[toomuchtodo]

Because Boeing is too big to fail and will be parted out by the US government if management does not get it together. Management and equity will be wiped out, the manufacturing infra and workers will not. The demand for the product will still exist (civilian and military aircraft, space vehicles, etc), but the economic configuration will be forced to change by bringing the system to failure.

Based on all available evidence, Boeing is failing because of its management (since the McDonnell Douglas deal), its board, and its shareholders not pressuring for sufficient change.

https://aviationweek.com/air-transport/aircraft-propulsion/d...

[blackeyeblitzar]

It’s not solely management or shareholders. If you have worked for Boeing or with them as a contractor or supplier, you have probably experienced some of the cultural issues with their workforce. A lot of the companies biggest failures have a mix of people who caused them. Remember, the door plug was meant to be secured in final assembly by an IAM worker. And even if you go back to the two 737 Max hull losses, the design of it and choices like having no redundancy on a cheap sensor were done by SPEEA workers (the union for technical staff). Boeing is also failing due to the low quality workers it has, their demands, and the inability to freely replace them. It’s not just bad executives.

[genocidicbunny]

Well, a problem with company culture is still absolutely the fault of management, so I think it's fair to lay the blame at their feet. If your workforce is underperforming, invest in training them or finding a better workforce. If you can't find a better workforce for what pay you're offering, offer higher pay. And if you can't afford to do that and keep your business profitable... Sucks to suck; you don't have any guaranteed right to profit.

[blackeyeblitzar]

When I said “cultural issues with their workforce” I didn’t mean general “company culture” but the “union culture” specifically. Is that still a responsibility of management? Sure, for some aspects. But unions remove a lot of the control and tools management usually has to deal with some problems effectively.

[genocidicbunny]

Absolutely still a responsibility of the management. Management can find other, different tools to deal with problems if they're feeling like they're being hampered by the union. Management is not entitled to anyone's labor and if said labor collectively tells management "our way or the highway", well, c'est la vie.

Unions provide a form of power symmetry between the general workforce and the upper management of the company, and while it's not always balanced with the power of the company itself, the alternative is even more asymmetric. And ultimately, if the union is behaving in such a way that none of their members can find employment, the problem will tend to correct itself.

[ETH_start]

The union mindset is being exhibited in your comment here, where you scapegoat the management for everything. Even things where the unions aggressively fought for and have now mandated into law at the expense of management's contract freedom.

[genocidicbunny]

> where you scapegoat the management for everything.

Well, that's sort of their job -- to be the ones responsible for the actions of the company. If I hire you to do a job, and you don't do it, I'm not 'scapegoating' you if I complain that you didn't do the job I hired and paid you to do.

> Even things where the unions aggressively fought for and have now mandated into law at the expense of management's contract freedom

Most of these are the 'FO' part of 'FAFO' historically, so I have little sympathy there.

[Dalewyn]

The problem isn't Exec vs. Union or McDD vs. Engineers or any specific bit of Boeing, it's all of Boeing as a whole from top to bottom including the striking workers and that's why a bankruptcy will be a good thing.

A bankruptcy will force Boeing to either restructure from the ground up or be cut apart and distributed to companies who can hopefully conduct business better.

[Arainach]

Can you point to a bankruptcy where what you described (management wiped out, manufacturing infrastructure not) actually happened and didn't fail within 5 years?

[toomuchtodo]

The reorg of GM by the Obama administration does not tick all the boxes [1], but is the most recent example that would come to mind of government support via BK management and recapitalization. The administration did this to save jobs and the manufacturing supply chain [2].

Capital is made up, management is fungible, manufacturing supply chains and systems are the hard part (which is why, after incredibly aggressive financialization, Boeing is having to acquire Spirit AeroSystems, which had previously been spun out for cost savings...which went to management comp and shareholders). If you are optimizing for a specific outcome, it is important to understand the malleability and limits of the components that make the whole.

Even Elon recognized this during Model 3 production hell [3]. I suppose we must always learn the hard way for the lesson to be of value. If management is the problem (and it is very clear Boeing management is the problem), it must be replaced so that the people who do the actual building can build. This is no different than the tech culture of "employ great people and get out of their way."

[1] https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...

[2] https://obamawhitehouse.archives.gov/economy/jobs/rescuing-t...

[3] https://x.com/elonmusk/status/984882630947753984 ("Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.")

[hhs]

If interested, Charlie Munger had a special take on the failure of old GM and several other things, including what was said about unions:

"General Motors, out of the profits of their good years, they could have bought, every year, for many years, a big company. They could have bought Eli Lilly one year and Merck the next, and United Technologies. General Motors could own the world. Instead, what they declared to their shareholders was a goose egg. They took the common equity to zero. And they would say it was all somebody else’s fault. The climate was bad, the unions got powerful. Those damn Asians and Europeans were too competitive.

The truth of the matter is, their very prosperity made them weak. The dealerships got in the hands of inheritors, and the executives on the sales field go around and drink martinis with inheritors, and didn’t pay enough attention to defects in their vehicles. And one thing led to another, and when they were all done the shareholders’ equity went to zero.

And that was in a company that at its peak was one of the most admirable companies in the world. Take the stuff that Boss Kettering (Charles Kettering – head of research at General Motors from 1920 to 1947) had invented in the early days. Kettering was one of the most useful citizens that ever lived in America.

A self starter on a car is a wonderful thing. Under the old system, you frequently broke your arm. You would give it a crank and it would answer back by spinning backwards and breaking your arm. I would much rather push a button than have my arm broken. Nor do I have the opportunity to go and crank in the sleet and snow." [0]

[0]: https://fs.blog/worldly-wisdom-from-charlie-munger/

[ETH_start]

Wiping out the investors does profound downstream harm because it means that future investors will be less likely to invest in these kinds of companies, or smaller companies striving to occupy similar roles.

Moreover, union obligations cannot always be petitioned in bankruptcy proceedings. This has resulted in company assets being dissolved altogether, instead of sold off and used, in some cases in the past.

[Dalewyn]

To be clear, there won't be a "wipe out" at least in the "floor fell out from left field" sense.

If a bankruptcy becomes likely, investors will start selling Boeing stock to recover what they can. Creditors will start calling Boeing bonds, if applicable. Remember, "the market has priced it in" is a meme for a reason.

So far we haven't seen anything like that yet, just otherwise normal reductions in stock valuation following lackluster business performance.

However, Boeing is courting the possibility of having their credit ratings reduced to junk bond status by Moody's[1] and S&P[2] and that would certainly be a potential sign of the end times coming. Getting slapped with junk bond status literally means lenders should not consider Boeing reasonably solvent.

[1]: https://www.marketwatch.com/story/boeings-bonds-are-being-sn...

[2]: https://finance.yahoo.com/news/boeing-biggest-ever-us-fallen...