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Comment by wkat4242 | Hacker News Reader

I watched a documentary on Netflix recently that alleged that a lot of this change came from importing McDonnell Douglas management into Boeing after the acquisition. I wonder if the book concurs on that, I don't have time to read it right now.

If this is the case I wonder if it could be reversible.

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Yes: the running joke is/was that McD bought Boeing with Boeing's money.

* https://www.theatlantic.com/ideas/archive/2019/11/how-boeing...

* https://archive.is/q5pQV

* https://qz.com/1776080/how-the-mcdonnell-douglas-boeing-merg...

* https://simpleflying.com/mcdonnel-douglas-boeing-merger/

B was pressured to buy McD for 'national security' reasons. What would have been a better idea would have been, instead of doing an 'total' acquisition, is to wait for McD to go bankrupt, and then buy the parts that didn't suck.

When they did the acquisition, they also got the management folks… who ran McD into the ground in the first place.

You don't have to keep the management from the company you've bought.

In a broad sense high level management tends to take care of it's own in a bit of self interest so when they screw up and run a company into the ground chasing short term quarterly profits they'll also get taken care of.

Well clearly the McD people were more skilled politicians.

This can't be emphasized enough. Businesses (and most organizations) are not meritocracies.

This is exactly it. The skilled politicians are the reason why the company failed in the first place. They then take over the acquiring company from within like a virus and destroy that next. Rule of thumb: If a company is failing and you purchase it, fire everybody. Either the culture or the people are poison, and they will infect you.

> fire everybody

At the very least, anyone in a management position.

Yes absolutely - keep the skilled folks below the VP level and perhaps some of the Directors. Generally garbage flows from the top down, and they've been putting up with it this entire time.

We just had a close call with this where I work. Bought a company, because they were failing and being crushed under their own weight. Somehow they convinced the management at my company that they knew the path forward and we've been in complete gridlock trying to get anything done for a couple years, eventually they hired outside management for the company we bought, set clear KPIs which they failed to deliver on (in some cases failing to even attempt to deliver on) and the got fired.

But god damn, when you buy a company that can no longer afford to support its own weight, don't let those fuckers convince you that they somehow know how to run your business too when they can't run theirs.

Phil Condit only had his job through the influence of his wife at the time. Unfortunately, he was busy diddling his executive assistant at the time of the merger, clearing a path for Harry Stonechiseler to be CEO.

I’ve heard variations on this story a few times, successful company swallows failing company and gets infected by failing-culture. Isn’t that what happened to Netscape?

Who poisoned Netscape?

AOL

Didn't AOL buy Netscape?

There's a long list of companies that died by being acquired into a bad culture. OP is talking about the opposite: an acquisition so toxic it rots the parent company.

AOL was borgified by Time Warner management post acquisition the same way Boeing was by MD.

You make it sound like AOL was cool before the Time-Warner merger and people didn't joke about e.g. the free trial CD's

They were a successful online service before the internet. Yes. They were just as cool as Compuserve and Prodigy.

By the time of the merger with Time Warner they were a joke among technical people. They were in the same category as Compuserve and Prodigy, but marketed specifically as an "easy" service for less technical users.

Netscape died because browser became a utility in the OS.

It's not that simple.

Netscape died because Microsoft bundled their browser with the operating system and made it free for commercial use, what essentially led to the huge antitrust case.

Only after that did browsers become utilities in the OS, with open source engines like Konqueror's KHTML (which later became WebKit, which later became Blink) and Netscape/Mozilla's Gecko

Microsoft was the overwhelming majority of all installations. So effectively, once Microsoft added it, it was a utility. I'm well aware of that history.

Collabra, per jwz. See "groupware bad" (not direct linking in case he still has the referer block up).

Is Collabora not a good product?

Not Collabora. Collabra was a groupware company Netscape acquired to shore up the E-mail portion of Communicator. It didn't work and ended up substantially delaying future development of the browser suite.

thanks, I couldn’t remember where I had heard it

Google bought DoubleClick in 2008. Pretty much everything they started after that point has failed because the focus has been on selling ads rather than building something normal people enjoy using.

On the other hand how much of the things Google has built/bought and grew today we enjoy could exist without the firehose of money that ads represented? I'm not sure Youtube happens without the ad money.

Google had enough 3rd party ad revenue before they bought DoubleClick (2008) to buy YouTube (2006).

I'm mostly wondering if they could have kept it as open as they do to non revenue generating users or would they have had to do something like Vimeo where after a certain number of views they come asking for money or would have had to limit the quality/quantity of uploads from small creators due to the costs of storing and serving their videos with limited ad returns.

AdWords was doing just fine before DoubleClick. That's how they got the money to buy DoubleClick in the first place.

The problem was specifically DoubleClick management, who then got inserted in high levels within the Ads organization, forcing out the very technically & economically savvy people who were there before.

This is a recurring problem in large organizations. People who spend their time learning to be politically savvy will be...politically savvy, and be at an advantage when playing power politics that determines who is in charge. The effort needed to become politically savvy usually comes at the expense of domain/technical/economic knowledge required to actually get the job done. Eventually the organization becomes very good at playing political games and very bad at getting stuff done, until it collapses.

Yes, ad money built a lot of the web. I’m not saying it’s evil on a conceptual level, but rather that a lot of companies start failing when they switch from thinking about what their users would like which happen to be ad supported as opposed to building products which are designed around ad revenue first. It’s what gives you things like Google+ but also things like social media sites optimizing for outrage or other low-quality interactions which maximize ad sales revenue.

YouTube has obviously done well, but look at everything they’ve done since the ad sales mentality dominated their thinking. Stuff like Google+ happens when you are thinking “we need X to keep Facebook from cutting into our ad revenue, therefore our users will use X” rather than asking “what will our users like more than Facebook?”.

The other side is what we saw with things like Stadia, GCP, or G-Suite where executives used to the ad model have trouble with other business models. The problem there again isn’t that ads are evil but rather that you need to understand your users and what they want so you can think about the product the right way.

Not a good example. Google reinterviewed every DoubleClick employee and fired half of them.

That doesn’t say anything about whether it’s a good example: even if it’s true, the real question would be whether they looked for the right things and especially who they kept at the management level – at the time, Google announced they were laying off a quarter of the employees due to redundancy, which tends to mean that groups like HR and accounting get hammered more than senior managers. This is especially important to get right when you consider that the most damaging people aren’t comic book villains but rather people who sound like they know what they’re talking about and are charismatic – exactly the sort of people who would make it through an interview process.

The Google interview process at that time was definitely not tuned for selecting the charismatic lol. I was there at the time and I can't recall anyone from DoubleClick management surviving, only engineers. It was a bloodbath.

> B was pressured to buy McD for 'national security' reasons.

Creating monopolies and reducing suppliers actually harms "national security." Our braindead managerial class in action.

That is correct. However MDD was manufacturing key military products (F-15, F-18) and it was doing bad financially, going bankrupt and jeopardizing the fighter plane production and maintenance was a "national security" problem that forced the Boeing acquisition of MDD.

Weird how you can be a "key manufacturer" yet "go bankrupt." Perhaps they should have just been auctioned off and other investors given an opportunity to create new lines of business out of the incompetent mess they had become. Taking the mess and wholesale buying it into another company and then keeping the management that created the problem in the first place is astronomically dumb.

> Weird how you can be a "key manufacturer" yet "go bankrupt."

We massively drew down defence spending at the end of the Cold War.

Also, all the money in the world doesn't mean you spend it on things that make money later. If you spend your manufacturing budget on strippers, you won't have anything to sell later.

woah woah now, someone has to put those young ladies through college and the manufacturing budget has to be spent.

Umm, no we didn’t. We spent less as a percentage of GDP. But total spending barely shrank by the late 90’s. We hadn’t even started to shift spending away from piloted jets by then either.

https://www.macrotrends.net/countries/USA/united-states/mili...

Nowadays the reduction of the increase of military spending is called 'budget cuts'. Not the actual budget reduction, just increasing the budget slower than in previous budget somehow is a 'cut'. That's the reality we live in now.

But at least we have thorough audits that tell us where each of our dollars is spent…

If you change the endpoints on that graph to 1985 and 2000, the drop in spending in the 1990’s is a lot clearer. 325 billion to 287 billion is a sizable decrease—about 11%—, especially in non-inflation-adjusted dollars. It only looks small compared to the post-9/11 increase in spending, and a larger share of that spending was operations rather than procurement.

Also real, versus nominal, dollars.

Right, but he said “massively drew down”. 11% would not qualify. It was relatively brief during a period of normally low inflation, so even in real dollars, it was not a steep decline.

At this point you’re just making a semantic argument about the word “massive”. The impact of that 11% cut in spending was massive; between 1990 and 1998, manpower dropped from 2.18 million to 1.59 million and the total number of active ships in the Navy dropped from 570 to 344. The total budget didn’t drop by a similar proportion because there are a lot of expenses that are much less flexible; it’s not simply a matter of employing fewer personnel and buying less equipment.

I almost couldn’t believe this statement so I looked it up. Sure enough you’re correct. As a factor of GDP, it dropped by about half.

Incidentally, however, as a factor of gdp, it had gone down 50% since the Korean War before that too.

I think all this means is that military spending isn’t outpacing gdp growth (a good thing) rather than we’re actually cutting spending.

Actually, spending was cut in an absolute sense as well, especially if you factor in inflation.

https://en.wikipedia.org/wiki/Military_budget_of_the_United_...

But it is - obviously - on the rise right now.

With relation to inflation?

In part, but not all of it.

Even in dollar terms it actually did go down.

https://www.macrotrends.net/countries/USA/united-states/mili...

Late 1989 was the fall of the Berlin Wall and the end of communism in most of Eastern Europe and 1991 was the end of the Soviet Union itself. There’s a drop between 1990 and 1991, a slight increase in 1992 (replenishment after Desert Storm?) and then a gradual decline in nominal dollars throughout the 1990’s. Also remember that federal budgets were usually passed ahead of time; this was before the government normalized all the government shutdowns and other monkeyshines we have grown accustomed to today, so budget changes might be a year behind current events. Adjusting for inflation the drop in spending would be even more.

Spending does start to increase after 1998. I’m not exactly sure why, but a lot of things started happening in 1998 and 1999, ranging from Bin Laden’s attacks on American embassies, the Kosovo conflict, Saddam Hussein ejecting UN weapons inspectors from Iraq, the discovery of Chinese interference in the 1996 elections and China stealing nuclear secrets.

Also, at the end of the Cold War, there were a number of systems that were in the late stages of design and development that were either radically cut back or canceled outright. These included the F-22, B-2, and Seawolf class submarine, just to name a few big ticket items. This saved a lot of money and made sense at the time since these were all designed specifically for Cold War missions that no longer seemed relevant. But eventually the older hardware still needs to be replaced; instead of replacing the Los Angeles class submarines with the Seawolf class starting in the 90’s, you end up replacing them with the Virginia class starting in the 00’s.

Other cutbacks during the post-Cold War period included closing military bases (which was fraught with political difficulty; no congressman wants the base in his district to be closed!) and reducing the number of US forces permanently stationed in countries like Germany.

Dollars aren’t the only measure, either. One of Reagan’s goals was a 600 ship navy. It takes time to build ships so it wasn’t until 1987 that the US Navy reached a peak size of 594 ships. Currently the US Navy has 238 ships. Sometimes a higher defense budget means you’re building a larger military but sometimes it means health care has gotten more expensive or you need to buy more fuel and ammunition to support operations. This also explains the drop after Korea.

What is even weirder to me is how could you be key manufacturer, go bankrupt, cause forcing a merger, then being promoted to Boeing to 'carry on!' ...

That is the definition of "failing upwards". It's the fashion of the past 50 years in business.

The reason Boeing had to buy them was that nobody was willing to do so otherwise.

Now whether doing a full blown merger vs an asset deal would have been more advisable can be debated.

Well now we can add all the planes Boeing manufactures to the list of things which the inevitable bankruptcy will jeopardise.

All the manufacturers of key pieces of military advanced weapons are on that list. Fighter jets are on the very top. When corporate America is now more about "business" than engineering, making a good plane is very expensive. It's just business :|

How was MDD going bankrupt Boeings problem?

If it’s a national security issue, that’s the governments problem to fix, surely?

Boeing is in its position only because of a close relationship with government. They didn't get rich because of their brains. They will do anything for government to maintain the current benefits.

They did get rich because of their brains. But they then replaced those brains with accountants and since then it is a steady downward trajectory, which if it were any other company would likely result in controlled descent into terrain.

They both acted in the same area. In case an important company is going under, you can merge it into a similar company to keep it running.

That's when the government goes, "buys" the design for some price it decides, and distributes for other companies to manufacture.

Yeah, but that won't help my buddies at MDM that have been buying me lunch and beers on the golf course

Aka privatize profits, socialize losses.

It may potentially harm the security of the nation's subject, but it does not harm the interests of the ruling elites - and that's the real "national security" in practice.

> B was pressured to buy McD for 'national security' reasons.

Are we seeing similar things right now? Will companies like OpenAI or Nvidia be forced to merge or buy other players in the space?

Nvidia already has to work around export restrictions. https://www.theverge.com/2023/10/17/23921131/us-china-restri...

After seeng your comment, I just went ahead and watched the doc, and I frankly I find myself in a state of rage right now. From my limited understanding, I had this impression this was an engineering failure. And you know, when you have a complicated machine, sometimes shit happens.

But it wasn't that at all. Boeing knew clearly what the dangers of MCAS system were, they went to great lengths to completely hide the presence of the system from the world before delivery of the planes. Within days of the first crash, they knew it was MCAS, and kept trying to blame uneducated "foreign" pilots, kept trying to go on and tell the world again and again it was safe to fly, until that second crash happened. I understand greed, we all have that, but I don't understand how a company-wide culture can get so toxic, how utterly devoid of humanity do you have to be that your first concern after that crash and knowing there might be more deaths coming, is keeping wall street happy.

And what the hell FAA? 1) they didn't regulate properly before the plane was delivered, 2) After first crash they knew how dangerous the plane is, but didn't ground it (TAMARA report), 3) After second crash, you had the transportation secratary basically saying 737 Max was "innocent untill proven guilty" so let it fly before China forced its hand, 4) No criminal proescution in the end for those fanatic executives, just a cash fine.

And today this happens.

You have to view all US regulatory goings-on wrt Boeing through the lens of Airbus-Boeing/EU-US trade rivalry (plus China's COMAC as a new entrant).

Boeing is the US's largest exporter (defense + civilian), and also the 65th largest US stock overall. Any US regulator action against Boeing would affect all that, plus US stock markets. You have to wonder how independent the FAA head can afford to be from Congressional interference, in the current setup. In the US, the FAA head is appointed (or, in recent admins, left vacant) by the Senate.

Back in the 2018/9 first 737MAX scandal [0], it was the Canadian, EU and Chinese regulators which were more aggressive about investigating and grounding, meanwhile the US FAA dragged its feet on taking action against Boeing while its donees like Congressman Sam Graves (R-MO 6) [1] continued to blame foreign pilot training, which was dishonest and adding insult to injury.

PS consider also in 2020, Rep. Mike Garcia (R-CA 27) secretly sold $50K Boeing stock ahead of his committee's damning 737MAX report; then avoided election scrutiny by simply blowing the deadline to report the stock sale... When he finally did disclose the sale, it was two weeks after the 2020 general election votes were cast, and three days after Garcia declared victory. He won by 333 votes. [2]

There's some scrutiny of Congressmen insider-trading biotech/pharma stocks esp. which their own committees (gasp) regulate, but really not a lot of scrutiny on aerospace. [3] Compare to George Santos, who wasn't implicated in a coverup that actually killed hundreds of people.

[0]: https://en.wikipedia.org/wiki/Boeing_737_MAX_groundings#2019

[1]: https://www.opensecrets.org/members-of-congress/sam-graves/s...

[2]: https://www.thedailybeast.com/gop-rep-mike-garcia-secretly-s...

[3]: NYT 2022/09 : These 97 Members of Congress Reported Trades in Companies Influenced by Their Committees https://www.nytimes.com/interactive/2022/09/13/us/politics/c...

Self-correction: the US did ground 737MAXes at the same time as the Canadian and other regulators, but dragged its feet on any criminal investigation.

[0]: https://www.cbsnews.com/news/boeing-737-max-8-grounded-by-mo...

> I don't understand how a company-wide culture can get so toxic, how utterly devoid of humanity do you have to be that your first concern after that crash and knowing there might be more deaths coming, is keeping wall street happy.

The most garbage human being I know personally is a project manager at Boeing. Unfortunately the only way to get this person completely out of my life would be to move to a different neighborhood.

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