'm talking about the way we think and talk about corporations the same way we talk about people.
When we domesticated animals, we had to be very cognizant that they were not people. For example, bulls are extremely aggressive and extremely physically powerful. You can allow a person into a room with a baby in a crib. There are exceptions, and they are treated as exceptions. With bulls, you do not allow them into a room with a baby in a crib, by default or by exception. It would be considered criminally irresponsible for a person to say, this bull is an exception, I've had it for five years, it's a great friend, and based on its past behavior I'm going to keep it in the same room with my infant child. You just wouldn't do that.
We have enough experience with corporations to know that we need to start treating them less like humans and more like a species of partly domesticated but still extremely dangerous animal. Based on long experience with them, we should expect corporations to predictably lie, steal, and destroy whenever it is in their financial interest. We don't need to get rid of them (we don't have any good replacement for their role in the economy) but should structure the way we treat corporations around our knowledge of their destructive tendencies.
Our long experience with cattle has taught us ways to protect humans from their destructive tendencies while still extracting what we want from them. We keep cattle out of our residences, we castrate most of the males, and we manage intact bulls in a way that ensures human safety while allowing them to serve their necessary functions. We design fences and other management technology with their aggression and power in mind.
It is long past time to treat corporations the same way. In many small ways we have done this, but always held back by the human metaphor. Corporations are in a sense made of humans, and we feel a sense of respect towards fellow humans that we then unconsciously, and with horrible consequences, extend to the corporations they are part of. We need to consciously and decisively put that behind us. You don't have to be cynical about humans to accept that corporations are greedy and untrustworthy. That is their nature. How you square that with the nature of the humans who run them is irrelevant, as irrelevant as bovine neuroscience is to knowing that we should keep bulls out of our nurseries. We don't have to agree about humans to agree about corporations and stop giving them free reign to wreak havoc in society.
If you are on a stranded Boeing spaceship right now, this is not news that will bring you comfort.
It’s not stranded, they are running tests. Please don’t exaggerate the situation. They just want to be safe. Stranded implies completely broken.
Good but I have a feeling this is yet one more of those maneuvers where everyone says their line in the movie but in the end nothing is actually done other than some slap on the wrist for show. Too many powerful people and interests for Justice to work.
And no, unfortunately this is not a tinfoil hat view. There is a long history of Boeing getting away with murder already.
Very possibly literal murder in this case.
I wish there were more details. Does anyone know of any reporting that gives more information? That is, the article says this:
Under the 2021 deal, the Justice Department agreed not to prosecute Boeing over allegations it defrauded the Federal Aviation Administration so long as the company overhauled its compliance practices and submitted regular reports.
So, if they want to prosecute, I'm assuming it's because Boeing didn't adequately overhaul its compliance practices or that it didn't submit regular (or truthful) reports. But what are the specifics of how they failed?
I also get frustrated reading these comments here, which are basically "Boeing bad, they only care about execs and shareholders, they ruined their engineering culture." I agree with all of that , but when the government wants to criminally charge someone or a company, they need some specifics (i.e. fraud). It's not enough to just say they had a lax culture or valued profits over safety. Again, to emphasize, not saying that's the case here, I just don't understand how folks can form an opinion on criminal prosecution without even knowing what specific charges are being proposed.
Honestly, we should be at least considering nationalizing Boeing. There's a strategic need for us to build planes, and the corporate leadership continues to show they will not emphasize engineering and safety.
Criminal Neglicence Tax - CNT must be paid
I must admit I have very little faith in US gov executing on this.
Keep in mind the whole “certify your own stuff” that contributed towards the Boeing mess is a US gov plan
And there are a lot of them to charge. Start with the last two CEOs, add in the CEOs/COOs for Boeing Commercial aircraft, the test pilots, the program director(s) for the 737 Max, the engineers who designed MCAS and didn't add in any redundancy, and then move all the way down to the Spirit and Boeing employees cutting deadly corners on the production line.
It's almost like it's a systemic issue the system can't fix because it's the system that is broken
It's just late-stage capitalism at work.
To quote the immortal words of every drama teacher and English teacher ever: "Capitalism bad."
If capitalism wants to throw off that reputation, it perhaps should try doing more good. Or at least less bad.
Its not a capitalism thing its a.people under pressure from above thing. Look at the example of the Concord and the Tupolev TU144. The Concord was a great plane the Tupolev was a Soviet knockoff and deathtrap.
But capitalism is structured as a system where people above put lots of pressure on people below. There are other systems that are not so top heavy that may alleviate the people-under-pressure problem. Soviets were very top heavy too.
Perhaps you mean corporatism? Capitalism does not define a hierarchical system.
And yet that’s exactly what happens under capitalism.
Compared to who?
Itself, obviously.
It is, and it was, it always decays down to a gilded age. The only golden phase, was when it- ironically was in systemic competition and feared for its life. You need facism/socialism behind a information curtain, to get great capitalism and golden generations. Standalone, its minimal effort and monopolies all the way, decaying to some "medieval aristocratic thats the natural order peasants" state.
Not really, it's just bad management, they took unjustified risks for cost-cutting, and the system, both government and market, is punishing them for it at the first sign of something bad happening.
You could argue that the punishment is not harsh enough for deterrence, or not fast enough, but that's an issue with the government, not the market. Furthermore, the main reason why they are not more afraid of market repercussions is because they know the government needs them, they created a monopoly.
The system is mostly working as it should. The malicious players were found relatively quickly, through a mix of whistleblowing and the first relatively minor accidents getting a lot of attention (fourth estate and all).
Don't get me wrong, we need to keep making things better, there's so much work to do. But if the system were not working we would just have not heard about any of this and accidents would keep happening routinely while robber barons get filthy rich (literal violent monopolists, not plain billionaires), like 100 - 150 years ago.
Do you think that issues being discovered in 2018 with 2 planes and 346 people lost and systemic safety issues persisting since then qualifies as "relatively quickly"?
You are right, that is not remotely "relatively quickly", it should have been prevented.
My point was generally that the system (and specifically the current flavour of capitalism) is not fundamentally broken, it has the right shape of components and they are working roughly how they are supposed to, to balance each other. If it was broken, things would be way worse, as we have seen throughout history. But there's so much to improve.
I guess I am looking at it from a too wide lens. Sure things are working much better than they used to a century ago, such disasters were largely accepted as a normal cost of being productive, there was no system to correct them. But that's no excuse, I do agree with you, this Boeing mess was not acceptable, the system needs to do better.
The market can't do much in this case, as within the US, Boeing has a monopoly, and internationally its only competitor is Airbus. And there is a very strong "lock-in" in regards to pilot type rating.
So while there is some competition, the airline industry is very much controlled and regulated by government.
And here in particular there was a lot of failures in particular with the FAA allowing Boeing to self-regulate (when has that ever worked?) and then the DOJ failing to prosecute after the two deadly crashes.
It really seems like a systematic problem, not an exception to an otherwise healthy situation. Time and time again we see a lack of consequences to corporate greed when those actions are literally killing people.
You're quite correct that things are not as bad as during the robber barons era, but that is a pretty low bar. We can do much better.
I agree with all your points. And there is indeed a fundamental systemic issue with how private companies that deliver critical social services interact with the government: healthcare, education, energy, banking, logistics, real-state...
In my anecdotal experience, the EU social-democratic model seems to be the most competent one right now specifically for this problem: more of these should be state-owned. Don't get me wrong, this is a crappy solution too, you are making a lot of sacrifices for it, but generally, these state-owned corporations do seem to be better at delivering critical services, and often (unintuitively) more efficiently than private ones.
My point was that this is not necessarily about "late-stage capitalism" (as I understand it), this was not a case of the open market harming society. Because indeed Boeing is a state-supported monopoly and that's the root of the issue, at least in theory capitalism abhors monopolies.
This happened because Boeing has both the duty to make the most money possible, and is protected by the government because they offer a critical service. There is something fundamentally broken in this incentive model. Either let them play in the open market and encourage competition, or make it non-profit and serve the state directly. A mix of both is a recipe for disaster.
I believe the argument being made is that in "early-stage" capitalism a company could not afford that type of management, as it would immediately loose the market due to "true" competition and other "quality" options being available.
I agree. Perhaps I don't have a good understanding of "late-stage" capitalism.
I think that the current version of capitalism is "working" (very relatively), exactly because there is substantial oversight from the government and the media, and there should be more.
An open and fair marketplace generally seems to be good at improving lives at scale. But I don't understand why so many people have this idea that it is a fundamental law of nature, that if you remove government intervention it will naturally become a more open and a more fair market.
An open and fair marketplace is quite artificial and needs so much enforcement to keep alive. Futhermore, even if it is good in general, there are a huge number of exceptional emergent behaviours that are bad and require intervention.
We clearly see from history that without oversight, the economy does not become an efficient market. It consolidates into rent-seeking monopolies, often defended and expanded by violence, controlled by an elite with a self-reinforcing long-lasting hold on power. In other words, different flavours of Feudalism, not always focused on land assets.
Let out the engineers and workers. The management always justifies its salaries with their responsibility, then at least when it comes to that, they've got to stand for it. Also it's important that the penalty is no cash fine in any way. They usually got an insurance for the case.
Yes, this might be driven from a punishment thought of justice but it is important that there is an educational correction in the business to no longer calculate human life in terms of money which one may balance against.
No.
"Just following orders" is not a valid excuse. Your manager being a piece of shit forcing you to skip on safety does not invalidate your guilt in skipping on safety.
A whole team circumventing the official process and forgetting to put back bolts they took out isn't something that can be brushed aside as "they were just pressured by management". They made a very serious mistake and all of them deserve at least a suspended sentence for it - it literally could have killed 100+ people.
A whole team of engineers designing a critical system that can crash a plane with optional redundant inputs on inputs that are known to get blocked/fail are irresponsible.
In my experience, large corporations that want to get away with breaking the law have a structure something like this:
* An "everyone was doing it, and everyone knew" layer of junior employees aged 20 or so.
* An obfuscation layer, comprised of several levels of middle manager who regularly shift roles, companies and countries.
* An "I had no idea this was going on, and would have stopped it if I'd known" layer. This is the CEO and suchlike.
If the criminal behaviour comes to light, the top-layer employees pretend not to have known about it; the bottom-layer employees say (accurately) that everyone was doing it and they thought it was normal; and the middle layers split themselves between the two, relying on forgotten e-mails, miscommunications, and placing the blame on people who aren't around any more.
This works for some things, but not for everything
If it was your job to tighten the bolts and you didn't, that's one easy slam dunk coming your way. And they're right.
Any engineer with AoA failure information (which I assume in Boeing is an easily obtainable information) should have designed/reviewed/approved MCAS in a different way.
See the VW emissions case.
Documents get names and signatures for a reason.
Hell, I'm not anywhere close to aviation, just have an interest in it, and even I know that AoA sensors are prone to failure (relatively, for an aeronautics component), can easily get blocked by external stuff, and multiple crashes and accidents have happened due to that. It's nothing short of criminal negligence to design a system using only one.
That's why aviation has very strict reporting and documentation requirements, everything should be traceable. Of course Boeing failed at that too, with them being unable to say e.g. who actually worked on the famous missing bolts. Send them all to prison for egregious negligence, and maybe the other workers will start refusing to do subpar and deadly work.
Theoretically, I believe, it is not hard to tackle this schema, just don't accept "I had no idea" as an excuse, not from CEO at least.
Yes, I believe the legal criteria is "known or should have known" that it was happening.
If the C-level knew, they were criminally culpable. If they didn't know, they were criminally negligent.
Boeing employees are penalized and threatened for reporting safety and quality issues, and whistle blowers are retaliated against.
In that kind of situation, it absolutely is a management responsibility.
And this is how executives escape responsibility when they are being paid specifically to be responsible. The case against the test pilot goes through court, and the test pilot is convicted and goes to prison, and now fewer people are willing to be test pilots. Meanwhile, the CEO ends up settling with the justice department, maybe has to sell a mansion, maybe wears an ankle monitor for a while.
The trick is to not work at Boeing.
As a licenced professional engineer, I disagree. The whole value of my licence is that I have the power to take responsibility for my work. If you strip me of that power by making excuses for irresponsible engineers, it errodes the value of a responsible professional.
What did the test pilot do?
There is, but it's optional :))))
Validate the tests while knowing that they shouldn't. It's literally their main job, to confirm that the plane handles as it should.
https://www.seattletimes.com/business/boeing-aerospace/explo...
They might have been under pressure (why else would they validate a failed test)? And you can't blame people for not being a whistleblower.
When your literal job is to test critical safety features, yes, you can be blamed for failing at it. Especially when people died because you knowingly failed at your job.
What's next, not blaming architects for designing an unstable building that crashes down? Not blaming a chemical factory's security inspector for OKing dumping of toxic waste into a river?
Perhaps. But in any case, let them go after management first.
They were convinced it was a non-issue.
From experience with government contracts, aircraft certifications, and listening to directors speak, they will tell people whatever needs to be said to get the airplane to pass a final check to get a certification.
One exchange I overheard with some details changed: >you will get a warning light here but this is the end of the fiscal and we need to ship airplanes. It will break on landing then take one week to get the replacement part and we have the maintenance contract anyways. By then we will do the work to fix the issue before anyone else actually flies this aircraft. You can retest it before final delivery and you will also get a bonus or we have more test pilots who hate being drone pilots.
Some Boeing test pilot was boasting about using "Jedi mind tricks" to mislead the FAA. He was one of people responsible for convincing the FAA to drop mandatory training requirements linked to the MCAS system.
https://www.theverge.com/2021/10/14/22727244/boeing-737-max-...
Test pilots have warned about this issue, we have emails proving it. Specific people have decided to release a dangerous plane, and those are people with decision making power higher up the food chain.
Imagine a world where a company /can/ be put in jail.
Companies like to be treated like natural people when it suits them, but then when it comes to liability and accountability things conveniently don't apply.
Need to figure out how to do that without punishing the (presumably) innocent employees.
Putting a real person in jail prevents them from going to work, so jailing a company might be sanctioning it.
The thing is, companies are composed of people, and those people can just go to another company. Real people are composed of organs, but those organs can't just move to other bodies and commit the same crimes.
So, companies are just not people and the whole idea is stupid.
Corporate personhood is critical because how else can the company enter into any contracts or employ people.
Corporate misbehaviour can be punished by fines, jail time for execs, and revocation of their business license - probably the closest thing to jail time
Are you really trying to claim that the only thing that lets corporations do their thing is a legal fiction that was dreamed up by Congress? And further, that Congress could not have just enumerated corporate rights separately?
That's goofy.
We could....just define in law that corporations can do those specific things, without explicitly tying them to a notion of "personhood".
I agree that "corporate jail" doesn't make much sense, at least not in a direct analog to human jail. I think the closest you could come to "jailing" a corporation would be for the government to take temporary control of it, go through it with a fine-toothed comb to eliminate the corruption and malfeasance, and operate it for the benefit of the nation as a whole for a specified period of time, then re-privatize it in some manner as long as it wasn't some kind of a natural monopoly or necessity of modern life.
If you have a liver from a serial killer, and commit murder, can you blame the liver?
Asking for a friend.