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Comment by jamincan | Hacker News Reader

Muilenburg had an engineering background and he was at the helm for the MCAS issues with the 737 Max.

GP didn’t imply that an engineering background guarantees success, just that the lack of an engineering background is detrimental to success (which one could argue against, but you didn’t).

In some ways this whole industry creates it's own problems because airlines don't want to get pay to get their pilots certified for new planes. So Boeing tried to engineer their way out of the problem and hack in some changes to make an entirely new design fly like an old 737-800. Southwest Airlines was a major contributor to this as the largest purchaser of 737s in the world, because you know, god forbid Southwest's pilots had to get certified to fly a new plane once every 50 years.

Airline customers don't want pay more for tickets, its not like airlines are swimming in money to take that on themselves.

They make millions of dollars every year. They can afford the training, they'd just rather have better metrics and not pay for expensive training, just to make the stock look better.

The also spend millions of dollars every year. I don't think many airline companies are actually very profitable right now. Take a look at any airline stock for the last 10 years, they were at a plateau before the pandemic, they are just at a lower plateau after.

I don't know much about US airlines but Cathay Pacific made a record breaking profit this year and they aren't even at full capacity https://www.bloomberg.com/news/articles/2024-03-13/cathay-pa...

They must have other problems then because they are doing more poorly than US-based airline stocks:

https://www.google.com/search?q=Cathay+Pacific+stock&oq=Cath...

That's not really how the stock market works. Also Cathay pays profit to its shareholders in the form of dividends.

It was their first profit/dividend since the pandemic:

https://www.reuters.com/business/aerospace-defense/cathay-pa...

The COVID restrictions here were only removed last year so that makes sense.

From Southwest 4Q and Full Year 2023 results [1]:

> Full year 2023 operating revenues were a record $26.1 billion, a 9.6 percent increase, year-over-year

> Full year net income of $498 million, or $0.81 per diluted share

I'll say again... They have _plenty_ of money (record-breaking, even!) to train their pilots on the differences between two aircraft models. It's not that they can't afford it, they'd just rather not spend the money unless absolutely forced to, because a better stock price is their primary goal/motivation.

[1] https://www.southwestairlinesinvestorrelations.com/news-and-...

They must be bleeding somewhere because their stock is doing horribly. Record profits and yet investors are not optimistic about it for some reason. Also, I'm not sure if we are taking into account inflation? Like I recorded record income this year personally, but I don't feel very rich. If you look at their google page:

https://www.google.com/search?q=southwest+airline+profit&oq=...

Look at March 2023, they are way up until you hit the bottom : operating income is really down and they are bleeding cash like crazy.

> Southwest Airlines was a major contributor to this as the largest purchaser of 737s in the world, because you know, god forbid Southwest's pilots had to get certified to fly a new plane once every 50 years.

I would guess Southwest's goal is more of a staff flexibility thing: if all their pilots are certified to fly all their planes, scheduling could be much easier and more effective. I don't know anything about airline management or pilot certification, but my guess is pilots are typically certified to only fly one kind of aircraft at a time, and don't typically maintain multiple certifications.

However, as much efficiency that strategy may have gained them over the last several decades, it's not one that's reasonable to maintain anymore.

And Jack Welch came from an engineering background.

As much as I sympathize with the notion that engineers make better CEOs, they're not immune to the same influences as everyone else.

No one is arguing it's a guarantee engineers are always good executives. Also looks like Welch was a chemical engineer before GE, so not sure how much of that knowledge transfers.

I highly doubt that an engineer would make a great CEO, but a CEO with no engineering background isn't going to know when what the engineers are saying that goes against what the business people are saying will matter. The bean counters will always be against anything cutting into the profit margin even if that extra expense the engineers are pushing for will actually make or break the thing.

> The bean counters will always be against anything cutting into the profit margin even if that extra expense the engineers are pushing for will actually make or break the thing.

I think they key point is: you can't competently make a tradeoff between two domains if you don't understand both of those domains.

Engineers want to make the best engineered thing, and have a harder time prioritizing costs. Accountants/business types want to make some money number go up this quarter, and will reject good engineering ideas to penny-pinch. Someone needs to be able to (competently) keep both groups aligned.

The biggest issue with what you just said is "this quarter". The shortsightedness of "this quarter" is the downfall. It is possible that for the greatest good in "number go up" measurement, that this quarter "number not go up" is acceptable if it means "number go up" is possible for longer later.

> The biggest issue with what you just said is "this quarter". The shortsightedness of "this quarter" is the downfall. It is possible that for the greatest good in "number go up" measurement, that this quarter "number not go up" is acceptable if it means "number go up" is possible for longer later.

Another problem is the shortsightedness of "this quarter" can actually work for a long time, until it doesn't. People who kick the can down the road don't always realize what they're doing, because they never stuck around to pay the piper for that decision they made. Then problems are easy to excuse as the incompetence of the last guy(s), and the can-kicker can imagine themselves as some great business leader.

I think this is a mass generalization of accountants. Accountants are a wide varying type but the attention to detail is the key distinguishing factor.

The only distinguishing feature of an accountant is that they care deeply that left column = right column. They care that you can track where your money goes, not that every budget is squeezed for profit. In truth, the right accountant might be a boon because she will listen to the engineers rather than think she knows better because she was an engineer decades ago.

She may end up being a terrible CEO, but let's consider our biases here.

Most of these "bean counters" don't even work for Boeing. They're institutional investors and hedge funds who only care about share price. In other words, Wall Street. Boeing's mistake was in listening only to these folks and using share price as their sole success metric. Goodheart's Law took over.

https://en.wikipedia.org/wiki/Goodhart's_law

Capitalism before the late 20th century had as its mantra "Build a quality product. Keep the customers and workers happy and the share price will take care of itself."

Around 1980 that changed to "Bump the share price and to hell with everything else."

Not all engineers care about engineering or quality. Boeing self selects for those that don't

An engineering background doesn't protect from the incentive to squeeeeeeze -- the best you can hope for is that it calibrates the C-suite instincts for having squeezed too far to a level more sensitive than "doors are literally falling off." But that's just hope, and hope vs incentives is a game that, well, has a favored player.

Only meaningful competition does. For example, competition with Comac is not meaningful due to politics, but competition withing the country with Douglas and Lockheed was.

Yep. The Boeing/Douglas merger didn't just put the wrong people in charge, it removed competition. US antitrust is in a sorry state and we are seeing the consequences.

It's a worldwide game nowadays though.

For civilian aircraft manufacturing... Boeing (US), Airbus (EU), and Comac (China).

All of which have varying degrees of state capture.

Maybe that's the nature of highly-compled and -refined products? You only have meaningful competition at the internal level?

Yeah he was at the helm but the engineering occurred before him and he navigated it ok all things considering. He was the most competent of their ceos in the last 2 decades probably

Boeing has declined in quality over the last two decades. They used to be considered great. How could he be the best if their tailspin started around 20 years ago?

All things are relative. A -2 is better than a -10.

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