Boeing workers vote to strike
washingtonpost.com
washingtonpost.com
No hate if they are optimizing for that, unions don't exist to serve corporate culture. Just want to be clear-eyed about what the union is seeking and (potentially separately), what it will take to make Boeing an American great again.
I wouldn't be surprised if a machinist used to be able to go home, proud of the work they have done, and now, it is not so.
It had gone up almost 10x from 2010 to 2020, then they got hammered by the obvious.
The S&P 500 is worth 5.4x over the same time period. There might have been some enthusiasm back in 2018, but in the past 5 years they've definitely underperformed.
Let's not be naive here. People are going to strike on what they are incentivized to strike on. Not the goodness of their hearts.
Is child labor good for the economy? Maybe short term.
Are 16 hour workdays and subsistence pay good for the economy? That doesn’t make good consumers out of the employees.
Unions exist because people were subjected to brutal conditions and it seems very unlikely to me such conditions were conducive to a healthy economy.
Sod people. Won't somebody think of the LLCs!!!
The sheer impudence of workers demanding money for their work and whining about rent.
There are shareholders over here who don't even have a megayacht to sit around on all day.
"American dynamism" is hot right now and there should be ample funding available. Lots of the old dinosaurs are being nipped at by nimble upstarts like Anduril.
It's very natural that any company be subject to scrutiny – this doesn't mean that you shouldn't set up a company or that the environment for setting up a company isn't favourable.
Supersonic travel is expensive and environmentally unfriendly, and it will probably always be, because it requires more energy, because physics. All that for the minor advantage of saving a couple of hours on select flights. What it means is that it is a privilege for the wealthy (because it is expensive for what you get), at the expense of everyone else (because of the environment). So of course it is going to be unpopular, except to the wealthy in question.
It doesn't mean Boom can't be successful because the public opinion is negative, if the rich can pay. I am still not convinced though, after all, Concorde didn't fail technically (and it still flew after that one accident), it failed commercially. Boom is not taking the easy path here, since it is a technically hard problem with a dubious market.
If it's only for the rich then the prices will be high. Meaning the capitalist mechanism of resource distribution will be even higher (more paid by the rich received as income by the non-rich). It will also take demand from existing airlines making fares lighter for everyone else. It also employs people. It also drives technology forward. And ultimately it does let people travel in less time, and why wouldn't we want that? To some extent emissions are not as bad as you'd think since they are being emitted over less time in the course of a shorter journey. Success in this category will also drive competition in every metric and work to bring cleaner, shorter flights to everyone over time.
There is a lot to love about the idea of supersonic flight.
That's not how airline economics work. The first class passengers (the ones who could afford to leave for supersonic) subsidize the economy seats[1]. If they left you would probably see worse prices, worse amenities or both.
There are airlines that don't have business or first class seats (e.g. Spirit), and they're generally a terrible experience.
[1] https://www.wsj.com/articles/first-class-vs-coach-a-game-of-...
If all your focus is on those premium passengers, then you don't need as big an aircraft, and you end up with things beginning to approach JSX's (https://www.jsx.com/home/search) mode of operations.
Emissions are usually compared in amounts per passenger-kilometer.
If you are not, then you are probably not making the right comparison. Supersonic travel will absolutely not be for those who are flying economy right now and complaining about reclining, legroom, and crying babies. The kind of things that make flights feel very long, and yet, that's how most people fly despite much superior alternatives, because it is cheaper.
Judging by how much it cost to fly on Concorde, it is reasonable to assume that a supersonic ticket will be equivalent in price to first class, or at least a very good business class.
It means a seat that can recline 180°, good enough to sleep on, an internet connection suitable for remote work, as I expect it to become standard in the near future, a decent meal and some privacy. In these conditions, saving a few hours may not be as desirable as it is in economy class. Knowing that in order to shorten your trip, you will be sacrificing some of that comfort, or pay even more, maybe getting close to private jet territory.
I have always traveled coach, and should I fly first class, I would definitely want my flight to last as long as possible, for the experience, but I guess the novelty wears out.
But 500 flights is crazy, one flight every 10 days for 15 years... I certainly understand why you would want to fly supersonic. But now I am curious... why would someone fly that much with the remote communication abilities we have now? I heard that in order to do business in Japan, it is important to be there, so I guess that if you want to come back home sometimes, it is hard to avoid, but still, that's a lot of time flying.
1. The remote calls have gotten better but 15+ years ago not so much. 2. Timezone and remote calls are hard. 3. Face to face is very important to be able to build understanding and also judgement (you need to read the room, which you cannot do over a call). 4. Building relationships requires time not in a meeting, dinner or drinks with a client. 5. Having a relationship with your local team requires the same. 6. In Asia the foreigner flying moves the needle. It is a sign of respect for the customers that you value and will support them. 7. Languages. Unless you are fluent in the local language remote meetings are difficult. 8. Nature of the company. Im my case all 3 companies were startups. They are a risk for the customer. Your willingness to be there helps them feel more comfortable with the risk.
Durning the pandemic there was no flying of course and it was great to be home. I now have a new startup and we just started doing business in Japan at the start of this year. I have hired the same local team that I have worked with at 3 companies. They are amazing! However by the end of this year I will have visited 6 times. Reestablishing the connections lost durning the pandemic has already moved the needle enough that it will materially affect the success of my startup. To be fair, come next year I do not feel I will need to visit every month, but once a quarter is going to be required.
For me cutting flights times in 1/2 is a major win.
As to first class, yes the novelty goes away. It is just another segment of a very long day.
Don't know where this so-called efficiency should come from, but this is a statement that doesn't seem to be based in reality.
Except for the techno-bro startup take that the incumbents are so imbued with themselves that they dropped the ball, which rational explanations are put forward to explain how the current manufacturers are doing a bad job?
To fly at Mach 2 (or 1.8 as boom now seems to be targeting once they realised the difficulty of the task ahead) you still have immutable laws of physics you need to overcome, and that's going to cost an unreasonable amount of fuel.
That's international flight in general.
If Boom wants respect, they should merge with Sergey Brin's LTA Research.
Supersonic airships are the future's future.
I'm just curious how much inflation there is in those schedules because I'm sure it's not zero.
But you make a good point that these long runways are because the overarching tradeoff is one that prefers taking as long as it takes.
So, while I think the startup model is a fine way for investors to get exposure to an asset class that is the equivalent of 0DTE options, for the startup ecosystem to enable participants to play in the fiat that falls from those investment decisions, and perhaps some value to be generated, I would hazard that the model would not scale to meet the needs of the aerospace and defense marketplace at this time. All that is needed is skilled engineers and manufacturing practitioners to be enabled to do their best work, while keeping out of their way. Airbus demonstrates this, imho. They employ almost 150k workers, and successfully deliver products to customers that aren't fraught with manufacturing defects. They also have a book of work into the next decade, demonstrating customer confidence in the product and the org.
https://luisazhou.com/blog/startup-failure-statistics/
https://www.forkingpaths.co/p/billionaires-and-the-evolution...
Clearly not in Bezos’s case.
There is no magic involved here, some people have the skill/experience to lead the design, build, and selling of innovative hardware, others don’t.
For example, for designing new rockets, one of the major things Musk innovated at SpaceX was the traditional aerospace design cycle. Instead of spending 5 years on countless analyses and few actual tests, like the incumbents did/do, SpaceX built and destructed as many prototypes as possible, learning rapidly and innovating. Musk knows what innovative design truly requires.
What did Bezos do? He hired a bunch of ex-Lockheed and Boeing engineers/leads (from an industry that for decades has not felt market-driven pressure to innovate), and those engineers/leads just kept doing things the old fashion way.
When the person in charge (Bezos) misses this detail, no amount of money or wishful thinking will fix this.
To me the main thing that the failure of Blue Origin demonstrates is that the notion of "business" as some generalizable and all-applicable skill is nonsense. Bezos has done an amazing job of overseeing a digital marketplace, but that doesn't somehow mean he'd be amazing at overseeing an aerospace company. To me this just seems like it should be obvious.
The vision, talent, and other such things are just so radically different. For instance Musk picked up his first engine engineer [1] based on engines the guy was literally building in his garage. Bezos just staffed Blue Origin with a bunch of people from old space, and so it seems quite unsurprising that you just end up with another Boeing, but without the legacy hardware and political cronyism to use as crutches.
The same goes for Steve Jobs. 3 enormous successes.
And Bill Gates: 1. dominate 8 bit microcomputer software 2. pivot to 16 bit DOS. 3. pivot to 32 bit Windows. 4. pivot to internet. If you don't think that was a big deal, none of the other microcomputer software companies survived. Lotus, for example, muffed the pivot to 32 bits.
Nadella didn't arrive until a full 10 years later.
I appreciate the value Nadella brought to the company (as I own some MSFT), but have pivoted away from Windows to Linux for development work. I remain with Windows 7 for other uses, so much so I bought a complete set of spare parts for my Win7 box for when it inevitably fails.
The (almost successful) EEE strategy with Internet Explorer was the only part of Gates's internet strategy that survived the 90s.
This also explains why Ballmer went full in on Windows: there had been no pivot to speak of.
See my other comment just below. PayPal wasn't Musk's idea, it was already created when Musk's company merged with them.
Musk was CEO for FOUR MONTHS only. Before being fired by the board, on his honeymoon. Since then, he had no operational input into PayPal whatsoever.
Musk had very little to do with the success of PayPal. I'm not even talking in terms of the "Gwynne Shotwell is the real genius of SpaceX" naysayers. I'm talking:
Musk had an attempt at an online bank that was ... not going well.
Confinity had done what Musk couldn't - had built a prototype/MVP of PayPal. They'd already got it running. They had trademarks, everything. At this point, they'd created PayPal having nothing to do with Musk.
So Musk and his company architected a merger with Confinity. As a result of this merger, Musk was the largest shareholder, and was made the first CEO.
He remained CEO for only four MONTHS, most of which he spent trying to be stubborn about throwing away the entire prototype to rewrite it in Windows/IIS and Classic ASP (i.e. Visual Basic) because he didn't understand Solaris and Java.
The Board got so sick of this that a couple of days after his four month anniversary, when he'd just left for two weeks off on his honeymoon of all things, they fired him in his absence.
Think about how badly you have to fuck up as a CEO of a company that you're the major shareholder in that they fire you (no "concentrating on my family", no "exploring other opportunities"), AND do it while you're on your honeymoon.
Following that, Musk's "contribution" to PayPal was mostly collecting shareholder dividend checks.
I despise Musk. But I will give him credit for his contributions to Tesla and to SpaceX. PayPal, though? That's just another rewriting of history to support the Musk idolatry.
This spanned back to PayPal and he had to try this crap again with the Twitter rebrand, that frankly hasn't worked all that well, because most within my circle still call it by the old name Twitter.
It’s not a terrible idea, but also not a simple panacea to aligning interests in a business where payoffs happen decades in the future.
Bombardier thought so, and did so! They developed and introduced the C-series aircraft to compete with smaller 737s and A320/A319. After introduction, Boeing fucked them over so hard that they sold the aircraft program after introduction to Airbus for a token sum. Airbus now builds and sells the C-series as the A220.
https://en.wikipedia.org/wiki/CSeries_dumping_petition_by_Bo...
About 20 years for a fully-certified new commercial airliner design. They could have experimental prototypes flying much sooner of course. Even in China, their state-owned effort to develop a new narrow-body airliner took about 15 years and that's very likely with the CCP greasing the skids for them as much as they could. They are still not certified in Europe or North America.
And some of the problems we've seen with Boeing have nothing to do with engineering, but problems with subcontractors, materials, and assembly.
The tricky part is designing the massive manufacturing apparatus around it that can produce them in volume (ask Elon how easy building cars is), satisfying the varying demands of hundreds of different airlines, many from developing nations, helping them set up financing, supporting the design in the field for 30-50 years, AND turning a profit. Each widget produced has an MSRP of hundreds of millions of dollars.
Ask yourself why Lockheed permanently exited the commercial aircraft business 40 years ago, despite having what was regarded as the most technologically advanced design of the era, ahead of its time. Douglas went bankrupt and got bought out, Convair and everyone else failed and closed up shop.
You can't throw some engineers - they could be the smartest on the planet - into rented office space and become the next airplane company. There's more to it than designing the next WiFi-enabled food processor and slapping it together in Shenzhen.
They could also join some of the small aircraft startups that are trying to gain a foothold. Maybe a cadre of experienced aircraft engineers would help them raise money and get a product to market faster.
Maybe that’s just the way to live and lead the company and market and I just should stop dreaming about quality.
Engineers like Musk, Zuck, Gates are outliers than the norm. If you are a Boeing Engineer and had above average risk-appetite, you wouldn't be stuck in Boeing for 10+ years.
Plus, they'd have to learn french also. France is not very accommodating to non French speaking foreigners. Trying to get around in life with just English there outside of Paris is not easy.
I don't really get this kind of comments... Usually people also say the same thing when visiting Japan. "This restaurant only has menu in Japanese and staff only speaking Japanese!!".
That's true a bit everywhere in the world, isn't it? In the US, apart from places with say huge Spanish speaking presence, you better interact in English.
Try "getting around in life" using only say French, or Portuguese, or Japanese in a random US city like Portland, NYC, or Chicago.
No it's not, western Europe for example has a bunch of countries where English is almost as good as native. But obviously that's not the common case across the world, and like you say there's nothing wrong with expecting people to know the local language.
That has not been my experience. I'm not arguing it should be this way, but for better or worse I've gotten by very well with english virtually anywhere with tourists and most places without. I lived in east ukraine for two years and learned russian - enough people spoke english there that at times it could be hard to get practice time in russian. This was with a younger student crowd, most non-students and older people did not speak english, but the point stands that you can find english speaking people and get by in most situations.
If I make money in Toulouse then I had better really love Europe, since I will have limited resources to relocate elsewhere if I ever change my mind.
Tl;dr one advantage of getting paid in money over services is that money is much more portable.
If you are making $250k/year, you are already getting health insurance, and even if you weren't, it doesn't cost $170k.
- There are several state programs in the US that make attending an in-state public university very affordable. For example, in GA I attended university for $0 in tuition (only paying for room and board + a couple hundred bucks a semester on bs “fees”). The requirement for that grant is getting a 3.0 or higher high school GPA.
- Not sure how cheap Toulouse is, but at least in the US you’re probably better off making 200k+ in HCOL than 100k in LCOL. At that level of income, you don’t have to spend much of your income on essentials even in an extremely HCOL area like SF ($3000 a month gets you a nice apartment).
But judging by the current policies and laws (or lack of them) in the US, seemingly "high salary" goes above all of those things for most people.
The one tip is to not bother applying to Medtronic. They don't actually hire anything outside of interns. All the job postings are for internal roles (but required by federal law to be ... blah blah blah). Suffice to say, don't bother.
I'm not saying it's good or bad. I've seen communism, and it's much worse to help failing companies -- they tend to fail even more instead of improving.
The problem now is that international market is not really fair, trade treaties help too little.
Feature of nature too, the jungle forces the weak to die quicker.
One more argument for companies != people: we will be a lot more ok for this to happen to companies vs it happening to people.
That door-blowing-off thing wasn't a design issue. "It's hard to forget to install the bolts when you're working from home" is a bit of a logical fallacy.
I had a similar experience with my graduating class in undergrad computer science at a no-name state university. Of the graduating class (significantly smaller than when we started), I don't know of a single person who couldn't find some kind of gainful tech related employment - including the few folks who somehow could not code! by the end of our program. My experience is circa 2014, so only shortly after the great recession.
Where are these people who just can't get any kind of work with real CS degrees? Even the many hardcore cheaters I know of found ways into the FAANG (some have been promoted several times now too!)
I know several guys with postgraduate STEM degrees and 10 years of development experience who can’t even get interviews.
It’s very bad here.
The easiest step, IMHO, is to start by ignoring employers who use a service to filter applicants.
If Boeing was paying $500K+ TC for engineers in their early/mid career, you'd see a lot more expertise enter the field. Instead you basically have to go into tech or PE/IB to see that type of compensation fresh out of school. Especially when students are taking on hundreds of thousands in debt, the payback period becomes really important when considering career paths.
I know a few people who changed careers from biology to finance - but that was only after going back to school and getting some business degree....
1. Firing 100% of management between CEO and lowest level supervisors that make things happen. All of middle management should go.
2. Promote supervisors into middle management.
3. Promote ground level employees into supervisor roles.
4. When human problems happen (and they will), spare no expense with resources and training. Remember, the reason for firing management is because they had the interpersonal talent, but fundamentally lack aeronautical talent. Interpersonal talent is of minimal value at Boeing.
The strike in question is the machinists' union, engineers aren't involved.
Striking is one way to get closer to that, good on them.
There is no company called GE anymore. Most of its engineering units were sold off to other companies which just license its brand. GE appliances, for example, are actually Haier. GE Lighting was sold to a home automation startup.
GE's biggest value creator today is its brand name, not its engineering.
Good luck, Boeing. (And I mean that.)
I fear this will do the exact opposite: vindicate the union-busters who wanted to move out of Washington in the first place.
The union-busters from MD are a cause of Boeing's woes, and it would be difficult to maintain a high-discipline, high-quality culture in a right-to-work plant without external oversight. The plausible deniability of production mandates with records falsification make zero-tenure employment toxic to a safety-critical program.
I know during turmoil you can usually negotiate better terms, but...
Gonna try and avoid Boeings of all types going forward
A tiny number.
And for the ones that can, it’s likely that there are strong ties to the same government that’s supposed to prosecute them. For Boeing, there are significant financial and contractual ties to the US government.
Having a steady stream of ultra-reliable government cash surely reminds you of a state department?
Some are even immortalized in Oscar-winning movies. See e.g. the disasters section here: https://en.wikipedia.org/wiki/Pacific_Gas_and_Electric_Compa...
100% of the ones that are at, or near, the top of their domain. As the US and other developed nations move more towards Oligarchy, this describes a vast majority of the economy.
If you pick a domain, any domain, there's typically < 5 companies that represent almost 100% of the value in that domain. There're some exceptions, like tech, but not many.
Losing even just one of those companies therefore has catastrophic economic effects. So you can't lose them, or even really hurt their profit much, because what's good for them is good for you (you being the US economy).
Bayer Pharmaceutical famously gave thousands of people HIV, knowingly, instead of clearing their inventory. Who knows how many of those people went on to unknowingly spread HIV to their future children or partners. We literally can't measure how many people died of AIDS because of them.
But they're one of the most important pharmaceuticals out there. And we need drugs.
The regulators are under-resourced, if anything.
As opposed to what, people dying because government workers were negligent or on a power trip and nobody getting even that much accountability?
The root problem is that the rich and powerful[1] face no consequences for wrongdoing. It's endemic to every part of life, and nothing gets done about it because the rich and powerful make the rules. It really doesn't matter if they happen to be aligned with "Team Corporation" or "Team Government". They are equally unaccountable to justice.
1: Rich and Powerful are both the exact same thing since money is frictionlessly convertible to power and vice versa.
Bernie Madoff. Jeff Epstein & Ghislane Maxwell. Sam Bankman-Fried. Elizabeth Holmes. Harvey Weinstein.
I get that sometimes you'll see things like Hunter Biden's tax issues being allowed to pass the statute of limitations, but a universal "the rich never face consequences" is just plain false.
can you find any?
can you list how many people were jailed for engineering SARS-CoV?
heck, government hasn't even acknowledge that it was engineered and still pushes fairy tale about bat infecting pangolin who infected a chain of few other animals and then ended up in wet market - but no signs of viruses in 1000 miles between caves and wet market were ever found
But what about "95% of the time 95% of the rich do not face consequences"? It's still a huge problem, and probably what the commenter meant.
I say this more to reminisce than anything. It used the big industry, not anymore. People either adapted or they didn't. Kentucky and Ohio for example used the be Big Tobacco. Now, in large parts - nothing.
EDIT: accidentally a word.
For example, depending on how you calculate it, Merck killed between 3,000 and 500,000 people with Vioxx, and they knew the risks prior to releasing it. They got a fine. And now, the company is now doing just fine. No one was individually prosecuted.
If you have a corporate charter and billions of dollars, you have a license to kill.
They still exist and are regularly pumping out millionaires from their executive suites.
It's helpful to think about corporate America as a gigantic factory, but instead of a factory that makes gadgets or appliances, it's a factory that makes millionaires. On one end of the factory, the raw materials come in: Able-bodied workers, money from customers, and capital from investors. On the other end of the factory, the finished product--millionaire executives--fly out on golden parachutes into retirement. In the back, the waste from the manufacturing process gets discarded: The broken lives and bodies of all the rank-and-file workers, and all the negative societal and environmental externalities that were also destroyed in the process.
Profit for shareholders and [temporary, conditional] employment for workers are mere side effects of the process, and they'd do away with the second one if they had the technology to.
It's the American way.
It looks like the firm bought the prosecutor, resulting in a win for its client. How could this be prevented, though? Politicians can't be trusted with oversight like this--they would use it to punish prosecutors and would inevitably further politicize the Justice Dept.
https://www.corporatecrimereporter.com/news/200/lead-boeing-...
It's like trying to separate church and state in England back in 1600-1700s.
It is the same problem - bribery/corruption but hard to proof and not much interest to investigate.
But there's also a recency bias here, as in fatal defects aren't new. Example: there were several fatal accidents with the 737 rudder in the 1990s [1].
One valid area of criticism is how the FAA has essentially allowed Boeing to self-certify to safety since ~2009 [2].
[1]: https://en.wikipedia.org/wiki/Boeing_737_rudder_issues
[2]: https://www.seattletimes.com/opinion/letters-to-the-editor/b...
Unless you're not in the US, you want Boeing to get better, not fail (or root for a competitor, but I see no such thing)
Only the absolute worst of the worst of the worst will get jail time for doing something illegal in the course of doing their job at the company, if it's something that nominally benefits that company (as opposed to, say, stealing from the company themselves). And even then, probably only some.
This creates a perverse incentive to commit crimes as an executive, because the upsides are huge -- big bonuses/promotions/pay raises as a part of cutting costs, even if you had to compromise on safety or otherwise do something illegal -- but the biggest downside is usually only having to resign or get fired.
Imagine if the worst result of repeatedly putting someone in the hospital or robbing a bunch of banks with a gun was just losing your job. That's how executive crime works in the US.
"went on strike"
I don't think Boeing is going down due to it being well, Boeing, but it will likely need to get bailed out if it goes on like that.
So go machinists!
The news reported that the new CEO said he chose to be based in Seattle.
From Seattle Times:
Kelly Ortberg, the new CEO of Boeing whose appointment was announced Wednesday morning, has chosen to be based in Seattle.
You ship defects, you get salary or bonus deductions and vestments pulled.
Now if the issue is malice and not mistakes - then you can apply discipline. And indeed most union contracts do still have a process for discipline.
The practice alone of organizing labor power against owners, irrespective of the demands, given the existing state of the world, is what is needed to show Class solidarity.
Simply showing class solidarity in order to kick off other strikes is valuable in and of itself.
Y’all really have to understand a general strike is coming.
A general strike means the labor class (you most likely), which is the group of people who do not primarily gain their income from passive investments, and are reliant on contracts that they don’t create or control which provide them very little control over their economic future, stop working in order to put extreme pressure on the group of people who do control those contracts and who do control capital.
Such a system is foundationally unethical, and should be Deconstructed as rapidly as possible with the expropriation of all that capital to the rightful owners: the people actually producing the value, and done in a way that’s not under duress, such that you do not have to take whatever dog shit contract is put in front of you
Capitalism is the new, cool, unique idea that has actually delivered prosperity for society. Not perfectly evenly, but certainly more evenly than other ideas like socialism, fascism and feudalism.
Economists call this “arbitrage” which is a fancy word for, “Someone can dominate you economically and you have no legal avenue to avoid it.”
Proudhon covered this thoroughly in “What is property”
I'm a business owner. I believe in business, and I like participating in a competitive market. I like that it keeps me honest and forces me to really try to do my job. But that doesn't imply that I have to be hostile to the interests of laborers in principle! They're sticking up for their interests, just as much as I stick up for mine. That's how a market works. And just as with my customers, we can have a mutually beneficial working relationship while still negotiating in the knowledge that we're all adults with some degree of self-interest.
As long as we're working within a system where we don't expect businesses to show loyalty to employees beyond self-interest (and it seems that we are), why should we expect employees to behave any differently? You can't make employment an ethical question for one side and not the other: either we're all in this together (and thus that businesses have a responsibility that Boeing has clearly failed to uphold), or we believe in a ruthlessly competitive market (and labor has every right to play hardball).
> Such a system ... should be Deconstructed as rapidly as possible with the expropriation of all that capital
(emphasis added)
The result, predictably, is that unions lose all their leverage against the investor class (which no longer exists) and management (which is now the government). See, e.g. https://en.wikipedia.org/wiki/Trade_unions_in_the_Soviet_Uni... ("[S]trikes were still more or less restricted... Unions remained partners of management in attempting to promote labor discipline, worker morale, and productivity.").
How much of the Soviet Union was owned in any functional, practical or legal way, by the proletariat?
Oh zero? Did they have communal decision making? Oh also no?
How is state ownership of everything in a dictatorship relevant here at all?
It remains mind-boggling that the only thing people can fathom as an alternative to nightmare capitalism is state centralized, economic controlled bullshit dictatorship.
Unreal
I’m employee #3 so…you know Probably not exactly what you expected
No, because calling for a communist revolution from your position is a suicide wish then, any entrepreneurs or owners of pretty much anything were considered a class enemy and you being in a leadership positions of any kind is a guaranteed ticket to a gulag.
As they say, it’s easier for most people to picture the end of the world than the end of capitalism
Maybe do more drugs or something
Read about Mondragon etc… and explore the idea of living completely differently
Instead of doing drugs just read some history on how those things go. Once you start expropriating anything you'll get a violent pushback, that's either a coup or a civil war, during those you will get violent people take charge, then if your side looses you get Pinochet and a helicopter ride, if your side wins, you get Stalin, Mao, Pol Pot, etc that will exterminate anyone remotely like you as class enemies.
>The anarchist movement lived on during the time of the Soviet Union in small pockets, largely within the Gulag where anarchist political prisoners were sent, but by the late 1930s its old guard had either fled into exile, died or disappeared during the Great Purge.
Read Proudhon. Try harder
Why? I have zero interest in yet another utopian idea that will probably result in millions dead, as they always do. The current system works well enough and seems like a miracle to me coming from where I grew up, the fact that you can work hard on anything you want, take risks and get rewarded for it, and no one is gonna arbitrarily take it all away is magical.
1. It signals employees still care about the company enough to not just quit and go elsewhere. And employees who care make a better product.
2. Negotiating better benefits generally helps retain the solid "middle class" who make the brunt of the work in a company. It might not entice the "rock-stars" or so, but they generally are not dis-incentivised by their colleagues getting better benefits either.
3. The C-suite gets to know they are not untouchable, this also helps keep them level when answering to the board of directors.
Profits over safety and performance fucked boeing over
> The Biden administration was monitoring the situation; acting Labor Secretary Julie Su has been in contact with both sides.
If it's important enough for the whitehouse to get involved, then the union members have incredible leverage. It's telling that 96% voted against the deal. They know they can get a better one.
> To support its share price, the company under McNerney poured billions into stock buybacks instead of investing profits into the kind of research and development needed to stay competitive. McNerney decided not to spend billions of dollars building a new plane to replace the 737. Instead, Boeing tweaked and updated the existing model and called it the 737 Max, outfitting it with larger, more efficient engines for increased economy. Compensating for the resulting instability was a secretive automated system called MCAS that would adjust the plane’s pitch without input from the pilot.
> McNerney also fought to deeply cut costs. On his watch, the company opened its first non-unionized aircraft production line and initiated a program called “Partnering for Success” that pushed suppliers to cut their prices by 15 percent or more. Many feared that squeezing suppliers would harm the quality of their components, but McNerney was determined to recoup the cost of the 787’s development; if the subcontractors complained, they could find their work taken away from them, as happened to landing-gear-maker United Technologies Aerospace Systems.
> McNerney retired in 2015, handpicking his successor, president and COO Dennis Muilenburg. Over the next three years, Boeing’s stock price more than doubled as it sold new planes the world over. (As Bloomberg News reported, Muilenberg and McNerney “had personal reasons to emphasize productivity and cost-cutting” because their compensation was tied to share performance. Together they took $209 million in total pay over seven years.)
https://nymag.com/intelligencer/article/boeing-planes-proble...
> In 2019, following the discovery of exterior damage on planes manufactured in Charleston [the non-unionized factory], for a time Qatar Airways would only accept delivery of Dreamliners assembled in Everett [the unionized factory]. (from https://en.wikipedia.org/wiki/Boeing_South_Carolina#Quality-...)
But then they moved all 787 production to North Charleston, so problem solved.
That better be some top shelf sarcasm.
It’s shameful what’s happened to Boeing. I worked there during the fall. After the bribery scandal, but before MD broke it. It was still okay-ish until they butchered their R&D dept. That’s not a healthy company.
I am also not sure why the stock buybacks are worth mentioning. There are many reasons why a buyback may be the right thing for a company to do. I am aware that sometimes it can be a manipulation of executive compensation by artificially raising the stock price (and may have been so here). And obviously I don’t support that. But I feel like the practice of buying back is attacked by many without adequate understanding of what it is for and how it can be financially good for the company, helping support future investments.
Aren't those identical? If you do a bad job, we could have got the same bad job from someone else, who we could have paid less...
From the perspective of other board members, upper management and the shareholders at the time.
> I am also not sure why the stock buybacks are worth mentioning
Because Boeing is a very capital intensive business that is currently in mountains of expensive debt, with multiple projects delayed with years, and a recovery time of 5 years minimum. The idiots in charge wasted billions on the wrong things, and now the company is a very bad situation.
Ironically, I think the poster child for how to properly structure compensation away from this is Hank Greenberg's AIG, where not only was his compensation basically all deferred stock options, they were deferred until retirement, so about as long-term a view as you can get. He was very risk-averse, and his biggest flaw wasn't under his operational ownership but under successor and personnel selection (looking at you, Welch).
But at some level, it was just bad people making bad calls. I don't think McNerney thought that this would wreck Boeing, he was just wrong. Even if he was left predictably destitute at the end of such a failure, he probably wouldn't have changed his choices because he thought they were good. You could claim that this is a failure of boards and governance (and, truly, I think boards are by and large really bad and I wish there was a much more pervasive activist investor culture) but at some level I'm not sure how much of this is solvable.
I don't know. There's probably a way to do boards well enough that this isn't a problem.
Well, he was stupid not to - there's no way he didn't know thay focusing on the short term stock price won't have negative effects on the quality and future of an engineering organisation whose main business, building and selling airplanes, is extremely capital intensive. He came from McDonnell Douglas who nearly bankrupted themselves doing the same sort of crap (pushing suppliers to the edge, cost cutting at every opportunity).
Cite? Wiki[1] appears to suggest otherwise.
[1] https://en.wikipedia.org/wiki/James_McNerney#Career_path
That being said, McDonnell Douglas' history was visible to everyone - what they were doing hadn't been working for decades (first as Douglas, then as McDonnell Douglas).
People keep repeating this without context. The auto companies are strategically significant. That didn't prevent them from going bankrupt [1][2]. Wiping shareholders doesn't mean blowing up the factories.
I'm increasingly convinced Boeing needs to go bankrupt. It can then shed unprofitable units--through spin-offs, sales or liquidations--and restructure its obligations. I'm not convinced the union comes out of that better off than it is now. But America sure does.
[1] https://en.wikipedia.org/wiki/Chrysler_Chapter_11_reorganiza...
[2] https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...
It’s clear that Boeing was able to squeeze costs centers at the expense of quality and business investment all while keeping the coin under shell in the form of regular old stock buybacks.
But if/when Boeing goes under who is going to vet all this NDI sitting in their portfolios? They’re just gonna spin it off to another buyer—consisting of who exactly? McDonnel Douglas? Elon Musk? Tencent?
Seems like a nightmare for someone, not sure for whom.
Idk, pick one that's American or closely allied [1]. Ideally not one of the three larger than Boeing.
Worst case: audit and re-assign the contracts. We'll be better for it in the long run. And I'm not convinced it wouldn't result in quicker, higher-quality deliverables in the short.
[1] https://en.wikipedia.org/wiki/List_of_defense_contractors
Its military stuff.
Not really, they're more politically significant than economically critical. I've certainly never owned an american car and never plan to. We'll be fine continuing to rely on foreign companies to produce our vehicles. Foreigners certainly don't want our cars (outside of maybe tesla in the nordics, i guess?). None of this is true for the plane market, or at least not until boeing acquired its current popular reputation of not being very good at making planes (deserved or not)
The fact we bailed out the companies but refused to take ownership should be considered treason. Same for the banks, the car companies, the airline industry we bailed out for more than its entire value, etc etc. completely corrupt and incompetent governance
IBM made machine guns on typewriter lines in WW2.
Years of startup problems but when it finally started humming they were building a B-24 every 63 minutes! In the meantime existing factories were winning the war.
As Americans we tend to glorify the industrial feats of WWII but the US government used a very heavy hand to pull that off. Public-private partnership is the preferred euphemism today but essentially we were a socialist economy.
Today the US military budget is 3.4% of GDP. Can you imagine it being ten times as much?
This is not 1940, and the US simply doesn't have the strategic industrial base it used to.
Off-shoring made some people a lot of money and lowered consumer costs (while simultaneously cutting consumer pay.)
But it was economically and strategically unwise. The US is set up to run small-scale wars against technologically inferior opponents. It has no ability to sustain a prolonged multi-year slug-fest against an opponent with a superior manufacturing base.
Now granted I might be unfair to the US here; the Middle East is known as the graveyard of empires for a reason.
2) I’m not sure the military was doing just fine in all of those. Vietnam comes to mind, but also Afghanistan—reading the Afghanistan papers, the brass seems to have given up on any kind of actual goals or accountability in favor of a system that let them continually cycle officers through and let them claim they succeeded at their mission (funny, they all keep achieving their mission, but facts on the ground remain exactly the same or worse!), for years and years. Fighting fitness may have been OK throughout, but military leadership in the military itself was absolutely not committed to any kind of winnable mission, let alone to actually winning it. That may have been driven (I’m sure it was) largely by civilian leadership, but the entire upper echelon of military leadership betrayed their commands and the soldiers counting on them, to keep up a convenient (to their careers, and a bunch of junior and mid-tier officers who got a big boost to their careers…) political fiction at the cost of any hope of something resembling actual success, and all it took was shitting all over their soldiers and the trust of the American people.
I bet Iraq (part 2) was similar. I have some grave concerns about the state of our more-politicized-and-static professional officer corps since roughly Vietnam.
Disagree on point #1. We occupied Afghanistan for 20 years. We operated with nearly absolute impunity in all population centers, through all trade routes, and all agricultural areas. Our casualties were a minuscule amount our total forces. Our culture completely transformed theirs (in a way that old school hardliners lament publicly). We killed a huge number of Taliban (and foreign fighters).
Clausewitz says that "the political object is the goal, war is the means of reaching it." Can you tell articulate what the political goal of the war was?
Thinking back to 2001 (I was in middle school), the goal was retribution. I believe the military achieved that in spades. Yes, in the end Afghanistan did not turn into a US vassal state or a US colony. But was that the goal?
The goal was to eradicate the Taliban, remove terroristic sentiments, rebuild Afghanistan, bring the country to 21st century democratic standards, and prevent future 9/11s.
Did we achieve it? Hell no.
Verdict: We lost. Over 20 years of bloodshed and misery on both sides for fucking nothing. We failed on every single fucking count. Every. Single. Count.
You haven't shown a military failure.
I also disagree with that list of objectives and their current status. Let's go through 1 by 1:
+Eradicate Taliban. Complete. This is a new gen of fighters and the movement shares very little outside the name. Nearly all the Taliban from 2001 are dead of violent causes.
+Remove terroristic sentiments. Not a goal, but also has Afghanistan committed many terror acts in the last 15 years? Current status is trending green.
+Rebuild Afghanistan. Not an original goal (ie in Oct-2001). Also not a DoD goal, this was a State Dept goal after the military victory was secured. Also I'd argue that Afghanistan today has better infra than it did in Aug-2001, so this is complete.
+Democratic standards. Not an original goal. Also not a DoD goal, this was a State Dept goal after the military victory was secured. Not met.
+Prevent future 9/11s. Current status is trending green.
So we met all but 1 goal. That's not bad as wars go.
While I started off with the former, overall it is both.
>You haven't shown a military failure.
It has been demonstrated by Afghanistan, Iraq, Vietnam and others that the best way to defeat America is to engage in low tech guerilla warfare. We have lost every single one of them.
Even more embarrasing is that the Houthi are demonstrating that the age old adage of "Don't touch America's ships!" also isn't true anymore. Our Navy hasn't adequately responded to some deranged goat herders lobbing missiles into one of the world's biggest sea lanes.
>Eradicate Taliban. Complete.
Are you drunk? The Taliban is literally back in power ruling over Afghanistan with an iron fist.
>Remove terroristic sentiments. Not a goal,
Lest we forget, we waged "The War On Terror".
>Rebuild Afghanistan. Not an original goal
You can not remove hate until the people thereof can live comfortable lives, which is still not the case.
>Democratic standards. Not an original goal.
See above.
>Prevent future 9/11s. Current status is trending green.
I've lost count on the acts of terror we've seen across the west, America and otherwise.
Democracy (and "comfortable lives") was not a military objective. The military provided security for the State Dept and NGOs to pursue those goals.
Since 9/11, Afghanistan has not prosecuted any terrorist acts on the West in my recent memory.
The Taliban of 2001 was largely killed off. Yes, there are people in charge of Afghanistan today who call themselves Taliban, have some limited pre-9/11 leadership, but are largely a completely different set of people than existed back then and this occurred because of military action, not old age.
> The United States has given Israel extensive military aid and vetoed multiple UN Security Council ceasefire resolutions.
> United States provided advice and intelligence to Israeli forces during the raid, through its "hostage cell" stationed in Israel. The attack resulted in the deaths of 274 Palestinians.
How would that work in your mind? Call that one for Harris because Biden is mentally unfit?
Neither Trump nor Biden started a war. They had wars happening around them that we were to various degrees involved.
By my quick count, Obama (awarded the Nobel Peace Prize) started seven wars, Trump started zero wars, and Biden so far started one war. All three Presidents were involved in a war started by a predecessor.
So, yeah. Trump started no wars, and he is the most rejected POTUS by the Powers That Be(tm) for that and other reasons.
>“We’re sort of on the verge of the Houthis being able to mount the kinds of attacks that the U.S. can’t stop every time, and then we will start to see substantial damage. … If you let it fester, the Houthis are going to get to be a much more capable, competent, experienced force.”
https://www.navytimes.com/news/your-navy/2024/06/16/navy-fac...
Worth noting, this is an entire USN carrier strike group. This is simply embarassing.
Vietnam: limiting Cambodia ops, the DMZ, limiting bombing of N Vietnam
Afghanistan: limiting Pakistan ops, focusing on creating a stable democracy rather than killing Taliban then leaving
Also the military.
A war effort involves the entire country: The entire economy beyond just the military industrial complex, all branches of politics, and the military including both officers and rank-and-file soldiers.
this is just wrong.
The US didn't really have that industrial base in 1940 either. We developed it fast over a couple years of war.
To the extent the US had an industrial base, we still do. US manufactures more than we did in 1940 - we just do it with far fewer people in factories via automation.
In fact, we dump our cheap overproduced food on third world countries and collapse their ag. sector. If we stopped producing and switched to importing we would boost their economies.
Since food can be grown in almost any country on earth, we would have a diverse supply chain. I'm sure nothing would go wrong with this plan./s
There's a limit to how long USA can print petrodollars to make up for the trade deficit. And the limit doesn't seem that far off.
The Nordics are not all the same, Norway is far ahead (20% of private cars already full EVs) of the rest with Denmark a distant second when it comes to electrification of transport.
But also the Tesla Model Y was the best selling car in the WORLD in the last twelve months, not just Norway. Of course quite a few of those were built outside the US so perhaps they don't count as US cars.
Actually, in the private marked it was 96.7% !
Links to info (in Norwegian)
- https://elbil.no/vi-kan-klare-hundre-prosent/
- https://ofv.no/aktuelt/2024/nybilsalget-i-august-h%C3%B8yest...
I know, I live there. Been driving electric since 2017.
> Foreigners certainly don't want our cars
Then why are they always bitching about their neighbors who buy large American vehicles that are too wide for their streets?
I agree and hope they do go bankrupt, but I hope so because the country needs a fucking wake up call: American Exceptionalism(tm) is simply no longer true.
I sincerely think we need to see one (Boeing), maybe even a few (Intel? US Steel?) paragons of American Excellence(tm) go down in smoking ruins so we have to accept that we are not 1970s America taking mankind to the Moon and beyond anymore.
Once we realize that, we can actually get started on Making America Great Again in a real, meaningful way instead of a dumb political catchphrase.
I see no reason to believe this will happen rather than a continued slow decline and eventual collapse.
So, technically, you are correct. The business entities of June 2009 failed. However, the consumer DGAF who owns www.gm.com or www.chrysler.com. They can still go to their local dealer and purchase a vehicle "made by" these companies. The "companies" live on.
So... remove the need to actually produce planes, or anything at all for that matter, subsidize their continued failures?
It did the opposite.
Humans respond - on some level - to incentives.
Tying compensation to short-term performance creates perverse incentives which make it much harder to accept the idea that your plans might be ruining the company.
Of course this “short term thinking” trope is just a meme that the armchair commentators like to pedal out. If the system was dysfunctional enough to prioritise short term profit seeking to this extent, then all a competitor would have to do to monopolise any market is do enough “long term thinking” to outlast all their failing competitors. Investors would notice this and reallocate their capital accordingly.
But none of this is what happens in reality. If anything I would say the market is over-interested in long term strategies. The popularity of the growth over profit model that we observe amongst most prolific capital allocators takes “long term thinking” to absurd lengths.
This makes it sound like my broker, the finance community in general, or maybe the state is better able to handle long term thinking than our industry leaders, but why would anyone believe that? Aren’t they all looking quarter to quarter and retiring next year no matter how bad they wreck the company/economy/country?
Sure in 30 years they may be eventually pushed out but they can coast 2 generations of successful careers till then.
isn't this exactly what's going on with Boeing?
> Airbus last year topped Boeing for the fifth straight year in the orders race, with 2,094 net orders and 735 delivered planes. Boeing had 1,314 net orders and delivered 528 aircraft.[0]
I 100% agree the majority of investors don't seem to take the long view, and that's been the case for a while.
[0] https://apnews.com/article/boeing-airbus-airline-safety-manu...
Half of them would look like job hoppers with such short tenures on their resume. Some of them have simultaneous executive positions at other companies.
If you want some evidence of short-term thinking not being a meme, it's probably that.
The Board of Directors at most major corporations is made up largely of current or former executives, many of whom come from the same industry. It's in their personal interest to normalize lucrative and exploitable compensation plans.
You would also be shocked to know what people control the lion's share of investment dollars.
This reasoning was always flawed. The Stock Market is not real life. It consists of the opinions of a bunch of guys who sit in towers in New York, London, Shanghai, etc... In theory there are fundamentals that should drive the price, but in practice the market is not rational. It's not a good metric for the long term health of a company. Even worse, Goodhart's law applies in spades:
"When a measure becomes a target, it ceases to be a good measure."
Time and time again we see CEOs playing games with the stock price in order to get a big payday. We see management sacrificing long term stability in order to maximize their year end bonus.
Imagine if every time you remember a now dead company do a stock buyback they instead invested that money into R&D, or simply lowered their prices to be more competitive in the market? Maybe they paid their employees better and didn't have constant turnover problems and had higher quality output. How many of those now failed companies would still be around today?
Boeing share price was up almost 400% in that period. If the business goal was to maximise share price and therefore return for investors over that period it was a cracking success.
Since the US government will always pick up the pieces in the event of a failure its a minimal risk stratagy.
And yes, people track that, and yes taking loans to pay dividends is a favorite trick of dying companies.
Ordinary people have to sell assets to take advantage of appreciation. So unless they can time sales to optimize taxes - really only an option for retirees - they might as well get regular dividends.
Not entirely true.. Ordinary people can take advantage of appreciation of their home value via a standard home equity loan.
Also rich people get way, way lower interest rates borrowing against their assets than us poors do on HELOCs.
> No one's talking about houses here. I thought that was obvious.
For most ordinary Americans, the largest asset they will ever own is their house. Owning that asset is the essence of the old American Dream. So it seems like your original comment was primarily about housing assets.
Anyone can get a home equity loan to access the appreciation the house might have. They don't pay taxes on the loan, and many people use the money on improvements that further increase at value of the asset. That combined with further asset appreciation and the loan pays for itself when the house is later sold.
Ordinary people can and do do this. The rich just do it at a much larger scale.
Finally primary homes don't have any capital gains tax on sale (or at least not up to a pretty high limit). So this whole discussion is irrelevant. Ordinary people can always sell their "biggest asset" without paying much in tax.
Eliminating the double taxation of dividends would likely solve most of the buyback problems.
A stock buyback of 1000 shares means that your one share now represents 1/999,000th of the company, not 1/1,000,000th. Thus the share is worth more. It isn't income until you sell the share and pay taxes on the gains. This flexibility is useful and can result in tax savings depending on the situation.
Stock buybacks are cashing in your chips, a one-off payment.
This is not true, but seems to come up a lot. I guess it makes for one of those fun "internet facts" that people like to repeat without any investigation. Bonus points for blaming Reagan.
Stock buybacks were not illegal before 1982. If you sit down even think through it, it doesn't even make sense they were illegal. Just like issuing new shares (or doing a stock split), companies have legitimate business needs to buy back stock (reduce the quantity of outstanding shares).
What happened in 1982 was that the government made Rule 10b-18, which outlined the "safe harbor" requirements for stock buybacks, where if followed, the company could not be found liable for stock manipulation.
https://www.skadden.com/-/media/files/publications/2020/03/t...
So stock buy backs were legal before 1982, but companies faced a risk of stock manipulation if they were reckless in how they did it.
Sounds like a much better state of affairs.
I think that's a good thing. I'd rather have it be clear to all parties what is acceptable and what isn't, rather that a murky legal framework where you never know if you're breaking the law.
Stock buybacks were legal and happened before 1982.
The “thanks Reagan indeed” is just your own internal biases. The President didn’t draft the law and the Democratic Congress passed it.
So quite odd to blame a single person.
It should be a warning against believing things on the internet because they conform to your biases. Check your sources.
And you keep acting like the 1982 law had no effect when it made the largely marginalized practice of stock buybacks mainstream. Maybe you should check your biases.
https://corpgov.law.harvard.edu/2020/10/23/the-dangers-of-bu...
https://crsreports.congress.gov/product/pdf/LSB/LSB10266
https://www.vox.com/2018/8/2/17639762/stock-buybacks-tax-cut...
https://www.sciencedirect.com/science/article/abs/pii/S01651...
Absolutely stunning - those guys will walk away from this mess with more money than God and American aviation will take a backwards step that may take decades to fix if at all... fuming here.
Oh, and make executive and BoDs personally and criminally liable for safety fiascos like the 737MAX. I bet you'll see culture change in a hurry under those circumstances
https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...
https://www.newyorker.com/magazine/2020/03/09/thomas-piketty...
The saying of "oh if you don't give big bucks then you won't hire good talents" is only true to certain extends. Einstein doesn't figure out GR because he wants the cash from Nobel's prize, actually none of the winners probably achieve because of the money. Scientists won't stop inventing because they don't get the big bucks (most don't get big bucks anyway). Carmack would still pump out great code if he stays indie. As long as properly paid, pretty much every real talent would be happy and do whatever they love to do.
Giving disproportional pay to executives ONLY attract bad players and TBH some 500 are probably better NOT have an executive. It also creates sort of toxic culture everywhere that people are forced to chase big bucks because average pay is screwed.
If they aren't sufficiently excited by the mere idea of being in charge of the company's products, services, and future direction, doing a good job for customers, shareholders, and employees, then they should look for a different job.
I am very sympathetic to this line of criticism but I also find that "stock buybacks" are misunderstood and, as a result, overly demonized. So I just want to explain a few things for anyone who reads this.
The question with a corporation is what to do with surplus profits. The first iteration of this was to pay dividends. These legally are paid equally among shareholders. If you distribute $1B in profits and have 100M shares issued then each share gets a $10 dividend. Simple. Additionally, dividends had to be profits so corporate taxes were paid on those.
So there are two problems here:
1. Not every shareholder may want a dividend; and
2. The US tax treatment of dividends is bad, specifically double-taxing. as an example, the company may pay 15% corporate tax, pay a dividend with the remaining 85% and then the individual may 50% federal and state taxes on that, leading marginal tax rates of upwards of 60%, possibly higher.
(2) has led to some screwy legislation (eg passthrough corporation discounts) so solve what is otherwise a simple problem. Australia has completely solved this problem with so-called "franking credits". This means that $1B of profit is made, 30% taxes are paid and $700M is distributed but it comes with $300M in tax credits. So if you get a $700 dividend, you also get $300 credit with the ATO. If your marginal tax rate is higher than 30% is higher, you may have to pay a little more. If it's lower, you'll get a refund.
Now you generally can't borrow to pay dividends until you historically pay dividends. There are a lot of rules around this.
Enter share buybacks. This is where the company buys back its own stock on the open market. This reduces supply and hopefully raises the price for remaining shareholders.
Some will argue this is market manipulation but it really isn't. It's just a different way of distributin gmoney to shareholders. Unlike dividends, you can choose to take it or not by selling or not.
A share buyback has none of the dividend tax problems but it's even better. If you've held for 12+ months you're paying the long-term capital gains tax rate, which can be substantially lower than the marginal income tax rate.
But here's the big problem: it's completely fine to borrow money for a share buyback. This loophole needs to be closed.
Prior to the IRA and Trump tax cuts, it would work like this: you would leave profits overseas so you wouldn't have to pay corporate tax on them. You'd then borrow money used those overseas profits as collateral and do a share buyback. This should've been illegal. Or, in the very least, any borrowing against foreign profits should be treated by the IRS as repatriation of profits and thus tax is owed.
The Trump tax cuts changed how foreign profits are treated. The IRA further changed this with the 15% minimum tax, which was a very good change and one that didn't get a lot of attention.
Should a company pay out shareholders or pay its workers more? I absolutely favor the latter. But we shouldn't focus solely on share buybacks because that's a small part of the problem. I'd say what we need is:
1. A higher corporate tax rate;
2. An end to passthrough corporations;
3. End the double-taxing of dividends. Just do what Australia does;
4. All share buybacks have to come from profits only; and
5. An aggressive attack on profit-shifting / transfer pricing to offshore profits.
Which if stocks come with voting rights means shedding influence of shareholders. You can't say that a buyback is equivalently classed to a dividend (by being a transfer of money to exiting shareholders), if you don't account for the second and higher order effects.
I'm not defending share buybacks, for the record. They're only one piece of the puzzle however. The real issue is what companies should do with profits and that includes share buybacks and dividends. You can't really be against share buybacks without being against dividends. And tit's fine to be against both. Being against one but not the other is kinda silly though.
Stock buybacks should be illegal or at least very difficult to do. They provide short-term gain to shareholders (and the executives who authorize them to prop up the stock price on which their bonuses depend) but can be extremely damaging to the company long-term (by which time the CEO is out anyway, and shareholders may have reaped their profits and moved on), with workers, and the local economy, left paying the price. The worst kind of capitalist poison.
How about making the conditions good enough for employees so they don't have to strike to get some basic benefits and OK salary for performed work?
If the executive team doesn't want to people to be comfortable at their work, it feels a bit unfair to put "creating an antagonistic environment" on the employees.
It looks like the new boss was not smart enough to ask for a big worker pay increase (or maybe did not ask at all). Looks like not a good place for Boeing.
BTW - there is another contract due in 2026. Hmm, another strike in a couple of years? Will Boeing be in a better place or worse place in 2 years? Interesting times ahead.
https://investors.boeing.com/investors/news/press-release-de...
Hard not to think negative things about a union being "pushy" at a place where there are serious cultural failings around safety, the company has engaged on a decades-long campaign of financial engineering where it has slashed investment into the company and instead paid out huge dividents to its shareholders, and the company regularly pursues and demonises whistleblowers (partly in what a cynical person might term collusion with the regulator, but also independently) who attempt to apply pressure to the company to improve and inform the public about the risk to life that the dangerous practices the finance types at Boeing have adopted.
They are striking to get the biggest share possible of the pie before Boeing completely crumbles down. Reading the news, there isn’t a single demand from the workers that’s about trying to get the company back on its feet.
> No one understands safety better than the very workers who meticulously build these planes every single day. That's why we must have a voice in the company's safety initiatives, as our livelihoods depend on it. Our Members are experts - they know how to build the best airplanes in the world, and they are the ones who will bring this company back on track.
>
> We spent Saturday drafting and proposing a new safety and quality framework that provides Union involvement and input into the Quality Management System, ensuring we protect the integrity of our production system. We know that the only way to ensure Boeing makes the right decisions is to have a seat at the table when critical decisions about quality, safety, and new product developments are made. Having a voice at the highest levels can and will influence changes. That's what we are trying to do in this contract. We are proposing these articles for the first time in our history and know that our Members' voice is critical in this effort.
https://www.iam751.org/?zone=/unionactive/private_view_page....
*obvious hyperbole
Would that really help, though? Do you have the industry know-how, expertise, and internal knowledge to assess whether the offer is reasonable or not?
Otherwise it just reads like “lots of people are mad”. Well about what exactly?
It’s fine for a headline, but not very impressive reporting.
It's like a BS meeting by a BS manager that he holds for "stakeholders" where he just throws a bunch of facts on the table, and then proceeds to do nothing to guide the decision making process. And then during the whole meeting we all run around like headless chickens trying to find out more info and context, all half-arguing with one another because we all have different pieces of the puzzle.
</rant> Sorry had one of these just yesterday, and no matter how delicately I phrased or insinuated-it the person with the most info/context just did not offer up guidance and direction (ironically it's the same person that organized the meeting). Then at the end they gave praise to all those that contributed and then said they'll schedule another meeting to discuss the outcomes because we "couldn't reach consensus" or "decide on the next course of action".
In 2009 Boeing decided to build the 787 in a non-union factory in SC instead of in Washington.
A few years later (can’t recall exactly - it was around 10 years ago), Boeing cut the pensions for new workers. The union was not in a strike position at the time.
In the last 5 years the company has pushed forward with the 737 Max program with all of its problems that you’ve likely heard of.
There was a leadership crisis and a new CEO is starting. They’ve made a big show about recommitting to Washington.
The contract that was voted on this week included a headline raise of 25% over 4 years, but buried in the details was the elimination of a 4% annual bonus.
Sounds like there is a generation’s worth of grievance to sort out, and this being a fraught moment for the company, the union has decided to press their advantage. More power to them. This could have been avoided if the company leadership had a long-term approach to management and employee relations.
I don't think that entirely detracts from the general premise of wanting to be given more information however.
We live in an era where a lot of media types actively push pro-unionization ideas. It'd be helpful to present facts and details alongside union efforts! I personally assume that if details are withheld it's because they'd be damaging to their argument. YMMV.
Another pet peeve of mine is omitting the time frame for wage increases. A 25% raise today is not the same thing as a 25% raise over the course of 4 years.
And is also different than 25% over 4 years while also removing a 4% per year annual bonus.
Getting 96% to vote to go on strike pretty much says that company offer is complete garbage. You probably can't get 96 out of 100 people to agree that the sky is blue.
And while I wish that things were a bit more fact heavy, sometimes the sticking point is something really arcane and non-obvious to outsiders (on-call requirements, for example).
People can vote the same way without agreeing with each other. Some of them could think it's a bad offer, the others could think the company has bankruptcy immunity because the government will bail them out so they might as well hold out for more even when the company makes a reasonable offer.
> And while I wish that things were a bit more fact heavy, sometimes the sticking point is something really arcane and non-obvious to outsiders (on-call requirements, for example).
This isn't an excuse for not providing the explanation. What should happen in this case is that you get a longer article because there is more context to unpack.
Bit of a green hue towards downtown, regional bank creating the Aurora Desjardins
If you need more information on the union's position you can check the union's website: https://www.iam751.org/?zone=/unionactive/private_view_page....