Sleight of the 'Invisible Hand'
February 28, 2024 12:44 PM Subscribe
A surprisingly interesting case study on what the left hand does, when the other is the invisible hand of the market: How Boeing broke down: Inside the series of leadership failures that hobbled the airline giant.
"It was that managerial decisions, made over a period that spanned more than 20 years and four CEOs, gradually weakened a once vaunted system of quality control and troubleshooting on the factory floor, leaving gaps that have allowed sundry defects to slip through" (non-paywall), changing Boeing from an engineering product company to the McDonnell Douglas finance machine. Previously (1) (2) (3).
Wendover Prouctions has a good video explaining Boeing’s downfall, as well.
posted by Big Al 8000 at 12:53 PM on February 28 [1 favorite]
posted by Big Al 8000 at 12:53 PM on February 28 [1 favorite]
I love that Fortune magazine is befuddled that "the company did what Wall Street wanted" but was destroyed. Yes, you assholes, yes, that is what happens when you "maximize shareholder value" over "fulfilling your company's mission and valuing your customers."
posted by Abehammerb Lincoln at 12:58 PM on February 28 [46 favorites]
posted by Abehammerb Lincoln at 12:58 PM on February 28 [46 favorites]
GE management philosophies infected Boeing after executive turnover brought Jack Welsh proteges to the helm.
posted by They sucked his brains out! at 1:26 PM on February 28 [2 favorites]
posted by They sucked his brains out! at 1:26 PM on February 28 [2 favorites]
The CEOs that oversaw the destruction of this company will, of course, never work as CEOs again.
Hahaha, I’m sure they all left with millions and can get a job in seconds, to do the exact same thing again, somewhere else.
posted by teece303 at 1:28 PM on February 28 [10 favorites]
Hahaha, I’m sure they all left with millions and can get a job in seconds, to do the exact same thing again, somewhere else.
posted by teece303 at 1:28 PM on February 28 [10 favorites]
Your life doesn't matter, unless you're a shareholder, and only if you control a sufficient number of shares.
posted by tommasz at 1:35 PM on February 28 [3 favorites]
posted by tommasz at 1:35 PM on February 28 [3 favorites]
There is distancing language for you and me, and then there is Board of Directors distancing language:
"Boeing Board Shuts Down Potential Headquarters Move (back) To Seattle"
posted by MonsieurPEB at 1:46 PM on February 28 [2 favorites]
"Boeing Board Shuts Down Potential Headquarters Move (back) To Seattle"
posted by MonsieurPEB at 1:46 PM on February 28 [2 favorites]
It's what happens when the bean-counters displace the engineers in a highly technical endeavor...
posted by jim in austin at 1:47 PM on February 28 [1 favorite]
posted by jim in austin at 1:47 PM on February 28 [1 favorite]
Related: A former senior Boeing employee on why he still won’t fly on a MAX plane.
‘I’m Not Trying to Cause a Scene. I Just Want to Get Off This Plane.’
posted by chavenet at 1:47 PM on February 28 [9 favorites]
‘I’m Not Trying to Cause a Scene. I Just Want to Get Off This Plane.’
posted by chavenet at 1:47 PM on February 28 [9 favorites]
Strangely I just read this today about it, via Politico: ‘I’m Not Trying to Cause a Scene. I Just Want to Get Off This Plane.’ A former senior Boeing employee on why he still won’t fly on a MAX plane.
I was never keen on flying on Max 8s or 9s but now I definitely will avoid them.
This is happening, in some form, everywhere, as a feature (ie bug) of late-stage capitalism, thanks to decades of neo-liberalism.
On preview: oops, jinx, chavenet!
posted by urbanlenny at 1:49 PM on February 28 [7 favorites]
I was never keen on flying on Max 8s or 9s but now I definitely will avoid them.
This is happening, in some form, everywhere, as a feature (ie bug) of late-stage capitalism, thanks to decades of neo-liberalism.
On preview: oops, jinx, chavenet!
posted by urbanlenny at 1:49 PM on February 28 [7 favorites]
between this, finding out that boeing's military arm is in deep shit, and all the troubles surrounding getting starliner off the ground i sure hope the astronauts boarding it this spring don't experience a quality and atmosphere escapement
posted by i used to be someone else at 1:53 PM on February 28 [2 favorites]
posted by i used to be someone else at 1:53 PM on February 28 [2 favorites]
They probably extracted billions of dollars in profits while doing this. All of that good will and reputation had value, but it wasn't on shareholders pockets!
By converting a reputation for quality and safe products into liquid cash, they enriched shareholders. And who really matters, 100s of dead passengers, or billions of dollars for shareholders?
One of these will give the CEO a multi million dollar bonus.
Public externalities (like "boeing makes good planes, and I am right!") are economic inefficiencies from the shareholder perspective. We need less economic efficiency.
posted by NotAYakk at 2:01 PM on February 28 [3 favorites]
By converting a reputation for quality and safe products into liquid cash, they enriched shareholders. And who really matters, 100s of dead passengers, or billions of dollars for shareholders?
One of these will give the CEO a multi million dollar bonus.
Public externalities (like "boeing makes good planes, and I am right!") are economic inefficiencies from the shareholder perspective. We need less economic efficiency.
posted by NotAYakk at 2:01 PM on February 28 [3 favorites]
Hi mods, in the OP, can the spelling “McDonald” be changed to “McDonnell,” for later searching?
posted by toodleydoodley at 2:03 PM on February 28 [3 favorites]
posted by toodleydoodley at 2:03 PM on February 28 [3 favorites]
Ditto @ toodley. I'd sent a mod correction email as soon as I'd hit post. Oof/eek
posted by rubatan at 2:08 PM on February 28 [1 favorite]
posted by rubatan at 2:08 PM on February 28 [1 favorite]
This season in The Writers Fucking with Us: the pressure to push planes out the door leads to pressure pushing the doors out of planes.
posted by Riki tiki at 2:15 PM on February 28 [40 favorites]
posted by Riki tiki at 2:15 PM on February 28 [40 favorites]
Back when it was becoming clear that McDonnell Douglas's cutthroat culture had infected Boeing even though they're the ones that got taken over, I believe the joke was that “McDonnell Douglas bought Boeing with Boeing’s money”.
posted by theory at 2:50 PM on February 28 [5 favorites]
posted by theory at 2:50 PM on February 28 [5 favorites]
Damn you autocorrect!
posted by toodleydoodley at 2:52 PM on February 28
posted by toodleydoodley at 2:52 PM on February 28
I mean, if the airline says that one plane is interchangeable for the other, who are we "consumers" to argue?
I *also* wasn't trying to cause a scene this past Monday when I stopped a pelvic exam when a different doctor than the one I'd been specifically referred to walked in. "We all do the same things".
Doctors are interchangeable in a similar way to aircraft. One unit produces an identical flow of money to another one. Really, they'd prefer to just not have to fly passengers or have empty exam rooms if they could only find some trick to keep the money flowing.
posted by tigrrrlily at 3:28 PM on February 28 [5 favorites]
I *also* wasn't trying to cause a scene this past Monday when I stopped a pelvic exam when a different doctor than the one I'd been specifically referred to walked in. "We all do the same things".
Doctors are interchangeable in a similar way to aircraft. One unit produces an identical flow of money to another one. Really, they'd prefer to just not have to fly passengers or have empty exam rooms if they could only find some trick to keep the money flowing.
posted by tigrrrlily at 3:28 PM on February 28 [5 favorites]
That would be the ultimate alchemical corporation. One that has no overhead costs and just funnels money to slaveholders, I mean shareholders.
posted by nikoniko at 4:29 PM on February 28 [2 favorites]
posted by nikoniko at 4:29 PM on February 28 [2 favorites]
How do the airlines make money from those flights, hippybear?
posted by tigrrrlily at 4:36 PM on February 28
posted by tigrrrlily at 4:36 PM on February 28
That's reasonable.
posted by tigrrrlily at 4:42 PM on February 28
posted by tigrrrlily at 4:42 PM on February 28
I love that Fortune magazine is befuddled that "the company did what Wall Street wanted" but was destroyed. Yes, you assholes, yes, that is what happens when you "maximize shareholder value" over "fulfilling your company's mission and valuing your customers."
"Whoever would save the stock price shall lose it. But whoever forsaketh the stock price for engineering culture's sake shall save it," or something like that.
posted by officer_fred at 6:13 PM on February 28 [3 favorites]
"Whoever would save the stock price shall lose it. But whoever forsaketh the stock price for engineering culture's sake shall save it," or something like that.
posted by officer_fred at 6:13 PM on February 28 [3 favorites]
I’m starting to think of the Max-series 737s like the McDonnell Douglas DC-10. In the end, the DC-10 was a safe and reliable plane but only after several crashes that exposed significant flaws in MD’s design process. The reason MD had to be bought out was — in no small part — due to the fact that the flying public didn’t trust their planes. For Boeing to buy the company and then adopt their development model is just crazy-making.
posted by Big Al 8000 at 6:43 PM on February 28 [3 favorites]
posted by Big Al 8000 at 6:43 PM on February 28 [3 favorites]
The article whitewashes what happened with the two crashes in 2018 and 2019. It was not just some "faulty design of a new flight control software system", it was that Boeing decided to sell certain safety systems basically as optional DLCs, and the FAA was entirely complicit in this.
posted by Pyrogenesis at 2:10 AM on February 29 [6 favorites]
posted by Pyrogenesis at 2:10 AM on February 29 [6 favorites]
It was that managerial decisions, made over a period that spanned more than 20 years and four CEOs, gradually weakened a once vaunted system of quality control and troubleshooting on the factory floor, leaving gaps that have allowed sundry defects to slip through
It was also that management and CEOs profited handsomely by those decisions, and will pay no price for the damage the company takes now due to their decision, to say nothing of the lives lost due to their corner-cutting.
posted by Gelatin at 4:34 AM on February 29 [4 favorites]
It was also that management and CEOs profited handsomely by those decisions, and will pay no price for the damage the company takes now due to their decision, to say nothing of the lives lost due to their corner-cutting.
posted by Gelatin at 4:34 AM on February 29 [4 favorites]
Come on, the CEO did it for shareholder profits. Since when is it a crime to kill people for shareholder profit???
posted by tigrrrlily at 9:01 AM on February 29 [2 favorites]
posted by tigrrrlily at 9:01 AM on February 29 [2 favorites]
The merger of Boeing and McDonnell Douglas was driven by Les Aspin as part of the "Peace Dividend" during Clinton's presidency. At the time I thought that removing competition for civil and military purchases would be a huge mistake. I think that breaking all the mergers back up would be good for all involved, but probably politically infeasible.
posted by pdoege at 10:02 AM on February 29 [1 favorite]
posted by pdoege at 10:02 AM on February 29 [1 favorite]
I think some of the blame for the whole 737 debacle lies with the airlines, especially Southwest and Ryanair. Both have totally 737 fleets and neither wanted Boeing to build a new 797 that would require retraining, new simulators, new maintenance procedures,etc. So rather than designing a new state-of-the-art airliner, Boeing made 737 version 4 or 5.
posted by leaper at 10:05 AM on February 29 [1 favorite]
posted by leaper at 10:05 AM on February 29 [1 favorite]
The article whitewashes what happened with the two crashes in 2018 and 2019. It was not just some "faulty design of a new flight control software system", it was that Boeing decided to sell certain safety systems basically as optional DLCs, and the FAA was entirely complicit in this.
Yes. The whole reason Boeing was altering the 737 design, instead of designing a whole new aircraft, was to save time and money -- the 737 was already certified, and by making the new plane a variation on the old one, it could circumvent a lengthy and costly regulatory approval process.
The problem was that, by moving the positions where the engines were mounted on the wings, Boeing's design for the 737 Max changed the weight balance of the old 737 design pretty significantly... to the point that the plane wouldn't actually fly properly under certain conditions.
The fix for this was the Maneuvering Characteristics Augmentation System software. The MCAS software would adjust the position of the plane's horizontal stabilizer to correct for the instability introduced by the repositioned engines.
But Boeing didn't bother to tell airlines or pilots about any of this. Pilots literally had no idea this software was intervening to help steer the plane. And they had no idea that if a certain sensor failed and started sending incorrect data to the software, it would forcibly reorient the plane in a disastrous way.
It was a huge shitshow, and a product of a completely dysfunctional corporate culture -- and a dysfunctional regulatory culture as well.
posted by Artifice_Eternity at 10:25 AM on February 29 [4 favorites]
Yes. The whole reason Boeing was altering the 737 design, instead of designing a whole new aircraft, was to save time and money -- the 737 was already certified, and by making the new plane a variation on the old one, it could circumvent a lengthy and costly regulatory approval process.
The problem was that, by moving the positions where the engines were mounted on the wings, Boeing's design for the 737 Max changed the weight balance of the old 737 design pretty significantly... to the point that the plane wouldn't actually fly properly under certain conditions.
The fix for this was the Maneuvering Characteristics Augmentation System software. The MCAS software would adjust the position of the plane's horizontal stabilizer to correct for the instability introduced by the repositioned engines.
But Boeing didn't bother to tell airlines or pilots about any of this. Pilots literally had no idea this software was intervening to help steer the plane. And they had no idea that if a certain sensor failed and started sending incorrect data to the software, it would forcibly reorient the plane in a disastrous way.
It was a huge shitshow, and a product of a completely dysfunctional corporate culture -- and a dysfunctional regulatory culture as well.
posted by Artifice_Eternity at 10:25 AM on February 29 [4 favorites]
The thing is, to me it's worse than that, even.
Since the whole purpose of MCAS was to not trigger a pilot re-training requirement, its very presence had to be hidden. This had two consequences: one, its development was not given the exposure and review that one would assume normal avionics software would get. If Boeing hadn't been so eager to keep MCAS on the DL, there's no way a system that directly moves the control surfaces would have been allowed to depend on a single sensor input. Two, the flight control inputs that would have suppressed MCAS could not be taught to pilots, and an MCAS failure scenario could not be part of recurrency training either.
posted by tigrrrlily at 12:22 PM on February 29 [4 favorites]
Since the whole purpose of MCAS was to not trigger a pilot re-training requirement, its very presence had to be hidden. This had two consequences: one, its development was not given the exposure and review that one would assume normal avionics software would get. If Boeing hadn't been so eager to keep MCAS on the DL, there's no way a system that directly moves the control surfaces would have been allowed to depend on a single sensor input. Two, the flight control inputs that would have suppressed MCAS could not be taught to pilots, and an MCAS failure scenario could not be part of recurrency training either.
posted by tigrrrlily at 12:22 PM on February 29 [4 favorites]
And they had no idea that if a certain sensor failed and started sending incorrect data to the software, it would forcibly reorient the plane in a disastrous way.
Further, if I remember correctly (reinforced a bit by this stackoverflow answer, but still take this with a grain of salt) there are redundant sensors so that this didn't have to have a single point of failure. But using redundant data meant there'd have to be a strategy for what happens if the sensors disagree (probably indicating some sort of sensor failure).
The more complicated the system became, the more noticeable the design changes would be and the more likely it'd become that pilots would need simulator training. It seems that Boeing was desperate to tell customers they could deploy the 737 MAX without extra training. I can't remember if there's a specific smoking gun email where they said that's why they'd limit MCAS to one sensor. But even if that particular choice was incidental, this whole situation was textbook normalization of deviance.
Edit: what tigrrrlily said.
posted by Riki tiki at 12:27 PM on February 29 [2 favorites]
Further, if I remember correctly (reinforced a bit by this stackoverflow answer, but still take this with a grain of salt) there are redundant sensors so that this didn't have to have a single point of failure. But using redundant data meant there'd have to be a strategy for what happens if the sensors disagree (probably indicating some sort of sensor failure).
The more complicated the system became, the more noticeable the design changes would be and the more likely it'd become that pilots would need simulator training. It seems that Boeing was desperate to tell customers they could deploy the 737 MAX without extra training. I can't remember if there's a specific smoking gun email where they said that's why they'd limit MCAS to one sensor. But even if that particular choice was incidental, this whole situation was textbook normalization of deviance.
Edit: what tigrrrlily said.
posted by Riki tiki at 12:27 PM on February 29 [2 favorites]
I think the real story of interest is how Airbus is not suffering from Boeing's disease despite existing in the same market.
posted by srboisvert at 6:29 PM on February 29
posted by srboisvert at 6:29 PM on February 29
The documentary Downfall: The Case Against Boeing on Netflix is really good.
posted by neuron at 8:42 PM on February 29 [1 favorite]
posted by neuron at 8:42 PM on February 29 [1 favorite]
The worst thing about the issue with conflicting sensor readings is that it was was foreseen and software to alert the pilot about it existed. But it was sold as an "upgrade" - a safety feature with no marginal cost as an upgrade! Imagine if car manufacturers sold safety brakes or seatbelts as extra.
posted by ndr at 1:00 AM on March 1 [1 favorite]
posted by ndr at 1:00 AM on March 1 [1 favorite]
I mean, even when the car already has the necessary hardware, notifying emergency services in a crash is usually a subscription service, right?
posted by Riki tiki at 3:23 PM on March 1
posted by Riki tiki at 3:23 PM on March 1
Boeing almost went forward with the Pelican, a monster transport plane for the military.
posted by Brian B. at 4:11 PM on March 1
posted by Brian B. at 4:11 PM on March 1
Imagine if car manufacturers sold safety brakes or seatbelts as extra.
You can rarely buy options al la cart any more but it is certainly the case that features like ABS, airbags, traction control, lane assist, cruise control, power brakes, larger brakes, disks instead of drums, halogen headlamps, mirrors on both sides of the car, etc. were often available on only the most expensive model of a line up or as part of the most expensive options package. Only later moving down market till eventually becoming ubiquitous. And even then often only when legally mandated.
posted by Mitheral at 7:39 PM on March 1
You can rarely buy options al la cart any more but it is certainly the case that features like ABS, airbags, traction control, lane assist, cruise control, power brakes, larger brakes, disks instead of drums, halogen headlamps, mirrors on both sides of the car, etc. were often available on only the most expensive model of a line up or as part of the most expensive options package. Only later moving down market till eventually becoming ubiquitous. And even then often only when legally mandated.
posted by Mitheral at 7:39 PM on March 1
Heck doors on old school jeeps were extra cost options until 1986.
posted by Mitheral at 7:41 PM on March 1
posted by Mitheral at 7:41 PM on March 1
First, see also: Motorola. The only real difference being that some of their feats of financial engineering rivaled their feats of electrical engineering. Seriously, Iridium was some seriously impressive shit on both fronts. Completely unethical on the financial side, and the mindset doomed the company, but nevertheless a display of pure wizardry.
The merger of Boeing and McDonnell Douglas was driven by Les Aspin as part of the "Peace Dividend" during Clinton's presidency. At the time I thought that removing competition for civil and military purchases would be a huge mistake. I think that breaking all the mergers back up would be good for all involved, but probably politically infeasible.
The important context here is that the defense contractors especially the aerospace companies, had grown to a level that was simply unsustainable without the massive government projects that were shoveled into their increasingly gaping maw throughout the Cold War. There was zero chance that the government tap was going to be enough to support more than two prime contractors, so warning was given, hard conversations were had, mergers happened, and Boeing and Lockheed stood together atop the mountain of missiles and planes, dead trees, and ink that were the primary output of the previous five decades.
Point being that while it sounds a bit nefarious, it really wasn't, it was just a recognition that the only option on the table was consolidation. The only question was whether it would involve many visits to the bankruptcy court by most or all of them on the way. In hindsight I think the latter path might have been better because there would have at least been a chance of having meaningful competition if more could have survived in a shrunken post bankruptcy state, but I understand why neither the government nor management of the companies involved wanted to go down that road.
posted by wierdo at 1:50 AM on March 2 [2 favorites]
The merger of Boeing and McDonnell Douglas was driven by Les Aspin as part of the "Peace Dividend" during Clinton's presidency. At the time I thought that removing competition for civil and military purchases would be a huge mistake. I think that breaking all the mergers back up would be good for all involved, but probably politically infeasible.
The important context here is that the defense contractors especially the aerospace companies, had grown to a level that was simply unsustainable without the massive government projects that were shoveled into their increasingly gaping maw throughout the Cold War. There was zero chance that the government tap was going to be enough to support more than two prime contractors, so warning was given, hard conversations were had, mergers happened, and Boeing and Lockheed stood together atop the mountain of missiles and planes, dead trees, and ink that were the primary output of the previous five decades.
Point being that while it sounds a bit nefarious, it really wasn't, it was just a recognition that the only option on the table was consolidation. The only question was whether it would involve many visits to the bankruptcy court by most or all of them on the way. In hindsight I think the latter path might have been better because there would have at least been a chance of having meaningful competition if more could have survived in a shrunken post bankruptcy state, but I understand why neither the government nor management of the companies involved wanted to go down that road.
posted by wierdo at 1:50 AM on March 2 [2 favorites]
wierdo, I assume you know that that's an example of regulatory capture. Of course one can understand it, you don't want any upheaval that would turn off the money spigot. I just want to make sure we don't fall for the pernicious narrative that that implies any kind of morality.
posted by tigrrrlily at 9:24 AM on March 2
posted by tigrrrlily at 9:24 AM on March 2
Boeing whistleblower John Barnett found dead in US
posted by cendawanita at 6:13 AM on March 12 [1 favorite]
posted by cendawanita at 6:13 AM on March 12 [1 favorite]
On Friday, Boeing acknowledged in a letter to Congress that it cannot find records for work done on the door panel of the Alaska Airlines plane. “We have looked extensively and have not found any such documentation,” Ziad Ojakli, Boeing executive vice president and chief government lobbyist, wrote to Sen. Maria Cantwell [D-Wash].
On Saturday, Boeing whistleblower John Barnett, 62, was found dead in his truck in the parking lot of his Charleston hotel. The Charleston County Coroner’s Office told media that Barnett died from “what appears to be a self-inflicted gunshot wound,” and that the Charleston Police Department is continuing to investigate the death. According to his lawyer, Brian Knowles, Barnett had done two days of deposition in his AIR21 case (AIR21 refers to a federal law that provides whistleblower protection for employees in the aviation industry), and was to continue with his attorneys that morning. Starting in 2014, Barnett had filed multiple complaints within Boeing. He filed a whistleblower complaint with OSHA in January 2017, and also retired from Boeing that year, after working for over three decades as a quality control engineer and manager. See "John Barnett on Why He Won’t Fly on a Boeing 787 Dreamliner," Nov. 24, 2019.
On Sunday, it was reported that the DOJ opened a criminal investigation into the Alaska Airlines 737 blowout.
2021 DOJ press release: Boeing Charged with 737 Max Fraud Conspiracy and Agrees to Pay over $2.5 Billion. Boeing had agreed to pay to resolve an investigation into the crashes of Lion Air Flight 610 on Oct. 29, 2018, which killed all 189 people on board, and Ethiopian Airlines Flight 302 on Mar. 10, 2019, which killed all 157 people aboard.
posted by Iris Gambol at 3:08 PM on March 12 [2 favorites]
On Saturday, Boeing whistleblower John Barnett, 62, was found dead in his truck in the parking lot of his Charleston hotel. The Charleston County Coroner’s Office told media that Barnett died from “what appears to be a self-inflicted gunshot wound,” and that the Charleston Police Department is continuing to investigate the death. According to his lawyer, Brian Knowles, Barnett had done two days of deposition in his AIR21 case (AIR21 refers to a federal law that provides whistleblower protection for employees in the aviation industry), and was to continue with his attorneys that morning. Starting in 2014, Barnett had filed multiple complaints within Boeing. He filed a whistleblower complaint with OSHA in January 2017, and also retired from Boeing that year, after working for over three decades as a quality control engineer and manager. See "John Barnett on Why He Won’t Fly on a Boeing 787 Dreamliner," Nov. 24, 2019.
On Sunday, it was reported that the DOJ opened a criminal investigation into the Alaska Airlines 737 blowout.
2021 DOJ press release: Boeing Charged with 737 Max Fraud Conspiracy and Agrees to Pay over $2.5 Billion. Boeing had agreed to pay to resolve an investigation into the crashes of Lion Air Flight 610 on Oct. 29, 2018, which killed all 189 people on board, and Ethiopian Airlines Flight 302 on Mar. 10, 2019, which killed all 157 people aboard.
posted by Iris Gambol at 3:08 PM on March 12 [2 favorites]
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Nobody destroys company culture faster than MBAs.
posted by Abehammerb Lincoln at 12:48 PM on February 28 [45 favorites]