What is Going On inside Boeing?!
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- Опубликовано: 11 дек 2024
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Is Boeing circling the drain? Is the historic #aircraft manufacturer on its way to follow McDonnell Douglas, and become just another once-great but now-irrelevant name? And why are several #industry insiders getting increasingly frustrated with Boeing’s vision - or lack of one? Stay tuned.
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Below you will find the links to videos and sources used in this episode.
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www.composites...
• Boeing CEO Dave Calhou...
• Boeing Employee Inspec...
• Perfect Match! Xiamen'...
• In the Making: First #...
• Boeing CEO Dave Calhou...
• From Plants to Planes,...
• The #A321XLR rolls out...
• 2022, a strong commitm...
• 2022, a strong commitm...
• Making of - Boeing 787...
• Boeing Engineers Redef...
• Video
• Boeing Brazil 90 Years...
• Boeing in Canada
• Final 747 departs Boeing
• How Boeing Suppliers P...
• Boeing Introduces its ...
• Boeing CEO Dave Calhou...
• Boeing France Employee...
• Boeing 787-10 Dreamlin...
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Petter, Remember; it's not Russia's War. It's NATO's Proxy War. ...Maybe your sponsor isn't real news, but the Establishment narrative?
Personally, Boeing doesn't need a leadership change. Boeing needs to purge every last remnant of the MacDonnell-Douglas leadership and management culture that let them down this path. Ever since they bought out Boeing with their own money, they have severely stagnated, and their production and design quality has gone way down. That has unfortunately led to the loss of hundreds of lives.
They don't just need new leadership. They need to go back to their roots. Unfortunately, it may already be too late.
If you plan on doing another Boeing video in the near future, I would love to see you cover their influence on Boeing after the buyout.
Flying Cars? Boeing could be hiring 10,000 engineers to build Flying Cars... :-))
You started your channel with very interesting plane and flight curiosities, now your videos are large essays. Can we go back to the time when we could sit back and relax what that red triangle on some windows are? I don't want to tune in to hear why Boeing is in a [insert very complex situation here] and one of these [insert 3 complex fixes here] could potentially fix - disclaimer, none will affect your travels and are not interesting for the general public.
@@MrCaiobrz well, first of all, there are only so many red triangles to explain. Second, there does seem to be a large interest for these videos so as long as people are watching, I’ll continue producing them.
Thanks for the feedback though
After 17 years with Bombardier, I’ve concluded that the care and feeding of technical people is the only path to success. I watched my program wither under the motto “no good deed shall go unpunished”. I personally loaded the jigs onto a flatbed and watched my career drive away. I personally watched a dedicated and talented team scatter to the winds. Retention and engagement of technical people is only possible if their needs are prioritized.
I worked many years at Bombardier transportation. It was nice to work there but the products we made where no good due to underfunding and unrealistic planning. At least the C series turned out to be a really great aircraft (at least that is what I hear).
Yes, a company is its people. Something management often don't seem to have a clue about.
Bombardier was so successful in building Toronto street cars in Mexico. That program was plagued with delays and massive quality issues. Proof that when you prioritize profits over innovation and quality you will always lose. Same thing with the 737 max. It may actually be a good thing Airbus took over the C5 line.
Homer Simpson: "Doh!"
Been there - admittedly in oil & gas.
Makes you wonder why you bother, why all that stress...
Not sure a change of leadership will help. Several years ago (loooong before 2022) Boeing fired all its senior engineers to save costs. With that, they then forgot how to make planes. A friend of mine was a technician with Boeing and he told me all the horror stories he has to fix. It included the junior engineers designing planes forgetting to account for the wire insulation diametre when designing the internal conduits, and things like that.
Yikes! Surprised the authorities didn't clamp down on that.
"Boeing fired all its senior engineers to save costs." All of them? At specific times going back to at least the 90's, senior engineers were offered attractive retirement incentives. That led to some relatively large batches of departures (and lots of informal monthly lunch clubs) just ahead of or coincident with layoffs.
"forgetting to account for the wire insulation diametre when designing the internal conduits, and things like that" Rhymes with Airbus having made A380 wire harnesses exactly the nominal length according to a CAD model, only to find that connectors wouldn't plug together when it came time to hook things up in the real world. Or their non-steerable main landing gear debacle, also on the A380. Everyone gets some of the engineering wrong, at least on the first try. Do software releases start with Ver 2.1? : )
@@marcmcreynolds2827 Effectively all of them. Not sure if they kept a few on as managers.
Nonsense. And just because an engineer is senior doesn't mean they're talented or competent.
@@davidcole333 But they are experienced with competence which means everything.
What Boeing needs is leadership that appreciates the craftsmanship and work quality behind building a stellar airplane. Someone of an engineering background with a long-term vision and pride for their product.
These professional CEO's only cater to shareholders and their stock portfolios, and reap the benefits of the achievements of times past.
Agree. The era of the bean counters.
@@donalddodson7365 I’m a bean counter, and stock markets nowadays barely rely on the product of accounting, only solid investors who look for added value do.
America needs more CEOs that know the business of their business, so they can grow the balance sheets by being good at what they do. Accountants might be good at solving short-term issues and steering companies back to a positive cash flow, but they’re often bad news if they stay in charge long term. Unlike a CEO that knows the ins and outs, the nuances, the minutia of their specific industry, accountants tend to keep running the company like they’re broke instead of getting back to doing all the things that made them successful in the first place.
And with management leading by example. Workers have no passion or motivation and just want to steal as much from the company as legally allowed.
McDonnell Douglast corrupt culture took over Boeing, which was a very upstanding company under Frank Schrontz, and subsequently declined under Phil Condit (an engineer who should never have been promoted to CEO). Its long past time for Calhoun and all of his supporters to go. They're directly responsible for the decline of technical excellence at Boeing.
Let's see, Boeing has been run by MD management and we're surprise they are turning into MD?
Those parasites from MD killed sonic cruiser once they got in. That was the last time Boeing ever tried to be innovative.
@@jaffacalling53 what was the market for the SC? I heard it was smaller than the A380 - and the composite ideas were integrated into the 787
The MD managers are long gone since that now 25 years on them. Can't blame it on them anymore.
@@johniii8147 The company culture they left is still there
@@ghostrider-be9ek How would it be smaller than the A380? It was basically just a 787 but faster and a little bit less fuel efficient. It was comparable to the 767 in efficiency, and the reduced flight times would mean that airlines would be able to utilize the aircraft more, which would help offset the fuel costs. I see no reason it wouldn't be able to compete well with other slower transonic twin jets.
Putting off paying invoices for up to three months is a bad sign about the actual liquidity of the company.
Not necessarily.
Business schools now preach the need to manage "Net Working Capital"- i.e. the amount of money invested into the product that hasn't been paid for by your customers yet. If you float a 90 day term payment, you don't accrue that cost on your books which makes your company look better financially. You are essentially pushing your financing costs onto your suppliers. Since that's what the likes of Merryl Lynch are obsessed about, that equates to a higher stock price.
In reality it does nothing but pisses off your suppliers and cause them to raise their price to you in order to compensate for the finance cost of floating you for the extra month or three. It is a visible benefit, but a hidden cost that makes CEO's millions.
Just one of the many ways that Corporate America likes to screw over everybody for a buck- and it will come back to bite them in the butt soon.
Or, it could simply indicate that if you hold on to a pile of money for three months, you collect interest.
But that kind of stunt makes all of your clients resent you.
@@JustaGuy316 Is there any part of how Boeing does business that does not harm the company in the long term for a one-off bonus that quarter?
It's causing major problems for suppliers who are under pressure to ramp up production.
@@DavidByrden1 No, no, no. It pisses off the people who suddenly don't get paid for three months. And you don't force a 90 moratorium on payment to get some interest on the money you're holding, someone else's money actually, you do it to because you need more working capital and the banks won't give it to you.
Boeing's problems began when they moved their headquarters from Seattle to Chicago in 2001 thus separating management from engineering. This is a fundamental and sometimes fatal error. They then started outsourcing some of the major parts of their new commercial aircraft. I also suspect that Elan Musk dipped into some of their best and most innovative engineers.
When Douglas designed-built the DC-3 the engineers were upstairs above the fabricators. They worked together and problems could be addressed in minutes. Contrast that to where the designers, fabricators and management are thousands of kilometers apart.
Prioritizing profits over the material factors that create the income is a recipe for failure.
That's on purpose. Management needs to insulate themselves from the nuts and bolts of the operation, so that when they make dumb decisions they aren't questioned by the practical people. It happens when you have insecure management that is ignorant to the business they are running and do not want to admit it.
The book Obliquity talks about this. Boeing is more a more driven on stock owner value and less on their core market.
A fatal error, only sometimes? In engineering branch of industry?
I point to the corrupt management which has been ruining the company from the inside since the "purchase" of MD (more like Boeing giving money to the devil to destroy its soul).
As someone who has been working at boeing for the past 5 years, I can say we do have a leadership problem. Every decision management seems to choose the most illogical choice. They've hired completely incompetent yes-men to fill most positions. I got told by one of our engineers that Pitot is not effected by atmospheric conditions. I really hope we can clean house and get ourselves back on track to be like the great Boeing of the past.
he's right though, they're not _effected,_ only _affected._ 😏👌
I feel your pain, as a retired airline pilot who idolized BOEING back in the day. These days, Boeing is worth less than two shits.
Please report to HR ASAP
As a member of the flying public who knows a little about aeronautics, the fact that an engineer working for an aircraft manufacturer said that is scary!
@@Sashazur Keep in mind we're only getting one side of the story here nor the overall context of that conversation. Sometimes people twist things when they don't get the answer they wanted. Wouldn't put much credence in such a one off story. You can also sense the bitterness here and that definitely can taint things.
*A Boeing 737 Max flight attendant walks into a bar and orders a martini*
. "You're here later than usual," the bartender comments. "Problems at work?" "Yes, just as our flight was about to take off we had to turn around and wait at the gate for an hour." "What was the problem?" the bartender asks. "The pilot was bothered by a noise in the engine," she replies. "It took us a while to find a new pilot."
I've lived just outside of Seattle since the 70's. Boeing went from a company people around here respected for being innovative and quality driven, to a company that many around here won't fly on their planes. The move to Chicago was basically to turn a highly engineered, quality aircraft into a piggy bank for Wall Street. The suits in the fancy offices will be more than happy to have shrinking market value and ancient tech as long as their bonus checks keep pouring in........
I agree, it's not going to change as long as Boeing is in bed with wall Street, those two and innovation don't go along cause innovation requires money or resources which Boeing management is unwilling to avail for engineers to really run wild
@@mwat22 Sad but true.
I WAS A FLIGHT GUIDANCE SYSTEM ENGINEER FOR WIDE BODY AIRCRAFT. EVERY TIME A PLANE CRASHED I SWEATED BULLETS. FORTUNATELY, NONE OF THEM WAS EVER MY FAULT. 😪🤓
Detroit 2.0, how sad
Totally right. The worst is I do have a nagging feeling that some of those executives would be quite happy for Boeing to sell re-badged Airbuses if they thought they could make a profit that way!
Boeing went stagnant when they merged with McDonnell-Douglas.
they are not stagnant anymore
As part of this process, the engineers who had lead boeing were pushed out by financial people. Boeing died when the engineers were no longer in charge. Don't expect anything innovative any time soon.
@@InquisitiveBaldMan well if they died they wouldn't exist now. Engineers are going back in Charge and we won't see anything innovative from airbus anytime soon either
Boeing crashed when they started to reduce IR&D every year. By the time I left it was near zero. Can't be innovative if you don't invest in research. Also doesn't help when you stuff highly educated people into noisy cubicles, cancel all maintenance, and have management impose impenetrable "processes".
DC-10 Contagion
Boeing needs to become an engineering company again.
Boeing had absolutely zero respect for or care for engineering as a profession as evidenced by at least two decades of further and further minimizing engineering and professional engineering. That ship has sailed. We are in a world , similar to other industries, where the quality of a company’s products don’t matter. It’s al about brand name, return on investment and optimizing efficiencies. Get the minimum viable result in the cheapest possible way. Of tech school recent hires can do that , that’s they way it goes.
Whenever a company is starting to penny-pinch too much and starts to oursource even its engineers, then you know that it won't be around for much longer.
it feels like Boeing is just trending towards the average business in US and Canada where they rely on market dominance and govt bailouts for constant growth instead of taking any risks.
Zombie company. Sad. I wish boring success, but not like this 🥺
Yep and the governments are not going to let them fail. They will bail them out because they are "too big to fail" and the companies know this.
GE got the biggest corporate bailout in history.
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The bailout was a disgusting $139 billion. Despite the bailout, GE is still doing worse than ever. They’ve sold off the vast majority of their businesses and they’re only left with healthcare, aviation, and energy. And GE is planning on spinning off healthcare and energy within the next few years as well. So, GE will only be left with the aviation industry.
Got to ask:
1. IN WHAT POSSIBLE WAY can one create/invent something new on aircraft?
2. WHY DO WE NEED any new types of aircraft to be invented?
You have given NO answers to these questions. Why invent new types of aircraft just for the sake of creating new types of aircraft when you can use the designs you already have that have proven to work?
Unless you invent an aircraft that can break the laws of thermodynamics, then any invention will be a trivially insignificant improvement.
I was once told by my economics teacher that short-term gains invariably result in long-term losses (which could mean actual losses or significantly reduced profits).
I wonder if textbooks of the future will use Boeing as an example?
Yes, my preference is for Airbus, but I want to see Airbus continue to improve because they have worthy competition across the ranges at the engineering level. It would be terrible if all Airbus had to do to sell aircraft is to use the sales pitch 'Not a Boeing' and decide that they no longer need to be as adventurous with their new designs.
Sadly, the stock market and politicians both go for short term gains regardless of the long term costs
I completely agree with everything you said - having finance running a company is a recipe for disaster. Finance’s job is to cut costs and ensure profitability, but numbers cannot quantify concepts such as sales derived from leadership and long term innovations. You don’t cost cut your way into leadership - or resort to financial tricks that ultimately kill your suppliers with net 90, 120 payments. You lead by seeing why Airbus is more agile in design and execution, improve on their process and exploit your inherent strengths to release designs that build on your leadership. This is what happens when you have an accountant as a CEO.
Finance's job is to account for expenditures and make sure the company's credit rating excellent; it is purchasing's job to negotiate contracts to insure the best price for goods and services. I wasn't aware Calhoun is an accountant; I thought he was just a thief.
Accountants just account. Yhey run a grand total of 0 companies.
ASML sees their suppliers as partners. You share information with partners to reach mutual improvement, and I doubt you let them wait 90 days for their payment.
It is worse.
Accounting is the department responsible for identifying areas for cost savings.
Finance might still have a broader perspective, but Accounting never will.
EXACTLY. SOMETHING I HAVE SEEN WAY TOO MANY TIMES. ALSO, THERE IS A LOT OF JEALOUSY/ENVY IN MOST BOARD ROOMS. EVEN WORSE NOW THAT THEY HAVE FALLEN IN LOVE WITH WOKEISM.
GO WOKE, GO BROKE!
So much industry in the US has moved into finance rather than manufacturing - that's fine if it works out, but not for Boeing, it seems. They've abandoned the engineering focus that supports their enterprise and they may turn around to find the tree supporting this limb has gone away. Sad news.
Nice analysis.
"I have never heard of a company retiring itself into greatness". That was a great statement!!! I have watched your video's for many years now, and you continue to excel to deliver timely and important content to those of us that love the aviation industry. Thanks to you and your team for such a great job!!! Happy and safe flying!!!
Boeing needs someone like Alan Mullaly who was in charge of the 777 project early on. Someone who appreciates engineering and wants things to be done right.
Agreed
Surprised more people aren’t saying this. I read the book about him going to Ford, the reason for leaving Boeing did really did not sound believable.
Wasn't it Alan Mulalli who first proclaimed One Ford (for, like, the third time in the last forty years), then decimated the model lineup and replaced cars with trucks?
I recall a family member working on a 757 replacement project when he was in his early 20’s. The project closed and most of the engineers were tasked with the 787 development. 20 years have elapsed and the senior engineers from that project must be in their 60’s. The recent aborted narrow body project would have drawn from that experienced crew.
In 10 years, the senior engineers from that first 757 replacement project will be sitting on a beach somewhere.
Our family member is now in his early 40’s and is a senior engineer with 20 years of experience in an area completely unrelated to airliners.
Executives all need an engineering background, stop stock buybacks to put $ into R&D, and remember that the engineers made Boeing great , not MBAs.
Look at the situation with the railroads in North America, they made huge profits, but are falling apart because management do not know the first thing about railroads.
@@mshotz1 lack of knowledge isn't the problem. Unchecked turbo capitalism is.
@@Argosh It's both actually.
Dave Calhoun doesn't even have an MBA. He has a BS in accounting from Virginia Tech.
Glad you also mentioned it. These are the same “leaders” that demanded a tax funded bailout after buying back all their stocks!
I worked at Boeing in flight testing in the late 80s to early 90s and their leadership problems date back to that era. Their first mistake was 737ng production instead of the new clean-sheet design they had been planning. Then outsourcing everything to sub-contractors. That has created supply chain problems for decades. They could have made Allan Mulally (777 program manager among other things), CEO but instead they brought in a corrupt dud. They have steadily eroded their engineering and production base.
I now fly 787s for a living and it is a fantastic airplane although that has also been plagued by the same old problems. A 737 replacement based on the same technology as the 787 would be a game changer. No need for pie in the sky technology.
To answer the question, the company vision is set by the board of directors. They should be the first to go. They have been notoriously short sighted and stupid. If it wasn’t for the massive military contracts, Boeing would certainly have gone under.
They just need someone who understands that planes need to fly in the air.
But what about the Stock market? The quaterly report and Saint Smith request for imaginary growth now! Who needs real progress when you just want a bigger number in some imaginary tables. 🙂
I would level 3/4 of business schools in this World 🤣 (not the poor people) just the institution. So those people educate themself outside this church. There is more than your god of quaterly reports in this world 🙋♂️
@@GreenTableDude Amen! I would, too.
@@GreenTableDudeonly three quarters of those? you softie... 😏
@@kittytrail i still think their are some aspects of econonics which need to be addressed. But most of their actual decisions basically boil down to a short term version to the primal rule of three. Its like the studied one course not a full proficiency 🤣
Has anything gone right for Boeing since 1997 and the 'merger' with McDonnell Douglas?
Can we stop referring to something that happened over 25 years ago? Boeing needed to evolve anyway. You can't just keep developing aircraft in a way where money is not an issue and where you can make your designs as expensive as you'd like. That's a sure way to bankrupt your company in the 21st century. It's not as there are no alternatives for Boeing products.
@@Hans-gb4mv actually the md and Boeing merger was start of decline of Boeing because of involvement of greedy corporates of MD since then they have shifted Boing's focus more towards profits and their stock prices , they even started to buy back shares just to increase their stock price and please their investors and less towards innovation
@@Hans-gb4mv So you're saying the company culture that killed one aerospace company has absolutely no impact on the one it's running now? That's... Curious. MD's failure to develop a twin larger than the MD80 led directly to its downfall because innovative Boeing steamrolled MD with not just one twin, but four. Meanwhile MD was trying to sell the MD-11 as its bigger-than-a-DC9, but its safety record (not all the airplane's fault, but that doesn't matter to the flying public) made that a tougher proposition, especially when you take into account the idea that their 3-holer burned a lot more gas than Boeing's twins were consuming. Didn't help that it lacked the range it should have had, which positioned the A340 well against it. The merger should have been more along the lines of Boeing management running the company and firing the decisionmakers at MD, but instead Boeing decided to go with the unsuccessful team to lead the new company, with predictable results.
@@Hans-gb4mv but Boeing already had a new airplane. That's the 787.
They could make smaller versions of the 787 with a single or double isle.
777-200LR, 777-300ER, 777F, 747-8 are all perfectly safe
Thank you! It is wonderful to see younger industrial leaders, like you, bringing light to the malaise plaguing many large organizations. I was in graduate school in the 1980s. We studied Tom Peters, Peter Drucker, Edwards Deming, Jack Welch, Frederick Taylor, Douglas McGregor. Later came Bill Gates, Steve Jobs and C. K. Prahalad. "Ready, Fire, Aim" and "Management by Wondering Around" became my compass. Perhaps giving the cyber-metric bean counters too much say is blocking innovation.
I think you have hit the nail squarely on the head ... as the ethos now is, what is the margin on this and when can I get the return of capital expended.
Thank YOU for your support, its because of support from people like you that I can continue producing things like this! And sorry for my late reply, I just saw it now.
I was a newly minted engineer working in Seattle when the 727 was being certified and later in Huntsville on the Saturn V moon rocket. The company was well run as management was in Seattle and had engineering and flight backgrounds. Then corporate moved to Chicago with the executives becoming financially motivated focusing one the stock price so they could get their golden parachutes.
'Retired itself into greatness'. A great phrase and highly relevant.
I am not sure vision is the issue; I would say execution has been their main issue for the past few years. Fixing engineering and quality seems to be a very reasonable priority, especially as they have a solid aircell portfolio. I wish them a speedy recovery:)
They also need to simplified or update their offerings.
MAX9 became redundant when they introduce MAX10. B787-10 doesn't have enough range and payload. Nobody likes the B777-8. And B777-9 is too little too late to get more orders.
Weren't the quality problems driven by unrealistic deadlines, likely set by the leadership? It feels like the problems in execution are more symptoms of leadership issues
@@inToDevNull leadership is accountable for both vision and execution. I recommend reading ‘extreme ownership’, on this topic 🙂
Engineering can only do so much when they’re being nickel and dimed by accounting. Boeing’s laser focus on every penny spent killed them. This is the sole reason they’ve stuck with the ancient 737 platform instead of going clean sheet. It’s cheap to build and was a cash cow. The 737 built their financial empire and the 737 is going to kill the company.
@@inToDevNull I agree, and leadership’s short-term bottom line attitude is at least as much to blame as their timelines.
The 767 was replaced by the 787 which had bveen resized to compete against the A330 which had been stealing all 767 sales. But once oaunched, airlines wanted even more capacity and Boeing agreed to densify cabin designed for 8 across to 8 narrower seats, and and when you look at sales, the larger -9 sold more than the -8.
When Boeing launched the 777, it was its first new clean sheet design launch since late 1970s launch of 767/757. And it was a very conservative aircraft (the FBW imitated conventional cockpit) filling the DC-10 gap in Boeing's lineup.
Not long after 777 entered service in 1995, Airbus started toying with the A3XX and doing a lot of R&D on composites and making lighter aircraft. Being was criticised for lacking innovation. Boeing then came up with the "Sonic Cruiser" concept of innovative design going at near speed of sound. Airlines told Boeing to go back to drawing board and it then came back with the 767 replacement, the 787 which incorporated many of the R&D oeing envisaged in the Sonic Cruiser (namely, the NASA sponsored research on all-composite single piece fuselage barrels) and the all electric design. (no bleed air, electric brakes etc). Boeing then istantly shined in the limelght as being very innovative and its 787 stole all sales from the A330 util Boeing couldn't deliver and delays caused sales to go back to A330. During that time, ETOPS extentions also made the A340 irrelevant (its only advantage was ability to fly polar routes which twins coudldn't) and 787 also stole those sales until airbus finalized the 350 which put some balance back.
Because Boeing fought so hard against govenrnent help to AIrbus over the years, the 787 was hampered because apart from the huge help it got from NASA, it couldn't be too much for govt help so it spread the risk with suppliers, notably Voight which failed to deliver and Boeing had huge production problems which really ruined its image. (Being ended up biuing Voight to fund it properly).
When the time came for Boeing to update its 1967 737, Airbus (weakened by the double 380 and 350 developments) was very releived that Boeing chose to re-engine the old 737 instead of building a clean sheet design which would have forced Airbus to respond in kind with a replacement of the 320 family. Instead, Airbus only needed to re-engine the 320 family.
The MAX fiasco resulted in one huge change: getting derivative designs approved by FAA was no longer a cheap rubber stamping, but not more involved testing campaign much closer to a clean sheet design.
Boeing right now has a HUGE backlog of old 737s to build which will keep Boeing busy for years to come. It is down to 3 aircraft in production: the 737, 787 and 777.
For Airbus, the A220 has taken up the lower end of narrowbody, allowing it to focus on A320/A321 or longer. Boeing still needs to decide whether to restart kinship with Embraer which would allow it to fill gap for smaller 737s and focus on growing narrow body to cover from 737-8 to 757. Until such a strategic move is decides, Boeing will play dead and not give Airbus any advance notice of its goals.
The other aspect is one of climate change. many European countries are starting to consider banning domestic flights, pushing people onto electric trains instead. If this catches on, it will have huge impacts on market size for the 737, Embaers, A220 and Dash-8/ATR-72. It is also unclear what happens to Russian aviation which had become such a good buyer of western aircraft since the 1990s. And lastly, there is currently no compelling technology advance to make a 737/320 replacement a game changer. The 320neo already has the Pratt geared turbofan like the A220.
The big unanswered question in this is whether Boeing's bet with the 787 worked out. Did all-composite achieve the revolutionaly weight savings that had been promised? Did it lower production costs as promised? Did the all-electric design truly pay off in terms of fuel efficiency and weight of aircraft? In other words, when Boeing designs a brand new replacement for 737, how much of 787 philosophy will it inherit vs conventional fuselage and systems?
I am pretty confident Boeing is hard at work on R&D and that it knows it next big project is replacement for the 737 which will encompass 757. But continued sales of 737 MAX and healthy order book means it is in no hurry, and the longer it waits, the more of a step change the replacement will be. The A380 really pushed the limits, from wing size, landing gear that didn't punch holes into tarmac/runways, and able to fly with enough efficiency to sell. A plane the size of 737 to 757 pushes no limits, so it is just a question of making better than existing aircraft.
The last aspect is that Boeing needs approval from its boss, Southwest Airline to discontinue 737 and create totally new narrowbody. But I am pretty sure that Boeing is very busy doing R&D to see what sort of design ciuld work for replacement of 737 and what the market will look like.
On Russia: Boeing started to hire Russian engineers as part of post-cold war prevention of these going rogue to design milityary stuff for everyone and anyone. (same with nuclear engineers). Also, this helped Boeing make sales of its Boeing jets to Aeroflot and other new airlines there.
When Bombardier was faltering, it offered to sell the C-Series to Boeing, and it refused. When the Québec government wanted to offload C-Series, Boeing again refused. It instead helped send Bombardier into liquidation. But that left door open for Airbus to snatch the engineers. Boeing could have bought the CRJ programe for its patents and engineers, it didn't. Boeing could have bought the Dash-8 and its engineers and it didn't.
I agree, too much focus in this video is spent saying Boeing is not doing anything new, but where is the "new" Airbus? where is the "new" Embraer? They are also waiting and monitoring the market, and there is a very important point missed here that proves how hard it is to jump Boeing: If the new middle-sized aircraft is so sought after and a missed opportunity, why Airbus that is in a position "so much better" didn't jump at it and put the last nail in the coffin? Well, because things are not as simple as this video make it seem. Literally EVERY aerospace company is waiting for how the future of legislation around emissions, new technologies that are "on the brink" of success, and new developments, and most important, how the market settles after covid turn out. Investing heavily in a new plane right when things are starting to settle is the worst thing you can do.
The many spelling errors undermine the credibility of this essay a bit.
@@mimimotor I base credibility on the content and the arguments presented. Perhaps for you it's easier to focus on things like searching for spelling imperfections as a way to gauge whether the author's arguments have merit. Most people have a limited amount of time to post comments here and if they choose to prioritize that time on content rather than proofreading that's fine with me. I'm happy whenever anyone takes the time to share information.
@@mimimotor What? 🤣
That comment is better than 99% of published articles.
Looks like Boeing needs to get out of their complacency and quick!
Another great video Petter!
Many thanks!
@@MentourNowthumbs down. Completamente estoy en desacuerdo. Obrigado and fly safe!!!! If it ain’t Boeing, I ain’t going. Post Tenebras Lux
@@MentourNow Hello Sir....big fan of your videos....i have noticed you have mentioned Dublin a few times...is that where you are based ?
@@jaws666 Mentour Pilot is based in or near Girona, Spain.
@@Eternal_Tech but does he fly to Dublin on a regular basis?
I’m just some random guy, but if I could, I’d tell Calhoun that if he wants to be the leader, Boeing needs to keep building new planes. The 787 is amazing and beautiful to boot, the 777 is getting a needed refresh, and the 737 remains a dependable cash cow, but without the next new thing up their sleeves, they can’t be innovators. If you can’t be an innovator, you can’t stay a leader.
I’m just some random woman and I agree. Really smart engineering and innovation seems like leadership to me
Boeing's fate was sealed when WALL Street insisted that Boeing's stock pay a dividend and so the company was "Financialized" and among other things, they laid off 1300 engineers. This forced Boeing to come up with some creative shenanigans when switching to the more economical but larger engines for the 737. The rest is history. Essentially Boeing was transformed from a profitable world class aviation design and production power house into a low reliability has been aviation company, soon to be eclipsed by foreign manufacturers that have greater ability to refuse investor greed.
When talking about everything that has gone wrong for Boeing in the last couple years, you should also mention the "CST-100 Starliner" spacecraft they are currently developing.
It was supposed to regularly transport astronauts to the International Space Station starting in 2018. Now, 5 years later, it still has not completed a crewed test flight.
On it's first uncrewed flight there were so many issues that NASA ordered them to repeat that test and bear the cost for that themselves. This repeat test flight alone set Boeing back several hundred million dollars.
Most issues came from seemingly simple issues that should never have slipped through quality control. Like for example the spacecraft performing certain maneuvers way too early because the mission clock was set to the wrong time...
While Boeings aircraft and spacecraft divisions are not really connected to each other in terms of engineering, it is still all within the same company group. Having a project with such massive cost overruns can not be good for the other divisions of the group, especially if those are not really doing well either.
Meanwhile, SpaceX is moving at incredible speed. Boeing will never catch up. :)
@@williamgreene4834 I would have said that too just two years ago...but I'm no longer so sure how things will go with their "Great Engineering Dad/CEO" jerking around in Twitter and micromanaging the place like it's an MMO for just-him. Which I suppose it is, now that I think about it...but there's no 'end-game content' and the 'grind' will involve ruining the company. I love Tesla cars, and their crash-safety record includes some AMAZING "And then we all walked away with only a few scrapes and bruises!" stories, but as he putters around with Twitter-mmo, jerks around, and levels up in "Why is nobody seeing my tweets now, waaaah!", Tesla's latest few reveals has been "Cybertruck actually works now!", and "More price cuts for the Teslas! Also, less sensors again."
If he keeps futzing around with Twitter and his 'woke-war against nonexistent-enemies', Boeing may not NEED to catch up...they might just keep 'messing up but not failing' while he's sucked into the 'end-boss raids' of 'fights with the FCC and the DOJ for violating his restrictions and the pre-existing consent decrees that he's knowingly-ignoring' and they'll just half-ass their way slowly past his work.
I'm starting to worry that Musk has fallen into the best trap anyone can make for themselves; "Only I Can Fix It", but there's nothing TO fix. It's a confirmation-bias and maybe an equivalence-bias and a strawman-fantasy all wrapped up into a corporation. Witness his 'company earnings call' or whatever it was recently where he said basically, "Tesla is doing awesome right now...I mean, I have 175 million followers!"
Oh! In fact, I suspect there might be something to my comment in this "Wendover Productions" video titled "How Tesla Fumbled". And maybe that's not in there; I mention that I haven't watched it yet, but once I drift off to watch that I'm not likely to remember to come back and say "Hey, this really explains my worries for Tesla!" later on. :) Hopefully this is a sensible recommendation. Oh well. Reality is annoyingly-complicated sometimes.
Got to ask:
1. IN WHAT POSSIBLE WAY can one create/invent something new on aircraft?
2. WHY DO WE NEED any new types of aircraft to be invented?
You have given NO answers to these questions. Why invent new types of aircraft just for the sake of creating new types of aircraft when you can use the designs you already have that have proven to work?
Unless you invent an aircraft that can break the laws of thermodynamics, then any invention will be a trivially insignificant improvement.
@@EShirako Luckily Gwynn Shotwell pretty much runs SpaceX. She has also taken over direct oversight at starbase. She is really amazing and can keep Elon in his place. As long as she's there they will be fine.
@@williamgreene4834 Hm, oh good! I was rather enjoying our not needing to buy TONS of the 'leftover Russian rocket motors' (RD-180, wasn't it? We were buying their warehoused spares or something.) for everything we wanted to send into space, but we had few/no skills or facilities for making advanced rocket engines left since we shut our stuff down and laid everyone off.
Every point you’ve made about the management’s decisions can be traced directly to GE in the 1990s. From engineering in low cost countries, to delaying payments beyond 90 days, the GE pedigree of the senior team is evident.
I worked in Boeing for many years and hate to say I told them so.
1) I thing Douglas merge was a mistake it’s bad, greedy, numbers focused management culture speeds everywhere.
2) I work a few years on weekends on my free time just to finalize work which was accepted/forced by management as completed, but I thought wasn't, we are risking a lot of people after all. And was constantly blamed by management for wasting my time on unnecessary improvements. Of course I left as soon as it was not possible for me to work on weekend because I started a family.
3) Overall qualification of engineers was extremely low, especially after they move a lot of production out from Seattle to cut even more costs.
Ehh.. I’m sad, but it seems this is how nature works on business landscape. Big, old greedy companies have to die one day to open space for new competition.
I think highly knowledge-intensive engineering companies must be leaded by technical people better if by the best engineer, because we more eager to listen and be inspired by engineers with higher qualification.
Still carrying 787 tail on my backpack despite I left 8 years ago.
what Boeing needs is not a person who loves self promotion or finding ways to monetize bug fixes. what Boeing needs is someone who loves building airplanes.
and someone who plans on doing so for more than a couple years. planning to not be around when your decisions start getting implemented.. disaster.
Like the founder of Learjet.
ABSOLUTELY!! I HAVE THAT LOVE MYSELF.
It’s not clear that there’s much stomach for a new clean-sheet airplane within company management, given the financial debacle that was the 787 development process. Distributed engineering and risk-sharing partners combined with first-time technology implementations were supposed to save money, but the 787 has been more of a money pit than a moneymaker. Against this backdrop, the decision to simply refresh the 757 with a new carbon wing, modern engines, and modern avionics (to wrest some market share back from Airbus) would appear to be a no-brainer, but there’s been no stomach for that plan, either. It’s worth asking if there’s ANY plan for the company, moving forward. If doing nothing is the most profitable course of action, then that’s just what they’ll do…
Well, it's the most profitable FOR NOW...the issue is that CEO's aren't shot when the company dies under their watch. They get voted a 'golden parachute' and go on to screw up some other company to maximize shareholder value after the previous one proves that they can up shareholder-payouts by 10, 20, 50%...for a few years, after which it all falls apart. I wish "Maximize Shareholder Value" was just buzz-speak, but when you choose short-sighted solutions that cost-less-now and screw you 'eventually', that's exactly what they are doing...maximizing the "Now" while planning to just hit the Eject button (that some other company/long-ago designer made for them...I mean, a NEW Eject Button might not operate for him and then what?!) when it all goes down in flames metaphorically OR literally...or both! It's the path to "Yeah, but it doesn't matter to MY life, so whatever, it gets me my bonuses!" That path is profitable 'for now'...and why would they worry about 'Then'? That's for some other poor sod...or the Bankruptcy Administrator...to figure out. "I got mine; see ya, suckers!"
@@jkeelsnc I grumble about the hard slant towards ever more complex and expensive engineering solutions, which drive cost in the wrong direction. An airline seat is only worth so much money, based on its earning power. If an airplane is so costly that it doesn't make sense to sell it (or buy it), then writing off the additional expense is the only way to keep the lines rolling. Creative accounting shouldn't be part of the engineering process...
NO. It needs a Steve Wozniak.
A comment as underrated as Woz
Agreed. Jobs was a major asshole.
I am an engineer, working for Israel aviation industries for long time. I mostly agree with your opinion, that if a company stop research and development it dies out. Their knowledge base worths billions of dollars. They have to maintain it, by getting more engineers and continue research, otherwise they will lose it, and the company will eventually die out.
In the collective mind of the flying public Boeing is guilty of putting profits ahead of safety.
Most of the filing public has no clue about it so don't think about it.
Show me one company that doesn't. You can't stay in business without profits and the profit margin for almost every business is razor thin due to competition. Airbus is happy that Boeing is getting the worst flak, it makes covering up their mistakes easier.
The passengers sure do to. Have you heard the bitching about $50 for luggage!!!
Steve Jobs was a terrible manager of people and oversaw appalling work conditions at Apple's suppliers. Given Boeing's quality issues, driven largely by the desire to move from a highly skilled union workforce to a low wage nonunion one, a Steve Jobs would be the nail in the coffin.
Well said.
You took the title too literal 😂. But then again that’s what it intended to do. Get you to click on the video.
@@ndg2828 True - still a bit sleazy - and the first of Petter's that I've not watched to the end...
Well, Steve Jobs had been dead for several years so that is not really an option anyway.
Unions are garbage
Wall Street focuses on short-term profits. Designing nothing new boosts _those profits_ at the expense of the company's long-term viability. And if Boeing goes down as a result, Wall Street cares not. It will simply shift investments elsewhere, perhaps to Airbus or whoever arises to replace Boeing.
No, Wall St. will then _short_ Boeing. When Market Movers play the short game they pay for slander articles across various news outlets daily/weekly for as long as that drives the price down - and they'll drive it down to a penny stock to make a buck.
Indeed, exactly.
Not having a replacement for a 50 year old airplance (737) is inexcusable.
It isn’t really a 50 year old airplane. It is in its fourth generation. There have been many improvements which have modernized it. The reason it survives is that it is a good aircraft. Airlines would not buy it otherwise.
@@agoogleuser4317 - Boeing has had several hits.
Count your lucky stars if a 50 year old C-130 ever delivers you emergency supplies in the aftermath of a natural disaster
Many people said that McDonnell Douglas managed to “purchase”Boeing by using Boeing’s money. Well, it seams that dividends are now paying off.
I’ve honestly stopped counting by now, how many times Boeing has shot themselves in the foot, just in the last few years. It’s honestly really depressing to look at.
I don't understand why they said they won't even go to the drawing boards until the end of the decade. I can get reassuring investors that they're not going to panic and rush something out and end up with another MAX-like disaster. But to admit that they plan on sitting there for seven years before they even begin to work on a new design sounds like defeatism.
I didn't know I was interested in airlines and airliner manufacturers until I found this channel.
Hi Pietr, I am a patreon supporter of yours (as you may recall). When I was in college I worked on engineering Boeing's design process. In other words, re-engineering the new product development lifecycle. My specific task was to help map the information dependencies between the design of the parts. With a goal to reduce complexity, cost, and shorten the lifecycle of developing a new plane. Learnt a lot.
My nephew is an engineer with Boeing, and is doing quite well. I hope for his sake and his generation that Boeing does stay competitive. They have really caused a boom in his city.
I'm not on telegram but do follow you on Instagram. Thanks for the thoughtfulness!
Interesting to me because my brother was an engineer working for Boeing for 30-40 yrs. And some of the things he told me simply don't correlate with some of the things I'm reading here. In some of his later years there he expressed frustration over the company bringing in new employees, new engineers, which the older staff had to orient and train on the current project. He said it was as if the new hires were almost " temps" because as soon as they got oriented and up to speed, they were let go. And this cycle happened repeatedly. Told me it's hard to believe in training when you know the new guy will be gone quickly.
The other thing he told me was that in the January before he turned 65 he basically was told he was going to be retired, from Boeing. He made it sound like he had no choice in the matter. An Engineer who'd worked for the company for over all those years? But my Bro said that this retirement, was against his wishes and prevented him from getting his full pension amount. He was a little bitter.
Do I believe this? Dunno, might or might not be true. He DID say that a similar thing had happened to several of his cohorts.
Boeing is an engineering company. CEO David Calhoun is an accountant, literally. Do you need any more words?
Correction: Was an engineering company. I suspect they would gladly put the Boeing name on an aircraft made by somebody else if it had a higher return! They already subcontract not just big sections of manufacturing but big sections of engineering to suppliers who they can screw down on price, don't they?
With the new halt in 787 deliveries to 'correctly' repeat forward pressure bulkhead fatigue analysis things are not getting any better - they can't even deliver existing airframes consistently.
I have mixed feelings on this. I’d love to see Boeing get their stuff together but sometimes you have to just jump off a sinking ship
There SOOO big though, is there really any realistic chance of them going under completely?
@@EternalModerate probably not in the sense of them closing their doors and walking away but they could be bought out by / merge with some other company
@@xslickrickx2103 But by who? Airbus? I'm not sure the US govt would let that happen given they are a foreign company.
@@EternalModerate could be any large company doesn’t have to be another airplane manufacturer. A conglomerate would have the ability to get funding. Like GE or J&J
@@EternalModerate I guess loockheed would be the obvious choice but no idea if they have an interest in getting back into the civilian market
It's not just their aircraft, their space division has not been impressive either... it absolutely reeks of maximum price for minimum effort.
And then there are all of the problems with the new KC-46 tanker for the Air Force (based on the 767). The Air Force found all sorts of quality control issues such as metal shavings left floating around the airframe, just waiting to get into electronics and mechanisms, poor parts fit, and a refueling camera system that did not provide the operator an adequate sense of boom position. This was after competitors forced a re-bid, accusing Boeing of corruption in winning the contract. I think one or two people might have been made scapegoats for that, but it was not a good look for the company. The tankers are years behind the promised delivery schedule, and Boeing has lost more than $3 billion on the project due to all of the required fixes. That's one of the reasons they've become habitually tardy on covering bills.
Only last week, the Pentagon said that the new TX trainer might be canceled. If that happens, that would be another $4.5 billion blow to Boeing.
Those of us that have been following the investment news, and reading Leaham, are starting to get very worried about David Calhoun's erratic leadership.
An international marketing company recently said that, "Boeing need to be bold, not brash, they need to be assertive, and not aggressive, and they need to innovate, not innervate."
And I couldn't agree more.
If they continue down this path, along with the manufacturing issues, and quality assurance issues, employee dissatisfaction, and market lethargy - then Airbus will simply romp over the market.
And with the recent talks between Airbus and Mitsubishi, and the co-development of a new VSR (very small regional airliner) , I believe things can only get worse for the Boeing Company.
Which would be tragic, and very sad.
To me it seems like Boeing like many many other organisations and even countries are on a troubling path of extracting value where value simply doesn’t exist anymore. Thinking they’re still in the good old days instead of realising its time to revolutionise. Create something new of value. It doesn’t mean they can’t turn it around but it would mean a change of course which would mean a change of ideas which would mean a change of people. The UK feels like a good analogy for Boeing right now.
Got to ask:
1. IN WHAT POSSIBLE WAY can one create/invent something new on aircraft?
2. WHY DO WE NEED any new types of aircraft to be invented?
You have given NO answers to these questions. Why invent new types of aircraft just for the sake of creating new types of aircraft when you can use the designs you already have that have proven to work?
Unless you invent an aircraft that can break the laws of thermodynamics, then any invention will be a trivially insignificant improvement.
Every company I’ve worked for has risen up because they focused on their product, their employees, and their customers. Every single one of them then started focusing on profit instead and handed the reigns to the bean counters…and every single one of those companies lost most of their success, talent, and profits. Several closed the doors.
Bean counters count beans. They have nothing to do with running companies.
I’m not overly concerned with what happens but 757 is still my favorite plane I ever did maintenance on. And 737 is the first time I got skydrol in my eye. Love/Hate relationship
And with these production issues again surfacing on the dreamliner everyone's doubting Boeing even more, and as a Boeing fan it is kinda sad to see all of this happening
As someone who has spent his whole professional life in the aviation industry, I look at Boeing's 787 problems, and my only question is, "where was Quality Control; on the Shop Floor; at Incoming Inspection; and also knowing in great detail that all their Vendor's Quality Control Systems met all their specifications. The Jack Welch's GE management fiasco has now been transferred by his GE acolytes at McDonnell Douglas to Boeing, - eliminate Engineering and Quality Control - they only cost money. Two 737 MAX crashes demonstrate conclusively how effective the Welch management system really is.
Great video!.....This really does seem to be a never-ending, repeating pattern within many industries - i.e. a company starts off with amazing projects/products/entrepreneurship and over the years (or even decades) becomes a prized/respected industry leader....then (because of economic, competitive, and/or shareholder pressures) that same company starts to "sit on its laurels", assuming that it will somehow retain its leadership position forever as the result of past successes. I get that every industry is different, and that managing organizations the size of Boeing is extremely complicated....but I gotta say there is something really discouraging/depressing when you see high-tech companies becoming complacent and losing their way.....especially when there are so many examples throughout the mid/late 20th century that tell us what happens when these types of companies (and their mngmt) prioritize complacency and short-term shareholder returns over everything else....
I remember the time when Boeing made fun of these little Europeans with their new Airbus A300 with a lot of smugness...
Could you do an episode on the total cost of ownership of a plane?
there are the initial cost and then ongoing costs to the manufacturer. Then there are maintenance costs by the owner.
@Pissedoff Cow58 Is the $600 million figure to operate the A380 for a year or over its lifetime?
Boeing should have launched a new 737 replacement program 10 years ago when they panicked and launched the MAX instead due to American Airlines and Southwest. The 787 Dreamliner program was so expensive they swore not to start any new "moonshot" programs. By some calculations (sunk costs) it's still not profitable. But what Boeing could have done is to use the 787 R&D to create a smaller version, the 737 replacement. They could have created a scaled down 787 with systems and flight deck commonality which would have been in the customer's hands right now.
Exceptionally well researched video; thank you. Boeing’s last truly successful new aircraft introduction was the 777 in the mid-1990s. What happened to the man who lead that program? He was passed over for promotion to the C-suite, left Boeing and became CEO of Ford. A sign of things to come as Boeing was effectively taken over by MD.
And I suspect he is quite happy with how things worked out.
I can imagine that air travel is not going to be what it was. I work for a global company. We all fly less the 1% of what we used to do. With every one working from home there is no point going to and mostly empty office at Home or Abroad. With the high energy prices, I hear a lot of people not going an holiday by air either. Post pandemic, the demand maybe high, but that is mainly saving driven. Lets see how 2025 is going to be.
It's still a growing industry despite setbacks. We are seeing a decline in business travel in high income countries, but that's more than offset by increasing demand in middle income countries.
Hi. When I heard "no new development" something hopeful came to my mind... No "new" development, but what about something like a rewinged reengined 767? They're still in production (cargo) after all, aren't they? It can carry around 260-290 passengers with a (current) range of around 11000 km (5900nmi), not bad compared to the A321XLR (244 passengers, 4700nmi).
When your primary drive becomes saving money, the idea becomes doing nothing saves the most money.
One note : the previous 'change in leadership' is internally cited as why things have gotten so bad. There is a running comment of not taking anything seriously because 'in 3 years someone new will come in, abandon the incomplete rework of the previous person, and start a whole new 10 year plan that they will leave before making work'.
In many ways, Boeing needs less change, and more, well, consistency. Simply cycling the 'we now have higher standards, lower budget, and an uninformed plan by someone who is going to cash out their stock options and leave before the ramifications of their shakeup hit' pattern only helps stock price, not safety or quality.
No, it needs an engineering version of Jonny Ive.
Ha Ha very good Stephen! 😂😂😎
Jony Ives? That'd mean planes so thin, there'd be only room for one passenger on each row. And it mean that, like Ives' infamous butterfly keyboard, the plane's controls would quit working after a few months use but not be replaced with a better design for five years. No, there were millions of Apple customers who were delighted when Ives left Apple. Don't put someone like him designing planes.
If your industrial "mission" is to sell overpriced toys to nouveau riches then a person like Jonny Ive is "Da man". Unfortunately passenger planes must fly, always, safely, profitably. You cannot slow down a jet by remote control to force, say, United Airlines to buy a new model or throw away perfectly good batteries. And you cannot ask JF Kennedy airport to buy proprietary push-tractors or Boeing-only jet bridges.
The 787 was launched in April 2004. If they launch the next new model in 2035, that'll be more than 25... That would be 31 years between new design launches!
And if it takes as long to get into service as the 787 took, then the new model won't actually enter service until 2042. Will Boeing still exist as an independent company in 2042?
The viability of a new clean sheet design is not driven by the passage of time, but by the emergence of a new technology. What new technology has emerged since the launch of the 787 that would motivate a new commercial aircraft design? Boeing’s focus on new engine and/or wing technology to motivate a new clean sheet design is correct in form, regardless of whether the specific technologies succeed. In the meantime, the viability of the company depends on incremental improvements in both existing aircraft designs and the company’s operations. Boeing may be failing to bridge the gap to when a new technology will make a new aircraft design viable, but that doesn’t mean that some imagined visionary personality or different management style can make or could have made a new clean sheet design viable just because three decades have passed since the 787 launch. That’s not how technology works.
The TSMC model of clustering works for them and used to work for Boeing. Clustering your operations in one locale along with suppliers speeds up feedback loops. The MBA types seem to think distributing the business around the world, and remotely locating the headquarters is the best model.
Boeing doesn't have a product pipeline problem or a shortage of engineers. But it does have a circa 2000 financial engineering problem that puts too much emphasis on cost at the expense of quality, and relies on trickery like shifting risk to suppliers. Maybe too much loyalty to the company and not enough to the product. The number of people who against their better judgment towed the company line not just during development, but _after the first MAX crash_ is depressing...
I worked for Nokia 2006-2010 and witnessed another great company in a different sector retire itself from greatness via obsessive cost savings. The CEO at the time was a former finance director, and was able to raise profits considerably by cutting costs wherever he could. Like Boeing he cut R&D costs too much, so the company was caught napping when Apple released the iPhone, and it's reply was too late and not good enough weakening the company to the point where they got brought out via a shady deal with Microsoft and went bust a few years later.
From this video it looks like Boeing is on the same trajectory. If Airbus bring out a new revolutionary technology that steals market share, then Boeing will be unable to respond quickly enough and it will be game over. I don't think Boeing will go bust, as their military contracts, and friends in Washington will prevent that from happening, but I would not be suppressed to see them shrink, weaken and get folded into another military technology company such as Lockheed Martin.
It’s the legacy of “shareholder value” you see in all of these former leaders: GE, IBM, AT&T Sears. Short term profit with an exit prior to the inevitable demise.
Boeing needs to be a global company. It makes sense for Boeing to build engineering centers outside the US. It allows Boeing to access top engineering talent worldwide without asking the engineers to relocate. Boeing needs to bring manufacturing of everything carbon fiber in house where it can maintain consistent quality. I would build the wings next door to the engineering center that designed them. Rinse repeat for the rest of the plane.
737 - 4th series of a design with a 1950s fuselage.
767 - Freight or military only available.
777 - new version still uncertified. Freight version only available.
787 - Repeated delays in deliveries. Paperwork and QC issues.
No new designs in the pipeline. Boeing has lost the plot.
Boeing's engineering culture disappeared with the MD merger and the move of HQ to Chicago. Now it's just a bunch of business majors chasing next quarter's profits to make shareholders giddy while ignoring the need for a 5 / 10 / 20 year plan. They're doing what GM did in the 70s and 80s - innovate as little as possible (Cadillac Cimarron!) and build as cheaply as possible (everything but the Corvette) and rake in the profits. Works great at first, until customers realize the company builds garbage now and stop buying. GM solved it with a government bailout and full-page ads apologizing for building junk, begging for another chance. Boeing, if it's planning ahead at all, probably figures it'll go the same way because the government isn't going to let the company that builds fighters, tankers and Air Force 1 go under. Wouldn't shock me to see Boeing go the Lockheed route and exit commercial aviation entirely in favor of military aviation, only unlike Lockheed, Boeing is wallowing in badness on the military side too.
What they don't appear to realise is that one can't just sit there and print money - product development involves investment and risk and I'm guessing the aerospsce industry is no exception. The A320 family has been around since the late 80's - it's not like anything that happening now should be a shock to them. They appear to be more concerned with laying off staff / reducing costs than the company's long term future.
Boeing is a perfect example of Pournelle's iron law of bureaucracy, which states:
"In any bureaucracy, the people devoted to the benefit of the bureaucracy itself always get in control and those dedicated to the goals that the bureaucracy is supposed to accomplish have less and less influence, and sometimes are eliminated entirely." Unfortunately Boeing went from an engineering company to a financial institution run by bureaucrats and bean counters.
Boeing can't really fail, perhaps an eventual merger with Lockheed. The US government wouldn't allow Boeing to disappear.
That is part of the problem.
Too big to be allowed to fail.
Makes them lazy on R&D as well as product innovation.
But Boeing could sell off its commercial aviation and concentrate on the less risky military ones - less risky precisely because the govermnt won't let that part fail.
With love from Kenya, East Africa
I love Airbus A380, 320 neo, 350….but I also really enjoyed flying on the 787 from NZ to San Fran. Lovely spacious cabin, smooth ride. Real shame if they can’t sort out the issues :(
I really would love to see more casual videos from you like these. They're great fun
I agree with you. I’m worried a once great aircraft design and manufacturing co has been destroyed by bean counters.
Reading several comments below it is impressive how many former Boeing-engineers reacted with their stories.
Being a relative layman in the area of aviation, I wonder how many of these problems were caused and still are by simple shortage of personnel. Not the engineers, but the personnel who build and finalize the planes for delivery to their customers.
Can you please make a video on the 470 aircraft order by Air India and what it might mean to the global aviation?
As it is, Airbus has one leg in the small jet market - A220, which is made from composites. A stretch could cover the A320 market, though it wont be a perfect match. That would leave Airbus with the need for a new plane to cover the A231 - A330 market with a new plane or two.
Superb and thoughtful analysis.
It’s clear Boeing has lost its way and without genuine and innovating competition , what incentive does Airbus (or Bombardier or Embraer) have to innovate either ?
The problem with Boeing isn’t their CEOs - it’s their board who set the strategic direction of the company. That board has remained largely unchanged for years and while they determine that profits and returns to shareholders remains a priority over innovation and safety Boeing will continue on this very sad path to irrelevance.
I really appreciate the wide variety of minimally repeated, usually relevant & interesting background visuals, especially in longer videos that cover a lot of info in the absence of "crisis in the cockpit" drama. Not that industry issues don't involve drama!
Who knew the bean counters of MD could destroy 2 companies.
MD, once the pride of Long Beach, Ca...now its shame in infamy.
it's not just Airbus that Boeing needs to worry about, it is new inexpensive competition from China.
What Boeing/Seattle needs is to spin off Boeing/Chicago. The old dynamic Boeing made airplanes, and got somewhat good at engineering and manufacturing of airliners. When the new Boeing chose to re-locate to Chicago, that was when I first thought Boeing was in trouble. The management in Chicago is chasing old late-20th century management myths, and destroying the company. Boeing/Chicago and that entire "leadership" team needs to go.
More likely this will not happen in this decade. The folk who have lead the company to this point are not the folk to lead an engineering company. Simple human vanity will preclude the current "leadership" admitting fault, or ceding control. Change will have to come from outside. This will not come quickly.
Just remember that his employees hated working for Steve Jobs. He was a terrible boss.
But a brilliant visionary who turned around Apple and under his leadership went on to became a massive success
But in this case I would very gladly make the McDonnell Douglas and top management suffer under such a boss. I don't know why, but of late I love it to see managers suffer.
@@eamonhannon1103 True but an iphone is not an airplane. No one's life is put at risk by having disgruntled employees building a product.
@@srinitaaigaura If he was in charge, I am sure that airplane accidents would rise. He was not a good boss nor a good manager. His engineers hated him. He did not run Apple well. He bullied his way to get the product he wanted. He hated following procedures which is critical in aerospace. He was well suited for developing a consumer based product.
"....then he took the plane and put it in the water. 'you see those bubbles?' he asked."
I just love videos like this in your channel and the centered cohesive way you present the facts and build the video narrative.
Thanks for all your work to the industry and to all the aviation community.
What about the other side of Boeing, the Starliner? That has had a failed test flight and is still hugely late. That must be weighing things down financially
They only lost the odd billion on Starliner - chicken feed for a corporation this size If the rest of Boeing was healthy it wouldn't matter.
It is like a fight in the boxing ring, Airbus against Boeing. Sometimes in a fight attack is the best defense. And as you mentioned, I would announce a new model within the next 5-7 years with the existing technology, perhaps just a little bit bigger, perhaps just a little bit faster, perhaps just a little bit more efficient in the fuel consumption (in our times the last approach would get better promotions). Anf, if ressources of engineers are scarce, I would try to concentrate the available engineers in one location in the USA, attracting them with an own house, better wages etc.. The more engineers in one location the more creativity produced.
Boeing is comprised of several huge divisions. So just speaking to the Boeing Commercial Airplane Company doesn't get one into the entire picture at Boeing itself. If someone can wrap themselves around the total corporate picture, then we might be able to understand what is going on at Boeing CAC and why that is so.
Very interesting analysis. Can you do a similar video on Rolls-Royce, as they are in a comparable situation?
RR's problem is different. Its just that they are now not big enough on their own to stay competitive in an industry depending on massive scale economies in developing new engines, and they won't do very large joint ventures.
For me fresh leadership or at least fresh thinking is massively needed. The starting point seems to be what does the ideal Boeing product line look like without the strings or limitations of the past. The smarts of Boeing’s joint development of 757 & 767 was a master stroke - from a cost and design efficiency as well as transitioning pilots between the two. Also totally agree waiting for unproven tech to become proven is an incredible risk to bet the future on.
Companies that go through a crisis sometimes lose all appetite for risk. It happened with banks just after the financial crisis, and it seems to be happening with Boeing now. The difference is that in the financial crisis, a whole sector was affected. While both Airbus and Boeing got hit with the pandemic, Boeing also got hit with the Max debacle (which involved the introduction of a new product). So while I don't exactly blame them for being extremely hesitant to introduce a new product, they do have a competitor that isn't so hesitant.
The big banks weren't at risk; GW let them write a blank check and we bailed them out with tax payer money. They were the victims of their own criminal act of writing sub-prime real estate loans. Not the same thing. Risk is developing a product that moves the industry forward; win or lose. The Max wasn't a new product; it was a derivative that incorporated MCAS; a military jet program that sounded like a good idea on paper.
@@CKLee-rs4kl "Risk is developing a product that moves the industry forward; win or lose."
That's technical risk. Financial risk -- what companies are concerned with as part of their legal responsibility to shareholders -- is about whether capital invested returns a profit or a loss.
"GW let them write a blank check and we bailed them out with tax payer money."
Typing the appropriate keywords into a search engine: "TARP recovered $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6%, and perhaps a loss when adjusted for inflation."
@@CKLee-rs4kl Bankers are not ordinarily careless in lending money. The problem was the Clinton-era interpretation of a "fair housing" rule passed during the Carter administration. Essentially, it forced the banks to write sub-prime mortgages under pain of being accused of discrimination. The mortgage writers adapted by bundling their mortgages into big packages and selling them to other banks as quickly as possible.
Honestly Boeing deserves this. They have sat on their laurels for years and relied on the achievements of years past to hold them up and it's time for a harsh wakeup call. I think they have a strong brand and strong ability to get back up to speed but I have my doubts especially with the current executive/management environment not just for Boeing or the aerospace industry but corporate America as a whole.
I don't think so => becoming irrelevant. Not that they don't use every opportunity to screw up, but there is no other major company left to merge with...in the US at least. Too big to fall. I guess it could end in a chapter 11 scenario with some sort of happy end (like GM). There is enough left for a successful company, but the current management is not up to the task.