Earlier quoted context omitted.
Actual interview begins around the 5 minute mark. Edit: these twitter space voice cutouts are brutal. Probably pass on this one if you like tight interviews.
What happens during minutes 1-4?
[deleted]
Did a 1997 merger ruin Boeing?
151–160 of 354 posts
Re: Did a 1997 merger ruin Boeing?
#152Earlier 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…
Up until recently there was also Bombardier, but it seems like they basically bankrupted themselves and ceded all of their commercial plane production to Airbus. Now they just do business jets.
They didn't bankrupt themselves, the US government (at Boeing's urging) bankrupted them.
Re: Did a 1997 merger ruin Boeing?
#153Earlier quoted context omitted.
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?
Interesting question. ASML?
Re: Did a 1997 merger ruin Boeing?
#154Earlier quoted context omitted.
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.
> That is a far greater maintenance headache than "merely" various types by the same company. You would think so, but it’s actually not. I used to work at an airline in IT, and asked that question of the Ops folks when the airline was evaluating switching fleets to Airbus. They said switching fleets or operating a mixed fleet is not cost prohibitive. This was midsize regional airline fwiw.
I'm not an expert by any means, but this is almost the opposite of what I've heard, and the fact that most airlines are either Boeing or Airbus exclusively supports that idea.
In particular, I've heard that maintenance and pilot training are big issues. If you've got half your pilots on the 737 and half on the A320, you're much less resilient to scheduling issues than having all of them on one or the other. Similarly, I believe maintenance facilities tend to be one or the other, so if you've got half your facilities for each, at the margins you're going to have more scheduling issues for maintenance.
There are economies of scale with anything to do with scheduling flexibility, and dividing like this essentially halves those economies of scale.
Re: Did a 1997 merger ruin Boeing?
#155I know ahead of time that what I am about to say, will result in me getting yelled at by the HN crowd that what I am saying is anecdotal and all that. But, after refraining for a while, I guess I have to say something so, I know you will down vote me because this is not based on a scientific A-B test blah blah. Cool. People's lives are at risk. And No, I DO NOT work for Boeing and never have. I work for a company tha…
The guidlines ask you not to comment about downvoting.
That is more important than people's lives.
This is HN Helping.
Re: Did a 1997 merger ruin Boeing?
#156I 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
Reputation is an asset like anything else. It's probably economically rational to build up a reputation for good quality while you're small, and then switch to extracting as much value as you can from that reputation once you've gotten big. (I don't like it but I don't see any way to prevent it being the most profitable course)
It's also possible to optimize for long term profitability.
> There were certain things about the business where it was obvious – speaking to people who had been on that journey for 25 years before I joined – that they were not likely to change in the future because they hadn’t changed in the previous 25 years. The first thing that struck me was an absolutely rock-solid commitment to gaining the trust of the customer, the employees, the suppliers and business partners. Almost every rule or method or procedure of the company was built around ensuring that.
https://inpractise.com/articles/aldi-culture-and-operations-...
Re: Did a 1997 merger ruin Boeing?
#157Earlier quoted context omitted.
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.
> That is a far greater maintenance headache than "merely" various types by the same company. You would think so, but it’s actually not. I used to work at an airline in IT, and asked that question of the Ops folks when the airline was evaluating switching fleets to Airbus. They said switching fleets or operating a mixed fleet is not cost prohibitive. This was midsize regional airline fwiw.
I'm retired from American Airlines. AA had eight different Boeing planes, plus a few Airbuses thirty years ago. By the time I retired last year, most of the different planes are gone and AA mostly focuses on 737, 777 and 787, with a few misc planes on the chopping block in the future. Fuel usage, mechanic training and parts inventory are the reasons for the changes.
Re: Did a 1997 merger ruin Boeing?
#158Earlier quoted context omitted.
None of the airlines are run by engineers who have a culture of safety either. That's why.
An engineer isn't the golden ticket to run every kind of job best. In fact I wouldn't think an airline is the kind of company that needs nor should have an engineer at the helm. They're a transportation/marketing company, not a manufacturing company. An airline markets a flight to a public which they perform on leased or purchased third party equipment based on negotiated route pairs/airport slots in a competitive ma…
>An engineer isn't the golden ticket to run every kind of job best.
Even for an engineering-heavy company, an engineer running it doesn't necessarily work out. The last time Intel had an engineer as CEO, it was a disaster.
Re: Did a 1997 merger ruin Boeing?
#159This 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…
You're only looking at this airplane. What about the space capsule that cannot be built correctly for a test launch? What about the planes to replace the ones the secret service uses to ferry around POTUS? What about the stories from employees saying they are punished from bring up issues they see? So much more than just this one plane (and its variants)
And before the 737 MAX, in the 90's there were a number of 737 accidents related to rudder control units. https://en.wikipedia.org/wiki/Boeing_737_rudder_issues.
And that space capsule, Starliner, was contracted in 2011 and has yet to be safe enough to carry humans. Meanwhile in the same time, the upstart competition has gone from zero to flying some 11 crewed missions (not all were to ISS) and charged the government much less than Boeing charged, and that despite Boeing's storied 100 year aerospace history and culture.
Re: Did a 1997 merger ruin Boeing?
#160Earlier quoted context omitted.
> That is a far greater maintenance headache than "merely" various types by the same company. You would think so, but it’s actually not. I used to work at an airline in IT, and asked that question of the Ops folks when the airline was evaluating switching fleets to Airbus. They said switching fleets or operating a mixed fleet is not cost prohibitive. This was midsize regional airline fwiw.
I'm not an expert by any means, but this is almost the opposite of what I've heard, and the fact that most airlines are either Boeing or Airbus exclusively supports that idea. In particular, I've heard that maintenance and pilot training are big issues. If you've got half your pilots on the 737 and half on the A320, you're much less resilient to scheduling issues than having all of them on one or the other. Similarly…
Type ratings are not prohibitive to achieve once a pilot has achieved an ATPL. It’s about 5-6 weeks per pilot. Yeah, it’s a pain but it’s also not a devastating road block.
Ironically if you hear some airlines talk about the whole point of MCAS and no extra type rating requirement didn’t actually factor in as much as Boeing thought.
Training and aircraft expense is actual minor compared to fuel efficiency and availability of aircraft. If you’re running 20 year old 737NGs the new engines on the MAX are going to save a tonne of money, even after potential reputations damage. It’s all risk management.
Edit: in regards to maintenance a lot of airlines are outsourcing maintenance to bigger providers so that’s less of a deal than you’d think as well. Fuel really is one of the largest factors in this and an extra 5 years of expensive gas while waiting for a new plane may be too much for budgets to bear.