By Financial Editor Samuel Insull with
Aviation Correspondent Douglas Corrigan
Like omens, pieces of Boeing planes keep dropping out of the sky. A door plug out West. Another 737 Max left its wheel in San Francisco. Then an exterior body panel fell off somewhere over Oregon.
And let's not forget the 346 innocents who died because Boeing didn't want to tell pilots about the changes they had snuck into the 737 Max autopilots.
Sounds like some planes and some people have a few screws loose.
How'd that happen?
As we've mentioned before, it's due to the usual suspects: rich white men and Republicans.
The story of how Boeing's culture of profits-first and safety last led to the catastrophic 737 Max 8 disasters has been well told elsewhere by the great James Surowiecki elsewhere so we don't see the value in plagiarizing him further here
 |
| Doors closed. Wheels on. Those were the days! |
Oh, OK just one quote:
Boeing migrated away from an engineering-centric culture in order to boost profits and shareholder value.
Actually some of the sordid details are worth mentioning. They start, as with much corporate malfeasance, in the boardroom:
During a series of meetings in 2010 and 2011, Boeing’s board discussed how the company should respond to the threat of a new, more fuel-efficient line of Airbus jets, ... The board talked about how it would be faster and cheaper to revamp an older version of a Boeing jet.
The plan to revamp an older 737 jet included larger engines mounted farther up on the wings, which altered the plane’s balance. Boeing engineers designed the [lethal] MCAS software to compensate for this imbalance. In both crashes, investigators believe an instrument called an angle-of-attack sensor fed the MCAS software bad data, causing it [to] push the planes’ noses downward.....
One challenge for board members is a lack of technical expertise. [One] Boeing director ...doesn’t remember anyone in that group questioning whether a reconfiguration of the 737 with larger engines would create trade-offs that would affect safety.
“The board doesn’t have any tools to oversee [safety],” [the director] said....Some corporate boards, such as JetBlue and Dow Chemical, mandate safety oversight in their bylaws, seeing it as a part of their duty to manage risks. Boeing’s corporate governance principles do not mention the word “safety,” and its board does not include any experts in airplane safety.
Who was worthy (and spineless and ignorant) enough to serve as a Boeing director?
Wait for it...
 |
| Photo: Washington Post |
Note she wasn't around for the fatal crashes, but as for the recent safety lapses....
We'll get back to her, as soon as we find out where she is.
The investigation into the door plug debacle has revealed the surprising tidbit that the company that actually duct-tapes the plane's body together is not Boeing itself, but something called Spirit AeroSystems.
Who they? It turns out they're a separate company that used to be part of Boeing until it was spun out in 2005. It seemed like a great idea at the time, according to Forbes:
Oh.
Why in the name of Wilbur and Orville Wright would you separate the building of the plane from the company that is supposed to build planes? The original idea was to unload some prairie factories it no longer wanted onto a private equity consortium, while retaining the option to buy what the factories made.
But the hard-eyed money men (apologies to Russell Baker) at Boeing realized that spinning out the enterprises that actually bolted together the planes could have a number of good effects, including unloading the expenses and bother of negotiating with a unionized work force off its financials and onto someone else's.
As for safety, well:
The underlying cause of problems on Boeing’s production lines are not clear, but analysts and some former employees point to pressure to meet delivery schedules and, more recently, workforce turnover during the coronavirus pandemic.
Over the years, former company employees have come forward with concerns about what they viewed as sloppy work at Boeing’s plants. The Senate Commerce Committee documented many of those issues ...based on the accounts of seven whistleblowers. The whistleblowers included Ed Pierson, a former manager at the 737 factory, who alleged an unusual number of quality control problems at a plant under “relentless schedule pressure.”
It's not surprising given that Boeing accounts for 64% of Spirit's revenue. When one customer who represents almost two-thirds of your revenue says jump you say how high. And when it says you need to work faster you say, “Thank you sir may I have another.” You don't say you need more time to attach the bolts to the door.
Although its 10-K is a little squirrely on the details, it appears that Spirit supplies the fuselages for a fixed price. Therefore, if it has to spend more on say safety (like making sure the doors stay on), that's Spirit's problem, not Boeing's. Nice for Boeing's profits, but less nice for passengers who didn't want to fly to San Francisco in a convertible. Maybe that's why Spirit has lost over $1.6 billion in the last three years (losses that don't appear on Boeing's income statement of course).
In the wake of recent developments and stuff falling off the planes, Boeing and Spirit have talked about merging the two companies, which would have the salutary effect of making Boeing financially responsible for its planes. Salutary unless you are a Boeing honcho whose lavish compensation is tied to profitability and stock performance.
But delegating the real work of bolting together the planes to a subordinate nominally separate company might be good for transferring losses of out of Boeing, but sadly for Nikki Haley and Boeing management, it doesn't insulate Boeing from having to deal with its woke deep-state out-of-control regulator, the Federal Aviation Administration.
The FAA is now telling us that Boeing has flunked 1/3 of its safety procedures audits:
George W. Bush thought that 66% on an exam was good enough for him at Yale and thereafter, but when it comes to the lives of passengers, the FAA says maybe not.
The FAA wasn't always so rigorous in its oversight of Boeing, according to The Washington Post:
The 2018 and 2019 [fatal 737 Max] crashes...raised questions about how the agency had reviewed the design of the Max, an updated version of Boeing’s popular 737. Investigators found that regulators had failed to understand the risks posed by an automated system that pushed the noses of the planes down before they crashed, in part because Boeing employees had sought to minimize its significance. The FAA relies heavily on Boeing employees to carry out safety work on its behalf, but in some cases those workers have reported feeling pressured by the company to rush their work.
The last time you were pulled over by cops and you told them you weren't drunk, did they rely on your self-certification?
 |
| Before regulation took away our freedoms. |
The FAA's what-me-worry attitude didn't come out of nowhere. And here we get back to our friend and Boeing director Nikki Haley. For over half a century, it has been a fundamental tenet of Republican dogma that regulation is bad, bad, bad and we should let the free market regulate itself. Of course, those who died in air crashes don't get to vote.
The Republican Party's ideological arm (one of them at least), the CATO Institute has only 17,392 examples of the derogatory term “administrative state” on its website. Spoiler alert: they hate it. Matthew Continetti, better known as Billy Kristol's son-in-law, who holds a sinecure at AEI, another fake “think tank” admitted the through line from St. Ronald of Bitburg to the Tangerine-Faced (but regulation-hating) Fascist:
Any conservative president would have embraced [tax cuts for the rich], deregulation, and originalist judges.
And the authors of 2025 Project, the neo-Fascist blueprint for the forthcoming Trump dictatorship, admit that dismantling the regulatory system (of which the FAA is a part) lies at the core of their mission:
Trump-era conservatives want to gut the “administrative state” from within, by ousting federal employees they believe are standing in the way of the president’s agenda and replacing them with like-minded officials more eager to fulfill a new executive’s approach to governing.... Much of the new president’s agenda would be accomplished by reinstating what’s called Schedule F — a Trump-era executive order that would reclassify tens of thousands of the 2 million federal employees as essentially at-will workers who could more easily be fired.
Letting Lara Trump fire FAA aerospace engineers? The wheels would never fly off of that.
And how would Nikki Haley have reined in the power-mad administrative state?
Haley, meanwhile, has said she would limit federal government officials to five years in the same job. On its face, this is even more sweeping than Trump’s plan, since it would apply to the entire federal bureaucracy — the Washington Post’s Catherine Rampell argued that it would “destroy the basic machinery of government.”
You wouldn't want her company Boeing regulated by anyone with extensive experience and institutional memory, would you?
The decades of Republican hostility to and undermining of regulation in the public interest set the stage for the collapse of oversight at Boeing, whose consequences can be found scattered all over the back yards of Oregon.
And if Trump is elected in 2024, the best advice we have is: stay on the ground and stay alive.
No comments:
Post a Comment