Crash Course

tags

Finance Outsourcing Boeing

Notes

“a culture of financial bullshit, a culture of groupthink.”

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management culture.

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demonstrated how the costs of a grounded plane would dwarf the short-term savings achieved from the latest outsourcing

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Boeing’s leaders began crying “crocodile tears,” Sorscher claimed, about the development costs of 1995’s 777, even though some industry insiders estimate that it became the most profitable plane of all time.

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the Wall Street analyst who cut him off mid-sentence: “Look, I get it. What you’re telling me is that your business is different. That you’re special. Well, listen: Everybody thinks his business is different, because everybody is the same. Nobody. Is. Different.”

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cash cow for the one percent, bound inexorably for the slaughterhouse.

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It smacked of the sort of screwup a 23-year-old intern might have made—and indeed, much of the software on the MAX had been engineered by recent grads of Indian software-coding academies making as little as $9 an hour, part of Boeing management’s endless war on the unions that once represented more than half its employees.

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MCAS was an honest mistake, but the secrecy shrouding the program’s very existence told you it wasn’t a 100 percent honest honest mistake.

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As the carriers became more profitable in the twenty-first century, more of them followed Southwest’s lead and helped Boeing make its numbers,

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Those partnerships were but one numbers-smoothing mechanism in a diversified tool kit Boeing had assembled over the previous generation for making its complex and volatile business more palatable to Wall Street,

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Boeing agreed to rebate Southwest $1 million for every MAX it bought, if the FAA required level-D simulator training for the carrier’s pilots.

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the No Sim Edict would haunt the program; it basically required any change significant enough for designers to worry about to be concealed, suppressed, or relegated to a footnote that would then be redacted from the final version of the MAX.

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the plane’s new aerodynamic profile was dragging its tail down and causing its nose to pitch up. So the engineers devised a software fix called MCAS, which pushed the nose down in response to an obscure set of circumstances

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Boeing modified MCAS to turn down the nose of the plane whenever an angle-of-attack (AOA) sensor detected a stall, regardless of the speed. That involved giving the system more power and removing a safeguard, but not, in any formal or genuine way, running its modifications by the FAA, which might have had reservations

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it would have involved some kind of cockpit alert, which would in turn have required additional training—probably not level-D training, but no one wanted to risk that.

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a Boeing technical pilot emailed the FAA and casually asked that the reference to the software be deleted from the pilot manual.

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So no more than a handful of people in the world knew MCAS even existed before it became infamous.

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the entirely predictable outcome of the byzantine process by which investment capital becomes completely abstracted from basic protocols of production and oversight: a flight-correction system that was essentially jerry-built to crash a plane. “If you’re looking for an example of late stage capitalism or whatever you want to call it,” said longtime aerospace consultant Richard Aboulafia, “it’s a pretty good one.”

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the crew flew manually the whole way to Jakarta, where a passenger told the television reporters everyone on board had spent the whole ride “reciting every prayer” they knew.

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all the pilots reported in a routine maintenance log that the plane’s speed trim system was “running to the wrong direction,” and that the air speed and altitude sensors were off. “Nothing about how, oh by the way, this plane is possessed by demons?”

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“I get so mad at Boeing trying to tar this captain when he was actually the most proficient pilot of all of them,”

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There’s no computer on the airplane that he cannot override,

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What has pitched up nicely since its initial nosedive is Boeing’s stock price,

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The line on Stonecipher was that he had “bought Boeing with Boeing’s money.” Indeed, Boeing didn’t ultimately get much for the $13 billion it spent on McDonnell Douglas, which had almost gone under a few years earlier. But the McDonnell board loved Stonecipher for engineering the McDonnell buyout, and Boeing’s came to love him as well.

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You are in a mature industry that is no longer innovative; it’s a commodity business. The last great innovation capable of driving major growth in aviation was the jet engine back in the 1950s, and every technological advance since has been incremental. And so the emphasis of the business is going to switch away from engineering and toward supply-chain management.

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Boeing was telling its own version of this story, with the aid of another Stonecipher initiative that naysayers dubbed “the cult of RONA,”

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all you had to do to make RONA go up instantaneously, no matter what, was to sell off your assets indiscriminately, and outsource whatever functions they used to serve

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“Literally where there had been 20 engineers, there was now one.”

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promised that, once finished, the parts would quickly “snap together” like Legos.

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much of the plane’s real design happened on the assembly line,

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From 2004 to 2008, the year the plane was scheduled to hit the market, Boeing plowed $16 billion into dividends and share repurchases—only ceasing when the plane officially blew its deadline, even though, as Sorscher bitterly recalled, “anyone could have told you that plane was going to blow its deadline.”

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McNerney held on to his job for the long haul, ultimately raking in about $250 million in compensation at Boeing.

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Asked by The Washington Post to comment on the company’s failure to ground the MAX when it first learned of the sinister suicide software that had killed 189 people, a coolly indignant Calhoun doubled down. “I don’t regret that judgment. And I don’t think we got it wrong at that time and that place.” Translation: It’s easier to lie about something when you can’t be bothered to understand it.

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most of Boeing’s response to the MAX disasters has involved disseminating a kind of misinformation and doubt that makes the crashes look more complex than they really are.

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turned out to be a lie.

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every pilot in the world knew how to respond to an MCAS error. They had the checklist!

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The Ethiopian pilots had followed the Boeing checklist.

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filmed a terrifying video in which he attempted to implement the MCAS override checklist in a simulator to demonstrate the system failure.

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Boeing had not only outfitted the MAX with a deadly piece of software; it had also taken the additional step of instructing pilots to respond to an erroneous activation of the software by literally attempting the impossible.

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a federal agent showed up at his door with a subpoena

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the FAA certified the plane despite its professed belief that the plane “does not meet” its own safety standards

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no one at FAA wanted to work on the MAX

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Indian coders engineered much of the software powering the MAX in offshore coding sweatshops as part of a campaign to make inroads in Airbus-dominated India,

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the then-acting FAA chief and the ranking Republican on the House Transportation and Infrastructure Committee, led a coordinated campaign to blame the dead pilots for crashing the planes.

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lax foreign pilot training standards.

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the post in question had been commissioned by one of Boeing’s institutional shareholders;

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FAA’s new concern that “female” pilots might lack the physical strength to fly the old-fashioned way.

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Boeing had a history of deflecting blame on to dead pilots,

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Carey could feel the MCAS story veering into similar territory, so he recorded the meeting in case another once- in-a-lifetime MCAS fail occurred—as it indeed did.

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Men like these had told far bigger lies for far bigger and scarier clients to far more destructive ends.

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it’s also true that no one who knew anything about anything thought it was a good idea to slash research and development spending, lay off half the engineers, or subcontract whole chunks of a plane without designing it first. It hardly mattered.

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“How do you merge those two management philosophies? The hunter killer assassins will destroy the Boy Scouts. That’s what happens.”

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one of her colleagues let it slip that the landing gear wasn’t strong enough to withstand certain weather conditions, and that if she wanted to keep her job she’d keep her mouth shut about it; she was laid off a few months later. “I thought to myself, oh my gosh! This happens in the movies.” She had no idea then how sick she would get of watching the same movie.

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Noting that the stock had surged from $140 four years earlier to $446 right before the crash that had killed his wife, and his son, four-year-old daughter, nine-month-old daughter, and mother-in- law, Paul Njoroge laid out the sequence of 737 MAX orders, ten-figure stock buybacks, and dividend hikes that had dealt out this horrible fate to his family. “Could that be the reason Boeing did not feel obliged to ground the MAX even after the second crash of the Boeing 737 MAX?” he asked. “Back to my very essential question, why wasn’t the MAX 8 grounded in November after the first crash in the Java Sea? One hundred and eighty-nine lives were lost, and executives at Boeing cared more about its stock price than preventing such a tragedy from occurring again,” and so had begun “a pattern of behavior blaming innocent pilots.” “I am empty,” he told the committee. “My life has no meaning.”

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