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Did a 1997 merger ruin Boeing?

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Re: Did a 1997 merger ruin Boeing?

#251

Post by RcouF1uZ4gsC »

KennyBlanken wrote: post #173
stg22 wrote: post #140

The role of McDonnell-Douglas is exaggerated. Boeing had achieved pretty close to a monopoly in the mid-1970s, but things had changed by the mid-1990s. 1. Domestic airlines protected by regulation had been effective monopolies and Boeing's engineer-led culture thrived in an environment where airlines didn't care about costs. But that environment died with airline deregulation in 1978 and an engineer-led culture made…

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

French intelligence has been doing full scale industrial espionage on US companies for quite some time.

https://www.hanford.gov/files.cfm/frenchesp.pdf

Re: Did a 1997 merger ruin Boeing?

#252

Post by fbdab103 »

idiotsecant wrote: post #235
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.

Given the choice between cost optimized and safe, fast, cool, etc very few engineers are going to go for cost savings. If there's no bean counters in charge and no market cnstraints its obvious that the product is going to be really good and really expensive.

"Any idiot can build a bridge that stands, but it takes an engineer to build a bridge that barely stands."

Engineering is all about fitting within your constraints. Make budget one of those limits and life will uh find a way.

Re: Did a 1997 merger ruin Boeing?

#253

Post by brazzy »

sjfjsjdjwvwvc wrote: post #100
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

Enshittification?

Completely different thing. The gist of the Boeing theory is that it was ruined by a finance-driven culture that resulted in cost-cutting away quality and safety.

"Enshittification" is not based on cost-cutting or optimizing for profits. It's when a product that's already "perfect" and widely used, has lots of money/effort invested in it to chase further growth, and the changes end up making the product worse for its existing userbase.

Re: Did a 1997 merger ruin Boeing?

#254

Post by inferiorhuman »

ethbr1 wrote: post #228
tiff_seattle wrote: post #204

Earlier quoted context omitted.

https://www.economist.com/special-report/2003/06/12/airbuss-...

>> According to a European Parliament report, published in 2001, America's National Security Agency (NSA) intercepted faxes and phone calls between Airbus, Saudi Arabian Airlines and the Saudi government in early 1994. The NSA found that Airbus agents were offering bribes to a Saudi official to secure a lion's share for Airbus in modernising Saudi Arabian Airlines' fleet. The planes were in a $6 billion deal that Edo…

A big part of why Lockheed got out of the airliner business was that they got caught bribing the Japanese prime minister.

Re: Did a 1997 merger ruin Boeing?

#255

Post by bcantrill »

code_biologist wrote: post #145
bcantrill wrote: post #90

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-fr…

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.

Yeah, sorry -- Twitter Spaces were absolutely awful, and this particular space was so bad with respect to audio that we made fun of it ourselves in our roundup of Oxide and Friends for On the Metal.[0] We moved to Discord over a year ago, and the audio issues went away. But I thought the content of this conversation was great nonetheless -- with my apologies for the audio snafus!

[0] https://oxide.computer/podcasts/on-the-metal/oxide-and-frien...

Re: Did a 1997 merger ruin Boeing?

#256

Post by refurb »

lmm wrote: post #187
GeekyBear wrote: post #156

Earlier quoted context omitted.

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…

If you're in a stable business like groceries where you can be confident that your market will still be around in 25 years, sure. But that doesn't apply to a lot of businesses.

Precisely. Who accurately predicted the shift from long-haul, high-capacity airliners to smaller, more fuel efficient airliners to fit with a hub-and-spoke model?

Now layer that on top of the decade it takes to get a new plane from drawing board to delivery.

From what I've read, it sounds like Boeing completely lucked into it. It wasn't some smart person who could accurately predict the future.

And to be honest, a lot of companies we think of as being "innovative" and having "foresight" are that way. They made the best business decision they could, based on what was known at the time, and the stars lined up to make it a huge hit.

Saying that a company can plan for future profitability isn't supported by the facts.

Re: Did a 1997 merger ruin Boeing?

#257

Post by refurb »

moose_man wrote: post #2

Jack Welch style management and shareholder capitalism are some of the most destructive forces in the US economy.

Meh... it's trendy to blame Jack Welch, but it's not like companies have always chased money and always will. Many will cut corners, and it often works out just fine, others crater their business.

Re: Did a 1997 merger ruin Boeing?

#258

Post by refurb »

skyyler wrote: post #21
moose_man wrote: post #2

Jack Welch style management and shareholder capitalism are some of the most destructive forces in the US economy.

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...

Nothing. As long as human run companies, you'll always have people cutting corners for short-term gain.

Hell, people will commit financial crimes that result in significant prison terms and they still do it.

Change humans and maybe you can solve the problem.

Re: Did a 1997 merger ruin Boeing?

#260

Post by hilux »

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

I don't follow your logical jump from (3) to (4).

Cost-cutting is always unpleasant, and never done just for fun. Typically companies cut costs when they're feeling squeezed, i.e. they have to.

A company with a "mini monopoly" would not feel squeezed - quite the opposite.

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