Boeing reports Starliner losses of more than half a billion dollars in 2024 | Hacker News Reader

Boeing reports Starliner losses of more than half a billion dollars in 2024

spacenews.com

49 pointsisaacfrond40 comments

The sad thing is, once a company loses its spark of engineering excellence, it's very difficult to recover. Politics take the place of excellence and this creates an environment where the talented are systematically suppressed and rejected. Those who run the show are not only incapable of identifying talent, but feel repulsed by it.

"The person of superior intellect is conscious of his superiority and therefore does not take so much pains to conceal it. From this the vulgar feel their insignificance, and therefore hate the possessor of such qualities." - Schopenhauer

I have a different take on this. Hardware is hard. Space hardware is exponentially so.

But in general these days we value non-physical stuff at multiples of the real.

Meta lost $15b on its Reality Labs last year by comparison. Orders of magnitude more. Lots of that was in AI, but that's a spend who's main value to Meta is to block OpenAI from outright monopoly and maybe push some more ads.

Space has a lot of money in it (Starlink alone made like $7B maybe last year!), which is why there are so many companies trying to get up there, but a half-billion loss on manned space hardware has all of us (including me) taking turns throwing flames at Boeing for being a dying dinosaur when in fact what they've already done is definitely harder than VR and arguably in the long run has more "value" to us as a species.

I sometimes see these numbers and have to reset my perspective about value and worth and what judgments I'm making about them.

The problem with this take is that Boeing was a major part of the Apollo program where they achieved dramatically more than is being asked of them here, in a far shorter time frame, and for far less money. There's no real explanation besides a complete atrophy of talent and overall capability, probably driven by becoming an entirely profit oriented company where taxpayer funding became a more productive means of of revenue generation than increasing quality or reducing costs.

That's all true and I agree with your conclusion, but comparisons to Apollo are complicated by changes in how much risk NASA is willing to tolerate. The Apollo missions were very risky and got lucky more than once.

> besides a complete atrophy of talent and overall capability, probably driven by becoming an entirely profit oriented company

Besides the fact that you didn’t add “short-term” before “profit” I’d say you’ve described 90-100% of public companies right there. They are all pretty good at making quick profits, buying back their own stocks, coming up with legal tax evasion strategies, and other things that only add actual value for a few wealthy people, but by any objective measure, what do we do now that we possess technology only dreamed of by previous generations? How about a fridge that has a screen on it, but the fridge itself has a one-year warranty and will probably be in a landfill in 5 years because it’s made shoddily of trash components but uneconomic to fix. A laptop with 8GB of RAM, in 2025, that can’t be upgraded in any way. Tons of things from vapes to AirPods with batteries sealed in, and designed to be discarded prematurely.

We don’t have as a society what we had back then. We’re too busy ripping each other off to do great things.

This is a good point that should be taken into account, but also i'm not a Meta user or shareholder (outside of ETFs etc.) so i don't care what they do with their money. Boeing is lighting our tax payments on fire and literally killing people

Starliner comes after decades of failed Boeing managed space programs to replace the Space Shuttle. Its probably the second or third reboot of a crew capsule. Congress should share part of the blame but at least taxpayers used to get working hardware for their corporate welfare.

Space is hard but not this hard

> Politics take the place of excellence

Our CEO has been very careful with hiring, and this aspect is one of the reasons. He's very aware we need people who all pull in the same direction to be successful.

A bad hire is much worse than no hire.

Hiring is by far the most important thing IMO. You can have the best processes possible but it means nothing without good engineers.

On the other hand, a company with really great engineers barely needs any processes.

> A bad hire is much worse than no hire.

Within limits. Obviously toxic employees pulling in the opposite direction are a major issue, but mildly suboptimal hires are generally not a big deal.

Conversely when a team is chronically overworked, the best people leave first and those who remain are stuck with even more work that they are less equipped to handle. This leads to a death spiral that kills or permanently maims a lot of companies.

How is Boeing having so many issues with Starliner when it appears they have perfect success with the X-37? Is something like this due to over-compartmentalization and having to re-invent too many things?

A with almost every defense contract, X-37 is cost plus and classified, which means that Boeing has been passing the costs on to the USA tax payer rather then have to pay for their mistakes. It’s possible that the program is perfectly run and on budget, but no transparency exists to validate that.

As wikipedia says: "Most of the activities of the X-37B project are secret." Presumably that includes some of the things that would bring about bad press.

As I recall, the Starliner contract was fixed cost and the X-37 was cost plus. Its not a new observation that the space and defence part of Boeing struggles with the former after decades of the latter.

But also, and obviously, Starliner is crew-rated and X-37 isn't. That introduces a lot of additional design and test complexity, as well as more conservative operational decision-making.

If I had to put one thing as the major boost in difficulty it'd be the crew rating. It's a lot easier to build a craft when it doesn't need to hold and maintain a breathable atmosphere.

Beyond cost vs cost-plus contracts I wonder if part of it might be that the X-37 was designed by qualified engineers at Boeing while Starliner was co-designed with members of the US Congress.

i find it very 'rich' that a crowd that would never accept firm fixed price work (we do 'agile', it has to be flexible .. we need time to explore options ...) is so down on cost plus.

'cost plus' is not infinite money. there is a budget, performance is evaluated every quarter. every increase is reviewed. the additional money has to be appropriated.

firm fixed price is how the government buys low risk. For lack of a better analogy, a waterfall development. Requirements are clear, the technology is well known. From the beginning.

cost plus is how the government buys systems that have never been made before.

> Requirements are clear, the technology is well known. From the beginning.

Is that really a true statement, even for Starliner? The US Gov't is infamous for changing plans/designs well into the process for many items which is the key reason for cost overruns and blown deadlines. I didn't follow Starliner's development process at all, but I would be shocked if from the beginning the requirements didn't change.

that mismatch between risk / requirements and the type of contract is the root of this whole problem.

if it was cost plus, the government would have had an incentive to no push for changes, since they would have been paying for it.

and yes, Boeing should have said no. but, politics.

Requirement changes on cost plus contracts are endemic. And it's not one way - typically the pipeline is starting to work on the project with requirement A under the assumption it will cost X, find out a decent way through that it's going to cost way more than X, then change to requirements B under the assumption it will only cost Y, repeat two or three times.

Maybe they should apply for a grant from usaid

"After a $523 million charge on its CST-100 Starliner program in 2024, Boeing's total losses on the commercial crew vehicle now exceed $2 billion -- and there's still no clear timeline for its next flight."

Best thing that could happen for Boeing right now is for Elon Musk to order that contract terminated, so Boeing can subsequently assert a conflict of interest and sue the government over it. When Bill Nelson announced that he didn't see the Starliner program ending before fulfilling it's contract I could feel Boeing shareholders everywhere wincing.

Boeing, for what it's worth, has learned from their mistakes with this project; they will never accept fixed-price contracts again. Rendering a service for an agreed upon amount of money is too complicated for Boeing, they will now only accept "cost-plus" infinite money tap contracts.

> Boeing, for what it's worth, has learned from their mistakes with this project

Ha ha, no.

What Boeing should have learned, after the past 5 years of repeated failures, and 346 deaths -may they rest in peace-, is that their engineering quality is lacking.

The only logical conclusion that can be made from all these failures is crystal clear: we have to prioritize engineering quality, so that our products can be delivered on time, and work safely and as expected. With this, we can create value that can be redistributed to our shareholders.

What you suggest they learned is: let's refuse fixed-price contracts, so that we can milk this cow until she starves.

And unfortunately, knowing Boeing, that's exactly the lesson they will have taken away from this program, which is why we can expect them to continue failing miserably in the future. Probably at the cost of human lives.

> we have to prioritize engineering quality, so that our products can be delivered on time, and work safely and as expected

This would require upper middle management at Boeing deciding to fire themselves, so they can hire better engineering management.

>so that we can milk this cow until she starves.

Since the federal government is one absolutely huge, well-fed cow, you can expect Boeing to continue milking this teat for a very long time to come. Let's just hope that fewer people die as a result; We all fly Boeing at one time or another.

> We all fly Boeing at one time or another.

Kayak.com allows you to pick flights based on the aircraft.

didn't know that, but, useful thing to know indeed.

> "What you suggest they learned is: let's refuse fixed-price contracts, so that we can milk this cow until she starves."

Not my suggestion! They've actually said this: https://arstechnica.com/space/2023/10/boeing-says-it-cant-ma...

I should have been a bit heavier with my sarcasm, I definitely disapprove of the way Boeing is going.

Can you give me a engineering quality metric, so i can game and gamble it?

>Boeing, for what it's worth, has learned from their mistakes with this project

okay, learning is good

>they will never accept fixed-price contracts again

Yeah, that's not the lesson they should take from this fiasco.

Given how Boeing was reportedly acting regarding the development of a new crew vehicle[1], the hubris shown seems to be systemic, top to bottom. I have no empathy for the Boeing management that got them into this situation, and if their takeaway is "we're just not going to accept contracts like this", and not, "we need to deeply change how we engineer solutions", then coupled with the 737-max tragedies, Boeing can go bankrupt for all I care.

[1] - https://www.reddit.com/r/Starliner/comments/1f0g0ow/some_int...

Please understand, putting a can of human beans into LEO using a preexisting flight proven rocket is very hard and there is no possible way America's most experienced aerospace company could have possibility come up with a realistic estimate for what it would cost.

There is a competency crisis at Boeing. Not in America generally, as some have suggested, but Boeing specifically.

Boeings problem is not that the United States government isnt giving it enough blank checks (cost plus contracts). If anything it’s the opposite. Fat cat got fat, and now everyone else in encroaching on their territory.

This is the true tragedy of Doge right now. The amount of fat cat entities who are eating themselves to death on the backs of USA tax payers is staggering. But I doubt anything effective ever comes out of Elon and company here.

"venture firm Space Capital predicts both Boeing and Airbus will divest their space divisions in 2025":

https://spacenews.com/space-venture-firm-predicts-industry-s...

SpaceX is making both of them pull out we are in the stupid place of having to depend on Bezos to be cost efficient competition.

China will be launching their reusables (note plural) this year.

They already learned that lesson with airforce one. Unsure on the timelines of them, but agreeing with others that it's the wrong lesson to learn. FFP can be done well. They are not doing them well.

Best thing for Boeing is for it to have competent engineers take over the leadership.

Boeing needs to be Boeing not McDonnell Douglas.

It's probably better for Boeing to give up its space business and focus on its airplane safety.

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