You Want to Fix Boeing? Prosecute Its Executives
thefp.com
thefp.com
This is at the core of the issue, but as the author points out, it's extremely unlikely to happen.
>The settlement makes it obvious that the government is afraid of what would happen—not just to Boeing but to the Defense Department and even the larger economy—if it hit the company as hard as the company deserves to be hit.
Boeing is very much too Big™ to (be allowed to) fail, and thus the actual individuals who are responsible for killings hundreds of people will walk away and be replaced by another set of people who will know that they can do the exact same thing with impunity.
Long term it's healthy to weed out your garden.
We individually don't regulate these companies but we do elect those who do and we choose to be customers for those companies. Shit rolls downhill, unfortunately when a company is allowed to dig such a massive hole those left standing have to deal with the aftermath of what happened on their watch.
Papering over the problem can seem to fix it for now but it completely misses the root cause. Banks walked away form 2008 largely unharmed in the long run, and more importantly the industry is just as capable today of causing a similarly huge problem as they were then.
If you get rid of the criminals and enforce regulations that ensure quality control and safety, I don't see why you need to completely eliminate the company and destroy all the supply chains they're a part of and jobs they provide.
What I wouldn't want to see is a company destroyed as part of a witch hunt. Boeing doesn't have to be destroyed by any means, they could find a way through it depending on what the punishment is for their actions.
All the current model of Bailouts do is protect the shareholders from having their share value wiped out as a part of the process, and of cause keep up the appearance that the stock market can keep going to the moon(which a lot of retirement funds depend on).
I known that the us chapter 11 is kind of a bad way to do bankruptcy as it don't really wipe out the whole but allows the previous executives way to much of a stake in the process where as other countries replaces the leadership with a bunch of court/creditor appointed outsiders on day one.
Nor can you try to slowly unroll their assets piecemeal on any normal human time-scale, and big parts of the organization's 100's of billions of dollars of value prop are things you can't sell in the first place, like principal arbitrageur status.
I'm not defending the banks here, and in fact this is one of a few large reasons why the US has had such huge conflicts over establishing both a national bank, and national governance of the banks. It begs the question, if these entities hold such a huge portion of the nation's financial destiny in their hands, why are they not beholden to the public?
Where I disagree here is that I don't see a forced absorption being needed if the assets are worth it. There may very well be red tape that needs to be cut or expedited in an extreme scenario, but if a bank's assets are still worth any value another bank will buy them for a price that benefits them. The government only needs to force the acquisition, including financial assistance or guarantees, if the bank assets have no net value.
> It begs the question, if these entities hold such a huge portion of the nation's financial destiny in their hands, why are they not beholden to the public?
This I totally agree with, though I land on the opposite direction. Should entities be allowed to be so large that they realistically need to be beholden to the public? I'd rather see bank protections removed, that would incentivize smaller banks that are inherently more beholden to their depositors.
You don't have to smash the company to bits to achieve it, either. You just have to instill a little personal fear in the C-suite that at a certain point prioritizing profits over lives becomes personal criminal liability.
GM was too big too fail, but fail it did in 2009. Boeing could/should be similar.
If Epstein was found out in the 60s, I think we all know he could have pulled the appropriate levers and eventually walked. SBF got 25 years. Elizabeth Holmes got 12.
Obviously Western justice is far from perfect. I still feel as if we’re trending in the right direction.
That feels like that would apply to half the software I use! Then again, it would describe some of the places at which I've worked. But I'm a software engineer and so I have lots of employment options. What's an aeronautical engineer, an aviation material engineer, or avionics expert supposed to do? They have limited options for employment - and that's why it's important to prosecute the executives.
It's bad for everyone that the DoJ offered a plea deal. I know that's SOP, but Boeing isn't a usual company, and this isn't a usual situation. We need to know what actually happened. Is this truly a failure of management as is being portrayed, or is this a failure of process? Has the complexity of design and manufacturing now exceeded our ability to ensure quality? These are the kinds of questions I would like to have answered and an actual trial would give us a better opportunity to learn the real issues.
There is a way to get around this problem of proving culpability of individuals in large organizations. RICO was a way to go after mafia bosses. Thanks to the revolving door (of politicians, staffers of various committees, DOJ employees, prosecutors), it is impossible for the latter class to use RICO to go after any executive of any large company. Of course, one can say SBF was convicted; here, it was easy to find evidence to prosecute and convict SBF.
It probably wont fix the issue but this kind of non-action is why most people have lost all trust in the American Governments ability to regulate corporations at all.
It's very likely that the current court structure would be extremely reluctant to issue any guilty verdict against a member of the executive class for simply chasing short term profit at the cost of the public good/safety so that this is the best that could be do but if that's true it's basically demonstrating that the technocratic center have lost it's ability to be effective technocrats and that can/will have severe implications for who is considered electable to the point where we might not see another centrist government for a while.
In general, corporations need to be more fragile than people. A corporation can live forever, gathering up resources, eating up the useful work of tens of thousands of people. Corporations can also be born a lot more easily than people.
Making it easy to kill them would actually benefit a lot of people, since the people can be transferred along with their experience to other corporations.
Want to make real culture change at a company like Boeing? You make it easy for Boeing to die, so that the people who have other ideas about how to make planes can do so without a massive incumbent in their way.
That said, I can say that whether the charges would be supported or not I don't think regulators or investigators are willing to pursue it and will happily stop at only slapping the corporation on the wrist.
(With notable exceptions: Apple and Google were silly enough to have the CEOs emailing back and forth. https://www.theguardian.com/technology/2014/apr/24/apple-goo...)
That doesn't stop prosecutors from going after those who did leave evidence behind though. When a company pleas guilty to fraud, for example, there absolutely are people that committed the fraud. A company can do nothing by itself, it definitely can't commit fraud without people making the decisions.
Do you remember when the Boeing 787 Dreamliner kept getting delayed? At some point I thought it was never going to get completed. And then they had to compete with Airbus. Competition is what killed Boeing safety culture.
The original sin of the Max disasters was rushing to make the 50+ year-old 737 something it wasn't meant to be to counter Airbus's success in the narrow body segment.
They do, just via different methods.
https://www.reuters.com/world/highlights-17-year-airbus-boei... has a blow-by-blow summary of the various convoluted WTO rulings on each side's versions.
So, while the EU has certainly supported Airbus, the US government has also heavily subsidized Boeing, creating a complex and competitive landscape in the aerospace industry. This context is crucial when discussing the challenges and decisions faced by both companies.
LLM-generated comment is becoming quite obvious to spot.
On the main topic: Boeing not only received subsidies from the government as stated on the two parent-sibling comments as they've also attempted to kill Bombardier CSeries competition by judicial means in the USA. Instead of providing a better product they attempted to delay Bombardier's sales of the CSeries by starting a long judicial process accusing Bombardier of price-dumping when they didn't have a competitive product.
Unfortunately for Bombardier it was a big blow to their sales of the CSeries, fortunate was Airbus who could pick up the pieces and start production of the jets in the USA to circumvent the main argument Boeing tried to use against them.
> The original sin of the Max disasters was rushing to make the 50+ year-old 737 something it wasn't meant to be to counter Airbus's success in the narrow body segment.
Completely due to mismanagement of Boeing's product line, they lost against Airbus A320neo/A321 and Bombardier CSeries, they weren't competitive and didn't have a product in the works to compete. Against Bombardier they tried their dirty tricks, and failed.
It's all on Boeing, they rushed a subpar product in a panic because of their own failures to read the market, in the process killing hundreds of people.
Boeing (and Airbus) is a massive corporation with a large market position. Why do they need government subsidies at all? Is the business, or a specific product, not viable? If they aren't viable, why should the government continue to prop them up?
Boeing and Airbus are the backbone of civilian aviation, if one was to falter there would be a massive gap in the market until a new entrant would be able to create a good enough product to fill it, during this period a shortage of planes would have cascading effects through many other industries.
The theory of an efficient market doesn't consider the in-betweens where these gaps can exist, in the long run an efficient market would stabilise itself but who is supposed to suffer the pain of a market failure until it stabilises itself when that can take decades? Government is the way humans have found to collectively act on those gaps, it's not the most efficient way per the free market utopia but it's necessary to dampen market swings when they happen.
This applies to many other industries, it's naïve to believe that no company should have support, it's also unfair in the general sense that some get it. It's a trade-off and finding that balance is where complexity hides away, just trying to shove that complexity away from a spherical cow model of the economy is not realistic, it's pure dogma.
Companies will expand, and spend, to fill whatever space they are given. If a government poor's money into the industry they will find ways to spend it. A company is ultimately trying to maximize the capital it has, sitting on profits and paying the taxes that go along with it don't do the trick.
Markets are much too complex to say what they would look like after removing subsidies, but with something like air travel it absolutely isn't a necessity that must be protected. Travel is great and all, but it isn't as fundamental as food, water, or shelter.
You need to actually prove with evidence actual wrongdoing on their part as a person. Or at a minimum prove that they failed in their fiduciary duties - a frustratingly murky concept.
Innocent until proven guilty, burden of proof etc all still applies.
Some general sense of well you were at the helm and everyone is angry thus you go to jail isn’t going to stick legally.
That’s not to say I’m against it, if they can manage to find suitable evidence they absolutely should. Just saying the article is big on emotion (rightly so) and thin on legal basis.
This is as true now as it was during the financial crisis. The most they will do is toss an engineer following orders under the bus like they did with Volkswagen.
Update: Perhaps the thing with Shkreli is that he did something pretty egregious that was drawing heat from the commoners, and to the rest of the upper class, he's a foreigner with a funny name who grew up poor and has vulgar tastes. If you have to give up the occasional sacrifice, better someone like him than your old roommate from Phillips Exeter.
I reckon if any of the Boeing execs responsible for the crash made waves at outrageous parties or went on TV and bragged their crimes with cocaine still up their nose then they'd probably get grudgingly thrown under the bus too.
It mirrors the way Prince Andrew was coddled until he did that idiotic interview and then the royal family decided to downgrade him to "still fully protected from criminal prosecution" but cut out of the family business.