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Comment by hwestiii | Hacker News Reader

This all points up the glaring conflicts of interest in the corporate business environment. Most of us think that Boeing is the business of building airplanes, but as a publicly traded company, its real business is making money for its shareholders, and aerospace is just a vehicle toward that end. The Boeing CEO's steadfast refusal to take responsibility for these two crashes are nothing more than CYA designed to limit or defer financial responsibility for >300 deaths and protect and privilege shareholder value above the safety and well-being of the flying public.

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Actually, I think it's worse than that. If it were all about making money for shareholders, they would have made sure this PR nightmare (which will likely result in many lost sales) didn't happen. The long term monetary incentive is to avoid crashes.

The more fundamental problem is that corporations are run by people who, mostly, care more about themselves than the company they are running, and more about this year than the future. Boeing needed to suck it up and accept a couple years' poor sales, in order to get an effective competitor to Airbus' latest. In the long run, or even the medium run, this would give the best monetary results, as well as save lives.

But, it would mean bad financial results this year and next year, and the corporate business environment is biased against that. If the CEO makes decisions which give worse results this year and next, but better results later, he will not be around in his job to enjoy those better results. So, he optimizes for the near term, and rolls the dice (with other people's lives).

The biggest exception to this would be companies where the CEO is the founder, who usually has the ability to retain his job through a bad year or two.

Of course, the CEO should have made the right decision anyway, and accepted the consequences, because people's lives are at stake and anyway it's not like he would starve if he got fired next year. But, if we're talking about incentives and conflicts of interest, that's the real issue, not money vs. lives (because both point in the same direction, of making the plane safe), but short term vs. long term and CEO vs. the company as a whole.

I'm not sure I buy the risk/market trade-off. You could replace Boeing with any car manufacturer that still has publicly traded shareholder needs.

The car industry is not as advanced as the aviation industry. It will come a time, where the level of complexity of a car means that in order to build and test it properly, it will be a ever-increasing easy business decision to take shortcuts.

And we have already seen glimmers of such behavior with all the emissions scandals around diesel cars... the outcome is not immediate death of passengers, but car companies were/are skirting health regulations to increase profits.

that has already happened...see the legal cases in last century via Gerry Spence for example ford pinto etc..

The world is full of examples of companies maximizing profits while screwing over their customers. Is that what was happening here? What's the alternative answer? They just didn't think it through? They rushed because of FOMO?

This is only the beginning of a question.

It's not obvious how the responsibility for those deaths should be allocated.

What's the tolerance threshold for airline fatalities?

Zero. Aviation is a zero tolerance activity on safety issues.

> What's the tolerance threshold for airline fatalities?

Meaning what?

>but as a publicly traded company, its real business is making money for its shareholders

This is such a tired argument.

How much money do you think Boeing is going to make for its shareholders if its planes are crashing and fleet is grounded?

You're right. The real motivation is always making money for the executives and board-members. Bonuses are paid for revenue, not for not killing folks.

>You're right. The real motivation is always making money for the executives and board-members.

What sort of mindset must one have to assume that once a person becomes a "manager" or "executive" they are suddenly immoral or evil? Such an odd worldview.

I guarantee no one at Boeing make the conscious effort to kill hundreds of people for a bonus. Mistakes happen. People of all standing are corrupt. We fix the issues and move on, not cry about executives, board members and shareholders (of which most people on this board are striving to be).

I don't need an armchair assessment of my worldview, thanks.

It's well known that large US companies offer perverse incentives for their executives. As long as they don't do anything super illegal, there's often no recourse. I mean, recent history is replete with examples of executives optimizing-for-bonus.

>What sort of mindset must one have to assume that once a person becomes a "manager" or "executive" they are suddenly immoral or evil? Such an odd worldview.

Becoming an executive at a publicly traded company is a joyous and public acceptance of capitalism. Capitalism is objectively bad, given the state of the world.

Capitalism is nothing more than the free exchange among willing parties and cannot be objectively bad.

If Boeing can put out faulty products that kill people will no recourse, that's not capitalism, that's the government allowing these criminals to continue operating unchecked.

It's a poor definition of capitalism that equally well describes barter and gift economy.

That's also consumers accepting the risk and agreeing to pay for a flight. Here's a quick thought experiment in capitalism:

Two relatively new Boeing 737-MAX airplanes crash in relatively quick succession. A critical flaw in the aircraft is exposed to the public. Significant numbers of people refuse to fly in a 737-MAX.

Southwest made a substantial investment in 737-MAX airplanes, and cannot make their money back. They approach Boeing and Boeing gives them a 75% discount on a 737-MAX replacement. Or, Boeing shrugs their shoulders and says, "huh". Southwest cancels all future orders with Boeing and buys Airbus.

Or, Boeing waves their hands and says, "We fixed everything. The 737-MAX is perfectly safe now." The next week, Southwest relaunches their fleet and books 100% occupancy. They negotiate with Boeing about the $millions lost while the fleet was grounded and get back to business as usual. For the next 5 years, a 737-MAX crashes every year killing everyone aboard, but bookings stay high. All ticket prices go up $25 to fund the payouts to crash victims. Bookings stay high. Business continues as usual.

See all the very different directions capitalism can take you? I continually struggle to understand the mindset where all blame goes to the government and there is no individual responsibility for consumer choices. We've seen it over and over with Wells Fargo, GM, Facebook, and the list goes on.

Government can serve a meaningful purpose in the regulation of capitalism. But also, capitalism can and must serve a critical role in the regulation of capitalism.

Sociopaths are highly overrepresented among corporate executives. No, people don't suddenly become evil and amoral when they become an executive; evil and amoral people are simply more likely to reach those positions, precisely because they're evil and amoral.

You have the cause and effect backwards.

I have had the opportunity to observe a very wide variety of businesses in several industries and have noticed the same thing as multiple studies - a high degree of sociopathy among execs. My conjecture is that this is both because aggressive sociopathy will help people rise among the ranks, and also because the structure of business will tend to actively select for those traits (unless active counter-selection is implemented).

So, sure, one does not automatically change by becoming a manager (although there are psych studies indicating high income causing reduced compassion for others), but there is good reason to expect higher "immoral or evil" behavior in higher ranks.

Im curious about the study that shows the causation of lowered compassion with higher income?

Here's a couple articles referencing some of the studies

https://www.scientificamerican.com/article/how-wealth-reduce...

https://www.globalpolicyjournal.com/blog/06/10/2016/wealth-c...

In my opinion, one of the important qualities of an organized company is to spread and dilute responsibility. No individual manager or executive needs to be immoral or evil, they need only be short-sighted or a little greedy or willing to keep their head down and toe the company line.

Each person is only responsible for their own bad decisions. It's likely there is no one person who signed the memo that said "casualties totally okay, make more money!" Instead we'll find several people signing off on several bad decisions, each person myopic enough to be able to honestly claim they had no idea something this bad could happen.

It would be nice to see the buck stop at, say, the CEO, but I haven't seen that happen. In many cases the CEO will claim that they gave blanket performance goals and that the execution of those goals was too technical for them to actually understand, or that those technical details were hidden from them by people below them who were trying to hide things (rather than only deliver the type of information the CEO really wanted).

Mostly it doesn't happen. Shareholders might want to take risks. This time it gone bad. Next time it probably wouldn't.

> it probably wouldn't

if you cut corners on engineering to reduce costs and nothing bad happens, that good engineering actually

It's not necessarily good engineering, it could also be selection bias. It depends on how much risk is added by cutting corners. If too many corners are cut, but it didn't fail just due to luck, it's still bad engineering.

Its also bad for perception of the aviation industry if people die from faulty hardware. Many people don't like to fly already because they don't feel safe. These type of incidents don't help calm those fears.

Not really.

Suppose Bob fires a gun into a crowded area and happens not to hit anyone. I didn't hurt anyone! It's my right as a consequentialist!"

Bob still goes to prison.

Beyond that, engineering is about using a principled approach, by definition. Throwing something together ad-hoc and finding that it happens to work, is not what is meant by 'engineering'.

I think your analogy misses the point that a core scope of engineering is reducing cost. Firing a weapon in a crowded area is not a scope of anybody, bar terrorists. If Bob would be a humanitarian terrorist, him firing the gun in a crowded area and not hitting anyone would be a great outcome for him, even if he didn't hit anybody just by chance.

> a core scope of engineering is reducing cost.

A core scope of engineering is to make technologies to make life of people better without killing them. To reduce cost is a one of instrumental goals helping business to do more than it might have done without it.

To risk someone's life is a very bad idea, even if it increases profits.

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