33 Comments
founding

The Boeing mess--from its merger with McDonnell Douglas to its executives’ abandonment of quality (giving rise to a classic Orwellian term “quality escape”) -- has created a fault line in which the brittle justifications for the financialization of everything are breaking down, exposing the neoliberal fallacy of shareholder value. It’s as if these executives can’t help themselves from seeing that quality ought to be the first, second and third considerations when building an airliner. Matt, thanks for the awesome analysis, which can be used to chip away at the group think over at the WSJ.

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Jan 26Liked by Matt Stoller, Todd Mentch

Again, the story here shows the financialization of business, not just in Boeing management, but all down the chain. Everything is done by subcontractors, which means that along every stage of the job, there's a "management overhead" taking a cut of the contract. The result is twofold: (1) jacking up the final cost of the product, and (2) reducing the portion of that cost that goes to the actual workers producing it. The defense industry is a prime example, but it's all over the economy.

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Also the more elements the chain of sub contractors contains the bigger the communcation, coordination and scheduling problems.

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Exponentially.

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(presided over by neoliberal financial engineers who have a fundamental contempt for reality.)-

It's not contempt, they simply do not care about the future of anything beyond themselves. Once the lock-out period expires on their stock options and they cash out they could care less if their company goes bankrupt. Long term planning has been 100% replaced by short-term profit.

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Jan 26Liked by Matt Stoller, Todd Mentch

BTW, Spirit did not make the plug door. It subcontracted that to a Malaysian firm, which produced a door that could fall 16,000 feet and be in darn fine shape.

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founding

Boeing is lucky that Airbus's order books are already overflowing and that it cannot easily provide alternative planes in the short to medium term, but the long this lasts, the more airlines will turn to Airbus and others resolutely - this will drive orders in the next 10-15 years.

Interestingly, this could actually favor COMAC the Chinese plane manufacturer, which would not be good news for either Boeing or Airbus and could further encourage the US government to act - and Europeans to let it happen.

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Jan 26Liked by Matt Stoller

The government should force Boeing to re-integrate Spirit AeroSystems. Spirit was financially compromised by factory shutdowns during Covid. That combined with the constant pressure to increase output and lower cost have made them a danger to the flying public. It is also obvious that Boeing's quality management processes need a major overhaul. Finally, senior management should be cashiered.

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I did my part! I wrote to Biden with a link to your last Boeing article, as probably other people did, and asked him to heed your advice. It seems like many things are imploding right now. Hope this can apply to other monopolistic messes. I am still looking directly at Airlines. Their monopolies need to be broken up.

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https://images.app.goo.gl/29YHmgvyNJsq6eiu5 just replace this with an airliner and the weak link being some vendor dep in Central America

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Yup! great image! Reminds me of someone I went to college with who got a job working for our utility plant in their nuclear reactor division. He liked to get high a lot.

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Three mile island melted down on night shift . Brand new reactor and they melted it due to one leaking valve and a bad indicator light

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Matt, you have an amazing talent (born I know of a lot of real work) for finding good news in the worst kind of news. It's not spinning. You convince me. The sordid tale of that engineer's post rings all too credible. I'm a software engineer and I have seen enough down production systems to know how corners get cut, and slowly figured out the real underlying reasons.

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Jan 26·edited Jan 26

Speaking of Goliath, is it just me or does Boeing have a more than a few similarities to good old Alcoa? The levels of monopolization, cronyism, incompetence, and strategic necessity kind of give me similar vibes.

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author

They have a lot of similarities, but Alcoa did a lot of domestic capital investment and Boeing's leaders are focused on capital disinvestment.

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Jan 26·edited Jan 26Liked by Matt Stoller

Hey, I never said they were more competent. Alcoa may have been unable to keep up with their contracts during the war but they were a real industrial powerhouse in their time and where more than happy to innovate when needed. Boeing... not so much these days. The big reason I bring up Alcoa is I think there is a good precedent there for legal action.

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Thanks Matt- especially for this:

“ At the end of the day, the Reagan-era neoliberal era is crashing into reality, showing that a finance-and monopoly friendly model of corporate governance just cannot build airplanes that work.”

I hate to say it, without Big, and without the thorough grounding you give to how wealth, government, and democratic longing have shaped the ‘true’ American history in Goliath, I wouldn’t understand what our government actually does and has done besides raise a world-class war machine. This conclusion as a great summary of what has happened to us since the the end of the ‘thirty year war’ so many Americans fought and died for last century (“30 year war”is not my term but it makes me feel so Empire like, English perhaps, but almost European).

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Do you know and recommend any good scholarship on public-private partnership activism? It is a bit of a behemoth subject but it seems like the theory and practice of how these these kinds of partnerships--on all scales (whether visible/invisible to public scrutiny)--is critical to understanding how democracy and popular will is undermined so consistently. I suspect monopolies rely heavily on these underlying structures.

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author

I don't.

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From a practical sense, is there any unwinding of the McDonnel Douglas merger possible?

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author

No it will have to be restructured differently.

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Would that make any difference? Real question. Is it unwinding to move in a different direction, or just rewinding to slow down the same trajectory?

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Hadn’t seen Matt’s answer.

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“United Airline CEO Scott Kirby, who runs one of Boeing’s largest customers, went on CNBC this week to publicly bash the jet maker, tracing the problems to the McDonnell Douglas merger in 1997.” Did anyone else relish the irony of an airline executive faulting deregulation for slumping quality control?

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I bet the judge’s son doesn’t lose HIS Microsoft job.

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It’s a major election year in the US so there will be much posturing, etc. I don’t know if it matters also that It’s also a major global election year. So I hear.

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In my dream world we somehow engineer a JV between Boeing Commercial, MHI, and Toyota. Defense gets a time-limited nationalization.

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