As a physician in Colorado, this also explains the growth of the health care industrial complex. Hospitals and clinics are run by MBAs and MFAs focused on the bottom line which rarely gels with patient care. My primary care group was just bought by a private equity company out of Texas. The result? A system that sees patients and providers as commodities and not human beings. Goes along to explain why health care now sucks in the USA
Doctor, consider why medicine has been captured by MBA’s. A system of reimbursement has been created that represents a giant piñata of goodies. The government through all its programs and the thing we call private health insurance has created a huge incentive to capture the spoils. So called managed care, itself a response to the out-of-control costs of indemnity plans and Medicare reimbursement, has only accelerated the trends. Obama care itself was always just an insurance device. It never guaranteed you would have a health professional or system focused on patient care. Only that there was a payor. I don’t know how we fix this. Best wishes!
Private equity is 10 x more dangerous than the short term bean counter corporate culture we are plagued with in public corps that cater to Wall Street. There's a lot of great material on UA-cam on how they have gutted so many businesses to the point it's basically criminal. We can only hope that government wakes up to address the most important issues facing America's future. Unfortunately, current political parties lack the leadership to put America on the right path again. They say short term .. short sightedness .. but someone has to realize it's now 4th quarter .. and we're down by 14.
There's also the fact that if doing a 50k stent is much more profitable than doing prevention which is more tedious and labor intensive, then why is there a lack of funds going to preventive measures. For example, why are patients who's A1C are gradually increasing not allowed to have their blood sugar sensors covered unless they're officially diagnosed as diabetic. It just doesn't make sense !!! You should cover the sensor before the patient becomes diabetic not after the patient becomes diabetic. It shows how short sighted and sometimes deliberate the system is in making sure the patient becomes sick and stays sick !!! And it's jus sick that so many health professionals don't push back hard enough against such criminal behavior. Unlike Boeing, these deaths happen slowly and the healthcare system gets away a lot easier with murder than Boeing where the snafus tend to be spectacular and unmistakable.
I’ve worked at McDonnell Douglas/Boeing for 34 years. I’ve also taught research methods in Pepperdine University’s Doctoral Leadership program for the past 15 years. I was in the McDonnell Douglas side of the business. They were led by a bunch of jerks from St Louis. Once Harry Stonecipher got there, our journey to the GE way had started. Now, all of the chickens have come to roost. We don’t have any new commercial airplanes on the “drafting board”. We haven’t won a new major defense contract since the C-17 program. The public mistakes of the 737Max, the door plug popping off, the Crew Exploration Vehicle thruster issue, and our continuous lack of winning new contracts is where we are now. We’ve been in cost cutting mode for so long that we lost our innovation muscles. I am looking forward to retiring in the 1st qtr of next year.
I worked for McDonnell Douglas at the time of the merger with Boeing. The author of this video is correct, M-D was a rapidly declining company because it had lost the ability to secure new defense contracts.
@@garywanner7860 yes. That was due to the jerks in St Louis, which unfortunately, were in charge. Everyone not in St Louis hated them. We called them MacArrogance.
@@garywanner7860The DC-10 program failures that helped sink McDonnell Douglas are also very similar institutionally to the 737Max issues. The problem actually goes back to Douglas aircraft prior to their merger with McDonnell in the 1960s!
@@chadwells7562 I knew a lot of people from Douglas. Douglas went from number 1 in airliners to number 3 in 20 years. One of the big problems was the changeover from Donald Douglas to his playboy son. Boeing beat them in the transition from propellor to jet. Next, they only had 2 jets when the market segments increased to 4 segments. I started working on the C-17 in 1988 and all of the management were old “Dougloids”. They were- to a man- Idiots.
I'm a former military pilot. I remember when Boeing moved it's HQ to Chicago and my Brother-in-law (salesman) was really exited about it and wanted to know my opinion. He was somewhat taken back when I told him it was a terrible idea and would be the demarcation line when Boeing stopped being an aerospace company and became a business that just happened to produce airplanes. At the the time it was very popular for management consultant types to tell you things like "You're not an aerospace company, you are a transportation solutions company".
And, of course, as of 2023 their headquarters is in Crystal City, Virginia. Which happens to be across the street from the Pentagon and a skipping stone across the Potomac River from the Congress. (To be fair, Northrup Grumman's HQ is about 8 miles to the west, and Lockheed Martin's is about 11 miles to the north).
As a retired A&P who worked on biz - jets and turboprops I can say, given Boeing's incredibly successful past and its accomplishments, (B-17, 29, 52, 707, 747) I've always talked them up. But now, Boeing has become a dam Greek tragedy! Elon Musk seems to be the only one who can excel these days. He must have the gift of putting the right people in place.
If a publicly traded company chooses to outsource overseas to cut costs, it should start by outsourcing top-tier management positions like the CEO, CFO, and CTO. By saving millions paid to these executives, the company could preserve the jobs of many American workers. These employees, when gainfully employed, would contribute much more to the local economy than a small group of highly paid executives.
The system is failing as a result of both government and federal policy. In the next days, the banking crisis would have to be epic and gigantic for the FED to decide not to raise interest rates. This won't happen; an increase and a crash are coming. There will be more negative portfolios this 3rd half of 2024 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Just ''buy the dip'' man. In the long term it will payoff. High interest rates usually mean lower stock prices, however investors should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
This is striking! could you share info of your advisor, please? i'm in dire need of asset allocation and standing at a crossroads, whether to sell-off or keep holding my positions, my portfolio is retrogressing bad as of late
Great story great interview. I'm a retired Navy captain, 06 a senior leader. Leadership is continually hammered in our heads throughout our career in my case 27 years. One of the fundamentals of a good leader is listening to those whose he serves. If you are not listening to valuing and modeling your leadership to benefit, not only the product, but those who work for you, you've failed. Unfortunately, insatiable greed and lack of focus on a quality product completely derailed Boeing. What's most disturbing to me, is the golden parachutes given to CEOs who have failed the company. I completely agree with your first statement if you focus on a quality product, the money will follow. You're there for one thing and one thing only making a safe high-quality aircraft,........the rest follows. Sacrifice quality and safety…… And you have what you have now.
@@LTVoyager Or, it made me better able to work with engineering to make the best decisions for the company (quality, performance, cost, all must be considered) Also, note that Alan Mulally came to Ford from Boeing and that was the best hire we made during my career there (and likely the worst decision made at Boeing!)
@@dperreno If you didn’t understand performance and cost as a graduate engineer, then you went to a poor engineering school. Virtually every engineer at a competent school takes a course in engineering economy and knows more about cost considerations and assessment of alternatives than does an MBA. When I was in school in the 70s and 80s, quality, at least in the more formal Deming or Crosby sense, was not yet taught, but I learned it quickly in the corporate world. After getting my masters in engineering, I briefly considered an MBA, but after looking at the curriculum in detail and working with and talking with other MBAs, it was clear that this was a “check the box” degree for engineers who really were managers at heart and not engineers. I ended up in management anyway, but stayed close to engineering and retired early when the next step was VP which would have taken me completely across the threshold into paper pushing which wasn’t my idea of a good time. Better to retire early and pursue other interests, which for me was a great decision. So, I fully admit that I consider the MBA to be basically a worthless degree for a competent engineer and basically a check the box degree for engineers who are engineers in degree only and really want to be in management. An MBA might be useful for those with BA degrees in a business related field, but a competent engineer will learn next to nothing other than maybe how to read financial reports. I already knew that as I took two accounting classes as electives in my undergraduate program along with three economics classes. Add to that reading Graham’s book The Intelligent Investor, so as to assist me in my personal investing, and I knew as much or more about finance as did most MBAs, other than learning how to destroy a sound company by trading investment in the future for short term profit, selling off the profitable parts of the company and then declaring bankruptcy with what is left. I never did learn much about that so maybe I could have learned something in an MBA program. The only people impressed with engineers with an MBA are business people who have no idea what engineering is and think that engineer can’t understand business without an MBA degree.
I’ve worked for Boeing for 18 years. I love what I do. But experiencing what a horror show the bean counters have turned the company into is sickening.
Your comments reflect mine, but on a different continent and in the aviation sector, same as Boeing - the boss's husband was a director of the Civil Aviation sector so she appointed her husband to be the CEO of an affiliated civil aviation company - within 3 years, the company was broke and 3000 people lost their jobs!!! No-one was held responsible, so ALL the workers were sacked without any severance pay, just 2 days notice!!
@@hndflightsthe complain culture is a result and a cause of this false greedy business culture. In the meetings , the bosses lecture and the workers listen.
@@hndflights We now live in a world where weak, greedy people gang up against those with balls. After the merger with McDonnell Douglas, the only real solid Engineer left at the Corporate level was Alan Mulally. He was ganged up on by a board of greedy bean counters. Mulally knew he wasn’t going to change the culture and took the CEO job at Ford. Company that was ready for change. He saved Ford. Boeing on the other hand put James McNerny, a ruthless bean counter who led the way in the destruction of Boeings engineering culture. The sad part is that so many of us at the manufacturing level could do nothing but our own little jobs and hope those millionaires at the top of the company figure it out.
Normal employees build up the corporations, so that the CEOs can become rich on the backs of those employees, whom they then fire as they (the CEOs) destroy the corporation due to incompetence. I am a small engineering business owner - and we have no employees without company shares, because we know of this problem. The CEO must never be immune to employee feedback, and employees must always get a share in profits.
CEO's are hired for there contacts within that industry, and for there financial experience, but mostly for there contacts that ultimately grow the company. With this in mind CEO's bonus pay is 99% of the time given in the form of company stock options and buy doing this the stock option that is given is tied closely to how well the company does. Now there are a lot of people that think when the CEO gets say a 30 million dollar bonus that it is all cash and this is simply not true. So when the companies CEO pay is disclosed publicly people like the Boeing unions think they deserve a cut because the CEO made so much in bonuses. Now if the company does not grow and does not make additional revenue for it's share holders then that CEO's bonus becomes less valuable.
Had worked for some American and some German companies ….. American company boss wants to hear positive news only and they behave as if they are gods …. Germany the managers are mostly from shop floor and they are ready here any negative inputs and discuss openly .. they are glad to hear feedback S
@@JohnSmith-k1xThat’s true, but today’s CEO’s are not only the CEO of a company, they tend to be CEO, Chairman of the Board and President. This eliminates ANY checks and balances outside of their contractual incentive clauses. And since these clauses are tied to stock performance, that is the CEO’s focus. Now there are many ways to keep a stock price up that have nothing to do with producing a great product. The CEO’s turn the knobs to keep the stock price up, and when it comes to making products its all about cost and schedule.
Anybody who remembers back to 1980, the same argument was made about the financial focus destroying American industry. At that time, Japan was eating America's lunch with better products that met consumer demands better than anything made in the US. In Japan, they focused on engineering and quality. In America, the focus was on meeting the next quarters' financial targets.
1) Business school MBA programs teach that nothing is more important than shareholder value. 2) Current Capitalist dogma decrees that all government regulation is bad. As a result, we lose all of the industries that we once lead in. Aviation is in trouble. The automobile industry is in trouble. Next it will be the computer and phone industries. The answer is not to protect the US with high tariffs. We must become competitive again.
@@NotchEvident Economically, the economic numbers are not rising, but during the stagnation, companies have not neglected research and development, consumer prices have stabilized, and with the recent depreciation of the currency, Japan is doing better than the rest of the world. The only concern is the declining birthrate and aging population.
@@軍曹-n6j Perfect answer. After the election I'm hoping I can talk my wife into emigrating to Japan with me so we can watch future grand children to enable a slight uptick in birthrate at the cost of adding to the aging population
As an Aerospace Engineer in the past 20 years, i have been saying so for decades now. Give back the controls to the Engineers. Stop profit driven, but human driven.
I am a Mechanical Engineer. I have seen the same for the past 19 years. However the question that is never fully answered is why do Technical people always get eventually sidelined by Non technical people (within technology companies)? I have a few ideas, however, since I am commenting on your message board, I’m curious to know your thoughts…
My friend who is an engineer worked for Boeing for 36 years and became a engineering manager. He resigned 9 years ago citing confusion in decision making and a hostile work environment.
And at that point it would have been extremely hostile because he knew from his technical background what was wrong, and probably got completely dismissed and overridden when he broached the subjects. The hostilities really begin when they don’t listen to the ones who know best.
I am British and an engineer. It upsets me greatly that all the work of talented and motivated people has been sold off so cheaply by people who do not deserve the money that has been stolen. There should be a law against raping.
It's call Democracy of Enterprises. Gautam Mukunda made not want to say it, but like the Spanish Ship before, there are others doing better and sunset is not too far for Boeing.
I am assuming u r talking about the British empire, not Boeing. The “marauding empire” that raped, maimed, murdered and “sold off” most of what was not theirs by stealing from the civilized world at that time.
The real issue is lack of competition. The government helped destroy the competition, and now Boeing cannot be allowed to fail. If it wasn’t MBA nonsense it would be something us.
I agree, but I also counter that the only people qualified to make decisions that could cost a company billions of dollars and thousands of employees are sociopaths. If you or me had to make those decisions, we might die from the stress of it in just a few months.
and years ago the company i was working for was encourging eveyone to read his book s the way to do business. I never did becaues I always say this guys dont care about the long term business success as long as the quarterly report is good. I was proven right again and again
I used to work for Boeing, When Stonecipher gave his speech about improving share holder value I knew that it would take awhile but Boeing would have a lot of problems. I looked at a few of my co workers and the were shaking their heads "NO" The speech I wanted to hear is that we were going to be the best aircraft mfg in the world and that airlines would want more of the quality products we made. In my opinion this would have done more to increase share holder value (I owned shares). It would have taken a little more time but would have been worth it in a few more years. This mess was caused by the CEO and you are also correct about moving to Chicago.
Unfortunately for Boeing, all the US domestic airlines as their biggest customers do not force Boeing to improve its quality. Boeing quality problems had persisted since the 1980s. Practically all the new planes that were produced had repair carried out on the air frame structures and with defects in workmanship. The Airbus new planes were produced spotless clean. However, Boeing is famous for being very responsive to answer AOG problems on real time basis.
Mr.Akio Toyoda is a graduate of the Faculty of Law at Keio University. After graduating, he joined Toyota where he was in charge of sales, became president and is currently chairman, but he has no say in car development. He tried to develop an EV, but the development department was uncooperative, so he was forced to gather young people from within the company and engineers from group companies (DENSO, AISIN), Hino, Isuzu, Mazda, and Suzuki.
After joining the company, Akio Toyoda was assigned to dealer support operations. There, he noticed that dealers were having difficulty reselling used cars that had been traded in , so he built a network system (Gazoo) in 1998 that could be shared among dealers so that customers who wanted to buy a used car could find another dealer if the dealer they visited did not have what they wanted. The system added digital images of used cars as well as textual information. The first server was placed in the boardroom of a director at the time who had an understanding of this system.
It is every industry. The entire USA has been overly financialized. Do you wonder why Intel doesn't have chip manufacturing, but instead tsmc of Taiwan has over 50% of the chip manufacturing market of the world?
I began employment with Boeing in the early 80's through late 2000. I started with good pay, family wide medical and dental, an annual employee bonus, and great career advancement opportunity. When I left, pay was slow to meet cost of living, medical and dental required substantial payroll deduction with limited coverage, elimination of employee bonuses, and reduction in education/training and career advancement. The employment office became a vision of the Maytag repairman.
It's so nice to hear someone actually say this out loud. The worst thing that can happen to a company is for the lawyers and accountants to take over management. When I was in Business School, the organizational diagram had the line management people and a little bubble off the CEO called accounting and another little bubble off the CEO called legal. I went to Business School and law school at the same time. In the Business School, it was pounded into our heads that attorneys are nothing more than trained attack dogs, you keep them on a short leash, you never let them forget who's in charge and they're never allowed near the room where a deal is being made until the it is done and then all they do is write up what those in charge came up with. This day and age when accountants are in charge, every nickel they can cut out of costs becomes profit. I really hope this can change but, given the fact that most companies are owned by insurance groups, pension groups and other industrial investors, there is really no incentive it make a change. This also explains how we have so many CEO's with $1,000, 000,000 salaries and compensation packages.
@@TankEnMatemaybe so, but back then the attorneys still have souls.... Nowadays, the finance guys and attorneys are simply serving themselves when they know nothing about building airplanes... The finance people and attorneys are supposed to be serving us engineers and aircraft builders so that we can actually have safe products to sell. Finance and attorneys have stolen America's future for your own personal gains.
Every biz is a supply chain operation whether in the US or in China.or EU. If a link is broken , the supply chain is disrupted and the biz will suffer. Even though VW is run by engineers in Germany, it cannot compete against Chinese EV because of high costs of energy and lack of investment in the battery.
@@michaelloong964 The cost of energy isn't that much higher in the EU than China, cost of wages however is quite stark. But as automation becomes a bigger factor in vehicle manufacturing then the gap will close. But obviously the biggest difference is as you say, investment in EV manufacturing. In this regard VW has painted itself into a corner; it upped its investment in a dying market at exactly the wrong time.
Nice interview, but I think the main core issue is that CEOs get rewarded for short-term gains(cut R and D, layoffs, skimp on quality safety) and punished by Wall Street for investing resources into making better products and services.
I don’t think anyone at the vp or ceo level was responsible for the mcas system. None of them even knew what it was at the time of the crash. Unfortunately it was the engineers that designed that system and the faa that allowed it to be certified. We still don’t know who those individuals were. That’s the only actual criminal behaviour that has yet to be prosecuted. And before you say it, yes they were under pressure to minimize costs. But guess what - in any business where you spend billions on development and you can only recoup those costs in 5-10 years there will always be pressure. I can say from personal experience as a certification engineer that It’s the same at every aircraft mfg and probably every other industry where capital costs are high. It’s a fact of life that some manager will try to pressure you into cutting a corner in the name of budget and schedule. Applying pressure to get the job done is the manager’s job. But there’s a line they can’t cross. Did they cross that line or did the engineers just screw up? We still don’t know which is a huge problem. Boeing has hidden behind that deferred prosecution agreement so we don’t know the truth.
We don't put people in prison for faulty leadership or receiving large paychecks. The market can discipline a business far more effectively than does our justice system.
I am a grown man, Oxbridge educated, former chief advisor to the President of the country in which I was born, econometrician and not a softie by any imagination but whenever I think of Boeing tears come to my eyes. My head screams 'criminal'. What a waste. I always knew I was not alone but it's good to hear it said - sincere compassion to the residents of Seattle whose dreams and lives were shatter on the front line. Seattle to Chicago! What an unbelievable and unnecessary catastrophe. This is a very good video.
I work in the pharmaceutical industry which is another highly regulated industry. Aviation is regulated by the FAA, pharmaceuticals are regulated by the FDA. So I know a little bit about working with regulations and regulators. I can tell you that complaints that regulations stifle industry and hamstring business are NONSENSE! The regulations are almost all written in blood. For all the regulations of which I am aware, there is a story about how someone wasn’t thinking or someone who cut corners or someone who just didn’t care. In many cases, people got hurt. Bottom line: the regulations are there for a reason, and their presence gives credibility to the products manufactured under the regulations. They also give consumer confidence in the safety of these products. Fund the regulators. Businesses can’t help themselves from cutting every corner to maximize profits.
SOME of these regulations are indeed "written in blood"! Others are utter BS. For example, the required safety instruction packets in every seat. Notice it is in English and pictograms. So when were the passengers trained to read pictograms? And how many speak something besides English? And who bothers to read them [except maybe the first time flyer]? Who familiarizes themselves with the exits, much less how to operate each different type of exit.. And every seat? As it people can not share. Why not make the packets issued at the boarding and waiting areas? In language of choice. Sample training mechanisms for each type.
Similar tragic story at HP. Founded in the '30s by two Stanford ⚡ engineers, legends who led the Silicon Valley to be the tech capital of 🌎. When they retired, HP was turned over to career financial managers who juiced the stock but never came up with an innovatiive product. Finally Carly Fiorina dealt the final blow by buying a bankrupt PC company & putting it's management in charge. The rest is sad history.
So true. Old HP employee here. In the last few years it was weird to work for a hardware company that was ashamed of doing hardware. So many great people have kept the engine limping, but never got to recover.
What a brilliant analysis. When your car shuts down due to a defect on the highway, you can steer off onto the side of the road and stop. When your airplane shuts down at 40,000 feet there is no side of the road.
You are discounting China in the aviation industry. They may be 10 years behind right now but they have a habit of turning 10 years into 3 years. Boeing does not have that long to get its act together.
China's C919 is just the beginning. If Boeing does not see this coming, Airbus has for one reason not to extend, expand overriding cost, when another player comes in with better playing cards. They done it in Aero Space, Chips, EV, Solar, Cargo Ship, Crane for Ports, High-Speed Rail, Construction and many more other product lines, pass present and future.
@@chriswong9158 well said. What you mentioned are all Chinese SOEs that are run by CEOs based on making sure their biz is successful in the market place. Making money is of secondary consideration.
Boeing is like the US car industry, it’s on its way out. In a few years Boeing will be like US car manufactures. A local US only player. Airbus the pre eminent Global Plane Manufacture. Chinese manufacturing second. Boeing a minor player only servicing the us market.
@riderpaul. My post giving another dimension to China's rise in manufacturing was swiftly censored by the guardian of free speech. Seems that knowledge is toxic to some. Pathetic.
As a commercial airline pilot for 38 years, I’ve flown Boeing and Airbus. Airbus passed Boeing in the late 90’s. Just look how begrudgingly long it took Boeing to finally put winglets on their airplanes. They don’t design new aircraft, they just try to stretch out old models and put bigger engines on them . Ex 737, designed in the 1960’s. New ones are so long they risk scraping the tail on takeoff and landings.
So Airbus is still kicking out derivatives of the A320 which came out 40 years ago. There’s an a319, an a321 and an a320neo. So they haven’t done a new design in 40 years. At least the 737 nextgen got a new wing. Bombardier did the crj200, 700, 900 and 1000. They didn’t design a new regional, they just kept stretching what they had. (The C series was a new design but it is not a regional airplane). Embraer has come out with the E2 variant of its Ejet family with upgraded engines. So every company has in the past stretched or modified existing airplanes rather than create new designs. It is much less expensive, it’s usually less risky, you can get to market sooner and often you can minimize training requirements, which can make or break an aircraft program.
@@sblack48A380 and A350 were brand new designs, both less than 20 years old. They also bought the A220, a brand new design as well. I'm not saying you're wrong, I'm saying you're thrice wrong. They certainly can design brand new planes if the need arises.
@@sblack48 A320, despite its age, is a more modern airframe than Boeing's 737! A320 was built as a modern fly-by-wire plane right from scratch. So long as Boeing is fielding the 737 platform, the A320 family is more than sufficient as a competing product.
You can't deny that on top of every giant falling was some dude from Harvard involved. But your bubble is really good at convincing people that, for some undisclosed reasons, you are the right people to fix the situation.
It's sad how difficult things have become in this recessive economy. I was wondering how to utilize some money I had. I used some of it for e-commerce business, but that sank. I'm thinking of how to protect my $380K-worth stock portfolio from decline, but haven't figured which way to go.
Very difficult indeed, but when the going gets tough, the tough gets going. You have to learn and handle finances properly. you should hire a CFP to help you diversify your assets to include ETFs/index funds/mutual funds and stocks of companies with consistent cash flows. Don't go for penny stocks.
Opting for a brokerage Adviser is currently the optimal approach for navigating the market, particularly for those nearing retirement. I've been consulting with a coach for a while, and my portfolio has surged by 200% since 2022
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Melissa Terri Swayne for the last five years or so, and her returns have been pretty much amazing.
It was easy locating your coach's webpage by looking up her name online. Did my due diligence on her before scheduling a phone call to use her services. She seems proficient considering her resume.
I was at 3M when McNerny arrived and when he left. The focus went from technical expertise to marketing expertise. The technical training site was shut down and turning into a marketing excellence training site. In my technical area, Six Sigma became the focus and the road to advancement.
Six Sigma is great on the manufacturing floor. When I was an engineer at GE, everyone was required to become a green belt. The industrial designers, ad/com, marketing, admins, salespeople, and so on. Our admin did her project on whether it was better to have a single coffee station in the cafeteria or a small one in individual departments. I helped some of the industrial designers with their projects because, as one of them confided in me, “it’s not that I don’t know statistics, I don’t understand long division. When the senior leadership brought every sales person out of the field to learn the process and become an army of bad statisticians, we knew the company had lost its mind.
Sounds like Siemens! I worked for them years ago and the same thing... TOO MANY LAYERS of Arrogant Middle Managers who BELIEVED in their entitlement to be useless in the whole scheme of the production of the company. The just kept buying smaller companies and stripping what they wanted for short term gain.
You're spot on about building a new plane every 10 years: it's like Apple announce we'll never launch a new iPhone, or Tesla saying we'll not launch a new model, for the next 10 years, no engineers with any self-respect will want to work there.
True to all it is said, but understand, if the building, planning does not control COST and someone else can, you've just had build an empty shell that can fly. Consumer in the end is King
The executives are paid obscene amounts while destroying the company, then receive huge severance when booted. Customers, shareholders, and employees suffer. What's wrong with the directors?
He is right, it’s a culture problem in USwe had a senior VP show up on a status call on a major network project, he angrily said “I don’t want to hear any more problems” then no more problems we’re announced
I have heard of that happening at other major companies as well. Then there is the old management favorite - "we're going to improve production capacity and profit by 30%, year after year." Meanwhile all the engineers kick the floor and scratch their heads. Who are these dolts who decree such gains but have no idea how to get them? And why do they earn 5x - 20x what their top designers and engineers make? It's a hustle.
I worked for an engineering company, where the same crap took place in the 90s already. I quit and moved to a different country at the time and have never looked back.
Companies fail due to one reason: bad leadership, period. I've seen this too msny times over my career. Successful companies happen because you have the right leadership at the helm.
Huawei is the only private company in history that the US government wants to destroy by numerous sanctions. Normally such company would fail and disappear. However, the CEO, who is famous for being caring for employees and customers alike survived after its smart phones sale dropped to the abyss. He invested heavily to develop new products and also innovate to produce chips for his new smart phones. Now Huawei is successful and its operation survived US sanctions. It is a multinational private company operating in many countries except in the US due to sanction. Huawei employees own the company shares.
I bought Jack Welch's autobiography years ago and was appalled at how he runs businesses. Firing the "bottom" 10% each year etc. You can tell he was a thoroughly nasty, venal person.
As a former engineer and manager at The Boeing Company, I saw that DEI policies push out good managers and allow less qualified managers to be promoted instead of the most skilled engineers. Engineers lost faith, shut up, and stopped pushing for excellence when this happened. I recently heard that Boeing dismantled the DEI organization. I hope they go on a head-hunting exercise in the HR organization and let go of those HR representatives who promoted DEI. They ruined so many careers and ruined a good company.
I retired from Boeing after 42 years and I witnessed this change in culture first hand. My retired colleagues and I have discerned this exact argument over coffee for many years. This analysis is spot on.
I work for a company that hired a consulting company to help them. All they did was to lower expenses by getting rid of all the high level techs and replace them with lower paid newbies. Company now paying the price for bad work .
Airbus will win. For Boeing its too late. I love the anecdote about how "Boeing was a group of engineers who made planes". Oh they also made a fortune doing it. Greed is not good. It has destroyed so many companies.
Greed is fine as greed pushes the boundaries and ambitious aircraft like 747 and 777. The issue was the management class. The management class undermined public safety and degraded Boeing's public image.
I remember reading an article back in the early A380 days that one of the reasons behind building it was to keep the engineer busy and not have them wandering off to other industries.
No mention that China has begun making aircraft for the commercial market. China has a tendency to do engineering well, we can see examples of this in their space station and space exploration. They are presently dependent on Western manufacturers for avionics, engines and some other components, but knowing China this will change in the near future. No one thought 15 years ago that they would be the worlds largest manufacturer of automobiles or The world's leading manufacturer of active pharmaceutical ingredients (APIs) and 5g communications.
China dependent on Western manufacturers for avionics, engines & some other components is because like the US & EU, it is better to BUY available product FASTER, CHEAPER, BETTER KNOWN (OEM) then build self. BUT like Germany failure to deliver the needed "high tech rail wheels" for high speed trains, the German done 2020 to slow down China high-speed rail project, China will just build their own (fact check it). If one cannot BUY first, one have no choice but to BUILD on own.
@@chriswong9158 Chinese government is the world largest capitalist company that knows how to do biz. They have the best supply chain in the world. They are the factory of the world. Their biz is based on supply chain principle for their biz success. Their biz motto is to make sure their biz operation is successful and competitive, The US company biz motto is to make money first and then cut corners to ensure company share price does not fall. .
The rise of China's manufacturing sector has lately been boosted greatly by the US' policy of trying to kill off its biggest customer, the result of which the biggest customer has become the biggest competitor. I thought business schools should teach companies to keep their customers, especially their biggest one, dependent on them for as long as possible. This is quite straightforward. Never hand your econimic policiy to the geopolitical establishment. Everything is an existential threat to them, even their biggest customer. The economist Jeffrey Sachs calls them economics illiterates.
Greed conquers all. I witnessed the same at Teledyne, Litton, Northrop Grumman, & Curtiss Wright. The mantra was 5% ROI for investors, Workers you get 2% or 3%. If, if we like you. Great incentive to find a new job. ❤❤
@@jamesmorton7881 it was the rise of the MBA in the 90’s that used a common management template across all companies in all industries. Outsource expertise, move from manufacturing to service based, give massive/obscene salaries CEOs and their inner circle lower employee expertise and drive them to minimum wages. At Boeing it makes sense to management that complicated aircraft can be assembled (not manufactured) with ex hamburger flippers.
Boeing Commercial Airplanes is by far the largest revenue generator in the company, followed by defense/space, and then global services. When a large percentage of the costs have been amortized, the profit from each airplane delivered is substantial. The question then becomes, what's next? There needs to be sufficient capital for innovative products, and Boeing currently is stymied by too much debt.
@@mchristr No argument - Within Boeing Commercial Airplanes (BCA) is revenue from aircraft sales AND parts & service. By selling aircraft attractively near production cost they hook customers into a parts & service contract in order to maintain warranty. The bulk of revenue is parts & service. Boeing's Airplane on Ground (AOG) teams are legendary but not cheap. When airlines jump ship... it's a bad day at the "Lazy B."
I studied business in the late 80s. I'm also someone who builds and repairs things. I kept what I learned in perspective. Since then, I watched formerly great companies get ruined with poor management, and I watched the trends. I think from a higher level, and to a certain extent, the cultural knowledge of how to continue what was created in the past has been lost. On the other hand, the best talent goes into new and exciting technologies, because that's where the fun is.
Recall the Ford Pinto? Before it was released Ford executives learned that, if rear ended, the Pinto’s gas rank could rupture and cause fatalities. They decided to proceed with production, calculating that legal costs would be less than redesign and retooling. People died. Boeing followed much the same pattern. Wishing to avoid the time and expense of commissioning a new airframe, they crammed design changes into a “variant” of the 737. It was not airworthy and, left on its own was unsafe to fly. They decided to address the problem with a software patch. People died.
As a retired RN, who worked 60 hours per week since 1975, I saw the last refuge of actually CARING for the “services” of patient care, lose out to the corporate mind-think of CARING about short-term financials only, resulting in the largest RN shortage in history, and more “NEGATIVE PATIENT OUTCOMES” than ever recorded, and this will only get worse, as more baby boomers turn from being an RN, to a patient……
I must say, as a Boeing employee for the last 13+ years and from a multi generational Boeing family I agree fully with Mr. Mukunda. I can feel his investment in Boeings failures and his ideas for solutions I tend to agree with. I think the next generation of true new aircraft will decide if Boeing falls or succeeds. Unfortunately that time is approaching exceptionally fast and we still see no changes on the shop floor
Excellent piece. It would be great to cover private equity as well. Private equity is 10 x more dangerous than the short term bean counter corporate culture we are plagued with in public corps that cater to Wall Street. There's a lot of great material on UA-cam on how PE has gutted so many businesses to the point it's actually criminal. We can only hope that government wakes up to address the most important issues facing America's future. Unfortunately, current political parties lack the leadership , insight , and intelligence to put America on the right path again. They say short term .. short sightedness .. but they also need to realize it's now 4th quarter .. and we're down by 14.
Amazing and eye-opening insights on Boeing, Intel and Amazon. Thank you for this interview. Content like this ideally should get much more visibility - not just 70K followers ;-)
Wish more western people see "Atlas Shrugged" for American now see it in all parts of the Country of the USA. China's government since 2000's seen that path and is making sure this will not apply to the other countries. Seen China today compare to 1990's... Seen China's Bridge & Road Investment in Africa, So America, Middle East, Asia
In the late 1980s I was in law enforcement and investigated a fraud that occurred at McDonald-Douglas. An embezzlement of around $500,000 had occurred in their accounting department. I was appalled at their slip shod financial practices. They had hired a felon to work in their accounting department with absolutely NO background check. Not even a minimal effort! When interviewing some of their supervising employees It blew me away how naive and downright unaware they were. Even a minimal effort by a number of people would have discovered this embezzlement. I was surprised when, years later, I saw that McDonnel-Douglas had merged with Boeing, a company I knew was well run. The result does not surprise me.
This was one of the best interviews I've seen all year, what an eye-opener. Corporate greed for stockholders has to change'cause it is ruining all our corporations. I started working in corporations in 1985 and the change was horrible night and day difference once we hit the 2000 I retired.
I want to work for a large corporation that was taken over by bean counters. It didn’t take them two years to start the demise of the company, and within five years it was basically destroyed. The only thing they value is the green back.
America's regulators are all "captued" by the industries they are meant to regulate. Regulator staff should not be able to swap sides after a few years and get a huge "thank you" job for failing to do their job as a regulator.
Can’t help that we are living through the fall of the Roman Empire. What really struck me was when you were talking about needing to build a plane just to know how to do it. There was so much we are doing that is parasitic on the existing economy instead of doing anything to grow it. Problem is, when we decide to stop, will there be enough to produce reap value again?
More Government is not the answer, Boeing was a hugely successful and profitable business when we had LESS Government regulations. The merger with McDonnell Douglas was terrible for Boeing - a total culture class where the MD culture won. The only reason a business fails is poor management and this is the case with Boeing now. Many companies have been through this - IBM, Apple, etc and have come back to success once they recognize their management issues and correct it. I believe Boeing can come back and as both an investor and a person who has flown more than a million miles on Boeing planes I hope they do.
The story of Boeing is what happened to every other company… except it actually mattered at Boeing. You can outsource toys, computers, chips and cars but planes need to be made perfectly. There is zero tolerance for failure in this industry so the cost cutting strategies of the past 50 years destroyed it. Government bailout is likely next.
Europe, China and Japan, It's the 3rd world where it's not spreading, where does that put the USA? , not with the first world in terms of transportation!
Most folks probably dont remember when Boeing tanked back in the early 70s. "Last one to leave Seattle turn out the lights" My father worked for them at that time and was caught at the very end of the layoffs. He told me about those times and what sticks out in my memory was that he said entire departments were gutted , much of the cuts came from the bloated middle management. But the key takeaway was that the company was still able to meet demand. Sadly this story is all too common in todays world and we hear such phrases as "to big to fail". Meaning the problem wont get fixed. Hearing his story and having my own experience working for a larger company for 15 years is why today I would NEVER work for another. I actually enjoy working , but nothing is more frustrating than working in an inefficient organization that seems to value mediocrity furst and foremost. Thanks for sharing this clip.
This is indeed the problem in manufacturing. Self regulation and no regulation enforcement is disaster in aviation, tech, media, energy, on and on. It’s capitalism’s capture of government.
I used to work as an auditor at an aviation integration company. It wasn't just Boeing that was concerned about the bottom line but the sub-tier suppliers. The engineers would fight tooth and nail not to perform fixes to findings because they were told by management to do so to save money.
This happens again and again. HP used to be a great engineering company that made the best calculators, oscilloscopes, and computers. Then they outsourced everything and became little more than a label stuck on crap made to poor standards at the lowest bidder.
The biggest danger of Welch’s management style is that it works in the beginning. In this phase it empowered the spreadsheet army at Airbus, too. So it endangered the whole industry.
As a physician in Colorado, this also explains the growth of the health care industrial complex. Hospitals and clinics are run by MBAs and MFAs focused on the bottom line which rarely gels with patient care. My primary care group was just bought by a private equity company out of Texas. The result? A system that sees patients and providers as commodities and not human beings. Goes along to explain why health care now sucks in the USA
Doctor, consider why medicine has been captured by MBA’s. A system of reimbursement has been created that represents a giant piñata of goodies. The government through all its programs and the thing we call private health insurance has created a huge incentive to capture the spoils. So called managed care, itself a response to the out-of-control costs of indemnity plans and Medicare reimbursement, has only accelerated the trends. Obama care itself was always just an insurance device. It never guaranteed you would have a health professional or system focused on patient care. Only that there was a payor. I don’t know how we fix this. Best wishes!
Private equity is 10 x more dangerous than the short term bean counter corporate culture we are plagued with in public corps that cater to Wall Street. There's a lot of great material on UA-cam on how they have gutted so many businesses to the point it's basically criminal. We can only hope that government wakes up to address the most important issues facing America's future. Unfortunately, current political parties lack the leadership to put America on the right path again. They say short term .. short sightedness .. but someone has to realize it's now 4th quarter .. and we're down by 14.
You hit right on the nail.
There's also the fact that if doing a 50k stent is much more profitable than doing prevention which is more tedious and labor intensive, then why is there a lack of funds going to preventive measures. For example, why are patients who's A1C are gradually increasing not allowed to have their blood sugar sensors covered unless they're officially diagnosed as diabetic. It just doesn't make sense !!! You should cover the sensor before the patient becomes diabetic not after the patient becomes diabetic. It shows how short sighted and sometimes deliberate the system is in making sure the patient becomes sick and stays sick !!! And it's jus sick that so many health professionals don't push back hard enough against such criminal behavior. Unlike Boeing, these deaths happen slowly and the healthcare system gets away a lot easier with murder than Boeing where the snafus tend to be spectacular and unmistakable.
Exactly, I confirm as Aero Engineer
I’ve worked at McDonnell Douglas/Boeing for 34 years. I’ve also taught research methods in Pepperdine University’s Doctoral Leadership program for the past 15 years. I was in the McDonnell Douglas side of the business. They were led by a bunch of jerks from St Louis. Once Harry Stonecipher got there, our journey to the GE way had started. Now, all of the chickens have come to roost. We don’t have any new commercial airplanes on the “drafting board”. We haven’t won a new major defense contract since the C-17 program. The public mistakes of the 737Max, the door plug popping off, the Crew Exploration Vehicle thruster issue, and our continuous lack of winning new contracts is where we are now. We’ve been in cost cutting mode for so long that we lost our innovation muscles. I am looking forward to retiring in the 1st qtr of next year.
I worked for McDonnell Douglas at the time of the merger with Boeing. The author of this video is correct, M-D was a rapidly declining company because it had lost the ability to secure new defense contracts.
@@garywanner7860 yes. That was due to the jerks in St Louis, which unfortunately, were in charge. Everyone not in St Louis hated them. We called them MacArrogance.
@@garywanner7860The DC-10 program failures that helped sink McDonnell Douglas are also very similar institutionally to the 737Max issues. The problem actually goes back to Douglas aircraft prior to their merger with McDonnell in the 1960s!
Wait until you see what they have been doing to your health care
@@chadwells7562 I knew a lot of people from Douglas. Douglas went from number 1 in airliners to number 3 in 20 years. One of the big problems was the changeover from Donald Douglas to his playboy son. Boeing beat them in the transition from propellor to jet. Next, they only had 2 jets when the market segments increased to 4 segments. I started working on the C-17 in 1988 and all of the management were old “Dougloids”. They were- to a man- Idiots.
I'm a former military pilot. I remember when Boeing moved it's HQ to Chicago and my Brother-in-law (salesman) was really exited about it and wanted to know my opinion. He was somewhat taken back when I told him it was a terrible idea and would be the demarcation line when Boeing stopped being an aerospace company and became a business that just happened to produce airplanes. At the the time it was very popular for management consultant types to tell you things like "You're not an aerospace company, you are a transportation solutions company".
And, of course, as of 2023 their headquarters is in Crystal City, Virginia. Which happens to be across the street from the Pentagon and a skipping stone across the Potomac River from the Congress. (To be fair, Northrup Grumman's HQ is about 8 miles to the west, and Lockheed Martin's is about 11 miles to the north).
Good man. By the reaction of your brother in law he seems to have the wrong attitude to fit well into Boeing.
I work for Boeing and I approve this message.
As a retired A&P who worked on biz - jets and turboprops I can say, given Boeing's incredibly successful past and its accomplishments, (B-17, 29, 52, 707, 747) I've always talked them up. But now, Boeing has become a dam Greek tragedy! Elon Musk seems to be the only one who can excel these days. He must have the gift of putting the right people in place.
If a publicly traded company chooses to outsource overseas to cut costs,
it should start by outsourcing top-tier management positions like the CEO, CFO, and CTO.
By saving millions paid to these executives, the company could preserve the jobs of many American workers.
These employees, when gainfully employed, would contribute much more to the local economy than a
small group of highly paid executives.
I fly on Boeings and approve this message.
@@akmurf7429 I was with you until you had anything nice to say about the Sith Ifrican
"From making things to playing with spreadsheets." So true, love it.
The system is failing as a result of both government and federal policy. In the next days, the banking crisis would have to be epic and gigantic for the FED to decide not to raise interest rates. This won't happen; an increase and a crash are coming. There will be more negative portfolios this 3rd half of 2024 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Just ''buy the dip'' man. In the long term it will payoff. High interest rates usually mean lower stock prices, however investors should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
This is striking! could you share info of your advisor, please? i'm in dire need of asset allocation and standing at a crossroads, whether to sell-off or keep holding my positions, my portfolio is retrogressing bad as of late
Annette Christine Conte is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
A great American company ruined by corporate greed, like so many others
Democracy is playing it's part.
@@chriswong9158 *Capitalism is playing its part.
@@sithe0Boeing became an American icon due to capitalism. Hence the issue is not the economic system. Try again and listen this time.
@@sithe0Capitalism and the oligarchy that controls it.
@@brasidas2011Ok bootlicker
Great story great interview. I'm a retired Navy captain, 06 a senior leader. Leadership is continually hammered in our heads throughout our career in my case 27 years. One of the fundamentals of a good leader is listening to those whose he serves. If you are not listening to valuing and modeling your leadership to benefit, not only the product, but those who work for you, you've failed. Unfortunately, insatiable greed and lack of focus on a quality product completely derailed Boeing. What's most disturbing to me, is the golden parachutes given to CEOs who have failed the company. I completely agree with your first statement if you focus on a quality product, the money will follow. You're there for one thing and one thing only making a safe high-quality aircraft,........the rest follows. Sacrifice quality and safety…… And you have what you have now.
I agree entirely. You must listen to those below your status. Also I have always believed that if you make a good product the money will follow
As an engineer with an MBA in Finance and 25 years working in Finance at Ford - everything Gautam says is true.
So that makes you a financial engineer.
@@Emphasis213No, it makes you essentially useless to a manufacturing company.
Sad that anyone would hire a manager from GE. They are known to cook their books. Fire the Board of Boeing.
@@LTVoyager Or, it made me better able to work with engineering to make the best decisions for the company (quality, performance, cost, all must be considered) Also, note that Alan Mulally came to Ford from Boeing and that was the best hire we made during my career there (and likely the worst decision made at Boeing!)
@@dperreno If you didn’t understand performance and cost as a graduate engineer, then you went to a poor engineering school. Virtually every engineer at a competent school takes a course in engineering economy and knows more about cost considerations and assessment of alternatives than does an MBA. When I was in school in the 70s and 80s, quality, at least in the more formal Deming or Crosby sense, was not yet taught, but I learned it quickly in the corporate world. After getting my masters in engineering, I briefly considered an MBA, but after looking at the curriculum in detail and working with and talking with other MBAs, it was clear that this was a “check the box” degree for engineers who really were managers at heart and not engineers.
I ended up in management anyway, but stayed close to engineering and retired early when the next step was VP which would have taken me completely across the threshold into paper pushing which wasn’t my idea of a good time. Better to retire early and pursue other interests, which for me was a great decision. So, I fully admit that I consider the MBA to be basically a worthless degree for a competent engineer and basically a check the box degree for engineers who are engineers in degree only and really want to be in management. An MBA might be useful for those with BA degrees in a business related field, but a competent engineer will learn next to nothing other than maybe how to read financial reports. I already knew that as I took two accounting classes as electives in my undergraduate program along with three economics classes. Add to that reading Graham’s book The Intelligent Investor, so as to assist me in my personal investing, and I knew as much or more about finance as did most MBAs, other than learning how to destroy a sound company by trading investment in the future for short term profit, selling off the profitable parts of the company and then declaring bankruptcy with what is left. I never did learn much about that so maybe I could have learned something in an MBA program.
The only people impressed with engineers with an MBA are business people who have no idea what engineering is and think that engineer can’t understand business without an MBA degree.
I’ve worked for Boeing for 18 years. I love what I do. But experiencing what a horror show the bean counters have turned the company into is sickening.
Your comments reflect mine, but on a different continent and in the aviation sector, same as Boeing - the boss's husband was a director of the Civil Aviation sector so she appointed her husband to be the CEO of an affiliated civil aviation company - within 3 years, the company was broke and 3000 people lost their jobs!!! No-one was held responsible, so ALL the workers were sacked without any severance pay, just 2 days notice!!
@@hndflights screw you mr ceo apologist.
@@hndflightsthe complain culture is a result and a cause of this false greedy business culture. In the meetings , the bosses lecture and the workers listen.
Those bloody bean counters
@@hndflights
We now live in a world where weak, greedy people gang up against those with balls. After the merger with McDonnell Douglas, the only real solid Engineer left at the Corporate level was Alan Mulally. He was ganged up on by a board of greedy bean counters. Mulally knew he wasn’t going to change the culture and took the CEO job at Ford. Company that was ready for change. He saved Ford. Boeing on the other hand put James McNerny, a ruthless bean counter who led the way in the destruction of Boeings engineering culture. The sad part is that so many of us at the manufacturing level could do nothing but our own little jobs and hope those millionaires at the top of the company figure it out.
CEOs are being way overpaid for basically doing nothing but destroying employees and customers.
Normal employees build up the corporations, so that the CEOs can become rich on the backs of those employees, whom they then fire as they (the CEOs) destroy the corporation due to incompetence.
I am a small engineering business owner - and we have no employees without company shares, because we know of this problem. The CEO must never be immune to employee feedback, and employees must always get a share in profits.
CEO's are hired for there contacts within that industry, and for there financial experience, but mostly for there contacts that ultimately grow the company. With this in mind CEO's bonus pay is 99% of the time given in the form of company stock options and buy doing this the stock option that is given is tied closely to how well the company does. Now there are a lot of people that think when the CEO gets say a 30 million dollar bonus that it is all cash and this is simply not true. So when the companies CEO pay is disclosed publicly people like the Boeing unions think they deserve a cut because the CEO made so much in bonuses. Now if the company does not grow and does not make additional revenue for it's share holders then that CEO's bonus becomes less valuable.
Had worked for some American and some German companies ….. American company boss wants to hear positive news only and they behave as if they are gods …. Germany the managers are mostly from shop floor and they are ready here any negative inputs and discuss openly .. they are glad to hear feedback
S
@@karthikckrishna Great information for us all and thank you for your reply
@@JohnSmith-k1xThat’s true, but today’s CEO’s are not only the CEO of a company, they tend to be CEO, Chairman of the Board and President. This eliminates ANY checks and balances outside of their contractual incentive clauses. And since these clauses are tied to stock performance, that is the CEO’s focus. Now there are many ways to keep a stock price up that have nothing to do with producing a great product. The CEO’s turn the knobs to keep the stock price up, and when it comes to making products its all about cost and schedule.
Anybody who remembers back to 1980, the same argument was made about the financial focus destroying American industry. At that time, Japan was eating America's lunch with better products that met consumer demands better than anything made in the US. In Japan, they focused on engineering and quality. In America, the focus was on meeting the next quarters' financial targets.
Thank god for the Plaza Accord 😂😂
1) Business school MBA programs teach that nothing is more important than shareholder value. 2) Current Capitalist dogma decrees that all government regulation is bad. As a result, we lose all of the industries that we once lead in. Aviation is in trouble. The automobile industry is in trouble. Next it will be the computer and phone industries. The answer is not to protect the US with high tariffs. We must become competitive again.
And how has Japan been doing for the past 30 years? (Answer STAGNANT).
@@NotchEvident Economically, the economic numbers are not rising, but during the stagnation, companies have not neglected research and development, consumer prices have stabilized, and with the recent depreciation of the currency, Japan is doing better than the rest of the world. The only concern is the declining birthrate and aging population.
@@軍曹-n6j Perfect answer. After the election I'm hoping I can talk my wife into emigrating to Japan with me so we can watch future grand children to enable a slight uptick in birthrate at the cost of adding to the aging population
As an Aerospace Engineer in the past 20 years, i have been saying so for decades now. Give back the controls to the Engineers. Stop profit driven, but human driven.
Yeah. And we need more engineers in government too... especially in Congress and also in regulatory agencies.
And give the controls of running the country to statesmen and diplomats, not business men, shills and opportunists.
They are not going to "give back" nothing. You have to take it.
Look at the US Government.... first.
I am a Mechanical Engineer. I have seen the same for the past 19 years. However the question that is never fully answered is why do Technical people always get eventually sidelined by Non technical people (within technology companies)? I have a few ideas, however, since I am commenting on your message board, I’m curious to know your thoughts…
My friend who is an engineer worked for Boeing for 36 years and became a engineering manager. He resigned 9 years ago citing confusion in decision making and a hostile work environment.
I did not do the same kind of work, BUT when your old hands quit, something is wrong.
And it is usually already too late to fix it.
And at that point it would have been extremely hostile because he knew from his technical background what was wrong, and probably got completely dismissed and overridden when he broached the subjects.
The hostilities really begin when they don’t listen to the ones who know best.
@@rockym2931You're talking about American capitalism as is, all for shareholders.
I am British and an engineer. It upsets me greatly that all the work of talented and motivated people has been sold off so cheaply by people who do not deserve the money that has been stolen. There should be a law against raping.
It's call Democracy of Enterprises. Gautam Mukunda made not want to say it, but like the Spanish Ship before, there are others doing better and sunset is not too far for Boeing.
Same story for UK. Whole economy sold off to finance will be the end of UK as we know it.
Boeing or the Titan submarine, same shiet :P
I am assuming u r talking about the British empire, not Boeing. The “marauding empire” that raped, maimed, murdered and “sold off” most of what was not theirs by stealing from the civilized world at that time.
Rich people build Boeing. Not engineers & the blue collar workers.
Gautam is absolutely brilliant and 100% correct about Boeing and corporate America in general.
It’s not just corporate America it’s every where
The Harvard Bussiness School decease is contagious and destructive for American industry; Boeing is an example of the financialization mania
Completely agree. The Harvard school of business also moved manufacturing overseas.
The real issue is lack of competition. The government helped destroy the competition, and now Boeing cannot be allowed to fail. If it wasn’t MBA nonsense it would be something us.
It’s a Jack Welch disease that was taken over by Harvard.
Disease not decease, unless you meant something by it
Jack Welch was a Sociopath. If you want to solve the problems discussed here, focus on keeping Sociopathic people out of power.
I agree, but I also counter that the only people qualified to make decisions that could cost a company billions of dollars and thousands of employees are sociopaths. If you or me had to make those decisions, we might die from the stress of it in just a few months.
@@brushstroke3733 Baloney. Break out of your malignant assumptions and realize that something better is possible.
@@presence5426 Whoa, OK pal.
@@brushstroke3733 You defend the Sociopathic Class at y(our) peril. No more enabling the defectives or the evil.
and years ago the company i was working for was encourging eveyone to read his book s the way to do business. I never did becaues I always say this guys dont care about the long term business success as long as the quarterly report is good. I was proven right again and again
I used to work for Boeing, When Stonecipher gave his speech about improving share holder value I knew that it would take awhile but Boeing would have a lot of problems. I looked at a few of my co workers and the were shaking their heads "NO" The speech I wanted to hear is that we were going to be the best aircraft mfg in the world and that airlines would want more of the quality products we made. In my opinion this would have done more to increase share holder value (I owned shares). It would have taken a little more time but would have been worth it in a few more years. This mess was caused by the CEO and you are also correct about moving to Chicago.
Unfortunately for Boeing, all the US domestic airlines as their biggest customers do not force Boeing to improve its quality. Boeing quality problems had persisted since the 1980s. Practically all the new planes that were produced had repair carried out on the air frame structures and with defects in workmanship. The Airbus new planes were produced spotless clean. However, Boeing is famous for being very responsive to answer AOG problems on real time basis.
Mr.Akio Toyoda is a graduate of the Faculty of Law at Keio University. After graduating, he joined Toyota where he was in charge of sales, became president and is currently chairman, but he has no say in car development.
He tried to develop an EV, but the development department was uncooperative, so he was forced to gather young people from within the company and engineers from group companies (DENSO, AISIN), Hino, Isuzu, Mazda, and Suzuki.
After joining the company, Akio Toyoda was assigned to dealer support operations. There, he noticed that dealers were having difficulty reselling used cars that had been traded in , so he built a network system (Gazoo) in 1998 that could be shared among dealers so that customers who wanted to buy a used car could find another dealer if the dealer they visited did not have what they wanted. The system added digital images of used cars as well as textual information.
The first server was placed in the boardroom of a director at the time who had an understanding of this system.
I hold quite a few shares yes I like it when they rise in value and dividends but not at the expense of product quality
It is every industry. The entire USA has been overly financialized. Do you wonder why Intel doesn't have chip manufacturing, but instead tsmc of Taiwan has over 50% of the chip manufacturing market of the world?
I began employment with Boeing in the early 80's through late 2000. I started with good pay, family wide medical and dental, an annual employee bonus, and great career advancement opportunity. When I left, pay was slow to meet cost of living, medical and dental required substantial payroll deduction with limited coverage, elimination of employee bonuses, and reduction in education/training and career advancement. The employment office became a vision of the Maytag repairman.
It's so nice to hear someone actually say this out loud. The worst thing that can happen to a company is for the lawyers and accountants to take over management. When I was in Business School, the organizational diagram had the line management people and a little bubble off the CEO called accounting and another little bubble off the CEO called legal. I went to Business School and law school at the same time. In the Business School, it was pounded into our heads that attorneys are nothing more than trained attack dogs, you keep them on a short leash, you never let them forget who's in charge and they're never allowed near the room where a deal is being made until the it is done and then all they do is write up what those in charge came up with. This day and age when accountants are in charge, every nickel they can cut out of costs becomes profit. I really hope this can change but, given the fact that most companies are owned by insurance groups, pension groups and other industrial investors, there is really no incentive it make a change. This also explains how we have so many CEO's with $1,000, 000,000 salaries and compensation packages.
Politicians are overrepresented in politics.
The irony is that during Beoing's heyday the company was lead by an attorney.
@@TankEnMatemaybe so, but back then the attorneys still have souls....
Nowadays, the finance guys and attorneys are simply serving themselves when they know nothing about building airplanes... The finance people and attorneys are supposed to be serving us engineers and aircraft builders so that we can actually have safe products to sell. Finance and attorneys have stolen America's future for your own personal gains.
Every biz is a supply chain operation whether in the US or in China.or EU. If a link is broken , the supply chain is disrupted and the biz will suffer. Even though VW is run by engineers in Germany, it cannot compete against Chinese EV because of high costs of energy and lack of investment in the battery.
@@michaelloong964 The cost of energy isn't that much higher in the EU than China, cost of wages however is quite stark. But as automation becomes a bigger factor in vehicle manufacturing then the gap will close.
But obviously the biggest difference is as you say, investment in EV manufacturing. In this regard VW has painted itself into a corner; it upped its investment in a dying market at exactly the wrong time.
Nice interview, but I think the main core issue is that CEOs get rewarded for short-term gains(cut R and D, layoffs, skimp on quality safety) and punished by Wall Street for investing resources into making better products and services.
💯👍
You’re exactly right about these CEOs. Thank you.
This is the role of journalism.... to highlight how things can go wrong, because it really matters to people's lives....
Until a ceo goes to prision, the pattern will not change.
or at least get their bonuses clawed back
I don’t think anyone at the vp or ceo level was responsible for the mcas system. None of them even knew what it was at the time of the crash. Unfortunately it was the engineers that designed that system and the faa that allowed it to be certified. We still don’t know who those individuals were. That’s the only actual criminal behaviour that has yet to be prosecuted. And before you say it, yes they were under pressure to minimize costs. But guess what - in any business where you spend billions on development and you can only recoup those costs in 5-10 years there will always be pressure. I can say from personal experience as a certification engineer that It’s the same at every aircraft mfg and probably every other industry where capital costs are high. It’s a fact of life that some manager will try to pressure you into cutting a corner in the name of budget and schedule. Applying pressure to get the job done is the manager’s job. But there’s a line they can’t cross. Did they cross that line or did the engineers just screw up? We still don’t know which is a huge problem. Boeing has hidden behind that deferred prosecution agreement so we don’t know the truth.
We don't put people in prison for faulty leadership or receiving large paychecks. The market can discipline a business far more effectively than does our justice system.
@@mchristr yeah we do, when it gets people killed.
Jim Mcnerney is a murderer... He belongs in prison
I am a grown man, Oxbridge educated, former chief advisor to the President of the country in which I was born, econometrician and not a softie by any imagination but whenever I think of Boeing tears come to my eyes. My head screams 'criminal'. What a waste. I always knew I was not alone but it's good to hear it said - sincere compassion to the residents of Seattle whose dreams and lives were shatter on the front line. Seattle to Chicago! What an unbelievable and unnecessary catastrophe. This is a very good video.
Very impressed with this interview.
I work in the pharmaceutical industry which is another highly regulated industry. Aviation is regulated by the FAA, pharmaceuticals are regulated by the FDA. So I know a little bit about working with regulations and regulators.
I can tell you that complaints that regulations stifle industry and hamstring business are NONSENSE!
The regulations are almost all written in blood. For all the regulations of which I am aware, there is a story about how someone wasn’t thinking or someone who cut corners or someone who just didn’t care. In many cases, people got hurt.
Bottom line: the regulations are there for a reason, and their presence gives credibility to the products manufactured under the regulations. They also give consumer confidence in the safety of these products.
Fund the regulators. Businesses can’t help themselves from cutting every corner to maximize profits.
But you have a bunch of ignorant know it alls who will whine to you about how efficient the market is.
SOME of these regulations are indeed "written in blood"! Others are utter BS. For example, the required safety instruction packets in every seat. Notice it is in English and pictograms. So when were the passengers trained to read pictograms? And how many speak something besides English? And who bothers to read them [except maybe the first time flyer]? Who familiarizes themselves with the exits, much less how to operate each different type of exit.. And every seat? As it people can not share. Why not make the packets issued at the boarding and waiting areas? In language of choice. Sample training mechanisms for each type.
@@gobot4455 But only when A) there is competition B) the buyers are not ignorant
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Similar tragic story at HP. Founded in the '30s by two Stanford ⚡ engineers, legends who led the Silicon Valley to be the tech capital of 🌎. When they retired, HP was turned over to career financial managers who juiced the stock but never came up with an innovatiive product. Finally Carly Fiorina dealt the final blow by buying a bankrupt PC company & putting it's management in charge. The rest is sad history.
So true. Old HP employee here. In the last few years it was weird to work for a hardware company that was ashamed of doing hardware. So many great people have kept the engine limping, but never got to recover.
What a brilliant analysis. When your car shuts down due to a defect on the highway, you can steer off onto the side of the road and stop. When your airplane shuts down at 40,000 feet there is no side of the road.
You are discounting China in the aviation industry. They may be 10 years behind right now but they have a habit of turning 10 years into 3 years. Boeing does not have that long to get its act together.
China's C919 is just the beginning. If Boeing does not see this coming, Airbus has for one reason not to extend, expand overriding cost, when another player comes in with better playing cards. They done it in Aero Space, Chips, EV, Solar, Cargo Ship, Crane for Ports, High-Speed Rail, Construction and many more other product lines, pass present and future.
I agree. I watched American Factory with horror and fascination.
@@chriswong9158 well said. What you mentioned are all Chinese SOEs that are run by CEOs based on making sure their biz is successful in the market place. Making money is of secondary consideration.
Boeing is like the US car industry, it’s on its way out.
In a few years Boeing will be like US car manufactures.
A local US only player.
Airbus the pre eminent Global Plane Manufacture.
Chinese manufacturing second.
Boeing a minor player only servicing the us market.
@riderpaul. My post giving another dimension to China's rise in manufacturing was swiftly censored by the guardian of free speech. Seems that knowledge is toxic to some. Pathetic.
As a commercial airline pilot for 38 years, I’ve flown Boeing and Airbus. Airbus passed Boeing in the late 90’s. Just look how begrudgingly long it took Boeing to finally put winglets on their airplanes. They don’t design new aircraft, they just try to stretch out old models and put bigger engines on them . Ex 737, designed in the 1960’s. New ones are so long they risk scraping the tail on takeoff and landings.
So Airbus is still kicking out derivatives of the A320 which came out 40 years ago. There’s an a319, an a321 and an a320neo. So they haven’t done a new design in 40 years. At least the 737 nextgen got a new wing. Bombardier did the crj200, 700, 900 and 1000. They didn’t design a new regional, they just kept stretching what they had. (The C series was a new design but it is not a regional airplane). Embraer has come out with the E2 variant of its Ejet family with upgraded engines. So every company has in the past stretched or modified existing airplanes rather than create new designs. It is much less expensive, it’s usually less risky, you can get to market sooner and often you can minimize training requirements, which can make or break an aircraft program.
@@sblack48A380 and A350 were brand new designs, both less than 20 years old. They also bought the A220, a brand new design as well. I'm not saying you're wrong, I'm saying you're thrice wrong. They certainly can design brand new planes if the need arises.
@@nictamer380 was an epic financial failure. Out of production already because no one besides Emirates wanted it. Wouldn’t hang my hat on that
@@sblack48 A320, despite its age, is a more modern airframe than Boeing's 737! A320 was built as a modern fly-by-wire plane right from scratch. So long as Boeing is fielding the 737 platform, the A320 family is more than sufficient as a competing product.
@ that’s not saying much. the Wright Flyer is a more modern AC than the 737!
Excellent discussion between two clear-thinking individuals. I learned a good deal! Thank you!
You can't deny that on top of every giant falling was some dude from Harvard involved. But your bubble is really good at convincing people that, for some undisclosed reasons, you are the right people to fix the situation.
Harvard is a corrupt school. How else can you explain how an idiot like G.W. Bush graduated?
It's sad how difficult things have become in this recessive economy. I was wondering how to utilize some money I had. I used some of it for e-commerce business, but that sank. I'm thinking of how to protect my $380K-worth stock portfolio from decline, but haven't figured which way to go.
Very difficult indeed, but when the going gets tough, the tough gets going. You have to learn and handle finances properly. you should hire a CFP to help you diversify your assets to include ETFs/index funds/mutual funds and stocks of companies with consistent cash flows. Don't go for penny stocks.
Opting for a brokerage Adviser is currently the optimal approach for navigating the market, particularly for those nearing retirement. I've been consulting with a coach for a while, and my portfolio has surged by 200% since 2022
I could really use the expertise of this advisors.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Melissa Terri Swayne for the last five years or so, and her returns have been pretty much amazing.
It was easy locating your coach's webpage by looking up her name online. Did my due diligence on her before scheduling a phone call to use her services. She seems proficient considering her resume.
I have ultimate respect for this dude. His words are of truth, not standard BS.
I was at 3M when McNerny arrived and when he left. The focus went from technical expertise to marketing expertise. The technical training site was shut down and turning into a marketing excellence training site. In my technical area, Six Sigma became the focus and the road to advancement.
Six Sigma has some great methods, but it's also just another "magic bullet" for management to require its employees to learn and employ.
Six Sigma is great on the manufacturing floor. When I was an engineer at GE, everyone was required to become a green belt. The industrial designers, ad/com, marketing, admins, salespeople, and so on. Our admin did her project on whether it was better to have a single coffee station in the cafeteria or a small one in individual departments. I helped some of the industrial designers with their projects because, as one of them confided in me, “it’s not that I don’t know statistics, I don’t understand long division. When the senior leadership brought every sales person out of the field to learn the process and become an army of bad statisticians, we knew the company had lost its mind.
I left my work at a German company when I counted 9 layers of management above me none of who understood the engineering work I do
Sounds like Siemens! I worked for them years ago and the same thing... TOO MANY LAYERS of Arrogant Middle Managers who BELIEVED in their entitlement to be useless in the whole scheme of the production of the company.
The just kept buying smaller companies and stripping what they wanted for short term gain.
One CEO said that the job of a corporation is to make money for the investors. Product quality and worker welfare be damned
You're spot on about building a new plane every 10 years: it's like Apple announce we'll never launch a new iPhone, or Tesla saying we'll not launch a new model, for the next 10 years, no engineers with any self-respect will want to work there.
True to all it is said, but understand, if the building, planning does not control COST and someone else can, you've just had build an empty shell that can fly. Consumer in the end is King
Apple hasn't made a "new" iPhone in over 10 years
Like playing tennis by watching the scoreboard rather than the ball.
Two words : Harvard & McKinsey
Love the host. Not interrupting the guest
The executives are paid obscene amounts while destroying the company, then receive huge severance when booted. Customers, shareholders, and employees suffer. What's wrong with the directors?
They are beguiled by the over-confidence of fools.
The directors are the same kind of people as the executives.
It all comes back to Jack Welch...look what he did to GE they used to make great product while employing 400k employees.
He is right, it’s a culture problem in USwe had a senior VP show up on a status call on a major network project, he angrily said “I don’t want to hear any more problems” then no more problems we’re announced
Collapse follows almost immediately upon barriers being imposed on problem reporting.
I have heard of that happening at other major companies as well. Then there is the old management favorite - "we're going to improve production capacity and profit by 30%, year after year." Meanwhile all the engineers kick the floor and scratch their heads. Who are these dolts who decree such gains but have no idea how to get them? And why do they earn 5x - 20x what their top designers and engineers make? It's a hustle.
I worked for an engineering company, where the same crap took place in the 90s already. I quit and moved to a different country at the time and have never looked back.
Companies fail due to one reason: bad leadership, period. I've seen this too msny times over my career. Successful companies happen because you have the right leadership at the helm.
Huawei is the only private company in history that the US government wants to destroy by numerous sanctions. Normally such company would fail and disappear. However, the CEO, who is famous for being caring for employees and customers alike survived after its smart phones sale dropped to the abyss. He invested heavily to develop new products and also innovate to produce chips for his new smart phones. Now Huawei is successful and its operation survived US sanctions. It is a multinational private company operating in many countries except in the US due to sanction. Huawei employees own the company shares.
Financial culture can cut costs but only engineers can make profits.
I bought Jack Welch's autobiography years ago and was appalled at how he runs businesses. Firing the "bottom" 10% each year etc. You can tell he was a thoroughly nasty, venal person.
Jack Welch is the king of the A$$ holes. No soul and destroyed the biggest company in the USA (GE) in less than 10 years.
Even I have his book. My initial thoughts after reading it was, how soulless all these ideas were.
A lot of cos have done this. I think Verizon did this to their Wireless BU.
As a former engineer and manager at The Boeing Company, I saw that DEI policies push out good managers and allow less qualified managers to be promoted instead of the most skilled engineers. Engineers lost faith, shut up, and stopped pushing for excellence when this happened.
I recently heard that Boeing dismantled the DEI organization. I hope they go on a head-hunting exercise in the HR organization and let go of those HR representatives who promoted DEI. They ruined so many careers and ruined a good company.
Very good analysis; this is spot on. The greed model doesn’t work, especially in aviation.
I retired from Boeing after 42 years and I witnessed this change in culture first hand. My retired colleagues and I have discerned this exact argument over coffee for many years. This analysis is spot on.
I work for a company that hired a consulting company to help them. All they did was to lower expenses by getting rid of all the high level techs and replace them with lower paid newbies. Company now paying the price for bad work .
Did the consulting company name rhyme with McKinsey?
Incredible story! I am a commercial pilot and airplane owner and really appreciate this article!
Airbus will win. For Boeing its too late. I love the anecdote about how "Boeing was a group of engineers who made planes". Oh they also made a fortune doing it. Greed is not good. It has destroyed so many companies.
Thats what seems obvious, just make excellent planes and the money takes care of itself.
Greed is fine as greed pushes the boundaries and ambitious aircraft like 747 and 777. The issue was the management class. The management class undermined public safety and degraded Boeing's public image.
Greed is destroying everything. Greed is never good.
@@dalebogucki Greed within limits built everything. No greed, no progress.
It is not Airbus Vs Boing. It is USA outsourcing jobs to India vs europe keeping it in Europe.
I remember reading an article back in the early A380 days that one of the reasons behind building it was to keep the engineer busy and not have them wandering off to other industries.
No mention that China has begun making aircraft for the commercial market. China has a tendency to do engineering well, we can see examples of this in their space station and space exploration. They are presently dependent on Western manufacturers for avionics, engines and some other components, but knowing China this will change in the near future.
No one thought 15 years ago that they would be the worlds largest manufacturer of automobiles or The world's leading manufacturer of active pharmaceutical ingredients (APIs) and 5g communications.
China dependent on Western manufacturers for avionics, engines & some other components is because like the US & EU, it is better to BUY available product FASTER, CHEAPER, BETTER KNOWN (OEM) then build self. BUT like Germany failure to deliver the needed "high tech rail wheels" for high speed trains, the German done 2020 to slow down China high-speed rail project, China will just build their own (fact check it). If one cannot BUY first, one have no choice but to BUILD on own.
@@chriswong9158Engineers love being engineers be they Chinese or American. ❤😊
The toxic fields of abandoned and unsold Chinese evs? Maybe they can sell to Lebanon?
@@chriswong9158 Chinese government is the world largest capitalist company that knows how to do biz. They have the best supply chain in the world. They are the factory of the world. Their biz is based on supply chain principle for their biz success. Their biz motto is to make sure their biz operation is successful and competitive, The US company biz motto is to make money first and then cut corners to ensure company share price does not fall. .
The rise of China's manufacturing sector has lately been boosted greatly by the US' policy of trying to kill off its biggest customer, the result of which the biggest customer has become the biggest competitor.
I thought business schools should teach companies to keep their customers, especially their biggest one, dependent on them for as long as possible. This is quite straightforward. Never hand your econimic policiy to the geopolitical establishment. Everything is an existential threat to them, even their biggest customer. The economist Jeffrey Sachs calls them economics illiterates.
Outstanding explanation of what happened to Boeing!
Greed conquers all. I witnessed the same at Teledyne, Litton, Northrop Grumman, & Curtiss Wright. The mantra was 5% ROI for investors, Workers you get 2% or 3%. If, if we like you. Great incentive to find a new job. ❤❤
@@jamesmorton7881 it was the rise of the MBA in the 90’s that used a common management template across all companies in all industries. Outsource expertise, move from manufacturing to service based, give massive/obscene salaries CEOs and their inner circle lower employee expertise and drive them to minimum wages. At Boeing it makes sense to management that complicated aircraft can be assembled (not manufactured) with ex hamburger flippers.
Do you live in Santa Barbara? I think all of those companies have a presence here.
This is a brilliant insightful man….! Our nation needs to wake up and realize his shared truth…..!
POINT: Aircraft sales are not where the profit is. Parts and service is the bread and butter of aircraft manufacturing.
Boeing Commercial Airplanes is by far the largest revenue generator in the company, followed by defense/space, and then global services. When a large percentage of the costs have been amortized, the profit from each airplane delivered is substantial. The question then becomes, what's next? There needs to be sufficient capital for innovative products, and Boeing currently is stymied by too much debt.
@@mchristr No argument - Within Boeing Commercial Airplanes (BCA) is revenue from aircraft sales AND parts & service. By selling aircraft attractively near production cost they hook customers into a parts & service contract in order to maintain warranty. The bulk of revenue is parts & service. Boeing's Airplane on Ground (AOG) teams are legendary but not cheap. When airlines jump ship... it's a bad day at the "Lazy B."
By margin yes, by yield no.
What a rare and GREAT podcast! Rarely we now can listen to smthng so logic and facts heavy and condensed. Thank you, Sir!
I studied business in the late 80s. I'm also someone who builds and repairs things. I kept what I learned in perspective.
Since then, I watched formerly great companies get ruined with poor management, and I watched the trends.
I think from a higher level, and to a certain extent, the cultural knowledge of how to continue what was created in the past has been lost. On the other hand, the best talent goes into new and exciting technologies, because that's where the fun is.
This was surprisingly, actually quite good
I worked at Motorola as senior management made bad decisions that drove the company into the ground, and then worked at Boeing - my worst experience.
Thank you for telling the truth!
Recall the Ford Pinto? Before it was released Ford executives learned that, if rear ended, the Pinto’s gas rank could rupture and cause fatalities. They decided to proceed with production, calculating that legal costs would be less than redesign and retooling. People died. Boeing followed much the same pattern. Wishing to avoid the time and expense of commissioning a new airframe, they crammed design changes into a “variant” of the 737. It was not airworthy and, left on its own was unsafe to fly. They decided to address the problem with a software patch. People died.
It’s not the first company destroyed by bean counters , but certainly the most spectacular example of it …
As a retired RN, who worked 60 hours per week since 1975, I saw the last refuge of actually CARING for the “services” of patient care, lose out to the corporate mind-think of CARING about short-term financials only, resulting in the largest RN shortage in history, and more “NEGATIVE PATIENT OUTCOMES” than ever recorded, and this will only get worse, as more baby boomers turn from being an RN, to a patient……
I must say, as a Boeing employee for the last 13+ years and from a multi generational Boeing family I agree fully with Mr. Mukunda. I can feel his investment in Boeings failures and his ideas for solutions I tend to agree with. I think the next generation of true new aircraft will decide if Boeing falls or succeeds. Unfortunately that time is approaching exceptionally fast and we still see no changes on the shop floor
Excellent piece. It would be great to cover private equity as well. Private equity is 10 x more dangerous than the short term bean counter corporate culture we are plagued with in public corps that cater to Wall Street. There's a lot of great material on UA-cam on how PE has gutted so many businesses to the point it's actually criminal. We can only hope that government wakes up to address the most important issues facing America's future. Unfortunately, current political parties lack the leadership , insight , and intelligence to put America on the right path again. They say short term .. short sightedness .. but they also need to realize it's now 4th quarter .. and we're down by 14.
Amazing and eye-opening insights on Boeing, Intel and Amazon. Thank you for this interview. Content like this ideally should get much more visibility - not just 70K followers ;-)
Impressive guest.
The same difference appears between those who run the government. In USA it’s lawyers , in China it’s engineers .
Great news coverage, very well done.
Say what you want about Ayn Rand, but she was right about finance people in Atlas Shrugged. We're living it.
Wish more western people see "Atlas Shrugged" for American now see it in all parts of the Country of the USA.
China's government since 2000's seen that path and is making sure this will not apply to the other countries.
Seen China today compare to 1990's... Seen China's Bridge & Road Investment in Africa, So America, Middle East, Asia
Ironic since this insane greed ethic seems to start with her people
Excellent analysis by Prof Gautam!
So true sir! This should be required study for all the leader wannabes!!!
In the late 1980s I was in law enforcement and investigated a fraud that occurred at McDonald-Douglas. An embezzlement of around $500,000 had occurred in their accounting department. I was appalled at their slip shod financial practices. They had hired a felon to work in their accounting department with absolutely NO background check. Not even a minimal effort! When interviewing some of their supervising employees It blew me away how naive and downright unaware they were. Even a minimal effort by a number of people would have discovered this embezzlement. I was surprised when, years later, I saw that McDonnel-Douglas had merged with Boeing, a company I knew was well run. The result does not surprise me.
This was one of the best interviews I've seen all year, what an eye-opener. Corporate greed for stockholders has to change'cause it is ruining all our corporations. I started working in corporations in 1985 and the change was horrible night and day difference once we hit the 2000 I retired.
I want to work for a large corporation that was taken over by bean counters. It didn’t take them two years to start the demise of the company, and within five years it was basically destroyed. The only thing they value is the green back.
What a smart, eloquent and dedicated guy 🙂
America's regulators are all "captued" by the industries they are meant to regulate. Regulator staff should not be able to swap sides after a few years and get a huge "thank you" job for failing to do their job as a regulator.
Thank you for the blunt talk about Jack Welch; it sickened me how corporate business news sucked up to him and Suzy.
Can’t help that we are living through the fall of the Roman Empire.
What really struck me was when you were talking about needing to build a plane just to know how to do it. There was so much we are doing that is parasitic on the existing economy instead of doing anything to grow it.
Problem is, when we decide to stop, will there be enough to produce reap value again?
More Government is not the answer, Boeing was a hugely successful and profitable business when we had LESS Government regulations. The merger with McDonnell Douglas was terrible for Boeing - a total culture class where the MD culture won. The only reason a business fails is poor management and this is the case with Boeing now. Many companies have been through this - IBM, Apple, etc and have come back to success once they recognize their management issues and correct it. I believe Boeing can come back and as both an investor and a person who has flown more than a million miles on Boeing planes I hope they do.
Didn't we all know Jack Welch would be at the root of the problem.
Outstanding discussion.
I retired from Boeing 10 years ago, sadly the truth hurts.
Chrysler downfall started in the sixties when a bean counter became the chairman.
The story of Boeing is what happened to every other company… except it actually mattered at Boeing.
You can outsource toys, computers, chips and cars but planes need to be made perfectly. There is zero tolerance for failure in this industry so the cost cutting strategies of the past 50 years destroyed it.
Government bailout is likely next.
Let it be noted, it is one reason the High-Speed Rail System has come back and is all over the world now.
Except for california where incompetent, corrupt Demonrats ruin everything.
@@chriswong9158If it were, it would be. It is not.
Europe, China and Japan, It's the 3rd world where it's not spreading, where does that put the USA? , not with the first world in terms of transportation!
Most folks probably dont remember when Boeing tanked back in the early 70s. "Last one to leave Seattle turn out the lights"
My father worked for them at that time and was caught at the very end of the layoffs.
He told me about those times and what sticks out in my memory was that he said entire departments were gutted , much of the cuts came from the bloated middle management. But the key takeaway was that the company was still able to meet demand.
Sadly this story is all too common in todays world and we hear such phrases as "to big to fail". Meaning the problem wont get fixed.
Hearing his story and having my own experience working for a larger company for 15 years is why today I would NEVER work for another.
I actually enjoy working , but nothing is more frustrating than working in an inefficient organization that seems to value mediocrity furst and foremost.
Thanks for sharing this clip.
This was a really good interview 👍
This is indeed the problem in manufacturing. Self regulation and no regulation enforcement is disaster in aviation, tech, media, energy, on and on. It’s capitalism’s capture of government.
Wow. One of the most educatif vodeos on the topic. Thank you
Boeing has a long history of ignoring safety issues. Many lives lost due to corporate greed well before they merged with MD.
I used to work as an auditor at an aviation integration company. It wasn't just Boeing that was concerned about the bottom line but the sub-tier suppliers. The engineers would fight tooth and nail not to perform fixes to findings because they were told by management to do so to save money.
This happens again and again. HP used to be a great engineering company that made the best calculators, oscilloscopes, and computers. Then they outsourced everything and became little more than a label stuck on crap made to poor standards at the lowest bidder.
Carly Fiorina happened.
So refreshing to hear a fact based discussion on anything these days.
Reminds one of Amtrak which hired an Airline Executive to run a passenger train organization
The biggest danger of Welch’s management style is that it works in the beginning. In this phase it empowered the spreadsheet army at Airbus, too.
So it endangered the whole industry.