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Did a 1997 merger ruin Boeing?

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Re: Did a 1997 merger ruin Boeing?

#71

Post by fsckboy »

mcv wrote: post #34

Here's what I don't understand: the 737 MAX was introduced in 2017. In 2018, two of them dropped out of the sky, the grounded for a while, it turned out Boeing had lost its engineering culture and its priority for safety, and it became clear that the 737 MAX had some serious design problems that they had tried to fix in software. And according to this article, the 737 MAX is Boeing's best selling plane ever. Why? Why…

>the 737 MAX is Boeing's best selling plane ever... WHY?

in most industries, the fat part of the market is the lower end, so your smallest cheapest product is your biggest seller. McDonalds sells more regular hamburgers than they do Big Macs. BMW sells more 3 series than they do 7 series.

There are many other factors that go into selecting the brand of the next plane you buy than simply "zomg they made a mistake".

Boeing still has a leading technology and engineering position in the aerospace field, and their product line overall is a very good fit for what many carriers need to buy. This problem of some loose bolts is easily remedied, and is just not a dealbreaker. despite an exaggerated title, TFA is very light on making any case that there's a set of deep problems inside Boeing that rise to any level of statistical significance. A software problem and some loose bolts.

Re: Did a 1997 merger ruin Boeing?

#72

Post by ip26 »

moose_man wrote: post #22
skyyler wrote: post #21

Earlier quoted context omitted.

What can reasonably be done to combat it? Leadership at all the biggest firms is on board with shareholder capitalism. To them, Welch style management just means line goes up...

It's going to take a long time, but first is to destroy the myth that corporations have one purpose they need to fulfill: Generate revenue and ensure things are profitable for shareholders. This myth artificially took root in the 1970s. Business schools have to stop teaching this.

Ok, suppose the myth is destroyed and companies change their ways. Then a small group of activist investors demands a return to "shareholder value", the company refuses, and the investors orchestrate a takeover with other people who have not yet learned the myth was dispelled. What next?

Re: Did a 1997 merger ruin Boeing?

#73

Post by rtpg »

solarkraft wrote: post #62
jltsiren wrote: post #47

Earlier quoted context omitted.

While there is a growing demand for passenger aircraft, the fixed costs of getting into the business are so high that the market cannot support that many manufacturers. Not on a commercial basis, anyway. Airbus and Boeing are commercially viable, and they have customers all around the world. Comac is more of a political project, as China tries to reduce their dependence on Western technology. There are 1000+ orders f…

> Airbus and Boeing are commercially viable, and they have customers all around the world. Comac is more of a political project I thought Airbus was heavily subsidized

So is Boeing! Companies without this massive amount of government support either barely survive on a tiny niche or fall over before actually shipping products.

It's fine that governments have decided to prop up these industries in their own ways, of course. Just hard to expect "free market" participants to show up and take on such a capital intensive industry

Re: Did a 1997 merger ruin Boeing?

#74

Post by ta8645 »

dylan604 wrote: post #50
mcv wrote: post #34

Here's what I don't understand: the 737 MAX was introduced in 2017. In 2018, two of them dropped out of the sky, the grounded for a while, it turned out Boeing had lost its engineering culture and its priority for safety, and it became clear that the 737 MAX had some serious design problems that they had tried to fix in software. And according to this article, the 737 MAX is Boeing's best selling plane ever. Why? Why…

I'm guessing a lot of the purchase orders were placed well before the MCAS incidents occurred. These purchases tend to be contract based, and not something you can just leave with the cashier when you suddenly decide not to purchase them. So you're contractually obligated to spend the money, so might as well get a plane out of it and hope for the best

Lawyers for the airlines should have made their orders conditional on a continued high safety record.

Re: Did a 1997 merger ruin Boeing?

#75

Post by atleastoptimal »

I feel like this pattern occurs in too many companies across all sectors:

1. Company is product-quality focused

2. Beats competition and creates mini-monopoly

3. Sales becomes somewhat inelastic to changes in quality

4. This leads "cost-cutting" and marketing focused execs/decision making to beat out product quality execs/decision making

5. Company's product quality takes predictable linear path to the bottom

Re: Did a 1997 merger ruin Boeing?

#76

Post by esotericimpl »

mcv wrote: post #34

Here's what I don't understand: the 737 MAX was introduced in 2017. In 2018, two of them dropped out of the sky, the grounded for a while, it turned out Boeing had lost its engineering culture and its priority for safety, and it became clear that the 737 MAX had some serious design problems that they had tried to fix in software. And according to this article, the 737 MAX is Boeing's best selling plane ever. Why? Why…

Check the orderbook for the A320 Neo

If you need single aisle planes, your only option would be to book the Max, the A320 is decades out on order.

Re: Did a 1997 merger ruin Boeing?

#77

Post by [deleted] »

jltsiren wrote: post #37
mcv wrote: post #34

Here's what I don't understand: the 737 MAX was introduced in 2017. In 2018, two of them dropped out of the sky, the grounded for a while, it turned out Boeing had lost its engineering culture and its priority for safety, and it became clear that the 737 MAX had some serious design problems that they had tried to fix in software. And according to this article, the 737 MAX is Boeing's best selling plane ever. Why? Why…

The world is very small, and it can't support that many companies making passenger aircraft. If you want aircraft of that size, you have to buy Boeing or Airbus. Both are sold out until the 2030s. And if you are already operating Boeing aircraft, it's more cost-effective to buy more of them instead of switching to Airbus. China spent ~15 years developing the C919, and it's finally entering mass production. But it als…

[deleted]

Re: Did a 1997 merger ruin Boeing?

#78

Post by codethief »

solarkraft wrote: post #62
jltsiren wrote: post #47

Earlier quoted context omitted.

While there is a growing demand for passenger aircraft, the fixed costs of getting into the business are so high that the market cannot support that many manufacturers. Not on a commercial basis, anyway. Airbus and Boeing are commercially viable, and they have customers all around the world. Comac is more of a political project, as China tries to reduce their dependence on Western technology. There are 1000+ orders f…

> Airbus and Boeing are commercially viable, and they have customers all around the world. Comac is more of a political project I thought Airbus was heavily subsidized

As is Boeing.

Re: Did a 1997 merger ruin Boeing?

#79

Post by joe_the_user »

The article seems really thin. I'd be curious what decision-making process went into the situation where "McDonnell Douglas bought Boeing with Boeing’s money". Was the MD management team just savy about mergers? Were consultants pushing for "value creation" involved? Or what?

Anyone have a better link?

Re: Did a 1997 merger ruin Boeing?

#80

Post by [deleted] »

mcv wrote: post #34

Here's what I don't understand: the 737 MAX was introduced in 2017. In 2018, two of them dropped out of the sky, the grounded for a while, it turned out Boeing had lost its engineering culture and its priority for safety, and it became clear that the 737 MAX had some serious design problems that they had tried to fix in software. And according to this article, the 737 MAX is Boeing's best selling plane ever. Why? Why…

[deleted]
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