I really want Boeing to reclaim its glory days and I believe they will, slowly but surely in the coming years and decades
Posted by Twitter_2006@reddit | aviation | View on Reddit | 34 comments
Its sad to see Boeing struggling with the delays of the 777X, 737-Max delays and I really want them to go back to the days of the 1970's-1990's when they produced the 747, 757, 767 and 777 and deliveries very on time with no delays and everything was smooth.
My favorite aircraft is the 777 and I also love the 747,
I believe Boeing will come back strong in the coming years and decades and the recovery will begin slowly after the 777X is in service, hopefully early in 2027.
I prefer Boeing over any other aircraft manufacturer and I am not from the United States
Blue_Etalon@reddit
Forget it. Boeing went from being run by hard nosed engineers who knew how to build planes and make a buck to hard nosed accountants driving by active investors telling them to maximize values over all else, including engineering excellence and safety. I don't see a way in today's corporate structure to stuff that nightmare back in the box. Boeing's actions over the last few decades border on criminal, especially in the safety arena. Hell, they've even screwed up their space systems division with the catastrophe known as The Strarliner.
devildog2067@reddit
This is such a reductive narrative.
The way to “stuff that nightmare back in the box”, as you put it, is to simply put leaders in place at Boeing who understand that the way to maximize shareholder value is to focus on engineering and operational excellence. It worked before, it’ll work again, and investors have all seen what happens (and experienced the loss) when they compromise too much.
Investors aren’t stupid and they don’t want to lose money.
Blue_Etalon@reddit
You don't get around much do you? Investors are not interested in long term performance. They can just swap where they keep their money. I guess you don't pay much attention to all the other corporations that have marched down this road.
devildog2067@reddit
I mean, I’ve literally built a career doing M&A strategy for industrial companies, what could I possibly know?
Some investors are not interested in long-term performance. The vast majority of investors absolutely are — they’re pension funds, and 401k target date funds, and other people who need the money to grow and to be there in 10 or 20 or 40 years when they retire or pay out benefits or whatever. The kind of investor that moves in, tries to make change or bet on stock price movements and then get out only makes up a small portion of the market.
Many, many corporations have steadily created value for decades. Warren Buffet famously looks for these kinds of investments. Boeing went down the road it went down because it thought it would create more value that way, and it was wrong. I’m not saying that necessarily means Boeing has learned its lesson, but the fact is the investors who ultimately elect the board that appoints the CEO want the value of Boeing to go up. They want Boeing to create shareholder value and pay dividends, and achieving those goals will require a back-to-basics approach that re-focuses on fundamentals of engineering and operational excellence. I think the MAX issue was far less of a wake up call on these things than the door blowout was (and it’s pure dumb luck that the door blowout didn’t kill 200 people). It is obvious that Boeing will not make money or grow in value if it continues to have operational quality issues like that, so investors want that kind of thing to stop.
This whole Reddit narrative that investors are stupid makes no sense. Yes, there are real problems with public markets and the focus they drive on quarterly earnings. Yes, companies occasionally make short-sighted decisions. But investors and companies also understand that if the company goes bankrupt, all their money goes away.
Blue_Etalon@reddit
I’ve been in aerospace for the last 42 years and seen Boeing go from the world leader to shitting the bed in every respect. What could I possibly know?
devildog2067@reddit
Nothing, evidently.
What specifically about that experience makes you think you have expertise in how investors think? I don’t pretend that my experience gives me any expertise in, say, running an aircraft development program. I know how to value and buy and sell aerospace companies, not how to design airplanes. They’re different things.
Blue_Etalon@reddit
I bow to you o Reddit captain of industry. Go polish your CV
devildog2067@reddit
No need, I own my own shop now, never going to apply to another job again.
Other than running a consulting business, I’m no operator. I’m certainly not a captain of industry. I give advice for a living, other people (like you presumably) actually design and make stuff. I wouldn’t try to tell someone who’s an expert in that how their job works.
Blue_Etalon@reddit
That’s Boeing’s problem. People who don’t understand the business telling them how to make stuff. I suppose you can call that reductionist
devildog2067@reddit
Making stuff and running the business are related, but separate things. You can’t let engineering run everything. The Tristar is the obvious example. The S-duct, the choice of the RB211 as a single engine supplier, all of those decisions were reasonably engineering choices but obviously terrible business decisions — someone from the business side should have spoken up, but Lockheed then was the kind of engineering-forward company you seem to think every aerospace company should be.
Ultimately aerospace companies are businesses, with revenues and costs and shareholders and boards to manage like any other public company. Engineering and building the airplanes needs to be the focus, but it’s not the only thing they do — that’s why all those other people at the company have jobs. It’s when things get out of balance that problems occur. An obvious one in recent Boeing history is (I’m a consultant, I’m quite critical of consultants when they do poor work) when their supply chain team hired McKinsey and got told to beat up all their suppliers. PFS was a terrible program at exactly the wrong time, and it made the 37MAX recovery so, so much harder.
Blue_Etalon@reddit
People should have gone to jail for murder with the Max. That was way more than a poor decision. If not for the first crash, certainly for the second.
Terminal_Phase@reddit
Investors don’t want to lose money, you’re right, they want to make money.
But that doesn’t mean your idea for making money is automatically the one they’ll choose.
Prioritizing pushing an inferior product out and hitting the market first at the determent of basically everything else has always been the way the American greed machine works. Investors aren’t stupid. It’s not about the quality of the product. It’s about your product hitting the market faster, and suturing the market more quickly than your competitor.
Which tricks the market into thinking your product is better than the competitor. Once you win that battle you can solve the rest later. And hope any quality slips don’t affect your reputation too much.
It’s never about the quality of the product. It’s about gaming the illusion that is the stock market to a point that your shareholders make maximum profit.
devildog2067@reddit
That’s simply not true, and history shows over and over that first-mover advantage in most markets is fleeting. How many search engines existed before Google? How many word processing and spreadsheet applications existed before Word and Excel? If hitting the market faster means you’re the winner, why is Facebook huge and MySpace non-existent?
Quality matters. I’m not going to pretend that it’s the only thing that matters, and aviation in particular is full of examples of high quality products not working out for other reasons — I’m looking at you, Lockheed Tristar — but in general, in aviation, the best product that you can actually buy wins out. Note here that “best” means “most economical product that delivers what the customer is looking for”. Over the long term, getting the product right leads to sales that lead to lots of deliveries and huge fleets with lots of high margin services spend, and ultimately that’s what drives enterprise value.
Adjutant_Reflex_@reddit
Which Ortberg is doing. And it ignores that the CEO that made Airbus competitive had no engineering background.
At this point the whole “engineers in charge” trope is just copypasta.
devildog2067@reddit
I used to do work for Rockwell back in the day, I never knew Kelly personally but I worked with many of the folks on that team and they all had good things to say about him. I think he’s the right person in the seat, and I thought Calhoun was a really odd choice given the decline of the GE school (in aviation in particular — McAllister, Gentile, etc.)
I’m cautiously hopeful.
Terminal_Phase@reddit
Boeing bought up every defense aerospace manufacturer, and their designs along with them, then sold their soul to the U.S. government in the name of sickening profits.
They deserve everything they get.
The moment you start short cutting manufacturing and safety procedures to bow to the demands of boards members and stock prices, you should fail as a company.
henryhttps@reddit
Are there any examples of current U.S. airplane manufacturers that haven't sinned in these ways? /srs
Snoring_Eagle@reddit
Unlikely. Once the MBA types get into the top roles, it's almost impossible to get engineers back in those roles.
Walbabyesser@reddit
„how good Boeing were“ - past tense. They need to go a long and painful way back to reach that level again
tadeuska@reddit
I hope it will be done. The way how Boeing tried to destroy Embraer was sinister.
Impressive-Yak-7449@reddit
Boeing's problem is they're run by Core IE. Basically added fat, who know nothing of airplanes, making the decisions.
Ancient-Park-8330@reddit
787 is maybe the most in demand widebody - super efficient, covers pax from 250 to 350, it’s pretty amazing.
Twitter_2006@reddit (OP)
I love the 787 for sure. 787 and 777x will help Boeing recover.
mf104@reddit
Whatever it takes to get the stock price up again. I don't care what it is.
Nice-Community-2345@reddit
A tunnel-visioned fixation on stock prices is what caused the whole mess at Boeing in the first place.
Healthy_Reporter4243@reddit
Boeing has already lost some 777x orders to a350 so they have to sell a lot
Adjutant_Reflex_@reddit
Boeing is eating Airbus’ lunch when it comes to widebodies. The 787 by itself has a larger backlog than all of Airbus’ wide body backlog. The 777X adds another 600 and a product that Airbus has no real counter to.
Twitter_2006@reddit (OP)
Yeah, the 787 has over 2,300 orders and the 777x has over 600 and its not even in service yet.The orders will increase once it enters service.
Twitter_2006@reddit (OP)
Yeah, but the order book is at over 624 so its a good start. All it takes is one mistake to lose momentum.Boeing must learn the way Airbus learned from the A380's commercial failure.
TrustOk4495@reddit
Keep dreaming not in this world
Twitter_2006@reddit (OP)
Keep dreaming? Boeing dominated Airbus for decades man.Bad times do come, but the rise will come too, one day, again.
devildog2067@reddit
Boeing really started to lose to Airbus after 9/11, when they took the 737 rate down and Airbus didn’t. They lost share in the narrowbody segment they never got back.
Would have been nice to have some more MBAs around then…
Twitter_2006@reddit (OP)
A320 is a huge success yes.I think had the A350 never happened, Boeing would still be on top today.A350 helped Airbus recover from the commercial A380.
Oh_Wiseone@reddit
I hold the same wish but they have a long way to go to regain the trust of the people. They need to get back to their engineering excellence rather than the business heads.