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Did a 1997 merger ruin Boeing?

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Re: Did a 1997 merger ruin Boeing?

#241

Post by toyg »

kelnos wrote: post #214
linkjuice4all wrote: post #58

Earlier quoted context omitted.

Haven't seen it mentioned yet - but there are several reasons why airlines continue to buy from Boeing - specifically the 737 variants. - The pilots are already trained (this is a big one and is part of the reason behind the MCAS debacle - new features mean retraining which costs money and limits which crews can fly which aircraft) [0] - The 737 generally fits easily at a lot of airports since it's been around for a…

> In the US many airlines have shifted to single-aisle "mid-sized" planes for domestic routes due to deregulation around direct service - instead airlines can use a hub-and-spoke model with several connecting flights as opposed to only providing direct routes with enough demand to fill a plane I think this is no longer strictly true. In the early days of deregulation, yes, absolutely, airlines went to a hub-and-spoke…

I agree. The trend in Europe is actually the opposite, with point-to-point now considered the winning approach. Consumer preference for this modality is actually a significant factor in the dramatic rise of low-cost carriers (Ryanair, easyJet, etc). Hub-and-spoke is obviously still around, particularly for intercontinental flights, but the commercial failure of the giant A380 indicates where the market actually is.

Re: Did a 1997 merger ruin Boeing?

#242

Post by MikePlacid »

kelnos wrote: post #205

I was pretty disappointed in this article; I was expecting a deep dive into the merger and its effects, but I all I got was the surface-level stuff that everyone repeats over and over, without any verification that any of it is really the reason. As other sibling posters have mentioned, it feels like there was a lot more to it. Sure, the McDonnell Douglas executives taking over Boeing after the merger certainly didn'…

Well, speaking of airplane industry one thing is obvious - you can’t build great airplanes without money and you can’t get large sums of money without building great airplanes. The survival/prosperity question is of balance, not of preference of one to another.

I do not know why the author decided to “simplify” things. In my field of experience such simplifications end very badly. I guess if someone decided to really just build great airplanes no matter the costs - his enterprise would have ended very badly too.

Now, the question of finding a proper balance, as each engineer knows - this is the question of real pain and real beauty. But - is it possible to write an article about a struggle to find a proper balance in something? anything? Will anyone read such an article? Imagine, how many things should be explained before the problem becomes clear…

Re: Did a 1997 merger ruin Boeing?

#243

Post by KingOfCoders »

EndorphinRush wrote: post #224
KennyBlanken wrote: post #173

Earlier quoted context omitted.

What's wild is that all this happened even with the NSA conducting industrial espionage on Airbus on behalf of Boeing and M-D.

This isn’t Reddit. Do better. The article referencing this and Airbus is rather sensationalized and cuts off half the quote. This was said in reference to Airbus bribing foreign officials to buy from them. The full quote reads: "When we have caught you at it, we haven’t said a word to the U.S. companies in the competition. Instead we go to the government you’re bribing and tell its officials that we don’t take kindly…

CIA director says "We haven't done anything wrong, we're the good guys".

To judge the credibility of the director of the CIA, start here:

https://en.wikipedia.org/wiki/List_of_CIA_controversies

Re: Did a 1997 merger ruin Boeing?

#244

Post by Xixi »

bloomingeek wrote: post #157
SkyMarshal wrote: post #134

Earlier 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 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.

"a few misc planes on the chopping block in the future" sounds somewhat disingenuous: we are talking of a fleet of 477 Airbus A320s [1] (family, mostly A319s and A321s), nearly 50% of American Airlines entire fleet.

This includes 80 A321 NEO, and with a further order for 50 A321XLRs I strongly doubt these are on the chopping block. The A321 NEO is very hard to beat on transcon: AA needs the subtype, so it's here to stay. And Airbus knows it: the A321 NEO is expensive...

As for the older A319s, AA is currently looking for their replacements: it should be either A220, 737 MAX7 or maybe Embraer E2 195. If they go for the 737 MAX7 that will make it to 4 types, eventually: Airbus A321 and Boeing 737, 777 and 787. Otherwise 5 types.

[1] https://en.wikipedia.org/wiki/American_Airlines_fleet#Curren...

Re: Did a 1997 merger ruin Boeing?

#245

Post by salty_biscuits »

epistasis wrote: post #234
naasking wrote: post #229

Earlier quoted context omitted.

> an engineer-led culture made it more difficult to compete in a cost sensitive environment. I know this is a common sentiment, but I don't quite get it. Engineering is often about optimizing multivariate functions, and cost is just another variable to optimize. If you frame it properly to engineers, they can solve cost problems too.

Agreed. Maybe I have become too much of a PHB, but I find that engineers (or scientists in my case) really love having cost as one of the visible metrics to optimize for, and will generally do a fantastic job at evaluating it amongst quality concerns. At least much better than management can do.

They are often surprisingly ruthless when given cost as part of the objective as well.

Re: Did a 1997 merger ruin Boeing?

#246

Post by epistasis »

bee_rider wrote: post #240
epistasis wrote: post #201

Earlier quoted context omitted.

I'm curious when this was recorded, but my guess is early 2000s or maybe late 1990s? With how Apple has avoided ever becoming a monopoly in pretty much any area, and instead tries to just take the top most profitable customers, it really meshes well with this idea of not becoming a monopoly and having the company rot. Edit: looks like this might be from Triumph of the Nerds, a series released on PBS in 1996. So befor…

That’s an interesting thought. I always assumed they went for the upscale market because that’s where the profit margin is. But also, it does seem to let them pull in a ton of profit while not ever becoming a monopoly or the dominant player. I think they are only the majority in tablets, right? And tablets seem to be, oddly enough, a bit stagnant.

Yes, it's more than simply going for the most profitable customers, it's about avoiding the least profitable customers so that there's still a forcing function on the company to stay on top. And also direct immediate feedback trhough loss of the high profit margin customers, when starting to fail.

Of course, this could be overthinking a plate of beans, maybe Apple just aims for a high price point and high profit margin. But if you did want to take most of the current profits, and most of the future profits, you'd ensure you got enough feedback to not become a monopoly. You'd aim to take only the high profit margin customers and intentionally ignore the lower profit margin customers to let some form of competition continue to push on you.

Re: Did a 1997 merger ruin Boeing?

#247

Post by Beldin »

pfannkuchen wrote: post #179
Beldin wrote: post #87

Earlier 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.

Why can’t airbus ramp up production and soak up Boeing’s customers? Too regulated?

I have no special insider knowledge. I reckoned it could be turn-around time coupled with needs.

A quick google suggests that in optimal conditions (all parts available), it would take minimum of 2 months to assemble a large airliner plane. 6 months is suggested as a common time frame. As far as needs go, a plant would need suppliers for all pieces (over 350k by one count for one type of airbus). And you'd need a place where you can assemble the plane, with a sufficiently large runway attached. Possibly in an area where testflights would be acceptable.

All in all: perhaps current suppliers are at or close to their limits, and a new facility would need a completely new supply chain. If not, I'd imagine that if the bottleneck is exclusively with the builder, a solution could be found.

Re: Did a 1997 merger ruin Boeing?

#248

Post by kelnos »

jltsiren wrote: post #49
mcv wrote: post #48

Earlier quoted context omitted.

But why are they not also getting into the 737-size market, if that's such a huge market? If even the questionable 737 MAX is sold out for decades, that sounds like a pretty lucrative market to be in. It sounds to me like if you build something that works, you will sell as many as you can build.

For the same reason Boeing developed the 737 MAX instead of a completely new model. The fixed costs are too high, the risks are too high, and the profit margins are too low. If it takes 10-15 years to develop a new plane, several years to ramp up production, and several years beyond that to break even, it does not make sense as a business. If you think it purely as an investment, there are always better uses for your…

Wasn't a significant part of Boeing's decision to "recycle" the 737 time-to-market? Sure, they saved a bunch of money not designing a new plane, but they were also under heavy threat from the A320neo and needed to get something out there relatively quickly.

Re: Did a 1997 merger ruin Boeing?

#249

Post by rob74 »

quink wrote: post #211
AniseAbyss wrote: post #167

Earlier quoted context omitted.

What's happening to Boeing isn't really remarkable lots of dinosaur conglomerates rise and fall. I'm just a casual follower but it seems their glory days are from the 60s and 70s and they've been coasting along since then.

> glory days 1971: Will the Last Person Leaving SEATTLE — Turn Out the Lights I’d argue the 757, 767 and 737 Classic (i.e. -300 to -500), all of which much more 80s than 70s were much more glorious. And the 90s brought us the 737NG and 777 which continue to carry more than everything else today and for that matter anything else ever, other than maybe the A320ceo.

I would say even the 787 is a good plane, if it didn't have major build quality issues because of Boeing wanting to reduce manufacturing costs (it was initially built at two plants, Everett WA and North Charleston SC, and it got to a point when airlines only wanted to have 787s manufactured in Everett, but ultimately the production in Everett was discontinued). And now the same major build quality issues start popping up with the 737 MAX (whose fuselage is being manufactured by Spirit Aerosystems, which was originally a division of Boeing but was outsourced in 2005).

Re: Did a 1997 merger ruin Boeing?

#250

Post by kelnos »

carbine wrote: post #41
ajkjk wrote: post #39

Earlier quoted context omitted.

Well a lot of them didn't fall out of the sky and were used like millions of times, and the reason a few of them did was ostensibly fixed so now the chances of them falling out of the sky is even less than when most of them already weren't.

ostensibly the need for MCAS in the first place is a major design flaw and results in additional failure modes that other aircraft do not have. the "fix" was to prioritize human inputs over MCAS, making these planes more vulnerable to human error. still worth avoiding IMHO.

MCAS is not strictly needed; the planes would fly fine without it, and pilots would be able to handle things just fine. MCAS only exists to make the MAX's flight characteristics more similar to 737NG.
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