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To understand that, one has to think like finance bro. (Feel free to consider that a multi-gender derogatory term, btw.)
A reputation that has been built painstakingly over 75 years or so is a valuable asset. But it's almost impossible to extract money from it, here and now. And to them, the next quarterly result is everything. Sure, their compensation is very high indeed, but if they want to build generational wealth, it's all about the company shares. So they see to the shares. An asset that doesn't get strip-mined for maximum value simply does not compute in their world. They think of it as leaving money on the table. So they do the vampire trick: Tap just a little blood from the victim, gradually, almost imperceptibly. Surely we can make planes that are practically as good for, say, 99% of the cost? Right? Or 95%? OK, so we took a little ding with this problem that grounded an aircraft for a while, but with all this cash, we can buy our own stock back and hey, we're good again. The reputation remains bullet-proof for years - house-hold name, right?
It works long enough for them to move on and for their shares to vest. Heck, sometimes it just keeps working. Coca-Cola went from cane sugar to HFCS in their main product, and the buying public just took it on the chin.
As for Boeing, they said it up front: They moved their HQ to Seattle so as not to get distracted with day-to-day operations. The leadership simply did not want to be bothered with all this airplane stuff.
Boeing is too big to fail, anyway. The taxpayer will come to their rescue.
It's a nice narrative, but most of these companies are not run by 'finance bros' i.e. "Wall Street guys". Muilenberg - who ran Boeing during much of this - was an aerospace guy. And even people in the financial management of big corporations are often very different in temperament and outlook from the investment banker and security trader cliches.
That's not to say they're not driven at least partially by greed. After all, most people are. But if one wants to understand how these things happen one needs to look past lazy stereotyping. It's not like Boeing was run by some idealistic tinkerer who built the company and then the money men came and tore it down. William Boeing was an aggressive, expansionist businessman who was literally forced by Congress to break up his company and soon thereafter sold his shares. Boeing has thus been run to some extent by 'money men' for nearly a 100 years.
Can you blame 'finance bros' for the organizational failings at NASA which led to the Challenger disaster and then several years later to the Columbia disaster? Let's think about this, NASA government managers thought that foam strikes were no safety concern during a space shuttle mission because it had happened a few dozen times without destroying the orbiter. Not because they knew through an extensive testing program that it was safe, just because it hadn't happened before. When a foam strike finally managed to terminally damage an orbiter they were shocked. If a commercial aviation manufacturer took that approach, commercial aviation would grind to a halt due to too many fatalities.
I have no doubt Boeing has many problems at management level, but I'm also pretty sure it's not 'finance bros' who are to blame for it.
A new whistleblower has come forward warning about dangerous design shortcut that affects the 777 and 787.
A Boeing quality engineer went public Tuesday with damaging allegations that the jet-maker took manufacturing shortcuts to increase production rates that led to potentially serious structural flaws on its 787 and 777 widebody planes.
The Boeing engineer, Sam Salehpour, alleged that almost 1,000 787s and about 400 777s currently flying are at risk of premature fatigue damage and structural failure.
These hearings have convened just four months after a door plug blew out of a Boeing-made Alaska Airlines plane mid-flight in January, sparking further concerns about a precipitous downslide in Boeing’s reputation for safety and quality in recent years. The first hearing, held by the Senate Commerce Committee, questioned aviation experts who put together an FAA report published in February. It concluded that the company had not made enough strides in improving its safety culture since the deadly 2018 and 2019 737 MAX crashes that killed 346 people.
That's because no one was held accountable for the Max debacle. There are many posts here noting why people needed held accountable and what the results would be if they were not.
It was sheer luck that stopped even more deaths. The sad part is, Boeing still does not seem to get it.
The second hearing put the spotlight on two whistleblowers — Boeing quality engineer Sam Salehpour and former Boeing engineer Ed Pierson — alongside aviation safety advocate and former FAA engineer Joe Jacobsen and Ohio State University aviation professor Shawn Pruchnicki. The whistleblowers slammed Boeing for allegedly knowing about defective parts and other serious assembly problems, and choosing to ignore or even conceal them. Such problems could slow down production and be expensive to fix — and internal and external critics say that Boeing’s priority was maximizing its profits.
Now to be fair, this is a problem that is widespread over many industries. "Shareholder value" is at the top of every list. It's more important than safety, quality or taking care of one's employee's.
It's not like Boeing was run by some idealistic tinkerer who built the company and then the money men came and tore it down. William Boeing was an aggressive, expansionist businessman who was literally forced by Congress to break up his company and soon thereafter sold his shares. Boeing has thus been run to some extent by 'money men' for nearly a 100 years.
You can't run a major company without people who understand money, obviously. But there's a difference between building a good product (and charging for it) vs. mining a brand name for stockholder value. It's the difference between primary markets - providing products of actual value to willing buyers - and secondary markets, which the management of expectations and perceived value. Do you spend money on R&D, or stock buybacks?
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Can you blame 'finance bros' for the organizational failings at NASA which led to the Challenger disaster and then several years later to the Columbia disaster? Let's think about this, NASA government managers thought that foam strikes were no safety concern during a space shuttle mission because it had happened a few dozen times without destroying the orbiter. Not because they knew through an extensive testing program that it was safe, just because it hadn't happened before.
Not at all. It's the The Anna Karenina principle: A deficiency in any number of factors can cause failure. Although arguably Challenger had a wide streak of managing image over technology in it.
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