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This pressure to prioritize profits over quality was felt throughout Boeing’s supply chain, including at its offshoot, Spirit. Mustafa Erdem Sakinç, an economist who studied Boeing’s corporate strategies, told us in an email, “Cost-cutting was the single major reason behind selling commercial aircraft-parts operations to . . . the new entity named Spirit Aerosystems.”
Sakinç explained that “Spirit AeroSystems introduced its own cost-cutting strategy, even harsher than Boeing’s,” largely centered around cutting labor costs. "Boeing took advantage of Spirit’s weaker union and more cutthroat business tactics by further squeezing their supplier to do faster, cheaper work."
In a 2007 Securities and Exchange Commission (SEC) filing, two years after they were founded, Spirit executives explained that they “hired 1,300 fewer people than the predecessor had employed” and implemented less favorable union contracts which “provided for wage reductions of 10%,” among other profit-motivated measures.
Sorscher explained that Boeing took advantage of Spirit’s weaker union and more cutthroat business tactics by further squeezing their supplier to do faster, cheaper work. “You couldn’t screw over your own employees like you could screw over your supplier’s employees,” Sorscher said.
In a federal securities lawsuit that we reported on Monday, some of Spirit’s former employees alleged that production defects came from Spirit’s “failure to hire sufficient personnel to deliver quality products at the rates demanded by Spirit and its customers including Boeing.”
The suit identified many serious production issues including “out-of-calibration torque wrenches” that mechanics were using, and “defects such as the routine presence of foreign object debris (‘FOD’) in Spirit products, missing fasteners, peeling paint, and poor skin quality.”
The complaint concluded that “such constant quality failures resulted in part from Spirit’s culture which prioritized production numbers and short-term financial outcomes over product quality.”
Boeing may attempt to distance itself from Spirit in the wake of recent revelations. When asked previously about the lawsuit, Boeing spokesperson David Sidman told us, “We defer to Spirit for any comment.”
But the two companies remain closely intertwined. According to Spirit’s SEC filings from 2022, the company’s “business depends largely on sales of components for a single aircraft program, the B737.” Sixty percent of Spirit’s revenue that year came from Boeing, according to the company’s annual report. Spirit’s new CEO Patrick Shanahan also previously worked at Boeing for more than thirty years, and Spirit’s senior vice president Terry George previously served as Boeing’s manager on the 737 program.
Some people will probably deny this, and claim that it's all additive. If your employees were 100% focused on safety and quality before, then adding more stuff just means they're now 200% as focused and nothing has to lose out. This is obviously incorrect.
The real question here is not whether climate/diversity focus over quality is bad because it obviously is. The question is whether it's a symptom or a cause of their culture issues.
This is a quasi-Marxist analysis. All of Boeing and Tesla's competitors are exposed to the same "financialization", whatever that is, yet it's Boeing with the problem. Tesla meanwhile has focused on developing and shipping cutting or bleeding edge tech, their quality issues aren't due to management but because the thing they're trying to do is inherently very difficult.
You can argue they shouldn't have shipped their autopilot features, but not that it has defects due to bad manufacturing practice. The defects are due to it being a hard and new problem. Making sure bits of the plane don't fall off mid-flight is though not due to pushing the tech boundary, it's the opposite, the 737 MAX exists specifically to avoid introducing anything new.
2. Financialization is a specific term. Look it up if you don’t know what it means. Here’s a hint: “Calhoun [Boeing CEO] has a bachelor’s degree in accounting from Virginia Tech.”
What’s the path for an accountant to end up leading an aerospace engineering firm? That’s the effect of financialization.
Compare to Airbus: “Guillaume began his career in 1992 as a flight-test engineer for the Eurocopter Tiger helicopter in the Direction Générale de l’Armement (DGA).”
Toyota’s CEO: mechanical engineer.
Subject to the same external pressures maybe, yet some companies somehow didn’t end up ruled by an accountant. You can have every company subject to a bull market yet some do better than others. It’s not very confusing.
Musk has, as usual, no idea what he's talking about.
But: the MDD merger was 25 years ago. Boeing wasn't considered to be in dire quality straits until the MCAS disaster, which is recent. Maybe the people with "shreds of industry knowledge" are missing what's actually going wrong there, perhaps for ideological reasons? It wouldn't be the first time people have suddenly developed selective blindness over catastrophic decision making by "diverse" people. See the Harvard debacle for one in just the last few weeks.
I think we can safely say that promoting people because they hired lots of black women, over the head of someone who focused on safety, will yield poor safety outcomes regardless of whether the stupid decision making is ultimately traceable to a merger 25 years ago or not.
Diversity, and whatever right eing talking point non-sence people spit out, has nothing to do with any of the issues at Boeing. Or at any other company.
Sad that people actually believe that nonsense. Especially coming from a decidedly non"woke" manly man guy like Musk, who is also on record deprioritizing safety, and who's cars and facotories are as bad as it get nowadays outside of sweat shops.
Clearly diluting focus away from safety is an issue for whatever the reason especially when the safety of airplanes is declining. This should also be taken in context that many aspects of manufacturing have improved greatly over the past 20 years so even if everything else stayed the same the general safety should have been greatly improved. So the drag on safety by the culture is bad enough to overcome these 'free' gains and end up with even less safe planes should highlight just how bad that effect is.
Musk is being a broken clock, he's right, even if it's for the wrong reasons.
It's aviation, SAFETY before ALL else.
This is, along with things like Medicine, one of the very last industries that should get involved with culture wars on any side.
“Do you want to fly in an airplane where they prioritized DEI hiring over your safety? That is actually happening.”
That is not only wrong for the wrong reasons but wrong in and of itself. You and Musk and the cacophony of right wing commentators attempting to shoehorn this week’s thing to be outraged by exhaust a lot of people. I’m only semi-surprised that (your?) group isn’t blaming Boeing’s failures on trans people participating in the “wrong” gender of sports.
Additionally, I can tell from their comments elsewhere in the post that they’re definitely not arguing in good faith so this is likely an (pretty bad) attempt to just waste my time. If I were to engage in good they would certainly just post some nonsense or keep asking questions like “How is it wrong?” or “Why?”
Original claim: they prioritized DEI hiring over your safety
What you're now saying: the claim they’re making, which is something like “DEI led to decreased safety” or something
Read again - the claim is that they have prioritized DEI hiring over safety, a claim amply backed up by Boeing's own statements which are very proud of this fact. Employees who were once told to focus on safety and quality exclusively are now told this is no longer their only priority, and now they must focus on recruiting racial minorities and women as well.
There isn't yet hard evidence this policy has led to a concrete safety problem, which is the claim you're now rejecting. But nobody said it had. Only that it's very, very likely to.