> This is what happens when you let the accountants run the business.
You're shooting the messenger when the core issue is that Boeing, like all publicly traded companies do not have medium to long-term views for their business. It is always quarter-to-quarter. That is what management is judged on, because their job and their compensation is tied to maximize shareholder returns.
>like all publicly traded companies do not have medium to long-term views for their business
Why do people keep repeating this garbage over and over and over? It just isn't true.
Amazon literally didn't make profits for 10 years. Many other tech companies haven't made a cent yet, but investors are looking 5-10 years into the future for those.
Some businesses just make bad decisions, others make good decisions. Overall the free market/public corporation system is a resounding success. Just because boeing messed up doesn't say anything about the rest of the system.
>Overall the free market/public corporation system is a resounding success.
We don't have a free market. The market is not allowed to implode. Mega corporations and banks are not allowed to fail. Boeing is not allowed to fail, and that fact, more than anything else, explains why they are such a poorly run company. Where you see a "resounding success" I see an absolute failure that is closer to a scam or a ponzi scheme than a legitimate system.
Boeing isn't allowed to fail because they're a national security risk. The government doesn't want Boeing's most talented aerospace engineers to move to a foreign company like Airbus or Comac. The government will happily allow businesses like Macy's or Uber go under.
Boeing didn't take the money anyways, so I don't know why people are so riled up about it.
AFAIK, Airbus won’t hire American nationals. Boeing will hire Europeans, at least on the commercial side.
The defense part of Boeing used to be a separate company (McD). DoD could easily let commercial fail and spin out McD again, or just shrink to defense only. For a long time, Airbus has claimed that the DoD spending subsidizes the commercial side. So TBH, letting commercial fail would result in more bang for the DoD buck.
About Airbus and American nationals, you might want to check out John Leahy: Head of Sales from 1985 until 2017, sold 16000 planes, brought Airbus inside US airlines, and overall probably the most well known Airbus executive.
Regarding military activities, I don't doubt that there are engineering synergies between commercial aviation and military aviation. However I've always heard that from a commercial perspective the two are at odds: for a defense organization you want to make sure to keep as little cash on hands, as it's fairly easy to ask for more. There are always scope changes, delays and shit happening. The last thing you want is to have a war chest that your customers will ask you to tap in to cover the costs of contradictory requirements, feature creep and original underbidding to win the contract. See the A400M as an example: the civil side of Airbus is coughing up quite a lot of cash for that clusterfuck.
On the other hand, developing civil airliners requires cash. A lot of cash. You can't ask American Airlines to cough up some extra cash because your 787 is delayed and is costing more to produce than anticipated. In fact the opposite is true: because your 787 is delayed, your customers will pay much less, and only when you can actually deliver the product (for the most part). Bombardier didn't have pockets deep enough to sustain the CSeries...
Bear Stearns, Washington Mutual, WorldCom and many others are evidence to the contrary. I'm not sure if Boeing will be "allowed" to fail if it's on that path, but your statement that "Mega corporations and banks are not allowed to fail" is simply false.
Yeah every decade or so we let a company fail just to set an example to the rest. WaMu, in particular, is a pretty hilarious example. We, the public, bailed out JP Morgan and with those funds they purchased WaMu at pennies on the dollar.
You’re right, we don’t have a free market. We don’t have the freedom to leave our homes and shop at will. Stores don’t have the freedom to be open. People don’t have the freedom to provide services. So until our government overlords deem it ok, allowing businesses to fail at-will in the existing climate makes little sense.
Most stores are permitted to be open, no healthy American is currently locked in their home, delivery services will bring anything you want to your doorstep, and only a few services are currently shut down.
Yet for some reason, nobody's buying from the stores that are open.
> Amazon literally didn't make profits for 10 years.
Yeah, and they caught never-ending flak for it until AWS starting turning a profit and eventually dragged Amazon into the black. Amazon was/is the exception, not the rule.
> Amazon literally didn't make profits for 10 years. Many other tech companies haven't made a cent yet, but investors are looking 5-10 years into the future for those.
Amazon went public in 1997. Boeing went public in 1962.
You get leeway as a young-ish public company, which will expire once you are an established player. How do you think markets are going to react if the bottom falls out of Amazon's business in 2055?
In my experience at the executive level of a company this was never the case. There were always 1 year, 3 year, and 5 year plans in place.
Long range plans get re-evaluated periodically because things change, both technology and markets but I have never experienced them being either ignored or thrown out in pursuit of the quarterly 'numbers.'
That said, if your senior management doesn't understand all aspects of your product value, they will make poor choices both in the short term and for the long term.
This thread reminds me of one I saw on here this morning re: the netflix quikster debacle.
I would imagine that it is easy to push a narrative that execs are greedy, short sighted and barely competent. I would imagine this can be true, but more than likely its a bunch of factors that aren't public that led to less than optimal decision making.
I think you're conflating job losses with not prospering.
Boeing's stock is up on the news. Lost jobs = lower payroll = improved cash flow. That's the bottom line. Shareholders couldn't care less how you arrive there, just that you do.
This is one of the best arguments I can think of against having large corporations with "corporate person hood". It does enable large capital accumulation over time, but that capital accumulation eventually becomes so de-personalized in how it gets used that it becomes detrimental to society. A single private owner tends to care and have more purpose, more personal stake in real long-term growth, and can take the real risk of investment. Corporations, as we see more and more, get huge amounts of capital and then start gaming the system for short term executive bonuses.
Economies of scale are extremely valuable to the overall economy as mega corps tend to charge lower prices. Similarly, SpaceX as a high risk high cost investment is vastly more likely with group funding than a single private owner.
Clearly there are some downsides, but managing them via laws and regulations is possible.
There's a cost associated with this as well though. Those lower costs don't come for free - they come from increased efficiency which translates to fewer workers and less money being redirected into local economies.
Is more workers to achieve the same total outcome a desirable state? It seems like what you’re proposing doing there is literally wasting entire human work lives for zero productive output.
If you took this to an unrealistic extreme, where 100% of all jobs are automated, every cent of profit flows into the hands of owners and shareholders, and there's literally no job that labour can take, that's clearly and obviously worse. The flipside, where efficiency is at it's lowest, and every single product ever is hand-crafted with a tremendous amount of labour seems obviously bad too.
Of course, those are both ridiculous extremes - the answer to what balance is healthiest for an economy I'm sure is immensely complicated. I'm just saying that efficiency doesn't come without costs, and we shouldn't design our entire economy completely around the interests of shareholders of major corporations.
It seems like your automated example allows a welfare state to provide a better quality of life than we currently enjoy. Having people do pointless jobs for the same income at that point seems inherently worse.
That said, I have serious doubts that everything can be automated as that suggests all human labor would be providing zero value.
While generally true,
The medium term view is why they need to let go in the first place .
I am guessing aircraft manufacturing is going to severely depressed in the medium term. Customers are delaying deliveries, canceling orders etc. Demand will likely not return to pre covid levels in even one year. Even if it does, airlines are not in any financial position to make significant purchases for few years. On top of it 737-MAX issues and resulting hold in manufacturing of that line has not left Boeing in a great shape.
Quarterly pressure from Wall Street is not a good excuse. That just means that the CEO and other C-level execs are just ineffective leaders. People who are too far removed from the product, i.e. bean counters with little passion for the technology and industry, tend to make bad leaders for firms like Boeing.
You're shooting the messenger when the core issue is that Boeing, like all publicly traded companies do not have medium to long-term views for their business. It is always quarter-to-quarter. That is what management is judged on, because their job and their compensation is tied to maximize shareholder returns.