I dont blame NASA, who knows what else is wrong with that capsule.
I feel bad for Boeing. Though to be honest when I worked on a project where we were a Boeing sub (defense)we didn’t really care for them..
Competition is good, and it’s sad they can’t get their act together. Hopefully someone else will, though it will take years. The problem with Boeing is they seem to treat all their projects like the non competitive defense space..
I don't quite understand this. Boeing is a for-profit company that chose to try to optimize profits over anything else, and now that's biting them in the butt. What's to feel bad about? That the executives made the wrong decision?
I think they meant they feel bad for the people actually doing work, not the people strategizing around wringing out the company for short-term profits so they can move on and do it again someplace else. At least I really hope that’s what they meant. You never know on HN.
Are there actually people doing work at Boeing? As far as I can tell they outsource every last thing, retaining only a management hierarchy internally. Elements which were once Boeing are now spun off subcontractors, and machining, assembly, component design, integration - all of these are third party activities.
But wouldn't you say "I feel bad for the people working at X" in that case? And besides, isn't that also a quite strange sentiment?
Replace Boeing with Facebook/Google, and it still sounds strange to feel bad for the workers at those companies when the executives make bad decisions like chasing profits over all. I mean, why? People obviously like it there, otherwise they wouldn't work there, so why feel bad for them?
> Replace Boeing with Facebook/Google, and it still sounds strange to feel bad for the workers at those companies when the executives make bad decisions like chasing profits over all.
I don't understand this sentiment at all. I know quite a few people who worked on the Google Domains team. It was a good team, a good product, and it sadly was all blown up by some senior executive decision that didn't make any sense.
Why can't I feel bad for the workers I knew whose product got deleted out from under their feet?? Some of them are in the process of getting laid off now!
There is a lot of pride to be had from seeing something you worked on, with your own hands, successfully work - look at mission control videos for examples of how excited people get. Conversely, if it fails, there’s a lot of disappointment.
You can’t compare something like these massive pieces of hardware with people inside failing and taking all your work with it, with some software launch that maybe fails and takes a couple of bugs to be fixed before relaunch.
The Boeing story is tragic because they were a source of pride for America overall, played a huge part in winning WW2, made some great technological advances, but succumbed to MBAs fleecing all their goodwill. There are still world class aerospace engineers working there, and sure they could probably get a job somewhere else, but they might need to uproot their lives to do so.
Interestingly the market for Aerospace engineers is really small. For many of those guys, they could only go work at Airbus or Embraer. Some could potentially get jobs in military with Lockheed or something. Very few may be able to find work with Textron or similar.
> Replace Boeing with Facebook/Google, and it still sounds strange to feel bad for the workers at those companies when the executives make bad decisions like chasing profits over all. I mean, why?
Because there are people working at Boeing, people like you or me, who poured their heart into the project and the institution sapped their energy away and made their efforts ultimately worse than futile.
There was someone working at Boeing who spent years of their life qualifying those thrusters. They tried their very best. Perhaps they even batted for more testing. Or more analysis. Or perhaps they didn't because they didn't know better, but they still spent their best effort to do a good job.
And when they heard that the engines are acting up they probably felt like a trap door has opened under them. They felt that sinking feeling in the pit of their stomach. Either angry that they haven't caught this in testing, or angry that they haven't approved their request to test more.
Years and years ago they proudly told their mom/girlfriend/drinking buddies that they are working on a beautiful spaceship. And they were very proud of the project. And now all those people have heard that their spaceship is a liability. All that good feeling turned ash in their mouth.
There are people at Boeing who worked very very hard the last few weeks (months?) trying to uncover what is wrong with those thrusters. There are others who spent endless hours in meetings with NASA discussing risks and explaining tests and arguing persuasively that the space ship is fine enough to ride. And it is not really their individual fault that the spaceship is not fine.
And even worse, there are people who spent years of their life designing and building flawless systems. And they did a great job and built their subsystem really really well. Well made, high quality products. Yet nobody will think of their stuff positively because some other subsystem failed.
It is kind of like you are working on a beautiful great pyramid. (FYI pyramids were not built by slaves.) And you work hard, and quarry stone all day, and shape it, and push it and pull it and you really really do your best job. You are really a champ. And you should deserve to celebrate in the sun with your team mates the beautiful pyramid. But unfortunately you are not one of the lucky ones working on Khufu's pyramid, you are on the team which works the second pyramid built for Sneferu. And something is wrong with the plans. Or the foundations, or the site selection. Or the rocks are not strong enough. Nobody really knows but even though you are doing a great job individually the damn thing is collapsing in front of your eyes. And it will be known forever as the "bent pyramid". And it sucks. And you feel bad. And that is sad and we should feel bad for those people.
Boeing is made up of a lot of people, some who have done their absolute best. They don't deserve the failure that their leadership caused. I feel bad for Boeing employees, but I don't feel bad for their management.
Most of the time, workers and managers are smart, well-meaning, and hard-working. Even executives (though as you get higher and higher up, you see more and more people whose qualification is political skills and not expertise).
The issue with Boeing is less any individual and more institutional decay. Over time, a spigot of effectively unconditional cash corrupts an organization, especially once anyone with enough internal weight to fight against it is no longer involved in the day-to-day. Give it 20 years, and SpaceX will be the same way.
> Most of the time, workers and managers are smart, well-meaning, and hard-working.
This has not been true at any job I’ve had, from working in fast food as a teenager to now being a data scientist. What you describe would be exceptional in almost any company, where things otherwise regress to the mean of these various aspects, or, in especially bad circumstances, go south of that. Boeing would seem to be in the latter category at this point.
Neither Nvidia nor Apple have access to a spigot of unconditional cash. Their customers are quite discerning and have alternatives they could switch to.
Succession remains an unsolved problem. Seemingly.
I hope to be alive long enough to see how Toyota's story plays out. They seemed to have lost their way under Akio Toyoda. We'll see if Koji Sato can get them back on track.
I'm also keenly interested in Haier and its "Rendanheyi model". They're worthy of HBR style case studies, receiving at least as much attention as Apple, Sony, Honda, Toyota, etc. And yet we know so little about them. https://en.wikipedia.org/wiki/Haier
In 2021, Liang Haishan succeeded Haier's legendary CEO Zhang Ruimin. What happens next? Continued success? Long slow decline? Jump into a volcano?
Every organization will have incompetent individuals. A healthy organization is able to remove them; a typical one will blunt their effects; and an unhealthy one will allow them to reproduce themselves and seize power.
We want it all to be a matter of just one or two incompetent individuals, because then the solution is simple. We just need to be aware that incompetent individuals exist, and through sheer force of will we can prevent them from destroying great things! But a much darker possibility is that it's something inherent to complex systems. Then, there's nothing to do to escape the inevitable cycle. Whatever brilliant schemes we come up with are doomed to failure, because the issue isn't individuals being stupid but institutional incapability to repair itself.
Because while the issues are serious and many, Boeing is still making extremely safe and working airplanes. It's impressive and shows that in general, things are going right. It doesn't excuse the decay and issues, but this isn't a case where everything they do is faulty. they're just held to an extremely high bar.
Manager's entire job is to provide the organizational support and navigate the organizational challenges to allow the non-manager employees the space to do their job. When we talk about systemic organizational failures, managers are the ones that own that problem and are accountable for the failures.
Sure, on an individual basis, you have pockets of amazing managers that can't overcome organizational inertia. I feel for them as well, but when organizational failures come into play, I'm certainly taking more pity on the employees then the managers.
The problem is management sets the core rules and incentives. And no matter how competent and motivated you are, at some point you either move along or stop caring.
There are bad employees but they have less influence over the company overall.
"Management" is short hand for the Jack Welch wannabe MBA try hards. Not middle management.
From my limited experience with megacorps, and lots of reading, persons Director level and up are bat guano insane. Execs live in their own separate Machiavellian fantasy world bubble. Any nod to reality (eg rocket go boom) is a selfown for corporate ladder climbers.
Any productive work at an org like Boeing, post infection by MD's leeches, is in despite of "managagement"'s best efforts.
I don't think the comment you replied to implies such a black and white distinction. Is it so absurd to suggest that some of the people working on Starliner actually cared, and did the best work they could?
Managers too, though ultimately this failure must come down to management at some (presumably high) level.
Except that's capitalism for you. The profit motive means only those willing to put profit (and often very short term profit) ahead of everything else means that only unempathetic assholes (and often psychopaths) end up as leaders of these organisations.
So not everyone who is not a manager is good, but almost all top-level managers are bad. They need to be in order to make the decisions needed to advance short term profit before all else.
This isn’t any better. Are you an IC? All you’re probably saying is, “the people that I work with more directly, that share the same organisational context as me, that I personally can relate to, etc are good, and the other ones aren’t”.
Treating Boeing as a single entity is absurd. The people there have done great work and their collective contributions to the people of the US and world at large is very much appreciated by many (including myself).
It is a tragedy that what was even greater has been so badly diminished by the greed and incompetence of a few. Hating what’s happened to Boeing (and perhaps those responsible for it) is very different than hating Boeing.
They didn’t really try to optimize for maximum profits.
That memo from 20 years ago talks about how Boeing management was optimizing their earnings to capital expenses ratio by selling off factories and manufacturing lines to their contractors. The idea was that this would make Boeing more efficient. In theory they would have the same profits but lower capital expenses. The memo points out how fallacious this is, because while it does improve _this year’s_ numbers, next year’s profits will drop because they no longer own the factory that makes the profits. The memo points out that the contractors will now be earning a larger and larger share of the profits that Boeing used to collect, while Boeing keeps all of the risks. When you buy a whole fuselage from one supplier and a pair of wings from another, you take on all the risk that they won’t fit together properly while the suppliers pad their profits by making you pay extra for every change you ask for.
>“between 2013 and 2019, Boeing spent 43 billion dollars on stock buybacks (a hundred and four per cent of its profits) rather than spending resources to address design flaws in some of its popular jet models,”
If companies voluntarily choose to operate with lower cash reserves and then end up unable to weather hard times or make necessary investments in their products, do they have any fault for what happens next?
> You can't operate a successful company (i.e. with a decent ROI) if you're sitting on a Scrooge McDuck cash vault.
Of course you can. There are thousands of examples around the world - not least the great success story of the last decade or so, Apple.
Minimising your cash holdings is a microoptimization. It might get you a fraction of a percent more return in good times, but that doesn't make it wise.
The purpose of being in business is to make more money than you could by putting the money in an interest-bearing account. Another way of saying it is there is no point to operating a business if you cannot make more than the "opportunity cost".
> Minimising your cash holdings is a microoptimization.
What businesses are in business to do is put cash to work earning more than the opportunity cost, often meaning about 15% ROI.
That certainly is not a microoptimization.
In fact, what most businesses do is borrow money at, say, 5%, and then invest the money so it earns, say, 20%, and therefore make 15% overall.
I do something similar with my investments. I borrow money and buy investments with the borrowed money.
It's similar to borrowing money to buy a house, and then selling the house at an appreciated price to make many multiples of your down payment.
> In fact, what most businesses do is borrow money at, say, 5%, and then invest the money so it earns, say, 20%, and therefore make 15% overall.
Getting more of your capital as debt is a microoptimisation (unless there are special circumstances like different tax treatment, and usually even then) - that's the classic Modigliani-Miller result. Holding more cash makes your nominal return on equity lower, but improves your cash position, and unless you push it to the point where you're taking a real risk of actually going bankrupt the two effects balance and your risk-adjusted return is the same.
> I borrow money and buy investments with the borrowed money.
Exactly. So it really doesn't make a lot of difference how levered a given company is, because an investor can always make a more or less levered investment in the company - if a company has a lot of cash then an investor can lever up a lot, if a company has a lot of debt that same investor levers less or not at all, and ultimately either way the investor gets the same level of risk and the same return.
> It's similar to borrowing money to buy a house, and then selling the house at an appreciated price to make many multiples of your down payment.
Not really - there are all sorts of special treatments for home mortgages (in particular the mortgage interest tax deduction, the most horribly regressive piece of the tax code) that mean you're genuinely disproportionately better off to do one. But it's rare for something like that to apply to corporate borrowing.
You're never going to make much money if you aren't willing to take on risk.
Elon Musk at one point was within hours of personal bankruptcy with Tesla when he managed to secure more funding. He's the richest man in the world, and got that way by taking on enormous personal risk.
How wealthy would you be today if you put everything you had into Amazon stock the day of its IPO?
Yes, but the world doesn't work better if everyone maximally leverages their way into every weakly EV-positive (or EV-negative) high volatility play. If everyone is maximally leveraged, any tiny negative disturbance wipes out all wealth.
At some point, you're just hoping to get lucky, and to leave other people (debtors, governments) holding the bill if you don't. This is what people talk about when they criticize others for "privatizing profits, socializing risk."
Back to Boeing: Boeing put up really good numbers by gutting engineering and manufacturing organizations, hoping it would all turn out okay. For awhile it did, but then it didn't.
And it's questionable how much of these costs Boeing is going to bear, because there's a whole lot of talk in policymaking circles about how to keep an important defense manufacturer and top manufacturer alive (through contracts, tariffs, and supportive policy).
A degree of risk is priced into the interest rate. I still have a fiduciary duty to my lenders to not take undue, undisclosed risks. In practice, people get away with this except in the most egregious cases, but that doesn't make it less wrong.
Worse, systemic risk isn't priced into the interest rate, because the government tends to bail out the banks.
Everyone using leverage and betting on things going up forever is a really big part of how you get 2008. A lot of people made a ton of money in the run-up to 2008 (privatized profits); the population as a whole paid the costs (socialized losses).
edit: I wrote "borrowers" above when I meant lenders.
Boeings choice to not sufficiently invest in its core products while pumping its stock through buybacks belongs solely to Boeing and Boeing’s board. The impact to their reputation was a predictable and ignored consequence.
In Boeing’s case it has very little to do with coronavirus, which was just a related example: some businesses set aside enough seed corn to survive without help, and others didn’t.
There are still some, even many, people there that are doing their jobs as well as they can at the expense of bad executive decisions. I’m sure morale there is not great. I don’t feel bad for the executives at all, or the company really, but there are likely some great people that are just getting kicked around based on the crisis of the week.
But it's exactly the same at Facebook/Google/Amazon/Palantir and countless of other places, yet people chose to work at those places. Why feel bad for them? They've made their choices, and if they're not happy with those anymore, they can make new choices.
The Boeing of today is merely a husk of its former glory. If the U.S. had another viable domestic airplane manufacturer I bet we’d see a lot more pressure on them. That can still happen. I hope it does.
The commercial aircraft part of McD was dead when the merger happened. The had a cash cow called the "MD-80", which was a derivative DC-9. That had stopped selling.
Boeing got more value out of the defense part of McD.
Breaking up businesses that are “too big to fail” is good for the economy in the long run, and for defense firms is arguably an issue of national security. It seems to me an incredibly bad idea for a nation to have all of its defense eggs in a single, increasingly fragile basket.
NASA failed to communicate the seriousness of the issue from the beginning. Their press conference mentioned all the work they've been doing for MONTHS. Who knew? Everyone thought things were 'fine'. Huge huge huge failure by NASA here. They can't be trusted.
I feel bad for Boeing. Though to be honest when I worked on a project where we were a Boeing sub (defense)we didn’t really care for them..
Competition is good, and it’s sad they can’t get their act together. Hopefully someone else will, though it will take years. The problem with Boeing is they seem to treat all their projects like the non competitive defense space..