Boeing 737 Max Recertification Testing - Finally.
One lesson learned seems to be delaying investments while looking nice on the balance sheet for a moment will finally cost you more.
It's about all that Neutron Jack mentality. To be fair Boeing has left it behind from my point of view.
If ... one main root of what went wrong is the corporate acquisition of McDonnell Douglas, then what is the lesson to be learned from such a massive misstep? Maybe the answer is "stakeholder capitalism" and a rejection of the Milton Friedman bedrock economic guidance.
It is sometimes said that 'the first duty of a public company is to maximise shareholder profit'. I wonder how the make up of senior management and the application of 'corporate' practices to low-probability outcomes would change if a way was found of subjecting certain industries to an equal-first duty of care?
Last edited by Easy Street; 30th Sep 2020 at 12:19.
When the dust has finally settled, the cost of this Max debacle, redesigning, legal and compensatory, plus cancellations could have funded a completely new model, the Boeing hindsight?
Any honest appraisal of the investment decisions would recognize that everyone is equally crushed by the virus.
So Boeing's decision to defer real investment because they could not justify the economics of a 737 replacement was correct. At most they were too cheap on the MAX derivative, a $10B oversight.
That notwithstanding, there will be a need for a super efficient yet cheap modest size workhorse after this crisis is resolved.
Perhaps it will come from China, although the engines, the pacing items, are still Chinas weak point.
So Boeing's decision to defer real investment because they could not justify the economics of a 737 replacement was correct. At most they were too cheap on the MAX derivative, a $10B oversight.
That notwithstanding, there will be a need for a super efficient yet cheap modest size workhorse after this crisis is resolved.
Perhaps it will come from China, although the engines, the pacing items, are still Chinas weak point.
Join Date: Oct 1999
Location: ex EGNM, now NZRO
Posts: 551
Likes: 0
Received 0 Likes
on
0 Posts
Did you bother to check the link in my post?
This one?
https://www.dailypost.co.uk/news/nor...eturn-18386776
The one that has this headline?
This one?
https://www.dailypost.co.uk/news/nor...eturn-18386776
The one that has this headline?
The FRENCH government is investing money, not the EU. To help your understanding that would be like North Carolina as a state offering money to build a factory there.
Join Date: Jul 2013
Location: Within AM radio broadcast range of downtown Chicago
Age: 71
Posts: 838
Received 0 Likes
on
0 Posts
Not unexpected, but still news
FAA Chief Dickson reportedly had favorable comments about his test flight of the 737 MAX as modified, per article by Pasztor and Tangel in Wall Street Journal. Also noteworthy - House Transportation and Infrastructure Committee has voted on a piece of legislation to reform and restructure significant parts of FAA processes. (Article posted to WSJ website evening of 9-30; apologies in advance - link hits a paywall . . . )
Last edited by WillowRun 6-3; 1st Oct 2020 at 11:12.
Join Date: Jul 2013
Location: Within AM radio broadcast range of downtown Chicago
Age: 71
Posts: 838
Received 0 Likes
on
0 Posts
Link to U.S. House of Representatives, Committee on Transportation and Infrastructure, press release of Sept. 30 2020 in re: legislative measure based on results of Committee and Subcommittee on Aviation majority staff investigation of 737 MAX situation. Legislation entitled Aircraft Certification Reform and Accountability Act. (Prospects for action in Senate . . . well, no politics on PPRuNe.....)
https://transportation.house.gov/new...boeing-737-max
https://transportation.house.gov/new...boeing-737-max
Easy Street,
I agree. In 1 corporate I worked in , the Top exec team understood the sort of risk that Aviation has. The NEDs were less tuned in. I moved later to another corp, where the NEDs understood it, but the Exec were reluctant to engage properly.
I never found a magic wand for it!
I agree. In 1 corporate I worked in , the Top exec team understood the sort of risk that Aviation has. The NEDs were less tuned in. I moved later to another corp, where the NEDs understood it, but the Exec were reluctant to engage properly.
I never found a magic wand for it!
An issue is that the shareholders at the time the engineers were being pushed along reluctantly are not the shareholders now. Shares are nowadays bought and sold with considerable rapidity, with everyone looking to make a short term gain, then sell and move on. It's like a sophisticated game of musical chairs. Stocks are appraised and traded without the slightest understanding of what the company is actually doing, only what the forecast is for stock prices. Investors in Boeing ? I can't recall the last time that Boeing actually asked for investors, their capital base has not only long been static, but they have actually reduced it deliberately by buying back their own shares with their own money, huge amounts of it, on the somewhat spurious grounds that this elevates the stock prices of the remaining shares. The top execs, who should be looking after the revenue and future of the business, instead have all eyes bolted firmly on sustaining this Ponzi Scheme. Even the Boeing lifers get tainted and drawn in to it, otherwise they wouldn't make it to the top team.
You see it elsewhere. All the top team, focused just on share price. The non-execs, supposedly there to contain excesses, now seem to come from a merry-go-round of the Wall Street establishment, just looking at the share price for any amount it can be pushed up further (or held, in Boeing's current case). The senior engineering execs, all driven to conform to the programme which supports the share price, the actual engineering becoming subordinate. The company futures, announced not at industry conferences but in Wall Street earnings calls.
You see it elsewhere. All the top team, focused just on share price. The non-execs, supposedly there to contain excesses, now seem to come from a merry-go-round of the Wall Street establishment, just looking at the share price for any amount it can be pushed up further (or held, in Boeing's current case). The senior engineering execs, all driven to conform to the programme which supports the share price, the actual engineering becoming subordinate. The company futures, announced not at industry conferences but in Wall Street earnings calls.
Join Date: Nov 2000
Location: Canada
Posts: 603
Likes: 0
Received 0 Likes
on
0 Posts
WillowRun 6-3
He called his flight "Productive" but also said work remains. "FAA head calls test flight of 737 ‘productive’ but work remains1 October 2020Canadian Aviation NewsFrom BNN Bloomberg – link to story
30 September 2020 | Alan Levin, Bloomberg News
He called his flight "Productive" but also said work remains. "FAA head calls test flight of 737 ‘productive’ but work remains1 October 2020Canadian Aviation NewsFrom BNN Bloomberg – link to story
30 September 2020 | Alan Levin, Bloomberg News
You see it elsewhere. All the top team, focused just on share price
While product quality and commercial practices are somewhat unrelated, it does suggest that the company’s culture has been impacted by an increasing focus on financial management and shareholder return. It is therefore probably not a complete coincidence if the company’s stock price increased five fold between 2009 and 2013 while problems were building below the surface.
https://aviationweek.com/aerospace/a...ec8e54f8fa84c9
Join Date: Jul 2002
Location: UK
Posts: 3,093
Likes: 0
Received 0 Likes
on
0 Posts
Firstly, in 2011 Boeing had started to pull together ideas as part of the "Yellowstone" project to have a clean-sheet 737 replacement ready by 2020. But it would appear that they found themselves utterly wrong-footed by the apparently overwhelmingly positive customer response to the A320neo. Boeing were confronted with several major US airlines asking them if they had a response (and if not, why not?). Boeing's original plan to have a 737 replacement by 2020 would be no use if a significant number of airlines (particularly in the US) had already standardised their short-haul fleets on the A320neo series, which would not only be available and ready by 2015, but would require minimal conversion training from the original A320 series.
The other "elephant in the room" as I see it (and I'm surprised that there hasn't been much mention of this) is Southwest. Because a major aspect of their business model has always been an "all-737" fleet, that airline is the closest thing Boeing has (within the US) to a captive market. Southwest would undoubtedly be deeply unhappy if their competitors were given a five-year head start on significantly lower operating costs as a result of being Boeing's most loyal 737 customer, and even if Boeing was able to bring forward the launch of the 737 replacement, the cost of conversion training to the new type would have been a significant obstacle.
In effect, the 737 became a victim of its own success in part because Boeing seem to have been content to rest on their laurels for too long. The signs were there all the way back to the '90s when complaints were made about the limited FDR parameters during the rudder controversy. The limits weren't due to the FDR units themselves, rather the expense of fitting sensors to the '60s-vintage control mechanisms. So it went with the MAX - there is nothing fundamentally wrong with its flying characteristics, but the differences in those characteristics exceed what the FAA can allow while using the grandfathered type certificate. And while a type based around a digital flight control system can be programmed to compensate for those differences relatively easily, the same is not true of the '60s technology underpinning the 737. With the benefit of 20/20 hindsight, MCAS looks like an unbelievably crude workaround - however it would not have been necessary had Boeing not painted themselves into a corner.
Join Date: Jul 2013
Location: Within AM radio broadcast range of downtown Chicago
Age: 71
Posts: 838
Received 0 Likes
on
0 Posts
DozyWannabe - wanting not to intrude on the sense of perspective and rationality created by your excellent post, I want only to say that some discussion did occur about the lawsuit filed by the Southwest pilots union (perhaps it took place on one of the other threads); this is pertinent inasmuch as the complaint in that case lays out, in pretty strong detail and depth, the manner in which Boeing's 737 MAX program was determined by its need to keep the airline a happy customer. (SWAPA filed its case in Texas state court; it then was pulled into federal district court by Boeing under the federal judicial code, but sent back to state court because Boeing's basis for removing it into federal court was ruled (by the federal judge) to have been invalid.)
One can point the finger at Southwest in more ways than one. An airline of that size should have an adequate technical team, maybe they felt they can leave all that sort of thing to Boeing, diverting their pay to executive bonuses, but they should surely have their own people, who say "what's everything different about the Max", and when they come across MCAS (which at least, even if concealed from pilots, must be mentioned in passing in the maintenance manuals and in the programming logic for the sim), say "how does this work then ?", at the programming level. And then "Isn't this liable to a single point of failure ?". Because if every armchair commentator it seems can see what was wrong with the design, shouldn't an airline the size of Southwest have someone who could have done the same ?
The pressure started with the CSeries. Latest engines, new construction and good performance.
The two big players had to react. Airbus could do the neo without major troubles but Boeing had the NG that could not accommodate the same engine diameter even when mounted far forward. It was too late to develop the entire new NSA now Boeing needed something fast, the MAX.
The two big players had to react. Airbus could do the neo without major troubles but Boeing had the NG that could not accommodate the same engine diameter even when mounted far forward. It was too late to develop the entire new NSA now Boeing needed something fast, the MAX.
well, it surely could have funded doing it right in the first place. If Boeing managers really want to increase share price, they need to let the engineers do the right things.
Join Date: Jul 2013
Location: Within AM radio broadcast range of downtown Chicago
Age: 71
Posts: 838
Received 0 Likes
on
0 Posts
Stuff happening in re: 737 MAX
Despite the arrival in earnest of silly season in U.S. political affairs, stuff is happening around the 737 MAX that does appear legitimately really interesting and, though forecasts tend not to age well, holding a medium-to-good size chance of having significant impact.
House Transportation and Infrastructure Comm. Chairs issued a letter (Oct. 1) calling on FAA to release its full documentary record pertaining to return of the aircraft to service. Notwithstanding FAA's nominal response so far, notice that the letter - while not mentioning anywhere the current FOIA litigation against FAA on this very same point - does expressly and with some emphasis point out a federal appellate court ruling in 2017 under which FAA was ordered to release documents to a "safety advocate" group. That group? Flyers Rights Education Fund, Inc. . . . the same as the plaintiff in the current FOIA litigation. Deft move on separation of powers basis by the Committee; plus the none-too-subtly suggested linkage to the recently introduced FAA restructuring and reform bill appears to add some leverage to the FOIA action plaintiffs.
Link to the letter: https://transportation.house.gov/imo...%20Service.pdf
Second, that FAA restructuring and reform measure, the Aircraft Certification Reform and Accountability Act - well, it's quite a piece of proposed legislation. Suggest the section-by-section summary, or for those with more time on their hands, the actual text of the bill, are easily found on the Committee webpage. There is much to follow as the bill moves now or in the next Congress, and much that could be said directly related to some of the big nasty compelling issues that have shown up in this thread - good example would be the extensive whistleblower and reporting system improvements, and another is what seems likely to be a wholesale overhaul of the ODA system.
Even before getting very far into the actual text of the proposal, two provisions jumped off the page and have led me to notice them here. The creation of a mandatory Safety Management System program for manufacturers would be required to conform to the SARPs of Annex 19 under the Chicago Convention of 1944 - which is expressly cited in the text of the bill. Then, in the next numbered section, the bill sets up an expert review panel to review ODAs as a status. It's a long provision, with several other key terms and provisions but for the present, it charges the expert panel with evaluating (among other things): "the extent to which the holder has implemented a safety culture consistent with the principles of the International Civil Aviation Organization Safety Management Manual, Fourth Edition (International Civil Aviation Organization Doc. No. 9589) or any similar successor document."
Notwithstanding that the FARs already contain various types of references to ICAO materials, this SLF does not claim to know whether those references were mandated by previous legislation, or if this House Committee proposed measure might be breaking some new "public international air law" ground.
Not at all least, the bill does go big on legislating protections for employees who object to acts or omissions, and whether it would obviate the quandaries said to confront engineers (in previous posts) could be an interesting subject. Or alleviate those pressures, at least.
House Transportation and Infrastructure Comm. Chairs issued a letter (Oct. 1) calling on FAA to release its full documentary record pertaining to return of the aircraft to service. Notwithstanding FAA's nominal response so far, notice that the letter - while not mentioning anywhere the current FOIA litigation against FAA on this very same point - does expressly and with some emphasis point out a federal appellate court ruling in 2017 under which FAA was ordered to release documents to a "safety advocate" group. That group? Flyers Rights Education Fund, Inc. . . . the same as the plaintiff in the current FOIA litigation. Deft move on separation of powers basis by the Committee; plus the none-too-subtly suggested linkage to the recently introduced FAA restructuring and reform bill appears to add some leverage to the FOIA action plaintiffs.
Link to the letter: https://transportation.house.gov/imo...%20Service.pdf
Second, that FAA restructuring and reform measure, the Aircraft Certification Reform and Accountability Act - well, it's quite a piece of proposed legislation. Suggest the section-by-section summary, or for those with more time on their hands, the actual text of the bill, are easily found on the Committee webpage. There is much to follow as the bill moves now or in the next Congress, and much that could be said directly related to some of the big nasty compelling issues that have shown up in this thread - good example would be the extensive whistleblower and reporting system improvements, and another is what seems likely to be a wholesale overhaul of the ODA system.
Even before getting very far into the actual text of the proposal, two provisions jumped off the page and have led me to notice them here. The creation of a mandatory Safety Management System program for manufacturers would be required to conform to the SARPs of Annex 19 under the Chicago Convention of 1944 - which is expressly cited in the text of the bill. Then, in the next numbered section, the bill sets up an expert review panel to review ODAs as a status. It's a long provision, with several other key terms and provisions but for the present, it charges the expert panel with evaluating (among other things): "the extent to which the holder has implemented a safety culture consistent with the principles of the International Civil Aviation Organization Safety Management Manual, Fourth Edition (International Civil Aviation Organization Doc. No. 9589) or any similar successor document."
Notwithstanding that the FARs already contain various types of references to ICAO materials, this SLF does not claim to know whether those references were mandated by previous legislation, or if this House Committee proposed measure might be breaking some new "public international air law" ground.
Not at all least, the bill does go big on legislating protections for employees who object to acts or omissions, and whether it would obviate the quandaries said to confront engineers (in previous posts) could be an interesting subject. Or alleviate those pressures, at least.
