Are Boeing’s problems beyond fixable?
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Even the Raptor 3, which wrong footer Tory Bruno, is simply application of invest in research, iterate, apply etc…
See Rolls Royce who are still in the aerospace engine game, because they remembered that either you build the next engine, or someone else does.
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Nope, not a good idea.
The plane is dynamically unstable.
Such planes exist (the F16), but their pilots are a lot more capable and receive a hell of a lot more training.
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I'm pretty sure the machinists know the difference between a defined benefit pension and an annuity. Among other things, an annuity takes the company off-the-hook, and it is the company-being-on-the-hook for their future financial well-being that they desire. The company can say, "here is your annuity, good-bye", and that is clearly not what the desired outcome is.
Other than that, annuities are crap, as any long-term investor can attest. They are contracts with insurance companies that are sold primarily on the basis of fear of market down-turn. and promise that they will remove risk. That is a lie of the worse sort. When you buy an annuity you take the very real risk that the annuity will under-perform the market, the economy, and inflation. Historically annuities under-perform virtually all broad market indexes.
The best thing about annuities? They are however highly profitable for those who sell them. So profitable that one might characterize them as predatory products. I know someone who targets people to sell them annuities, and the sales pitch is 100% based upon fear. They make a largish six-figure income every year by doing this.
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The Geeman
Wise, Aged Ars Veteran
I'm not sure executives jets are safer per passenger mile. Seems they tend to fall out the sky more regularly than airliners. That's my impression anyway.
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The big thing the machinists are striking for isn't wages, it's to reinstate their defined benefit pension plan. That's not nickel and dimes -- that's huge money. I hope they get it. I hope we all get one.
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Boeing is fixable, but not in a short period like 3 or 5 years, or even 10 years. It takes long time like 10 years to develop a new model of airliner like Boeing 787. It took about 30 years for Boeing to fall from the grace. So it will take another 30 years to recover from the current disgrace of Boeing, so not in my lifetime.
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ColdWetDog
Ars Legatus Legionis
The 737MAX is aerodynamically stable. The FAA won't currently accept a commercial passenger plane that isn't. There are a number of planes whose engines stick out forward of the wing. The Airbus A220 for instance.
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The question posed in the article headline is directly relevant to that desire. One would hope their objective is to "get" a benefit that will actually be available to them when the time comes to collect. Winning the battle while losing the war, and all that.
Speaking of long-term benefits for which we sacrifice but are not guaranteed to receive: please vote wisely, if you have not already done so.
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There's also the fact that in a previous labour dispute, Boeing made promises they failed to keep.
People remember that shit.
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Isn't MCAS added to fix stability? It was necessary because if pilot pushes the nose up too much, weirdly placed engines start to behave as aerodynamic surfaces, pushing the nose even more up. MCAS was supposed to fix this. But I am confused how this plane got the certification if that's true.
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It is perfectly possible to build commercial aircraft of quality and make a profit doing so. A number of companies do so.
If you strip the company for parts and give all the money back to the shareholders, eventually you run out of… company.
The Invisible Hand then smites you.
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I’ve been working at Boeing for a lot of years now and this is the best description I’ve heard of what it is like working a union manufacturing job here. The leadership/ upper management just doesn’t understand what needs to be done to build an aircraft. They act like building airplanes is the same as building a car or whatever other widget. An executive will come in and cut everything to the bone to look like a hero for their next promotion then the next guy gets to spend 100x the amount they saved fixing the problem then putting the process back to the way it was making them look like a problem solver for their next promotion. All the while the union guys are just trying the best they can. Let us not even talk about the brain drain we had during COVID where we lost a ton of employees who had 20 plus years.
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From the perspective of the impact on the company, I don’t see a difference between excessive dividends and excessive stock buybacks. There only seems to be a difference in tax implications on the receiver’s side.
Since dividends have never been illegal, can you give a bit more detail on why banning stock buybacks would make any difference to the health of Boeing and future companies in similar positions?
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I was merely pointing out that when egos and making money come into conflict, the egos, if large enough, and high up enough in the corporate pecking order, win. Sanely run corporations are generally more profitable for the shareholders than ones run by raging egos.
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Buybacks make sense if you’re in Apple’s situation, and you have so much free cash that you cannot effectively reinvest it all back into the company. Then (and only then, IMO) does it make sense to “return the cash to the shareholders“
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ColdWetDog
Ars Legatus Legionis
Yes, the plane will rise faster than a 737NG or Classic when throttled up, but other planes do it as well. Pilots just have to know about it - other planes will have similar characteristics. But the whole point of MCAS was to keep from having to train pilots..... Costs money and time.
Now, I've read where the MAX sans MCAS violates some FAA guidelines on yoke pressure / pitch curves and thus would not be considered 'stable' per guidelines but those points have also been refuted by others and the fact that the FAA requires passenger aircraft to be dynamically stable would seem to go against that idea and the plane should never have received certification.
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In this case this (single point failure with disastrous consequences) should have never gone through the hazard analysis (HAZID), which hints at that the the Functional Safety process, which is the bedrock of safe systems design, was not working correctly. Normally this is done by a separate safety organization apart from the actual engineers.
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I think I've shared this before, but the roots of this are deep and sinister. As a public-school educated kid, I will always remember being shocked going to a different part of my hometown and seeing TEAMSTERS on the side of the building. I (may have been a dumb child but I) thought that was essentially equivalent to writing "GANGSTERS" on the side of a building.*
That's the state-approved stance on teaching kids about unions.
*Which, I guess if you dig into it, could still be pretty close depending on how to you read "team" and "gang." But you know what I mean.
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Letting GM fail would have meant a big chunk of the auto industry went with it. Car manufacturers aren't isolate, there's lots of smaller companies making the various components, and given how consolidated the car industry is, GM going bankrupt would have echoed through those suppliers who did nothing wrong other than not have a lot of other customers.
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This is an excellent post and I want to thank you for taking the time to write this. Of everything I have read here today, this is the one their in-coming CEO needs to read.
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Dividends are the way a mature company should return value to shareholders. That puts money in shareholder wallets but doesn't run the risk of executives trying to improperly prop up the stock price.
Buybacks need to die.
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Buybacks are a way to artificially manipulate the stock price by reducing the number of circulating shares. While it may not matter much to the balance sheet, its much harder to do that use the same cash to pay dividends. So eliminating buybacks is one less opportunity for the C-Suite to play Wall Street games with the number of shares and making them focus more on the actual business.
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Having recently watched a video on Japan Air 123, I'm no longer certain Boeing really ever had it together.
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It says a lot about how dysfunctional the management of this company and the wider culture of corporate management in general are that there's people in the article heaping praise on the new CEO for...Moving to where the company operates so he can actually show up for work? Something that corporate America is all too happy to demand of most people they employ, including right now as a bait and switch with employees they told could work remotely (and, let's be clear, those people would be much more justified in working remotely and far less well resourced to move to nearby the business than someone like the CEO). It's hard not to see it as "when the rich, powerful boss does it that's a noble sacrifice but when it's a working stiff they should just do as their told and say thanks for the privilege"
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Just Nazi trash. Who requires white male privilege to compete with those he deludes himself he is at least the equal of.
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At this point, what is the benefit of being a public company? It's not to raise money for growth, it's to placate the "shareholders" with ridiculous returns until nothing is left even for the employees.
This version of capitalism is hopelessly broken. Restart it.
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If you dig deep you'll find that what you show here is the PR stunt to save face for MS. The $2 billion was the settlement. The $150 was chump change for thePR stunt. More than patent cross licensing, Apple had both Intel and MS dead to rights on copyright code theft. And they settled it all at once.
Without that $2 billion Apple might have had to borrow to stay alive.
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wow. that’s surprising. you’d think even folks willing to skip safety for others to amass more wealth would still be reluctant to do that to themselves. maybe greed is more powerful than i’ve assumed.
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Good points, but for your first, the 737 was never fitted with turbojet engines. Per the specs, it was the Pratt & Whitney JT8D, a low-bypass turbofan. Due to the low ground clearance desired, it was an odd setup (from the first link):
This created some challenges as jet engine technology increased, as was witnessed on the 737MAX.
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I remember in management class learning that one recommended management model was "Management by walking around." Of course, this doesn't involve MBAs running financial models assessing the benefits of additional corporate mergers and consolidations with the associated merger-department staff bonuses, so naturally it fell by the wayside.
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Me: corporations don’t do anything unless they think it will make them more money
You: yes, but a lot of the time they fail to make more money because their decisions are poor quality
What you wrote is true, but it’s almost a non sequitur in reply to what I wrote. I was talking about motivations and you were talking about outcomes. Clearly there was a misunderstanding in there somewhere between what I meant and what you read. That isn’t the first time this has happened in this thread, so my conclusion is that my posts aren’t nearly as clear to the reader as they are to me
edit: alternatively, I’m too stupid to see how your point relates to mine. Could be that too I suppose
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This is the legacy of Jack Welch and the shareholder value movement. It will bleed every commercial institution to a husk, wrecking the global economy, all so that parasites can have "passive income" while constantly squeezing those who actually produce.
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I doubt Ortberg is planning for that as it would be illegal for him to do that and it's also unlikely he'd stay on a CEO after a Chapter 11.
But I tend to agree with you.
IMHO the problem with Boeing (and many companies in similar positions) starts with the shareholders: too many shares are in the hands of investors who are in it for short term profit and they nominate boards and CEOs who deliver on that and eventually rot the company from within.
A Chapter 11 would wipe out the current shareholders and whoever would invest in a Boeing going through Chapter 11 would know they'd be there for the long term.
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Not sure why this is getting downvoted... The Boeing-MD wasn't just "approved" by regulators, it was nearly architected and desired by USG, largely to give the MD military line a stable corporate owner. Then MD's management took over after buying MD with Boeing's money, as the saying goes.
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Outside of institutional players and activists, the influence of most shareholders is insignificant in most cases, barring a movement for change. Do most people have the time to research the backgrounds of board members? Even in cases where high visibility CEOs and boards exist, there can be a perception that so much value is tied in the leadership's relation to the company's value that even institutional shareholders will acquiesce. The recent Tesla proxy vote is a good case in point.
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