Let me state up front that I am a former executive of one of Boeing's primary competitors in their defense related work. I can't speak to the company's civilian aircraft production, but I dealt with them and competed against them for defense contracts for more than a decade. I have dealt personally with Dennis Muilenburg when he ran that sector of the company.
Culturally, Boeing was a bit of an outlier. For instance, it was a company that did not value contradictory input from its subordinate executives or engineers, or from partner companies. Thankfully, that is not the typical approach of most large engineering enterprises.
With respect to that culture, there is a lot of truth in this article. Boeing has had a well earned reputation for squeezing suppliers. Often small suppliers would be driven out of business, and Boeing would simply absorb the work internally. As a partner on a major contract, we and the other majors typically would be forced to expend enormous energy protecting our share of the project. Our relationships with Lockheed, BAE, and GD were far more constructive which also generally worked to the interest of the customer. In my experience, Boeing's most egregious behavior was its predatory mismanagement of the Army's Future Combat System Program in the early 2000's.
However, there is a lot of typical anti-capitalist nonsense in this article as well. The Boeing Company existed and had the fiscal wherewithal to purchase McDonald Douglas only because it had been a hugely profitable enterprise previously. The notion that it had been a company run by altruistic engineers uninterested in the company's bottom line is farcical.
Yes, creating share holder value is extremely important to every publicly traded corporation. Yes, business management plays a huge part in driving that perceived value. Successful design works when customer requirements, engineering decisions, and cost analysis are in balance. When they get out of balance bad things happen. In the world in which most of us have familiarity, the post 1964 Winchester product list is the best known example of out of balance offerings.
I have no inside information on the 737 MAX project. It does appear, however, that the reuse of much of the original 737 structural engineering led to blue sky cost analysis. That analysis found its way into pricing, securing orders for an aircraft that subsequent systems engineering indicated couldn't be built within acceptable profit margins. (To remind the socialists among us, products sold at a loss result in fiscal collapse - whether publicly, privately, or government owned entities.) It seems clear that the project was so far along, that a design restart was impossible - particularly with a competitor sitting in the wings with nearly equivalent offerings. In such an environment, cost and schedule inevitably became the driving concerns. String too many "good enough" compromises together, particularly software engineering, in a satellite, weapons system, or passenger plane and bad things will happen. It appears even the test pilot was caught up in the snowballing catastrophe.
As is the case in virtually all such failures, the costs of those decisions will far outweigh the feared loss of margin. Losses in Boeing stock value, customer order cancelations, and now liability payments wouldn't be survivable by a less robust company.
But it was worth the tax break...
And this statement is ridiculous.
www.nytimes.com
