Boeing and the Dark Age of American Manufacturing | Hacker News Reader

Boeing and the Dark Age of American Manufacturing

theatlantic.com

33 pointsfortran7719 comments

One important factor that the article does not engage is financialization. For financialized business, doing what is says on the sign is only a cover. This of course affects many other industries as well.

Yeah, I was expecting to see the, er, F-Word somewhere around where it said Boeing "slowly but very deliberately extracted itself from the business of making planes."

One thing that I see in my industry is replacement of knowledge with rule based systems exacerbated by engineering degree inflation.

Boeing had all the required systems in place. Even 2x the quality systems they needed.

None if this matters if people are playing legal word games with quality requirements instead of basic engineering. Technically following a rule might win in court, but it wont win over physics.

Three out of four of Boeing CEOs of the last 20 years came up under General Electric's Jack Welsch. These people are actively hostile to engineering and seem to think financial markets are the only truth that exist.

One of the former CEOs called engineers who care too much about quality "assholes" because they don't care about the stock price, so he actively made efforts to chase them off. How can you possibly think that the quality of the products and stock price are completely disconnected?

These people really are the Tommy Wiseau of running a business. They kind of know what it looks like, but get so many details wrong and the end result is completely absurd and doesn't work at all, so all you can do is laugh at it.

Businesses have basically two kinds of products : stock and what they say they actually make. The latter is domain-specific; you always would need an in-house expert as a leader to do it well. Selling stock is more general; an MBA from GE can do it effectively for Boeing or any other company. Thus in a world where CEO's hop around companies at the behest of Wall Street, stock promotion will always get more focus than the actual business. The incentives are broken and since Wall Street won't fix it all on it's own, that leaves Congress, which isn't any better.

Aren't stock price 'just' a performance indicator, all thing considered?

Hence, aren't people always talking about improving the stock price just targeting the metrics instead of focusing on the interesting part?

> Aren't stock price 'just' a performance indicator, all thing considered?

That is a hypothesis from the 1990s. Turns out that incentives need to be better aligned over time than what stock prices can manage

Saying that "incentives need to be better aligned" is like saying that the Sun is more than fifty miles up in the sky: (A) it is technically true, and (B) there are people who don't believe it.

More like whatever someone is willing to pay for it. There is correlation with performance, but it's far far from perfect, especially the kind of performance we're talking about here (long-term technical foundations).

People $4,000 for brand-name Whatever™ designer clothes. It's not really worth $4,000 in any real sense, other than what someone is willing to pay for it.

To be fair, they mention "financial engineering" but your point is fair in that they write of this is as if it was a mistake rather than a result of well-financed operations that would buy companies and squeeze them for assets unless the company drained, subcontracted and so-forth itself.

Yeah, unless one gives a full picture of this environment, that this is how investment works today, all the exposes in the world wind-up just someone crying over their beer about "back in my day, they cared about quality".

"For financialized business, doing what is says on the sign is only a cover."

Well put. The MBA-isation of America is a cancer.

Damn frickin' straight man. Remember that scene in The Founder? "You're not going to run a hamburger business. You're going to run a real estate scheme that happens to sell hamburgers". With the Welchians, they've distilled it down to very nearly its apotheosis: the old Mob trick of insuring a restaurant, selling it down to the plumbing for cash, and then burning the joint to the ground.

Buyin' you a drink.

Sears, at the top of its game, built a tower.

It isn't called Sears Tower any more.

In a moment of decline sears sold it. Because it was a liability, not to the company but to the stock price. Sears Tower was going to be bought at the bargain basement price of sears stock.

Hell all of the robber barons of the 80's (the gordon gekos) were doing the same thing. We're still doing it now with private equity. Only now there's nothing to sell so we're stacking debt on the companies.

You could have an anti capitalism rant here. It would not be productive. Stronger regulation, and different corporate structures are needed (See Mondragon). The latter is on everyone, myself included, CoOps aren't new in America. (See everything between the coast's that involves farming intersecting with CoOps.) We just need more of them in urban areas.

Actually, the test of a true Chicagoan is, "Do you still call it 'Sears Tower' even though that's not its official name?"

I don't live there anymore and even I know that.

I had a finance professor who once did a study that correlated the construction of new fancy new office building with a major decline in stock price. Hubris before the fall.

Counterpoint: Apple

That's not a counterpoint. It's a data point in a statistical correlation.

> You could have an anti capitalism rant here.

Yes

It is so obvious to anybody who looks at the diversity of human societies that mixed economies do much better than pure anything

The proportion of the best mix is a cultural question

I'm not sure exactly what point I'm making here, but I can't help but point out that Sears didn't build the tower themselves. They outsourced it.

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