You Want to Fix Boeing? Prosecute Its Executives

https://www.thefp.com/p/fix-boeing-prosecute-executives-joe-nocera

by fortran77 • 2 years ago

161 54 2 years ago

kombookcha• 2 years ago

And that’s the larger point. The Justice Department seems to believe it’s meaningful to charge a company with a felony. But it’s not. Companies don’t commit felonies—people do. And if people aren’t held responsible—and sent to prison when necessary—then they’ll never have the incentive they need to change.

This is at the core of the issue, but as the author points out, it's extremely unlikely to happen.

The settlement makes it obvious that the government is afraid of what would happen—not just to Boeing but to the Defense Department and even the larger economy—if it hit the company as hard as the company deserves to be hit.

Boeing is very much too Big™ to (be allowed to) fail, and thus the actual individuals who are responsible for killings hundreds of people will walk away and be replaced by another set of people who will know that they can do the exact same thing with impunity.

_heimdall10• 2 years ago

Boeing isn't too big to fail, nothing is. That whole concept has always bothered me. We absolutely can let companies and banks that size fail. Sure there will be a lot of damage caused, but that's called taking responsibility for our mistakes and learning from them. You can't sweep problems under the rug forever.

fleischhauf• 2 years ago

repercussions on the general economy and for the people is what they are worried about

techostritch3• 2 years ago

While I am a morbidly curious individual who would love to see one of these “too big to fail entities fail”, I don’t know that I share your confidence. And I don’t know that it’s taking responsibility either, if you let them fail, the pain is sharply distributed unevenly away from the people who caused the issue, then if you just prosecuted them.

aslihana• 2 years ago

Yes. And I think this is why the article ends with `Then prosecute its executives. There is nothing like the prospect of prison to focus the mind.`

clwg• 2 years ago

In this instance, does Boeing need to fail though? There seems to be quite a bit of criminality happening, which is a law enforcement issue. The rest should have been caught by regulatory bodies.

If you get rid of the criminals and enforce regulations that ensure quality control and safety, I don't see why you need to completely eliminate the company and destroy all the supply chains they're a part of and jobs they provide.

slowmovintarget• 2 years ago

"Too big to fail" is the bullshit phrase used to sell privatizing profits while socializing failure. What made private profits OK was that both risk and failure were also born by the same private entity. It's time we got back to how regulated capitalism is supposed to work. Let the company face its own consequences and fail, or perhaps heal.

Stranger433• 2 years ago

And even if they do fail it's rarely the end as the bankruptcy process do totally allow for the critical/valuable aspects of an company to continue under new ownership, and the state could easily ensure that that process happens by buying up the parts they have an interest in doing the bankruptcy proceedings.

All the current model of Bailouts do is protect the shareholders from having their share value wiped out as a part of the process, and of cause keep up the appearance that the stock market can keep going to the moon(which a lot of retirement funds depend on).

viridian• 2 years ago

I do think the global mega banks are too big to fail in ways that other entities are not. You can force their assets to be wholly absorbed by other entities, like the Obama admin did with WaMu and Bear Stearns, but you can't liquidate them like a normal company.

Nor can you try to slowly unroll their assets piecemeal on any normal human time-scale, and big parts of the organization's 100's of billions of dollars of value prop are things you can't sell in the first place, like principal arbitrageur status.

I'm not defending the banks here, and in fact this is one of a few large reasons why the US has had such huge conflicts over establishing both a national bank, and national governance of the banks. It begs the question, if these entities hold such a huge portion of the nation's financial destiny in their hands, why are they not beholden to the public?

lenkite• 2 years ago

This is why there should be a hard limit on mergers and acquisitions for any business. All companies become tentacular godzillas after a decade or two and the state is forced to keep them running because its "too big to fail" for the economy.

ceejayoz6• 2 years ago

It baffles me that they're not similarly afraid of what might happen to those same entities if they don't hit Boeing as hard as it deserves. It's clear they need a serious shakeup.

You don't have to smash the company to bits to achieve it, either. You just have to instill a little personal fear in the C-suite that at a certain point prioritizing profits over lives becomes personal criminal liability.

andy_ppp• 2 years ago

I find it so funny how kind and socialist the government is towards the rich. If there was a person who wasn't part of the elite networks who are allowed to run companies like Boeing had built something criminally unsafe, you can guarantee they would be hit with the most extreme legal prosecution you can imagine.

bryanlarsen• 2 years ago

Not only is fining Boeing into failure possible, it would be highly beneficial for the government. Being the biggest creditor, the government would take over the company temporarily. The business itself would continue under government trustee-ship, the only losers would be the shareholders and executives. The government would likely quickly sell off its holding at fire sale prices so new shareholders and executives would take over.

GM was too big too fail, but fail it did in 2009. Boeing could/should be similar.

M95D• 2 years ago

Maybe Airbus will buy it. Then, McDD culture will get the chance to corrupt that company too.

alistairSH• 2 years ago

If Boeing is "too big to fail" isn't the first step to cut them up? Split the defense business out. Split each airline model out. Or something else.

joenot443• 2 years ago

Why is it so unlikely to happen, though? In my lifetime I’ve only witnessed the American political sphere in general grow less and less friendly with the C-suite class. All the present drama in Washington aside, I’m pretty confident we’ll see real hard-time consequences for the leadership of bad-actor companies becoming more and more the norm.

If Epstein was found out in the 60s, I think we all know he could have pulled the appropriate levers and eventually walked. SBF got 25 years. Elizabeth Holmes got 12.

Obviously Western justice is far from perfect. I still feel as if we’re trending in the right direction.

smsm42• 2 years ago

Maybe letting Boeing collapse is too scary, fine. Find people who signed for the fraud and throw the book at them. Decades in prison, millions in fines. Nothing will collapse from that. If that's not happening then thd concern is not the noble one about the country bug selfish one about never letting the elites suffer any consequences of anything.

pydry2• 2 years ago

The upper classes don't allow the prosecution of people like themselves unless their crime was extreme in some way (e.g. SBF, Epstein, Shkreli). It sets too awkward a precedent.

This is as true now as it was during the financial crisis. The most they will do is toss an engineer following orders under the bus like they did with Volkswagen.

throwawayyall• 2 years ago

Consider too that SBF (and likewise Bernie Madoff) stole from the upper classes, and Epstein had damaging information on many of them. Doesn't explain Shkreli but then even a stopped (analog) clock is right twice a day.

Update: Perhaps the thing with Shkreli is that he did something pretty egregious that was drawing heat from the commoners, and to the rest of the upper class, he's a foreigner with a funny name who grew up poor and has vulgar tastes. If you have to give up the occasional sacrifice, better someone like him than your old roommate from Phillips Exeter.

pydry2• 2 years ago

I'm fairly sure that Shkreli's crime was being a bit too showy and blatant and drawing too much attention to drugs racketeering as a whole. I think if he'd done it a bit more quietly he'd have easily gotten away with it. The extremeness on his part was just the drama that surrounded him.

I reckon if any of the Boeing execs responsible for the crash made waves at outrageous parties or went on TV and bragged their crimes with cocaine still up their nose then they'd probably get grudgingly thrown under the bus too.

It mirrors the way Prince Andrew was coddled until he did that idiotic interview and then the royal family decided to downgrade him to "still fully protected from criminal prosecution" but cut out of the family business.

whamlastxmas2• 2 years ago

The powerful aren’t prosecuted unless it was a crime that affected the powerful

bearjaws• 2 years ago

It feels like in the future Universe post Chevron vs. Natural resources defense council we are going to either have to punish executives or inevitably guillotines will start to come back.

djyaz1200• 2 years ago

Counterpoint: How about the government subsidize Boeing on the same level as the EU does with Airbus?

The original sin of the Max disasters was rushing to make the 50+ year-old 737 something it wasn't meant to be to counter Airbus's success in the narrow body segment.

ceejayoz6• 2 years ago

Counterpoint: How about the government subsidize Boeing on the same level as the EU does with Airbus?

They do, just via different methods.

https://www.reuters.com/world/highlights-17-year-airbus-boei... has a blow-by-blow summary of the various convoluted WTO rulings on each side's versions.

guardian5x• 2 years ago

It’s important to note that Boeing has indeed received substantial subsidies and tax breaks over the years, comparable to or even exceeding those provided to Airbus by the EU. For instance, Washington state alone has granted Boeing tax breaks worth about $9 billion. Additionally, the World Trade Organization (WTO) has ruled that both the EU’s support for Airbus and the US’s benefits to Boeing violated trade rules, leading to tariffs on both sides.

So, while the EU has certainly supported Airbus, the US government has also heavily subsidized Boeing, creating a complex and competitive landscape in the aerospace industry. This context is crucial when discussing the challenges and decisions faced by both companies.

piva002• 2 years ago

So, while the EU has certainly supported Airbus, the US government has also heavily subsidized Boeing, creating a complex and competitive landscape in the aerospace industry. This context is crucial when discussing the challenges and decisions faced by both companies.

LLM-generated comment is becoming quite obvious to spot.

On the main topic: Boeing not only received subsidies from the government as stated on the two parent-sibling comments as they've also attempted to kill Bombardier CSeries competition by judicial means in the USA. Instead of providing a better product they attempted to delay Bombardier's sales of the CSeries by starting a long judicial process accusing Bombardier of price-dumping when they didn't have a competitive product.

Unfortunately for Bombardier it was a big blow to their sales of the CSeries, fortunate was Airbus who could pick up the pieces and start production of the jets in the USA to circumvent the main argument Boeing tried to use against them.

The original sin of the Max disasters was rushing to make the 50+ year-old 737 something it wasn't meant to be to counter Airbus's success in the narrow body segment.

Completely due to mismanagement of Boeing's product line, they lost against Airbus A320neo/A321 and Bombardier CSeries, they weren't competitive and didn't have a product in the works to compete. Against Bombardier they tried their dirty tricks, and failed.

It's all on Boeing, they rushed a subpar product in a panic because of their own failures to read the market, in the process killing hundreds of people.

whamlastxmas2• 2 years ago

ChatGPT says it was only 5.7 billion in tax breaks. And it doesn’t seem to think it gets subsidies outside of that really, however it does of course get massive bloated US contracts. Airbus has had $22 billion in subsidies

nocsi• 2 years ago

The Washington state tax package was to coerce Boeing to stay. To which to ate it and proceeded to move its HQ to Chicago and migrate manufacturing to North Carolina. WA state != US gov. Contrast Microsoft to Boeing. Taxpayers dob’t have to feed Microsoft to get them to work on public works. They are self-motivated to improve their environment, which in turns improves the quality of life for their workers and the residents.

_heimdall10• 2 years ago

Counterpoint: How about the government doesn't get involved to begin with?

Boeing (and Airbus) is a massive corporation with a large market position. Why do they need government subsidies at all? Is the business, or a specific product, not viable? If they aren't viable, why should the government continue to prop them up?

piva002• 2 years ago

Pure free marketism is not the answer to everything. Things that are risky, demand a lot of capital investment, and are strategic are not best done by the free market since there are gaps between the profit-motive incentive and long-term strategic assets.

Boeing and Airbus are the backbone of civilian aviation, if one was to falter there would be a massive gap in the market until a new entrant would be able to create a good enough product to fill it, during this period a shortage of planes would have cascading effects through many other industries.

The theory of an efficient market doesn't consider the in-betweens where these gaps can exist, in the long run an efficient market would stabilise itself but who is supposed to suffer the pain of a market failure until it stabilises itself when that can take decades? Government is the way humans have found to collectively act on those gaps, it's not the most efficient way per the free market utopia but it's necessary to dampen market swings when they happen.

This applies to many other industries, it's naïve to believe that no company should have support, it's also unfair in the general sense that some get it. It's a trade-off and finding that balance is where complexity hides away, just trying to shove that complexity away from a spherical cow model of the economy is not realistic, it's pure dogma.

nashashmi• 2 years ago

A culture of safety was transformed into a culture of results and productivity. That is not a crime. That’s a business achievement.

Do you remember when the Boeing 787 Dreamliner kept getting delayed? At some point I thought it was never going to get completed. And then they had to compete with Airbus. Competition is what killed Boeing safety culture.

lordnacho2• 2 years ago

About this case specifically, is there anything the execs can actually be put in jail for?

In general, corporations need to be more fragile than people. A corporation can live forever, gathering up resources, eating up the useful work of tens of thousands of people. Corporations can also be born a lot more easily than people.

Making it easy to kill them would actually benefit a lot of people, since the people can be transferred along with their experience to other corporations.

Want to make real culture change at a company like Boeing? You make it easy for Boeing to die, so that the people who have other ideas about how to make planes can do so without a massive incumbent in their way.

_heimdall10• 2 years ago

I would be surprised if internal documents didn't point to individuals involved knowingly allowing the company to find itself here. That said, I obviously don't have that access and couldn't say if criminal charges against any individuals are reasonable.

That said, I can say that whether the charges would be supported or not I don't think regulators or investigators are willing to pursue it and will happily stop at only slapping the corporation on the wrist.

ceejayoz6• 2 years ago

The paper trail tends to taper off as you get up towards the C-suite, though, in favor of in-person verbal instructions.

(With notable exceptions: Apple and Google were silly enough to have the CEOs emailing back and forth. https://www.theguardian.com/technology/2014/apr/24/apple-goo...)

techostritch3• 2 years ago

But if we prosecute Boeing’s executives, what message would that send to other executives? That they shouldn’t sacrifice safety engineering standards in the pursuit of record profits? Will no one think of the shareholders!

agentultra• 2 years ago

Echo this for security at tech companies. The industry would be much different if the liability were shifted to incentivize the right behaviors.

raincom• 2 years ago

It is very hard to get guilty verdicts because prosecutors have to prove the culpability of any executive of any large corporation. In large organizations, executives are shielded by layers of bureaucracy along with legal counsel.

There is a way to get around this problem of proving culpability of individuals in large organizations. RICO was a way to go after mafia bosses. Thanks to the revolving door (of politicians, staffers of various committees, DOJ employees, prosecutors), it is impossible for the latter class to use RICO to go after any executive of any large company. Of course, one can say SBF was convicted; here, it was easy to find evidence to prosecute and convict SBF.

taylodl• 2 years ago

“This airplane was designed by clowns, who in turn are supervised by monkeys.”

That feels like that would apply to half the software I use! Then again, it would describe some of the places at which I've worked. But I'm a software engineer and so I have lots of employment options. What's an aeronautical engineer, an aviation material engineer, or avionics expert supposed to do? They have limited options for employment - and that's why it's important to prosecute the executives.

It's bad for everyone that the DoJ offered a plea deal. I know that's SOP, but Boeing isn't a usual company, and this isn't a usual situation. We need to know what actually happened. Is this truly a failure of management as is being portrayed, or is this a failure of process? Has the complexity of design and manufacturing now exceeded our ability to ensure quality? These are the kinds of questions I would like to have answered and an actual trial would give us a better opportunity to learn the real issues.

Stranger433• 2 years ago

Going directly after the executives would at the very least be better theater then letting a company pay the government with the governments own money.

It probably wont fix the issue but this kind of non-action is why most people have lost all trust in the American Governments ability to regulate corporations at all.

It's very likely that the current court structure would be extremely reluctant to issue any guilty verdict against a member of the executive class for simply chasing short term profit at the cost of the public good/safety so that this is the best that could be do but if that's true it's basically demonstrating that the technocratic center have lost it's ability to be effective technocrats and that can/will have severe implications for who is considered electable to the point where we might not see another centrist government for a while.

Havoc• 2 years ago

That’s not really how the law works though.

You need to actually prove with evidence actual wrongdoing on their part as a person. Or at a minimum prove that they failed in their fiduciary duties - a frustratingly murky concept.

Innocent until proven guilty, burden of proof etc all still applies.

Some general sense of well you were at the helm and everyone is angry thus you go to jail isn’t going to stick legally.

That’s not to say I’m against it, if they can manage to find suitable evidence they absolutely should. Just saying the article is big on emotion (rightly so) and thin on legal basis.

You Want to Fix Boeing? Prosecute Its Executives

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