People keep repeating this without context. The auto companies are strategically significant. That didn't prevent them from going bankrupt [1][2]. Wiping shareholders doesn't mean blowing up the factories.
I'm increasingly convinced Boeing needs to go bankrupt. It can then shed unprofitable units--through spin-offs, sales or liquidations--and restructure its obligations. I'm not convinced the union comes out of that better off than it is now. But America sure does.
[1] https://en.wikipedia.org/wiki/Chrysler_Chapter_11_reorganiza...
[2] https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...
Not really, they're more politically significant than economically critical. I've certainly never owned an american car and never plan to. We'll be fine continuing to rely on foreign companies to produce our vehicles. Foreigners certainly don't want our cars (outside of maybe tesla in the nordics, i guess?). None of this is true for the plane market, or at least not until boeing acquired its current popular reputation of not being very good at making planes (deserved or not)
The fact we bailed out the companies but refused to take ownership should be considered treason. Same for the banks, the car companies, the airline industry we bailed out for more than its entire value, etc etc. completely corrupt and incompetent governance
IBM made machine guns on typewriter lines in WW2.
This is not 1940, and the US simply doesn't have the strategic industrial base it used to.
Off-shoring made some people a lot of money and lowered consumer costs (while simultaneously cutting consumer pay.)
But it was economically and strategically unwise. The US is set up to run small-scale wars against technologically inferior opponents. It has no ability to sustain a prolonged multi-year slug-fest against an opponent with a superior manufacturing base.
Now granted I might be unfair to the US here; the Middle East is known as the graveyard of empires for a reason.
2) I’m not sure the military was doing just fine in all of those. Vietnam comes to mind, but also Afghanistan—reading the Afghanistan papers, the brass seems to have given up on any kind of actual goals or accountability in favor of a system that let them continually cycle officers through and let them claim they succeeded at their mission (funny, they all keep achieving their mission, but facts on the ground remain exactly the same or worse!), for years and years. Fighting fitness may have been OK throughout, but military leadership in the military itself was absolutely not committed to any kind of winnable mission, let alone to actually winning it. That may have been driven (I’m sure it was) largely by civilian leadership, but the entire upper echelon of military leadership betrayed their commands and the soldiers counting on them, to keep up a convenient (to their careers, and a bunch of junior and mid-tier officers who got a big boost to their careers…) political fiction at the cost of any hope of something resembling actual success, and all it took was shitting all over their soldiers and the trust of the American people.
I bet Iraq (part 2) was similar. I have some grave concerns about the state of our more-politicized-and-static professional officer corps since roughly Vietnam.
Disagree on point #1. We occupied Afghanistan for 20 years. We operated with nearly absolute impunity in all population centers, through all trade routes, and all agricultural areas. Our casualties were a minuscule amount our total forces. Our culture completely transformed theirs (in a way that old school hardliners lament publicly). We killed a huge number of Taliban (and foreign fighters).
Clausewitz says that "the political object is the goal, war is the means of reaching it." Can you tell articulate what the political goal of the war was?
Thinking back to 2001 (I was in middle school), the goal was retribution. I believe the military achieved that in spades. Yes, in the end Afghanistan did not turn into a US vassal state or a US colony. But was that the goal?
The goal was to eradicate the Taliban, remove terroristic sentiments, rebuild Afghanistan, bring the country to 21st century democratic standards, and prevent future 9/11s.
Did we achieve it? Hell no.
Verdict: We lost. Over 20 years of bloodshed and misery on both sides for fucking nothing. We failed on every single fucking count. Every. Single. Count.
You haven't shown a military failure.
I also disagree with that list of objectives and their current status. Let's go through 1 by 1:
+Eradicate Taliban. Complete. This is a new gen of fighters and the movement shares very little outside the name. Nearly all the Taliban from 2001 are dead of violent causes.
+Remove terroristic sentiments. Not a goal, but also has Afghanistan committed many terror acts in the last 15 years? Current status is trending green.
+Rebuild Afghanistan. Not an original goal (ie in Oct-2001). Also not a DoD goal, this was a State Dept goal after the military victory was secured. Also I'd argue that Afghanistan today has better infra than it did in Aug-2001, so this is complete.
+Democratic standards. Not an original goal. Also not a DoD goal, this was a State Dept goal after the military victory was secured. Not met.
+Prevent future 9/11s. Current status is trending green.
So we met all but 1 goal. That's not bad as wars go.
While I started off with the former, overall it is both.
>You haven't shown a military failure.
It has been demonstrated by Afghanistan, Iraq, Vietnam and others that the best way to defeat America is to engage in low tech guerilla warfare. We have lost every single one of them.
Even more embarrasing is that the Houthi are demonstrating that the age old adage of "Don't touch America's ships!" also isn't true anymore. Our Navy hasn't adequately responded to some deranged goat herders lobbing missiles into one of the world's biggest sea lanes.
>Eradicate Taliban. Complete.
Are you drunk? The Taliban is literally back in power ruling over Afghanistan with an iron fist.
>Remove terroristic sentiments. Not a goal,
Lest we forget, we waged "The War On Terror".
>Rebuild Afghanistan. Not an original goal
You can not remove hate until the people thereof can live comfortable lives, which is still not the case.
>Democratic standards. Not an original goal.
See above.
>Prevent future 9/11s. Current status is trending green.
I've lost count on the acts of terror we've seen across the west, America and otherwise.
Democracy (and "comfortable lives") was not a military objective. The military provided security for the State Dept and NGOs to pursue those goals.
Since 9/11, Afghanistan has not prosecuted any terrorist acts on the West in my recent memory.
The Taliban of 2001 was largely killed off. Yes, there are people in charge of Afghanistan today who call themselves Taliban, have some limited pre-9/11 leadership, but are largely a completely different set of people than existed back then and this occurred because of military action, not old age.
> The United States has given Israel extensive military aid and vetoed multiple UN Security Council ceasefire resolutions.
> United States provided advice and intelligence to Israeli forces during the raid, through its "hostage cell" stationed in Israel. The attack resulted in the deaths of 274 Palestinians.
How would that work in your mind? Call that one for Harris because Biden is mentally unfit?
Neither Trump nor Biden started a war. They had wars happening around them that we were to various degrees involved.
By my quick count, Obama (awarded the Nobel Peace Prize) started seven wars, Trump started zero wars, and Biden so far started one war. All three Presidents were involved in a war started by a predecessor.
So, yeah. Trump started no wars, and he is the most rejected POTUS by the Powers That Be(tm) for that and other reasons.
>“We’re sort of on the verge of the Houthis being able to mount the kinds of attacks that the U.S. can’t stop every time, and then we will start to see substantial damage. … If you let it fester, the Houthis are going to get to be a much more capable, competent, experienced force.”
https://www.navytimes.com/news/your-navy/2024/06/16/navy-fac...
Worth noting, this is an entire USN carrier strike group. This is simply embarassing.
Vietnam: limiting Cambodia ops, the DMZ, limiting bombing of N Vietnam
Afghanistan: limiting Pakistan ops, focusing on creating a stable democracy rather than killing Taliban then leaving
Also the military.
A war effort involves the entire country: The entire economy beyond just the military industrial complex, all branches of politics, and the military including both officers and rank-and-file soldiers.
this is just wrong.
The US didn't really have that industrial base in 1940 either. We developed it fast over a couple years of war.
To the extent the US had an industrial base, we still do. US manufactures more than we did in 1940 - we just do it with far fewer people in factories via automation.
In fact, we dump our cheap overproduced food on third world countries and collapse their ag. sector. If we stopped producing and switched to importing we would boost their economies.
Since food can be grown in almost any country on earth, we would have a diverse supply chain. I'm sure nothing would go wrong with this plan./s
Years of startup problems but when it finally started humming they were building a B-24 every 63 minutes! In the meantime existing factories were winning the war.
As Americans we tend to glorify the industrial feats of WWII but the US government used a very heavy hand to pull that off. Public-private partnership is the preferred euphemism today but essentially we were a socialist economy.
Today the US military budget is 3.4% of GDP. Can you imagine it being ten times as much?
There's a limit to how long USA can print petrodollars to make up for the trade deficit. And the limit doesn't seem that far off.
The Nordics are not all the same, Norway is far ahead (20% of private cars already full EVs) of the rest with Denmark a distant second when it comes to electrification of transport.
But also the Tesla Model Y was the best selling car in the WORLD in the last twelve months, not just Norway. Of course quite a few of those were built outside the US so perhaps they don't count as US cars.
Actually, in the private marked it was 96.7% !
Links to info (in Norwegian)
- https://elbil.no/vi-kan-klare-hundre-prosent/
- https://ofv.no/aktuelt/2024/nybilsalget-i-august-h%C3%B8yest...
I know, I live there. Been driving electric since 2017.
> Foreigners certainly don't want our cars
Then why are they always bitching about their neighbors who buy large American vehicles that are too wide for their streets?
It’s clear that Boeing was able to squeeze costs centers at the expense of quality and business investment all while keeping the coin under shell in the form of regular old stock buybacks.
But if/when Boeing goes under who is going to vet all this NDI sitting in their portfolios? They’re just gonna spin it off to another buyer—consisting of who exactly? McDonnel Douglas? Elon Musk? Tencent?
Seems like a nightmare for someone, not sure for whom.
Idk, pick one that's American or closely allied [1]. Ideally not one of the three larger than Boeing.
Worst case: audit and re-assign the contracts. We'll be better for it in the long run. And I'm not convinced it wouldn't result in quicker, higher-quality deliverables in the short.
[1] https://en.wikipedia.org/wiki/List_of_defense_contractors
Its military stuff.
I agree and hope they do go bankrupt, but I hope so because the country needs a fucking wake up call: American Exceptionalism(tm) is simply no longer true.
I sincerely think we need to see one (Boeing), maybe even a few (Intel? US Steel?) paragons of American Excellence(tm) go down in smoking ruins so we have to accept that we are not 1970s America taking mankind to the Moon and beyond anymore.
Once we realize that, we can actually get started on Making America Great Again in a real, meaningful way instead of a dumb political catchphrase.
I see no reason to believe this will happen rather than a continued slow decline and eventual collapse.
So, technically, you are correct. The business entities of June 2009 failed. However, the consumer DGAF who owns www.gm.com or www.chrysler.com. They can still go to their local dealer and purchase a vehicle "made by" these companies. The "companies" live on.
So... remove the need to actually produce planes, or anything at all for that matter, subsidize their continued failures?
Well, he was stupid not to - there's no way he didn't know thay focusing on the short term stock price won't have negative effects on the quality and future of an engineering organisation whose main business, building and selling airplanes, is extremely capital intensive. He came from McDonnell Douglas who nearly bankrupted themselves doing the same sort of crap (pushing suppliers to the edge, cost cutting at every opportunity).
Cite? Wiki[1] appears to suggest otherwise.
[1] https://en.wikipedia.org/wiki/James_McNerney#Career_path
That being said, McDonnell Douglas' history was visible to everyone - what they were doing hadn't been working for decades (first as Douglas, then as McDonnell Douglas).
It did the opposite.
Humans respond - on some level - to incentives.
Tying compensation to short-term performance creates perverse incentives which make it much harder to accept the idea that your plans might be ruining the company.
Of course this “short term thinking” trope is just a meme that the armchair commentators like to pedal out. If the system was dysfunctional enough to prioritise short term profit seeking to this extent, then all a competitor would have to do to monopolise any market is do enough “long term thinking” to outlast all their failing competitors. Investors would notice this and reallocate their capital accordingly.
But none of this is what happens in reality. If anything I would say the market is over-interested in long term strategies. The popularity of the growth over profit model that we observe amongst most prolific capital allocators takes “long term thinking” to absurd lengths.
This makes it sound like my broker, the finance community in general, or maybe the state is better able to handle long term thinking than our industry leaders, but why would anyone believe that? Aren’t they all looking quarter to quarter and retiring next year no matter how bad they wreck the company/economy/country?
Sure in 30 years they may be eventually pushed out but they can coast 2 generations of successful careers till then.
isn't this exactly what's going on with Boeing?
> Airbus last year topped Boeing for the fifth straight year in the orders race, with 2,094 net orders and 735 delivered planes. Boeing had 1,314 net orders and delivered 528 aircraft.[0]
I 100% agree the majority of investors don't seem to take the long view, and that's been the case for a while.
[0] https://apnews.com/article/boeing-airbus-airline-safety-manu...
Half of them would look like job hoppers with such short tenures on their resume. Some of them have simultaneous executive positions at other companies.
If you want some evidence of short-term thinking not being a meme, it's probably that.
The Board of Directors at most major corporations is made up largely of current or former executives, many of whom come from the same industry. It's in their personal interest to normalize lucrative and exploitable compensation plans.
You would also be shocked to know what people control the lion's share of investment dollars.
This reasoning was always flawed. The Stock Market is not real life. It consists of the opinions of a bunch of guys who sit in towers in New York, London, Shanghai, etc... In theory there are fundamentals that should drive the price, but in practice the market is not rational. It's not a good metric for the long term health of a company. Even worse, Goodhart's law applies in spades:
"When a measure becomes a target, it ceases to be a good measure."
Time and time again we see CEOs playing games with the stock price in order to get a big payday. We see management sacrificing long term stability in order to maximize their year end bonus.
Imagine if every time you remember a now dead company do a stock buyback they instead invested that money into R&D, or simply lowered their prices to be more competitive in the market? Maybe they paid their employees better and didn't have constant turnover problems and had higher quality output. How many of those now failed companies would still be around today?
Ironically, I think the poster child for how to properly structure compensation away from this is Hank Greenberg's AIG, where not only was his compensation basically all deferred stock options, they were deferred until retirement, so about as long-term a view as you can get. He was very risk-averse, and his biggest flaw wasn't under his operational ownership but under successor and personnel selection (looking at you, Welch).
But at some level, it was just bad people making bad calls. I don't think McNerney thought that this would wreck Boeing, he was just wrong. Even if he was left predictably destitute at the end of such a failure, he probably wouldn't have changed his choices because he thought they were good. You could claim that this is a failure of boards and governance (and, truly, I think boards are by and large really bad and I wish there was a much more pervasive activist investor culture) but at some level I'm not sure how much of this is solvable.
I don't know. There's probably a way to do boards well enough that this isn't a problem.