return to table of content

Boeing workers vote to strike

toomuchtodo
116 replies
14h33m

Boeing spent $43B on stock buybacks between 2013 and 2019 while paying their CEO ~$30M/year.

To support its share price, the company under McNerney poured billions into stock buybacks instead of investing profits into the kind of research and development needed to stay competitive. McNerney decided not to spend billions of dollars building a new plane to replace the 737. Instead, Boeing tweaked and updated the existing model and called it the 737 Max, outfitting it with larger, more efficient engines for increased economy. Compensating for the resulting instability was a secretive automated system called MCAS that would adjust the plane’s pitch without input from the pilot.

McNerney also fought to deeply cut costs. On his watch, the company opened its first non-unionized aircraft production line and initiated a program called “Partnering for Success” that pushed suppliers to cut their prices by 15 percent or more. Many feared that squeezing suppliers would harm the quality of their components, but McNerney was determined to recoup the cost of the 787’s development; if the subcontractors complained, they could find their work taken away from them, as happened to landing-gear-maker United Technologies Aerospace Systems.

McNerney retired in 2015, handpicking his successor, president and COO Dennis Muilenburg. Over the next three years, Boeing’s stock price more than doubled as it sold new planes the world over. (As Bloomberg News reported, Muilenberg and McNerney “had personal reasons to emphasize productivity and cost-cutting” because their compensation was tied to share performance. Together they took $209 million in total pay over seven years.)

https://nymag.com/intelligencer/article/boeing-planes-proble...

JackYoustra
64 replies
13h16m

It's kinda fun, right? The whole point of tying executive compensation to share price was to have them have some rough stake in the business, but even that didn't prove enough: there's always a longer term, and doing a visible, clear NPV boost is usually accretive to market cap even if it introduces long-term risk, because the long term risks are usually hidden from public eye and very mushy.

Ironically, I think the poster child for how to properly structure compensation away from this is Hank Greenberg's AIG, where not only was his compensation basically all deferred stock options, they were deferred until retirement, so about as long-term a view as you can get. He was very risk-averse, and his biggest flaw wasn't under his operational ownership but under successor and personnel selection (looking at you, Welch).

But at some level, it was just bad people making bad calls. I don't think McNerney thought that this would wreck Boeing, he was just wrong. Even if he was left predictably destitute at the end of such a failure, he probably wouldn't have changed his choices because he thought they were good. You could claim that this is a failure of boards and governance (and, truly, I think boards are by and large really bad and I wish there was a much more pervasive activist investor culture) but at some level I'm not sure how much of this is solvable.

I don't know. There's probably a way to do boards well enough that this isn't a problem.

darby_nine
46 replies
13h1m

We all know boeing won't be "wrecked"; they're too critical for state interests to be allowed to fail. If they're smart they'll either nationalize the company to remove the profit inefficiency or force the company to split to remove the profit inefficiency. Either way, the profit motive and lack of any competition is clearly a national security risk.

JumpCrisscross
43 replies
12h53m

We all know boeing won't be "wrecked"; they're too critical for state interests to be allowed to fail

People keep repeating this without context. The auto companies are strategically significant. That didn't prevent them from going bankrupt [1][2]. Wiping shareholders doesn't mean blowing up the factories.

I'm increasingly convinced Boeing needs to go bankrupt. It can then shed unprofitable units--through spin-offs, sales or liquidations--and restructure its obligations. I'm not convinced the union comes out of that better off than it is now. But America sure does.

[1] https://en.wikipedia.org/wiki/Chrysler_Chapter_11_reorganiza...

[2] https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...

darby_nine
35 replies
11h35m

The auto companies are strategically significant.

Not really, they're more politically significant than economically critical. I've certainly never owned an american car and never plan to. We'll be fine continuing to rely on foreign companies to produce our vehicles. Foreigners certainly don't want our cars (outside of maybe tesla in the nordics, i guess?). None of this is true for the plane market, or at least not until boeing acquired its current popular reputation of not being very good at making planes (deserved or not)

The fact we bailed out the companies but refused to take ownership should be considered treason. Same for the banks, the car companies, the airline industry we bailed out for more than its entire value, etc etc. completely corrupt and incompetent governance

bombcar
23 replies
10h29m

The auto companies are strategically significant because war footing America will turn those F150 lines into tank lines in a matter of months instead of the years it would take to spin them up from scratch.

IBM made machine guns on typewriter lines in WW2.

TheOtherHobbes
17 replies
8h18m

No it won't, because only about 30% of F150 parts are made in the US. The rest are made elsewhere - mostly China.

This is not 1940, and the US simply doesn't have the strategic industrial base it used to.

Off-shoring made some people a lot of money and lowered consumer costs (while simultaneously cutting consumer pay.)

But it was economically and strategically unwise. The US is set up to run small-scale wars against technologically inferior opponents. It has no ability to sustain a prolonged multi-year slug-fest against an opponent with a superior manufacturing base.

Dalewyn
14 replies
6h54m

Considering the US hasn't won a single war against technologically and numerically inferior opponents since the turn of the century, I think we have even more fundamental problems than just a rusty war machine dependent on Chinese blue jeans.

Now granted I might be unfair to the US here; the Middle East is known as the graveyard of empires for a reason.

bluGill
12 replies
6h10m

The US clearly choose to lose all wars lost though. The military was doing just fine, but the people back home got sick of the efforts.

willcipriano
9 replies
5h26m

When the participation trophy generation grows up and becomes generals you'll hear things like, we would've won that war if it wasn't for all that attrition!

bluGill
5 replies
5h23m

What attrition? While deaths were not zero they were very low.

willcipriano
4 replies
5h20m

Roughly 2.2 trillion on the credit card for Afghanistan alone. That's without the interest that will be paid on it. Your grandkids children will be paying for that war.

bluGill
3 replies
4h0m

The only time anyone cares about that debt is when democrats are in control of the government - then republicans care. (sometimes when republicans control congress and the democrats control the president they care, but it is not as much then)

willcipriano
2 replies
3h55m

The only president in my lifetime to not start any wars isn't really liked by either the democrats or the establishment republicans. Both parties are big fans of losing wars for some reason.

mulmen
1 replies
20m

Were you born in 2020?

willcipriano
0 replies
2m

An armed conflict between Israel and Hamas-led Palestinian militant groups[ad] has been taking place in the Gaza Strip and Israel since 7 October 2023.

The United States has given Israel extensive military aid and vetoed multiple UN Security Council ceasefire resolutions.

United States provided advice and intelligence to Israeli forces during the raid, through its "hostage cell" stationed in Israel. The attack resulted in the deaths of 274 Palestinians.

How would that work in your mind?

https://en.wikipedia.org/wiki/Israel%E2%80%93Hamas_war

ahmeneeroe-v2
2 replies
1h28m

literally no one said that or even a rough approximation of that. Seriously I have no love for the generals but even they're not that dumb.

willcipriano
1 replies
1h13m

The comment I'm replying to said that and it was said frequently about Vietnam. What they didn't do is use the clear language I used and instead blamed the public for not wanting to spend every last penny on a pyrrhic victory as if that isn't attrition.

ahmeneeroe-v2
0 replies
44m

I agree that the dollar cost is real attrition too. Vietnam and Afghanistan were so wildly costly because we made the (political) choice to limit how we could engage the enemy, while our enemies were not limiting themselves

   Vietnam: limiting Cambodia ops, the DMZ, limiting bombing of N Vietnam
   Afghanistan: limiting Pakistan ops, focusing on creating a stable democracy rather than killing Taliban then leaving
We made political choices on how to wage war, and then blamed the military for those poor choices.

vundercind
1 replies
5h37m

1) That’s still losing.

2) I’m not sure the military was doing just fine in all of those. Vietnam comes to mind, but also Afghanistan—reading the Afghanistan papers, the brass seems to have given up on any kind of actual goals or accountability in favor of a system that let them continually cycle officers through and let them claim they succeeded at their mission (funny, they all keep achieving their mission, but facts on the ground remain exactly the same or worse!), for years and years. Fighting fitness may have been OK throughout, but military leadership in the military itself was absolutely not committed to any kind of winnable mission, let alone to actually winning it. That may have been driven (I’m sure it was) largely by civilian leadership, but the entire upper echelon of military leadership betrayed their commands and the soldiers counting on them, to keep up a convenient (to their careers, and a bunch of junior and mid-tier officers who got a big boost to their careers…) political fiction at the cost of any hope of something resembling actual success, and all it took was shitting all over their soldiers and the trust of the American people.

I bet Iraq (part 2) was similar. I have some grave concerns about the state of our more-politicized-and-static professional officer corps since roughly Vietnam.

ahmeneeroe-v2
0 replies
1h30m

I'm with you 100% on point #2.

Disagree on point #1. We occupied Afghanistan for 20 years. We operated with nearly absolute impunity in all population centers, through all trade routes, and all agricultural areas. Our casualties were a minuscule amount our total forces. Our culture completely transformed theirs (in a way that old school hardliners lament publicly). We killed a huge number of Taliban (and foreign fighters).

Clausewitz says that "the political object is the goal, war is the means of reaching it." Can you tell articulate what the political goal of the war was?

Thinking back to 2001 (I was in middle school), the goal was retribution. I believe the military achieved that in spades. Yes, in the end Afghanistan did not turn into a US vassal state or a US colony. But was that the goal?

rurp
0 replies
4h32m

The US did not lose the war against Saddam. The war was started under false pretenses and they made a mess of the reconstruction after, but that's different from a military defeat. If one side of a war manages to destroy the other's military, execute its leader, and set up shop in his palaces; that's a win on the military front.

bluGill
1 replies
6h12m

This is not 1940, and the US simply doesn't have the strategic industrial base it used to.

this is just wrong.

The US didn't really have that industrial base in 1940 either. We developed it fast over a couple years of war.

To the extent the US had an industrial base, we still do. US manufactures more than we did in 1940 - we just do it with far fewer people in factories via automation.

bombcar
0 replies
4h9m

This is really the key - there's a ocean of difference between "we manufacture literally nothing" and "we don't manufacture/assemble as much as we could".

mulmen
1 replies
10h20m

Exactly correct. Good time to skim https://en.m.wikipedia.org/wiki/Willow_Run.

Years of startup problems but when it finally started humming they were building a B-24 every 63 minutes! In the meantime existing factories were winning the war.

As Americans we tend to glorify the industrial feats of WWII but the US government used a very heavy hand to pull that off. Public-private partnership is the preferred euphemism today but essentially we were a socialist economy.

bombcar
0 replies
4h6m

At its peak, the US had 40% of GDP going into the war. Forty percent!

Today the US military budget is 3.4% of GDP. Can you imagine it being ten times as much?

darby_nine
1 replies
7h42m

Seems like a terribly irrational and inefficient way to run an economy but I'm sure russia will invade any day now. Or is it china these days?

themaninthedark
0 replies
5h33m

I agree. We should also stop subsidizing agriculture, there is enough food grown around the world for everyone. All this waste is very inefficient!

In fact, we dump our cheap overproduced food on third world countries and collapse their ag. sector. If we stopped producing and switched to importing we would boost their economies.

Since food can be grown in almost any country on earth, we would have a diverse supply chain. I'm sure nothing would go wrong with this plan./s

newsclues
0 replies
9h54m

If America goes to war it will need many f-150s for the war itself.

kwhitefoot
3 replies
9h17m

Foreigners certainly don't want our cars (outside of maybe tesla in the nordics,

The Nordics are not all the same, Norway is far ahead (20% of private cars already full EVs) of the rest with Denmark a distant second when it comes to electrification of transport.

But also the Tesla Model Y was the best selling car in the WORLD in the last twelve months, not just Norway. Of course quite a few of those were built outside the US so perhaps they don't count as US cars.

kwhitefoot
0 replies
5h16m

Norway is special

I know, I live there. Been driving electric since 2017.

janalsncm
0 replies
3h4m

China is the biggest auto market in the world and also produces the Teslas they buy domestically.

mulmen
2 replies
10h14m

The auto bailouts saved hundreds of thousands of jobs and turned a profit for the US government.

darby_nine
1 replies
7h39m

Cool, i don't care about either of these things. Jobs are a poor index of economic health for americans and we should really be guaranteed one as a fundamental human right if we also refuse to implement modern welfare.

mulmen
0 replies
1h17m

You don’t care about saving jobs but you think we should be guaranteed jobs? How do you imagine guaranteed jobs work?

jampekka
1 replies
10h15m

Major industries are economically critical for trade balance. Even if foreigners don't buy US cars, domestic buying means there's less import.

There's a limit to how long USA can print petrodollars to make up for the trade deficit. And the limit doesn't seem that far off.

darby_nine
0 replies
7h40m

Good, let's learn to get along with people without trying to dominate them for the first time in living memory

throwaway2037
0 replies
9h14m

    > Foreigners certainly don't want our cars
FYI: Tesla sold 600,000 cars in China last year. It is a huge market for them. They also sold more than 200,000 cars in Europe last year.

HeyLaughingBoy
0 replies
2h52m

Foreigners certainly don't want our cars

Then why are they always bitching about their neighbors who buy large American vehicles that are too wide for their streets?

Dalewyn
3 replies
9h25m

I'm increasingly convinced Boeing needs to go bankrupt.

I agree and hope they do go bankrupt, but I hope so because the country needs a fucking wake up call: American Exceptionalism(tm) is simply no longer true.

I sincerely think we need to see one (Boeing), maybe even a few (Intel? US Steel?) paragons of American Excellence(tm) go down in smoking ruins so we have to accept that we are not 1970s America taking mankind to the Moon and beyond anymore.

Once we realize that, we can actually get started on Making America Great Again in a real, meaningful way instead of a dumb political catchphrase.

gartdavis
1 replies
7h6m

The Canadian government drove its primary aerospace company, Avro Canada, not just into bankruptcy/reorganization, but to completely shutdown operations. The country lost 14,000 aerospace professionals, but more importantly, it lost its leadership position in cutting edge aerospace. Its best engineers left for the USA or the UK. Canada, more than a half century later, has never recovered anything like the leadership role it had built during the post-war period. Be careful what you ask for.

Dalewyn
0 replies
7h1m

Look, we're going down one way or another. We might as well get down there faster so we can start crawling back up sooner.

umanwizard
0 replies
7h43m

Once we realize that, we can actually get started on Making America Great Again in a real, meaningful way

I see no reason to believe this will happen rather than a continued slow decline and eventual collapse.

night862
2 replies
12h38m

Maybe so, but I would say cars are different than aerospace.

It’s clear that Boeing was able to squeeze costs centers at the expense of quality and business investment all while keeping the coin under shell in the form of regular old stock buybacks.

But if/when Boeing goes under who is going to vet all this NDI sitting in their portfolios? They’re just gonna spin it off to another buyer—consisting of who exactly? McDonnel Douglas? Elon Musk? Tencent?

Seems like a nightmare for someone, not sure for whom.

JumpCrisscross
1 replies
12h30m

But if/when Boeing goes under who is going to vet all this NDI sitting in their portfolios? They’re just gonna spin it off to another buyer—consisting of who exactly? McDonnel Douglas? Elon Musk?

Idk, pick one that's American or closely allied [1]. Ideally not one of the three larger than Boeing.

Worst case: audit and re-assign the contracts. We'll be better for it in the long run. And I'm not convinced it wouldn't result in quicker, higher-quality deliverables in the short.

[1] https://en.wikipedia.org/wiki/List_of_defense_contractors

AnthonyMouse
0 replies
12h7m

Who even needs a specific buyer? Boeing itself is a publicly traded company, the spin-offs can be too. Put the business unit into its own corporate entity and give all the shares of the new entity to the existing Boeing shareholders to do with as they please, or sell them into the market.

jajko
0 replies
10h28m

Some car manufacturers are definitely not critical to national security, they just employ tons of folks in few places. Company making weapons like choppers, planes etc for whole US military is on completely different level of importance.

donatj
0 replies
11h11m

If they're smart they'll either nationalize the company to remove the profit inefficiency

So... remove the need to actually produce planes, or anything at all for that matter, subsidize their continued failures?

AmericanChopper
7 replies
12h6m

Then blame the board imo. They define the objectives for the CEO, the incentives for achieving them, and the governance framework for governing their execution. If shareholders want this “short term thinking” that always gets brought up, then they have every right to it.

Of course this “short term thinking” trope is just a meme that the armchair commentators like to pedal out. If the system was dysfunctional enough to prioritise short term profit seeking to this extent, then all a competitor would have to do to monopolise any market is do enough “long term thinking” to outlast all their failing competitors. Investors would notice this and reallocate their capital accordingly.

But none of this is what happens in reality. If anything I would say the market is over-interested in long term strategies. The popularity of the growth over profit model that we observe amongst most prolific capital allocators takes “long term thinking” to absurd lengths.

photonthug
1 replies
10h45m

If the system was dysfunctional enough to prioritise short term profit seeking to this extent, then all a competitor would have to do to monopolise any market is do enough “long term thinking” to outlast all their failing competitors.

This makes it sound like my broker, the finance community in general, or maybe the state is better able to handle long term thinking than our industry leaders, but why would anyone believe that? Aren’t they all looking quarter to quarter and retiring next year no matter how bad they wreck the company/economy/country?

M95D
0 replies
8h31m

Stock is sold and bought all the time with no tax. It's in the investor's intrest to sink a company for short-term profits. When the s*it hits the fan, they can sell the falling stock, short-sell even, to some clueless pension funds and invest the money in a competitor instead. When only one company remains, profit +++. This is how stock markets work. Why are you surprised?

riffraff
0 replies
9h22m

If the system was dysfunctional enough to prioritise short term profit seeking to this extent, then all a competitor would have to do to monopolise any market is do enough “long term thinking” to outlast all their failing competitors.

isn't this exactly what's going on with Boeing?

Airbus last year topped Boeing for the fifth straight year in the orders race, with 2,094 net orders and 735 delivered planes. Boeing had 1,314 net orders and delivered 528 aircraft.[0]

I 100% agree the majority of investors don't seem to take the long view, and that's been the case for a while.

[0] https://apnews.com/article/boeing-airbus-airline-safety-manu...

jajko
0 replies
10h18m

Its not like you have 30 competitors who can produce AH-64 Apache chopper equivalent out of blue with all support stuff required around it, its not perfect market and boeing c suite knows it very well.

Sure in 30 years they may be eventually pushed out but they can coast 2 generations of successful careers till then.

immibis
0 replies
10h39m

Long term thinking is often incompatible with short term thinking. It doesn't matter if your company is long term sustainable if it's short term unsustainable. See dumping.

hnthrow289570
0 replies
8h22m

Then blame the board imo

Half of them would look like job hoppers with such short tenures on their resume. Some of them have simultaneous executive positions at other companies.

If you want some evidence of short-term thinking not being a meme, it's probably that.

banannaise
0 replies
3h26m

Then blame the board imo.

The Board of Directors at most major corporations is made up largely of current or former executives, many of whom come from the same industry. It's in their personal interest to normalize lucrative and exploitable compensation plans.

You would also be shocked to know what people control the lion's share of investment dollars.

sofixa
2 replies
13h10m

But at some level, it was just bad people making bad calls. I don't think McNerney thought that this would wreck Boeing, he was just wrong.

Well, he was stupid not to - there's no way he didn't know thay focusing on the short term stock price won't have negative effects on the quality and future of an engineering organisation whose main business, building and selling airplanes, is extremely capital intensive. He came from McDonnell Douglas who nearly bankrupted themselves doing the same sort of crap (pushing suppliers to the edge, cost cutting at every opportunity).

sofixa
0 replies
9h31m

Oops, my bad, he was just a GE sociopath.

That being said, McDonnell Douglas' history was visible to everyone - what they were doing hadn't been working for decades (first as Douglas, then as McDonnell Douglas).

selimnairb
2 replies
8h25m

Would love to see a shift towards something like deferred options for executives. Or, ya know, a fixed multiplier on median employee pay, like managers make 3x median, VPs 5x, CEOs 7x. I’m okay with people who have crazy responsibilities making good money, but it doesn’t have to be obscene.

timfsu
1 replies
3h18m

This sounds like an incentive to fire/outsource all of your lower-paid employees

selimnairb
0 replies
3h16m

Good point. It would have to include contractor pay in the calculation.

jandrese
0 replies
4h9m

The whole point of tying executive compensation to share price was to have them have some rough stake in the business

This reasoning was always flawed. The Stock Market is not real life. It consists of the opinions of a bunch of guys who sit in towers in New York, London, Shanghai, etc... In theory there are fundamentals that should drive the price, but in practice the market is not rational. It's not a good metric for the long term health of a company. Even worse, Goodhart's law applies in spades:

"When a measure becomes a target, it ceases to be a good measure."

Time and time again we see CEOs playing games with the stock price in order to get a big payday. We see management sacrificing long term stability in order to maximize their year end bonus.

Imagine if every time you remember a now dead company do a stock buyback they instead invested that money into R&D, or simply lowered their prices to be more competitive in the market? Maybe they paid their employees better and didn't have constant turnover problems and had higher quality output. How many of those now failed companies would still be around today?

danielheath
0 replies
12h21m

even that didn't prove enough

It did the opposite.

Humans respond - on some level - to incentives.

Tying compensation to short-term performance creates perverse incentives which make it much harder to accept the idea that your plans might be ruining the company.

InDubioProRubio
0 replies
12h13m

Bad people brought to fruit by a MBAd culture whos claim to success is mostly inherited inertia.. Longterm Losers with an Attitude and shortterm numbers to silence doubters.

swarnie
20 replies
13h15m

Boeing spent $43B on stock buybacks between 2013 and 2019 while paying their CEO ~$30M/year.

Boeing share price was up almost 400% in that period. If the business goal was to maximise share price and therefore return for investors over that period it was a cracking success.

Since the US government will always pick up the pieces in the event of a failure its a minimal risk stratagy.

cced
19 replies
10h53m

Can someone explain to me the theory of stock buybacks? How is this not just financial engineering? How are you meant to differentiate companies who’s stock goes up because they’ve been productive and made great products from those that increase their stock prices using buybacks? Are there rules against taking out loans and using them to perform stock buybacks?

bombcar
11 replies
10h27m

Stock buybacks are mathematically identical to dividends if you work it out.

And yes, people track that, and yes taking loans to pay dividends is a favorite trick of dying companies.

MereInterest
7 replies
9h26m

Aren’t they taxed differently, though? To my knowledge, dividends are taxed as ordinary income, whereas sales following a stock buyback may be taxed as capital gains (if they were held long enough before that point).

triceratops
1 replies
5h8m

Rich people borrow against appreciated assets. They don't sell and incur capital gains tax. That's why company leadership loves buybacks.

Ordinary people have to sell assets to take advantage of appreciation. So unless they can time sales to optimize taxes - really only an option for retirees - they might as well get regular dividends.

lordfrito
0 replies
26m

Ordinary people have to sell assets to take advantage of appreciation

Not entirely true.. Ordinary people can take advantage of appreciation of their home value via a standard home equity loan.

teraflop
1 replies
6h23m

"Qualified" dividends from long-term-held stocks are taxed in the same way as long-term capital gains.

triceratops
0 replies
5h7m

You only have to hold a stock for 60 days to get qualified dividends. For long term gains it's a year.

refurb
0 replies
6h24m

If you're talking about the US, then no, dividends are given special tax treatment at a reduced rate if they are "qualified dividends". If they aren't, then yes, they are taxed as regular income.

positr0n
0 replies
3h32m

As a shareholder, dividends are income. Cash going in to your account that is taxed immediately.

A stock buyback of 1000 shares means that your one share now represents 1/999,000th of the company, not 1/1,000,000th. Thus the share is worth more. It isn't income until you sell the share and pay taxes on the gains. This flexibility is useful and can result in tax savings depending on the situation.

bombcar
0 replies
4h10m

The real problem with dividends is they're taxed at the corporate level (corporate income tax) and then taxed when distributed to the shareholders (the shareholders pay income tax on the dividend).

Eliminating the double taxation of dividends would likely solve most of the buyback problems.

darkfloo
1 replies
9h27m

Do you have to pay taxes on dividend under American law ? If so I guess that makes stock buyback better from a point of view of shareholders

bluGill
0 replies
6h4m

You pay taxes in Dividends, which is one reason shareholders generally don't like them. A lot of shareholders are also in the savings phase of their life - they are working some other job and don't need the income from Dividends yet and so getting a dividend is a bad thing as it is more money they have to invest (particularly if you have to pay for each trade which is common). Shareholders who are retired like dividends because it is a simple paycheck without needing to sell their shares and they would be paying those taxes anyway.

FireBeyond
0 replies
2h47m

This makes no sense. A dividend is more akin to an annuity, paying out periodically.

Stock buybacks are cashing in your chips, a one-off payment.

thrance
6 replies
8h54m

Stock buybacks used to be illegal in the States up until 1982. You can thank Raegan for that too.

refurb
5 replies
6h31m

Stock buybacks used to be illegal in the States up until 1982. You can thank Raegan for that too

This is not true, but seems to come up a lot. I guess it makes for one of those fun "internet facts" that people like to repeat without any investigation. Bonus points for blaming Reagan.

Stock buybacks were not illegal before 1982. If you sit down even think through it, it doesn't even make sense they were illegal. Just like issuing new shares (or doing a stock split), companies have legitimate business needs to buy back stock (reduce the quantity of outstanding shares).

What happened in 1982 was that the government made Rule 10b-18, which outlined the "safe harbor" requirements for stock buybacks, where if followed, the company could not be found liable for stock manipulation.

https://www.skadden.com/-/media/files/publications/2020/03/t...

So stock buy backs were legal before 1982, but companies faced a risk of stock manipulation if they were reckless in how they did it.

naasking
3 replies
6h15m

So stock buy backs were legal before 1982, but companies faced a risk of stock manipulation if they were reckless in how they did it.

Sounds like a much better state of affairs.

refurb
2 replies
5h52m

Really? You think it's bad that the government is explicit in its rules?

I think that's a good thing. I'd rather have it be clear to all parties what is acceptable and what isn't, rather that a murky legal framework where you never know if you're breaking the law.

SaintGhurka
1 replies
3h48m

This subject brings up so much rancor that I think you might have missed the possibility that there was no sarcasm intended in the post you responded to.

refurb
0 replies
3h41m

That’s why I asked

thrance
0 replies
2h22m

I mean, from what I can read online, it seemed the practice was generally regarded as market manipulation prior to 1982 and so was de facto illegal. So yeah, thanks Reagan indeed. There are good reasons to blame him for his part in the current state of affairs.

blackeyeblitzar
7 replies
13h19m

Why is the CEO pay relevant? It is not even within an order of magnitude of the amounts needed to pay for even the contract Boeing proposed to the union, let alone the union’s demands. People complain about CEO pay as if paying them less would get them what they want. Frankly companies need CEOs, and people who are qualified for the job are very few in number. Whereas the line workers represented by the machinist unions are in trades where there are massive quantities of workers available - which is why many took Boeing jobs even if they were not happy with the pay and benefits.

I am also not sure why the stock buybacks are worth mentioning. There are many reasons why a buyback may be the right thing for a company to do. I am aware that sometimes it can be a manipulation of executive compensation by artificially raising the stock price (and may have been so here). And obviously I don’t support that. But I feel like the practice of buying back is attacked by many without adequate understanding of what it is for and how it can be financially good for the company, helping support future investments.

stevage
4 replies
13h16m

High CEO pay is a symptom of poor board control, not a direct cause of poor performce.

AnthonyMouse
3 replies
12h23m

CEO pay generally has a relationship to company size, and Boeing is pretty big. It would be hard to argue their CEO is overpaid if they paid the CEO that much and the CEO did a good job. Implying the problem is not how much they were paid but rather the quality of the work.

ywvcbk
1 replies
8h28m

They did a great job, though..

From the perspective of other board members, upper management and the shareholders at the time.

bluGill
0 replies
6h2m

There is the real problem - we cannot evaluate how a CEO did today for another 10 years. Their job is to figure out where the company needs to be in 10 years and then get them there.

tempfile
0 replies
9h54m

Implying the problem is not how much they were paid but rather the quality of the work.

Aren't those identical? If you do a bad job, we could have got the same bad job from someone else, who we could have paid less...

triceratops
0 replies
5h12m

It's relevant because the company's performance has been a dog turd. They clearly overpaid for a low-performer.

sofixa
0 replies
13h5m

CEO pay is relevant because Boeing haven't had a competent CEO in decades. Yet all of them were compensated handsomely for making pretty obviously bad choices (e.g. the 787 development was done McDonnell Douglas style, pushing most of the costs and risk to suppliers, and was highly problematic) or downright killing people through negligence.

I am also not sure why the stock buybacks are worth mentioning

Because Boeing is a very capital intensive business that is currently in mountains of expensive debt, with multiple projects delayed with years, and a recovery time of 5 years minimum. The idiots in charge wasted billions on the wrong things, and now the company is a very bad situation.

hinkley
6 replies
14h17m

They started new factories in new states to try to break the unions in Seattle.

IntelMiner
3 replies
14h8m

Boeing fleeing Seattle while trying to cheerfully pretend they're a "Washington company" was absolutely disgraceful

sofixa
2 replies
13h10m

They moved their HQ to Chicago and then DC to focus on government contracts (they suck at those too), so "Washington company" is extra funny.

hinkley
0 replies
2h38m

Technically they also had offices in St Louis after the coup. The MD people moved to Chicago. And I hope every single one of them was a Cardinals fan.

extraduder_ire
0 replies
6h46m

I mean, any company based in DC can call itself a Washington company.

rob74
1 replies
12h23m

...with resounding success:

In 2019, following the discovery of exterior damage on planes manufactured in Charleston [the non-unionized factory], for a time Qatar Airways would only accept delivery of Dreamliners assembled in Everett [the unionized factory]. (from https://en.wikipedia.org/wiki/Boeing_South_Carolina#Quality-...)

But then they moved all 787 production to North Charleston, so problem solved.

hinkley
0 replies
2h36m

But then they moved all 787 production to North Charleston, so problem solved.

That better be some top shelf sarcasm.

It’s shameful what’s happened to Boeing. I worked there during the fall. After the bribery scandal, but before MD broke it. It was still okay-ish until they butchered their R&D dept. That’s not a healthy company.

jmyeet
4 replies
8h15m

Boeing spent $43B on stock buybacks

I am very sympathetic to this line of criticism but I also find that "stock buybacks" are misunderstood and, as a result, overly demonized. So I just want to explain a few things for anyone who reads this.

The question with a corporation is what to do with surplus profits. The first iteration of this was to pay dividends. These legally are paid equally among shareholders. If you distribute $1B in profits and have 100M shares issued then each share gets a $10 dividend. Simple. Additionally, dividends had to be profits so corporate taxes were paid on those.

So there are two problems here:

1. Not every shareholder may want a dividend; and

2. The US tax treatment of dividends is bad, specifically double-taxing. as an example, the company may pay 15% corporate tax, pay a dividend with the remaining 85% and then the individual may 50% federal and state taxes on that, leading marginal tax rates of upwards of 60%, possibly higher.

(2) has led to some screwy legislation (eg passthrough corporation discounts) so solve what is otherwise a simple problem. Australia has completely solved this problem with so-called "franking credits". This means that $1B of profit is made, 30% taxes are paid and $700M is distributed but it comes with $300M in tax credits. So if you get a $700 dividend, you also get $300 credit with the ATO. If your marginal tax rate is higher than 30% is higher, you may have to pay a little more. If it's lower, you'll get a refund.

Now you generally can't borrow to pay dividends until you historically pay dividends. There are a lot of rules around this.

Enter share buybacks. This is where the company buys back its own stock on the open market. This reduces supply and hopefully raises the price for remaining shareholders.

Some will argue this is market manipulation but it really isn't. It's just a different way of distributin gmoney to shareholders. Unlike dividends, you can choose to take it or not by selling or not.

A share buyback has none of the dividend tax problems but it's even better. If you've held for 12+ months you're paying the long-term capital gains tax rate, which can be substantially lower than the marginal income tax rate.

But here's the big problem: it's completely fine to borrow money for a share buyback. This loophole needs to be closed.

Prior to the IRA and Trump tax cuts, it would work like this: you would leave profits overseas so you wouldn't have to pay corporate tax on them. You'd then borrow money used those overseas profits as collateral and do a share buyback. This should've been illegal. Or, in the very least, any borrowing against foreign profits should be treated by the IRS as repatriation of profits and thus tax is owed.

The Trump tax cuts changed how foreign profits are treated. The IRA further changed this with the 15% minimum tax, which was a very good change and one that didn't get a lot of attention.

Should a company pay out shareholders or pay its workers more? I absolutely favor the latter. But we shouldn't focus solely on share buybacks because that's a small part of the problem. I'd say what we need is:

1. A higher corporate tax rate;

2. An end to passthrough corporations;

3. End the double-taxing of dividends. Just do what Australia does;

4. All share buybacks have to come from profits only; and

5. An aggressive attack on profit-shifting / transfer pricing to offshore profits.

Dennip
1 replies
6h46m

My understanding of stating this figure was to highlight that the cash to pay employees reasonably exists, its just being spent elsewhere...

toomuchtodo
0 replies
5h25m

Correct.

jandrese
0 replies
4h7m

How about they tried using that money to be more competitive in the market? Lowering prices. Paying workers more. Spending more on R&D. That sort of thing. Why are shareholder considerations the only considerations?

foobarian
0 replies
6h31m

I wonder if a non-profit aerospace competitor would be viable, if this would force all profits to be invested back into the company. Or maybe a hybrid with some kind of profit cap.

markus_zhang
3 replies
9h0m

I have said this and I'll say this again: executives should never have a disproportionate pay comparing to their most senior trench workers (think a very senior, lead engineer). 3-5x should be the maximum.

The saying of "oh if you don't give big bucks then you won't hire good talents" is only true to certain extends. Einstein doesn't figure out GR because he wants the cash from Nobel's prize, actually none of the winners probably achieve because of the money. Scientists won't stop inventing because they don't get the big bucks (most don't get big bucks anyway). Carmack would still pump out great code if he stays indie. As long as properly paid, pretty much every real talent would be happy and do whatever they love to do.

Giving disproportional pay to executives ONLY attract bad players and TBH some 500 are probably better NOT have an executive. It also creates sort of toxic culture everywhere that people are forced to chase big bucks because average pay is screwed.

triceratops
0 replies
5h13m

Pretty much this. If a potential leadership hire is willing to walk away solely because of the pay then they are clearly not the right hire. Of course they should be well-paid. But the job is about the job, not about the money.

If they aren't sufficiently excited by the mere idea of being in charge of the company's products, services, and future direction, doing a good job for customers, shareholders, and employees, then they should look for a different job.

passwordoops
0 replies
8h57m

Also, the only reasonable response to the saying of "oh if you don't give big bucks then you won't hire good talents" is "you mean the same talent that got you into this mess in the first place?"

ericd
0 replies
5h2m

My reply to this is that the potentially outsized rewards gives Carmack de facto leadership of his next project, because he’s the one paying the bills, and it lets him work on whatever he wants, in perpetuity, without ever having to consider money again. In a system where that’s not the case, then maybe his superior skills are enough to secure a leadership spot, or maybe not, because maybe he hasn’t invested enough in developing his political skills. This is generally a failing of engineers versus business people. Many of the engineer-led companies you see these days are because they were founders.

Simon_ORourke
3 replies
12h54m

Muilenberg and McNerney “had personal reasons to emphasize productivity and cost-cutting” because their compensation was tied to share performance. Together they took $209 million in total pay over seven years.

Absolutely stunning - those guys will walk away from this mess with more money than God and American aviation will take a backwards step that may take decades to fix if at all... fuming here.

passwordoops
2 replies
8h53m

Incentives matter. The extremist solution would be to ban executive compensation tied to stock price and some mechanism where every penny more that goes into buybacks/dividends than R&D/CapEx is taxed at 105%.

Oh, and make executive and BoDs personally and criminally liable for safety fiascos like the 737MAX. I bet you'll see culture change in a hurry under those circumstances

gigachadbro
1 replies
5h56m

Just make stock buy-backs illegal. It would streamline a lot of "focus" issues when it comes to financial "engineering" mindsets.

dh2022
0 replies
3h58m

Stock buy-backs are a tax efficient way to send distribute to shareholders. If you make them illegal then the only way left to distribute money to shareholders is via dividends. Want to make that illegal as well???

x0x0
0 replies
13h19m

Also, the 25% (over 4 years) they're bandying about as the offer includes (per [1]) a loss of a bonus with a 4% target, and that's an annual bonus. I don't understand how this person calculated, but one of the employees claims it's more like a 10% raise including the foregone bonus. Good deals don't need to be sold with lies.

[1] https://archive.is/qVO5D

hsdnd65
0 replies
13h43m

Its not about one or two guys its financial engineering culture that Wall St rewards. You can make bank without being an engineer anymore. 2008 meltdown has not changed the culture.

iancmceachern
107 replies
10h49m

Any Boeing engineers who may be looking for alternate paths, please know that I've known many great aerospace engineers who have made a pivot to medical devices very successfully and many of the best medical devices to come out in recent years are due to such. It seems very different but really it's very similar.

bibelo
71 replies
10h8m

or they could come here to Toulouse to work for Airbus ^^

echelon
49 replies
7h47m

Boeing engineers should leave and start their own company.

"American dynamism" is hot right now and there should be ample funding available. Lots of the old dinosaurs are being nipped at by nimble upstarts like Anduril.

Maken
27 replies
6h1m

I seriously wonder how long it would take for a team of engineers to produce a competitive commercial airplane, from planning to the first prototype, if they started right now. Also, is it viable to produce something like the A320 in low quantities when airlines need fleets in the hundreds?

toomuchtodo
15 replies
5h30m

Why? Have the government step in, nationalize Boeing, give the union a board seat, and keep shipping. The problem is Boeing management and their board enabling the train wreck; don't build from scratch, refactor.

charlie0
12 replies
5h9m

SpaceX has done such a phenomenal job rebuilding from scratch. How is it not obvious to you rebuilding airlines from scratch is also the best route?

toomuchtodo
11 replies
5h1m

Lottery tickets are not policy. SpaceX took decades to get to the success they realize today, having been founded in 2002, and it took a lot of luck to build a rocket shop from scratch. We must realize that companies are not built out of Legos, but ecosystems that require care, feeding, and are fragile systems.

jonhohle
9 replies
4h30m

PayPal, Tesla, SpaceX,… how many times does someone “win the lottery” before it’s not actually chance? Not saying anyone can repeat it, or a random IC could leave and succeed, but that space seems ripe for disruption. (Maybe not passenger planes, but cargo with less liability.)

toomuchtodo
5 replies
4h13m

If 90% of startups fail, why would you think winning wasn't mostly chance? Regardless of how many people work hard and grind, you can still fail (and most do, that's just life). Some are more lucky than others, and capital begets capital. Once you've "won" enough, it becomes much harder to lose, even if you make terrible forward decisions and run off the inertia of past wins (Twitter). Bezos built Amazon, but also has sunk somewhere between $10B and $20B into Blue Origin and it is still not terribly successful, for example, and demonstrates that even with resources and skill that success is potentially out of reach.

So, while I think the startup model is a fine way for investors to get exposure to an asset class that is the equivalent of 0DTE options, for the startup ecosystem to enable participants to play in the fiat that falls from those investment decisions, and perhaps some value to be generated, I would hazard that the model would not scale to meet the needs of the aerospace and defense marketplace at this time. All that is needed is skilled engineers and manufacturing practitioners to be enabled to do their best work, while keeping out of their way. Airbus demonstrates this, imho. They employ almost 150k workers, and successfully deliver products to customers that aren't fraught with manufacturing defects. They also have a book of work into the next decade, demonstrating customer confidence in the product and the org.

https://luisazhou.com/blog/startup-failure-statistics/

https://www.forkingpaths.co/p/billionaires-and-the-evolution...

https://escholarship.org/content/qt6668s4pz/qt6668s4pz.pdf

double0jimb0
2 replies
3h41m

Bezos doesn’t know how to build good hardware. Plenty of examples from Amazon. Then add Blue Origin to that track record.

toomuchtodo
1 replies
3h40m

Sure, but can you not hire people who are good at hardware with billions of dollars of investment? Or, is it culture and an intangible ability to procure and orchestrate great people doing great work that leads to success? Think in systems. If you have the resources, and the physics demonstrate it can be done, the system is not properly configured, no?

double0jimb0
0 replies
1h42m

can you not hire people who are good at hardware with billions of dollars of investment?

Clearly not in Bezos’s case.

There is no magic involved here, some people have the skill/experience to lead the design, build, and selling of innovative hardware, others don’t.

For example, for designing new rockets, one of the major things Musk innovated at SpaceX was the traditional aerospace design cycle. Instead of spending 5 years on countless analyses and few actual tests, like the incumbents did/do, SpaceX built and destructed as many prototypes as possible, learning rapidly and innovating. Musk knows what innovative design truly requires.

What did Bezos do? He hired a bunch of ex-Lockheed and Boeing engineers/leads (from an industry that for decades has not felt market-driven pressure to innovate), and those engineers/leads just kept doing things the old fashion way.

When the person in charge (Bezos) misses this detail, no amount of money or wishful thinking will fix this.

somenameforme
0 replies
2h50m

I don't entirely understand this logic. 99.9% of players that play competitive chess will never make master, but of course nobody would then say that becoming a chess master is just down to chance. What percent of startups are just bad ideas, outright cons, hair brained money-first schemes, or people entering into competitive domains (like eateries) without sufficient skill? IMO you're probably pushing 90% there!

To me the main thing that the failure of Blue Origin demonstrates is that the notion of "business" as some generalizable and all-applicable skill is nonsense. Bezos has done an amazing job of overseeing a digital marketplace, but that doesn't somehow mean he'd be amazing at overseeing an aerospace company. To me this just seems like it should be obvious.

The vision, talent, and other such things are just so radically different. For instance Musk picked up his first engine engineer [1] based on engines the guy was literally building in his garage. Bezos just staffed Blue Origin with a bunch of people from old space, and so it seems quite unsurprising that you just end up with another Boeing, but without the legacy hardware and political cronyism to use as crutches.

[1] - https://en.wikipedia.org/wiki/Tom_Mueller

WalterBright
0 replies
2h14m

Musk has had 3 huge successes - Paypal, Tesla, SpaceX. Having one such success might be luck. But when it's 3 times, dismissing it as luck is not very credible.

The same goes for Steve Jobs. 3 enormous successes.

And Bill Gates: 1. dominate 8 bit microcomputer software 2. pivot to 16 bit DOS. 3. pivot to 32 bit Windows. 4. pivot to internet. If you don't think that was a big deal, none of the other microcomputer software companies survived. Lotus, for example, muffed the pivot to 32 bits.

FireBeyond
1 replies
3h2m

Obligatory repeat of this detail, since you're talking about PayPal as a Musk success story:

Musk had very little to do with the success of PayPal. I'm not even talking in terms of the "Gwynne Shotwell is the real genius of SpaceX" naysayers. I'm talking:

Musk had an attempt at an online bank that was ... not going well.

Confinity had done what Musk couldn't - had built a prototype/MVP of PayPal. They'd already got it running. They had trademarks, everything. At this point, they'd created PayPal having nothing to do with Musk.

So Musk and his company architected a merger with Confinity. As a result of this merger, Musk was the largest shareholder, and was made the first CEO.

He remained CEO for only four MONTHS, most of which he spent trying to be stubborn about throwing away the entire prototype to rewrite it in Windows/IIS and Classic ASP (i.e. Visual Basic) because he didn't understand Solaris and Java.

The Board got so sick of this that a couple of days after his four month anniversary, when he'd just left for two weeks off on his honeymoon of all things, they fired him in his absence.

Think about how badly you have to fuck up as a CEO of a company that you're the major shareholder in that they fire you (no "concentrating on my family", no "exploring other opportunities"), AND do it while you're on your honeymoon.

Following that, Musk's "contribution" to PayPal was mostly collecting shareholder dividend checks.

I despise Musk. But I will give him credit for his contributions to Tesla and to SpaceX. PayPal, though? That's just another rewriting of history to support the Musk idolatry.

TheAmazingRace
0 replies
29m

He also has his long and obnoxious obsession with x.com.

This spanned back to PayPal and he had to try this crap again with the Twitter rebrand, that frankly hasn't worked all that well, because most within my circle still call it by the old name Twitter.

gosub100
0 replies
3h15m

he pissed off the far-left so nothing he has done or will do will ever redeem him. Start a profitable EV company that makes a durable, sexy-looking product? Nah doesn't count...but we need more regulation to save us from climate change!

mensetmanusman
0 replies
14m

If you think engineering is like a lottery, you may want to stop buying lottery tickets.

lotsofpulp
0 replies
2h39m

There is not one union, there are multiple employee unions, all fighting for their piece. Not only are there multiple unions, but even within a union, the older members usually vote against younger members.

It’s not a terrible idea, but also not a simple panacea to aligning interests in a business where payoffs happen decades in the future.

enriquec
0 replies
3h26m

nationalize? with the government that loses $500B to fraud and $3T to interest a year? What a horrible idea.

badpun
4 replies
5h42m

I remember reading that one engineer spent 6 years designing „ventilation for seats 40-80” on one of the larger Airbuses. It seems like the amount of design and engineering work required for a prototype of a complete aircraft (assuming you buy the engines) is just immense.

kevindamm
3 replies
5h31m

How much of that time was actual engineering-tradeoff decision-making and how much of that was working in a large corporation with abundant communication overhead?

seabird
1 replies
1h36m

For a safety critical system, the work documenting, explaining, testing, validating, etc. a decision outstrips the work it took to make the decision. It is that way for a very good reason. The problem with it requiring so much work and time isn't that there's BigCorp bureaucracy that needs disrupting, it's that there isn't a problem with the amount of work and time required.

kevindamm
0 replies
22m

I'm aware of that, but the proportion of overhead varies per company. Six months seems like a long time for a ventilation system, and the point being made in this thread is that the runway available for some spun-off group of former Boeing engineers would need to accommodate the very long schedules of the design stage.

I'm just curious how much inflation there is in those schedules because I'm sure it's not zero.

But you make a good point that these long runways are because the overarching tradeoff is one that prefers taking as long as it takes.

badpun
0 replies
2h40m

I'm betting a lot of that is reviews, approval, documentation, testing, re-testing etc - but it may be required for building a safe aircraft, and for getting it licenced to fly.

cptcobalt
2 replies
4h1m

Also, is it viable to produce something like the A320 in low quantities when airlines need fleets in the hundreds?

Bombardier thought so, and did so! They developed and introduced the C-series aircraft to compete with smaller 737s and A320/A319. After introduction, Boeing fucked them over so hard that they sold the aircraft program after introduction to Airbus for a token sum. Airbus now builds and sells the C-series as the A220.

https://en.wikipedia.org/wiki/CSeries_dumping_petition_by_Bo...

lainga
1 replies
3h26m

And it went right into the little shelf in many Canadians' heads of "Canadian companies destroyed by the USA". Mauldite en soit trestoute la lignye.

bornfreddy
0 replies
1h22m

Trying to translate your last sentence to English gives "Mauldite in itself very all the ligny". Trying to autocorrect it gives "Maudit soit toute la ligne" which apparently means "Damn the whole line". So... am I close? :D

wannacboatmovie
1 replies
2h23m

Designing an airplane and producing a prototype isn't terribly difficult and many thousands of companies have done this.

The tricky part is designing the massive manufacturing apparatus around it that can produce them in volume (ask Elon how easy building cars is), satisfying the varying demands of hundreds of different airlines, many from developing nations, helping them set up financing, supporting the design in the field for 30-50 years, AND turning a profit. Each widget produced has an MSRP of hundreds of millions of dollars.

Ask yourself why Lockheed permanently exited the commercial aircraft business 40 years ago, despite having what was regarded as the most technologically advanced design of the era, ahead of its time. Douglas went bankrupt and got bought out, Convair and everyone else failed and closed up shop.

You can't throw some engineers - they could be the smartest on the planet - into rented office space and become the next airplane company. There's more to it than designing the next WiFi-enabled food processor and slapping it together in Shenzhen.

Corrado
0 replies
1h2m

Actually, thinking about Tesla is appropriate. No one really thought starting a new automotive manufacturer from scratch was possible, but Tesla did it. Yes, it's very hard and you'll probably fail, but if you do things different you might actually have a chance. The reasons all the old aircraft companies failed is probably the same reason Boeing is struggling. Don't copy what they've done in the past, make your own way. Yes, I know that building aircraft is a much higher hill to climb, but I think it might be worth it.

They could also join some of the small aircraft startups that are trying to gain a foothold. Maybe a cadre of experienced aircraft engineers would help them raise money and get a product to market faster.

SoftTalker
0 replies
2h29m

I seriously wonder how long it would take for a team of engineers to produce a competitive commercial airplane.

About 20 years for a fully-certified new commercial airliner design. They could have experimental prototypes flying much sooner of course. Even in China, their state-owned effort to develop a new narrow-body airliner took about 15 years and that's very likely with the CCP greasing the skids for them as much as they could. They are still not certified in Europe or North America.

And some of the problems we've seen with Boeing have nothing to do with engineering, but problems with subcontractors, materials, and assembly.

fragmede
19 replies
7h41m

Have you seen how much lambasting Boom Aerospace gets every time they come up? Starting a new aerospace company isn't for the faint of heart!

GuB-42
14 replies
7h3m

Well, Boom is not any aerospace company, they want to make supersonic planes.

Supersonic travel is expensive and environmentally unfriendly, and it will probably always be, because it requires more energy, because physics. All that for the minor advantage of saving a couple of hours on select flights. What it means is that it is a privilege for the wealthy (because it is expensive for what you get), at the expense of everyone else (because of the environment). So of course it is going to be unpopular, except to the wealthy in question.

It doesn't mean Boom can't be successful because the public opinion is negative, if the rich can pay. I am still not convinced though, after all, Concorde didn't fail technically (and it still flew after that one accident), it failed commercially. Boom is not taking the easy path here, since it is a technically hard problem with a dubious market.

meiraleal
6 replies
6h44m

Computers used to be very, very expensive. Residential telephone lines were acquired through mortgage a couple decades ago in my country so being expensive now doesn't mean expensive forever.

adgjlsfhk1
3 replies
6h31m

unlike with computers, there's some pretty obvious barriers that limit the efficiency of supersonic airplanes. your volume has a strict lower bound from the size of passengers and luggage, your engines have a lower bound since there's only so much air you can push against, and your drag has a lower bound of a perfectly smooth aerofoil that produces lift and can fit the people and luggage. Even if you take the most optimistic assumptions that didn't violate physics, your fuel burn isn't going to be reasonable.

thehappypm
2 replies
5h46m

What if you leave the atmosphere?

adgjlsfhk1
1 replies
5h11m

That's a thing called a rocket. Those have different constraints (e.g. energy proportional to mgh to get out of the atmosphere, dramatically less efficient engines since you now need to carry your oxidizer, etc. It seems vaguely plausible that for very long distances (e.g. New York to China), a rocket could be more efficient than an airplane, but it does seem pretty unlikely that a rocket can be as efficient as a normal airplane.

krisoft
0 replies
3h0m

Plus the added benefit of looking exactly like a ballistic missile attack on radar. :D Hope nobody with a twitchy trigger finger ever mistakes your flight for one! And also hope that no enemy will try to disguise their incapacitating strike as a scheduled flight.

vundercind
0 replies
6h25m

What’s expensive, largely, is the fuel to shove something through the air faster than the speed of sound. Short of sci-fi frictionless materials cheap enough to cover an aircraft, I don’t think you’re going to see a big breakthrough there.

bluGill
0 replies
6h19m

No, but there are nothing I'm aware of changing the economics. Electronics were coming down in price for decades before computers reached the average house (of course when they reach the average house is debatable - on one extreme the Atari 2600 had a CPU, on the other there are still remote villages that are just adopting phones )

beaned
4 replies
6h52m

I think that take is a little cynical.

If it's only for the rich then the prices will be high. Meaning the capitalist mechanism of resource distribution will be even higher (more paid by the rich received as income by the non-rich). It will also take demand from existing airlines making fares lighter for everyone else. It also employs people. It also drives technology forward. And ultimately it does let people travel in less time, and why wouldn't we want that? To some extent emissions are not as bad as you'd think since they are being emitted over less time in the course of a shorter journey. Success in this category will also drive competition in every metric and work to bring cleaner, shorter flights to everyone over time.

There is a lot to love about the idea of supersonic flight.

tmhrtly
1 replies
6h37m

Not fully convinced by the "will make fares lighter for everyone else" argument. The economics of planes are heavily weighted towards the passengers up front - business & premium economy make more profit per sqft for the airline than seats at the back. So I'd imagine that a reduction in demand for premium seats could actually increase prices.

FireBeyond
0 replies
2h54m

The flipside of this is that the passengers in the back, while not as profitable in the "$/sqft" equation, are what merit the airline buying a 777-300 or A350.

If all your focus is on those premium passengers, then you don't need as big an aircraft, and you end up with things beginning to approach JSX's (https://www.jsx.com/home/search) mode of operations.

nemetroid
0 replies
6h33m

To some extent emissions are not as bad as you'd think since they are being emitted over less time in the course of a shorter journey.

Emissions are usually compared in amounts per passenger-kilometer.

AlexandrB
0 replies
6h40m

It will also take demand from existing airlines making fares lighter for everyone else.

That's not how airline economics work. The first class passengers (the ones who could afford to leave for supersonic) subsidize the economy seats[1]. If they left you would probably see worse prices, worse amenities or both.

There are airlines that don't have business or first class seats (e.g. Spirit), and they're generally a terrible experience.

[1] https://www.wsj.com/articles/first-class-vs-coach-a-game-of-...

myrandomcomment
1 replies
2h47m

As I am currently sitting on a flight from Tokyo to SFO I would greatly appreciate the flight taking half the time. Boom should be as efficient current aircraft. They will operate at 60K feet where the drag is much less and fly for less time. Their engines are being designed to run on 80% biofuels. But let's see how it turns out in the end.

GuB-42
0 replies
1h57m

Are you travelling first class?

If you are not, then you are probably not making the right comparison. Supersonic travel will absolutely not be for those who are flying economy right now and complaining about reclining, legroom, and crying babies. The kind of things that make flights feel very long, and yet, that's how most people fly despite much superior alternatives, because it is cheaper.

Judging by how much it cost to fly on Concorde, it is reasonable to assume that a supersonic ticket will be equivalent in price to first class, or at least a very good business class.

It means a seat that can recline 180°, good enough to sleep on, an internet connection suitable for remote work, as I expect it to become standard in the near future, a decent meal and some privacy. In these conditions, saving a few hours may not be as desirable as it is in economy class. Knowing that in order to shorten your trip, you will be sacrificing some of that comfort, or pay even more, maybe getting close to private jet territory.

WarOnPrivacy
1 replies
5h53m

much lambasting Boom Aerospace gets

If Boom wants respect, they should merge with Sergey Brin's LTA Research.

Supersonic airships are the future's future.

orbisvicis
0 replies
4h14m

Supersonic dirigibles? Isn't that an oxymoron?

tjpnz
0 replies
2h37m

They're an aerospace company? It seems I've been confusing them for a lobby group trying to remove urban noise regulations.

sealeck
0 replies
7h30m

I agree but not because "boohoo people aren't nice enough to us" – because it's a tough market to break into with (justifiably) high regulatory scrutiny, high R&D costs and few investors who know what they are doing.

It's very natural that any company be subject to scrutiny – this doesn't mean that you shouldn't set up a company or that the environment for setting up a company isn't favourable.

zooq_ai
0 replies
4h13m

Engineers always over value their ability to start companies on their own. There is a lot to building a successful company and needs irrationality and risk-taking (not exactly traits of a median engineer).

Engineers like Musk, Zuck, Gates are outliers than the norm. If you are a Boeing Engineer and had above average risk-appetite, you wouldn't be stuck in Boeing for 10+ years.

benhurmarcel
13 replies
6h21m

That's not a great plan if what they're looking for is a higher salary though. Engineering in western Europe doesn't pay nearly as well as in the US.

mricordeau
11 replies
6h4m

Yes but Toulouse is way cheaper than any Tier 1 city in the US and you have to include insurance/health, school cost in the US (I'm from Toulouse and living in the US for more than 10 years). If you make 250k/year in Tier 1 city in the US it's probably as good as making 80k/year in Toulouse.

Rinzler89
7 replies
5h26m

Don't Boeing engineers also get insurance and 401k from their employer?

Plus, they'd have to learn french also. France is not very accommodating to non French speaking foreigners. Trying to get around in life with just English there outside of Paris is not easy.

kpw94
3 replies
2h51m

France is not very accommodating to non French speaking foreigners. Trying to get around in life with just English there outside of Paris is not easy.

I don't really get this kind of comments... Usually people also say the same thing when visiting Japan. "This restaurant only has menu in Japanese and staff only speaking Japanese!!".

That's true a bit everywhere in the world, isn't it? In the US, apart from places with say huge Spanish speaking presence, you better interact in English.

Try "getting around in life" using only say French, or Portuguese, or Japanese in a random US city like Portland, NYC, or Chicago.

retzkek
0 replies
1h30m

I didn't sense any judgement there, just a statement of fact. Learning a new language as an adult is doable, but not trivial, so it's certainly a factor in making a decision to relocate to another country for a job.

dataflow
0 replies
2h15m

That's true a bit everywhere in the world, isn't it?

No it's not, western Europe for example has a bunch of countries where English is almost as good as native. But obviously that's not the common case across the world, and like you say there's nothing wrong with expecting people to know the local language.

Rinzler89
0 replies
1h56m

Not really, the world isn't either black or white but various shades of gray. Everything North of Benelux is a lot friendlier and open to speaking English and doing things in English outside of capitals, compared to places like France where not speaking it gives you a severe handicap in life and career.

hobs
0 replies
4h22m

That's funny you say that because my experience of France is that everyone outside of Paris seems to hate the Parisians more than me, an American.

benhurmarcel
0 replies
5h17m

There are quite a few employees in Toulouse that don't speak French, the company is very international. That being said I agree that daily life is much easier if you speak at least a little bit.

FireBeyond
0 replies
3h9m

My experience, although 20ish years ago now, was that France was very accommodating to people who were trying to make an effort to speak French, however badly, and would help correct pronunciations and other little errors, whereas their patience for foreigners who thought that the locals English would get better if they just spoke more loudly and slowly was thin.

smallnamespace
0 replies
4h11m

But if I save money in the US I can decide to spend it anywhere else in the world later, including places that are much cheaper than Toulouse.

If I make money in Toulouse then I had better really love Europe, since I will have limited resources to relocate elsewhere if I ever change my mind.

Tl;dr one advantage of getting paid in money over services is that money is much more portable.

kfajdsl
0 replies
41m

- Engineering jobs in the US tend to come with health insurance benefits

- There are several state programs in the US that make attending an in-state public university very affordable. For example, in GA I attended university for $0 in tuition (only paying for room and board + a couple hundred bucks a semester on bs “fees”). The requirement for that grant is getting a 3.0 or higher high school GPA.

- Not sure how cheap Toulouse is, but at least in the US you’re probably better off making 200k+ in HCOL than 100k in LCOL. At that level of income, you don’t have to spend much of your income on essentials even in an extremely HCOL area like SF ($3000 a month gets you a nice apartment).

jdminhbg
0 replies
2h9m

If you make 250k/year in Tier 1 city in the US it's probably as good as making 80k/year in Toulouse.

If you are making $250k/year, you are already getting health insurance, and even if you weren't, it doesn't cost $170k.

diggan
0 replies
6h0m

True, as long as you don't consider cost of living, quality of life, work/life balance and life expectancy.

But judging by the current policies and laws (or lack of them) in the US, seemingly "high salary" goes above all of those things for most people.

fecal_henge
4 replies
4h35m

They have nothing Tolouse right now.

Avshalom
3 replies
3h23m

That feels like too lousy of a pun to be making when we're talking about peoples lives here.

fecal_henge
1 replies
2h35m

Sorry for boeing so insensitive.

atlantic
0 replies
2h26m

Good puns. Just out of curiosity, is your name a synonym for sh*tpost?

gaius_baltar
0 replies
1h44m

Jokes on Boeing are ok, they are just people with some loose screws.

extraduder_ire
1 replies
6h55m

Do they do any applicable work down in Alabama, or is that just manufacturing?

coderjames
0 replies
6h3m

That's who went on strike. "Tens of thousands of machinists voted Thursday to reject a proposed deal between the company and the union." This was the IAW manufacturing folks rejecting a contract, not the SPEEA engineering folks.

jandrese
21 replies
4h20m

On one hand I can't blame any engineer that wants to flee, but on the other Boeing really can't afford any more brain drain. We are already seeing the results of years of forcing experienced but well paid engineers out and outsourcing their jobs. Planes literally falling out of the sky, but some nice fat executive bonuses.

MPSFounder
8 replies
3h1m

Anecdotal, but out of my graduating class in chemical engineering from a University in Seattle, the top 20 students went into tech and finance. The worst performing students (by academic metrics) went to Boeing. Over time, I expect decisions to be made by engineers which are not stand outs. Coupled with the MBA trainwreck prioritizing profits and cost cutting, I expect Boeing has a very rough patch ahead.

dh2022
4 replies
1h21m

Top 20 students in chemical engineering went into tech and finance.... two professions that at the first sight have nothing in common with chemical engineering... Tech and finance must really be looking for a lot of employees....

boc
2 replies
1h13m

Or they just pay a lot more.

If Boeing was paying $500K+ TC for engineers in their early/mid career, you'd see a lot more expertise enter the field. Instead you basically have to go into tech or PE/IB to see that type of compensation fresh out of school. Especially when students are taking on hundreds of thousands in debt, the payback period becomes really important when considering career paths.

dh2022
1 replies
1h10m

I completely understand graduates would choose higher TC from tech/finance vs TC from Boeing. What I do not understand is why tech/finance companies would want to hire chemical engineering graduates.....

I know a few people who changed careers from biology to finance - but that was only after going back to school and getting some business degree....

darod
0 replies
31m

because they solve a lot of math problems very well.

protastus
0 replies
44m

No doubt, Big Tech prints money and absorbs all available talent. Boeing's troubles are surely compounded by having all the best new talent hired away from them, because Big Tech pays much better.

Der_Einzige
2 replies
1h51m

I always wonder who these folks who graduate with excellent STEM degrees are who can't land a job.

I had a similar experience with my graduating class in undergrad computer science at a no-name state university. Of the graduating class (significantly smaller than when we started), I don't know of a single person who couldn't find some kind of gainful tech related employment - including the few folks who somehow could not code! by the end of our program. My experience is circa 2014, so only shortly after the great recession.

Where are these people who just can't get any kind of work with real CS degrees? Even the many hardcore cheaters I know of found ways into the FAANG (some have been promoted several times now too!)

spratzt
1 replies
1h16m

I suggest you come over to the UK.

I know several guys with postgraduate STEM degrees and 10 years of development experience who can’t even get interviews.

It’s very bad here.

ghaff
0 replies
14m

Things are a bit sketchy at the moment. Had a recent get-together including a former co-worker who was an obvious hire-this-person. They got hit in a layoff and they're still essentially out of work after a year.

deepsun
6 replies
3h26m

That is a feature of capitalism and effective market. If a company falls a little bit below competition -- market forces it do dive even deeper, die quicker.

I'm not saying it's good or bad. I've seen communism, and it's much worse to help failing companies -- they tend to fail even more instead of improving.

The problem now is that international market is not really fair, trade treaties help too little.

noisy_boy
2 replies
2h30m

If a company falls a little bit below competition -- market forces it do dive even deeper, die quicker.

Feature of nature too, the jungle forces the weak to die quicker.

One more argument for companies != people: we will be a lot more ok for this to happen to companies vs it happening to people.

salawat
0 replies
2h12m

Solution: for e supremacy of compliance with regulations over fiscal performance. You have to be able to check all of the boxes reliably before we can talk about innovating or optimizing.

mensetmanusman
0 replies
17m

Companies = people + assets + organizing structure

weaksauce
1 replies
2h2m

boeing isn’t a company the us government will let fail. it’s too important to have as a domestic ability.

UberFly
0 replies
1h39m

This is true and I wonder if it's going to put them even more into a zombie state of existence. Their bad business practices will keep getting bailed out and they'll never really improve until a better company comes along.

LargeWu
0 replies
8m

The problem is that the "competition" aspect assumes low barriers to entry. We're not talking about the corner diner or a bank or even a large insurance company. There's very little substitute for what Boeing does, and the barriers to entry for new competition are (quite literally?) astronomical. Boeing can't just be replaced; even to allow it to fail would be a major problem for the western economy.

wetpaws
1 replies
3h57m

Why it should be the engineers problem?

onepointsixC
0 replies
3h34m

It isn’t. But Boeing failing and turning the commercial airline market into an Airbus monopoly is bad.

gosub100
1 replies
3h21m

Pivoting to a remote-first culture would be a great start. Tons of talented engineers angry about RTO to draw from.

wannacboatmovie
0 replies
1h26m

Why would a manufacturing company - who is clearly having manufacturing problems - pivot to a remote-first culture? What problem would that solve? It's hard to build airplanes in your driveway, but I can't say that I've tried.

That door-blowing-off thing wasn't a design issue. "It's hard to forget to install the bolts when you're working from home" is a bit of a logical fallacy.

infamouscow
0 replies
20m

There is literally nothing actually preventing Boeing from:

1. Firing 100% of management between CEO and lowest level supervisors that make things happen. All of middle management should go.

2. Promote supervisors into middle management.

3. Promote ground level employees into supervisor roles.

4. When human problems happen (and they will), spare no expense with resources and training. Remember, the reason for firing management is because they had the interpersonal talent, but fundamentally lack aeronautical talent. Interpersonal talent is of minimal value at Boeing.

Balgair
5 replies
5h34m

I'll echo this and have done something of this path. It's a very similar field surprisingly. Quite rewarding too. The timelines for products are also about the same (years-decade).

The one tip is to not bother applying to Medtronic. They don't actually hire anything outside of interns. All the job postings are for internal roles (but required by federal law to be ... blah blah blah). Suffice to say, don't bother.

eddd-ddde
4 replies
1h51m

I'm curious. So this company basically only hires newbies and trains them from zero to any role they might need? That's kinda cool.

behringer
2 replies
1h29m

Except for the worker that will see stagnant wages.

mbrameld
0 replies
37m

Couldn't they change employers after leveling up their skills?

ghaff
0 replies
18m

I suppose the theory is that people won't see significant pay increases if they stay with the same company (but also presumably that if everyone leaves after training, the company will just stop training workers).

mensetmanusman
0 replies
18m

It’s not true, I have many colleagues that have made lateral movements into Medtronic (and out… and back).

SecretDreams
2 replies
6h38m

Conversely, I've seen a lot pivot from aero to auto and flounder. They are kind of opposite industries in terms of pacing and design compromises, as well as the fact that most of a car has to plasticize in crash events which is not a primary consideration in aero.

Zigurd
1 replies
4h45m

Counterexample: Mulally

SecretDreams
0 replies
4h41m

I was moreso referring to ICs, but fair point.

ajross
1 replies
3h33m

Any Boeing engineers who may be looking for alternate paths

The strike in question is the machinists' union, engineers aren't involved.

carabiner
0 replies
2h13m

This is correct and I'm not sure why it's downvoted. The engineers at Boeing are still going into the office and not on strike.

patmorgan23
0 replies
2h3m

I can see how they'd be similar. They both have lots of Real-time, must work, critical type systems.

RSHEPP
0 replies
4h50m

Consider valves or pressure regulators also! Lots of shared fundamentals with the flow of gases!

Havoc
41 replies
6h11m

Just watched a documentary on Boeing an hour ago. It’s incredible that they avoided criminal prosecution despite two planes crashing, door popping out and then paperwork somehow going AWOL. Also Boeing knew about wiring issues since 2022 and the FAA only issues an inspection order in ‘24.

Gonna try and avoid Boeings of all types going forward

diggan
26 replies
6h6m

Once you start thinking of Boeing as a government agency with less oversight that poses as a for-profit corporation, a lot of things start to make more sense. Including what you wrote about.

aners_xyz
22 replies
6h4m

I’m not really sure this framing makes any sense if I’m being honest.

diggan
21 replies
6h1m

What private corporation could make mistakes where people lose their lives on the same scale while still operating as normal afterwards?

schmidtleonard
11 replies
5h51m

People dying due to profit-motivated corporate negligence and the corporations in question getting a slap on the wrist? Must be a day ending in "y."

tbrownaw
6 replies
4h47m

People dying due to profit-motivated corporate negligence and the corporations in question getting a slap on the wrist?

As opposed to what, people dying because government workers were negligent or on a power trip and nobody getting even that much accountability?

ryandrake
5 replies
4h39m

You know, it's possible that both are bad.

The root problem is that the rich and powerful[1] face no consequences for wrongdoing. It's endemic to every part of life, and nothing gets done about it because the rich and powerful make the rules. It really doesn't matter if they happen to be aligned with "Team Corporation" or "Team Government". They are equally unaccountable to justice.

1: Rich and Powerful are both the exact same thing since money is frictionlessly convertible to power and vice versa.

tbrownaw
4 replies
4h21m

the rich and powerful[1] face no consequences for wrongdoing.

Bernie Madoff. Jeff Epstein & Ghislane Maxwell. Sam Bankman-Fried. Elizabeth Holmes. Harvey Weinstein.

I get that sometimes you'll see things like Hunter Biden's tax issues being allowed to pass the statute of limitations, but a universal "the rich never face consequences" is just plain false.

slt2021
1 replies
3h9m

can you list how many financiers were jailed after 2008 GFC ?

can you find any?

can you list how many people were jailed for engineering SARS-CoV?

heck, government hasn't even acknowledge that it was engineered and still pushes fairy tale about bat infecting pangolin who infected a chain of few other animals and then ended up in wet market - but no signs of viruses in 1000 miles between caves and wet market were ever found

hobs
0 replies
2h26m

Well, disregarding the bankers - generally we require evidence to be presented in a court of law and then those findings to be found true for people to go to jail - repeating stuff you read on the internet doesn't really rise to that level.

ryandrake
0 replies
4h15m

You can always cherry pick a few counter examples to any argument without invalidating the typical case.

lucianbr
0 replies
2h32m

If you approach it with mathemathical universality, yes, it is false.

But what about "95% of the time 95% of the rich do not face consequences"? It's still a huge problem, and probably what the commenter meant.

FredPret
3 replies
5h44m

There must be a billion corporations out there. What % can kill customers on the scale of Boeing and get away with it?

A tiny number.

And for the ones that can, it’s likely that there are strong ties to the same government that’s supposed to prosecute them. For Boeing, there are significant financial and contractual ties to the US government.

Having a steady stream of ultra-reliable government cash surely reminds you of a state department?

consteval
0 replies
5h0m

What % can kill customers on the scale of Boeing and get away with it?

100% of the ones that are at, or near, the top of their domain. As the US and other developed nations move more towards Oligarchy, this describes a vast majority of the economy.

If you pick a domain, any domain, there's typically < 5 companies that represent almost 100% of the value in that domain. There're some exceptions, like tech, but not many.

Losing even just one of those companies therefore has catastrophic economic effects. So you can't lose them, or even really hurt their profit much, because what's good for them is good for you (you being the US economy).

Bayer Pharmaceutical famously gave thousands of people HIV, knowingly, instead of clearing their inventory. Who knows how many of those people went on to unknowingly spread HIV to their future children or partners. We literally can't measure how many people died of AIDS because of them.

But they're one of the most important pharmaceuticals out there. And we need drugs.

Zigurd
0 replies
4h51m

Debatable. For all the complaints about regulation, there's lead in your cinnamon and filth in your deli meats. Listeriosis kills.

The regulators are under-resourced, if anything.

jfarina
1 replies
5h54m

Boeing. It's literally the post.

echoangle
0 replies
5h6m

The question obviously was meant as "except Boeing".

Al-Khwarizmi
1 replies
5h29m

Monsanto, Nestlé, J&J, the whole tobacco industry, the companies that made asbestos, talidomide, etc.

frmersdog
0 replies
4h5m

So, yes. All have deep ties with government through their regulatory apparatus (some would characterize this as "capture"). Also of note: people might be confused by tobacco's inclusion here if they don't realize that North America was essentially settled as a tobacco agribusiness (Spanish gold-hunting and death-trap religious colonies notwithstanding). Tobacco's role in shaping America's socioeconomic nature is massively underrated.

tbrownaw
0 replies
5h26m

Maybe do a search for "most dangerous jobs"?

piva00
0 replies
5h49m

Probably all of the oil industry?

dimal
0 replies
1h27m

Are you joking? Once a corporation gets large enough, the worst they can get is a fine, which is usually a fraction of their income. This is how the system works.

For example, depending on how you calculate it, Merck killed between 3,000 and 500,000 people with Vioxx, and they knew the risks prior to releasing it. They got a fine. And now, the company is now doing just fine. No one was individually prosecuted.

If you have a corporate charter and billions of dollars, you have a license to kill.

TehCorwiz
0 replies
5h24m

BP and Exxon have killed entire ecosystems including people. They lied for decades about the environmental effects of fossil fuels. Air pollution alone has conservatively killed hundreds of thousands of people. While you can't blame them for air pollution existing, you can blame them for intentionally suppressing the ability of people to mitigate it and improve air quality.

EDIT: accidentally a word.

jdright
2 replies
5h58m

This is just malicious. Boing is the exemplar capitalist enterprise, traded, where the sole objective is profit above everything else, including safety and following regulations obligations, something that they can do because they bought politicians (lobby aka legal corruption).

MOARDONGZPLZ
1 replies
5h34m

Their stock is down 55% in the last five years. How is that an exemplar of profit making capitalism?

ryandrake
0 replies
4h31m

How is that an exemplar of profit making capitalism?

They still exist and are regularly pumping out millionaires from their executive suites.

It's helpful to think about corporate America as a gigantic factory, but instead of a factory that makes gadgets or appliances, it's a factory that makes millionaires. On one end of the factory, the raw materials come in: Able-bodied workers, money from customers, and capital from investors. On the other end of the factory, the finished product--millionaire executives--fly out on golden parachutes into retirement. In the back, the waste from the manufacturing process gets discarded: The broken lives and bodies of all the rank-and-file workers, and all the negative societal and environmental externalities that were also destroyed in the process.

Profit for shareholders and [temporary, conditional] employment for workers are mere side effects of the process, and they'd do away with the second one if they had the technology to.

mnau
8 replies
5h40m

They hired the lead prosecutor that cut them a deal. To be precise a Boeing criminal defence firma hired her after she left the Justice department.

It's the American way.

marcusverus
7 replies
4h32m

Boeing’s lead corporate criminal defense law firm is Kirkland & Ellis. Cox, the lead prosecutor in the Boeing case, left the Justice Department earlier this year. And last month she joined Kirkland & Ellis as a partner in its Dallas office.

It looks like the firm bought the prosecutor, resulting in a win for its client. How could this be prevented, though? Politicians can't be trusted with oversight like this--they would use it to punish prosecutors and would inevitably further politicize the Justice Dept.

https://www.corporatecrimereporter.com/news/200/lead-boeing-...

evilos
5 replies
3h53m

Can't a law be passed that states prosecutors legally cannot consult or assist in cases or for defendants they were involved with during their tenure as a prosecutor for X years after they leave their position?

triceratops
1 replies
3h30m

The allegation is the prosecutor got a cushy gig at the law firm, not that they subsequently worked on the case after switching sides.

evilos
0 replies
1h4m

Ah so the implication is not that the prosecutor gave them inside info on the government's case's weaknesses but the prosecutor intentionally played the case suboptimally in hopes of being paid after the fact? If this was done with prior assurance that sounds already illegal no? If it was done simply on the hopes of securing "payment" afterwards with no prior deal then that seems like a large risk for the prosecutor to take.

dmix
1 replies
2h41m

Politicians don't have much incentive to do this since plenty of them get cushy jobs at bigco benefactors of the spending bills they voted on. Trying to target prosecutors would cast a eye on themselves.

It's like trying to separate church and state in England back in 1600-1700s.

lukan
0 replies
1h28m

"Politicians don't have much incentive to do this since plenty of them get cushy jobs at bigco benefactors of the spending bills they voted on."

It is the same problem - bribery/corruption but hard to proof and not much interest to investigate.

para_parolu
0 replies
3h32m

Then some friend of Boeing CEO would invest in prosecutor's startup

markus_zhang
0 replies
3h29m

If the whole legal system protects and even encourages such actions, maybe...wait an UPS guy is knocking the door, strange I don't remember ordering anything...hold on.

zooq_ai
0 replies
4h11m

You can make a documentary about any person or any company on this planet and make them look evil with the benefit of hindsight.

mensetmanusman
0 replies
11m

Didn’t the door of the flight land on the lawn of one of the universe’s lawyers suing them?

kjkjadksj
0 replies
3h23m

You get a lot of leeway when you are a large defense contractor and one of the last American aviation companies.

jmyeet
0 replies
4h57m

Not defending Boeing here. They have lost engineering focus as everything has become financialized in the search for ever-higher profits.

But there's also a recency bias here, as in fatal defects aren't new. Example: there were several fatal accidents with the 737 rudder in the 1990s [1].

One valid area of criticism is how the FAA has essentially allowed Boeing to self-certify to safety since ~2009 [2].

[1]: https://en.wikipedia.org/wiki/Boeing_737_rudder_issues

[2]: https://www.seattletimes.com/opinion/letters-to-the-editor/b...

__xor_eax_eax
0 replies
1h42m

Sadly, this will kill the US. We have no other aerospace manufacturer at that scale.

Unless you're not in the US, you want Boeing to get better, not fail (or root for a competitor, but I see no such thing)

forrestthewoods
17 replies
13h59m

It should be illegal* to post articles about strikes without including details on current deal, current offer, and union demands. All these pieces try to influence your opinion without providing any details! Maybe the union demands are reasonable, or maybe they're not. Give me specifics please!

*obvious hyperbole

calcifer
9 replies
13h55m

Maybe the union demands are reasonable, or maybe they're not. Give me specifics please!

Would that really help, though? Do you have the industry know-how, expertise, and internal knowledge to assess whether the offer is reasonable or not?

ikawe
3 replies
13h49m

I’m not an expert, but I’d like to know more. To me it’s interesting to know what the workers are concerned about specifically.

Otherwise it just reads like “lots of people are mad”. Well about what exactly?

It’s fine for a headline, but not very impressive reporting.

calcifer
1 replies
13h45m

That much I agree with. I'd like to know more too, but I won't pretend it would be because I'd like to judge it for reasonableness :)

zo1
0 replies
13h5m

That's the whole point of journalism. Right now, they gave neither the facts that the GP wanted, nor the context and understanding that you may need to be comfortable enough to judge it's reasonableness within the context of the strike/industry/company.

It's like a BS meeting by a BS manager that he holds for "stakeholders" where he just throws a bunch of facts on the table, and then proceeds to do nothing to guide the decision making process. And then during the whole meeting we all run around like headless chickens trying to find out more info and context, all half-arguing with one another because we all have different pieces of the puzzle.

</rant> Sorry had one of these just yesterday, and no matter how delicately I phrased or insinuated-it the person with the most info/context just did not offer up guidance and direction (ironically it's the same person that organized the meeting). Then at the end they gave praise to all those that contributed and then said they'll schedule another meeting to discuss the outcomes because we "couldn't reach consensus" or "decide on the next course of action".

anon7725
0 replies
12h35m

This union last initiated a strike in 2008 just as the financial crisis hit. They were in a weak position and didn’t get a good deal.

In 2009 Boeing decided to build the 787 in a non-union factory in SC instead of in Washington.

A few years later (can’t recall exactly - it was around 10 years ago), Boeing cut the pensions for new workers. The union was not in a strike position at the time.

In the last 5 years the company has pushed forward with the 737 Max program with all of its problems that you’ve likely heard of.

There was a leadership crisis and a new CEO is starting. They’ve made a big show about recommitting to Washington.

The contract that was voted on this week included a headline raise of 25% over 4 years, but buried in the details was the elimination of a 4% annual bonus.

Sounds like there is a generation’s worth of grievance to sort out, and this being a fraught moment for the company, the union has decided to press their advantage. More power to them. This could have been avoided if the company leadership had a long-term approach to management and employee relations.

forrestthewoods
2 replies
13h18m

Does it matter? These puff pieces exist solely to influence public opinion. That's true whether I have internal knowledge or not!

We live in an era where a lot of media types actively push pro-unionization ideas. It'd be helpful to present facts and details alongside union efforts! I personally assume that if details are withheld it's because they'd be damaging to their argument. YMMV.

immibis
0 replies
10h33m

This is true but the media is usually anti-union, because, you know, shareholders vote for who has editorial control.

OKRainbowKid
0 replies
7h47m

I hope you are this critical not only when an article goes against your own personal stance.

Incipient
1 replies
13h34m

That's an interesting point to make. If you can't make a informed opinion, should you have an opinion at all? What defines informed? How much information and experience does one need?

I don't think that entirely detracts from the general premise of wanting to be given more information however.

dotancohen
0 replies
12h48m

The recent past had clearly shown that the most vocal about their opinions are very often the least informed.

bsder
3 replies
13h41m

It should be illegal to post articles about strikes without including details on current deal, current offer, and union demands.

Getting 96% to vote to go on strike pretty much says that company offer is complete garbage. You probably can't get 96 out of 100 people to agree that the sky is blue.

And while I wish that things were a bit more fact heavy, sometimes the sticking point is something really arcane and non-obvious to outsiders (on-call requirements, for example).

obscuretone
1 replies
12h6m

The sky is in fact black at the moment.

Bit of a green hue towards downtown, regional bank creating the Aurora Desjardins

hamilyon2
0 replies
11h18m

Black? I am pretty sure it is some shade of grey.

AnthonyMouse
0 replies
12h12m

Getting 96% to vote to go on strike pretty much says that company offer is complete garbage. You probably can't get 96 out of 100 people to agree that the sky is blue.

People can vote the same way without agreeing with each other. Some of them could think it's a bad offer, the others could think the company has bankruptcy immunity because the government will bail them out so they might as well hold out for more even when the company makes a reasonable offer.

And while I wish that things were a bit more fact heavy, sometimes the sticking point is something really arcane and non-obvious to outsiders (on-call requirements, for example).

This isn't an excuse for not providing the explanation. What should happen in this case is that you get a longer article because there is more context to unpack.

ikawe
1 replies
13h52m

I’m going to assume the “illegal” is hyperbole, but yes I agree.

Another pet peeve of mine is omitting the time frame for wage increases. A 25% raise today is not the same thing as a 25% raise over the course of 4 years.

anon7725
0 replies
12h46m

A 25% raise today is not the same thing as a 25% raise over the course of 4 years.

And is also different than 25% over 4 years while also removing a 4% per year annual bonus.

jjulius
0 replies
6h5m

The specifics are literally in the article.

hungie
12 replies
13h20m

Good. Jim McNerney absolutely shredded the culture, and eroded decades of good will. It's far past time workers for Boeing pressed for things to go back to being an engineering and manufacturing led company.

Striking is one way to get closer to that, good on them.

M95D
7 replies
7h4m

Ever heard of a stock-price led company that "went back to being an engineering and manufacturing led company"?

fragmede
3 replies
6h50m

Depends on how deeply you know the story of GE, which was an engineering company, became a financial services company, and now is back to engineering.

triceratops
0 replies
5h23m

I think GP meant went back successfully. Whether today's GE will ultimately be successful remains to be seen.

paxys
0 replies
3h21m

and now is back to engineering

There is no company called GE anymore. Most of its engineering units were sold off to other companies which just license its brand. GE appliances, for example, are actually Haier. GE Lighting was sold to a home automation startup.

GE's biggest value creator today is its brand name, not its engineering.

harimau777
0 replies
5h14m

Do you have any more information on that? I worked for GE in the past and would like to do so again; however, I'd avoided them because it seemed like they'd been run into the ground.

paulvnickerson
0 replies
3h24m

Maybe they should go private then, like Musk did with Twitter.

extraduder_ire
0 replies
6h53m

What happened with dell when they went back to being privately owned for a couple of years?

JKCalhoun
0 replies
6h34m

It may be Boeing's only chance of having a future.

Good luck, Boeing. (And I mean that.)

michael1999
1 replies
3h19m

I don't see anything about the engineering culture in the union demands. It's all about pay, benefits, etc.

I fear this will do the exact opposite: vindicate the union-busters who wanted to move out of Washington in the first place.

michael1999
0 replies
1h18m

I should be clear, I see the linkage.

The union-busters from MD are a cause of Boeing's woes, and it would be difficult to maintain a high-discipline, high-quality culture in a right-to-work plant without external oversight. The plausible deniability of production mandates with records falsification make zero-tenure employment toxic to a safety-critical program.

tempodox
0 replies
8h0m

Reclaiming control from the beancounters and misers to rein in their destructive influence? I'm not optimistic.

hintymad
0 replies
1h10m

And what's enraging is that he was boasting his so-called culture-building in his book and retried scar free

wtcactus
7 replies
6h35m

Unlike the idea I’ve initially got from reading some of the comments here, the workers aren’t striking for long overdue measures that will save the company and get engineers back in charge of Boeing.

They are striking to get the biggest share possible of the pie before Boeing completely crumbles down. Reading the news, there isn’t a single demand from the workers that’s about trying to get the company back on its feet.

SalmoShalazar
4 replies
6h26m

And why would they demand that? That’s management’s responsibility. The workers want fair compensation for their labor.

ericd
3 replies
6h8m

Because they have a set of specialized skills with only a few potential buyers, and if they kill this one, they’ll have very limited options that use their skills without massively uprooting their lives.

coldpie
2 replies
6h3m

The workers aren't the ones killing the company.

ericd
0 replies
4h57m

If you reread what I was replying to, I was saying they might want to demand changes to management because it’s in their best interest to demand those changes, focusing only on short term benefit to themselves is harmful to their long term best interest. And organized labor does have the power to severely damage the companies they’re part of it’s not all one group or the other.

droopyEyelids
0 replies
5h50m

This is obviously true but one of the biggest privileges of management is being able to deny this specific bit of reality

jjulius
0 replies
6h18m

... you do know that unions historically support workers, not companies?

TheBigSalad
0 replies
6h19m

This reads like someone just spouting off a preconceived notion. How much are they making now? What are they looking to make? What do you think is reasonable? The AP article says the union salaries haven't been visited in 16 years.

benced
5 replies
56m

A lot of people here seem justifiably angry at Boeing management's total destruction of an engineering corporate culture. It's unclear to me if fixing that is what the machinists are demanding or if they just want normal union things like being paid more and working less.

No hate if they are optimizing for that, unions don't exist to serve corporate culture. Just want to be clear-eyed about what the union is seeking and (potentially separately), what it will take to make Boeing an American great again.

kedean
3 replies
53m

It's not totally clear to me, but it is telling that the union members specifically say boeing needs to "stop breaking the law" and that the rejected deal included an allegedly large pay increase. 96% turning that down doesn't feel like the increase just wasn't enough to me

hosh
2 replies
28m

It goes with the perception of corporate greed. Boeing stocks have shot up, profits are not being shared, and those profits came at a cost of safety, and it isn't as if market share had not still declined against Airbus.

I wouldn't be surprised if a machinist used to be able to go home, proud of the work they have done, and now, it is not so.

goda90
0 replies
15m

And if the culture destroys Boeing and its reputation in the end, the machinists are going to be struggling to find new jobs. "Sorry, we don't want someone who built bad airplanes to work on this other safety critical thing."

blueelephanttea
0 replies
1m

Unless you are talking about a very specific period in the last ten years, Boeing's stock has not "shot up". It is barely up over the last decade in a period when the total US market has nearly tripled.

carabiner
0 replies
13m

It's the latter. They want normal union things (nothing wrong with that). Engineering is a whole different world, white collar vs. blue collar.

AndrewKemendo
5 replies
3h57m

In my mind, this is an unalloyed good

The practice alone of organizing labor power against owners, irrespective of the demands, given the existing state of the world, is what is needed to show Class solidarity.

Simply showing class solidarity in order to kick off other strikes is valuable in and of itself.

Y’all really have to understand a general strike is coming.

A general strike means the labor class (you most likely), which is the group of people who do not primarily gain their income from passive investments, and are reliant on contracts that they don’t create or control which provide them very little control over their economic future, stop working in order to put extreme pressure on the group of people who do control those contracts and who do control capital.

Such a system is foundationally unethical, and should be Deconstructed as rapidly as possible with the expropriation of all that capital to the rightful owners: the people actually producing the value, and done in a way that’s not under duress, such that you do not have to take whatever dog shit contract is put in front of you

Nifty3929
2 replies
3h49m

This is an ancient and universal idea, that has failed to deliver prosperity and growth, and often drives societies that were once flourishing into starvation.

Capitalism is the new, cool, unique idea that has actually delivered prosperity for society. Not perfectly evenly, but certainly more evenly than other ideas like socialism, fascism and feudalism.

rachofsunshine
0 replies
3h34m

Labor action isn't contrary to a free market. Labor action is precisely labor using its negotiating power in a market to secure concessions, the same way that employers use their market power to secure concessions from employees, customers use their market power to secure concessions from businesses, or businesses use their market power to extract profit.

I'm a business owner. I believe in business, and I like participating in a competitive market. I like that it keeps me honest and forces me to really try to do my job. But that doesn't imply that I have to be hostile to the interests of laborers in principle! They're sticking up for their interests, just as much as I stick up for mine. That's how a market works. And just as with my customers, we can have a mutually beneficial working relationship while still negotiating in the knowledge that we're all adults with some degree of self-interest.

As long as we're working within a system where we don't expect businesses to show loyalty to employees beyond self-interest (and it seems that we are), why should we expect employees to behave any differently? You can't make employment an ethical question for one side and not the other: either we're all in this together (and thus that businesses have a responsibility that Boeing has clearly failed to uphold), or we believe in a ruthlessly competitive market (and labor has every right to play hardball).

giraffe_lady
0 replies
3h44m

You're conflating political and economic systems here. Capitalism is fully compatible with fascism. And it emerged out of and is an evolution of manorialism, the economic system used under european feudalism.

bdowling
0 replies
2h51m

A general strike means the labor class ... stop working in order to put extreme pressure on the group of people who do control those contracts and who do control capital.

Such a system ... should be Deconstructed as rapidly as possible with the expropriation of all that capital

(emphasis added)

The result, predictably, is that unions lose all their leverage against the investor class (which no longer exists) and management (which is now the government). See, e.g. https://en.wikipedia.org/wiki/Trade_unions_in_the_Soviet_Uni... ("[S]trikes were still more or less restricted... Unions remained partners of management in attempting to promote labor discipline, worker morale, and productivity.").

asats
0 replies
1h46m

In your profile it says you work for some company, do the founders know you want to expropriate their company? Those damn kulaks, feasting on the fruits of your labor.

mlindner
4 replies
6h1m

They're voting to strike right as the new CEO gets in? That's kind of the worst time possible to improve the situation at Boeing. All you're doing is creating an antagonistic environment with your boss. So dumb.

thinkingtoilet
1 replies
4h58m

Some of us don't like the taste of dirt licked off a boot. They'll be fine.

spacemadness
0 replies
3h15m

There is an insane amount of “bootlicking” being posted here. I’d say it’s astroturfing but really it’s likely decades of brainwashing. Time to go watch some Amazon union busting videos in my right to work state.

diggan
0 replies
5h21m

Imagine thinking that people should stop thinking of their own best because it might create "an antagonistic environment"...

How about making the conditions good enough for employees so they don't have to strike to get some basic benefits and OK salary for performed work?

If the executive team doesn't want to people to be comfortable at their work, it feels a bit unfair to put "creating an antagonistic environment" on the employees.

dh2022
0 replies
2h31m

So when Boeing was shopping this summer for a new boss I was thinking the new boss would negotiate with the board worker pay increases related to the upcoming union contract.

It looks like the new boss was not smart enough to ask for a big worker pay increase (or maybe did not ask at all). Looks like not a good place for Boeing.

BTW - there is another contract due in 2026. Hmm, another strike in a couple of years? Will Boeing be in a better place or worse place in 2 years? Interesting times ahead.

https://investors.boeing.com/investors/news/press-release-de...

danielodievich
3 replies
2h31m

During national neighbor night out few weeks ago I met a couple who just moved to the neighborhood, wife is a doctor and husband is a Boeing engineer in the material science something rather. Me being a huge Boeing fan we've immediately connected on the topic of Boeing's issues. His view from inside echoed mine - too many MBAs, too much focus on financial engineering and stock buybacks and shareholder returns (he was LIVID about Boeing having no cash now because they sent it back to shareholders), too little focus on engineering. I touched on the nextgen (79?7) program and he just shook his head. And the CEO based out of wherever but not Seattle is just a huge spit into everyone's face.

I don't think Boeing is going down due to it being well, Boeing, but it will likely need to get bailed out if it goes on like that.

So go machinists!

squigz
2 replies
1h18m

Why would bailing out Boeing be a good idea?

danielodievich
0 replies
0m

Um, they are one half of duopoly of widebody aircraft makers, they are a huge portion of high technology export from USA, they are in every state (for better or worse), they are a defense provider of insane importance with planes, rockets and satellites. Yeah, they're strategically essential to this country's abilities in airspace. I have no doubt they'd get bailed out. With a huge stink but they will.

cwmma
0 replies
50m

because it's too big to fail.

zardo
2 replies
52m

The negotiating team has to be pretty out of touch with the members to reach a deal that's rejected with 96% of the vote.

cwmma
1 replies
47m

Not really, the negotiation team gets the best deal that can get that doesn't involving going on strike and they present that to the union which is then better informed for their vote.

rtkwe
0 replies
43m

Correct rejecting the companies "best and final" contract is basically par for the course in union negotiations. The company is banking on being able to outlast the strike to get a better deal than the union would otherwise agree to or betting on the government coming in an kneecapping the union and forcing the workers to accept a deal like happened with the ATC and train operator unions when they struck (striked? struck doesn't sound right in the context of a union strike for some reason...).

DevX101
2 replies
13h38m

Defeat for the company or defeat for shareholders? These things are not the same.

mrdevlar
0 replies
11h34m

It's a Washington Post article, owned by who? Who has what kind of relationship with labour?

Y-bar
0 replies
11h35m

Depends on if you are a shareholder for the long terms (many years) or a short-term trader. I don't own stock in Boeing (or any of their main competitors), but when there is a strike like this in a company I hold stock in I generally get more bullish for the long term because it means that:

1. It signals employees still care about the company enough to not just quit and go elsewhere. And employees who care make a better product.

2. Negotiating better benefits generally helps retain the solid "middle class" who make the brunt of the work in a company. It might not entice the "rock-stars" or so, but they generally are not dis-incentivised by their colleagues getting better benefits either.

3. The C-suite gets to know they are not untouchable, this also helps keep them level when answering to the board of directors.

mc32
1 replies
3h55m

Maybe in this contract they both can have provisions in for poor workmanship and poor engineering decisions. Both for the shop floor as well as the management.

You ship defects, you get salary or bonus deductions and vestments pulled.

advisedwang
0 replies
2h9m

Typically quality improvement programs don't rely on punishing mistakes. Doing so results in people hiding mistakes, pressuring QA people to do a worse job etc.

Now if the issue is malice and not mistakes - then you can apply discipline. And indeed most union contracts do still have a process for discipline.

honeybadger1
1 replies
7h37m

Trying not to see it black and white because I do support unions to a point but it is hard not to think negative things about a union being pushy at a place like Boeing. I know one engineer there and she was incredibly bright. I'm hoping for the best outcome so they win and everyone in the USA wins because a company like Boeing nose diving is bad for everyone.

sealeck
0 replies
7h28m

it is hard not to think negative things about a union being pushy at a place like Boeing

Hard not to think negative things about a union being "pushy" at a place where there are serious cultural failings around safety, the company has engaged on a decades-long campaign of financial engineering where it has slashed investment into the company and instead paid out huge dividents to its shareholders, and the company regularly pursues and demonises whistleblowers (partly in what a cynical person might term collusion with the regulator, but also independently) who attempt to apply pressure to the company to improve and inform the public about the risk to life that the dangerous practices the finance types at Boeing have adopted.

underseacables
0 replies
6h12m

Boeing has been on a deathwatch for years now. I predict before the year is out. We will see something about a bankruptcy filing.

cchance
0 replies
1h3m

Good! Fuck boeing the company/executives, the merger with McDonnell Douglas totally fucked that company!

Profits over safety and performance fucked boeing over