Managers come in on a short term basis and get bonuses in return for cutting costs, they aren't concerned with the long term consequences as they will have moved on by the time the effects are felt. This can only go on for so long before the wheels come off, in the case of Boeing quite spectacularly and tragically.
The US car industry is a good example of the long term decline this leads to, the Japanese are the opposite and try to continually improve their products.