They wouldn't even ground the fleet if death and destruction occurs. Like they didn't do after the Lion Air crash.
Even after the Ethiopian plane they tried hell and high water, including a call to the president, to not have the plane grounded.
It's clear that to Boeing, their numbers are more important than lives.
Absolutely. Nicely demonstrated by lies, deflections, omissions and still smearing everybody else but themselves after killing more than 300 people by bad design and greed.
Isn't it the case by design for any corporation?
If you have a hard time competing and every day is a fight anyways, why would you act in a way that is sustainable in the long term?
If you listened to the NYT’s the Daily podcast where they interview a former Boeing quality manager/whistleblower this is clearly the picture that is painted here: Managment doesn’t give a shit if they use potentially broken or dangerous parts, they leave metal debree and garbage inside the wmhull right next to important control lines, in one case they forgot a whole ladder inside.
The 737 Max is not the illness, it is just the first visible symptom.
It has been the case, recently, that a company that is traded publicly cannot have a long term goal - any such goal is held in place solely by the ephemeral existence of an autocratic executive and will dissipate once they are removed or retire, instead corporations seek constantly to maximize short term gain since incentive systems like stock options and our current form of performance evaluations reinforce this strategy.
Most of the companies that have had long term clout or tried to invest in long term research have been acquired and butchered by venture capitalists for a quick payday.
Such a conservative culture may one day be their downfall, but it won't hasten it as is so often the case of management culture elsewhere.
You think Apple or Berkshire Hathaway have no long term goals? Why make such sweeping statements that are easily shown to be wrong, when you can make a more nuanced and possibly true statement easily?
> Most of the companies that have had long term clout or tried to invest in long term research have been acquired and butchered by venture capitalists for a quick payday.
See, this might well be true and point to a real problem.
Though I think the notion that public markets are dumb and impatient and private markets are wise and long-term is a caricature itself.
Sure, some company management may be spurred to be good actors because they feel it will cause long term vale creation.
But then again you could just do the right thing because by and large people are not assholes.
That's why when I hear of exploitative predation by companies I get so mad: because it's ultimately exploitative predation by people. Even if the person on the phone to you / writing that code may not have enough context to understand the evil they might be doing, someone set the context that way, and in many cases it was deliberate.
They are required to do what the shareholders want, which is usually maximizing returns.
I know of no such law. In which country is the the law?
In fact there is some concern by some economists that the management of public firms have too much discretion as unhappy shareholders can simply sell their shares and invest elsewhere rather than provide any direct feedback. Even when direct feedback is provided, management can and usually does ignore it, as can be seen from this week's Amazon AGM.
All that respect private property. The shareholders own the company, the management is essentially their employees.
The shareholders may not micromanage their company, but still management's job is to further the aims of the shareholders just as the job of elected politicians in a representative democracy is to further the aims of the people. Otherwise they get fired.
While this may not be working as well as it should, you wouldn't say a law is not the law because enforcement is spotty either.
It's a shameful state of affairs, but the entire system is set up to reward this kind of behavior now.
I'd love to hear someone who understands the problem explain how we got here.
I would be more interested in how we can move to more long term thinking. (Long term thinking includes the short term because otherwise the organisation might not survive. But nowadays it appears to solely be about the short term.)
But to categorically say this about any corporation is nonsense.
It is basically a result of agency theory (principal agent problem) in the typical setting of economic theory (no transaction costs, bla bla bla).
The question is what a corporation should do, which aims it should strive for. That's an extremely difficult question, in particular if there are many owners ("principals", shareholders) who have different utility functions (goals), who are furthermore distinct from the CEO and managers actually running the business ("agents"), who might have their own interests (enlarging their fiefdom, job security, what have you).
The theoretical solution is to say: maximise the net present value of the firm (which goes to the shareholders, after paying debt), and then they can decide what to do with it, and pursue their own goals. Now, this makes some sense in a no-transaction cost world - if shareholders care about workers and peace and the sick, they can use the shareholder value created, and put some of it in, dunno, charity and health insurances, and what have you.
Thus, goal should be shareholder value maximisation, and to get the agents on board, you "align their interests" by incentives, specifically by giving the CEO options.
(Note that shareholder value maximisation is not the same as profit maximisation, and definitely not the same as short-term profit maximisation - the value of the shares is theoretically the sum of discounted cashflows in all eternity).
The other argument, of course, is that shareholders care only about maximisation of the value of their share, and thus a firm which does not pursue shareholder value maximisation will lose shareholders and go out of business.
Both arguments are not all bad, but of course the real world is much more complicated. Shareholders might have more goals than maximising the value of their shares (not in Econ 101, of course). A company might be in a much better position to achieve some of those aims directly, rather than via the circuitous route of handing it to the shareholder and them pouring it back into the game.
At any rate, the notion of shareholder value maximisation is not some God-given absolute truth, but one proposed solution for specific problems within a specific theoretic framework, and it's not clear at all that it's always optimal, and should not be reflexively trotted out when talking about corporations, and not serve as a defense for corporations acting badly.
a news alert popped up on my phone today about "bird strike possible in ethiopian crash...". I didn't bother reading it, but I thought seriously ? What media outlet did they pay off to even think of trying to divert attention and who in their right mind would think propaganda like that would be effective ?
Aside from a bird strike the possibilities are just as unlikely. There could be sabotage. There could have been an impact with the passenger boarding equipment. Somebody cleaning or painting the plane could have smashed it.
Choosing to use a competing product as an end consumer would require an immense sacrifice (like refusing to board your flight if it happened to be a Boeing, which you might get a rebate for?). Only if a significant amount of end consumers protested would the actual plane consumers (the airlines themselves) take notice - or if public opinion shifted to the point where there was a significant externality attached to purchasing a Boeing plane, but that certainly isn't the case now and I'd bet that Boeing has found some way to compensate airlines for the cost of having their planes grounded.
For example, if airline A flies MAX and has a ticket for 200 and another airline B has the same route for 400 on A320, most people I know would still fly the MAX because they cant afford to be picky.
I think talking with your wallet works only when the price is relatively inelastic
How many vacation days would you sacrifice out of your week in Cancun to stand by that belief?
The Max has issues, for sure, and I will be weary of that as well as the upcoming 777X, but I wouldn't hesitate to get on any prior 737 or other Boeing model.
It's not like they're sitting by the gate sucking the blood of passengers. They're still delivering the safest method of transportation around, not only by distance, but also by time. I know some Boeing employees, they want to deliver great airplanes.
It's safe by distance and time because most accidents will occur on take-off or landing. For example, the two recent MAX incidents. It's the nature of flying, not the technology per se, that makes it relatively safe as compared to other modes of transportation. Once you're cruising at altitude the components have already passed maximum load, and you usually have lots of time to remediate issues when they do occur. You get distance & time largely for free rather than as a consequence of engineering.
If you look at risk for just the distance and time spent on take-off and landing, flying is roughly comparable with driving. Of course, the machines are vastly more complex so it's still a testament to the amazing technology and safety standards. But at the same time there's so much more that could be done, not only from an engineering standpoint but especially from a process standpoint.
One might even be able to make the case that Toyota has better quality control and safety engineering processes than Boeing. I mean, many of the most critical components in a plane, such as the engines, aren't even designed or manufactured by Boeing. I think Boeing executives know this and have increasingly tried to offload performance and safety engineering burdens to suppliers, maximizing Boeings profits. Engine manufacturers and other suppliers have begun to take notice, I think. And for areas where Boeing can't offload the burden, they've faltered.
Last time I looked, planes were 200x as safe per pax mile, but 3x as safe per pax journey.
(EDIT: "Kx safer" -> "Kx as safe", though the uncertainty is so big that it doesn't really matter)
What are you referring to here?
"A total of 157 people aboard the two aircraft were killed."
"The National Transportation Safety Board ultimately determined that the accidents and incidents were the result of a design flaw that could result in an uncommanded movement of the aircraft's rudder."
You're assuming they have no stock or stock options in Boeing.
That would not be bad by itself. It is only important that regulators and customers make sure that this leaves really big dent in their numbers.
https://www.seattletimes.com/business/boeing-aerospace/inves...
BTW (I'm not folowing this very closely) is there already, or will there be a criminal investigation?
They knew there were problems with the design and flew the planes any way.
What worries me is not the MCAS (now), but what else might be lurking under the surface that Boeing pretends is not a problem.
I don't feel confident that Boeing would accept the cost of grounding the fleet the next time something serious-but-not-yet-crashing shows up. It's clear that to Boeing, their numbers are more important than lives.