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Boeing 737 Max Recertification Testing - Finally.

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Boeing 737 Max Recertification Testing - Finally.

Old 9th Jan 2021, 06:09
  #621 (permalink)  
 
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But what units of account?

Accountability is the proper term to use here, without any question. Yet it is necessary also to define the most sensible (effective, achievable) combination of the ends sought to be achieved, and the state of affairs after the action steps have been taken fully or as fully as it turns out actually is attainable.

A benefit of some time spent in unionized steelmaking work is that when pressed for big answers to big problems in the productive realm of the U.S. economy, I don't hesitate, I reach for remembrance of my union card. No claim that I subscribe to the main run of current union sector political views, at all. But for a plan to shake things up and get sensible results, and I posted along these lines in a related thread about a year ago (as the Boeing board was going through changes and Dennis was headed out), make it happen that Son of Wimpy Rides Again. I mean, never having met the man I recognize some up-on-a-pedestal effect might be involved. But he was one son-of-a-gun effective, wasn't he?

So rather than measure change by the ordinary unit of account in an economy (one of the three functions of money, in standard Economics teaching) go instead for qualitative change. Convene whatever federal agency and authority proceedings are needed but get the manufacturing of the 787 back to the Pac Northwest. Undo the bust of the union. Yeah, it'll be criticized as the dread "industrial policy"....but technology has spread, and become more diffuse reaching into countries and sectors of countries' economies so rapidly and bringing so much erosion to U.S. as well as European manufacturing prowess. Having that label slapped onto this action step would not deter advocacy for its pursuit and fulfillment. It's a choice to shake things up in a big way, or become passive in the onslaught of global effects like...let me think for a moment, ... how about a strange new virus which emanates from the major economic competitor to the U.S. and spreads and devastates major segments of national and regional economies all around the world? Might even hurt the civil aviation sector internationally, you never know until it happens.

The other major change I think is needed is to de-glorify boards of directors - the progressive platform for what is called stakeholder capitalism is, well, I see it as little better than vapid. We don't have capitalism, we have a free enterprise system. Big and important differences. And the least well-moneyed relatively young person with a strong sense of holding a good idea and the gumption to bring it into the marketplace and stay with it, that young person just plain *ought* to be able to get a good "fam flight" observing and interacting with the actual directors of any major company. I don't mean to embarrass him but a certain relatively young person broke away from the Wall Street Journal and founded The Air Current and ... the example illustrates the point.

A board can be as stuffy as a hot humid summer day when the air isn't moving at all but open it up to qualified and interested people who want to participate in the line of business somehow, and you'll get improvement. If this is too Up With People-ish, okay, fair point. But a few years ago, I attended a client's board meeting to present a brief item on legal work I was doing on an academic accreditation issue. A person entered the boardroom a little bit after the meeting had started, sat down next to me. A director. On the next break, in ice-breaker conversation, turns out we both had lived in a certain midwestern city close to Chicago. Turns out also her husband was an attorney at a firm in Chicago I knew well. Turned out also he had been CEO of a major defense and aerospace contractor. If you have to think any further about whether this little bit of plain old business world conversation was a kind of kick-start to pursue a re-engineering of my legal career so that it could include aviation and space....well, WR sends.
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Old 9th Jan 2021, 06:33
  #622 (permalink)  
 
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Further to Easy Street at #601, this is not first time that Boeing (in collusion with US government agencies) has announced unpalatable news when media attention is elsewhere.

Immediately before Christmas 2015 Boeing and FAA jointly announced that Boeing would pay a civil penalty of $12 million mainly for tardiness in fixing the underlying cause of TWA 800 accident. Which happened 20 years earlier! See https://www.faa.gov/news/press_relea...m?newsId=19875 and https://www.smh.com.au/opinion/the-l...08-gm27r0.html Boeing supposedly faced $24 million in extra penalties if it failed to implement improvements in the effectiveness of regulatory compliance activities. Agreement didn't expire until 1 January 2021, so I reckon Boeing owes that extra $24 million.

Likewise, Boeing announced ouster of its CEO Dennis Muilenburg immediately before Christmas 2019.
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Old 9th Jan 2021, 08:36
  #623 (permalink)  
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Originally Posted by 568 View Post
tdracer

Quote" just imagine what it would be like dealing with a company that has a guaranteed 10 year monopoly on the business".

Are you meaning "Airbus"?
If so, what about the defense contracts Boeing has had over the years?
Do you honestly believe that giving any company a 100% worldwide monopoly in large commercial aircraft is a good idea?
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Old 9th Jan 2021, 12:14
  #624 (permalink)  
 
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For those that say if Boeing went bust there would be a monopoly for Airbus, let's look at what might happen if they went bust.
Their assets would be sold, including Intellectual Property such as the aircraft designs. A "new Boeing" could emerge from the ashes funded by some Venture Capital funds and private investment. Divested of its problems it could downsize, ride out the Covid issues and emerge when people start buying aeroplanes again. With Boeing's outsourcing strategy there would be plenty of suppliers willing to pick up work on the manufacture of "new Boeing" aeroplanes.
Contracts with the military would be picked up by other US companies that supply the military, probably picking up the Intellectual Property of the designs as well en-route.

The bigger issue is whether any manufacturer can be trusted to guarantee safety. As one of the earlier posters notes, there was a significant move to safety after previous crashes but this withered away as people retired and the memory of the "pain" of these accidents and deaths at the hands of Boeing design was forgotten. The safety regulation of the FAA, CAA, EASA etc. needs to be beefed up, not devolved into the modern process of expecting everyone to do their job right with no-one checking. (The same kind of nonsense with no oversight has led to deaths due to unsafe building cladding for example).

Clearly the people at the top of these huge corporates don't care enough about safety, to the point were the average interested party (like me) who is not a pilot or even involved in aviation anymore could see that an MCAS system that took information from a single input was always a disaster waiting to happen. We forget the lessons of triple redundancy at our peril. No doubt though we will go round this loop again in 20 years. Maybe very top executives of any industry related to safety need to go through a compulsory course showing them the horrors of the past and the lessons learned. If they make the same mistakes again after this education, they go to jail. I don't know what else will focus their attention.
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Old 9th Jan 2021, 12:54
  #625 (permalink)  
 
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On timing of bad news getting announced (ozaub #622)

Former CEO Dennis Muilenburg's ouster was announced as you say but the board had been resisting forcing his ouster until it became untenable for him to continue. Plus there was the need to arrange what the c-suite would look like after he'd gone -- in that stage of the crisis likely not a quick task. Recalling the atmosphere of events in those months leading up to the end of 2019, if the decision to oust him had been made a significant time earlier but was just held until the holiday season, then the company and its flacks did an admirable job, for its effectiveness not its ethics, in faking out a lot of astute people.

This isn't to ascribe any excess of public-interest minded ethics to the company or its senior or top management. Boeing named its General Counsel at the time of the crashes, T. Michael Luttig, to a newly-created position of Counselor and Senior Advisor to Muilenburg and to the Board on May 1, 2019 - at the time Dennis Muilenburg still wore all three hats, CEO, Chairman and President of the company. Per a Boeing press release issued at that time, Luttig "will manage all legal matters associated with" the two crashes as well as "other special matters." Former Judge Luttig has a beyond-illustrious legal resume and career . . . but if one already holds a measure of cynicism about Boeing in recent years, taking the GC and in effect boosting him above what was then emerging as a firestorm of legal difficulties could be seen as a way to insulate the obvious involvement the GC role had during the MAX development and the time immediately after the crashes. Luttig became GC in 2006. (News reports, seen when I looked up these details, indicate that Mr. Luttig's illustrious legal career has now extended just days ago to the title Counselor and Special Advisor at Coca-Cola - congratulations.)

As for the timing of the fine announced in 2015 relative to a 20-years earlier crash, part of the timing appears to be the convenience of tying the duration of the agreement to the start of a calendar year. And given the lapse of time after TWA 800 crashed and the resulting investigation and FAA inquiry which led to the fine, what amount of added attention could be logically and realistically thought to have obtained had the announcement been made in January, February, June or July? Not denying the flacks and others try to minimize bad pr but in this example, there wasn't all that much attention even to be minimized in the first place, was there?
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Old 9th Jan 2021, 13:29
  #626 (permalink)  
 
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Ianal, but does the government not have any recourse against the senior corporate types at Boeing's for the corporate failure to cooperate during the initial investigation?
Martha Stewart went to jail for much less iirc. It might perhaps help if the C suite had visible skin in the game.
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Old 9th Jan 2021, 14:12
  #627 (permalink)  
 
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I didn't follow the Martha Stewart case closely so I'll have little to add on that. I did garner the impression at the time, though, that Ms. Stewart got roughed up - legally speaking of course - for one essential reason. That reason, I can only describe it as a combination of two aspects of who she was at that time. She was very high-minded, arrogant we might say, toward the enforcement people at the federal gov't agency, who she seemed to think were, compared to the high and mighty fashion goddess, lowly salaried peons. So besides this attitude, she also had, not to clobber myself over the head with understatement or anything, a lot of business savvy and acumen, as well as, you know, finance, cash baby cash. So for her to screw around for relatively speaking spare change with the securities laws? .... I'm not sourcing anyone by saying this and I won't, but when you dare and double-dare Uncle Sam to make an example of yourself, well, guess what.

On Boeing, etudiant, I'll give you my forecast. In the continuing legal dramas in several courts in the U.S. as well as the closely related legal - and policy - show playing out in and around the structure and operation of the FAA, Boeing's failure and refusal to cooperate at the start of the investigations after the first crash and then the second also, these failures will play pretty significant roles, maybe even prominent one. Even if not technically admissible in evidence in, say, the class action suit that may be certified to proceed in Chicago, it is a safe forecast I think that the sorry, sordid record put together by Boeing will have a role in how that case resolves. And other cases too.

I happen to think that throwing execs into jail for being part of the big "playing of the game" of the corporate world is not the best way to deter others. Instead, consign them to having a lower disposable income life for a long time, and make it much lower and for a good long time. No more caddies deters more than a stint in a 'Club Fed'.
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Old 9th Jan 2021, 16:28
  #628 (permalink)  
 
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Sadly the US model for "capitalism" is capitalization of the profits and socialization of the losses. Plus it doesn't matter how badly the C suites guys screw up they always walk away with a big pot of cash. Former CEO Dennis Muilenburg got 65 Million dollars to preside over the destruction of what was a aerospace giant. In a perfect world he should have had to pay back every penny of every bonus he ever got on the job.

Sadly Boeing is just a symptom of the bigger problem. A business environment that prioritizes short term stock price appreciation over all else. Maybe OK if your business is making pillows or burgers but a recipe for disaster technology heavy, safety sensitive industries like aerospace. In that environment what happened at Boing was inevitable.
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Old 9th Jan 2021, 21:28
  #629 (permalink)  
 
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WillowRun 6-3

I agree.
Very large fines for each Director and relevant members of the C-suite, plus court orders for each disqualifying them from holding any office as a Director or a Manager in any registered corporate entity would be a good start. No point burdening the US taxpayer with "Club Fed" membership fees. Unless deliberate acts of malfeasance can be demonstrated Beyond Reasonable Doubt, of course.
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Old 9th Jan 2021, 23:29
  #630 (permalink)  
 
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Thanks Willow for #625. Perhaps you are right and timing of Boeing announcements was purely fortuitous. Forgive my cynicism. I wasn’t born a cynic; it’s the product of 50 years in an industry which claims that “safety is paramount”.

More importantly the 2015 agreement between Boeing and FAA is referenced in DPA as “prior history” presumably because Boeing undertook to improve “effectiveness of regulatory compliance activities” and did not do so. Which meant Boeing could not escape blame for misbehaviour of employees 1 and 2.
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Old 10th Jan 2021, 17:51
  #631 (permalink)  
 
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kiwi grey

I think that malfeasance has already been amply demonstrated in the testimony so far.
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Old 12th Jan 2021, 05:06
  #632 (permalink)  
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WillowRun 6-3

I disagree with not placing these so called "execs" in prison. Many people have gone to prison for less! The judicial system is already weak and beyond repair IMHO.
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Old 12th Jan 2021, 17:18
  #633 (permalink)  
 
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'68, it's not that I would object to actual prison sentences, upon proper proof and due process in a court of law, a court of competent jurisdiction, and those kinds of..... "lawyer points".

For reasons not worth the time of anyone here to read about, I just happen to be strongly inclined to avoid pre-judging outcomes of properly conducted court proceedings. Of course there is, on the other hand, much to deride about the state of affairs in the U.S. court system.

I lack the type, let alone the depth, of insight that I think is needed to evaluate whether, in the reconfiguring or reorganizing or re-something of the Boeing enterprise, incarcerating former senior execs would be a hindrance or a benefit. Reasonable minds can traverse this terra incognita in different directions.
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Old 12th Jan 2021, 17:38
  #634 (permalink)  
 
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I’m not a lawyer. There are provisions in the U.S. Code that make false statements to a federal official illegal. There are well understood requirements for those signing and submitting official statements of compliance to certification rules that there are penalties if these are falsely made. When such violations are discovered, the FAA can take enforcement actions and, if deemed necessary, refer the matter for federal prosecution. All this is probably obvious.

It gets complicated when trying to determine and prove intent. Visibility of what really happened gets difficult when the delegation process reaches the “advanced” stage of ODA, where practically all technical details are within the company and FAA oversight is relegated to a clerical level. It should also be no surprise that the application of “executive judgement” further attenuates or, dare I say, distorts/defeats the process.
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Old 12th Jan 2021, 18:28
  #635 (permalink)  
 
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So has there been any / much action from the airlines to retrieve the aircraft stored prior to delivery at Boeing or indeed return their own (owned) aircraft back to service ?
I am aware that Southwest says they will resume flying them again in March.
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Old 12th Jan 2021, 18:30
  #636 (permalink)  
 
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Yes, That’s how American is now flying them. It’s a big job.
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Old 13th Jan 2021, 23:36
  #637 (permalink)  
 
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WillowRun 6-3

Exactly.
I've not the competence to assess what the the appropriate remedy should look like, but I do feel strongly that the Board holds ultimate responsibility for the performance of the corporation.
If that performance is shown to be woefully inadequate, the Board members need to be tagged with that responsibility.
To do otherwise is really to make a mockery of our whole concept of corporate governance.
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Old 14th Jan 2021, 19:16
  #638 (permalink)  
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Originally Posted by tdracer View Post
Do you honestly believe that giving any company a 100% worldwide monopoly in large commercial aircraft is a good idea?
Don't think I stated or suggested in my comment that "giving any company a 100% worldwide monopoly in large commercial aircraft is a good idea?"
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Old 15th Jan 2021, 09:18
  #639 (permalink)  
 
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a detailed assessment of everything that makes that aircraft fly

A surprisingly public, necessary, and to the point reminder for Boeing management.
The FAA also gets a comment.
$50B sales vs $2.5B penalty !!
https://www.reuters.com/article/us-b...-idUSKBN29I32E
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Old 15th Jan 2021, 09:21
  #640 (permalink)  
 
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The owners install the board that installs the CEO. It's some owner's (shareholders) issue then not only the CEO's.

It's still a very capable company and will recover but I see a need to bring back more long term engineering thinking to the board level again and less stock exchange tuning. Boeing performed most impressive during it's NG and 777-300ER years. Now several programs wasted a lot of what could have been earned just because they were kept too tight early on. Other programs have been milked forever so big investments will be needed. However it sometimes feels like not products but fighting unions is top on their agenda right now. So they need more diplomacy and a clear product strategy again moving forward.
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