It's Time to Nationalize and Then Break Up Boeing
thebignewsletter.com
thebignewsletter.com
In the American system, the gov should assess punitive fines for regulatory failures, revoke self regulation privileges, and impose consent decrees on company behaviors.
The combined impact of these actions would cost Boeing billions which would result in shareholder action to replace management.
Perhaps the gov should also investigate willful neglect on the part of management. If it’s found that engineers complained about policies for reasonable safety concerns and management ignored them, then personal liability, perhaps even criminal, would extend to the directors and executives.
I don’t know how much of this would happen, or be found guilty in court. But I do hope this isn’t just another administrative slap on the wrist like 2019.
Boeing is just too integrated in too many places to interfere with. The governments of both Republican and Democratic states would need a comprehensive agreement to even consider making small moves on Boeing. Thats the issue, the biggest fight isnt with Boeing itself but the stake holders and beneficiaries. Boeing are very astute when it comes to business, they covered their bases well long before this drama started.
Maybe no one has the guts to take proper action.
... yeah, no one has the guts.
Why? I'm on board with punitive fines, but why should the government be in the business of being a babysitter to these spoiled executives. If they can't do their job without committing crimes, send them to jail and break up the company if it's too big to fail.
>If they can't do their job without committing crimes, send them to jail
I'm getting mixed messages here. So you want them to be the Government's problem or not?
So if your goal is to not have governmental babysitting, are you advocating the death penalty for corporate crimes?
It's a false dichotomy dressed up as something else.
It would make more sense for the government to Engineerize.
Maybe mandate qualifications for executives of certain types of engineering companies beyond a certain size.
Looking at the fundamental engineering tasks that are under the umbrella of the chain of command, each entire chain from task to top executives should be composed of engineers having deep experience starting at the lowest levels of task performance.
Where outstanding task performance, engineering ability, and experience can be crafted to overcome the sad situations where corporate ladder-climbing is instead favored to allow those without proper engineering ability to end up making important decisions.
IOW if the tasks were design, manufacturing, and maintenance, each of those departments would be headed up by the best leader in the company at that particular task. Maybe a 10-year time frame, from first progress as task operator to leadership at this level.
Before being laterally transferred to an adjacent department which retains its established leader, and the transferree retains their title and pay while actually having to spend some time performing some of those entry-level tasks for familiarity before being mentored back up the leadership chain in their new department in a much fewer number of years. Before further being given the immersion treatment within another key department.
Enough of this and you've got the company's best leadership candidates having the deep and broad capabilities to lead the departments all together in a combined way.
And eventually the top executives will be people like this and no other.
The best the company has to offer, proven from the ground up.
For some types of engineering where the business follows the design, manufacturing, maintenance progression, it might be ideal for some promising new engineers to start in maintenance, then move through manufacturing, then design. Which is in reverse, but that might be one of the ways to get the best designs more consistently. Provided this type of engineer has what it takes to be an outstanding designer to begin with, and from the start visualizes how each of their non-design tasks will be able to leverage their future design efforts to no end.
And each of the leading engineers should have appropriate managers working under them to handle the non-engineering staff needs.
Anything less and you're fooling yourself.
If there were only some kind of national aeronautics administration within the government that had enough qualified engineers to oversee something like this for Boeing.
It might just get off the ground.
The problem is that successful companies converge towards regulatory capture to maintain their advantage - this includes buying up all competitors in order to maintain cartel/monopolistic market positioning. Look at Ma Bell. It was broken up. It slowly reconstituted its old self - albeit in a more competitive, less monopolistic landscape.
Boeing, like the too big too fail banks, like the airlines during Covid is already quasi-nationalized. Perhaps we should make that relationship explicit and demand divesture of business units in order to increase competition and transparency.
The conclusion does not follow from the premise. Has the QoL nosedived in NJ because the tech industry is dominated by California?
A better question may be, has QoL nosedived in the rust belt because the tech industry is dominated by CA?
> if the US limits size of it's companies the world will be simply dominated by Chinese/European companies and the QoL of life for ordinary citizens would nosedive.
Spell out why you think this. The US has done antitrust and regulation before and it was great for the middle class. Life seemed fine for Europeans last time I was there, despite existing in a world with US megacorps dominating their markets.
Maybe check out e.g. years 1688, 1775, 1779, 1848, 1917, 1947, 1953 and 1989 for some ideas?
One interesting observation I have is that in Europe, a career at Airbus is competitive with the other industries for talent, due to the relatively lower salaries at big tech and even lower at others. Whereas if you are in the United States, a job at Boeing or in Airspace is mostly not competitive with the tech options (even for a non tech job). SpaceX is doing well, but SpaceX compensation is better due to stock options and hiring is easier due to the Elon cult of personality/or the SpaceX mission.
At any rate the biggest reason Boeing salaries are lower is because they are the only competitor. The reason why silicon valley companies pay so much is because they're all competing for talent and the talent has optionality to go down the street and get paid more.
SpaceX is a private company so no, the stock options are not the biggest pull there. Hiring may be easier due to strong leadership but that goes without saying.
Also fwiw my wife left a 10 year aerospace career, moving from NASA to Google, largely for comp reasons. She was a structural aerospace engineer, now she’s a data scientist.
Whether Boeing has competition or not is not relevant if Airbus salaries give their employees a better life and help them to recruit better in the european talent market.
SpaceX does a private company version of stock options though, and Elon frequently cites this in his mails to employees on why they are not hurt by the company not being public.
There isn't a need for nearly as many aerospace engineers as there is for software development, so whatever the market works out for that is fine. Nobody is talking about mechanical engineers at Tesla, Ford, GM, Toyota, etc are not doing the same thing nor is anyone blaming silicon valley for a lack of talent in those companies. Absolute scapegoating.
Airbus and Boeing being located on different continents hardly compete for the same talent. Boeing's problems are almost entirely at the leadership level, not at the lower or mid levels. Everything else is downstream of that.
No, SpaceX cannot give out stock options because if they give equity to too many people they will be forced to go public, which Elon has said he doesn't want to do. After 2500 people own a company's stock, the company has to IPO. They just pay well.
https://www.quora.com/How-many-shareholders-are-allowed-in-a...
edit: It seems that the 2000 shareholders limit (not 2500) doesn't count employees: https://www.quora.com/How-many-shareholders-are-allowed-in-a...
Which is why many large private companies have special purpose entities for employee ownership and the like.
https://en.wikipedia.org/wiki/Airbus
Europe created Airbus by merging different companies, but the US should break up its only competitor?
If that said competitor is not behaving, and abusing its status as a de-facto monopoly, than yes, the US should break up that competitor.
It's not like Boeing is a book store or a video game developer which has little risk to society if things go belly up - it produces critical transportation infrastructure that can kill people if something goes wrong. That's a responsibility to not be taken lightly, and a track record of Boeing management ignoring safety checks and guidelines because it would cause shareholders to lose a bit in the short-term is just is irresponsible.
I completely agree, I just don't think that more competition is necessarily the solution here, and that's the point of my example. Airbus is a trusted company, and it was created through merging different companies, through removing competition.
Industry can't M&A its way to a monopoly and then use the power of the monopoly to say "we get to do whatever we want". Great power, great responsibility and all that.
https://en.wikipedia.org/wiki/United_Aircraft_and_Transport_...
What are those forces exactly, in a defacto monopoly? Building huge jets takes so much money and know how buildup that only nations and maybe the top 5 or so companies could pull it off.
Regulatory measures are what can force bean counters to respond.
The airline industry has already been nationalized once before. I don't think it was the end of USA.
"Just look at <X> country" is also a really poor, unintelligent argument to make.
This is not a serious analysis of history. Besides, a large number of countries (e.g., Sweden, Norway, France) have more public ownership of corporations than Argentina.
Is this "better?" I don't know, but for an extremely large, capital-intensive, national security-critical industry, it might be the least bad solution (and no, I'm not a socialist).
And how exactly that privatisation is at all related to fascism? The argument is totally irrelevant. Let's turn this on its head: Most of American corporations are privately/publicly (and not the government) so does America right now look like Nazi Germany?
Yeah, I did miss it rather did't even know this convention. :)
If 1 in a million odds are going to scare you off a plane, you shouldn't be flying anyway. The response by the regulators is a waste of time and money. Let alone trying to remake an entire company as this article title calls for.
Maybe a call for people to get a $ discount when flying on a 737 Max as hazard pay would be reasonable.
You're also ignoring how humans react to such things. If people learn that a specific make of planes is much less safe, they're going to refuse flying that plane. I sure as hell wouldn't want to fly the "more dangerous" plane just to save some money.
(2) Am I not a human any more? What do I count as? Flying in a 737 Max is safer than getting vaccinated, I think the Astra Zenica clotting thing was about 50 per million and that was the one I got. We were forcing people to do things that were an order of magnitude more risky than this where I live. At least with a 737 if you don't want to get on one you don't have to.
You can round small numbers. There isn't much of a difference in practice between 1 in a million and 0.1 in a million fatal risks. The odds of it biting you are almost literally 1 in a million.
This thread started with you talking about an order of magnitude increase. Any notion that the management of Boeing is interested in anything other than the short term stock price is deeply naive.
> At least with a 737 if you don't want to get on one you don't have to.
Provided you are rich enough to walk away from a plane ticket at boarding time when the airline switches out your carefully-booked Airbus flight underneath you with no recourse (usually - some airlines are more flexible with status).
That is the effect that will cause Boeing management to do something about the safety problems. Or the airlines to do something about the plane safety. I dunno, someone would do something, these plane crashes are expensive and bad PR.
> Provided you are rich enough to walk away from a plane ticket...
If you have enough money to hurtle through the air at a million meters per hour in a tin can, you have enough money to walk away from a plane ticket. I don't think I've even seen homeless people in an airport, let alone on a plane. Flying is a luxury good.
And yet, here we are, it hasn't. The fact you can't get an Airbus for love nor money for the next decade doesn't help either.
> I dunno, someone would do something, these plane crashes are expensive and bad PR.
They are indeed. Largely for Boeing rather than the airline, at the moment.
> If you have enough money to hurtle through the air at a million meters per hour in a tin can, you have enough money to walk away from a plane ticket.
Horse shit.
What do you mean, here we are? They'll be fixing issues. I don't think there is any argument that airlines get safer over time.
> Horse shit.
What % of humans do you think have flown in a plane? What % of that have needed to fly in a plane? This is a luxury good.
Flying got safer because of a combination of regulation and competition. Now the regulatory bodies are fully captured and the only competition has an order book so full you can’t get a plane for a decade.
Meanwhile the enshittification via financialization of Boeing is complete, and we are starting to see the results.
Whether or not flying is a luxury good is irrelevant if your options are to fly in an unsafe plane or lose your family vacation. In Europe, flying is usually cheaper than a train between any sufficiently distant points. For those living on different continents to their family it is a necessity, so I couldn’t care less about your characterization of it to be fair, especially given how wrong you are about market forces.
If you're not using previous performance to guess at future performance here, then a reasonable assumption would be that Boeing 737s perform at industry averages. All the known issues will have been fixed and the planes checked for other ones.
> For those living on different continents to their family it is a necessity,
It literally isn't.
And if plane flight vacations aren't a luxury, what is? Are we going with a luxury being anything that you can't afford, perhaps? If everything you can afford is a necessity then I can see this line of argument making sense. And I don't know many poor people with family spread over multiple continents, that tends to be a marker of relative affluence in my experience (much like plane flight). If you feel a need to walk away from a luxury, you can. It doesn't hurt.
The problem is one of quality assurance not quality control. The known issues can be fixed, but one can practically guarantee given the current Boeing approach to engineering that there will be a lot more. And to discover the issues in the first place is often either fatal or a near miss.
> And I don't know many poor people with family spread over multiple continents, that tends to be a marker of relative affluence in my experience (much like plane flight).
Recent immigrants to a country are the most likely to be poor, and simultaneously almost definitionally will have family a plane ride away.
(1) Not but two posts ago you were pointing out that past performance is not an indicator of future performance. This is an area where that applies; airlines remediate defects after they are uncovered.
(2) Unless you are suggesting Boeing has an intentional criminal conspiracy afoot to sabotage the planes, they can't be crashing at an 'increasing rate'. The rate will be either roughly constant or trending downwards.
> but one can practically guarantee given the current Boeing approach to engineering that there will be a lot more
You can't. There have been more than half a million flights by these machines; we've probably already seen everything that is happening at a one-in-a-million frequency, and even if we haven't we've probably seen most of them. There are 1-2 other issues lurking tops and there might not even be that.
> Recent immigrants to a country are the most likely to be poor
Not if they're flying planes around; if they've got enough money to do that they've established themselves and have opportunities for savings that put them ahead of the vast majority of families. The people who are poor come and go by foot.
Causing metal to float through the air is an energy-intensive and hence expensive activity. While I'm sure you get the occasional poor person on a plane, the vast majority of flyers are affluent people who have access to a bit of luxury.
That's a false equivalence because the choice wasn't between exposing yourself to the risk due to the vaccine and exposing yourself to no risk; it was between the vaccine risk and the risk of a COVID infection.
Why not?
It's the same reason that the telco duopoly is worse than municipal telcos.
There should be a range of regulatory/policy actions that could be taken with nationalization being the most extreme.
Just like the banks are regulated by FDIC so can be Boeing. They’ve done great things before and they can do it again. You “just” need to figure out the right incentive structure.
If regulating it doesn’t help, throw some billions into establishing a new Boeing, the US has a history of establishing new industries based on national priorities- most recently with the space industry, before that was the semiconductor industry, etc.
that's a good example, because when the FDIC runs out of regulatory measures it can apply to correct a problem, they have the option of nationalizing a bank to reduce the harm that can be caused. like we saw happen this spring with SVB.
In that case nationalization isn't like argentina, which everybody in this thread seems ot be jumping to. it's a corrective measure to prevent a collapse, where the government takes over keeps things running until the assets can be sold or otherwise transitioned to owners who will handle them better.
How's that? What private company outshines, say, NASA (especially in its glory days)?
After all, no one yet outshines their glory days of building classic planes and building the SaturnV?
Just like how the "glory days" of many nations or many companies are when they're unsustainably burning resources for a short time for the sole purpose of glory. To me quality implies sustainability.
Sure, except:
- First spacecraft to detect/study the Van Allen belt
- First solar-powered satellite
- First polar-orbit satellite
- First photograph of Earth from orbit
- First satellite recovered from orbit
- First spy photos from space
- First aerial recovery of an object returning from orbit
- First great ape in space
- First pilot-controlled space flight
- First successful planetary flyby (Venus)
- First spaceplane
- First reusable piloted spacecraft
- First geosynchronous satellite
- First geostationary satellite
- First piloted spacecraft orbit change
- First successful Mars flyby mission
- First rendezvous of manned spacecraft
- First spacecraft docking
- First direct-ascent (first orbit) rendezvous
- First (and only) human orbit of the Moon
- First (and only) humans to land on the Moon
- First spacecraft to orbit another planet (Mars)
- First spacecraft sent on solar escape trajectory
- First spacecraft to enter the asteroid belt
- First Jupiter flyby
- First Mercury flyby
- First Saturn flyby
- First untethered spacewalk
- First Uranus flyby
- First Neptune flyby
- First Pluto flyby
https://en.wikipedia.org/wiki/Timeline_of_the_Space_Race
https://www.nasa.gov/wp-content/uploads/2023/12/o51254593.pdf
https://en.wikipedia.org/wiki/Timeline_of_artificial_satellites_and_space_probes
https://en.wikipedia.org/wiki/Explorer_1Who was focused on vanity projects?
I'm not sure if the author used 'nationalize' in the title to be provocative, but if so, given the comments here, it seems to have been an unfortunate choice.
If it were actually nationalized that would be an improvement. But then there would be no need to break it up.
Sadly, yes.
Maybe chunks of BDS, later, after people are actually for-real prosecuted, you know, instead of yet another tax[1] on the shareholders who have absolutely zero power in the organization. Yet. Another. But talking about this right now? No.
I have a Wierd Al style parody of Bowie's "Starman" in my head, except it's called Straw . .MAAAAAAAN . .
[1] That's all the big fines are, incidentally. Moves the risk of bad behavior to the lowest tier of stockholder. Very often lower-tier Boeing employees.
991 times for a total of $635B
https://projects.propublica.org/bailout/entities/927-east-en...
Please don't do that. It makes your argument look very weak, and it's not polite. We're here to have a discussion, not attack people.
Second, you can't even articulate what my argument is (how do I know that you can't even articulate what my argument is? because I haven't made one, all I've done is ask for more information about yours), so how can you call it weak?
Third, you still haven't answered my original question: what is the last company to receive a bailout under your definition? More broadly, you haven't articulated what a bailout even is. It's telling that you haven't: you're not interested in a discussion, you're interested in making a political statement.
https://projects.propublica.org/bailout/main/timeline
which clearly shows this is the last company to receive a bailout (Harbor Bankshares Corporation)
https://projects.propublica.org/bailout/events/list/2022/8
A bailout is defined as
" We're tracking where taxpayer money has gone in the ongoing bailout of the financial system. Our database accounts for both the broader $700 billion bill and the separate bailout of Fannie Mae and Freddie Mac.
For each entity, we provide a “Net Outstanding” amount, which shows how deep taxpayers are in the hole after accounting for any revenue the government has received (usually through interest or dividends).
Companies that failed to repay the government and resulted in a loss are shaded red. You can see a list of those investments here. All other investments either returned a profit to the government or might still be repaid. Recipients of aid through TARP’s housing programs (such as mortgage servicers and state housing orgs) received subsidies that were never intended to be repaid, so we don’t mark those as losses.. "
So the lines marked in RED are where money was given to a private company and never repaid. That is an outstanding "loss" on a bailout.
Indeed, looking at what you believe to be the "last company to receive a bailout" we can see that they were bailed out in 2009. The August 2022 event that you believe to be a bailout is, as the description aptly notes, a "Partial Repayment" of their bailout from 2009.
To be honest, it seems like you have no idea what you’re talking about. Almost like you're just reciting some stupid Twitter/Reddit talking point that you agree with but don’t understand beyond "Arghhhhh I hate big corps! The system sucks! Corporations privatize profits and socialize losses!"
You said that already, verbatim.
Saying the same thing over and over does not help move the discussion forward, and is utterly pointless.
Do you want to have a discussion and exchange ideas, or just attack my ideas? So far you have shared none of your own ideas. Why is that?
Starting in 2008 GM were dispersed $50B dollars. As of today there is still $11.3B outstanding.
GM gross profit for the quarter ending September 30, 2023 was $5.356B (so roughly $20B a year). Do you not think GM should have to pay back some of that outstanding $11.3B ?
https://www.macrotrends.net/stocks/charts/GM/general-motors/...
You don't think American society would be better off if taxpayer money was used to benefit tax payers instead of private companies so they can pay their CEO $38.9 million dollars a year?
https://mywage.ca/salary/celebrity-salary/mary-barra
What is your definition of bailout? how does it differ from the site I linked? do you think they are not problematic? (if you share your thoughts and input I will learn something and be better educated as a result, rather than just continuing to attack me as a person.)
We definitely can’t afford to operate other industries the way we operate the military, which consumes 15% of the annual budget.
[1] https://www.propublica.org/article/train-derailment-long-tra...
Boeing is one the poster children for that. Costs would definitely be saved if there were more defence and aerospace bidders and engineering cultures, and Boeing couldn't rely on military pork to keeps its enshitified commercial arm in the air.
In fact if I were in some kind of gov procurement position I'd be looking very hard at the quality, costs, and reliability of Boeing's military projects right now.
Its premise is actually that it’s essentially a government run entity now, and that’s what needs to change.