How Boeing put profits over planes

“Experts say that the root of Boeing’s present troubles is a longstanding culture issue. Over the years, the company’s top decision-makers went from detail-oriented engineers to slick suits with MBAs.
“You’ve got a management team that doesn’t seem terribly concerned with their core business in building aircraft,” says Aboulafia.

There’s one name that keeps popping up when people talk about Boeing’s cultural downslide: Jack Welch, the legendary — and infamous — executive who helmed the conglomerate General Electric from 1981 to 2001. Welch was known for ushering in a sea change of “lean” management that ruthlessly made cuts in both manufacturing processes and the workforce, all in the service of pumping up stock prices. His leadership style included firing the worst-performing 10 percent of GE staff every year; he reportedly laid off over 250,000 people during his tenure. He inspired an entire generation of business leaders, and this Welchian GE philosophy was eventually brought over to Boeing.

Historically, Boeing was renowned for its boundary-pushing innovations in aviation, which helped put commercial air travel on the map. But in 1997, Boeing bought a rival plane maker called McDonnell Douglas; instead of Boeing culture influencing McDonnell, however, the opposite happened. The engineer-focused company got a heavy dose of the cutthroat GE ethos as McDonnell’s CEO — a Welch disciple — became the president and chief operating officer, and later CEO, of the merged company. Other Boeing leaders, including James McNerney and current CEO David Calhoun, have also had stints at GE.

In Flying Blind: The 737 MAX Tragedy and the Fall of Boeing, journalist Peter Robison describes an environment where safety concerns were concealed or downplayed, in part to be faster and cheaper than Airbus, the former underdog that overtook Boeing as the biggest commercial aircraft manufacturer in the world in 2019.

The company began relying more on subcontractors; It had its own fuselage plant until 2005, when it sold it to a private equity firm — that entity became Spirit AeroSystems. Today, Boeing only completes the final assembly of a plane after it sources parts from thousands of suppliers. Outsourcing is cheaper — but using so many suppliers reduces the fine-tune control and oversight a company has over the parts that make up their product, according to aviation experts.

While lean management was the name of the game for Boeing’s rank-and-file, in the past decade the company’s executives spent over $43 billion buying back their own stocks and paying out nearly $22 billion in profits to shareholders. By buying back shares and removing them from the public market, the individual value of a share automatically rises even though nothing about the company’s operations has changed.

Those billions represent cash that could have been reinvested in developing the next line of Boeing planes or hiring more quality inspectors. Former Boeing CEO Dennis Muilenburg, who led the company during the deadly Max crashes, reportedly received an exit package of $62 million.

After the merger, there was also “an open labor war between the unions and the management,” says Hamilton.

In 2000, feeling demoralized and disrespected by the leadership shift, over 22,000 Boeing engineers went on strike. One of the chants heard during the strike: “No nerds, no birds.” As in, if Boeing doesn’t let engineers do their jobs properly, with adequate pay, there would be no airplanes. The engineers got the extra money they asked for, but not the ideological win. Boeing bled about $750 million due to the strike, according to Robison, and kept on with its cost-cutting drive while Boeing’s workers have kept sounding the alarm with every mass layoff.

In 2019, the company said it could cut as many as 900 inspectors — the people who make sure the plane is ready to fly. In 2020, it laid off about 16,000 people. Some were offered buyouts, a move that the company might have regretted when it had to go on a hiring spree after the pandemic, and after the 737 Max was cleared to fly again. “So you have a lot of inexperienced workers who now have their hands on the airplane rather than the mature, highly experienced workers who were laid off or took early retirement,” says Hamilton.

Despite the regular rounds of mass layoffs, last summer, Boeing’s CEO Dave Calhoun said he would love to ramp up the production of 737 planes from 50 to 60 per month, which would further elevate the pace of work for Boeing workers who already felt pressured to meet unrealistic quotas. A 2019 New York Times report interviewed over a dozen people about their experience working at Boeing, who said they saw many safety hazards during assembly — like debris left on planes — and claimed that they were fired for raising potential problems.

Boeing’s treatment of its 10,000-plus subcontractors has come under scrutiny, too, as the company has demanded ever-lower prices. “They treated their suppliers the way they treated their workers — as a disposable commodity,” says Aboulafia.

Boeing’s strategy to continually shrink costs doesn’t appear to have paid off. The company hasn’t turned an annual profit in the past five years. Airbus is selling more planes, and recent headlines about Boeing are putting a halo over Airbus’s comparative reputation. In January alone, Boeing lost $35 billion in market value as its stock price fell.”

https://www.vox.com/money/24052245/boeing-corporate-culture-737-airplane-safety-door-plug

The Ukraine Air-War in 2024 – Interviewing Professor Justin Bronk

“The Ukrainians are losing thousands of people because they don’t have enough ammunition…political game in Washington, it’s an election year…thousands of people are dying because of this.”

https://www.youtube.com/watch?v=R31hMWs25UI

Russia apparently got control of the skies before seizing victory in a front-line fight, and it could be ‘devastating’ for Ukraine if it continues, war experts say

“As Russia’s ground forces pushed to capture Avdiivka, its air force appeared to establish air superiority over the war-torn town, clearing the way for critical close-air-support missions, conflict analysts assessed.
Although only temporary and localized, it appears to be the first time Russia has taken control of the skies in a front-line area since their full-scale invasion began almost two years ago. And if it continues or expands, a real possibility as Ukrainian air defenses are under significant stress, it could be “devastating,” war experts said.

On Saturday, Russia claimed victory in Avdiivka, a Ukrainian town northeast of occupied Donetsk. Despite it being hailed as Russian President Vladimir Putin’s biggest victory since the fall of Bakhmut in May 2023 — and a timely one given the upcoming Russian presidential elections next month — it came at a high cost. Moscow has suffered severe losses of both troops and equipment since focusing its forces on Avdiivka last fall.

Confirming its retreat from the area, Ukraine said it was saving troops from being fully surrounded by Russian troops. Over the past few months, geolocated footage of the area had shown Russia slowly and painstakingly advancing to encircle Ukrainian defenders fighting to hold the town.

Upon Russia’s capture of the town, reports said its air forces had been operating in the skies above Avdiivka, supporting ground troops in the last days of the offensive operations and eventually allowing them to overwhelm Ukrainian defenses.

According to The Institute for the Study of War, a Washington DC-based think tank, this was likely the first time Russian forces had been able to do so in Ukraine. Air defenses, particularly ground-based surface-to-air missile systems, have prevented either side from achieving this key element of offensive operations, even locally.

Over the final days of fighting, the Ukrainians reported an increase in the number of Russian glide bombs dropped by fixed-wing aircraft, George Barros, the geospatial-intelligence team lead and a Russia analyst at the Institute for the Study of War, told Business Insider. This activity appears to indicate the employment of a combined arms tactic involving having air forces support maneuver elements on the ground.”

“Ukraine’s air defenses have largely denied Russia air superiority, preventing its jets and aircraft from conducting significant air campaigns since the beginning of the war.

It is unclear if Ukraine can continue to do that, especially considering delays in further Western security aid. Ukraine has said its air defenses and missile stockpiles are running critically low, forcing them to ration and make tough choices on which front-line areas should be prioritized and protected.”

https://www.yahoo.com/news/russias-air-force-took-control-195949807.html

Israel claims Hamas commanders that helped coordinate surprise attack have been killed

“Israel’s military claims Qadi was apprehended in 2005 following the kidnapping and murder of Israeli civilians. He was released as part of the Gilad Shalit prisoner exchange in 2011, the post said.
The Gilad Shalit prisoner exchange saw Hamas release Israeli soldier Gilad Shalit in exchange for Israel’s release of more than 1,000 prisoners, most of whom were Palestinians or Arab-Israelis.”

https://www.yahoo.com/news/israel-claims-hamas-commanders-helped-144505094.html

Joe Biden, Travel Agent in Chief

“These are the sorts of proposals that sound good in theory—who wouldn’t want to pay less in junk fees? But some of these fees exist for good reasons. (Late fees, for instance, encourage people to pay their bills on time, which is good for both credit card companies and for users, who will otherwise rack up more interest to pay back.) And in any event, companies aren’t simply going to say, “OK, we’ll just make less money.”
Hotels may respond by raising base room rates or charging new fees for typical amenities. Airlines that can’t charge for choosing your seat may raise base ticket prices, baggage fees, or other costs. Banks that can’t fine people for overdrawing their accounts may raise rates for opening an account, require higher minimum balances, or deny more people bank accounts to begin with. Credit card companies that can’t charge late fees may deny more lines of credit or charge higher interest rates. And so on.

All the Biden administration is really doing is shifting people’s costs around.”