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Once a paragon of quality, Boeing's focus on its stock price has caused hundreds to die.
When asked how Boeing’s recent door plug incident came about, company CEO Dave Calhoun cryptically explained “a quality escape occurred.” That kind of corporate doublespeak is indicative of the problem at hand. Boeing used to have quality, but it escaped, apparently sometime around when it merged with McDonnell Douglas in 1997.
For the last three decades, the company has spent substantial amounts of money buying back its own shares to pump up the stock price, and issuing dividends, instead of researching and developing new high-quality high-efficiency airplanes. The results have been catastrophic, as HBO’s funny Sunday night news man John Oliver explains. //
Prior to Reagan-era deregulation, stock buybacks were considered illegal market manipulation. If a company wanted to boost its stock, it had to do something worth crowing about, like develop good product. //
The desire to push R&D costs off to the company’s suppliers meant that Boeing was essentially building its planes from kits that weren’t designed together, didn’t fit together, and didn’t meet the standard of quality the company had once been known for. This move may have been a short-term boon for company profits, the share price, or for CEO bonuses, but the reduction in quality has given rise to the phrase “If it’s a Boeing, I ain’t going.” //
Saigon_Design
Bradley Brownell
3/07/24 9:55am
It began when Boeing took over Mcdonnell-Douglas and transplanted their board and C-suite into Boeing’s, effectively making it a MDD takeover of Boeing when it was actually Boeing that actually bought MDD.
MDD failed precisely because of their shitty leadership, and they had the opportunity to try their shenanigans again at Boeing and... look where we are now.
Boeing has literally no answer to Airbus and other competitors’ products, and won’t for at least a decade precisely because they focused on their stock price instead of the business. They claimed it would cost too much to invest in a new design - well, now you don’t have anything to offer airlines except the 777, 787, and 737Max, with big holes in the product lineup (e.g. a product to rival the A220). //
Mosko
Saigon_Design
3/07/24 10:31am
Somebody put it brilliantly in another comment on a previous article:
“McDonnell-Douglas bought Boeing with Boeing’s money”.