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Did a 1997 merger ruin Boeing?

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Re: Did a 1997 merger ruin Boeing?

#81

Post by yongjik »

kazen44 wrote: post #32
Archelaos wrote: post #27

In what way is Airbus different? (Honest question of someone who has no knowledge about this industry.)

airbus was made as a very deliberate political project from various european countries to stay competitive in the airline bussiness. Mind you this happened around the same time many foundations of a lot of european institutions where formed, and airbus is the primary example of a intra-european company in both its bussiness form (being an S.E[0]) aswell as in the way its products get build across different member sta…

Which makes Airbus even more impressive, TBH. How many "deliberate political project from various countries to stay competitive in the X business" can you think of that actually became successful?

Re: Did a 1997 merger ruin Boeing?

#82

Post by dylan604 »

ta8645 wrote: post #74
dylan604 wrote: post #50

Earlier quoted context omitted.

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.

You're also looking over the fact that the purchasers really Really REALLY wanted this plane, and Boeing knew this. The fact that it was being sold as an in kind upgrade so no new training was required was a H. U. G. E. part of the decision to purchase. There was a helluva sales pitch with that fact on top of the fuel savings. I'm guessing there's a lot of bar lowering that the airlines would have been willing to accept to even contemplate a safety record clause

Re: Did a 1997 merger ruin Boeing?

#83

Post by throwup238 »

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

The list of orders and deliveries is public: https://en.wikipedia.org/wiki/List_of_Boeing_737_MAX_orders_...

Most orders were before the accidents but the vast majority haven't been canceled. Boeing has only delivered a fraction of them; they have another 3,000 to deliver before they get to the orders placed after the accidents (~1400).

Re: Did a 1997 merger ruin Boeing?

#84

Post by ta8645 »

dylan604 wrote: post #82
ta8645 wrote: post #74

Earlier quoted context omitted.

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

You're also looking over the fact that the purchasers really Really REALLY wanted this plane, and Boeing knew this. The fact that it was being sold as an in kind upgrade so no new training was required was a H. U. G. E. part of the decision to purchase. There was a helluva sales pitch with that fact on top of the fuel savings. I'm guessing there's a lot of bar lowering that the airlines would have been willing to acc…

Regardless, it would seem prudent to give yourself flexibility to react to such a compromised safety record. You can always still go through with the purchase if it makes sense. It just seems to me the airline lawyers failed to protect their interests, when agreeing to these purchase contracts.

Re: Did a 1997 merger ruin Boeing?

#85

Post by Animats »

jltsiren wrote: post #47
stcredzero wrote: post #40

Earlier quoted context omitted.

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. There's an apparent contradiction here. China spent ~15 years developing the C919, and it's finally entering mass production. But it also appears to be sold out until the 2030s. And here.

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 was a political project. It took them over 20 years before they produced anything good. But then they got it right.

Re: Did a 1997 merger ruin Boeing?

#86

Post by hencq »

sneak wrote: post #4

This is the “everybody knows” narrative that seems to get trotted out whenever modern Boeing has problems. I’m curious - how much of it is true? Is it really systemic, or has it manifested only with one specific model plane? It seems to fit very well with the “financialization is bad” narrative, too, but is there any other data to support the claims? It’s possible that engineer-driven Boeing could have fucked up the…

Yeah, agreed, it makes intuitive sense and also neatly fits an emotional "finance bad" story, but shouldn't we then also expect the 787 to have similar problems? Or, why would the 787 with its entirely new airframe exist in the first place? As an outside observer with no particular knowledge of the industry it at least seems like Boeing was able to produce a high quality new plane more than a decade after the 1997 merger.

Re: Did a 1997 merger ruin Boeing?

#87

Post by Beldin »

throwup238 wrote: post #83
dylan604 wrote: post #50

Earlier quoted context omitted.

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

The list of orders and deliveries is public: https://en.wikipedia.org/wiki/List_of_Boeing_737_MAX_orders_... Most orders were before the accidents but the vast majority haven't been canceled. Boeing has only delivered a fraction of them; they have another 3,000 to deliver before they get to the orders placed after the accidents (~1400).

If you cancel, you'll have to place an order elsewhere and end up at the back of their log. Since there isn't that much competition, this means Airbus. Moreover: this also means introducing another brand of aircraft into your fleet. That is a far greater maintenance headache than "merely" various types by the same company.

Basically: Switching cost are stratospheric.

Re: Did a 1997 merger ruin Boeing?

#88

Post by mewse-hn »

This article doesn't cite sources but it seems to be just repeating every point made in the netflix doc Downfall - including the joke about McDonnell Douglas buying Boeing with Boeing's money.

My friend also recommends the book Flying Blind which I haven't read yet, but both seem like better info sources than the linked article.

Re: Did a 1997 merger ruin Boeing?

#89

Post by vincent-manis »

atleastoptimal wrote: post #75

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

Hewlett-Packard

Re: Did a 1997 merger ruin Boeing?

#90

Post by bcantrill »

The answer to this is "yes" -- and for details, I would recommend Peter Robison's excellent Flying Blind. (Selfishly, I would also recommend the conversation that we had with Robison on Oxide and Friends shortly after the book was published.[0]) For insight into the deep roots of the broken McDonnell Douglas culture, I would recommend an older book, John Godson's Rise and Fall of the DC-10.

[0] https://oxide-and-friends.transistor.fm/episodes/flying-blin...

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