https://qz.com/1776080/how-the-mcdonnell-douglas-boeing-merg... - 2020 article on the topic
I'm trying to find an article from circa 2007 on the changes at Boeing but I can't find it right now. Read those two and follow their various links and you'll get more information.
The long story short version is that post McDonnell Douglas merger, Boeing's management culture was replaced with MD's management culture and things have only declined since.
I'm sure there's a number of books on the topic in the publishing pipeline.
> It can't be just the mismanagement or the greed of the leadership, right?
It can.
- Boeing is a 'too big to fail' corporation with a significant source of revenue coming from the government. 40% in 2024¹, billions of dollars of public funds! Just a bit more and it would be mostly state-funded.
- They're the 4th biggest American defense contractor, so they're likely seen as vital for securing state power by many in the government.
- The government is not a good allocator of funds, free market competition works a lot better for creating the best product.
Using Ockham's razor, here's my guess what happened: To get in this position in the first place, there will have been a fair bit of lobbying and "greasing the wheels" involved. Boeing eventually found themselves in a position where they got government contracts, no matter what. Leadership got complacent, they didn't really compete anymore because they didn't have to. This was when Musk came in and disrupted the space industry. But at that point, company culture was likely already too far down the drain for quick fixes. The situation would already be much worse for their space division, if not for the fact that they have such good relations with NASA and the government. NASA basically covered for them and played down the seriousness of the issues for weeks. And even now, they're not having SpaceX rescue the astronauts immediately, which would be even more embarrassing for Boeing. Instead they're bringing them back together with the already planned SpaceX Crew-9 flight next year. Boeing keeps getting away with black eyes, there aren't enough consequences despite all the serious issues.
¹ https://www.seattletimes.com/business/boeing-aerospace/why-u...
This is irrelevant here; the only people buying most of the products that Boeing makes are governments or airlines (many of which have government backing, because countries find it advantageous to have an airline). Without government, there's just no Boeing, or SpaceX, or Lockheed Martin, or Airbus, or...
The problem ultimately goes back to 1996 when Boeing was more-or-less taken over by McDonnell-Douglas management, and quality engineering took a back seat to quarterly results. Everything, from bad QA to "greasing the wheels" with lobbyists, ultimately goes back to someone with an MBA deciding that those behaviors were worth it for the stock price increase.
And to be fair, they were... until they weren't. But by then, the guy with the MBA has either left or divested, and it becomes someone else's problem.
SpaceX's success can be in a large part contributed to the fact that they don't have a bunch of retirement and pension funds demanding a chunk of the profits every quarter regardless of actual market space performance.
This fucking meme needs to die the unholy death it needed years ago.
1996 was 28 years ago. In that time Boeing has had the 777, 787, Delta IV Heavy, and whatever else.
The problem is far deeper than MuH mCdOnNeLl-dOuGlAs.
I'm not unconvinced that organizational rot in a slower moving company like Boeing took 3 decades to fully spoil the org.
Whatever the cancer is inside Boeing, it's far more entrenched and destructive than something we can just flippantly handwave away with "MuH mCdOnNeLl-dOuGlAs" every single fucking time.
It's also worth remembering that the F-15 Eagle and F/A-18 Hornet, both still Boeing's most successful military products today, are McDonnell-Douglas products.
"MuH mCdOnNeLl-dOuGlAs" is a fucking waste of internet oxygen. It doesn't help explain anything, it doesn't help solve anything, it's not even that good at grabbing some internet points.
I believe there's also an element of "MBA bad, engineer good" resentment of management at play.
But the real truth is much more nuanced, no matter how satisfying it is to drop pithy one-liners about the MD merger.
It is also crazy to me that people speak as if Boeing is "falling apart", but managed to produce many successful models since the MD merger, including the amazing 787.
It was clear as day on the ground that something had switched, suddenly every conversation was about minimizing cost. Every meeting was about maximizing value. Efficiency above safety.
I cannot overemphasize that it really did fundamentally shift the language, the incentives, etc. I started having to prove I needed vms to two different business panels.
Sometimes you are right, the root cause is too simple, but I was there for this one. It really was that simple this time.
Dropping the McD one liner meme is neither thoughtful nor curious and it certainly doesn't explain anything.
It's like saying a McDonald's Big Mac is made of bread, beef, lettuce, and some mayonnaise like that's some conclusive end-all be-all. That's cool, but are we actually going to speak about something worth the time of day?
https://preview.redd.it/evolution-of-the-raptor-engine-by-v0...
A lot of defense and aerospace is not used to the Silicon Valley mindset. Gotta give Elon credit in achieving what he did with spacex
Despite his projected persona, Musk would love nothing more than to get to the position of being the bloated encumbant supplier with guaranteed government contracts regardless of results.
I'm impressed you can keep saying this nonsense despite how SpaceX operates being pretty well documented.
Fortunately it seems that we also have quite a few wealthy people that actually want to use their money to fund and do new and innovative stuff.
Selection bias?
People who don't care about constantly accumulating more wealth than they need rarely end up obtaining it.
Sounds like china currently has zero rockets that are reusable
Not true, ArianeGroup has decided that reusability is the future with their Ariane Next program [0].
And ultimately that wasn't enough for safety.
But it's way less time/labor intensive than the shuttle.
I think you raise a good point even if there are some "technicalities" about it.
Real question: I'm not an aerospace geek. The term "first stage" has probably changed at lot in rocket science in the last 50 years. From the NASA Space Shuttle to SpaceX Falcon 9, has the definition changed? From my elementary school memories, the Space Shuttle used a giant center rocket and two booster rockets that we expendable, but you are definitely right that the Space Shuttle "thing" (no idea how to call it) was used over and over again, (somewhat) safely. Something that I don't know: Where Apollo programme capsules reusued? I assume no.
That's incorrect. The orange "giant center rocket" had no engines, it was an external tank which held the propellant burned by the orbiter's main engines. The SSMEs were on the "Shuttle thing" and were reused.
Apollo/Saturn had a much more traditional staging design where the first stage booster would run then drop off, then the second stage booster would run, then drop off, etc. There exist other rockets like the Atlas which had what they called a “stage and a half” design where the center stage burned for a long time and there was an outer “ring” stage that dropped off after a shorter time while the center stage kept going.
After going to the moon, the only part of the entire Apollo/Saturn rocket that came back was the command module capsule with the astronauts and moon rocks. These were completely torched and affected by salt water and were not designed to be reused. Reentry from the moon is significantly faster than reentry from low earth orbit.
The shuttle orbiters were refurbished and reused. It was a very difficult, expensive, and time consuming process to get an orbiter ready for another flight.
All of that is to say that the picture is blurry for the shuttle regarding first stage reusability. Yes the SRBs and orbiters were reused and were lit at launch. The ET was in use at launch but discarded. In my opinion it’s sort of not that interesting to argue what is and isn’t first stage on the shuttle because the elements just don’t map cleanly.
The design of the system with the SRBs, tank, and orbiters being adjacent to each other is considered by many to have been too dangerous in retrospect. This design was a factor in both shuttle disasters - the SRB shooting fire at the ET causing it to explode on Challenger and cracked foam falling away from the ET during launch and hitting the leading edge of the orbiter wing for Columbia. If they were stacked vertically rather than adjacent, those specific failure modes would not have been possible.
Each launch cost almost half a billion dollars in 2010 money. The Falcon 9 is reportedly $60-65M per launch.
SLS was just more of the same, welfare for all the states with contractors who grew fat and happy off the shuttle contracts. There was no technical argument whatsoever for reusing such ancient technologies.
Each RS25 engine cost $35M to refurbish for use in the SLS. For the cost of building TEN falcon 9 engines, NASA refurbished one RS25 engine.
And yes, of course it was absurdly dangerous to rely on not just one but two solid rocket motors of which there is no control whatsoever except for slight thrust vectoring...
My understanding of the federal government of the US is that it is mainly a subsidizer of their national military-industrial complex. Something I would call: military-industrial socialism.
With that said, it is just more of the same in a different era. 1930s and the Empire State Building: to re-invigorate the economy, Eisenhower and the interstate highway system: to provide a stronger national defense, etc
First stage needs to go through rigorous safety check in order to be re-certified for next flight thats what drives the cost up.
But the Government has to buy them from businesses that meet certain characteristics. Woman owned, etc. That’s a great thing, right?
In this case however, that female owned business is the guy who invented the things wife. Who he sells them to at a mark-up. Who then sells them to the government.
Economy of scale? Ya! They are the number one buyer and pay the most. Honestly, who cares though, it’s only a couple million a year. Drop in the bucket.
How did Boeing fail? Death by a thousand cuts. That same story probably plays out across the entire supppy chain. Every part, every product, every supplier. Compounded over and over again.
There’s people who would say any bigotry in government is wrong.
That doesn't explain why their civilian aircraft aren't just not the best product, but have gone completely to shit over the last decade or two. The 737 max is the most notorious example here, as it's their most recent development and has never been good from the start - but reporting suggests that the engineering on their formerly-good lines has been going downhill also, and it's only the fact that they started out as good products which means they've taken longer to fall as low.
And there's very little government revenue for the civilian aircraft design and manufacturing side of the business. It's all free market competition.
> gone completely to shit over the last decade or two
> Boeing is a 'too big to fail' corporation
My more thoughtful reply: I think "too big to fail" gets a bad rap on HN. In my view, for any sufficiently large country+economy, at some point, your top 3-5 defense contractors will be considered "too big to fail". No way around that. Depending upon the size of your country+economy, this is true for steel manuf also, but probably just the top 1-2.
Has anyone with great expertise in Boeing considered the effects of a break-up? I'm not sure why Boeing needs so many different industries under one roof -- space, civil, military, plus others.
I would speculate that when those got shaken out, (and likely some space contracts sniped away by SpaceX) Boeing did not make any adjustments for the revenue loss and simply tried to continue on their original bloated trajectory but instead cutting every corner possible along the way.
Government aquisition is a monopsony (market dynamic where there is one purchaser who wields all the power) which means "free market competition" doesn't exist. This causes lots of negative consequences. Here's a discussion of the topic in the context of defense but a lot of the same surely applies to space.
https://www.firstbreakfast.com/p/break-the-department-of-def...
The gov created this environment and the private companies protect it because it's big money and grease it so it's the only option (like selling the bullshit idea "no one else can do what [Boeing] does cuz we huge staff counts and billions").
They both enable each other
And people are too scared to have a system that encourages new smaller companies take part because they don't have fancy sales pitches or fail early prototypes or take longer to get to Step A. And everyone criticizes them to death. So the only option is to get bought by Boeing or Lockheed, who then do really good at Step A just to fail a Step C and D and E.
SpaceX (as of a year or two ago) was getting 45%+ of its funding from the US government.
And then there's the $900M in subsidies SpaceX asked for to provide rural internet access via starlink...
But it's a net benefit for the company
....no, that does in fact explain everything that led to the decline of American manufacturing and engineering.
That's a very different type of business.
If Boeing was forced to make money with a successful civil aviation business alone it would be run very very differently.
Maybe I'm missing something but is this antidote to show you're not racist? What were the other cases this was hilarious?
This case in particular was just great because it was some liberal white guy calling me (a minority) racist for pointing out something clear as day. And then he got his karma.
Does your best friend of 15+ year also consider you a friend? Is he also able to capitalize proper nouns without trouble but can't seem to extend that same effort to americans?
I can't seem to understand what you're getting at in the last bit there. Are you upset that I didn't capitalize indian (assuming you meant indian since I never wrote american)? Feel free to reply in your native hindi and I'll use my own translator.
Ultimately if you were being objective, you'd be as upset at nepotism whether it favors your group or not. Try to overcome your implicit bias.
2. Moving headquarters to Chicago - part of the MBAs taking over
3. Losing the engineering first mindset - this is really the core of what happened there.
When the company kept focusing on stock returns and "financializing" the company, and did things like spinning off Spirt airplane assembly company, that was the real visible symbol of the problem. In the past few months they gave up and rebought them to join with Boeing.
The solution for being will be a multiple year transition of the company into being much more technology and engineering focused. They will have to eject the MBA type "reducing cost is the goal" type leaders. The problem is those are completely the leaders of the company today.
My two most major issues with the world today.
Boeing got some but worse, and also made their products so complex that humans can’t understand it as a whole let alone communicate it to others.
It’s not just Boeing. It’s everyone, everywhere. All systems in every market require so much extra “stuff” that we’re on a spiral.
Compound that with MBAs that insist things “run lean” and “the core competency group you aren’t in found X, so meet your target of Y or find somewhere else to work” to “We need that BlackRock money, so do whatever the govs of NY, IL, and CA say to do because their trillion dollars speaks”.
No one is ready to address either issue.
There was an interesting lecture Jonathon Blow gave a while back that addressed this issue but it was predictably panned as the ramblings of an insane game developer, I think wrongly. A lot of the points made were true.
> It’s not just Boeing. It’s everyone, everywhere. All systems in every market require so much extra “stuff” that we’re on a spiral.
Nah. That's just another facet of engineering incompetence.
Complexity doesn't just happen, it is allowed to happen.
We repeatedly went to the moon over 50 years ago, with complex systems that were well understood by the different teams that built them.
Now, 50 years later, if we are not capable of repeating the same feat, we are doing something wrong.
If we use software-controlled hardware and then throw are hands in the air screaming "it's too complex", we are doing something wrong. That stuff shouldn't have been used in the first place.
For instance, Boeing famously bungled the 737 Max. But 737s were first created in the era of slide-rules, there is nothing about the plane which is too inherently complex to be done well. MCAS, the software portion of the debacle, was so simple in principle it could have been easily implemented by one competent engineer plus a few more to check his work. Complexity inherent to the problem space is NOT the problem here.
MCAS was one flight control law, a one that was poorly conceived in the first place and then botched in implemention, but still only a single flight control law. If you think that such a system is too complex to created properly, then please tell me how many thousands of engineers must have been on the team that created the first all-digital fly-by-wire system for an aircraft. That was a hell of a lot more complex than one flight control law on a 737, and they were actually doing something new back then. Thousands, why it must have taken tens of thousands of people amirite.
It’s not my fault you can’t think beyond Boeing.
It’s the whole world, and you are just one of the people that even if it is pointed out to them can not see it. Because like I said, you haven’t made anything to see the issue.
https://www.documentcloud.org/documents/69746-hart-smith-on-...
It reads like a plea to not turn into McDonnell Douglas (this was only a few years after the MD and Boeing merger), which we all know it essentially has. The last couple of sentences fire shots at Douglas Aircraft directly:
"The fate of the former Douglas Aircraft Company, which was reduced to a systems integrator in the early 1970s by excessive outsourcing of DC-10 production, is a clear indicator of what will happen to other companies which fail to sustain the conditions under which it is possible to launch new products. It is hoped that this sacrifice can save the new and expanded Boeing from a similar fate."
Government/Defense contractors can track their suppliers and tell Congress exactly how many jobs are in which districts per project.
These aren't businesses operating in a competitive market with pressure to produce the best things quickly. Their goal is simply to be the best gov lapdog vs the only 1 or 2 other gov lapdogs.
Being extremely late and extremely over budget is standard practice in that world and worst case is usually the project gets cancelled for budget reasons then restarted 5yrs later doing the same thing.
This is the environment the gov fostered, they made Boeing etc critical to national security and industry while having a total aversion to risk, and zero forethought into long term investment in legitimate competition. All we get is the same growing monster that becomes the living embodiment of The Iron Law of Bureaucracy https://www.jerrypournelle.com/reports/jerryp/iron.html
NASA led private contractors to develop the Saturn V rocket and associated modules, now NASA is buying solutions, services, and products. https://en.wikipedia.org/wiki/Commercial_Crew_Program
Blaming capitalism alone on that is a bit silly. There's nothing capitalistic about a giant gov agency funding the same tiny group of companies for decades.
Public-private partners is a good idea because public orgs that need to produce IRL things are very flawed, but you still need national interests beyond market interests so this is the compromise that has worked many times.
But they replaced the public-private idea with a series of mega gov bureaucracies whose whole job is propping up monopolies who are prevented from failing in an open market because they are deemed essential to the national interest - entirely because gov refuses to adapt to reality and allow proper competition or long term investment.
Boeing has no risk and neither does NASA because they can just keep choosing the safe choice, Boeing. What a lovely market.
We need to kill or reboot legacy gov agencies when they get old. And we need to force any public-private arrangements to legitimately foster competition, which means lots of compromise beyond a VC type situation, like reducing the litany of special interest checkboxes (jobs, geography, diversity, etc) and paperwork for small companies.
I'm blaming capitalism 100% for the hollowing out of NASA. I never said early NASA was perfect.
>But they replaced the public-private idea with a series of mega gov bureaucracies whose whole job is propping up monopolies who are prevented from failing in an open market because they are deemed essential to the national interest - entirely because gov refuses to adapt to reality and allow proper competition or long term investment.
Yes, that's exactly what I'm blaming capitalism of doing.
>We need to kill or reboot legacy gov agencies when they get old.
I really think if we just didn't let this happen constantly we'd have a better system. It's going to shift the litany of special interest because the goal is profits, but barely, existing contractors will just open up a bunch of subsidiary companies.
"You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing" - December 26, 2008
https://www.amazon.com/You-Cant-Order-Change-Turnaround/dp/1...
Probably mostly of the "do the opposite of whatever this guy says" variety. ;)
The top review on this book says:
The author credits James McNerney for turning around Boeing. He
neglected to say which way they were turning. For example, he
credits JN for outsourcing so much of the 787 -- which included
the wings, perhaps the thing Boeing did best. The 787 ended up
way over budget and three years late. That's good management?
https://www.amazon.ca/Man-Who-Broke-Capitalism-America_and/d...
I’m tired of this hyperbolic, melodramatic angst about the general decline of the U.S. Did you not read the part about the crew being returned by SpaceX? A company that just made landing rockets a reality only 9 years ago, not even 10 years has passed and reusable rockets are as boring as smartphones. NASA identified an issue on the Boeing Starliner, and a cutting edge company (SpaceX) stepped up for a non-emergency rescue mission. There was no loss of life, or equipment, there’s been no injuries, just mild inconveniences. This isn’t a nation in decline, this is a nation that has even begun to peak yet.
Spend less time reading the news and more time enjoying your family. The world has been “ending” for decades now, the U.S. isn’t going anywhere and will continue to get some things right while getting other things wrong.
“Until such time as the world ends, we will act as though it intends to spin on.”
~ Nick Fury
Edit: and to those that do, SpaceX probably looks a lot more attractive.
Without knowing the details it makes a lot of sense that Boeing ended where they did (Boeing/SpaceX fits a lot of theories above). What may save the US is not the ability to save companies like Boeing - that would more likely hinder progress on a mid to long term scale - it's the ability to come up with new companies/innovators to overtake the incumbents.
In my interpretation. Fundamentally it goes all the way to the quality of institutions and culture. Time will tell, but I'm feeling more worried about those than the current ability to innovate.
Markets cycle. Companies cycle. People cycle (actually just die unless you consider their offspring their continuation).
All systems do cycle; including the USA. It doesn't mean it's the end. If China doesn't rise and crashes it, there isn't really any other serious challenger and it will likely be the "rising" empire again.
Peak air-travel.-
They are not impressive at all on almost any subject you talk to them about. Not for Boeing engineers and definitely not as MIT grads.
I don't think they could handle the coursework at Cal IMO, and I thought MIT was even more difficult.
They do seem like a very good example of diversity DEI type admission and hiring. And these kinds of Boeing problems might be the result.
I'm curious about such questions because on a larger scheme of the things, I really hope that Boeing is not a miniature reflection of the US - an empire in its twilight that got entangled in irreconcilable interests, doomed to watch its own inevitable decline.