‘This Has Been Going on for Years’: Boeing’s Manufacturing Mess

https://www.wsj.com/business/airlines/boeing-manufacturing-737-max-alaska-door-plug-spirit-18f7e233

by eduction • 3 years ago

324 321 3 years ago

dangle1• 3 years ago

jqpabc1232• 3 years ago

Eventually, Boeing management will probably decide it is cheaper to just buy planes from Airbus with the word "Boeing" conspicuously engraved on various components.

American management style is to focus on marketing as the source of all revenue to be exalted. Engineering, design and manufacturing are expenses to be minimized and controlled.

Right now, Boeing management is looking hard to find reasonable manufacturing scapegoats and when they do, heads will roll. Clearly, management had no involvement.

Gives you that warm, fuzzy and safe feeling doesn't it?

megablast• 3 years ago

Why would an airline buy an Airbus, or a Boeing branded Airbus with Boeing markup?

selimthegrim• 3 years ago

They’re already buying an Airbus branded Bombardier with an Airbus markup so why not?

LgWoodenBadger• 3 years ago

People do strange things, like buying John-Deere-badged excavators manufactured by Hitachi, or JD-badged dozers manufactured by Liebherr.

lmm2• 3 years ago

Why would an airline buy an Airbus

Because they're the best planes available?

or a Boeing branded Airbus with Boeing markup?

Because the Boeing markup is less than the US import tariff?

shiroiuma5• 3 years ago

Because they have no choice. There are currently 2 aircraft companies in the world that make commercial jets: Boeing and Airbus (we'll ignore Comac for now). If Airbus somehow bought up all of Boeing's manufacturing facilities and capability, leaving Boeing as just a re-badger, then airlines would have no choice but to buy an Airbus that either has an Airbus badge or a Boeing badge.

jqpabc1232• 3 years ago

In a word ---- marketing.

For the same reason people currently buy "American" autos (and planes) built from parts sourced around the world.

In American management culture, marketing is the knee jerk solution to any problem and the holy grail from which all revenue is gifted. They are true believers in the "magic" of being able to "game" people into making decisions based on something other than logic.

This same culture explains how/why the internet we have today is built around privacy invasion and (wait for it) ... marketing.

Havoc• 3 years ago

Boeing management is looking hard to find reasonable manufacturing scapegoats

Bit like when the two planes fell out of the sky and the third world pilots were blamed / strongly hinted at as being inferior

therealbilly2• 3 years ago

There was some truth to that. The 737 MAX is a hot aircraft (a light airframe with new powerful engines) that could quickly get away from you. Most US pilots come from the military and are typically top notch. Third world pilots to be quite honest, don't measure up in all areas.

rdtsc2• 3 years ago

https://archive.is/t0lZc

Morte42• 3 years ago

Boeing intentionally spread its operations to as many states as possible in the US to guarantee itself some level of privilege amongst a large number of politicians from both major parties. There are clearly downsides to having manufacturing split up like this but the decision wasn't made for its engineering perks. Boeing is a sinking ship but nobody is eager to rock the boat lest their part of the ship take on more water than the others.

stefan_• 3 years ago

That’s not really any different from how Airbus works (and explicitly so). But I learned that Boeing literally outsourced the fuselage and that makes you wonder if they are really fit to build airplanes…

Sirizarry• 3 years ago

Do you have an article or two where I could start the airbus rabbit hole?

dreamcompiler• 3 years ago

Boeing outsourced the fuselage to Boeing in Wichita, which had always built them. Boeing spun off that branch into a separate company now called Spirit, which is still basically Boeing except for its name.

HeWhoLurksLate2• 3 years ago

Lockheed Martin similarly has operations spread out to curry favors, but they also seem to build reliable stuff...

damiankennedy• 3 years ago

The F-35 has been plagued with defects. Even the ejector seat had a defect.

hintymad• 3 years ago

Boeing intentionally spread its operations to as many states as possible

Interestingly, it is the senators who forced Boeing's hand, according to the ACQ podcast on Lockheed Martin. The senators were responsible to approve all kinds of government budgets for Boeing, and they wouldn't approve it unless Boeing also created jobs in their states.

rdtsc2• 3 years ago

The paper from 2001 by Dr. LJ Hart-Smith, referenced in the article is just as interesting as the article itself https://www.documentcloud.org/documents/69746-hart-smith-on-...

If you squint, could apply some of those observation to the world of software.

For a TL;DR just skip to Hart-Smith's recommendations list at the end of the paper. Here are the ones I liked:

Look continuously at the entire activity. Do not minimize costs in isolation. Understand that one global cost minimization is worth far more than even 20 sub-optimum cost reductions.
Retain sufficient in-house production manufacturing that it is possible for future engineers to acquire the skills needed to develop new products, without which all businesses will fail. Even the work that is out-sourced requires internal expertise to write the specifications.
Acknowledge that cost-saving techniques that work in other high-volume industries are often quite inappropriate for low-volume industries like aerospace.
Listen more to your own employees about how to save cost than to any outside business consultants who have never run a factory producing your kind of product. In any event, if the advice they offer changes every year, it cannot possibly be correct.

baby• 3 years ago

Retain sufficient in-house production manufacturing that it is possible for future engineers to acquire the skills needed to develop new products, without which all businesses will fail. Even the work that is out-sourced requires internal expertise to write the specifications.

Damn, that really reminds me of a previous company I worked for, that wanted to replace important core internal libraries with open source libraries. My argument was always that we should always have in-house knowledge of the core technologies. I think a lot of companies fail to think long-term.

Listen more to your own employees about how to save cost than to any outside business consultants who have never run a factory producing your kind of product. In any event, if the advice they offer changes every year, it cannot possibly be correct.

This one is the difference between management-driven company and engineers-driven company.

groestl3• 3 years ago

Open source is different, in that you as a company can become maintainer and therefore expert of that component _and_ profit of other work being upstreamed. In case the library is not your USP, I think it's not that clear cut.

hinkley6• 3 years ago

I can hire people who have expertise in oss libraries. I have to build people who have expertise in our in house stuff.

Importantly, we can sit around and bond over bitching about how bad one of those libraries is. If the authors are or were internal, we are now being divisive and unprofessional.

AmericanOP• 3 years ago

Its the fundamental flaw of outsourcing manufacturing abroad. You cede all growth from innovation.

ChrisMarshallNY3• 3 years ago

Retain sufficient in-house production manufacturing that it is possible for future engineers to acquire the skills needed to develop new products, without which all businesses will fail. Even the work that is out-sourced requires internal expertise to write the specifications.

That's the biggie. I think the entire US tech industry has done a gigantic face-plant, when it comes to this.

We have not only outsourced the work, but we have interrupted the transfer of knowledge and expertise.

I have friends that run manufacturing businesses, and they explained how they believe that the US will never regain what it has given away, in the last couple of decades.

josho• 3 years ago

I've seen a variation of this problem firsthand.

Working at a cable company where they contracted out to vendors most of their software development. They had a few internal systems that they developed in-house and would only hire 'senior' developers. I was curious how they expected to have a steady supply of 'senior' skills without ever hiring, training, and promoting a junior.

I also saw they had no idea how to manage their vendors, partly because they didn't have in-house skills to serve as a sanity check on what vendors were charging. As a result, their vendors profited hugely from the company's ignorance (I know because I also switched to work for one of the vendors).

JeffSnazz5• 3 years ago

they explained how they believe that the US will never regain what it has given away, in the last couple of decades.

Sure we can. It requires pivoting into stealing or otherwise replicating China's insane level of industrialization, but it's a little funny seeing people become despondent at the idea of merely losing clear economic hegemony over the world and becoming #2. We didn't lose anything in the last 5 decades we can't gain back faster.

Here's hoping China's reign comes with fewer invasions.

hinkley6• 3 years ago

I came to say much the same thing, but specifically about IT.

I used to run architectural ideas by operations people who would - and occasionally did - tell me I was full of shit. Maybe 1 in 10 of us are brave enough to to this, 1 in 6 if we are generous, but now there is nobody to tell us we are being stupid before we steer the ship toward an iceberg.

bboygravity• 3 years ago

Same in Europe.

I've worked at 2 companies now that have been eaten by bigger ones and pretty much instantly moved to lower income countries. Both in manufacturing, one in aerospace.

cabalamat• 3 years ago

More simply: don't outsource activities that have a complex interface to your organisation.

Having to write complex specs for an outside organisation to implement is an anti-pattern, because:

- the more complex a spec the harder it is to write and understand

- there's potential for endless disagreements / lawsuits on what was actually promised and delivered

- the overhead of having a complex spec that must be understood by people in both orgs.

Aloha2• 3 years ago

Whats most interesting to me, is he's a former DAC person not a former Boeing one, and he saw first hand how outsourcing harmed DAC/MDC - particularly this section which caught my attention:

"The correctness of the author's position' on these matters is easily confirmed by two facts. It was the suppliers who made all the profits on the extensively out-sourced DC-10s, not the so-called systems-integrating prime manufacturer. (The same thing has happened on aircraft assembled by Boeing, in Seattle, too.) Also, when plans were being formulated for the proposed MD-12 very large transport aircraft, almost all potential suppliers indicated a preference for being subcontractors rather than risk-sharing "partners". Could they have known more about maximizing profits, minimizing risk, etc., than the prime manufacturer who sought their help even though it could borrow money at lower rates of interest than potential suppliers could? The DC-8 was manufactured and assembled almost entirely within the Long Beach plant, with only the nose coming from Santa Monica. That policy was changed after the acquisition of the former Douglas Aircraft Company by the former McDonnell Aircraft Company, but the change did not improve the company's profitability. It is time for Boeing to reverse this policy."

This closing also caught my eye -

"The fate of the former Douglas Aircraft Company, which was reduced to a systems integrator in the early 1970s by excessive outsourcing of DC-10 production, is a clear indicator of what will happen to other companies which fail to sustain the conditions under which it is possible to launch new products. It is hoped that this sacrifice can save the new and expanded Boeing from a similar fate."

Boeing in the end took the track that led to DAC functionally going out of business, putting thousands out of work in the end. It's not too late to undo it however - buying Spirit back would be one way to go about doing it - but I dont know if the Boeing management is aware enough being that the headquarters is in Arlington, VA, far away from any engineering or manufacturing centers that this is what must be done.

Whats even more astounding to me, this made the Seattle Times in 2003(!), https://archive.seattletimes.com/archive/?date=20030309&slug...

panick21_6• 3 years ago

The problem is that Spirit is much bigger then it was, and Boeing doesn't really have the money to buy Spirit. And in addition, Spirit is supplier to Airbus as well, and they wouldn't want Boeing to have it. They might even buy Spirit themselves.

mckn1ght• 3 years ago

I saw another one of his gems the other day in another thread:

“The performance of the prime manufacturer can never exceed the capabilities of the least proficient of the suppliers,” Hart-Smith wrote. “These costs do not vanish merely because the work itself is out-of-sight.”

https://news.ycombinator.com/item?id=38980098

hencq• 3 years ago

That line is quoted in the article (and in fact the comment cites the article)

mschuster912• 3 years ago

Retain sufficient in-house production manufacturing that it is possible for future engineers to acquire the skills needed to develop new products, without which all businesses will fail. Even the work that is out-sourced requires internal expertise to write the specifications.

This x1000 is what has led so many large government projects - no matter if in IT, construction, healthcare, military - go completely nuts.

When there is no one to write the specifications, the "consultants" writing the specifications instead will write them in a way that allows their closely related industry friends to deliver bullshit, and since the government doesn't have experts any more (because they are "too expensive" for shoestring budgets), it can't realize that it's being led by the nose.

When there are no experts to audit a project, no one can detect bullshit being designed, built or delivered until it's such a colossal failure that it cannot be hidden any more.

When there are no experts to maintain a project that miraculously got completed and delivered after years of delays and billions of overruns, eventually even the best project will go and rot.

And even in the private sector, this same concept holds. Just ask any F500 employee whose company "outsourced" their IT or anything else not "core of the business" to India or Pakistan to the cheapest bidder, or their building cleaning service or facility management, about what service quality they receive and how much upper management cares about that.

The general ideology of outsourcing everything that's not "core of the business" is the single utter scourge of modern ultra-capitalism.

outside1234• 3 years ago

Note: Alan Mulally, CEO of Boeing, was briefly in the running for CEO at instead of Satya. Just shocking to think how bad a choice that would have been.

* https://www.businessinsider.com/alan-mulally-as-microsoft-ce...

chihuahua2• 3 years ago

Very interesting, I had no idea.

After all these years, I'm still stunned that Microsoft got a new CEO who didn't run it into the ground. They used to make so many bone-headed decisions at the top levels.

Spooky233• 3 years ago

They were comically thin skinned in the Ballmer era. My boss used to have us flaunt MacBooks and iPhones when we would have senior MS execs come in to get yelled at or for a hard negotiation.

They’d get visibly agitated. It was funny.

wkat42423• 3 years ago

They did but running it into the ground they did not. Questionable business practices sure, but they were successful.

shiroiuma5• 3 years ago

Bad? That would have been a great choice! I wish I could see the parallel universe where Mulally became CEO of Microsoft. Even better, it'd be nice to see him as CEO of Apple.

gumby8• 3 years ago

This point (I put it in italics) should be discussed more:

At the time, then-Boeing executive Alan Mulally said selling the factory to a private-equity firm would let Boeing focus on final assembly, where it could add the most value to its airplanes.

By now I think we’ve learned that products made in factories owned by PE firms should carry warning labels. They are proactively anti-quality organizations, focused on extracting the maximum cash out in the short term at the cost of long term value.

ldoughty2• 3 years ago

You could say the same about publicity traded companies.

It all depends on who is in charge... And unfortunately self-serving people tend to reach the top more easily in both scenarios. You don't get Dan Price's very often (relatively).

In public companies, there is more public information, but that doesn't stop a company from doing "bad" things of the short term stock movement is good enough.

Look at all the merger promises that are broken. They all know what they are doing. Uphold the promise a year, then it's to late to undo the merger when you start to ignore the promise.

Can also look at all the fines companies get for willfully breaking laws (or treading the line).. (fine < profits)? success!

gumby8• 3 years ago

I think the PE companies have a specifically pathological and parasitic business model. There is more info about public companies and the majority of them don't suffer from the things you mention (which are real phenomena), and when they occur in the majority they do more from incompetence than malice. (I'm not talking about microcap companies).

The PE model is: - buy company with debt. - after purchase company assumes the debt (pays off PE company) and pays further fees to acquirer - company therefore cannot make a profit, cuts staff which cuts output over time - company goes bankrupt

This is the canonical business model from the big PE companies like Bain (Romney), KKR, Blackstone, CVC, Carlyle, etc.

forrestthewoods• 3 years ago

And unfortunately self-serving people tend to reach the top more easily in both scenarios. You don't get Dan Price's very often (relatively).

Oh boy do I have bad news for you.

https://www.seattletimes.com/business/seattle-celebrity-ceo-...

Simon_ORourke• 3 years ago

Perhaps it's the one common feature of air travel (safety & reliability) that they may start playing with to "reduce costs" elsewhere. Imagining two flights from L.A. to Vegas, one on an Airbus that costs $100, and one on a Boeing that's $5 but you have to sign a waiver going onboard.

Certhas2• 3 years ago

It's perfectly possible that that cost difference is massively exaggerated. It might well just be 95$ vs 100$. But if you don't have the information that one is far more risky, then you always pick the 95$ option, don't you?

jonplackett• 3 years ago

I can see Ryanair going for this!

dehrmann5• 3 years ago

Hopefully it doesn't come to this. Something I really like about the airline industry is it doesn't compete on safety.

inglor_cz3• 3 years ago

Falcon 9 is also produced by a PE firm and it is very reliable. German Mittelstand corporations are often family-owned for generations, and they are known for high-quality products.

As in everything, humans and their motivations cannot be ignored. Firms are conglomerates of people, and it matters which people are on the top.

555552• 3 years ago

Are you calling SpaceX a PE firm or am I missing something?

https://en.wikipedia.org/wiki/Falcon_9

foofie2• 3 years ago

By now I think we’ve learned that products made in factories owned by PE firms should carry warning labels. They are proactively anti-quality organizations, focused on extracting the maximum cash out in the short term at the cost of long term value.

I'd say basically the same thing but from a different perspective. Outsourcing is used to simplify management, as it allows companies to shift away from building quality organizations into the easier task of using coersion towards external organizations to drive down cost and avoid any liability due to loss of quality. Outsourcing is a cheat code for managers, and one which invariably causes serious harm to the company while shielding any decision-making exec from being held liable for nuking the company.

gumby8• 3 years ago

Outsourcing … invariably causes serious harm to the company while shielding any decision-making exec from being held liable…

OK I posted that spinning off a portion of your manufacturing is bad, but I think your statement overstates the issue. Ford used to be so vertically integrated that they raised sheep for the wool in their seats! It makes sense to buy bearings from companies that specialize in the metallurgy and precision of good bearings. Focus on what you’re good at and what really makes the difference to your customer.

I once visited a home generator factory in India. They bought billets of aluminium and copper and manually machined the two stroke engines, drew the wire and made the generators, and so on. They hadn't updated their design since the 80s. If they’d sourced the engine from an engine company and the generator from a generator company the two could have advanced separately based on the demands of a larger customer base.

MBCook4• 3 years ago

I wonder if we’ll ever get the guts to outlaw PE somehow, or at least make it so unprofitable it’s very rare.

Nothing good ever seems to come from it, despite their claims.

candiddevmike• 3 years ago

It makes a lot of rich people more rich at the expense of workers and retail investors. I don't think you'll ever be able to get rid of it.

ryandamm• 3 years ago

Ended the carried interest deduction would be low hanging fruit if we want to discourage purely rent-seeking financial behavior.

milesvp• 3 years ago

Would be nice. I think the main fix would be making sure that debt used to buy companies can never be transferred to the company purchased. I understand that money is fungible, but accounting is often there to deal with the most egregious abuses of fungibility. It would at least make leveraged buyouts much more expensive. Especially since now, the purchased company needs to maintain some kind of profitability over several years to be able to service this debt. Oh, and make it so the purchased company cannot borrow money for several years after purchase. If the purchaser wants to borrow money and infuse it into the company that's fine. I know there's still all kinds of accounting shenanigans that can be played to payout to PE purchasers, but that'd be a good first step I think.

Aurornis• 3 years ago

I wonder if we’ll ever get the guts to outlaw PE somehow

PE is just a type of company that participates in the act of buying and selling businesses.

You can't outlaw buying and selling businesses. You can't outlaw people working together to buy companies with financing.

Yes, there are a lot of PE horror stories, but there are also 100X more invisible private equity style buyups that you never hear or think about because nothing is going wrong.

Many of them actually improve when they roll up the company. My local eye doctor was bought out by a PE firm. They came in and installed all new diagnostic equipment that was standardized across their locations. They now nail my prescription on the first try and it's faster than ever before. The service is also more streamlined. This is the kind of thing that nobody ever thinks twice about, but it happens all over the place.

zeroCalories• 3 years ago

Outlawing PE would be incredibly difficult. Instead we should focus on punishing individual executives, board members, and even share holders that cause harm from cutting costs. It could be a criminal case, or even a culture of directly naming, shaming, and tracking people so that they can't get involved in another company without the share price instantly tanking.

hnthrowaway0328• 3 years ago

I feel a lot of similar recommendations on HN are to ask the left hand to slap the right or even slap the mouth that feeds them.

The point is, they don't care about us. We are just clogs on a machines and we are one type of resources just like coal and iron.

The only way to struck fear is by some collective methods but then everyone got spooked by "Socialism", so the whole thing becomes a perfect loop for the aristocratics.

g9yuayon2• 3 years ago

I don't think it will be effective. The root cause is not PE, but human nature: greed, complacency, myopia, and etc. We can outlaw PE, but Boeing can simply invent another way to maximize their profit at the cost of product quality. It looks to me the only cure is to encourage competitors, so that long before Boeing becomes this rotting organization, their talented employees can join another competitor to beat the shit of Boeing. Unfortunately there's so much regulatory capture and intertwined interests between Boeing and governments that I don't think we will see any meaningful competition for years to come.

JumpCrisscross4• 3 years ago

we’ve learned that products made in factories owned by PE firms should carry warning labels

Source? The data I’ve seen don’t show quality differences based on ownership model except when there is family ownership.

x0x03• 3 years ago

I just get hung up on being an airplane company that doesn't manufacture the plane. How is that possibly not a core competency for the design and manufacture of airplanes?

rgmerk• 3 years ago

It’s a matter of degree. Are they supposed to run a chip fab to make all the chips that go into their plane?

That said, fuselages do seem to be a core aspect of making planes!

bluGill7• 3 years ago

The trick is figuring out what is a core competency and what should not be. Boeing should obviously not make the light bulbs in their planes. Should they make the engines? How about the seats or carpet? What about the plastic bezels in the cockpit? At that point is something a thing they should do in house and when is it something to outsource? There is no easy answer, and often the best answer changes over time.

hinkley6• 3 years ago

I was there when Mulally was and people already knew what a horse’s ass he was.

Most of this is his fault, and the board who hired him.

renegade-otter• 3 years ago

But this is not just PE - this is the Jack Welch school of business. Ascend to the top of the company, attach to it like a parasite, and suck it dry over time.

Short to mid term, "woah, the stock is going up, this guy is a genius!"

Until there is no more company left to juice the shares with buybacks. This is how the GE engineering culture was destroyed as well.

Private Equity is like that, only much accelerated. There is no pretense of "management".

PedroBatista• 3 years ago

Since the late 90s/early 00's this type of concerns / horrible culture shifts and strategic mistakes were known and by the time the Dreamliner came out it was common knowledge even in the mainstream. Of course when the Max 8's started to fall and killing people everybody pretended to be shocked and surprised again.

And of course the "incidents" are always "different and not related", but as any very complex system goes, these "incidents" always end up happening due to the same root cause.

And yet again another evidence nobody learned anything with the latest big scandal of 2018/19, Boeing actively lobbied to reduce and get even more exceptions for QA and safety rules AFTER 2019.

During the 00's it was already clear many of their planes were clearly not the best on the market for various reasons, but a few phone calls from key people in the US government to the prospective buyers would always "help" the customer to make the "right buying decision", so new orders were always arriving, money coming in, stock and compensations for the big wigs was obviously sky high so anyone who raised any concerns was always ignored or fired, but by that time Boeing was already rotten.

I just pray I'm wrong and all of those planes don't crash until they are retired, but the new ones seem to be even worse.. so I don't know..

riffraff2• 3 years ago

Is the dreamliner bad?

I was under the impression it was quite nice and had partially eaten the lunch of Airbus' A380 by making longer flights with smaller plane economically advantageous.

Dalewyn• 3 years ago

The 787 is fine. It's by far the most comfortable aircraft I've ever ridden, and the batteries-going-up-in-flames issue was short-lived and if I recall stemmed from some manufacturing deficiencies at the Japanese OEM (I am brainfarting their name).

That being said however, the kind of workmanship negligience we have reason to suspect of Boeing means absolutely no Boeing aircraft manufactured during the timeframe(s) concerned can be considered safe until inspections are done.

For now we don't have reason to suspect this extends beyond 737 MAX 9, but that could change drastically depending on what FAA finds.

inferiorhuman5• 3 years ago

The 787 is an innovative aircraft, but its existence is a comedy of errors. It was never competition for the A380 though. The problem is that Boeing bit off more than they could chew when they tried to innovate in three areas: concept, design, and execution. They outsourced the latter two and provided insufficient oversight.

Concept: Lithium-ion batteries are great tech.

Design: Boeing outsourced the electrical system design work to Thales, and the first production airliner designed around lithium-ion batteries seemed like a great idea until they started catching fire.

Execution: Relying heavily on sub-contractors to build big chunks of the 787 was a great idea to save money, until the subs couldn't maintain the pace Boeing wanted for the price Boeing was willing to pay. So Boeing bought the South Carolina facility.

And Boeing keeps insisting on learning the hard way. Last year the FAA halted deliveries of the 787 for a few months due to quality issues.

panick21_6• 3 years ago

The 787 is not bad. Its a great aircraft and they have sold a shit-ton of them.

But it was also a program that went hilariously over budget. Nearly costing as much as the A380. It had a whole bunch of problems and still has problems today. Lots of production issues.

This had lead to a situation where they will need to sold literally 1500 or more planes to break even on the program. And 1500 is a gigantic amount of wide-bodies.

The 787 didn't really eat A380s lunch. Its more like 2 companies both thought about what the best investment would be for the future. Boeing picked the right plane. Airbus picked the wrong plane. The competitor to the A380 was the 747-8 and the 777.

Had Airbus not totally misread the market and invested in totally the wrong market. The Dreamliner could have backfired on Boeing. If Airbus had a 787 serious competitor out at the same time, the 787 might never have sold more then 1500 times. They already have total order of around 1800 and there are likely gone be many more because Airbus doesn't have a perfect competitor plane.

In the wide-body market, Boeing is still totally competitive with Airbus. Its the narrow body market where Airbus is kicking Boeing ass.

lmm2• 3 years ago

They took more risks than they should've. Which is a strategy that pays off until it doesn't, as we're seeing now.

koyote• 3 years ago

There's this article about a Boeing quality manager that raised very similar safety and QA issues (and general culture issues) during the 787 development:

https://www.corporatecrimereporter.com/news/200/john-barnett...

koonsolo• 3 years ago

I have an inside story about the Dreamliner. I know a person that was part of buying a few for an airliner. To my understanding there were 2 factories that made them, Seattle and somewhere in the South. There was a huge difference between the quality of the two. Everyone buying tried to get a plane that was made in Seattle and not in the South (can't remember exactly where it was).

philwelch9• 3 years ago

South Carolina.

Also Boeing doesn’t have any factories in Seattle. They have factories in Renton and Everett. The 787 used to be made in Everett. Renton is kind of a suburb of Seattle but Everett isn’t even particularly close.

hacketthfk• 3 years ago

Boeing's core capability is regulatory arbitrage and getting gov contracts, so it makes sense for them to outsource everything non-core, like building planes. Similar to NASA.

Boeing did the correct thing outsourcing the actual building of planes, so they could focus on their core competency. Standard tech industry advice.

gchokov• 3 years ago

Yeah they did the correct thing, only to get their airplanes falling like apples.

archerx• 3 years ago

Apparently for some people the correct thing is profit over safety/quality which is quite sociopathic and the cancer that is killing our society.

shiroiuma5• 3 years ago

Airplanes falling like apples isn't a bad thing; the only bad thing is delivering poor shareholder value. If some planes crash as a result of improved shareholder value, that's fine. Just ask the FAA (or just look at how the FAA "punished" Boeing for these failures that cost the lives of hundreds).

kmeisthax2• 3 years ago

I'm sick and tired of "core competency" rhetoric. Business management should not rigidly follow the UNIX philosophy, there's plenty of reasons you wouldn't want to outsource everything.

Furthermore, while those core competencies might sound correct to Boeing, they wouldn't sound like it to Boeing's customers. You're paying Boeing for a plane and support, not a trading company that can find five other companies who can outsource each task to a different firm that delegates responsibility to...

riffraff2• 3 years ago

I remember someone on this forum argued at some point that business management is basically just flip flop between "things are bad, we need more vertical integration" or "things are bad, we need more core focus".

sgt101• 3 years ago

The key think for Boeings customers is finance.

If you can get 70 airframes for five years in a way that means that you just have to borrow a nubbin of cash and then make regular payments that's what you will do. All your actual money can go to the shareholders and exec compensation. If the business (airline) folds the airframes go back to Boeing and you go on to the next gig - who cares...

If Boeing will take the risk the banks are happy to fund, local airlines - well the banks will be nervous. Every other consideration is either imposed by regulation or of no interest at all.

novok• 3 years ago

Core competency is a reminder, otherwise you start doing things like making your own chat system and word processing software when you should be just buying slack and google workspace while you are a B2B database company.

dralley• 3 years ago

There's an entire paper about why this is nonsense, written by someone AT Boeing, 23 years ago.

https://www.documentcloud.org/documents/69746-hart-smith-on-...

cryptonector• 3 years ago

GP was being sardonic.

specialist• 3 years ago

Agree with #1. Number #2 should be qualified: Good for Wall St and Boeing execs, at the expense of everyone else.

Then State House Rep Reuven Carlyle was the point person for negotiating WA state's $11.4b (?) tax breaks for Boeing. With non-binding terms like agreeing to create jobs. Boeing's negotiators completely lost their shit when Carlyle tried to add good government amendments like transparency (to the public) about the actual monetary value of tax breaks.

Similar to the US Sen Al Franken's inside baseball version of wrestling with corporations over the mergers of telecoms & cables. The corps demanded all, conceded nothing, had no intention of honoring their promises, completely lost their minds when Franken tried to get future promises in writing.

The USA is a Corporatocracy. Partisanship, culture wars, moral panics, food fights, etc. all serve to obscure that central fact.

TheBigSalad2• 3 years ago

Isn't their core competency supposed to be building airplanes?

mjfl• 3 years ago

Seems like a really good case study in how complex engineering technologies become unknowable overtime and this leads to a collapse as understanding of the core product declines.

ImageXav• 3 years ago

Boeing's competitors seem to be doing just fine. Rather, this is a clear case of poor management leading to a degraded engineering culture.

alkonaut• 3 years ago

Boeing just has one big competitor in the civiiian space and it would be really interesting to know what management and organizational differences exist. Because Airbus is known to be pretty complex too in terms of manufacturing in different sites with staff speaking a dozen languages and so on. Are they doing the same thing better or something fundamentally different (such as outsourcing merely distributing work among their own facilities)?

smcin• 3 years ago

We could label that the 'Mad Max' theory of how safely building airplanes inexplicably became arcane lost knowledge...

Anyway in reality, look at how post-merger, McDonnell Douglas’s professional managers hollowed out Boeing’s legendary engineering. And the stock market cheered that.

scrps• 3 years ago

This is what happens when the people who build the world we all live in are contravened by people who think they run the world we all live in.

082349872349872• 3 years ago

See also early (1960s) CAD/CAM saving a Boeing project in https://inria.hal.science/hal-01526813/document

“I just can’t get the wing data to match the body data, and time is no longer on my side.” “Show us your wing data. Hey where did you get this stuff?” “From the body project.” “But they’ve given you old data; you’ve been trying to fit an old wing onto a new body.” (The best time to make a design change is before you’ve actually built the thing!) An hour later life was restored and the 727 became a single numerical entity.

JohnCClarke• 3 years ago

Blaming "outsourcing" sounds like passing the buck.

The MCAS software debacle and penny pinching walk-back on the MCAS remediations shows that the rot has set in within Boeing.

OhMeadhbh• 3 years ago

I don't think this will change until Boeing's compensation committee cuts pay and bonuses for their execs. Even then they'll just move on to the next corporate job and the new execs will negotiate bonuses based on improving metrics which can be gamed.

In the mean time airlines are stuck with Boeing planes (at least part of) the public thinks of as ticking time-bombs. Some (many? most?) are stuck with planes that they've sunk a fair bit of cash into. Or, more likely, the airlines' corporate parents own a company that owns planes that leases them back to the operating airline for tax reasons. And while that might seem to reduce pressure on the carriers, it's unlikely their corporate parents will want to walk away from that investment.

The last time we had a problem with the 737-900 MAX's, Alaska started flying Airbusses. This time my monthly SEA -> SJC flight is on an Embraer. This can't be good for anyone (except Airbus and Embraer.)

Maybe it's time for corporate America to get serious and only pay the c-suite bigbux if they don't destroy the company.

shiroiuma5• 3 years ago

Embraer isn't competition for Boeing or Airbus; they only make very small regional jets, nothing even close to the size of a 737 let alone one of the larger jets.

awongh• 3 years ago

A lot of people blame the current toxic culture on the McDonnell Douglas merger that happened in the late 90s.

One of the reasons that merger needed to happen though, was that Boeing didn't know how to be profitable in a non-government regulated market (post deregulation of the airlines).

It's easy to make well engineered planes when the government has a hand in guaranteeing you good profit margins and you don't have to worry too much about costs.

tuber33• 3 years ago

Can someone explain why the tiny risk of death associated with Boeing's safety issues matters at all compared with the far greater risks that we take for granted (driving, etc.)?

I don't get it. It seems like we all make riskier tradeoffs whenever we buy a used car instead of a newer, safer one, or when we buy a slightly less safe new car instead of the safest new car. By not spending more on a safer vehicle, we're saying that we're willing to trade a certain amount of savings for a certain amount of risk.

How much more are we willing to spend to make aviation safer, when it's already so much safer than driving?

One argument I've seen on HN is that most car accident deaths are preventable by a responsible driver, while passengers have no control.

Ok, even if 99% of car accident deaths were preventable, that leaves 1% that are unpreventable. 1% of the ~35,000 car accident deaths in the US each year = 350.

Compare that to ~zero commercial aviation deaths/year in the US over the last decade or so. Source: https://injuryfacts.nsc.org/home-and-community/safety-topics....

If we include Boeings 737 MAX overseas deaths, that adds ~350 deaths. https://en.wikipedia.org/wiki/List_of_accidents_and_incident...

Which doesn't seem to change the picture.

smegger001• 3 years ago

because a plane falling out of the air has much larger potential for distruction than car running into another.

Because its easier to regulate 30,000 planes owned by a few dozen airlines made by a handful of manufacturers, than it is to regulate over a billion cars owned and maintainted by hundreds of millions of drivers and made by hudreds of manufacturers.

ActionHank• 3 years ago

You want KFC for dinner.

Down the street are 2 different KFCs.

One uses oil that sometimes, a very small percentage of the time, will instantly kill you. The other does not. They arrived at using the riskier oil because it saves them 5c a day and it makes the books look better.

Are you really asking why anyone would even bother differentiating these two because the drive to the KFC carries more risk?

Why would you as a consumer want to fly on something with an ever worsening safety record?

Why would you as an airline want the bad press, loss of revenue, and loss of reputation associated with a safety incident?

tuber33• 3 years ago

If the danger KFC is closer and chance of instant oil death is low enough, I would go to that one.

And to answer your second question, I would fly on the airplane with the worsening safety record if its other characteristics made up for it (price, timing, etc).

Why would an airline want the bad press, reputation effects, etc? That's a circular question to mine. My question was: why do people care so much about this minuscule increase in a minuscule risk? I agree that the game theory of such caring about caring (https://en.wikipedia.org/wiki/Keynesian_beauty_contest) makes sense, but I still wonder why HN readers care about it as individuals, not as Boeing execs.

alexzork• 3 years ago

Boeing delivered planes with loose bolts. If you bought a car with loose wheel bolts you would be upset. Cars are a much larger industry than aeroplanes and instead of “groundings” they have “recalls”, sometimes in the millions.

tuber33• 3 years ago

Right, sorry for the poor choice of words. I agree with the groundings, I'm just surprised by the enormous response in the popular press and HN.

panick21_6• 3 years ago

One argument I've seen on HN is that most car accident deaths are preventable by a responsible driver,

A false argument that keeps getting pushed in the US despite being false.

You are right but the solution is not to say 'Boeing is fine' but rather, the way driving is treated is fucking batshit insane crazy.

TheBigSalad2• 3 years ago

Because people are emotional and don't respond to statistics like that. 2 planes crashed over a single, critical software usability defect. Now Boeing is a complete trash company and is doing many things wrong. Airbus is perfect and does nothing wrong. With such a small sample size, it could very well be that Airbus is much worse than Boeing. But that's just not how people will perceive it. These businesses know that and know they need absolute perfection.

albert1803• 3 years ago

There are many news articles about Boeing's shoddy manufacturing quality out there, that have nothing to do with software, and they already got many times in trouble with the regulators for it.

natch• 3 years ago

As long as you're comparing cars and air travel, I'll point out that the aviation industry lies with statistics when they present the numbers.

When comparing safety within aviation, they talk about deaths per departure.

When comparing safety between aviation and cars, they suddenly change their metric and talk about deaths per mile, making aviation look much better.

I'm not saying aviation is worse than cars if you do a fair comparison; I haven't done the math. Maybe it's still better. But still they are fudging things in their own favor.

sokoloff2• 3 years ago

per departure comparison makes sense if the risks are concentrated in things that are 1:1 with departures. https://accidentstats.airbus.com/statistics/accident-by-flig...

Comparing different operators within aviation, using a rate per departure makes sense I think.

TobyTheDog123• 3 years ago

I just love how we can have a critical study about a failure that could have possibly led to the death of dozens if not 100+ people, a failure in something as routine and critical as flying in an airplane, and the article is behind a paywall.

We're getting very close to the point where the combination of the competency crisis and the greed crisis are going to start causing more people to think twice about doing things that were once common, like flying commercial.

Personally, I cancelled my flight later this month and am going to start getting in the habit of doing long road trips again.

Just-as-if-not-more dangerous? Maybe, but at least I have a higher chance of my fate being in my own hands (swerving out of the way of an oncoming truck vs being sucked out from a fuselage plug failing).

More inconvenient? Yep, don't care.

More expensive? Maybe, don't care.

g9yuayon2• 3 years ago

Ken Thompson in the most recent Sharp Tech podcast also talked about the management style of Boeing after their merger with McDonnell Douglas. They mentioned that when Boeing's HQ was still in Chicago, their CEO boasted that the HQ was thousands miles away from Seattle so that the management didn't have to get involved in day-to-day operations. This is just staggering how arrogant Boeing's the executives could be. Contrasting this with how old Boeing worked, how old Lockheed worked, how Elon Musk worked. No wonder Boeing has been in decline. It's just sad that so many talented engineers are stuck in this monopoly, when they could've leave the company and build something groundbreaking. For that matter, I feel extremely lucky that the IT industry have had a bustling culture of startups, so corrupted companies can die and new companies can innovate. I also feel extremely sad that how aviation industry has become complacent and ossified. I also worry that the US's industries are going the British way, as how British government forced their auto industry to consolidate many years ago, ending up destroying their the entire auto industry.

nobodyandproud• 3 years ago

A parallel discussion here: https://news.ycombinator.com/item?id=38978705

DrNosferatu• 3 years ago

Indeed years - Al Jazeera 2014 documentary / exposé:

https://youtu.be/rvkEpstd9os?si=YdVyOoYTNKkPBn6w

‘This Has Been Going on for Years’: Boeing’s Manufacturing Mess

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