I am British and an engineer. It upsets me greatly that all the work of talented and motivated people has been sold off so cheaply by people who do not deserve the money that has been stolen. There should be a law against raping.
It's call Democracy of Enterprises. Gautam Mukunda made not want to say it, but like the Spanish Ship before, there are others doing better and sunset is not too far for Boeing.
As a physician in Colorado, this also explains the growth of the health care industrial complex. Hospitals and clinics are run by MBAs and MFAs focused on the bottom line which rarely gels with patient care. My primary care group was just bought by a private equity company out of Texas. The result? A system that sees patients and providers as commodities and not human beings. Goes along to explain why health care now sucks in the USA
Doctor, consider why medicine has been captured by MBA’s. A system of reimbursement has been created that represents a giant piñata of goodies. The government through all its programs and the thing we call private health insurance has created a huge incentive to capture the spoils. So called managed care, itself a response to the out-of-control costs of indemnity plans and Medicare reimbursement, has only accelerated the trends. Obama care itself was always just an insurance device. It never guaranteed you would have a health professional or system focused on patient care. Only that there was a payor. I don’t know how we fix this. Best wishes!
Private equity is 10 x more dangerous than the short term bean counter corporate culture we are plagued with in public corps that cater to Wall Street. There's a lot of great material on RU-vid on how they have gutted so many businesses to the point it's basically criminal. We can only hope that government wakes up to address the most important issues facing America's future. Unfortunately, current political parties lack the leadership to put America on the right path again. They say short term .. short sightedness .. but someone has to realize it's now 4th quarter .. and we're down by 14.
There's also the fact that if doing a 50k stent is much more profitable than doing prevention which is more tedious and labor intensive, then why is there a lack of funds going to preventive measures. For example, why are patients who's A1C are gradually increasing not allowed to have their blood sugar sensors covered unless they're officially diagnosed as diabetic. It just doesn't make sense !!! You should cover the sensor before the patient becomes diabetic not after the patient becomes diabetic. It shows how short sighted and sometimes deliberate the system is in making sure the patient becomes sick and stays sick !!! And it's jus sick that so many health professionals don't push back hard enough against such criminal behavior. Unlike Boeing, these deaths happen slowly and the healthcare system gets away a lot easier with murder than Boeing where the snafus tend to be spectacular and unmistakable.
As an Aerospace Engineer in the past 20 years, i have been saying so for decades now. Give back the controls to the Engineers. Stop profit driven, but human driven.
I am a Mechanical Engineer. I have seen the same for the past 19 years. However the question that is never fully answered is why do Engineers always get sidelined by Accountants? I have a few ideas, however, since I am commenting on your message board, I’m curious to know your thoughts…
I used to work for Boeing, When Stonecipher gave his speech about improving share holder value I knew that it would take awhile but Boeing would have a lot of problems. I looked at a few of my co workers and the were shaking their heads "NO" The speech I wanted to hear is that we were going to be the best aircraft mfg in the world and that airlines would want more of the quality products we made. In my opinion this would have done more to increase share holder value (I owned shares). It would have taken a little more time but would have been worth it in a few more years. This mess was caused by the CEO and you are also correct about moving to Chicago.
I’ve worked for Boeing for 18 years. I love what I do. But experiencing what a horror show the bean counters have turned the company into is sickening.
If a publicly traded company opts to outsource overseas to reduce expenses, it should begin by outsourcing the CEO, CFO, CTO position. By saving millions in this manner, the company can maintain the employment of numerous American workers. These employees, in turn, will contribute to the local economy in various ways.
It's so nice to hear someone actually say this out loud. The worst thing that can happen to a company is for the lawyers and accountants to take over management. When I was in Business School, the organizational diagram had the line management people and a little bubble off the CEO called accounting and another little bubble off the CEO called legal. I went to Business School and law school at the same time. In the Business School, it was pounded into our heads that attorneys are nothing more than trained attack dogs, you keep them on a short leash, you never let them forget who's in charge and they're never allowed near the room where a deal is being made until the it is done and then all they do is write up what those in charge came up with. This day and age when accountants are in charge, every nickel they can cut out of costs becomes profit. I really hope this can change but, given the fact that most companies are owned by insurance groups, pension groups and other industrial investors, there is really no incentive it make a change. This also explains how we have so many CEO's with $1,000, 000,000 salaries and compensation packages.
@@TankEnMatemaybe so, but back then the attorneys still have souls.... Nowadays, the finance guys and attorneys are simply serving themselves when they know nothing about building airplanes... The finance people and attorneys are supposed to be serving us engineers and aircraft builders so that we can actually have safe products to sell. Finance and attorneys have stolen America's future for your own personal gains.
No mention that China has begun making aircraft for the commercial market. China has a tendency to do engineering well, we can see examples of this in their space station and space exploration. They are presently dependent on Western manufacturers for avionics, engines and some other components, but knowing China this will change in the near future. No one thought 15 years ago that they would be the worlds largest manufacturer of automobiles or The world's leading manufacturer of active pharmaceutical ingredients (APIs) and 5g communications.
China dependent on Western manufacturers for avionics, engines & some other components is because like the US & EU, it is better to BUY available product FASTER, CHEAPER, BETTER KNOWN (OEM) then build self. BUT like Germany failure to deliver the needed "high tech rail wheels" for high speed trains, the German done 2020 to slow down China high-speed rail project, China will just build their own (fact check it). If one cannot BUY first, one have no choice but to BUILD on own.
You are discounting China in the aviation industry. They may be 10 years behind right now but they have a habit of turning 10 years into 3 years. Boeing does not have that long to get its act together.
China's C919 is just the beginning. If Boeing does not see this coming, Airbus has for one reason not to extend, expand overriding cost, when another player comes in with better playing cards. They done it in Aero Space, Chips, EV, Solar, Cargo Ship, Crane for Ports, High-Speed Rail, Construction and many more other product lines, pass present and future.
You're spot on about building a new plane every 10 years: it's like Apple announce we'll never launch a new iPhone, or Tesla saying we'll not launch a new model, for the next 10 years, no engineers with any self-respect will want to work there.
True to all it is said, but understand, if the building, planning does not control COST and someone else can, you've just had build an empty shell that can fly. Consumer in the end is King
Wish more western people see "Atlas Shrugged" for American now see it in all parts of the Country of the USA. China's government since 2000's seen that path and is making sure this will not apply to the other countries. Seen China today compare to 1990's... Seen China's Bridge & Road Investment in Africa, So America, Middle East, Asia
Airbus will win. For Boeing its too late. I love the anecdote about how "Boeing was a group of engineers who made planes". Oh they also made a fortune doing it. Greed is not good. It has destroyed so many companies.
Greed conquers all. I witnessed the same at Teledyne, Litton, Northrop Grumman, & Curtiss Wright. The mantra was 5% ROI for investors, Workers you get 2% or 3%. If, if we like you. Great incentive to find a new job. ❤❤
@@jamesmorton7881 it was the rise of the MBA in the 90’s that used a common management template across all companies in all industries. Outsource expertise, move from manufacturing to service based, give massive/obscene salaries CEOs and their inner circle lower employee expertise and drive them to minimum wages. At Boeing it makes sense to management that complicated aircraft can be assembled (not manufactured) with ex hamburger flippers.
My father was a machinist at MCDD in STL in 1969-1972. He worked on the steering stabilizer for the F15. One day the part he was assembling came with wrong spec fastener. It was a Saturday and no Engineers were on the floor. He pressed a button to call for Engineering support. A few moments later an elderly man named Mac came by, did a few calculations, reviewed the drawing and signed off on the spec. That old man was a working engineer in a building with his name on it, Amazing. BTW, Those same stories are told about Elon at Tesla during the Model 3 launch. Not surprising that the Model 3/Y and the F15 are considered Iconic, best of breed, game changing products.
The story of Boeing is what happened to every other company… except it actually mattered at Boeing. You can outsource toys, computers, chips and cars but planes need to be made perfectly. There is zero tolerance for failure in this industry so the cost cutting strategies of the past 50 years destroyed it. Government bailout is likely next.
Similar tragic story at HP. Founded in the '30s by two Stanford ⚡ engineers, legends who led the Silicon Valley to be the tech capital of 🌎. When they retired, HP was turned over to career financial managers who juiced the stock but never came up with an innovatiive product. Finally Carly Fiorina dealt the final blow by buying a bankrupt PC company & putting it's management in charge. The rest is sad history.
If a publicly traded company opts to outsource overseas to reduce expenses, it should begin by outsourcing the CEO, CFO, CTO position. By saving millions in this manner, the company can maintain the employment of numerous American workers. These employees, in turn, will contribute to the local economy in various ways.
Can’t help that we are living through the fall of the Roman Empire. What really struck me was when you were talking about needing to build a plane just to know how to do it. There was so much we are doing that is parasitic on the existing economy instead of doing anything to grow it. Problem is, when we decide to stop, will there be enough to produce reap value again?
My friend who is an engineer worked for Boeing for 36 years and became a engineering manager. He resigned 9 years ago citing confusion in decision making and a hostile work environment.
I began employment with Boeing in the early 80's through late 2000. I started with good pay, family wide medical and dental, an annual employee bonus, and great career advancement opportunity. When I left, pay was slow to meet cost of living, medical and dental required substantial payroll deduction with limited coverage, elimination of employee bonuses, and reduction in education/training and career advancement. The employment office became a vision of the Maytag repairman.
I worked for an engineering company, where the same crap took place in the 90s already. I quit and moved to a different country at the time and have never looked back.
A Friedman quote from his 1983 book, Bright Promises, Dismal Performance: An Economist's Protest: "If you adopt the view that a man is not responsible for his own behavior, that somehow society is responsible, why should he seek to make his behavior good?" Friedman believed very strongly that there is a moral component to business.
@@mchristrSuch a high standard to ask of the people who live in a society where it normalizes prioritizing personal wealth over societal well-being!!!
Starting with the merger with MDD, leadership treated the employees like vermin. Stonecipher famously told all the engineers that he could “replace them all in a day”. McNerney said the employees would “continue to be cowering”. This sentiment infects all senior managers.
The last successful program that Boeing implemented was the 777. They even managed to turn a successful program (737) into a complete failure. The management culture is so far away from quality disciplines.
Excellent piece. It would be great to cover private equity as well. Private equity is 10 x more dangerous than the short term bean counter corporate culture we are plagued with in public corps that cater to Wall Street. There's a lot of great material on RU-vid on how PE has gutted so many businesses to the point it's actually criminal. We can only hope that government wakes up to address the most important issues facing America's future. Unfortunately, current political parties lack the leadership , insight , and intelligence to put America on the right path again. They say short term .. short sightedness .. but they also need to realize it's now 4th quarter .. and we're down by 14.
This is indeed the problem in manufacturing. Self regulation and no regulation enforcement is disaster in aviation, tech, media, energy, on and on. It’s capitalism’s capture of government.
I can see two thing's wrong with the Boeing situation #1 Poor upper management that needs to be replaced and #2 The FAA need's to do it's job instead of trusting Boeing because there has to be a check to make sure Boeing is doing the job correctly !!!!!!!!!!!!
I was at 3M when McNerny arrived and when he left. The focus went from technical expertise to marketing expertise. The technical training site was shut down and turning into a marketing excellence training site. In my technical area, Six Sigma became the focus and the road to advancement.
It is such a naiveté to claim that knowing about what is wrong with Boeing will give total picture about what is wrong about US economy. So, just knowledge of Boeing problems will be a path to fix US economy? In that case, India (which is a greatest nation in arts and literature), its economy can never be fixed, because there is so much wrong about so many Indian companies? Perhaps, you never heard of ebb and flow, and in all countries, their economies go through ebb and flow process. So does life. A-lesson worth learning.
I worked for GE back in 2008 when we had the GFC, while GE has jet engines, healthcare tech, and all kinds of other tech divisions, under Welch and after they'd relied increasingly on GE Capital which originally was for financing product purchases (like GMAC) but then branched into real estate and other lending, bond investing, etc... and when 2008 hit it virtually collapsed and basically took the rest of the company with it. Obviously the government wouldn't allow something like aircraft engines to fail (military reasons), but the company is no longer the manufacturing powerhouse it was...
Wow. You sir have probably stated the most important economic argument of our time. You should be in government with Elon, reforming the system. Out, out you gambling narcissists.
I recently heard an analyst say that the new field of innovations in the auto sector would come from financial innovation. I.e. new car loan structures and new ways to rip off customers.
The goals of governments is the public good. The goals of private equity is their profit. Expecting the private sector to consistently assume government responsibilities is crazy. Even the best fox will find it hard to guard the hen house.
How does a company pursue excellence when it is running a massive DEI program, forcing the same policies in it's suppliers and paying bonuses to managers to meet DEI quotas?
Wrong! Douglas was a successful defense contractor, not Boeing. Boeing was a commercial successful company. They tried to merge earlier but were denied by the trade commission. So they hired the GE hatchet man to make Douglas look less viable on their own. It worked , but they kept that business model and ruined both companies in the process 😒
There is another company in time heading down the same path :- Raytheon For the original Boeing read Hughes/Raytheon Missile Systems For McDonnell Douglas read UTC Very sad
I met someone from Boeing lower management who said they quit because they were burnt out from putting out fires everyday. This was 15 years ago. Does sound like Boeing lost their way. Sad. As a person has built amazing things myself through hard work and sacrifice and have it destroyed or stolen by the manipulators of the world I can empathize. How can we do a test on babies to see if they will turn into these monsters. I’m being cynical and sarcastic to make point but they do so much damage in the world.
So the government shares culpability in Boeing's systemic failures over the past 2 decades, and there's no doubt in my mind that money is the reason why. They need to completely trash their manned space program immediately and focus on rebuilding their aircraft manufacturing. They still haven't been able to get themselves together to finish the two presidential 747-800's that are years behind their promised delivery. And the KC-46 program still has serious issues with the remote vision system. It's clear that this part of the tanker was flawed from the very beginning, and now they're saying it's not going to be fixed until 2026....so that's probably more like 2028 in Boeing years. I can't help but imagine that Elon Musk would have had this problem solved in 6 months.
Boeing and Airbus lobbyists, along with pilot unions, keep Embraer out of competitions with larger Boeing and Airbus aircraft. Embraer is limited to smaller capacity aircraft for regional flying because it doesn’t compete with Boeing and Airbus in the regional segment. Embraer can’t sell their larger aircraft that would compete directly with the 737 or A320 because of Boeing successful lobbying and airlines can’t buy higher capacity regional aircraft from Embraer because of pilot unions.
How did the US govt "force" Boeing to merge with McDonnell Douglas? If they had stopped contracting with Boeing, Boeing imo could have stuck that out, by offering superior civilian aircraft to the world, as long as necessary, until the govt changed its philosophy and/or MD failed. (?)
One could argue that the investors most influential at Boeing actually want it to go bust because they're more interested in the globalization of the economy. The weakening of US is part of that goal. Boeing is not the priority of its biggest investors.
The short-term thinking applied at all levels of mgt in today’s corp world is appalling. Quality of product or service and employee satisfaction has become cannon fodder for top executive’s stock options.
The bottom line is the vast greed that has greatly increased in the past decades in American society. Here the stock holders demand higher and higher dividends and stock prices.🧐🤨
Of course many corporations and the economy in general would benefit from certain corporate regulations. However, corporations are always economically incentivized to destroy their own regulations by writing them (like how the police don’t police themselves). This is the case with all of the most highly regulated industries; banking, oil, pharmaceutical, real estate, finance, etc. And the role of the military (that employs Boeing) is to protect those industries.
Do you have problems in engineering? We have solutions for your issues. India is producing millions of engineers and techies who are unemployed. Boeing should consider shifting its operations to India.
It’s the same thing at spirit aerosystems. Parts off .030 or more thousandths a managers saying push it thru Boeing will buy it. We need to make our numbers.
Next “professor” Mukunda you should report on academia and the root of its failure’s. Clean up your own back yard and improve the quality of leaders being produced at Harvard and Yale. As a long time leadership professor, the quality of leadership in industry is your end product. By your own writing and comments you have given yourself a well deserved F grade.
An obsession with profit/loss statements (and the accompanying bonus pay structure) is symptomatic. The foundational issue is the loss, culture wide, of the notion of civic duty. Citizens in the past gave their employer a full-day's work because it was the right thing to do. There was a larger principle at play that involved honor. The American workforce is gradually embracing an "every-man-for-himself" norm.
Furthermore without saying, make your company’s major goal making money for its stockholders rather than great products. This country, and only talking about the US, is going down the toilet. I am glad I don’t have grandchildren to worry about their future.
I bought Jack Welch's biography years ago and was appalled at how he runs businesses. Firing the "bottom" 10% each year etc. You can tell he was a thoroughly nasty, venal person.
It's a problem that can happen to every public company too cozy with Wallstreet. In good time, Boeing spend extravagant on upper management and stock buyback. When they only care about stock price and earning, it's force them to lower cost on engineering and safety to maximize profit. It may look and felt good at first but like every bubble, it's destined to burst out and there you have Boeing today, bursting in flame
