Boeing is a key part of the military-industrial complex and has very close ties to the US government (the movement of people between the two groups is especially interesting). "Too big to fail" might not accurately describe it. "Too connected to fail", maybe?
They're too big and too important to go through Chapter 7 bankruptcy, but Chapter 11 bankruptcy can and should happen. Wipe out the shareholders and executives but keep the company intact.
Boeing, even without the military connection, is one of the more important companies in the US for exports. They are also too big to fail. It's very much in the national interest for them to right the ship. The same is true of Intel. Their domestic fabs are -very- important to NatSec.
Agreed. Yes, we have national security interests in having the capability to build airplanes, etc., but there must be a way to maintain that capability without permanently giving one company and its executives the right to mismanage unlimited amounts of money. Maybe some more flexible mechanism that can handle networks of smaller companies achieving the same end result.
If you consider it national interest, why as the biggest shareholder and bagholder do you not have board members that veto actions that are profitable but bad for national interest?
No it's the other way around. The Boeing we have today is the result of mergers. For example McDonnell Douglas that built the f-18 amongst other things was acquired in 1996.
They merged the companies, but outsourced component manufacturing to the lowest bidder and didn’t bother to check the lowest bidder was actually delivering what was needed.
The popular story is when Boeing merged with McDonnell Douglas in the late 90's, Boeing's engineering-driven culture was replaced with the more financialization-driven culture from McDonnell execs.
The 737-MAX saga was kinda the culmination of when profit-motivated shortcuts bump up against realities of engineering safety margins. I'm sure everyone has their campfire variation on this, tons has been written about it.
So yeah on the financial shenanery, but more culture/people-in-charge than conglomeration-megacorp per-se.
The unfortunate reality is that those who implement policies that produce short term gain but long term costs that strike after they have moved on look better than those who actually look to the long haul.
If we do, and SpaceX takes its place, it's only a matter of time before SpaceX ends up in with the exact same problems. It's not fair to compare the two companies on an apples to apples basis, as the rules they operate under may as well be from different planets.
Boeing's problems come from the regulatory environment and congressional horse trading that created it. SpaceX doesn't have these constraints for now, but the moment SpaceX replaces Boeing all that scrutiny and backroom dealing that created Boeing will start to carry over.
I'm not sure Boeing's problems are entirely due to the bureaucratic horse trading that infests many government acquisition programs. That issue shouldn't have affected their commercial airplanes, which seems to suffer from similar quality issues.
It actually seems to be a systemic issue that has been affecting many American companies and slowly grown worse over the last 50 years. The management views themselves as increasingly indispensable and the lower ranks of workers as commodities subject to arbitrage, where 10 years experience at this company is somehow just as valuable as 10 years somewhere else - despite not having the same institutional knowledge and connections. We've seen this with traditional "American" companies, such as Ford and GM, and even with the more established companies in the tech sector.
This is fundamentally caused by a shift how management has operated. The emphasis on market performance over dividends and increasingly public role of business leadership. With that, executive compensation becomes another signal of a company's confidence as a tool to drive market price. Businesses compete over lavish executive perks not to find the best talent, but as conspicuous consumption to signal their value to investors.
At the same time, human resources have worked to standardize and measure workers. Trying to turn them into interchangeable cogs, because it seems cheaper to think that way. But people are not cogs and reducing people to keywords on a resume loses valuable data. This is true when apples to oranges comparisons are made between the current employees and prospective employees. The precise nature of experience and how it maps to their company is lost so current employees are undervalued in the comparison. Likewise the value of proximity and relationships between management and workers and even local governments. This has lead to many off-shoring decisions that led to unexpected losses in the medium term, some of which were ultimately rolled back.
Start a new company and hire all the engineers. Not like we need any of the C staff to make it function. There's plenty you can do, the obstacle is regulatory capture rather than lack of options
Why would I want to hire all the engineers? Surely at least some share the blame. I don't really agree with you in general, but if I were starting a new company I'd probably be pretty selective about hiring Boeing engineers if I really thought it were a pervasive company culture problem.
Why is that your point of contention? If the goal is to have Boeing provide engineering capacity without all the cost cutting drama, all I'm suggesting is a change of governance.
Assuming there's a real cultural issue, I doubt that the C-suite is the entire problem. Just bringing in some new senior management is probably not the answer. You probably need to cull down to at least some level of mid-level people. At least that's what I would do.
That was done, by executive order during wartime, to some underperforming manufacturing companies during WWII. Here's that story, by the Navy admiral who personally led the takeover of the plants.[2] The Navy fired the C-suite of the Los Angeles Shipbuilding and Dry Dock Company, at 10 AM on December 8, 1943, for incompetence.
"Mr. McCoomb was informed that he, Mr. Alfred F. Smith, and the comptroller, Mr. Beeman, were informed that they were no longer on the payroll of the plant". Eventually the Government had to settle up with the stockholders, but the C-suite people were gone.
Are you proposing the federal government invoke The War Powers Act or The Defense Production Act and seize all of Boeing's production assets? During peacetime? Over engineering failures in the civilian sector? Does anybody actually believe that would fly in court?
Well… you can always invade someone and end these inconveniences of peacetime. Venezuela has a lot of oil very close to the US and recently disagreed with the US government about who was elected for their president.
Something like the Defense Production Act alone technically gives the government the authority to control civilian production in virtually any way if it meets a standard based on criticality to national defense (not hard to imagine the argument for boeing).
Using that power requires political support from the legislature and courts, I don't think we're there today, but if for example a critical fighter jet (or some other high visibility project) went south, boeing has been shitting the bed hard enough to support federal intervention.
Classified? We see their products every day... with a few exceptions, darn near every aircraft the US military flies today was designed, maintained, built or led by Boeing and/or it's affiliates. Their coverage spans drones, aircraft, spacecraft, missiles, rockets and more.
The civilian side of Boeing almost doesn't even need to exist.
So we're going to lambast the entire company because one arm has stumbled with two projects recently... ?
Perhaps we should nationalize and shut down Google because Gemini hasn't turned out to be that great.
>Perhaps we should nationalize and shut down Google because Gemini hasn't turned out to be that great.
I think you meant that sarcastically, in which case - Welcome to Hacker News!
And as for the military side of thing, you wouldn't believe the stories I've heard about that. Between the hanger queens they sold and Cold War superiority stuff they're still trying to sell...If they weren't notionally an "American" company then I doubt they'd still be in business.
They can't per say fire them. But they could start cancelling contracts if they think Boeing isn't going to deliver. And they can break up the company into smaller ones to foster competition this has happened in the past in other industries.
In the name of national security they could nationalize Boeing and then fire anyone they want. But this is a pretty big hammer, that comes at a price (and who really believes, the government will be more efficient at running Boeing?)
