[bbor]

You’re making great points about the software/engineering industry and I don’t disagree about any of those specifics — engineering culture is paramount. I was just trying to point to (what I see as) the root cause: the engineering culture at Boeing didn’t fall apart because it’s run by lazy millennials or because the managers hadn’t read Mythical Man Month, it’s because they spent their money on stock buybacks and executive compensation.

Funnily enough, I went looking for Boeing stock buyback info and found this article… seems my hypothesis has some specific backing in this case!

Opinion | Did Stock Buybacks Knock the Bolts Out of Boeing? https://www.commondreams.org/opinion/boeing-safety-stock-buy...

[toast0]

Stock buybacks are tax efficient dividends. Boeing has been paying dividends fairly regularly since 1937, so paying stockholders can't really be the problem. Executive compensation is kind of a red herring too. If you don't like what the executives did, it probably reflects more on the choice of executives rather than the compensation of them, but you could maybe make an argument about how compensation incentives were setup.

MCAS and unbolted door plugs feel like two separate types of problems, IMHO. Both of them can be tied to Executives and culture, of course. MCAS comes from a desire to skirt regulations --- hiding automation from pilots in order to reduce certification requirements is a design error. OTOH; the unbolted door appears to come from production / rework corner cutting; the design is sound, the written process is sound (I think), but written process was not followed in order to meet schedule pressure.

You can have a company culture that encourages skirting regulations and cutting corners in production regardless of dividends/buybacks and executive compensation.

[bcrl]

The unbolted door was caused by a desire to avoid reinspecting the door were it removed using the official process. That's exactly the same problem as MCAS: they tried to skirt the regulations that required reinspection.

[bbor]

Again, great response, I think you understand the dynamics better than I. HN is gonna cut off this thread soon but I think your last line helps me sum up my point well:

  You can have a company culture that encourages skirting regulations and cutting corners in production regardless of dividends/buybacks and executive compensation.

IMO, a good way to avoid such a culture is to choose and cultivate quality engineers. A better way is to also entice them with high pay and/or prestigious projects. The best way, which is entirely foolproof, is just to have more money so that corner cutting doesn’t come up. And given the scale of Boeing’s behavior, I thinks it’s reasonable to say they could’ve expanded QA/safety/training/testing/etc budgets by a LARGE degree.

In other words: imagine I bought Airbus (lucky crypto run, ofc) and immediately transferred 10-20% of their liquid(izable) assets as cash into my bank account. And otherwise left the company running as is. Wouldn’t you think that’s the most relevant fact when discussing changes to their engineering culture in the preceding years?

Re: “it’s always been this way so if can’t be that”, I don’t think that’s a solid enough premise to support that conclusion. A) context changes, and b) I think it really is crazy out there these days. From Jacobin:

  In a 2017 article for The American Prospect that he coauthored with Sakinç, Lazonick identified one especially distressing instance in which Boeing neglected to follow through on its planned redesign of the 737 Max airplane, a project that was estimated to cost $7 billion at the time. That amount, he wrote, was what “on average, Boeing has been spending on stock buybacks annually since 2013.”

  In another analysis, Marie Christine Duggan, an economic historian at Keene State, concluded the amount that Boeing spent on buybacks in recent decades has generally outweighed spending on capital expenditures like upgrades and maintenance. Duggan found that in 2017, at the height of its buyback frenzy, “Boeing’s spending on dividends and stock buybacks was 66 percent of total spending, while only 9 percent of Boeing’s cash went into new equipment to manufacture planes.”

  Many of Boeing’s mass stock buybacks came after President Donald Trump’s 2017 tax cuts, despite the fact that Boeing and other major companies promised to invest their resulting tax savings on capital expenditure and innovation.