> Going forward, we will be focused on fundamentally changing the culture, stabilizing the business, and improving program execution,
This is corporate speak for “I don’t have a real plan and probably won’t gut leadership and start over like I should.” I wish the board would force some bigger changes already.
Boeing culture has been going down for quite some time.
The pivotal point to me was, when Airbus launched the A380, Boeing thought they would have an easy home run with the Dreamliner, Airbus would be doomed as competition as no one wants the A380, Boeing slacked off, and then Airbus came back, listened to the customers, changed the A350 to a new plane and had a runaway success (on top of the bread and butter neos).
As a side note, I am still fascinated that Airbus is relatively well run and successful company, even though it's EU based, cross-border, with all the overregulation, bureaucracy and obstacles that come with that.
> I am still fascinated that Airbus is relatively well run and successful company, even though it's EU based, cross-border, with all the overregulation, bureaucracy and obstacles that come with that.
If it doesn't add up, maybe it's the other side of the equation that's the problem: Maybe the flaw or surprise in the equation is not Airbus but the other side - the beliefs about "EU based, cross-border, with all the overregulation, bureaucracy and obstacles" - maybe those aren't what you thought and don't have the impact you thought.
If the evidence doesn't match the theory, it's time to re-examine the theory.
I say that because those beliefs about the EU are a dogma of American big business and its fellow travelers, which prefers the US where they have so much power (and so little regulation or tax) rather than the more democratic power in EU.
>it's EU based, cross-border, with all the overregulation, bureaucracy and obstacles that come with that
That is because one of those things is not true. It's not very cross-border. The vast majority of Airbus R&D and manufacturing happens in Toulouse and Hamburg with each city focusing on specific plane models.
Airbus is incredibly centralized and has been able to take advantage of that to deeply integrate R&D and manufacturing.
You have several misunderstandings packed in there.
First off, one of the things the UE does accomplish is reduce the obstacles that come with cross-border work, and European bureaucracy is massively overblown as a problem. Insofar as it is a problem, US-style lobbying amounts to as much of an obstacle. E.g. with no Intuit lobbying involved, I have literally not filed taxes once in the last ten years, it's just completely automated and a non-issue for me.
"Overregulation" is a sweeping generalisation, and pretty much irrelevant in this particular space: this is the aerospace industry we're talking about, it's one of the most tightly regulated industries worldwide. Airbus is not bogged down by any meaningful amount of red tape that Boeing is free from.
Airbus is laying off a couple thousand employees. This might be a good thing for the company if those employees are truly bloat against what Airbus is currently producing but if they're quality resources that are being cut because some balance sheet needs to look better, it's a bad sign of what's to come.
What most people do not understand, most of the regulation in the EU is to make trade easier. That is the main focus of the EU commission (not the parliament though, which brings in pro-people regulation like food regulations or GDPR).
There is often the joke about the EU regulating bananas. People don't ask why this is regulated, they think it's "the idiots in the EU". The reason is easier trade. Because this way some dealer in Poland can buy a quality level of banana from someone in Spain and knows what they can expect to get. It's for easier trade.
It's like having a standard API and language (e.g. SQL) instead of everyone doing their own. It's like lanugages generating LLVM IR (the IR is "regulated") so they don't have to write their own backend. Think of EU regulation more like OAuth.
The pivotal point was when they physically moved the leaders away from the people that engineer and build the planes, ensuring the creation of a management class of employees who only cared about squeezing the working class of employees.
Which is part of what is so troubling about tech today, that it's ranks are filled with managers who don't build anything.
His podcast role is Chief Cynic but man I love listening to Ed Zitron's Better Offline. What I'm about to link is an extremely hard & direct a polemic, especially the second about the specific people at the largest companies, but damn. It was so enervating to hear.
The Shareholder Supremacy episode ties it all to Jack Welsh making everything awful forever everywhere, managing by number-goes-up. And then How Shareholders Are Destroying the Tech Industry is such a real shared anger against specific leaders, that undercuts how bad & ineffective & midling this age is, being lead by people with so little inspiration & touch with their products.
This podcast series is definitely on my world treasures list, as a how-it-really-is "histories of today" account. Also, the Daily Show keeps having some real bangers... (Covering the media coverage of McDonalds vs Enemy Within was a deep cut.) It's cathartic as hell and often remarkably informative (but also sometimes less so too).
> when Airbus launched the A380, Boeing thought they would have an easy home run with the Dreamliner,
This is ahistorical.
When Airbus announced the A380, Boeing tried to respond with their own version, the 747X [1]. The 747 is arguably the most successful aviation platform in history and was hugely profitable for Boeing for 40+ years. But the industry changed to wide-body 2 engine planes (eg 777, 787, A350) because they're more economical to run and engines have become so reliable that they'll generally last the entire service life of the plane.
The A380 needs 4 engines. The 747X would've too. Even with higher passenger count, running 4 engines instead of 2 is a huge economy issue. Basically you needed to fill ~550 seats to make a profit and not many routes could support that. It works great for the ME3 airlines and arguably a couple of Asian carriers (eg Sinapore Airlines) but not really anybody else and certainly not US airlines.
A way more pivotal moment was the A319neo. This was a complete surprise to Boeing and represented an existential threat to Boeing.
As you may already know, commercial pilots are generally certified for a single type rating at a time. They can train and certify for another type rating but generally speaking commercial pilots won't switch all the time between, say, a 787 and an A350 or even a 787 and a 737.
So airlines like Southwest keep costs low by maintaining a single type rating fleet, being the 737, an airline originally designed 50+ years. So that's both a blessing and a curse for Boeing. The curse being they lose that lock-in if they design a new cockpit. Airbus didn't have that problem.
But the A319neo was so efficient and coule potentially suit US airlines that Boeing ahd to respond and make the 737 more efficient, which of course led to the whole MCAS debacle.
That wasn't the first time Boeing had issues either. Back in the 90s the 737NG had an issue (that caused crashes) with the 737 rudder getting stuck in flight. That took years to resolve.
There were issues for Boeing as a company with the 787. That's when Boeing tried to savagely cut costs with layers of subcontractors and it was a disaster that delayed delivery by years. That's continued with the 737MAX issues like the door panels not being bolted in.
So not the turning point. 2007 is the point in time when Boeing thought they had won, not 2016. From that point on it went down, with Boeing hybris.
If you look at the sentiment from the times,
"Battle for the future of the skies: Boeing 787 Dreamliner v Airbus A380", Guardian 2013
or
" The market for big planes has fragmented and there is simply not enough demand for jets the size of the 747 or bigger to justify the huge development costs of an all-new jet such as the A380, according to the Boeing view. So it has bet its future on a midsize jet, the 787 Dreamliner. [...] Now, critics say Airbus made the wrong bet on the A380." [0]
The culture decline was largely from the merger with McDonnell Douglas[0]. Before that Boeing had a high engineering culture all the way up to leadership. When management of a tech company is decoupled from engineering, there are short-term wins and long-term losses.
Have been following Boeing, watching docs etc. Does anyone have any examples of a company this financialized and hollowed out making a comeback? I'm kind of skeptical it's even possible
Worth noting that Jobs made Apple come around due to the success of pivoting into a completely new and relatively untapped market at the time, the iPod-iTunes combo, which revolutionized the music industry enabling consumers to easily buy and own singles digitally and record studios to sell digitally for the first time, that's where the real genius was that nobody else on the market saw when Napster got shut down.
Had Jobs kept Apple only in the computer business trying to sell colorful expensive iMacs as alternative to cheap gray PCs, they would have long been bankrupt and their carcass devoured by Dell or Lenovo by now.
Boeing doesn't have any other new untapped markets they can enter and dominate. Come to think of it, neither does Apple now. They tried with the Vision Pro VR helmet thingy but that was a massive flop compared to the iPod and iPhone, coupled with the the shut down of their rumored secretive EV program, so they're left keep trying to milk that 30% AppStore fee as long as they can get away with.
A move which was partly financed by Microsoft. I don't know that Airbus would finance such a move by Boeing (but perhaps the US Gov will?) or who will "come back" to save the company.
I think a bankruptcy restructuring would do a world of good for Boeing, the sooner the better. The longer it keeps in this state, the further behind it gets.
One option is for government to step in, cut away the military support branch into a separate company and manage that. Leave the remaining stuff out in the open and either support financially to turn around (like banks in 2008 who then paid back with interest), or let it die due to market forces.
Wondering what consequences all that mean for FAA and its international recognition.
That would be a very, very bad outcome for the free world.
We lost commercial ship yards, and or navy is on a long, slow march to obsolescence. That's messy decades it -- we have a huge lead -- but it's the path we're on.
A lot of the "important names" in industrial manufacturing that wound up getting bought by the various industrial conglomerates of the mid 20th century wound up getting sold off when the conglomerates fell apart.
For example IH's agricultural equipment (now a part of CaseIH), construction equipment (now owned by Komatsu) and truck lines (owned by VAG) all more or less continued development and production despite being through a couple owners at this point.
I personally hope it gets split up and Ford winds up buying the passenger airline stuff so we can get a revival of the trimotor nameplate because I like it when reality is funny that way.
Electric Boat (US navy submarine maker) is trying. They were down to under 5k employees in the 90s (IIRC) after the end of the cold war and significant cuts to defense spending. Now they are probably over 20k and trying to increase production of one type of submarine, add a modified type to the same line, and build a new line for a new type. Not going perfectly but having billions shoved in your pockets sure helps recovery.
You can grow "external" daughter companies that have working "old" practices and get subsizdized by the dying parent, while keeping the MBA infection out as long as possible.
Just one piece of GE (GE Aerospace) is worth $200 billion now. The stock has tripled in eight months, with the company tracking to $5-6 billion in operating income and looking very healthy. GE Vernova (energy) is worth another $75 billion and is back in the black after years of losses. It's all probably going to be a lot healthier split up. That might be the case for Boeing as well. It's often the best way to restart failed old conglomerates (no Steve Jobs scenario is going to save Boeing).
Hard to see them turning this around, it’s a good 10 year program (optimistically) to develop a new aerospace platform like a 737 replacement. I don’t really see it happening.
Does Embraer have a program in the works? I like what they build.
If the problem was "Boeing have a big hole and need to fill it with money" you can indeed "fix" that by dumping US taxes into the hole until it's full. When US mortgages blew up, that's the exact fix. Money hole, fill with tax money, solved.
But that's not the problem here. Boeing is no longer able to make high quality aeroplanes. And if you dump US taxes into that hole the hole just yawns wider. Which doesn't mean the US government won't try that, but it's expensive and won't work.
Readit News
This is corporate speak for “I don’t have a real plan and probably won’t gut leadership and start over like I should.” I wish the board would force some bigger changes already.
The pivotal point to me was, when Airbus launched the A380, Boeing thought they would have an easy home run with the Dreamliner, Airbus would be doomed as competition as no one wants the A380, Boeing slacked off, and then Airbus came back, listened to the customers, changed the A350 to a new plane and had a runaway success (on top of the bread and butter neos).
If it doesn't add up, maybe it's the other side of the equation that's the problem: Maybe the flaw or surprise in the equation is not Airbus but the other side - the beliefs about "EU based, cross-border, with all the overregulation, bureaucracy and obstacles" - maybe those aren't what you thought and don't have the impact you thought.
If the evidence doesn't match the theory, it's time to re-examine the theory.
I say that because those beliefs about the EU are a dogma of American big business and its fellow travelers, which prefers the US where they have so much power (and so little regulation or tax) rather than the more democratic power in EU.
That is because one of those things is not true. It's not very cross-border. The vast majority of Airbus R&D and manufacturing happens in Toulouse and Hamburg with each city focusing on specific plane models.
Airbus is incredibly centralized and has been able to take advantage of that to deeply integrate R&D and manufacturing.
First off, one of the things the UE does accomplish is reduce the obstacles that come with cross-border work, and European bureaucracy is massively overblown as a problem. Insofar as it is a problem, US-style lobbying amounts to as much of an obstacle. E.g. with no Intuit lobbying involved, I have literally not filed taxes once in the last ten years, it's just completely automated and a non-issue for me.
"Overregulation" is a sweeping generalisation, and pretty much irrelevant in this particular space: this is the aerospace industry we're talking about, it's one of the most tightly regulated industries worldwide. Airbus is not bogged down by any meaningful amount of red tape that Boeing is free from.
What most people do not understand, most of the regulation in the EU is to make trade easier. That is the main focus of the EU commission (not the parliament though, which brings in pro-people regulation like food regulations or GDPR).
There is often the joke about the EU regulating bananas. People don't ask why this is regulated, they think it's "the idiots in the EU". The reason is easier trade. Because this way some dealer in Poland can buy a quality level of banana from someone in Spain and knows what they can expect to get. It's for easier trade.
It's like having a standard API and language (e.g. SQL) instead of everyone doing their own. It's like lanugages generating LLVM IR (the IR is "regulated") so they don't have to write their own backend. Think of EU regulation more like OAuth.
His podcast role is Chief Cynic but man I love listening to Ed Zitron's Better Offline. What I'm about to link is an extremely hard & direct a polemic, especially the second about the specific people at the largest companies, but damn. It was so enervating to hear.
The Shareholder Supremacy episode ties it all to Jack Welsh making everything awful forever everywhere, managing by number-goes-up. And then How Shareholders Are Destroying the Tech Industry is such a real shared anger against specific leaders, that undercuts how bad & ineffective & midling this age is, being lead by people with so little inspiration & touch with their products.
https://omny.fm/shows/better-offline/the-shareholder-suprema...https://omny.fm/shows/better-offline/how-shareholders-are-de...
This podcast series is definitely on my world treasures list, as a how-it-really-is "histories of today" account. Also, the Daily Show keeps having some real bangers... (Covering the media coverage of McDonalds vs Enemy Within was a deep cut.) It's cathartic as hell and often remarkably informative (but also sometimes less so too).
This is ahistorical.
When Airbus announced the A380, Boeing tried to respond with their own version, the 747X [1]. The 747 is arguably the most successful aviation platform in history and was hugely profitable for Boeing for 40+ years. But the industry changed to wide-body 2 engine planes (eg 777, 787, A350) because they're more economical to run and engines have become so reliable that they'll generally last the entire service life of the plane.
The A380 needs 4 engines. The 747X would've too. Even with higher passenger count, running 4 engines instead of 2 is a huge economy issue. Basically you needed to fill ~550 seats to make a profit and not many routes could support that. It works great for the ME3 airlines and arguably a couple of Asian carriers (eg Sinapore Airlines) but not really anybody else and certainly not US airlines.
A way more pivotal moment was the A319neo. This was a complete surprise to Boeing and represented an existential threat to Boeing.
As you may already know, commercial pilots are generally certified for a single type rating at a time. They can train and certify for another type rating but generally speaking commercial pilots won't switch all the time between, say, a 787 and an A350 or even a 787 and a 737.
So airlines like Southwest keep costs low by maintaining a single type rating fleet, being the 737, an airline originally designed 50+ years. So that's both a blessing and a curse for Boeing. The curse being they lose that lock-in if they design a new cockpit. Airbus didn't have that problem.
But the A319neo was so efficient and coule potentially suit US airlines that Boeing ahd to respond and make the 737 more efficient, which of course led to the whole MCAS debacle.
That wasn't the first time Boeing had issues either. Back in the 90s the 737NG had an issue (that caused crashes) with the 737 rudder getting stuck in flight. That took years to resolve.
There were issues for Boeing as a company with the 787. That's when Boeing tried to savagely cut costs with layers of subcontractors and it was a disaster that delayed delivery by years. That's continued with the 737MAX issues like the door panels not being bolted in.
[1]: https://simpleflying.com/boeing-747x/
The A380 is from 2007, the A319neo is from 2016.
So not the turning point. 2007 is the point in time when Boeing thought they had won, not 2016. From that point on it went down, with Boeing hybris.
If you look at the sentiment from the times,
"Battle for the future of the skies: Boeing 787 Dreamliner v Airbus A380", Guardian 2013
or
" The market for big planes has fragmented and there is simply not enough demand for jets the size of the 747 or bigger to justify the huge development costs of an all-new jet such as the A380, according to the Boeing view. So it has bet its future on a midsize jet, the 787 Dreamliner. [...] Now, critics say Airbus made the wrong bet on the A380." [0]
[0]: https://www.aviationpros.com/home/news/10384535/huge-mistake...
[0] https://en.wikipedia.org/wiki/Boeing#Merger_with_McDonnell_D...
Most other success stories involve first going bankrupt (ex. GM, Delta).
Had Jobs kept Apple only in the computer business trying to sell colorful expensive iMacs as alternative to cheap gray PCs, they would have long been bankrupt and their carcass devoured by Dell or Lenovo by now.
Boeing doesn't have any other new untapped markets they can enter and dominate. Come to think of it, neither does Apple now. They tried with the Vision Pro VR helmet thingy but that was a massive flop compared to the iPod and iPhone, coupled with the the shut down of their rumored secretive EV program, so they're left keep trying to milk that 30% AppStore fee as long as they can get away with.
I think a bankruptcy restructuring would do a world of good for Boeing, the sooner the better. The longer it keeps in this state, the further behind it gets.
Wondering what consequences all that mean for FAA and its international recognition.
We lost commercial ship yards, and or navy is on a long, slow march to obsolescence. That's messy decades it -- we have a huge lead -- but it's the path we're on.
I don't know the solution here.
A lot of the "important names" in industrial manufacturing that wound up getting bought by the various industrial conglomerates of the mid 20th century wound up getting sold off when the conglomerates fell apart.
For example IH's agricultural equipment (now a part of CaseIH), construction equipment (now owned by Komatsu) and truck lines (owned by VAG) all more or less continued development and production despite being through a couple owners at this point.
I personally hope it gets split up and Ford winds up buying the passenger airline stuff so we can get a revival of the trimotor nameplate because I like it when reality is funny that way.
Does Embraer have a program in the works? I like what they build.
But that's not the problem here. Boeing is no longer able to make high quality aeroplanes. And if you dump US taxes into that hole the hole just yawns wider. Which doesn't mean the US government won't try that, but it's expensive and won't work.