So they spin off core manufacturing to a supplier and then squeeze them for pennies instead of concentrating on operational excellence and quality.
They whip their test engineers until they pass a product instead of learning lessons.
etc etc. Yes, this is all about incentives.
After acquiring McDonnell, Boeing went on a spree of divestments where parts plants that supplied them were spun off into independent vendors. One of the biggest of these is Spirit Aerosystems, which provides the fuselage assembly for the 737.
The divestments were specifically motivated by improving short-term profitability of the company, in the classic "sell it and rent it back" mode that's particularly in mode with private equity.
By all accounts quality control at Spirit Aerosystems has suffered since, with Boeing having relatively little leverage in improving this state of affairs (one may argue that it's not terribly interested in improving the state of affairs).
As far as we know the aircraft that kicked off this crisis was delivered from Spirit with an incorrectly installed plug door (more specifically, the bolts that secured it from opening were not installed at all)
Sure, not everything is corporate greed, but there's a really bright and direct line here between the financialization of Boeing in the mid-00s and this specific crisis.
What problems are you referring to?
But I dont think the comparison makes much sense.
Funnily, even with NASA's example, we have several instances of Boeing screwing up everything in favor of short term gains. ULA had to be 'forced' into existence by the government, because Boeing was caught conducting espionage on Lockheed Martin and was at risk of getting barred from government rocket launches (which would've left the US with only one launch service provider). They also tried to amend their bid on the Artemis lander competition, potentially after having info on others' bids leaked to them by a NASA insider. They forced ULA to severely limit the capabilities of Vulcan to not make SLS unnecessary (even tried to get people fired for it). Then, of course, we have the ongoing engineering disasters of SLS and Starliner.
I'm also not really sure how NASA fits considering that they have no monetary profit motive. They subcontract everything because that's just how the government does most of its procurement.
What is the evidence of that?
Certainly there's every reason to believe that they exceeded requirements by a lot: NASA not only has an astounding successs rate (in the most challenging engineering and manufacturing challenges in human history) but their missions tend to last far longer than the specifications. Voyager 1 and 2 are still flying, and so is that helicopter.
In fact, is there any organization ever that is a worse fit for the description, "did the bare minimum to meet requirements".
For an interesting description of how NASA engineering and budgeting actually work, here's someone from JPL (for a bit more, see other comments from the same user):
* The Space Shuttle - a death trap and reusable in no practical sense. Refurbishment involved near rebuild of large components. Often used as proof about how reusable rockets were not financially viable prior to F9's reliability.
* SLS (ie the rocket to nowhere) - too expensive and too slow to build to be worth using unless literally mandated by law. Is too rough of a ride, Orion's screens had to be modified to flicker in sync with the vibrations so that they would be readable. Congress (in blatant bias towards Boeing) attempted to mandate Europa Clipper to launch on it instead of Falcon Heavy, only backing down when told that they'd have to give Clipper an extra $1B (in addition to the $3B for an SLS launch) to make it able to handle the conditions imposed by SLS. Continues to be a burden on NASA's budget by eating up funding for other projects.
* Vulcan being forcibly neutered down to the bare minimum functionality needed to sell national security launches, because the original proposal would've reduced costs and removed the one existing need for SLS. They were proposing an upgraded second stage which would be able to be refueled in orbit and would've been able to carry Orion. Boeing tried to get the designer of that component fired. Also has the bare minimum to be 'reusable' by having an eventual goal of detaching the first stage engines from the body and splashing them down via inflatable heat shield. Basically does just enough to be a minimum viable competitor to F9 in national security launches and nothing more.
* Starliner with its initially poor software, stuck valves, fire resistance system that actually catches fire and parachute issues. Here Boeing got NASA to pay them extra money on top of the agreed upon fixed-price contract, holding domestic access to the ISS over them. Also tried to get SpaceX's contract cancelled and that money also awarded to themselves for no additional changes. The vehicle is designed for the bare minimum required for the contract (only 2 being built), with no interest in separate commercial activity the way Dragon is used in.
* JWST (ie the telescope that ate astronomy) - massive delays, budget overruns and serious failures in testing which caused another ~5 year delay. It was nicknamed "the telescope that ate astronomy" due to the budget overruns, which harmed several other telescope projects.
* Hubble - the work done directly by NASA was mostly fine, but contractors had large cost and schedule overruns, with the mirror issue due to a failing contractor and Lockmart facing cost overruns + not taking the initiative with designing the spacecraft for the telescope.
There is a heavy Boeing bias here since the main culprit in half of these examples is Boeing. But at the moment these were the main cases that came to mind.
The sad thing about these cases is that the early excuse for not taking risks with new companies like SpaceX was that they didn't have spaceflight "heritage" and couldn't be trusted to not cut corners in important places, with the implication that the established companies would be charging less if they could without compromising safety/quality.
I'll concede on JWST, but with Hubble there was a whole investigation that found the contractor's poor internal management was at fault.
The point is that subcontracting is not the problem.
This isn't default bad. Do you build everything at your company, or buy some things? Specialization can be a boon.
>with Boeing having relatively little leverage in improving this state of affairs (one may argue that it's not terribly interested in improving the state of affairs).
One might argue that Boeing isn't interested making sure their planes are safe? Absurd.
When you've outsourced the supply chain, personal responsibility is washed in a sea of lawyers, managers, buyers, and other personnel - the incentive to do your job to the 80-90% of completion and no more is extremely strong as it makes everything look better over the next 2-3 years.
In theory, you can pivot the entire knowledge "supply chain" to a different problem in 1-2 years in this manner. Shifting a contracted supply chain could take decades if it was even possible.
You seem to be under the impression I'm arguing a point that isn't in the text of my post. It's not material whether this is "default bad" - what matters is that it was bad in this specific instance.
The claim isn't "all outsourcing bad", the claim is a very specific "Boeing's outsourcing of these specific parts directly led to the safety crisis the company is facing now".
This is particularly salient as pre-divestment, what is now Spirit, did not have a notable QC problem. Boeing has in the past faced safety crises over the design of its aircraft, but not their manufacture.
Not everything is a proxy argument. If I mean my argument to be generalizable, I will state it clearly rather than leave it up to others to impute.
* There's a meaningful market for the components you buy
Does Spirit contract out to Airbus and Tupolev to build THEIR fuselages too? Are there other companies that could reasonably bid for the 737 contract? It feels like there isn't a real market here; they just divested a captive supplier for paperwork reasons.
* The stuff you're buying isn't your core competence
Sure: buy the fabric for the seat covers from a supplier. Hell, buy the whole seat. But airframes are sort of Boeing's core competency-- too much of the business rides on them to put them at arm's length.
Short term profits is what matter to the elite in these conglomerates.
Their stock bonuses should just have a 10 year lag or something. That would align their incentives.
And how could Airbus be more fierce?
That is not true. Long-term profits are by far the best thing for the owners in a corporation. See: Berkshire Hathaway.
What happened here is someone got to be in charge who did not have the brain to do the job.
When you see short-termism among CEO's, that's either due to
a) owners not aligning the CEO's incentives correctly due to the owners' negligence or stupidity, or
b) the CEO does indeed have the correct incentives, but is stupid.
Boeing profits have cratered since 2019: https://valustox.com/BA
If they focused on making great planes with reasonable R&D costs, everyone there would be vastly better off financially.
Just skimming the wikis for Boeing, the 737 MAX, and the A320neo it looks like Boeing’s downfall should largely be attributed to McNerney. Mullenberg is guilty of shipping a doomed product and botching the response to the subsequent crashes.
The idiots cut corners and didn't even save money!
It is genuinely important for big corporations to have owners with a very long investment horizon who are involved in corporate management. People who are planning for their great-grandchildren are essentially trying their best to set up a company that can last forever.
Aircraft development is hideously expensive. 787 development cost Boeing $32B, and is part of the reason why airlines pushed Boeing not to replace the 737 wholesale.
HackerNews seems to hate companies maximizing profits, but loves when people like Elon run roughshod over shareholders. I don't get it, either.
It's galaxy-brain stuff to believe that Boeing's biggest holders decided to make a few extra bucks in one year, and sink the 100+ year-old company the next. Versus, say, your theory that it's a multitude of issues relating to corporate rot.
There are multiple competing levels of profit maximization:
Short-term vs long-term
Personal vs. operational
Cheap vs. expensive
Easy vs. complex