For some reason, I’ve been getting a lot of news about Boeing lately. Are you, too? Is it just that the company really is in the news right now, or is it some weird algorithmic quirk where the web notices that I grew up near Seattle, therefore I must be obsessed with Boeing? I was, once, because growing up in a place or time where one employer thoroughly dominated your family’s welfare was a worrisome experience, but really, I moved away and got better.
Anyway, I ran across two bits of Boeing news that were interesting and had nothing to do with my upbringing.
- The day the machines take over may have been delayed a little bit. Boeing tried having robots assemble these finicky curved metal panels that make up the fuselage of an airplane, and discovered that human machinists did a better job and didn’t entail all the development costs of making the robots work. This makes sense: humans are incredibly flexible general purpose machines, numerous and cheaply made, and I suspect that there will be niches in the future Robot Economy where skilled labor that can execute diverse tasks will flourish. We’re not obsolete yet! Also, there are real labor skills that ought to be more highly valued.
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There are also cases where human greed is the grit that wrecks a company. This is a sad story, where Boeing might have once been a capricious giant that tormented the Pacific Northwest, but at least it had an impressive engineering culture; now, the Suits have taken over, and useless MBAs run the show and are in the process of running it into the ground. I’ve been away so long, I hadn’t realized that Boeing management had taken flight and moved their executive headquarters to Chicago, where the people who run things are completely out of touch with the daily reality of a company that builds things.
As the aerospace analyst Richard Aboulafia recently told me, “You had this weird combination of a distant building with a few hundred people in it and a non-engineer with no technical skills whatsoever at the helm.” Even that might have worked—had the commercial-jet business stayed in the hands of an experienced engineer steeped in STEM disciplines. Instead McNerney installed an M.B.A. with a varied background in sales, marketing, and supply-chain management. Said Aboulafia, “We were like, ‘What?’“
It’s horrifying how the obsession with shuffling money around has taken over the actual business of being productive. It reminds me of the catastrophe that killed Sears, which was, in a nutshell, capitalism run amuck. It’s happening again. They should pay more attention to machinists than MBAs, but those MBAs will run off with personal fortunes carved out of the carcass of the company they should be managing, so they’ll be the ones thriving.
Uh-oh. Now that I’ve actually used the word “Boeing” a couple of times in a blog post, those nefarious web algorithms are going to slam me with even more news about the company, aren’t they?
AKA The entire economy is Fyre Festival.
Decades ago, when I was a young engineer, Hewlett Packard was THE company when it came to electronic test equipment. I knew people who would not use anything other than HP ‘scopes, spectrum analyzers, etc. I have little doubt that the MBAs figured that, in spite of being the flagship in that market, it wasn’t a huge market and they could do better (i.e., make more money) elsewhere. I am also pretty damn sure that it was welcome news to the people at Tektronix, a main rival, and now pretty much the industry leader.
Meanwhile, what of HP? After spinning off the test equipment to Agilent (who gets paid to make up these names?), they settled down to making nondescript PCs. Ugh.
I remember those days! We had an electronics lab all tricked out with all the coolest HP gear that we all drooled over.
I remember when I was in university, most of the MBA students for an entire year were expelled for cheating on tests. And this was not the first years. There was a guy who worked at the SU building who had done an MBA, then come back to do “A real degree,” and his position was that literally the only thing MBAs have to compete in in half the classes was their ability to cheat without getting caught, since you “really don’t actually learn anything.”
Interestingly, they also had a study posted up in the philosophy department (which for various reasons ended up right next to the business department), showing the expected earnings and job performance of various degrees. What was notable was that MBAs* outperform other degrees for about the first year of their employment, and then are outperformed by almost everyone, because everything they learn in their 4 year MBA can be easily picked up on the job in under a year by anyone with basic logic and critical thinking skills. On standardized tests designed to test your abilities in business related fields, the best that MBAs ever performed was on the GMAT (General Management Aptitude Test) where they came fourth behind math, philosophy, and physics. The one thing that MBAs DID perform well on was, of course, being overpaid – while other degrees outperformed them after a year, they took substantially longer to catch up in terms of pay.
They did expressly note accounting majors as an exception to these stats, saying that they perform much closer to math majors than other MBAs.
The takeover of Boeing by incompetent MBA’s is starting to show big time. We’ve all read the news.
One of Boeing’s most advanced and newest planes, the 737 MAX had a problem with falling out of the sky and crashing after Boeing sold 393 and has 300 built that are unsaleable.
This is costing Boeing tens of billions of dollars.
People are afraid to fly on the 737 MAX no matter whether Boeing manages to fix it or not.
Oddly enough, no one involved with the major disaster that is the Boeing 737 MAX has been fired that I know of.
The CEO is still there.
Boeing owns the commercial airplane market along with Airbus and it is theirs to lose.
They haven’t lost it yet, but they are definitely on a downhill slide.
“Boeing Boeing” may invoke the great spirit of Labor Day, Jerry Lewis. You are warned.
#2 jimf
I wasn’t restricted to test equipment. HP calculators, starting with the HP-35, were to die for. Yes, they were expensive and they used this weird RPN for entering things but they worked and, as long as you took care of them, lasted forever. I still have the two I bought back in the 80’s and they work as well as they did when they lived on my work desk. I expect they’ll keep working until I can’t get batteries any more.
@1: The economy is a ‘Fyre Festival’ goes with the country is run by alternative facts.
This is basically a good example of the financial economy in which the stock price of a company does not reflect the real world value of a company. There once was a case to be made that increasingly complicated financial trading instruments increased the efficiency of capitalism, but it is clear now that the whole system is close to complete collapse. (Really, it should have collapsed if trillions of government dollars weren’t poured into the system). The solution isn’t actually hard – strict rules on accounting practices with severe consequences for misleading and/or false statements, and ban hedges. Leave gambling to the casinos.
@2, @3, and @8: Yes, HP kit in those days has highly valued. I still have my HP-35 (somewhere), and distinct memories of debugging obscure problems using HP (and Textronix) ‘scopes, bus- and logic-analyzers. Nowadays, whilst I use and have HP printers, I otherwise avoid their stuff… it lacks both the build quality and functionality of that previous generation of kit.
What raven said. Boing hit a wall…or more precisely two 737 Max flights hit the ground killing 346 people. The problem seems to be a technology design flaw. So, the Max is grounded, but they are hoping to have it back in the air by the end of the year.
All of a sudden I’m seeing a lot of Boeing ads featuring the 737 Max with middle aged pilots and other professionals speaking earnestly. I don’t listen, but I’m sure they are extolling the virtues of Boeing and it’s airplanes. You know, they truly care about passengers and safety and stuff.
Boeing. Isn’t that the sound a plane makes when it hits the ground?
this has become an all too common very a sad and depressing story. with none the benefits of transferring business to other places where people there prosper instead where there is a transfer both the new workers and the product suffer while the old workers and their regions are left to rot with little but a token redevelopment
All hail the all mighty and sacred market!
uncle frogy
How expensive the 737 Max grounding must be. This little video was from September. The problems have only increased since then.
My understanding of the causes of the 737 MAX fiasco was that the changes Boeing made to the MAX changed the performance characteristics of the plane to such an extent that any pilot who was trained to fly the original 737 would have to be re-certified. Fearing their customers in the airline industry would balk at this expense (and loath to spend more money at the drawing board to solve, or at least alleviate, the problem) they decided to try to “fix it in software” instead. We see how well that worked out.
To me, this is a classic example of MBA-think, the attitude that it’s unnecessary, vulgar almost, for a C-level executive to know anything about what the company they’re supposed to be running actually does. To an MBA, all companies are black boxes that can be prodded in exactly the same ways for money to fall out their sides. There are plenty of industries where a software fix might be appropriate to the issue of flaky underlying hardware, but the aircraft industry is not one.
An interesting article on the Boeing disaster by someone who thinks it’s going to end up in a government bailout
The long-running RISKS forum on, well, risks in computerised systems has been covering the Boeing disaster (scroll to the end)
I too was a user of HP test equipment as an Electronic Engineering undergraduate. They had a good reputation for solid, reliable and easy-to-use (relatively speaking anyway!) The industry-standard General Purpose Information Bus (GPIB) used to connect test equipment together and to computers (and which some early microcomputers, like those IIRC from Commodore, used to talk to their own peripherals) was originally an HP innovation. The spin-off into Agilent (how more 90s a name can you get?!) is IMO symptomatic of how MBAs and people like them think: apparently, having a solid, if not particularly cutting-edge, business unit that could be relied on to deliver modest but dependable returns to the bottom line is not enough: It’s a “shoot for the moon!”/ “go big or go home!” mentality all the way.
(Notably, not long after the Agilent spin-off, HP appointed the odious Carly Fiorina as their CEO, who was the force behind HP’s merger with Compaq, and which pretty much cemented the company’s decline into the two-headed basket case it is now)
It’s not just the big companies that suffer from MBA cheerleaders not content with modest growth either: look at the chimpanzees’ tea-party that is “startup culture” in Silicon Valley. I remember when “startup” first began to be used in the IT press. This wasn’t going to be the dotcom bubble all over again, we were promised. Startups weren’t going to be all foosball-tables-stock-options-and-no-coherent-business-plan menageries burning through millions of investment capital every month like the dotcoms were, we were told. It was all going to be lean, agile, sustainable this time around, we were told. Yeah, how long did that last? 🙄
Boeing’s troubles go back to the merger with the remnants of McDonnell Douglas. The suits from MacDac basically took over Boeing. If you look at how MDD was run, you wouldn’t want any of those “experts” anywhere near your headquarters. Moving the corporate headquarters to Chicago was a disaster, too. It divorced the company from its engineering roots and turned it into just another Fortune 500 company fixated on short-term shareholder value maximization. Most of the issue with the Max modification boil down to two issues; inadequate pilot training on the new stability system, and allowing the plane to be certified with a single-point-failure system (the system that detects the angle of the nose with the airflow can be disabled by a baggage cart). The FAA, Boeing, and EASA (European equivalent of FAA) all have some explaining to do here.