Portrait of a modern Boeing plane
Everett, Seattle, Renton, Kent, Auburn — growing up in the Seattle area, we knew the chain of Boeing towns, where so many of our family members worked. My father worked in several of those plants as a diesel mechanic, my mother was wiring the planes, my brother works in the windtunnel unit, my sister was in marketing — we had a lot of Boeing pride. Before about 1990, when booking flights, I’d actually preferentially select Boeing planes over Airbus, because it was reassuring to be on a plane where I could imagine my Mom building cable assemblies with loving care.
No more, of course. Boeing, a company of engineers, merged with McDonnell-Douglas, a company run by profit-seeking military contractors, and oh boy, those flightless chickens have come home to roost, where “home” is no longer a series of factories but skyscrapers in Chicago. They got the John Oliver treatment this week.
I wouldn’t fly in a Boeing MAX plane myself. I’m just a timid little biologist, though…it’s a bad sign when your own former engineers refuse to fly in them. Ed Pierson, ex-Boeing engineer, says:
Last year, I was flying from Seattle to New York, and I purposely scheduled myself on a non-MAX airplane. I went to the gate. I walked in, sat down and looked straight ahead, and lo and behold, there was a 737-8/737-9 safety card. So I got up and I walked off. The flight attendant didn’t want me to get off the plane. And I’m not trying to cause a scene. I just want to get off this plane, and I just don’t think it’s safe. I said I purposely scheduled myself not to fly [on a MAX].
Our recommendation from the foundation is that these planes get grounded — period. Get grounded and inspected and then, depending on what they find, get fixed.
The people to blame are the executives at Boeing.
Boeing’s board of directors — they have a fiduciary responsibility to make sure that their products are safe, and they’re not in touch. They’re not engaged. They don’t visit the sites. They don’t talk to the employees. They’re not on the ground floor. Look, these individuals are making millions of dollars, right? And there’s others between the C-suite and the people on the factory line. There’s hundreds of executives who are also very well compensated and managers that should be doing a lot more. But their leadership is a mess. The leadership sets the whole tone for any organization. Public pressure needs to continue.
That board of directors, and all those executives, don’t know what they’re doing. They ought to all be fired, and the company put in the hands of good engineers who prioritize safety and quality, but instead you’ve got accountants who just want to make lots of money, doing their “fiduciary duty.” Ironically, all that short term emphasis on profit is destroying the company, trashing their reputation, and killing people. I also wouldn’t invest in Boeing any more.
Hey, why are stock buybacks even legal? The executives seem to be more interested in artificially pumping up their stock prices than in, you know, building airplanes.
Oh well. It’s all great news for Airbus.
“Ironically, all that short term emphasis on profit is destroying the company, trashing their reputation, and killing people.”
Been a theme in several posts by PZ. Have to agree. Believe we are becoming a byproduct of corporate greed.
Back when “America was Great”, stock buybacks were illegal.
Yet, somehow, I doubt that it’s on the MAGA radar to return to that policy.
Policy idea: for every avoidable death from a Boeing plane, one of the C-suite execs (ordered from top to bottom, in office at the time of the deaths) gets tossed off of their Chicago skyscraper.
Eye for an eye, mofos.
But they’re not even doing their fiduciary duty. Their insane salaries and bonus packages alone prove they don’t give a damn about their responsibilities to shareholders.
There is a saying that “if a metric becomes a target, it ceases to be a good metric”.
Using stock price as a metric for good management is certainly a prime example of that.
Don’t forget that this monopoly-making acquisition (right after acquiring Rockwell!) was not policed by the government on anti-trust grounds, but actually incentivized. And they were deemed “not a monopoly” because the joint firm promised not to act like a monopoly.
Thanks, Clinton administration!
In the financial world, all good ideas eventually become bad ideas.
Junk bonds, mortgage-backed securities, debt insurance, were all good ideas – but were pushed well beyond their areas of applicability – into areas were they were very bad ideas indeed.
Share buybacks are a reasonable way to dispose of surplus cash (though I would prefer dividends). But when famous investor Peter Lynch wrote that he found share buybacks to be a good indicator of a company’s future stock price, everybody started announcing that they were buying back stock – even when there were better uses for the cash, like repaying debt.
I’m not sure that stock options were ever a good idea, but they certainly became a bad one. AOL combined them with share buybacks for a horrendous ripoff of shareholders – shares would be sold to insiders at price x, then bought back on the open market at price 2x. The cost to the company is just the same as giving the executives the money, but it doesn’t look as obvious in the financial statements. And the execs got to claim capital gains, as if they actually risked anything.
I wouldn’t be surprised to hear that Boeing’s share buybacks are a similar hidden gift to those who run the company (some companies now avoid the use of the slightly tarnished phrase “stock option” in return for weasel words that mean more or less the same thing).
False. They know exactly what they are doing, and they don’t care if people die or planes crash until it affects the share price. They know they are gambling and that cutting all these corners increases the probability of a disaster, but allows them to use cash to push up stock prices – ie their own pay. They know it will all come crashing down, they just hope to get out before that happens, with a nice big golden parachute, and then repeat at a new company. They really don’t give a rats ass about building planes or safety or the future of Boeing – it’s all about making money right now, then getting out before the expected disaster.
Almost all of the problems descend, in some fashion or another, from a desire to have fewer workers involved — smaller flight crews, smaller maintenance/assembly crews, smaller engineering staffs. Just like universities, though, that doesn’t seem to reduce the demand for administrators, who often know little or nothing about what they’re administering. (Lawyers are even worse.) I’d say “Reaganite union-busting” except that (a) it started long before the Reagan era, at least at McDonnell Douglas, and (b) many of the “unions” are heavily coopted.
Sure beats rotary-wing airframes, though (that hawk ain’t credible, guys, no matter what you call it officially).
Decision to never fly VALIDATED.
I was a Boeing engineer for 25 years. One thing I barely see reported is how Boeing decimated its own engineering population. Years ago, they hired engineers from a company in Russia because they work for way less than American engineers. So we were directed to start sending some work to Russia. At first, they were just doing the brain-dead, repetitive work so us American engineers had more to do actual engineering. But as time went on we were directed to send more and more work to Russia. They started doing more and more actual engineering. Then Boeing went to Ukraine for engineers as well. They started doing more and more actual engineering. Then the Russia/Ukraine thing broke out so we had to drop Russia and a lot of the Ukraine folks. So Boeing did a global search and found engineers in India to replace them and they started doing more and more actual engineering.. By the time I left a couple years ago, these foreign engineers were doing most of the engineering work. Boeing’s engineering population plummeted. One person would now be running up to 15 groups, each of which used to have at least 3-4 people. Boeing engineers basically became just became managers for the foreign workers. I protested heavily against this and I believe this is, in part, why Boeing fired me. While I can’t prove anything directly, I did watch Boeing systematically get rid of us “old” engineers who spoke out against this.