Can Boeing’s Purchase Of Spirit AeroSystems Help Solve Its Problems?
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- Опубликовано: 17 июн 2024
- Boeing has struggled to get back on track after the fatal 737 Max 8 crashes in 2018 and 2019. The company announced it's in talks to buy back fuselage maker Spirit AeroSystems. A company Boeing spun off in 2005. Both companies have struggled with quality issues in recent years. Spirit AeroSystems, however, also supplies parts to Boeings main rival Airbus and other plane manufacturers making the deal a little complex.
Chapters:
0:00 Introduction
2:29 Chapter 1 - Boeing Wichita
5:05 Chapter 2 - Spirit AeroSystems
8:00 Chapter 3 - Back to Boeing?
11:22 Chapter 4 - What's next
Produced, Shot and Edited by: Erin Black
Animation: Jason Reginato
Supervising Producer: Jeniece Pettitt
Editorial Support: Leslie Josephs
Additional Reporting: Phil LeBeau
Additional footage: Getty Images, Airbus, American Airlines, Boeing, Spirit AeroSystems, United Airlines
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Can Boeing’s Purchase Of Spirit AeroSystems Help Solve Its Problems?
Boeing executives on "How can we solve the problem?"
Fixing production flaws and use better material ❌
Hiring more Hitman ✅
Dude, watch your back, boeing will hunt you down, RIP
Paying the wetworx team instead of giving factory workers a raise
@@monkeygalaxy6322 Boeing is nothing just a bunch of criminals
RiP mah man
Boeing needs to be turned into a cooperative. And or unionized.
how about putting engineers back in charge again
Do not forget that Muilenburg was an engineer. It is not so simple as putting an engineer in charge. The CEO does not have to be an engineer. He or she is not the person who designs the airplanes.
engineers dont deserve being heads of projects. they are just engineers. engineers dont belong running entire programs
Ever heard of William Allen? The lawyer that made boeing into a success after WW2. He was probably Boeing's best CEO.
But Airbus got subsidized by the EU government. The WTO ruling confirmed that . What Boeing can do?
@@nomercyinc6783 you should go back to pre school
Boeing solving their problems
Buy Spirit Aerosystems ❌
Turn their whistleblowers into a Spirit ✔
I worked engineering at Boeing Wichita when the Commercial side was sold off to Onex in 2005. A lot if experience older employees were laid off -- everyone knows the main goal was to cut cost. Boeing finally left Wichita completely around 2013 and 2/3 of employees would laid off again to cut cost.
It is actually Ironic to hear Boeing consider the Wichita workforce again after decades of reporting the need to lower cost.
I spent decades working for Boeing and never knew if I'd have a job next year. Though in the end they helped me raise my family and financially set me for life.
Quite bittersweet if I am being honest.
Don't forget, companies are not people, they have no feelings or compassion for anyone. Boeing didn't set you financially, you did.
They can start improving themselves by not killing their whistleblowers 🤷♀
that company built by blood and sweat
blood of whistleblowers, and sweat of outsourcing
and of course big bonus to executives
But that is not cost effective.....
Here’s a simple idea for Boeing: stop cutting corners with safety, stop punishing whistleblowers, and act like you’re building products where hundreds of people’s lives are at stake every time they’re in use.
Seems like pretty no-brainer, business school 101 ideas, but there’s basically nothing corporate executives won’t do to hit their quarterly profit targets, even if it means risking people’s lives.
This is what happens when your entire incentive structure is aimed at short term gain and not long term growth. Profits > everything, even human life unfortunately.
They met their DEI '"goals", but NOT their engineering goals per their own reports..
Congratulations, you just made it to the Boeing Hitliste top 10 👏
That's how capitalism works. Greedy companies are kept in check through government regulations. Unfortunately the government is failing to intervene here
@@monkeygalaxy6322 😂😂
Boeing has been extracting money from the company and handing it to shareholders for two decades. Now they're surprised the company is failing at its core mission. They need to re invest in their own workers, capacity, engineering, and quality.
The problem is that these are all exorbitantly expensive, they won't see returns for years, and they are projects which require years of dedicated focus to complete.
It was easy to strip mine these things, and sell them off, as Boeing has done for 20 years. They're going to find out it's actually quite difficult to create something. A lot more difficult than it was to destroy and sell of.
They just gave their ceo, who oversaw the violation of the deferred prosecution agreement and all these safety problems, a 45 million dollar golden parachute. Is it any wonder the company is failing, when the board and c suite are rewarding bad behavior?
They literally permanently silenced 2 whistleblowers, why is the public not alarmed
that company built by blood and sweat
blood of whistleblowers, and sweat of outsourcing
and of course big bonus to executives
We are alarmed
*3
Alarmed and doing something about it. Are two different things.
I'm alarmed
They not only need a new CEO, they need to purge their management tree of the people who got them in this mess. They need to do the same with the board. There have been a few board changes, but not enough. They need a board committed to restoring Boeing's place in the industry.
Who is they? The people you describe run the company
I like how the people that caused the problems will benefit financially. This is sooooo USA.
Get rid of the bean counters, replace them with engineers, and concentrate of safety. The rest will take care of it’s self.
This is a face saving move, they try to attach blame for their shortcomings to a supplier.
Spirit Aerospace isn't exclusively supplying Boeing, it supplies others, such as Airbus,
other aircraft manufacturers didn't have the same problems.
So this is most probably a Boeing not a Spirit Aerospace issue.
Actually it won’t, if they do things properly by the book their aircraft’s would be too expensive and everyone will just buy airbus.
Airbus had a similar model where most of the parts and components are outsourced, but QC and safety is still done properly as oppose to Boeing just rubber stamping the process
In 2003, a very senior JPMC person (1 level from exec committee) told me, "great news, we are almost done with corporate integration!". And I was like, "wow, the Chase integration (in 2000/01) is done?". He responded, "god no, I am talking about the Chemical Bank (1996 merger)". Merging large companies and their processes is *VERY* hard. The temptation of a complex org like Boeing, especially when end-to-end quality is a top concern, is to simply add additional layers of governance process, and the direct consequence of such a "bandaid fix" is then production effectively grind to a halt. This simply has a complete disaster written all over it.
I don’t see any mentioning of their proposed budget for hitman contracts. They must be expecting a huge increase …isn’t this gonna eat away their cost and estimates?
Boeing is not alone in moving from their core competency to a financial-focus. Look at GE before and after Jack Welch.
Those two companies are actually related.
Genesis gv70
Giving the ex CEO the biggest exit package in the history of the company is a fckn farce.
Get rid of all the folks that came from McDonnell Douglas, Put Engineers back in charge, and move back to Seattle. 🛫
I'd be open to a subset of the people to stay in STL, but Chicago? Definitely send the HQ back to STL or Seattle.
I’m pretty sure the McDonald Douglas people have all retired now. But their business methods are lasting way beyond that.
MD still flying are very safe planes
Culture and institutions outlive its people, and that’s what fundamentally has to change.
@@doujinflip
Usually culture of a company is good and you wanted to continue. But unfortunately, for Boeing they have a bad culture. They need to get rid of, and you can’t do it by just tossing random people. You have to change the culture by force.
This is the same "long road ahead" script from 2019 when the stock and two planes crashed from $450 a share. The 737 was being produced at a rate of 52/mo before the global MAX fleet was grounded in March 2019. In November 2022, Boeing announced its goal to hit a rate of 50 by the end of 2025. Today, the advertised production rate is 38/mo.
Cornell Beard, the president of The International Association of Machinists and Aerospace Workers, told The Wall Street Journal that continued pressure on employees could be pushing quality control to suffer. He added, “We have planes all over the world that have issues that nobody has found because of the pressure Spirit has put on employees to get the job done so fast”.
You’ve been advertently stated the problem. Which they be more concerned about number of planes per month, share price, or quality and safety.
Going back many years they’re number one concern has been share price
Boeing: "how we can get rich?"
: "let's outsource, outsource, outsource"
: "we got quality issues now, what to do?"
: "let's hitman, hitman, hitman"
You forgot "let's fire the engineers and mechanics and replace them with teenage burger flippers and ikea salesman.
They destroyed the company but at least the shareholders made out like bandits for a while, right?
Modern day thieves in the open
Sure, and they only offed about 650 people in 2 years for it...
As an american I would choose Airbus over Boeing. Boeing maybe be iconic and played a big part in US history. But #### its executives and investors. Safety is far more important than profit.
"Quality is not a tomorrow thing."
Too bad Boeing didn't think about that yesterday.
Boeing problems will be fixed when you replace the upper management with actual engineers who care and understand plane design. Right now its led by people looking for ways to build cheap and keep profits high for the executives and share holders.
For CEO Dennis Muillenberg was an engineer who spent his entire career with Boeing. From undergraduate intern to CEO. It’s not as simple as putting engineers in charge. Because by that logic, the 737-MAX8 would’ve never happened. But it did, twice, under an engineer’s watch.
If it's Boeing, I ain't going
Good thing I’m flying in an ancient 767 to London soon.
On paper. In reality, they need to fire their entire executive department. Clearly, the CEO is not qualified to run a company that deals with real products.
Let’s treat their executives like they treated their whistleblowers.
Lol the MAX crashes didn't change sh*t. Why would it now?
Boeing is now one deadly 737 max crash away from being a footnote in history.
They are so lucky that door did not blow out at cruising altitude.
The change of focus from Engineering to too much cost centricity happen when the leaders are just Management people but not the homegrown leaders who climb the ranks and know company in and out. The stock market guys can only do cost optimization because their training/experience but never understand the value their product delivers to customers. This is not just a Boeing problem but a problem in general on many retail & old school businesses.
Brilliant reporting and coverage. More like these please 🎉
Retired avionics 737 -800 and max. I was working for American in Boeings hangar and knew many Boeing employees when they changed to spirit. They got a bonus and a pay cut to stay.
This seems like a structural issue with how executives are compensated. IHMO, the reason the executives prioritized short term profits by selling off core competencies (after redefining the core competency to be w/e has the largest profit margin), squeezing suppliers (driving down quality,) and squeezing the workers (also driving down quality) was because it made them a boat load of money and they knew they would be long gone by the time the chickens came home to roost. If we want executives to think long term perhaps we should demand long term claw-back clauses that require they pay back their compensation if the company implodes after they exit.
First, I used to look for tickets according to the airline company. Now I look for tickets according to the plane brand.
An excellent report. Thanks guys!
Calhoun is saying that the fuselages will be "in near perfect shape" when they ship from Spirit, but they still need thorough inspection when they arrive at the assembly pkant. I still hear Calhoun saying he wants to speed up production at assembly. I want hear a new CEO say he (or she) wants to build a perfect airplane. Calhoun is part of the problem.
Exactly! A major part of the problem is boing receiving a fuselage in 'near perfect shape'. It should arrive to boing in perfect shape. What good is it to have something manufactured for you and not arrive of the highest quality?
If they have experience with that design problem then possibly yes. If not then the mass of more people in the business of Air Plane Manufacturing persons is always an advantage. I believe it’s a tradition for Spirit Aero to be lower on the supply chain than the larger Boeing and this may be the root problem. Some very interesting small aircraft have been created of scrap from larger projects. Hopefully they get it figured out.
Does this mean they get more or less hitmen?
More skilled hitmen.
Boeing needs a CEO as engineer and the headquarters should be in the same building as production, so they can see first hand what is occurring.
Just move back to Seattle, hire people who know about airplanes more than stock dividend....
The Spirit factory built the entire 747 for decades and they're still a major supplier for Airbus. Moving back to Seattle isn't the issue. Accountants trying to leverage anti union states against each other in the name of bigger margins is.
Not easy, since they moved from Chicago to Renton, Virginia is to get close to their other big customer, the US military. But a good solution would be if they move the commercial part of the business back to Seattle (or even move it to Wichita) while the military unit goes to Virginia.
To me Boeings problems seem to be related to cost savings in the actual quality assurance of their aeroplanes. For some reason their upper management started thinking that you can save money with aeroplanes by cutting corners in the quality control. Not sure they remembered that aeroplanes fly in the air where there is very little leeway for quality based issues.
The idea that yet more M/A will magically solve Boeing's institutional problems is laughable. Boeing needs to change itself, period.
This is a face saving move, they try to attach blame for their shortcomings to a supplier.
Spirit Aerospace isn't exclusively supplying Boeing, it supplies others, such as Airbus,
other aircraft manufacturers don't have the same problems.
So this is most probably a Boeing not a Spirit Aerospace issue.
I'm sure Boeing is gonna stick with what they're used to:
Crossing their fingers, buying another yacht, have a press conference saying they'll do better, repeat.
It's getting to the point that we may see the following happen:
1. The FAA may order the grounding of every Boeing airliner built since 2010 and have them subject to C-level maintenance checks to make sure all defective parts are found and replaced.
2. Boeing will need a totally new management system in place with tight external Quality Control checks as each plane is assembled.
Evidently FAA isn’t doing anything. They can keep coming up with excuses to let them keep flying their junk as more people get their lives taken.
They have already implemented a "brain drain" within the company. They have outsourced and replaced nearly all skilled and educated employees with minimum wage assemblers. One common thread of all failed companies is when executives make more than an entire department of a company combined. They won't recover from this without being bought by a company that hasn't gone this route.
I’m more concerned with its Orion Capsule… What a disaster it would be if they’re the reason we lose astronauts. The embarrassment would be irreversible and the damage impactful.
weve already lost astronauts. other nations dont care about american projects
How many people might be killed if the Orion capsule failed, compared with the losses so far from the Max disasters?
Boeings current problem are exactly the reason why there needs to be robust domestic competition. If there was still a McDonnell Douglas and Convair in the commercial airline business Boeing wouldn't have been so cavalier in product delivery.
As Russian MC-21 and China Comac will be ready to commercial usage, there will be an even stronger decrease in requests for 737 from African and Asian countries.
Brasil será EMBRAER.
The likes don't add up to the negative comments.. Easy to spot fake likes.
EVERYONE except quality control's pay there should be tied to number of defect free planes produced and quality control should get bonuses for defects found. THAT will fix the problems!
Naming your airplane construction similar to spirit airlines is hilarious
You have to talk about Boeings industry leading hitman division
Spirit AeroSystems also produces for AirBus - funny they don’t have any issues with quality (maybe because they pay for the job order) - but looks like that might change when Boeing gets them back in the fold. There’s no bar too low for B̷o̷e̷i̷n̷g̷ McDonnell Douglas.
Onex got Spirit in 2005 and then progressively sold it off with last shares sold in 2014. Part of reason was the deal imposed by Boeing on 737 production didn't make Spirit profitable. Either way, when/if Boeing gets its own 737 production, it will need to raise 737 prices to ensure it can deliver a product that works because the current price was not sustainable.
In late 2010s and early 2020/2021, Bombardier was liquidated to pay debts, leaving it only with what was left of its Business jets division. Bombardier Aerostructures ( formerly Shorts Bothers in belfast) did work for the C-Series (now A220), the CRJ, Bombardier's business jets and more recently some Airbus products. ) Aerostructures was sold to Spirit I beleive in 2020 or 2021 when finalized. But Spirit also had "native" conracts with Airbus in North Carolina.
The CRJ production is gone. All that is left of Bombardier is the Challenger and global 7500/8000 business jets, and Airbus has the 220 (formerly C-Series) and the 350. It seems to me that it would be easier for Boeing to buy the plants that make the 737 and 787 and allow Spirit Aierosystems to remain as an autonomous company with contracts it had independantly and those inherited from Bombardier Aerostructures.
(as opposed to Boeing buying Spirit and then spinning off the plants to Airbus).
Worked at Boeing and Spirit Aerosystems....... Dream On!
Here's a lesson for engineering-oriented companies: if you let the bean counters take near-total control of your company, you're screwed.
Why they would outsource so much of their plane is just crazy.
It must be mandatory for Boeing's top brass to spend a week (unpaid, of course) learning about why McDonnell Douglas stopped making passenger jets and had to merge with Boeing (using the latter's money).
Send Boeing top brass to Airbus to learn how you build airplanes.
No mention of John Barnett or Joshua Dean?
buying spirit and cutting airbus part production would be perfectly in line with boeings last 10 years
They have spent years cutting corners and coving up issues.
When they get serious they will actually fire upper level managers and NOT pay them a bonus.
You can’t just fire your entire management. Who’s gonna run the company. What they need to do is stop tying bonuses to things that are the opposite of safety.
Does Boeing have enough experience maintenance workers? Good luck finding. From 51 yr old average workers in N America to 41 yr old average workers post pandemic what does it tell you? Pay more to attract new talents and training them for years to come
I don't know about this strategy. To save costs and increase profit, Boeing for years outsourced to Spirit and at the same time reduced the number of Boeing inspectors. In the door plug case, a Spirit employee removed the door to fix something and reinstalled it; however, there was no inspection of the door after it was reinstalled which Boeing should have done. I suspect Boeing would like to blame it all on Spirit but Boeing clearly failed in their processes.
That's a good question. My question is, can they put all the bolts and plugs in ? Or maybe just leave to door off so it won't fall off.
Would people say now is the perfect time for a new commercial plane manufacturer with Boeing troubles
So Spirit let's go of experienced personnel when they probably NEED all hands on deck to make quality controlled Aircraft, that makes sense! Honestly, the mistake was allowing the merger McDouglas with Boeing. Less competition= higher prices, and more monipoly over the industry. We need more Aircraft makers. Maybe Bonbardier or some other maker can become the next big Aircrat maker. One thing is for sure, they're opening up a door to the Chinese Comac and even the Russians if they're not careful.
Love all of the industry experts in the comments. Same with executive experts. It’s amazing!
They can start by not getting rid of whistle blowers.
Boeing is doing great in the space SLS program.😮 the plane managers also work and use their same experience on this program
Maybe they can improve by listening to the advice of their whistleblowers
Maybe their first step is to listen to their engineers, instead of literally murdering them.
Putting profits over engineering and safety was never going to end well.
Source: Ed Pierson
'Ed Pierson, a former senior manager at Boeing’s 737 Factory in Renton, Washington, raised concerns to his supervisors about the dangerously unstable production environment and risks to the safety of airplanes. The factory was plagued with overworked employees, chronic part shortages, quality issues, and unrelenting schedule pressure to deliver MAX airplanes. Ed recommended Boeing leadership shutdown production operations before both crashes, but sadly he was ignored.'
So the present CEO is stepping down after December, but they voted to put him in the board of directors. This is the guy who got a huge bonus to ‘fix’ the 737 MAX problems. He’s reportedly getting over $33 million when he ‘retires’. I’m sure a board member gets a great salary. Not bad for driving a company into the ground 🤔
It bothered me that at 3:43 you said MD11 and MD80, but the videos of said planes were swapped with each other.
Fix problem by not talking about it
A case of allowing the fox to watch over chicken coop
Driving past Spirit in Wichita while listening to this lol
They should ask Allan Mulally to come fix them. He was a previous Boeing CEO then went to Ford and fixed Ford. And it’s hilarious that the FAA is now telling them to get their act together when this started cuz the FAA let this happen by letting Boeing self regulate.
Short term achievements always come at the cost of long term achievements and this is what happened to Boeing. A company can lose money but not its reputation.
Boeing already has lost its reputation.
By putting all whistleblowers in a plane made by Boeing.
Boeing better make sure it does. Get rid of any employee not interested in top quality performance.
The main issue now isn’t really the technical problems but the loss market share and lost customers and lost markets. On top their finances deteriorated a lot.
There is a lot of focus on Spirit and fuselages in this video, but the two 737 MAX crashes had nothing to do with the fuselage. That was MCAS and cost saving short cuts by management. Onboarding Spirit won’t solve that.
Boeing has reached the final point to move forward again with so much competition, what steps does Boeing need?
They really need to buy back spirit, as they need to completely rein in quality control.
There is nothing wrong with out-sourcing. The problem is out-sourcing and then demanding more cost cutting.
The companies you think actually make stuff make nothing. They are just assemblers.
They better fix this . Two airlines alone from India have ordered 1700 aeroplanes . And a lot of them from Boeing also.
Buying a different company WON'T solve cutting corners to save money, they need to STOP being so fkn greedy with things that will cost people's lives and make them planes right like they're supposed to
Can anyone recommend me some other channels that have this style of informative videos??
Basically they are saying give the company and the stock another chance 🙏
Sounds like a McDonnell Douglas 2.0.
Seems like now would be a great time to buy some Boeing stock... really great time, in fact. They have to change course, and I feel like they're going to come back bigger than ever. Sure it'll be a long term investment, but seems solid. Can't get much lower, right?
Don't count on it.....its a mess. I can see the equity firm hyenas circling
these Boeing's problems seems like the makings of a Michael Crichton's Airframe sequel
Gotta start with the culture, and the mindset of it's employees.
4:55 This is the real meat of the story. Private Equity exists to extract value from companies and pass them on to the next schmuck.
You have to ask how airbus has such a dispersed outsourcing set up and yet no flaws or no more than usual.
5:18 👈🏼🤦🏻♂️ Now I know what’s the problem…how the heck are you building a 737 aircraft in just 9 days !? 🤔 That’s why all the parts are loose because they are rushing.
Someone at CNBC going to get really sick today
The problems are management caused. Cleaning house at the top and bringing headquarters back to Renton are the first steps.
Maybe not caused by, but management is responsible for.
When skilled workers who previously assembled burgers at McDonalds and BurgerKing assemble airplanes
then it can't go well. Everyone knew that. Only the money-grabbing tie-dye wearers, who don't have the slightest interest in the product, didn't know that.
The scary thing is they probably DID know that.
If there is a firm out their with the capital, this is a great time to create a new airplane company. With boeing messing up royally, there is a gap in production with demand. If they can build with quality and saftey in mind, there is money to be made. And Airbus cant possibly fulfill all needed orders. With Boeing not having having the proper personnel in charge (engineers and not accountants and stockholders), I dont see Boeing fixing this problem in the near future.
Us little people should be quite fearful of getting on these planes at this point. I pray there aren't anymore major adverse events with these planes.
3:00 Why is the B-29 "infamous" ?