Comment by margalabargala
2 years ago
If you read this article looking for new or surprising insight, you won't find it. It is not new information that Boeing started a rapid decline shortly after the McDonnell Douglas merger, and it will be unsurprising to you to hear that shortly afterwards, Boeing began abusing its most senior employees into leaving.
What this article offers is new detail into exactly how Boeing has gone about cannibalizing itself. The specific things done to specific employees, the specific quality incidents that were swept under the rug, the lengths to which they went to ensure all prior institutional knowledge regarding how to properly build a plane was systematically destroyed.
It's worth reading, perhaps unless you're going to be flying on a Boeing plane anytime soon.
"the lengths to which they went to ensure all prior institutional knowledge regarding how to properly build a plane was systematically destroyed."
why do this intentionally?
Stock price gains.
Fire all the longest-tenured, highest-salaried employees. Now you have a company that appears to look similar but with millions of dollars fewer per year in headcount expenses.
Boeing's stock price went up 10x in the time frame covered by the article. The people responsible for gutting the company have cashed out.
>Boeing's stock price went up 10x in the time frame covered by the article. The people responsible for gutting the company have cashed out.
Why does the stock market reward idiot shit like this?
I've seen the same whit a a large US semiconductor company. In the 2008 crunch, the fired the most tenured employees and offshored the work abroad. Granted, the company didn't fail, their stock went up and now it's 5-7x that amount.
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It seems like this is the same pattern that we've seen happen more broadly in the tech industry over the past year--the big tech companies think they can juice the bottom line by reducing headcount, and the increased profitability will outweigh any negative impact on their engineering performance. It's a perverse incentive that seems very difficult to turn around once it starts happening.
> millions of dollars fewer per year in headcount expenses.
I don't know how much they saved by forcing out highly-paid employees, but it was a tiny amount compared to the 40 billion in additional revenue earned between 2008 and 2018 (60 to 101 billion). The stock market rewarded the company primarily because of the revenue gains.
How about eliminate your employees to pump up the stock selling price or whatever and instead of removing the best subordinates, keep them, give them automation capabilities, and remove the unintelligent dross?
That's much better than basically destroying your own company because you don't know how to progress forward and upward. This privilege is reserved for the few who can I guess.
This is what Google is actively doing. The layoffs continue and they are culling the most senior employees.
The only thing that seems to work nowadays is name-and-shame (unless you run for president, apparently).
Who are these folks that deserve to be outted for gutting an American institution? I'm sure they're still around, practicing their strain of vulture capitalism.
UPDATE:
Looks like the article points out the following main culprits: * Jim McNerney * Dave Calhoun
Y'all're gonna hate this, but financialization and the relentless pursuit of profits. Every time this stuff happens, people ask why, and it's because of greed. When you focus on making money above all else, this is what happens. It's not a mystery.
It’s this, absolutely. Professional managers trained in finance who either don’t know or don’t care about the actual business they’re managing. Work = moving money around a spreadsheet and all else is incidental at best and something to be avoided at worst, doubly so if it can’t be captured in a spreadsheet with a dollar value attached.
This is where regulation steps in. A regulatory body should make the cost of certain failure scenarios so painful that companies are incentivized to make better choices. We probably don't need regulations about the color choices of t-shirts, but safety & testing for mass-transit vehicles might be warranted.
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No. Under nearly any other circumstance a company like Boeing would simply go under.
If a car manufacturer pulled something like this they either have to fix it really fast or have to face severe financial consequences.
You have to realize that Boeing's customers have no alternative. They will be buying planes from Boeing.
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It's almost as if an economic system based on maximizing greed instead of reigning it in was not sustainable or desirable.
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The intention wasn't to destroy institutional knowledge. The intention was to cut costs in the short term, largely through outsourcing and turnover. Why pay a senior engineer a huge salary when you could replace them with a consultant in their twenties? They just didn't think or care about the consequences.
They adopted a philosophy of management that explicitly assigned no value to institutional knowledge, and thus eliminated anyone who had it as they were not considered worth their salary. From the article:
> Boeing had come under the spell of a seductive new theory of “knowledge” that essentially reduced the whole concept to a combination of intellectual property, trade secrets, and data, discarding “thought” and “understanding” and “complex reasoning” possessed by a skilled and experienced workforce as essentially not worth the increased health care costs.
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Rather: Money > consequences. And so far, they've been right. How likely will old managers that have long left, but fully participated, be held accountable?
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Those old engineers cost too much! And we already know how to build planes. So, we can ditch them, my quarterly KPIs look good and with the money freed up from pushing them out it can land in my bonus check!
Or 20 billion in stock buy-backs, juicing the price.
That's the million dollar question. Why talented people are forced out? Like managers/other key members have a mission and if you somehow not fit in their "world view", you get hell.
Are any of the executives who did this in jail? No? Well, carry on, then.
None of the executives responsible for this have paid any price. None of the investors or board members who allowed this paid any price.
And the worst part: it's not clear you can fix it, now. Even if you completely busted out every executive and wiped out the investors, there is no path forward since those executives pushed out all the engineering knowledge.
Perhaps because the senior people were at a higher pay grade? If you bump off the expensive employees, your overhead goes down. Better numbers next quarter so you get a bonus.
It's in the article.
Not just senior = higher pay. Senior = more likely to stick to existing (known good) safety/QC processes. Boeing didn't want QC at all - they wanted the guys assembling the planes to do their own QC (which is likely illegal per FAA regulations).
Toss in a side of union busting. And a dessert serving of outsourcing to the lowest bidder, regardless of that bidders history in the space.
Senior people also cost more because their health care costs more. Of course discriminating against older people is illegal, so they cut down on senior staff which just happens to have the same cost reduction. Funny that.
they did not. this article and many people are sensationalizing it to get attention and push whatever their angle is. it was short-sighted, stupid, greedy, and wrong, but not intentionally suicidal (let alone homicidal!).
a lot of people say things like 'stock price', but that's missing the point. the lesson is in the nuance.
its many factors, effecting all aspects of our lives now honestly.
- young people's disregard for the knowledge of people older than them. This can be an essay in itself, but there's the idea that the reasons why people are doing things the way they are is because they are stupid, something like: "you are young and you knows how to do everything right if only these dumb old people would get out of my way." I had a friend do a start up to make bourbon in 3 months. He thought all those alcohol producers that take 5-30 years making them were doing it wrong. I am like, definitely give it a go but understand that "I am sure they thought about this'.
- management focuses on nonsensical metrics. In recent history, you have to be data driven, focus on metrics, ignore everything else, its the new religion. An example is how technical support teams focus on having 0 tickets open, so support engineers just close tickets even if the customer isn't helped. but hey, that red line is pointing down and to the left right? win! And as with boeing, they made their metrics look really good, look, no more defects! all you have to do is stop reporting them.
- companies willing to outsource critical components of their business. I never understood this one, I don't care how 'cheap' it is, you don't outsource critical parts of your business. at best, they don't have the same stakes as you do on the matter, at worst they steal your IP and/or become your competitors.
> I had a friend do a start up to make bourbon in 3 months. He thought all those alcohol producers that take 5-30 years making them were doing it wrong. I am like, definitely give it a go but understand that "I am sure they thought about this'.
I realize this is focusing on the example, but no, established bourbon distillers aren't going to stop barrel aging. It's part of the brand, it's part of what people pay for, and they have no reason to.
Your friend might have been overconfident, I don't know, but macerating oak chips at high temperature, getting the process right, adding flavorants: if he succeeds in making a high-quality product, great! Am I skeptical? Yes. But again, the established distillers didn't consider and reject the idea of making liquor this way because it's a bad idea, they wouldn't do it because that's not bourbon.
If he's successful, they still won't do it, because it's not bourbon. He can sell to people who don't care, though. If it's good, I'd get a bottle.
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Don't blame this on young people, it's probably mostly post-40 dudes who run the board of these large companies
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Because the value of expertise does not readily show on balance sheets. Boeing had been systematically eroding expertise for 25 years before its planes started to fall out of the sky.
"intentionally" is too strong a word here.
More -> intentionally cut cost by eliminating experienced people.
Not -> intentionally getting rid of knowledge. even the worst managers wouldn't admit to wanting to loose knowledge.
>> why do this intentionally?
Myopia + greed is a hell of a drug.
It's a side effect of reducing the power of those awkward people who want to spend money on well designed aeroplanes.
It's a lot easier to make your outsourcing strategy stick, if you no longer have an alternative.
Most of the article is spent describing exactly why.
Some people in organizations can't take no for an answer. They want to see their orders followed, and if they see you as a roadblock, you will be marginalized, sometimes with harm.
That's not always bad, sometimes employees drag their feet when they shouldn't. But in some situations (for instance, one arm of the company gaining the upper hand), the people in power are so convinced that their own perspective and goals are right, that they think they don't need to listen or understand the big picture.
Ad to this that sometimes an exec has sociopathic tendencies, and you have an explosive cocktail of harassment and destruction of valuable knowledge. The more resilient the company, the more entrenched this behaviour can get, and the more irreversible it will become.
I learned some things reading this article from 2 days ago:
Boeing’s Dead Whistleblower Spoke the Truth
https://www.thefp.com/p/boeings-dead-whistleblower-spoke-the...
The Free Press
The entire first half of this (tfp directly above this comment) article blindly supports the spin that there is some conspiracy where someone killed him. HIs own family goes into great detail all over the press about how he had anxiety and ptsd. That he quit his job on DR orders or the stress was going to give him a heart attack.
The shit Boeing did to him was awful (stress, anxiety and ptsd) and Boeing should be blamed for that. They should be held accountable for that. Making his sucicide "Fishy" discredits the pressure he was under and its cause. Playing at the edges of conspiracy theory also serves to discredit the author of the article and the validity of everything else they are saying.
The man killed himself. The actions of Boeing played a part in that.
You say it like "anxiety" and "stress" are synonymous to suicidal. I am a pretty anxious person, and sometimes have a lot of stress at work, and experienced burnout in the past too. That doesn't mean I am about to shoot myself in a motel parking lot - or anywhere else, for that matter. This binary view of mental health - either a person is "healthy" which means 100% perfect, or he's not - and then anything can be expected, including a suicide at any arbitrary time - is nonsense. It's completely legit to ask how comes the person who wasn't suicidal, and actually told people that he's not - suddenly turns to commit suicide in the middle of court testimony, without any warning signs or explanation. Saying "oh, he was anxious and stressed about work" is not a good explanation to this. Maybe there was an explanation, maybe there wasn't, but pretending "anxiety" explains it is nonsense.
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There's more than enough circumstantial evidence to support the allegations of foul play here. When people kill themselves, they usually do it somewhere private and personal to them, like inside their home, or their car. Not in the parking lot outside a courthouse.
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Seems pretty convenient to the people in power that he had the courtesy to off himself before he could hurt them in court.
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On a previous HN discussion, plenty of people here believed it was fully possible that someone at Boeing essentially pulled the trigger and gave plenty of examples, even from a huge successful Silicon Valley company, of corporate folks doing stranger nefarious things than would be believable in film. As someone who has known multiple people who committed suicide, I'm not sure I can feel as certain as you that this was a suicide without more evidence.
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A billion dollars here, a billion dollars there, pretty soon someone needs to be taken out of the picture.
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> They should be held accountable for that.
In what way, exactly? Because from where I am sitting, it appears Boeing would enjoy unconditional support of US government no matter what they do.
It appeals to the "free thinkers"/"heterodox" (empty-headed contrarian) crowd that TFP caters to and that infests every tech website on the net.
I don't really even get the conspiracy theory that he was murdered, if Boeing etc are all so knowing and powerful why didn't they kill him years ago, well before he could tell his tale? Now they kill him because he already spoke out and they want to put the spotlight on themselves? The whole thing doesn't really make a lot of logical sense.
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On the other hand... I can imagine after testifying, the feeling that one had done all one could do. That it was finished and it was his time.
But he wasn't finished testifying. He was found dead on the morning of what was supposed to be his final day of deposition.
It's really hard to recover from a downgrade in culture. I hear the same kinds of things about IBM. I'm pretty sure there are other examples.
The tough part is - it is sad.
Read about boeing and Tex Johnston:
https://en.wikipedia.org/wiki/Alvin_M._Johnston#Boeing_Compa...
and IBM invented the PC:
https://en.wikipedia.org/wiki/IBM_Personal_Computer
Other examples include Xerox and Kodak.
I also wonder if it has happened in the past, with a subsequent recovery, to some American car companies? GM pre-2008 perhaps?
IMO the FAA’s approach and handling was the most shocking aspect. Not sure what purpose the FAA serves anymore.
Norminalization of Deviance: https://youtu.be/GN80sx3s4LA?si=de_4xxo1YhFVy0lD
>> It's worth reading, perhaps unless you're going to be flying on a Boeing plane anytime soon.
Just returned from Miami yesterday aboard a B757-200. I was intrigued because it has been so long since I've flown on one. The trip down was a 737-Max8 (or 9 I'm not sure). So I wondered if this was a plane that they had dragged out of retirement. Not like Newark-Miami is a backwater route.
it will be unsurprising to you to hear that shortly afterwards, Boeing began abusing its most senior employees into leaving.
Sounds a bit like what happened in newsrooms and at newspapers in the past decade and a half. (Except in that case, it was bottom-up, not top-down.)
Hm, i smell a google here. What a shame tbh.
I'll be on two 737 MAX planes going back and forth to Vegas in a couple weeks. Yay!
> It's worth reading, perhaps unless you're going to be flying on a Boeing plane anytime soon.
This is all bad for Boeing, but at the end of the day, nobody has died on an American carrier in a Boeing plane in a very long time.
Aircraft safety is layers on layers on layers. Let's not FUD people into thinking that flying on the worst plane Boeing has ever put out is anywhere comparable to the daily risks of driving.
> but at the end of the day, nobody has died on an American carrier in a Boeing plane in a very long time.
This is coincidental. When the plug ripped out of the plane over Portland, it was pure luck that no one was sitting in that row. The seats were shredded. If someone had been sitting there, they also would have been shredded.
Boeing and their deteriorated quality culture is directly at fault for that one, and the only thing that prevented a fatality is a coincidence of seating arrangement.
As far as I'm concerned, that resets their safety clock.
If a new 737 were to literally disintegrate in midair, but by pure happenstance it was entirely staffed and occupied by skydivers wearing parachutes and as a result no one dies, that also shouldn't be handwaved off as "oh nobody has died in a long time" just because luck prevented an otherwise sure death in that specific scenario.
Even if, worst case, 3 people had been sitting there and died (and people are tougher than seats), it would only move needle trivially vs cars.
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I’m sorry, why does it matter that no one has died on an American carrier for a while? Not so long ago, Boeing sent over 300 people to their deaths with their shoddy MCAS scheme. It’s pure chance that this didn’t happen in the USA so I’m not sure I understand the relevance of the nationalities of the deceased.
It's not pure chance. It was a plane error, but trained pilots following procedure would have responded appropriately and avoided a crash. In response to a plane malfunction, the pilots panicked, did the wrong thing, and everyone died.
This does not excuse Boeing, but it's just the way it is. Training standards are higher in the US than, for example, Ethiopian airlines.
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Thanks
> Aircraft safety is layers on layers on layers.
This is true, but disasters occur because those layers and layers get eroded until there is only one layer left which then fails.
The problem is that Boeing has eroded layers and layers and layers of that safety. The question is "How many of those layers are left?"
I am silently grateful to JetBlue for ordering Airbuses from the get go...
Airbus has a limited production capacity, and they are maxed out with this scandal.
So Boing is still getting orders, because the world need planes.
What do you mean by "down hill"? Boeing has developed incredible technologies since the MD merger. They have been profitable w/ these technologies. You make a claim they were going down hill, what do you mean?
I have a number of family members that work for Boeing, that have been in executive management, engineering and research. None of them ever mentioned MD as being the beginning of a decline.
All of them tell a different story. The problems began with James McNerney. Harry Stonecipher came from MD, and was one of the best CEO's to ever touch that company. The 787 wouldn't have been a thing if it were not for McNerney.
If you make a claim, back it up.
This is a discussion of an article. You'll find a link to it at the top of the page. If you read the article, I am sure someone as intelligent as yourself will be able to use context clues to figure out what I mean by "down hill". That article is what I am backing up my claim with.
Ha. That’s not the story I have heard from greybeard engineers there before and after the merger.
I got the story that Stonecipher wrecked the engineering culture and valued/promoted management at the expense of engineering. Management becoming the only path to promotion and career advancement leaving important engineering groups hollowed out.