What has happened to Boeing?!
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- Опубликовано: 17 май 2024
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Yesterday The Boeing Company released its first annual loss in over two decades. The ongoing Boeing 737MAX debacle keeps haunting the company who was once the pride of American engineering industry. What has gone wrong? In this episode we will dive back into the history of Boeing to try and answer that very question. We will look at the merger with McDonnell Douglas and the move of headquraters from Seattle to Chicago. We will look at leadership style and how that has odd only played a part in today’s situation.
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Below you will find some of the links to the articles/podcasts and other channels I have used to create this episode. I want to send a sincere"Thank you" to everybody involved!
www.google.se/amp/s/qz.com/17...
www.cnbc.com/2020/01/09/boein...
int.nyt.com/data/documenthelp...
podcasts.apple.com/es/podcast...
www.trendnuz.com/boeing-engin...
www.bbc.com/news/business-502...
Cargospotter (The Legendary Boeing 707)
• The Legendary Boeing 7...
Topfelya (Boeing 727 Takeoff)
• Boeing 727 impressive ...
Scaring Crab (Boeing 747-100)
• Trans World Airlines B...
ThamesTv (Boeing 747-100 takeoff 1970)
• Pan Am - Boeing Jumbo ...
Classic Airliners & Vintage Pop Culture (McDonnel Douglas video)
• McDonnell Douglas DC-1...
Timmy Chook (Boeing headquarters)
• Chicago Water Taxi Boe...
Excellent Video! As a former Boeing employee, I completely agree and concur with what you are saying. sadly, the very same management policies that led to the demise of McDonnell/Douglas are now destroying the reputation and quality of Boeing. I’m glad you also mentioned the role of the FAA in this disaster too. It was a Washington DC ordered cut in FAA funding that led to shifting oversight of Boeing, and all aircraft manufacturers to the manufacturers. The fix guarding the henhouse! These problems are not going to be easily fixed, and can no longer be swept under the rug. Firing one or two managers is not going to stop the bleeding either. massive changes are needed both at Boeing and in Washington.
I used to work for Airbus back then but got a contract with a Boeing contractor just as they took over McDonnell. We stood with our contracts in our hands, and the day after, got kicked out and the US government withdraw our greencards. It was devastating! But at least we later the following year received a letter from Boeing saying they were sorry for what had happened.
same kind of mentality here in Germany, cut cost by laying off people while the managers keep getting more and more monthly pay plus the millions of bonuses at the end of the year.
@@Christin5554 Come on, Connie, you you overreaching it.
@@ThomasKossatz I am not, but seems to me that you are one of those managers that can't get enough.
Absolutely agree, look at the military KC Tanker Debacle, The 777X, et al.
"McDonnell Douglas bought Boeing with Boeing's money". That quote explains everything.
if boeing were that dumb they need to go out of business
Yeah, but McDonnell Douglas isn’t a high up standard quality of a commercial airplane manufacturer neither!! Remember the DC-10? And it was a DC-10 that made one of the Air France’s Concorde plane to crash right after takeoff!! Remember that shrapnel piece of metal that fell off the plane’s fuselage lmaoo upon landing and then once the Concorde was taking off that metal piece was stepped on by the Concorde, and it caused a flat on one of its rear tires and the tire exploded sending the rubber into the planes underbelly causing a rupture onto the plane’s fuel tanks and that fuel leaked into the engine and caught fire and then after the plane took off, it caught fire and crashed into a hotel killing 2 on the ground also! So yeah, McDonnell Douglas is far worse of a company in my opinion!
@@vladimator1842 Concorde deserved better :(
@@vladimator1842 I present to you.. The 737MAX-10
That’s pretty much it.
I know a story, told by an engineer: "I design radio, and the company asked me to build one. I designed and built an excellent robust radio, you could listen all the stations in the world, clearly, loudly and in high fidelity. Then the salesmen came, and they said it was too expensive. They started removing a piece, and the radio was still working. Removed another piece and the radio was still working. An overpriced piece? Replaced with a cheap one. Continue like this until, after removing / replacing yet another piece, the radio stopped working. Then they put back the last piece removed. "Here is the radio we will produce." Cute as a little story? But a radio that stops working doesn't kills people.
It does not fit exactly, but still exemplifies the conflict between those who do and those who cannot do but only know how to sell, no matter what.
One of the biggest issues with large American companies is the attitude expressed by a phrase I often heard: "Don't bring me problems, bring me solutions." In these companies, the people that will get ahead are those who are either too stupid to see a problem, or those that are willing to hide the problem. A person who is smart enough to see a problem and find a solution will still be punished because the solution generally requires spending valuable time or money.
@Bobby Brady- I was not being anti-American. I have only worked for American companies, so I did not feel that I could comment on business attitudes in other countries. And, since we were talking about a big publicly held company, I saw no need to mention that I have also worked for, and with, very successful privately held companies where this kind of attitude did not exist.
@Bobby Brady in this context, don't you think it's really misleading to omit that the only reason we know about those bribes is because Airbus found out internally and self-reported to authorities?
If you really want to invoke whataboutism as defense of the bad (why?), this is an especially bad example.
the guy who fixes bars Jon Taffer "Bar Rescue" on television relys on that premise alone- He finds solutions to fixing things and thats it....
Bobby Brady just on point: it is the Airbus management who reported to the justice those "irregualrities" of some army contracts and blaming top management for that is in fact rather rewarding. To me, forcing witnesses to shut up to prevent justice to condamn or cheating to certify a flying anvil are more serious offenses If you see what i mean.
It has a blame culture and have not sorted out its attitude to it engineers. It runs it like they are the CIA and rule it by do as I say not as I do !,, ?
After my father retired as a captain from eastern airlines he worked for the faa , he was an aviation safety inspector , he was at Boeing in Seattle and he observed that he did not see one model of a Boeing aircraft in any office . That's says volumes of how Boeing thinks it not about aviation n at all.
I was an engineer at Boeing in Seattle in the 80's (I left in '89) and think this was a very good analysis. Boeing was the best place I ever worked, and its employees were the smartest, most worldly people I ever worked with. The company was a national treasure and recruited from all over the country. It was definitely an engineering-driven, rather than stock market-driven company. It's so disappointing and frustrating to see what's happened to it.
The one thing I would disagree with in the analysis is the idea that the CEO implements the vision of the Board of Directors. At Boeing and a lot of other big companies, the Board of Directors are simply a bunch of famous names that are there to impress outsiders. Most of the people who have been on Boeing's boards have had little or no knowledge of the aviation or aerospace industries.. It was the CEOs who screwed up Boeing, starting with Phil Condit and Harry Stonecipher. If I recall correctly, Condit was running Boeing's commercial division when I was there, and he was very unpopular in Seattle. In fact, one of the reasons people though the moved Boeing's headquarters to Chicago was so he could get away from Boeing's employees in Seattle. One of the best moves Boeing can make to show it's serious about making changes to the culture is to move the headquarters back to Seattle.
fixpacifica Seattle? With the drug problem they have?
" It was definitely an engineering-driven, rather than stock market-driven company." They built machines of murder for profit, dude.
@@johnaltz7143 'cause Chicago has no drug problems, right? Or gun problems.
Condit was a slimy creature that got booted out because of his lack of ethics.
@David Parry I'm already retired and I have no dependency on Boeing for that. They won't declare bankruptcy.
This video is right on! I worked at Boeing from 1965 to 1999 in the engineering organization... it was engineering heaven. We got everything we wanted and did great work! We always thought that Boeing purchased McDonnell/Douglas but it felt more like McDonnell/Douglas because the engineering culture in Boeing really changed. It was very hard to understand at the time.
A single AOA sensor giving a faulty reading ended many lives , having no redundancy on such an important part of the flight system is just unbelievable from Boeing.
A single flight-computer clock reading ruined the demo flight of their Starliner space capsule. The craft only knew "where it was" from this one input, of where it was expected to be x seconds into a flight. No double check from an altimeter, GPS, ground control inputs... And worse, apparently the pre-launch procedure has just one guy set the clock, with no one to confirm it.
Story i hear is that an airforce mentality creeped into the engineering department. Civil has always been about redundancy.
A pilot, especially in broad daylight, should see from his instruments (airspeed and horizon ) that the aircraft is not in danger of stalling. The problem was that they could not override MCAS.
@@wilicca99tokoroa51 They could override it (i.e., there is a way to cut out automatic stabilizer trim), but it currently looks as though, if they even tried to run the runaway stabilizer trim checklist, the aerodynamic forces on the aircraft might have made it physically impossible to pull on the trim wheels and yoke hard enough to right the aircraft.
@@donjones4719 Well, it didn't ruin the demo flight. They still met most of the flight test objectives.
Although, it turns out there was a *second* coding error with Starliner, dealing with the separation of the spacecraft from the service module. They caught it during the flight and were able to fix it before spacecraft separation. Had they not, it likely would have resulted in the loss of the vehicle.
So, yeah, coding and computer science issues in both cases (MAX and Starliner). They must do better. (At least with Starliner it was a test flight, where learning during the mission is more to be expected.)
Remember Hewlett-Packard? They were a great company run by engineers, and with a motto of "We are not a me-two company." Then the bankers took over and their products went down hill.
Hewlett Packard was the best... in my opinion it made apple look like a grape in the day.. my hp computer I bought out of high school was the absolute best. It ran so many programs so well and so easily, it still makes computers today junk.
There is also a chicken and egg causality factor here also... lots of these companies bean count when they don't have the margins to operate as they used to due to low product innovation and market creation/discovery... and they already have less funds to innovate or create/discover markets and break that cycle without an external capital injection or major refactoring that normally is resisted until they are in dire straights. Hence its hard to know when the bean counting caused the problem, or when the problem caused the bean counting.
FYI HP did not start as a computer company. The original HP was a test equipment company. Computers were a side thing that grew bigger. Computers are just what the average person knows them for ( along with laser printers ). The sold off the original business along with their life science part. They became Agilent. Then they split with life sciences keeping the Agilent name. Now test equipment is called Keysight. So yes I remember what HP was like. The original HP!
Even no La HP, when something grows strong then let that go . Most of things are right. The question is, the new owner still remember how a being is built?
I like their calculators though.
What's wrong with Boeing? Answer: MCAS (Money Comes Above Safety)
Brilliant!
Yes
Fugboi I my quote you on this 👍🏾
Bravo
Definitely
When companies are led by bean counters you can expect engineering standards to drop.
And to have all the blood sucked out of the company like a swarm of mosquitoes.
"Beatings will continue until morale improves"
that was said at CSX
''If all else fails, your co-workers are edible.''
I recently retired after a 42-year career in engineering, primarily in software development. Reference 13:52, as I have asserted for the past 46 years, software is the last chance to make hardware look good. If your hardware needs a software crutch or fix, get the software right the first time. After all, at that point you are already behind in the sense that you are fixing the hardware.
Would you still fly a boing?
@@tubester4567 Personally I wouldn't but what do I know.. I like to act stupid, I would ask that same question to an engineer.
tubester4567 seeing as the same Indian company HCL, who originally wrote mcas with no experience at all of aviation software, is responsible for fixing mcas, and pays it's workers less than $9 an hour, I will never fly on a max. Or a 787 made in charleston for that matter
Being part of workforce for over 30 years, a big part as a contractor/agency employee. I’ve seen the results of ‘bean counters’ taking over decisions that should be left to engineering. Everything from fast food distribution to automotive and truck manufacturing. The company’s ultimately loose market share.
The results of a airline manufacturer following this trend is people are going to die.
That same scenario played out in the us auto industry and the reason I drive a Toyota
"Bean Counters" make no decisions. Management simply convinced you to blame them.
msnpassjan2004 right.. the bean counters find the opportunities... the management approves said plans
MBAs are the "scientists" of management. Science is a great tool when dealing with minerals, trees, and lab rats, but it has an inherent flaw when dealing with people. Scientists objectify and mathematize what they study and what they manipulate, and with non-human objects, there aren't a lot of moral problems. But social scientists' perspectives render "the people" as lesser beings, objects not persons, numbers not names, objects of manipulation, and so on. These perspectives render social scientists morally blind, unless they bring in moral perspectives from outside their disciplines, and their moral blindness mucks up their ability to work with real people, who are NOT "lesser" objects, to be manipulated like chunks of ore going into alloys. So it's no wonder that corporations that scientize business devolve into crappy businesses over time, because businesses are made of people, not minerals or plants or livestock.
Fordsidevalvesforever likewise, people wouldn’t have died if Boeing would have made the decision to allow trained pilots to take control over the aircraft if something would have went wrong with the computer system.
We see so many Engineer led companies being destroyed by Accountants and management. Why do we race to the bottom being led solely on price
because things are more expensive now. but there is happy medium between both.
One adjustment...just management. The fact that they want to hear what accountants to the exclusion of others is in mo way the fault of the accountant. MANAGEMENT! is the unleashed gorilla here.
big picture: competitiveness on pricing is required for a company to survive
micro picture: rewards, properties, and priorities within a company are controlled by management types
As a test engineer myself (software testing, certainly not for planes though), I really love seeing videos like this because they help me keep perspective on the importance of testing holistically. The business wants to always take the assumption that we're being too cautious, so I think having real anecdotes like this helps express to them that it is far from being overly careful.
On this same note, companies need to include testing times in their deadlines. "You got 3 weeks for this." OK, well it'll take 3 weeks to dev. "No, that's the go live date" OK, well how long will testing take? Then I go to the testers and they'll say they need two weeks. A joke.
@@Stettafire Well, in IT it's de facto practice to use your customers as testers... (apparently now practice adopted in aviation too? 🙄)
Undercover boss. You get to see the inside problems. Try to get solutions...
A sad development.
Reminds me of the automotive industry (where I worked as an engineer for some 30 years). Outsourcing is a disastrous development. Companies lose their most valuable resources - their skilled workforce. That also shows in the enormous number of recalls and scandals. I fear it's a negative development which has spread globally.
At the same time those outsourced jobs and investment creates expertise and wealth as a seed for future competition. Then the company goes under as foreign competition they enabled dominates the industry. But some executives got bonuses for their quarterly numbers before that happened. Short sighted goals lead to long term problems.
So true, I was working in the automotive industy for some years and it is really scary how the autonomous driving development is going on... profit profit profit, costdown, lowcost, callbacks, etc. I would never buy a car like that. Engineers develop a good product then managers destroy it with their money lover attitude (while pushing the engineer’s wages down). Changing steel to plastic whenever they can, creating everything only reliable/operational up to the minimum life cycle (so the end customer will have to buy a new product), and so on. Disgusting. Basically a part of my engineer passion has been killed then I have changed career.
@@tamastoth7208 what car brand do you recommend? :)
Прикладна Економіка Depends on what kind are you looking for. Generally Japanese. Toyota, Honda
@@tamastoth7208 ok I get about eco cars, What about european design/engineering school? Porsche? Mercedes? Maybe Porsche cabrios are ok but Cayenne is terrible (or all are terrible). What about Mercedes? Is it complete junk? I heard terrible stories.
My first job was as an Engineering Aide in 737 flight controls in Renton in the 70's. It has been my best job in my entire career. Your comment that it was a "family" really rings true with me. Just enjoyed the high level of safety concern and attention to detail that the engineers I worked with brought to the job everyday. I was indeed a part of the "family" and that I believe made it such an enjoyable job.
I live in Renton, and am going to be writing an article about the Boeing community for the next issue of my high school's newspaper. I can truly attest to the fact that Boeing really seems to be like a family around here, and I hope Boeing management can get their heads out of the clouds and move back to Seattle to be closer with their company and make communication easier and more direct. It's time they move home
You very well might have worked with my dad. He was in systems engineering. Worked extensively on 737 and 747's
@@user-qr8ki8ue4i What was your dad's name, if you don't mind me asking? ~Jack
@jjensen, Doug W.
@Jjensen, did you know Dick Schoenman?
I was a mechanical engineer for Boeing during the "transition period" from Boeing to MD management style and all I can say is Boeing was moribund before MD and transitioned to moribund and penny wise and dollar stupid after MD. When I finally left in utter disgust, I was convinced that Boeing couldn't make instant coffee in less than five years for less than two billion dollars!!!
For example, the first step in making instant coffee for Boeing would be to gather embarrassing and blackmail-able information on Juan Valdez's grandmother. This is the way those people thought!!!
Moribund.😀
Yikes, you've painted a not-so-pretty picture of a has-been icon. I may use your first step comment for something, not yet sure on what - but I liked it
"Safety is our number one priority!!", (well, after profits of course, duh !!)
From "by engineers for engineers" to "built by monkeys supervised by clowns." How the mighty have fallen ...
In fact a senior German pilot was key in design of the debut 737 model.
Yup. This is what happens when you put mere accountants in charge of tech and innovation companies
@@woodycoat add hiring an ever cheaper workforce, partly from India to the mix
@@woodycoat It's not the accountants analyses that is the problem. It's the manager that take their dat as gospel and disregard everything other data source. Shame. Shame.
Seems I remember a story about Mr. Douglas of Douglas aircraft stating that he sat down to a meeting and he was the only engineer, the rest were accountants. He then knew it was time to get out.
Mr. Northrop quit his entire company because he felt Convair bribed the government to cancel his bat-wing bomber aircraft proposal.
and what is so bad. there are a lot more older douglas planes flying today then boeing planes
@@dknowles60 - Out of curiosity, do you know the numbers on this? Would be interested to see how many Douglas planes retired from passenger service are still flying freight compared to Boeing planes of the same era.
@@VisibilityFoggy lets see lots of DC 3 flying today no Boeing plane that old is flying lots of DC 4 flying today no Boeing plane that old is flying to day lots of DC 6 flying to day lots of DC 7 flying to day almost on Boeing plane that old is flying to day the 707 out sold the DC 8 3 to 1 but there are more DC 8 flying today then 707 almost all 747 100 and 200 retired but the DC 10 is still flying today the results speak for then self
@@VisibilityFoggy its true. These old dc10s and even some dc8s are still flying and seem to hold up quite well. Yet theres no old Boeing's really anywhere.
Top management need to be charged with manslaughter and tried. People died cause money was more important than safety.
reminds me of the DC 10 debacles. They would let planes crash and settle if it was cheaper than implementing a fix. cost of doing business
@mPky1 CEOs of corporations are required by law to be psychopaths. They have the fiduciary responsibility to maximize profits, to do anything else is illegal. It is the job of our governments to enact and enforce laws to keep corporations in check.
agreed
Ah yes well you can keep your mommy gubmt that loves you and has your best interest at heart. Lol. The gubmt will save us all. Lol lol lol
Mr. Mentour, All my respect to your knowledge and passion. You are not only a good pilot, you have sound knowledge of aircraft engineering and now you just managed to surprise me with a business analysis of the change in corporate culture, showing your business acumen as well. Hats off! From one Engineer and corporate man who admires your passion and dedication to spread aviation knowledge.
what probably happened is that when a company replaces its engineers with salespeople, shit goes wrong. Engineers leave or are dismissed as they are too expensive now and yeah, we have a product, so we don't need engineers anymore. New, younger, cheaper engineers are hired and have no clue what's going on. Contractors that don't have a clue are hired to develop mission critical systems _NOW_, and the code is then dumped like a big pile of poo on the shoulders of the overworked engineers that remained. This is what you obtain with a disposable engineer culture.
Pretty good synopsis. Older experienced engineers have a value that is hard to quantify. I can't imagine an experienced engineer actually signing off the MCAS system. Younger engineers may not recognize the risk of having a system that can effectively override the pilot's input, when that system itself has only a single input, and that input is a mechanical device out in the airstream and subject to all the potential insults thereof. There are numerous bad ideas in that system, none of which an 'old guy' would have ever signed off on without significant enhancement or modification.
This is exactly what's happeneing at the majority of software companies. It's the software, stupid!
Have seen it played out over and over again in many instances with the same outcomes, crap.
@@t2k777 it's not really Wall Street. It's a certain executive and upper management culture that is especially pervasive when software is involved but software is not the sold product. The idea is that software engineers are interchangeable and disposable, and that since software is not the product, they are not a software company.
@Natural Man :. You are absolutely right. Since about 25 years ago, in the industrial, energy and consumer products alike, outsourced engineering has taken over previous Engineering Firms. No longer the Engineers keep working for a lifetime inside the same company (which leads to good, experienced and ethical engineers), but subcontracted companies that hire engineers just for a project, and then fire the engineers, that results in a high professionals rotation, lack of engineering culture and under paid engineers that end up losing their ethics and working just to be able to eat!
BRILLIANT! Boeing won’t be Boeing again until HQ moves back to Seattle.
May be... management is very important as well
It would improve Seattle, too, from what I've heard.
When they announced their move I asked "why?" but the real question is "why they shouldn't". Just saying.
They won’t move back to a California transition type state anytime soon.
L.L S. What do you mean
The most complete and sober analysis about this issue so far, among thousand of videos and news I´ve read so far! Congratulations!
As a former CEO, I have to say you have an amazing insight as to what really makes business work. Im impressed.
He is in charge of ensuring quality of other pilot for his firm. Not interested in operations management.
Boeing let their accounting department engineer the 737 max...THATS what's wrong with boeing!
Directed by the ship of fools on the executive board.
I think you are right. They’re B777 and B787 are great safe products despite the hype. Upgrading the B737NG to the B737 MAX looked good on paper but turned out to be a maze of unexpected difficulties they didn’t allow for.
William Swenson William Boeing was a lawyer. Knew how to run a company and a board and hire the right engineers and let them do their job. Donald Douglass was an engineer also knew his shit in business, a very ethical person. The new philosophy problems came from McDonnell.
It has nothing to do with the accounting department. The company is driven by profit maximization and corporate culture greed. They want to satisfy their shareholders with short-term goals at the expense of the community well being within which they operate and sacrificing long term obligations. Sadly this culture and management behavior is prevalent in American and western corporate culture and dangerously they are slowly sipping into the rest of the world. The management schools and the media are also part of the problem.
William Jones-Halibut it never looked good on engineering paper, it only looks good on some kind of report from a hack manager that promised a fast low cost solution to compete with airbus.
I really appreciate the comprehensive nature of your explanation. It's hard to understand the context of the 737 MAX issue without the history the led to it. There is a bunch here that I'd not heard before. Thank you!
As disaster-documentaries show us, it often takes a series of mistakes and cultural issues to cause a disaster
Wow, great video. I work at Boeing and agree with every single thing you said. I hired in as a mechanic on the Dreamliner program May 2012. The people who were with Boeing before the merger have have always said that the culture shift began with the merger. In fact, the joke is that if we had a dime for each time we've heard that, we wouldn't need the pension we lost in 2014.
The problem with Boeing is they went from a family of engineers that produced top notch aircraft that were ahead of their time and is now overrun by a hierarchy of sociopaths with Business and Law degrees that only care about cutting costs just so they can handout bonuses to each other at the detriment of the business.
This problem is not unique to Boeing. It is the economy that encourages greed and basically turning everything into a cash cow instead of long term investment to improve quality. It is the economy that also encourages sociopaths with little to no creativity to infiltrate and overrun businesses with their obsession for profit, by using their worthless business degrees to cover their deficiencies to make thousands of engineers redundant in favour of handouts to wealthy shareholders. They are too stupid to realise that minimum long term investment never leads to maximum return of investment. Profit now now and now, that is their mentality.
Correct
Boeing never built any thing a head of it's time the DC 3 gave it a good spanking
Such lack of foresight means Boeing (as part of ULA) will be out of the satellite launch business in less than 5 years, courtesy of SpaceX, run by an engineer, Elon Musk They developed technology paths that Boeing and others ignored as not viable. Well, not viable if you can get profits today by using decades old tech. Now SpaceX is undercutting ULA's launch cost by an absurd margin. Interestingly, along with his B.S. in engineering from the University of Pennsylvania, Musk has a business B.A. from the Wharton School, but uses only the parts of that knowledge that serves his aggressiveness. Boeing/ULA's "new" rocket, Vulcan, is less than half new. The only thing Boeing management knows how to do is milk the govt cash cow of the Space Launch System (rocket that will take humans to the Moon) that continues to set new records for time and cost overruns - on a cost-plus contract.
Yeah, its pretty much the immature behaviour of a spoiled child, that wants everything right now. This is pretty much the mentality you will find at those levels. Also, the fact that C-Level position statistically attracts an extraordinarily higher amount of people with either psychopathic or saddistic personality disorders says also a lot about the many of such "managers"
@@dknowles60 The 747 disproves that theory.
Show of hands who agrees that Mentour one of the most eloquent speakers out there...he explains things very well....id love to have him as an instructor!
Right on!
Yes, great video, „as always“...! Thank you, Mentour, for these insights.
It‘s a pity that once again a greedy bunch of incompetent managers making the strategically wrong decisions (while not listening to their ingeneers) has obviously managed to destroy what was once a reputable industry giant. The next pity is that obviously they still have not understood the message. On the other hand, why should they - as long as Boeing receives gov subsidies for their space program. (And then also screws up the latest test, because somebody forgot to set a timer correctly. What a shame for a company that was once famous for their good engineering competencies!)
The „America First“ protectionism will also not help in this context, but will only increase the problem, I fear...
Definitely!!
👏✌🖒
It's refreshing seeing someone applying critical thought to something they're involved with, ie you being a 737 pilot.
How is interesting is it that those managers 'concerned' with shareholder value keep destroying shareholder value.
Indeed. That's the thing. There is a difference between short-term profits and long-term profits. Some of these cost-cutting measures might have been short-term winners, but clearly look to be long-term losers.
Such short-sightedness is usually bad business.
It's that relentless focus on constant economic growth (common to our whole current economic model!) which deprioritises things like safety or investment in quality R&D, and prioritises constant short-term shareholder profits... often exacerbated by short-term CEOs who make their bundle then jump ship, leaving the company's systems in disarray behind them! Competing on quality is the tougher route (profits are more longterm and based more on trust relationships than sales hype). For a company with an established A+ reputation it would've been the way to keep going... unfortunately if they want to get back to that, it seems they've got quite an uphill battle ahead of them now?
Incidentally, it sounds like the regulator kinda caved to industry pressure & set foxes to guard the henhouse...? Disappointing but seems to be a really common swing of the safety legislation pendulum in any sector - usually only swings back after actual serious fatalities occur, alas 😕
If the CEO just executes the wishes of the board, then why is the CEO paid so much? They take all the glory when things are going well, and escape with a 7 or 8 figure golden parachute when it turns sour.
CEOs are literally paid to fail. They walk away with 60 million worth of shares on average. And when they cause an economic crash as they did in 2008, the taxpayer has to bail them out. This is what you call corporate socialism. In contrast, the average joe is left in a savage, dog-eats-dog free-market.
This has all been documented thoroughly, only the ignorant debate it. Shareholders have no power. Board members have no knowledge of operations. Control, often absolute, rests with top management, until a disaster occurs, then the part-time Board often composed of top management of OTHER companies goes into panic mode. It is hard to imagine a more dysfunctional system.
@BVale Excellent point, agreed! The fund is the actual shareholder/owner with the voting rights, no? What are the implications for corporate governance? Are the fund's interests aligned with their own share owners?
The US “make the quarter” culture has built tremendous value over time, but also took an enormous toll on industries and the US economy.
Detroit was deserted when the Japanese changed the quality game, whereas the US car manufacturers chose to deliver the coming quarters instead of adapting.
Labor arbitrage moved all manufacturing to China in search of lower costs and we all know what happened after that.
Communication is the least of the problems. With a fat bonus waiting at the end of the quarter or the year, hearing “don’t tell me why it can not be done, tell me how you will do it” became the norm. Then you breach security rules once, and you get away with it. Naturally you fall in the trap to scrap all common sense and keep doing more of the same and at some point Bang! You lose it all...
It happens every day, everywhere, but more frequently in the US, due to the short time horizon everyone has.
Until those boards and management teams have, say, 90% of their net worth locked in their company stock for a decade, it will keep happening.
Until then, the Chinese (mostly), the Japanese and the Europeans who have a longer term approach, will have the upper hand!
"make the quarter” culture has built tremendous value over time...
No it hasn't, it creates an illusion of profit by converting substance - actual value - into a number justifying management bonuses and shareholder dividends.
*Over time* it produces Detroit and Boeing.
Its more complex in that the times the actual value your talking about was built it when it was subsidized, not realistically competitive. From when US aviation manufacture boomed, Detroit automakers boomed or Japanese auto makers boomed, all the major expansion realistically didn't sell its products for the total cost of making the company that produced them, only for a small margin on top of materials costs incurred per item, on factories, research and supply lines already paid for by an external government investor who never expected direct repayment. Government support is weaned off when they are properly privatized, which leads to the company not being able to offer the same quality at the same prices once further investment is needed to do anything more than minor updates, hence why Boeing originally intended not to update the 737NG for a decade, and why if the NEO hadn't shown up that would have happened.
Yen Tao Well, the industry is much much bigger, but Boeing has a much smaller share. That’s not the point. The real question is, have they watered down safety standards for profit? Hell yes they have. Should they be allowed to? No. Even if there was no oversight from FAA, should a company act like this on their own, in pursuit of another good quarter and year in financial terms? Absolutely not, hands down. Had they succeeded to keep the Max flying after the Ethiopian disaster, their financial performance would be great right now, but we would probably have had another 300-500 deaths in the mean time on subsequent Max disasters. The industry would still be safe by all standards... but is this something that could be allowed to happen? Really? I have children that fly every week. And guess what, they only fly Airbus and Embraer, and it is their own choice...
Sadly European managers are currently in the process of fully embracing that "successful" American philosophy.
Christian Barnay After two or three cycles of cost “optimization”, there is nothing left to cut, but the management pressure is still there, since they booked cost savings in previous cycles and they need them again... That’s when the cancer of those big Consulting companies comes in. Looking for new ideas, and knowing that those consultants have best practices from everybody else in your industry, you fall into the trap to ask them... And believe me they reeeeealy know how to manipulate entire organizations to sell their multi-million dollar “service”.
It is not the managers. Cost savings is a drug. You book them once, you take it for granted as an amount almost guaranteed each and every year in your P&L, and before you know it you have started cutting chunks off your bones. A truly deadly mistake!
This excellent video should be mandatory viewing for management, regulatory authorities and engineers alike. Well done.
It is amazing that no one has been arrested yet.
It's unlikely that any Boeing executives will be indicted over this, the rich and powerful can get away with murder in America.
Not really amazing, sadly. Disgusting and par for the course in aviation "safety."
The chief test pilot was just indicted for lying to the FAA. At least it's something.
Thank you for the in depth analysis. From what I have read Ford Motor Co has had a similar disconnect with its engineers regarding the transmission used in the Focus and Fiesta. In order to save costs upfront, they designed a faulty transmission that has now cost them many millions of dollars in consumer reimbursement and caused immeasurable damage to their reputation.
I owned a 2009 Ford Fusion which had an inferior transmission. Ford replaced it at their expense when the car had about 22,000 miles on it. When the car had 95,000 miles on it, the transmission on it, the transmission failed again. This time, I was not willing to spend 4,500 dollars to replace the transmission. I suspect that I'm not alone, because very few Fords from that era are still on the road.
As a die-hard Boeing fanboy, I have to admit you absolutely nailed it.
A++
why would anybody be a fanboy of any company? and even more to admit being one...
@@Blox117 why not?
@@Blox117 Oh gee, I don't know..... could it be not so much the company as the planes it has been producing for nearly a century....say.... the China Clipper, the B-17, the B-52, 707, 747, 777, 787 - I just can't imagine why....
Once you go find out what all those names and numbers refer to, consider this as well: As far as "admitting", it was my way of complimenting Mentour on the quality of his presentation.
Any more questions?
@@occhamite What you describe yourself as is a "fan". As you said, it's not so much the company as its products. "Fanboy" implies a level of obsession where you don't accept that the company could ever do any wrong.
@@Species1571 OK we'll beat this dead horse then.
Implies to YOU. "Fanboy" is a term usually used as a pejorative.
My self-deprecation was intended to underscore my approval of Mentour's work.
Next......
This is one your best clips I ve seen you do, great job ( PS Im a 737 Max Pilot )
I actually believe it will be the safest aircraft in the skies, simply because it is being scrutinized in such great depth now. We go every month for Simulator training now specifically in a Max Sim. So the most type specific trained Pilots on an aircraft with every nut and bolt having been cross checked so to speak. The question won't be the whether aircraft is safe or not, it will be safe when certified.. The question will be; if the flying public will ever accept it again. (Calhoun has to go too, he was on the Board throughout the mess leading up to the issues. )
@@patrickv418 I don't think they will. Plus it's not just the Max, the public now mistrusts all of their products
@@mp4373 you could be right MP, the DC10 was grounded a month give or take and never shook its reputation, whereas the Max will have been grounded over a year. This coupled with reports from the 787 issues has decimated Boeing's reputation worldwide. Time will tell
@@patrickv418 I think it will take a lot of time until people will trust the 737 MAX,
sure they´re gonna fly with it, (if ticket prices for MAX flights are discounted). I personnaly am in doubt of it - human brains work that way. Survival first.
@@mp4373 nah, flying public is not informed of what aircraft they'll be flying on when they buy the tickets - at least in the EU, we don't get that information.
You have hit it right on the head. Coming from a major airline I have seen this also. Giving the companies control of airworthiness regulations does not work. The financial reasoning will always win the arguments.
Agreed. It's basically a built-in conflict of interest, and unfortunately the cost of that always falls on personnel & members of the public.
An aircraft company with employees that have the audacity to mock the customers concern for safety. (Boeing employee called Lion Air, ‘idiots’ for asking to have its pilots trained in flying the plane).. It's just so wrong.
lion air has an air bus too how dare you
Great assessment of the Boeing situation. Appreciate your comprehensive explanation.
One of the best videos You’ve made. Love how you went back looking for root cause. Awesome. Thank you!!!
Great video. As someone who lost a friend in the 737-Max crash in Ethiopia, I've been very curious as to the full story regarding Boeing's decisions in the production of the aircraft. I am an aviation enthusiast and watch your channel anyway, so I was very pleased to see this video in your playlist, and really appreciate the effort you put into researching and opining on the matter.
Ralph Nader lost a niece in the 737 Max crash in Ethiopia, she was an aid worker. He was on Democracy Now (I think - or maybe it was The Real News Network). Not on big media - they knew what was expected from them (or their managers knew): to bring the least worst version and an angle that would be the least damning (for Boeing). And moving on from the story as fast as possible. The advertising and sponsoring budgets for media were not wasted, not at all. If mainstream media would go after Boeing - with the right hard hitting questions, the voters would pay attention, and politicians would be forced to go after a donor (company and managers).
Nader was incensed and he knew the details. (I guess many Boeing engineers knew how half-assed that quick-and-dirty fix was and were very uneasy about the 2 crashes. Likely he got very good briefing on the promise of protecting his sources.)
It was criminal, they had only ONE sensor (because alterations of systems with only one sensor do not mandate pilot training and likely it is easier to get them approved). And they removed information from the handbook - when MORE information would have been needed.
I do not think it was a "software mistake" - it is more likely that the software just got faulty or no data and there was not backup for the sensor (Airbus has 3 independently working sensors that provide the input).
As protection against crashes due to problems with aerodynamic there was:
1) the sensor - and 2) when that failed it needed a fast and perfect reaction by the pilot to avoid disaster. Pilots had pulled it off before and between the crashes (but did not really understand what was going on), there were reports - which were of course ignored by Boeing. After the first crash they blamed the pilot (that is Boeing habit, they blame the pilots and early on. They already did that in the early 1990s - when Nicki Lauda pestered them until they could be bothered to do a modelling for higher altitude and faster speed - and then they admitted that the pilot had no chance to correct the thrust reversal mid flight.
Regarding 737-Max: it was inevitable that at some point a pilot would be too close to ground or too startled or inexperienced / used to having assistance by the computer instead of having to save the machine from the computer. I assume the sensor might have worked more reliably in the first years.
Your friend is dead because Boeing management is very certain that they will never be criminally prosecuted and short term their crimes are lucrative for top management and shareholders. If there would be a chance of criminal prosecution it would be much harder to pressure the head of engineering and the people that do that actual work, to go along with those criminal actions (or casual acceptance that there will be accidents).
As is: they can just fire people that do not go along, those will never work in the industry again, and on top of that their sacrifice will be in vain, mainstream media will ignore their cause, and Boeing will find a person that goes along.
The situation is somewhat better in many European countries, because there is criminal liability. And middle management - no matter the pressure from top down - will not play the fall guys for the psychopaths on top.
This just goes to show how important it is that everyone feels perfectly free to share whatever concerns they have.
Good video and I would say exactly explains why Boeing have ended up where they are now. This is it is not just aviation this has happened with, its nearly every business and industry. I worked in Power Industry for 35 years and exactly the same things have happened there. Plant modifications done on the cheap without proper research, operators not getting trained in the changes and being faced with issues that confuse them because mods have been done and not communicated to them properly. Thankfully all it did to us was continually shut the plant down, not kill 100's of people. The drive to get more and more money to shareholders at the expense of safety has to stop.
Very interesting, cheap at the end becomes expensive... That's how life works...
Congrats Peter! This was the most informative and most in-depth video I have seen from you till this day. Thanks for sharing your research and expertise. Additionally, my fear of flying is now long gone after following your channel :)
What a great video! One of the best - if not THE best - I've seen on this topic. Thank you Peetr for your work.
I've always wondered why the Boeing 757 was terminated while the older 737 series continues to be updated, even with the low ground clearance and other design issues. The latest 737 models have similar similar passenger capacities.
Think the airlines preferred a lengthened 737 over a shrunken 757 because more pilots & mechanics etc. are trained on the former?
I always liked the 757 - and even flew in a simulator for one once. :)
The 757 could have easily accommodated the larger engine size of the 737 Max, as well!
The 757 is a great plane
Southwest. Boeing customers don't want change.
If you think of the 757 as an upgraded and high performance high capacity 727, and the 737 as starting off as a downgraded low capacity economy version of the 727 you are halfway to answering your question.
Unfortunately for the 757, it was optimised for a rather niche sector at the time, a market which has reduced with the lengthening of many of the runways for which it was designed, and it never had the same opportunity for economies of scale, or the cost-cutting potential of the 737.
An engineer may see the benefits of developing the 757, but the bean-counters only see the benefits of developing the 737.
In many ways, the A321LR and XLR, are engineering solutions which just happen to keep the bean-counters happy. Airbus however, were starting from a relatively modern and good original design which had already been stretched, rather than from a modified compromise of a modified compromise of a development from another aircraft developed (from something else) for a different market sector! Which if you at it like that, you really do wonder why the 737 is as good as it is - Boeing must still have some great engineers!
Excellent point about Regulation: In this case, the regulators might have saved Boeing a lot of grief with the 737MAX.
Excellent video! Funny thing is that I'm following your channel as a hobbyist aviation enthusiast, but this video is very relevant to my non-aviation related work. I'll share this in my company (a rapidly growing tech startup) next week as a good example of how company culture and management can affect a business.
I was wondering watching many of your videos if pilots are even allowed to talk about companies that are airlines' bussiness partners - but clearly you are freee to speak up - that's awesome!
Great video!! I have worked at Boeing sense 2011, i love my job and the company. But you hit the nail on the head on the communication mechanics on the floor raise problems all the time and nothing ever comes of it gets frustrating
Great video Mentour I enjoyed watching it, have a fantastic weekend my friend.
I have seen similar a similar "march to destruction" at General Electric. The GE is no longer a technical company, they buy other companies and suck the money out until the products fail and then buy another company...... almost the same here at Boeing. GE also was dropped out of the Dow Industrial Average. Boeing not there quite yet. But if you don't learn from history you're doomed to repeat it, so beware. OTOH if you make a great product, they will come. Look at Elon Musk endeavors. I'd love to invest in SpaceX. and look at TESLA a small company now worth more than General Motors. Every company seems to have a live cycle. GE is dying after 100 years and Boeing looks to be on it's way out to unless it gets back to having an engineer run the company and make products. Business people just focus on on short term profits this quarter. I'll bet Boeing doesn't even have a 5 year plan. GE doesn't.
Don Adams in comes COMAC with its C919 which will sell for 50% less. You’ll still get proven components and all the Chinese do is assembly with casings ( read aircraft fuselage , car bodies, smart phone casings )It’s the same business model applied to China made German designed cars , American designed Apple smartphones etc
Humm 2 of the last three CEO's at Boeing came from GE
You are speaking of Neutron Jack.
Isn't that the general trend? Most likely every company will go this way when founders are no longer present and lessons that lead to their success are forgotten.
Tesla never made a profit though, in my mind it’s a big bubble but I could be wrong
Mentour, as always thank you for being very fair and thoughtful in these presentations which involve controversy and emotion. The quality issues at Boeing may be cross-cutting, unsurprisingly, with the major software glitch during a recent Starliner spacecraft test and subsequent calls by NASA to investigate Boeing. Bringing in a new CEO from the board of directors? Maybe like rearranging the Titanic's deck chairs. Let's hope for fresh and critical thinking at the top. "If all of us are thinking alike then one of us isn't thinking", the timeless words of General George Patton.
I hope they wake up and smell the coffee before they completely fall on their face. Because hard heads make sore behinds.
I still remember the day when Boeing started worrying totally about "shareholder value" over the quality of the airplane. Good ol' Harry Stonecipher started it and infused us with his minions. Airplanes need to be built by airplane people, not business majors.
This! A thousand times this. Old Hairy Petroglyph even said he wanted all of us hourly workers and our families dead.
This country has gone to shit and is basically a walking zombie of a country
Your dog jumped right up when you said "watching your favorite Netflix show". :-)
My dad was a civilian in the USAF civil service area and started looking at McDonnel Douglas back in the 1960s. There seem to be some things that were not right with how contracts were being worked. As he gathered evidence, it became clear that test results for the government were being falsified. And there was a money trail which appeared to show that MD upper management was bribing USAF officials. As he began to get close to some answers, a general called him into his office. My dad laid out the case for what he saw. The general seemed to be impressed and said this would be looked into. But nothing more was heard. Later, he was (quietly) told that MD officials had heard about his investigative work and they were NOT pleased. Then the evidence he collected was confiscated and never seen again. Soon after he was transferred out to another department.
The reason he told me this was when I graduated from college with my engineering degree in the 70s, I mentioned my job hunt would include applying to McDonnel Douglas. My dad then advised me not to because if my last name was recognized, some in MD might seek retaliation. When I asked why, he told me this story.
Capt. Petter reminds me of my favorite flight instructor, Dan Sieber, back in the early 80's who happened to be Swiss (not Swedish). He was humble, soft spoken, patient, very intelligent, and an all around great pilot and teacher. Interestingly, I got my driver's license about 2 weeks after I got my pilot's license in the first car that I ever had (a baby blue Ford Mustang II, which I bought from him just before he returned to Biel, Switzerland to pursue his career as an airline pilot. I've always wondered what ever happened to him. I'm sure he went a long way in aviation and hopefully even today continues to live a good and prosperous life. God bless pilots and aviators everywhere...
Oh, then you'll laugh when I tell you that I once took a flying lesson and the instructor said "you start it just the way you start a car" and I said "I don't know how to start a car". (I only got the driving license, though, a few years later.)
Great video (and a sad story). Your evaluation of Boeing cultural changes as well as diminished FAA participation seems spot on. For the sake of crews, passengers, airlines, Boeing employees, and the Boeing Company itself, I hope that they can bring themselves back to their past greatness. Thank You
Mentour - I love your videos, and this one raises several good issues. But I have to correct a couple of items. I wrote my MBA thesis about deregulation; it was enacted in 1978 under the Carter Administration. Reagan had absolutely nothing to do with it. And prior to regulation, the CAB set routes and fares, as you pointed out. But there was never any direct subsidy paid to the trunk airlines, as they were then called. True, they could petition the CAB to increase fares, but airlines became much more conscious of expenses long before 1978. In fact, it was the 1973 OPEC oil embargo and price increase (or price-gouging by the Arab oil states, to be more accurate) that caused a cost panic in the U.S.
MBA? Mostly bullshit artist?
@@jameswhyard2858
"There is a cult of ignorance in the United States, and there always has been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "my ignorance is just as good as your knowledge."
Isaac Asimov
He is right and accurate on every point. Why some people are not unaware of their ignorance, but actually proud of it never ceases to amaze me. How else you get Trump as POTUS. I will go to my grave muttering about how badly I underestimated the galactic stupidity of your average person.
Mark Poidvin “Your average person” - a meaningless category really, and one from which you, perhaps mistakenly, thought yourself exempt.
Had the the qualification been in Engineering or Science I might not have been so direct, but I perceive business administration as on the same plane as theology and deserving of similar respect... Sadly Australia has declined to a similar state as the USA...
@@alanbarrow7447 Think how stupid the average person is, then realize that half of them are twice as stupid.
Excellent, thoughtful and well researched video delivered with your trademark energy and enthusiasm. A case history in the really bad stuff that happens when communication, honesty and trust break down.
Thanks for that incisive and thorough critique of the change in the philosophy inside Boeing over time. It was clear and instructive with just the right amount of detail to remain interesting throughout.
An excellent 'think piece'. Your analysis is the first I've heard that explains why the software villain of the piece was introduced. Thank you and cheers from DownUnder.
Mentour would have been a very effective investigative reporter
as an alternate career.
I truly agree with you
Thank you so much for putting together this video. It really helps give the entire situation some perspective, and I like how you were table to present the information that can be very complicated and confusing to a lot of people in a simple, clear, and concise manner.
I wish to be able to do this kind of video in the future in the areas that I have specialised/expertise in.
Thank you.
15:00 Lets have the fox as a guard dog for the hen house!
What is wrong with Boeing is that they've become lazy and complacent.
When I visited their facility in Washington, you can tell the lack of morale on the floor. From up high you could see the building full of planes but the people moved like they were ill and sickly. You can tell a lot by how people move in a company.
Laziness isn't the cause, but the effect.
The point of Boeing's problem is that management was started to oriented around money and lack of communication. 2 main problem combine to 1, it is the ultimate disaster for ANY company. There's so many example of companies that had 2 main problem like this, all of them never end well
No.
Could it be you'd wandered into a hospital by mistake?
Boeing moved its headquarters to Chicago to gain power in the US congress. Washington is a relatively small population state with few representatives in congress, while Illinois is a large population state with many more members of congress. The more power Boeing had in the congress allowed them to get more high dollar government contracts.
I worked for Boeing and would strongly disagree with that interpretation. Boeing was also considering moving its headquarters to Los Angeles, and if its objective was to gain power in Congress, it would have moved to California. Boeing's official reason for moving to Chicago was that it was easier to reach customers from Chicago's O'Hare than from Seattle's Sea-Tac, and it was more central to Boeing's many locations throughout the US. But in Seattle, it was felt that CEO Phil Condit moved the headquarters to Chicago in order to get away from Seattle, where he was despised.
Good point, ziggy
Mentour, this is an amazing video. Thanks for making it. This is EXACTLY how companies steer themselves into a corner by letting greed and cost cutting spiral out of control.
Bean Counters are the worst kind of managers and decision makers, because they value P&L over all else, and don't consider the long term impact of any of the other factors involved.
My husband is currently a mechanic at Boeing in WA state, and has been for 12 years. I've learned more about Boeing's history and the Max (which we got to tour once) watching your video than was ever communicated. Thank you!
Luckily we have Airbus, competition is good and needed, but giving up on quality will hopefully never create success in the long run.
Two ways to build value: cut cost or increase quality. They are mutually exclusive, antithetical to each other. Cost cutting always damages business in the long run and, ironically, truly improving quality will reduce costs more on the long run.
@@ExaltedDuck "cut cost or increase quality. They are mutually exclusive, antithetical to each other." smart phones have better cameras and are cheaper than professional camera two decades ago. You're talking out your ass.
Competition is not good. Airbus have been fined in Jan 2020 on several counts of bribery.
@@1983Bantam False equivalence!!! (BTW, thanks for your last sentence, telling us what kind of person you are. Do you really think it helps make your case? ... spurious as it is.)
When I heard that Boeing was moving their headquarters from Seattle to Chicago, I thought "I have a BAD feeling about this!".
yes!
As a software engineer and someone who has done quite a bit of reading on this topic as well, this is an excellent video and very thorough. An engineer will go through 2 phases of grief when projects go bad - at first they will get angry, and try to do something, whether that be quit their job or blow the whistle or attempt suicide. Then, the ones remaining on the job will be only the ones who can no longer afford to care, the ones you have broken to your will. And we can clearly see the poor engineering that results from such a process.
Awesome content, actually quite ballsey to say some of this! Quick question, does the MAX worry you, eg if you were asked to fly it, would you want to?
We need more people in the sciences for these companies. Shame no ones hiring them.
"What's wrong with Boeing?"
I can think of 737 things...
EXCELLENT
Not familiar with the 787? As a brief summary, Boeing can build the 787 for a hundred years and not recover their cost of development. Looking at recent programs, the 787, 747-8 and 767 tanker all had serious issues.
@@sheritonn5019 What is wrong with the 747-8?
@@planeflight1202
That one has 747 issues in 8 different sections of the plane. :P
@@sheritonn5019 have you seen the “787 broken dreams” documentary?
A great, detailed video, and your English is truly outstanding given your accent. Thoroughly impressive all round!
Absolute perfect research work presented in a way that even people unfamiliar with the airline industry understand easily. Thank you very much for your excellent videos.
Really great video... Among your best (which is really saying something, because your quality & sincerity comes across)!! Deep dive into Boeing... The joke used to be... The perfect airliner would be... Designed by Lockheed, built by Boeing and marketed by McDonnell-Douglas.
What's wrong with Boeing? Simply: a loss of _integrity,_ i.e. a commitment to doing what's right over what is profitable; from the way they ditched many of their highly-qualified, longtime Washington-state workers by moving thousands of production jobs - and their headquarters - out-of-state ( to undermine Labor's bargaining power, despite also having received exorbitant tax credits from Washington state for years ), to massively outsourcing offshore, including to low-wage countries ( ex: their planes' software! ), to the way they fostered a culture of denying reality ( esp. safety + design considerations ) and offloading responsibility, to the misleading of the FAA and their customers. It's a classic story, philosophically: loss of integrity ( i.e. the exclusive pursuit of near-term profit over all other considerations, specifically: fairness, quality and safety ), leads to a responsibility-averse culture, causing *reality* [ such as _gravity,_ and the Market! ] to eventually reassert itself-after stubbornly denying parts of it are true, or exist.
Another way to put this, in a broader sociopolitical context, is that, in my opinion, 'integrity' and 'responsibility' ( i.e. ethical norms ) are fundamentally _communally-defined_ and _held_ - and therefore _mostly local_ - values ( and so is _democracy!_ ), having much to do with maximizing what is deemed 'right' by a specific sociocultural group, at a particular place and point in time ( to maximize _its_ long-term welfare and autonomy, through sacrifice; like: by sacrificing near-term profits ), whereas the supply-chain has become globalized, to maximize profits. Unfortunately, delocalizing production has also resulted in a commensurate loss of accountability and visibility, as the various parts of the 'system' can no longer see and communicate among themselves very well, nor easily agree on a common set of - I would argue, intrinsically _locally-defined_ - values and interests, nor necessarily rapidly suffer the consequences when skirting the law or ethics. Basically, a major downside of globalizing production is that it externalizes and diffuses responsibility, while delaying negative consequences, and also decreasing the potential _penalty-cost_ of bad or counter-productive behaviors. It seems as though this broad externalization of accountability has finally caught up to Boeing. In short, globalization + neoliberal deregulation backfired!
@ ...Yes, but it’s not that clear-cut. On the one hand, it is _true_ that Republicans are notorious proponents of small government, deregulation, and pro-business - implicitly, _anti-labor_ - polices, in general. On the other hand, it is _corporate Democrats_ - liberals - that are the biggest supporters of free-trade deals ( ex: it was Bill Clinton who signed NAFTA into law, and Obama who pushed for the TPP - which Trump promptly cancelled - ), and of opening the nation's borders to the global supply-chain - thus hurting workers, here at home, in the US [ note: there is a reason _Hillary_ sat on the board of Walmart, a purveyor of mostly Chinese-made goods - 70-80% of their merchandise! ]. And it is _Democrat-backing_ industries - notably: Hollywood and Big Tech - that are the greatest advocates of multiculturalism, and of this cosmopolitan as well as "politically-correct" world view currently permeating mainstream media and popular culture ( an implicit "pro-globalization" ideology ). In short, both parties contributed to so-called "free”-market neoliberal policies that have savaged the working-class, as well as resulted in soaring economic inequalities in the US - to the point that US life-expectancy has decreased for 3 years in row! Boeing planes falling out of the sky are just _one_ consequence of a broader, systemic problem - and both US political parties are to blame, imo.
@Bobby Brady Airbus will take a no-cost loan from the EU to pay the EU that fine :)
"doing what's right over what is profitable"
And the thing is, these two things do not need to be at odds. Indeed, doing what is right is often in the long run what is profitable (and vice versa, as the MAX situation illustrates). Treating employees well tends to lead to a higher retention rate, which for companies that rely on skilled labor, is often vital. Making safe, reliable, useful products that people want or need is also vital, and cost-cutting measures can impede that. And so on.
I'd argue the issue here is largely short-sightedness. Cost cutting measures which increase profits in the short-term but which ultimately are unprofitable.
So why would managers make unwise short-sighted business decisions? I can think of at least three reasons:
1. They are only in it for the short term, and don't care about long-term consequences.
2. They aren't sophisticated enough in their thinking to even consider what the long-term consequences might be.
3. They look at possible long-term consequences, but aren't smart about it and come to incorrect conclusions.
The first is a character problem, and the second and third are intelligence and/or education problems.
BenjaminFranklin99 And here I thought Bill Clinton was a democrat.
I just discovered your channel and it's fascinating! I am a business strategist and when you started to talk about that switch from a quality strategy to a cost efficient one, I thought oh-oh. It's a common mistake to see that kind of switch however, the level of success is pretty close to 0% and that's why so many companies started to struggle when they reach a certain plateau. I think Boein is a good exemple to study in business schools all around the world to demonstrate the impact of toxic management style
7:24 Oh! Hello, there! :) Couldn't resist Liking this video when the dog appeared and cuddled at mid-video.
Thank you for finally come clean with Boing mismanagements.
Perhaps in this case, for this particular industry, moving your HQ half-a continent away was a big mistake. Just saying...
To better manage and supervise purchasing and shipment of parts.
@@martintheiss4038 It was Chicago, that toddlin' town. Center of America's corruption. Home of the Chicago School of Economics. Home to the idea that only the stockholder matters in all of life and this genius idea must be exported to all the world, any failures can be excused as the error of governments trying desperately to save their populations.
Very insightful. There was huge shift in 2011/2012 within the company regarding cost and schedule, contributing to where it is today. There are many good people still designing, building and supporting the aircraft development that don't deserve the unrealistic cost/schedule pressure they are subjected to. Hopefully we can do the right steps to turn it around.
Nicely summed up. Agree with all of that based on my own experience. In fact I think I remember you from FR back in the day. I’m new to viewing your content but definitely recognise you 😉 all the best.
I grew up on the 1960s and '70s when airlines were highly regulated. We were lower-middle class and the price of air travel was completely out of reach for us for routine travel. We weren't poor; my dad was a TV repairman and my mom was a hairdresser, both with lots of work. We owned our own home. But I remember that in 1973 our family had to save up for months so that my mom and one of the kids could fly from Oregon to Oklahoma to visit family. After deregulation nearly everyone in the US can afford to fly routinely.
Absolutely, it's getting the balance right. With regulation it's consistency that's important, so the companies know the hill they have climb, and aren't constantly faced with shifting sands.
They grotesquely over pay management and then go with minimum wage programmers.........next?
Greg Moore after sacking their entire aviation software design and development division with over 30 years of experience. Now it's all outsourced to HCL in India, who have no experience, pay $9 an hour and are currently working on the fix to mcas which they developed in the place.
@@GuinessOriginal Oh no not HCL. Unfortunately I have experience working with HCL. What a friggin nightmare that was.
Jack CF yeah tell me about it. Their motto is "we compete on price not quality". Says it all really.
@@GuinessOriginal Just curious how do you know HCL is involved?
@@GuinessOriginal Except there's no evidence that HCL worked on MCAS.
Excellent video. I watch some of your videos but this one is brilliant. You have clearly done a lot of research and have tied together the decisions and factors which have led to Boeing changing so much, from an engineering, business and logistical perspective. Thank you very much for this. Well done.
A clear, erudite and utterly comprehendible analysis of a situation that I'm sure is prevalent in many other industries but mainly goes unnoticed there because the consequences are not so publicly apparent. An excellent piece of work, thank you.
Sad, this whole mess. All because Boeing management decided money was more important than safety. They forgot what made them great.😩.
The problem with that thought is the blatant fact that it cost them tens of billions, crashing has NEVER been profitable for anyone but maybe attorneys.
Are the recent CEOs from Boeing are from MD?
An excellent historical explanation of failures at Boeing and the FAA regulators. Thanks.
Glad you liked it. It’s short but I think it covers the main points
Great videos all the time. I have learned a lot from your videos and have come to realize what one can potentially expect in a certain situation while inflight. I can also presume some actions that other pilots could have done to prevent serious incidents.
Now I would like to ask if anyone has a link where I can download a good flight simulation where I can just have fund flying a plane. Please share the link.
Another thing, you have made me understand that flights are actually safer than I generally thought.
Thank you for the great work...keep educating us.
Wow! so that's the truth! I have wondered so much.
I do Flight Spotting and I wonder what's going on. Thanks so much!