Boeing should go

By Erik Dolson

Boeing, maker of airplanes in America, employer of more than 100,000 Americans, major component of America’s economy and hero of America’s past wars, has become cancerous and should be cut out of the body of our capitalism.

For the good of America.

Boeing was once a company of engineers. It employed the best and the brightest who took ideas that were almost science fiction and built them into real, market-dominating airliners.

Like a healthy organ, Boeing did its job wonderfully well with a minimum of attention. Tucked up in the wet Pacific Northwest, Boeing dominated that part of Washington state not owned by Weyerhaeuser: the glacial plain from Boeing Field in the south to Everett in the north, and most of Seattle, long before the gestation of Microsoft and Amazon.

But in the 1980s, Boeing began to change. Focus shifted from building planes to growth. Originally intended to protect profit, growth became an end in itself, as did a focus in management on share price.

The hallmarks of cancer include continuous growth, limitless number of cell divisions, and invasion of tissue and formation of metastases. Boeing began to fit this description.

As with many cancers, there was an environmental component. The 1980s included a seismic shift in the concept of “success” in corporate America, epitomized by the genius of General Electric’s leader, “Neutron” Jack Welch. Neutron bombs kill people but leave buildings. Welch got his nickname by firing employees but keeping businesses, lowering cost and increasing profits.

One of Welch’s tools was “Six Sigma,” a data driven system to improve efficiency. He also had a policy of firing the bottom 10 percent of sales producers every year, regardless of their absolute performance. Stock price became a primary focus. At first Welch’s methods were successful. G.E. value skyrocketed as Welch bought and sold divisions, looking for maximum return.

Welch wanted G.E. to be the largest company in the world. Men who worked for him were sought by other companies hoping for some of the G.E. magic. This was also during a time of overall increase in stock valuations, but Welch’s G.E. and others outperformed indexes such as the S&P 500.

Welch also distributed stock to his management teams, took a good chunk himself. G.E. grew rapidly, gains in stock price became a primary measure of success, and Welch was regarded as a hero of capitalism. (It didn’t always work. Even G.E.’s stock lost half its value after Welch retired, and many of the companies that adopted his ideas did not fare much better.)

But other companies took note, including Boeing, in the 90s under the leadership of Phil Condit. Condit expanded Boeing, bought rivals such as McDonald Douglas, Rockwell Aerospace and Hughes Space & Communications, expanded operations to North Carolina and South Carolina (possibly to get away from the unions in the Pacific Northwest).

Condit doubled the size of the company and eventually moved Boeing headquarters out of its Seattle birthplace to Chicago in 2001. Boeing grew, it was profitable, but the cancer had metastasized. The company was showing early signs of disease as focus shifted away from building the best airplanes in the world to becoming one of the most valuable companies in the world.

Harry Stonecipher succeeded Condit in 2003 after it was disclosed that Boeing had been in discussions to hire an Air Force officer who was in charge of procurement of Boeing planes. One got the sense that values were open to question.

Stonecipher had worked for G.E. under Jack Welch prior to heading up McDonnell Douglas, until Boeing bought that company. At Boeing, Stonecipher was proud of the fact that he was blowing up the engineering culture at Boeing so that it would be run “like a business rather than like a great engineering firm.” (JOE NOCERA, Bloomberg) Stock price rose.

Two years later, Stonecipher was replaced by James McNerney, yet another G.E. man. McNerney had no experience in aviation. But he too was an avid cost cutter, and it was under his watch that the decision was made to “upgrade” the 737 series to a 737 MAX instead of developing a new model.

It’s important to realize that this was gaming the system. A new model would have required a full review by the FAA and other regulatory agencies. More training would be required of pilots, etc. This would slow down approval and make the plane more expensive.

In a hurry, management was more interested in driving down labor cost, outsourcing work to the cheapest subcontractor, reducing staff, and misleading the Federal Aviation Administration. Presentation of the 737 Max plane as “just another 737” was critical to its planned success, and necessary to jack up the stock price. Money saved would be used for stock buybacks, executive compensation, and growth.

Internal communication was fraying, because what employee wanted to bring problems to a manager who was trying to eliminate his/her job?

McNerney was succeeded by Dennis Muilenburg. While Muilenburg was an engineer by training and a long time Boeing employee, at this point the Boeing mindset was squarely focused on profit and share price. No one at the top seemed to be aware of, or willing to consider, what was happening on the shop floors, in the warehouses. In fact, one of the goals of the move to Chicago was to isolate management from day-to-day concerns.

So, 40 years after it began, the cancer finally resulted in catastrophe when 346 people in two Boeing aircraft died when the planes flew into the ground due to flaws in software design, possibly hardware problems, and a lack of pilot training, all of which were the result of Boeing’s focus on profit and cost cutting rather than engineering.

The company’s internal failures were exposed in 2019, but they’ve been obvious to thousands who worked for Boeing for years. Employees were not reluctant to share their opinions that the company had been floundering, but were unheeded. 2019 was simply when the disease at Boeing became known to the world. When Muilenberg told Congress after the two Max crashes that “safety is in our DNA” at Boeing, he was describing a company that had not existed for years, if not decades.

The crisis of the 737 Max is not the only example. Boeing is failing to meet military requirements for new refueling tankers, faces a lukewarm reception for its revolutionary 787 plane that was years late, and recently had an embarrassing failure when its space division shuttle failed to rendezvous with the space station.

Muilenburg was fired a month ago on December 23, 2019, but he was replaced by yet another G.E. alumnus, David Calhoun, who had worked for G.E. for 26 years and also had no background in building airplanes beyond being a director of Boeing during the time when the problems festered.

So, what’s to be done? Many will say that Boeing is too big to fail, that the impact to America and to the communities Boeing supported for generations is simply too great. But there’s another way to look at this.

The social and economic community of America is a very strong organism; diverse, vibrant, and resistant to many ailments. It often demonstrates the success of capitalism, a paradigm of production and distribution that has vastly improved the human condition.

Capitalism also heralds its accomplishments through “creative destruction.” Perhaps an American icon needs to be destroyed by the very forces that led to its dominance. Perhaps Boeing should fail so that American capitalism itself can improve and become healthy.

A healthy body sloughs defective cells so that good cells can flourish. It is when this process stops that cancer spreads and bodies die.

Corporate leaders often stress “consequences” for the less fortunate. Consequences for mismanagement are equally appropriate.

Stockholders should lose their equity. Stockholder risk will sharpen oversight. Only then can there be a return to responsibility.

Boeing should be parted out. Whatever value is reclaimed should protect hundreds of thousands of Boeing workers, pensioners, subcontractors, and customers. Subsidiaries like the military division and the space division should be broken off and sold. Money raised should be used to make reparations.

There has been an impact on subcontractors, and their employees. Communities have been harmed, and this is likely to continue. They should be revitalized.

Businesses have been disrupted. Southwest Airline built its business model around the 737, and purchased new 737 Max planes that will have been grounded for over a year. Southwest and other airlines have been harmed. They should be compensated.

Executives and board members who were complicit in the destruction of Boeing and the loss of lives should be held accountable. Money made off their dereliction of duty, if not outright criminality, should be clawed back and redistributed. It is obscene that Dennis Muilenburg’s separation package is equal to the amount set aside for families of those who died in crashes of the 737 Max.

Attempts to “save” the Boeing of the last century are doomed, because that Boeing hasn’t existed since then, and Boeing of the 21st century is collapsing. For the good of capitalism in America and the communities where it once thrived, Boeing must be excised. Several new companies could take Boeing’s place. This should be expedited and American capitalism set on a path toward a future once promised but forgotten in a maelstrom of corporate greed.

Then an biopsy should be performed, to see if Boeing, Enron, Lehman Brothers, Washington Mutual and Wells Fargo (with some executives finally facing prison) are exceptions or the inevitable result of capitalist energy. Questions need to be asked:

What is the impact on a company when stock options outstrip salary as a portion of total executive compensation? When stock price reflects an emphasis on lowest possible cost, rather than the best possible product? When the take home of top floor executives is based partly on suppressing the livelihood of shop floor workers?

Is a balance possible in capitalism between competing values, or does the system itself require dynamic experimentation, excesses, crashes and disruption that characterize the current situation at Boeing and events like the Great Recession earlier this century? Was that recession caused by anomalous corporate greed in an era of deregulation, or simply the natural outcome of a dynamic, self-regulating capitalist system? Are rules effective, even possible?

What happens when a company begins to focus on its success rather than on what created that success? When does a healthy system grow out of control and become malignant?

December 7

Yesterday on December 7 there was a post, by someone whose politics I do not share, about the sacrifice of our fathers in WWII. Later, I read about Eisenhower’s call to duty after Pear Harbor.

Few of our fathers were “professional soldiers,” but they went to war. Friends and brothers lost their lives. Though the navy uniform of my father sits in a chest two feet from where I write, I helped squander his sacrifice and made too few of my own.

I believe we are again at war, but today’s war had no declaration. It seeps into crevices between us and expands them, like water to ice. Our country, our way of life, and the future of our children may yet be lost.

Those whose politics I do not share blame me for this, as I am inclined to blame them. Our common enemy gloats at creating this discord, hoping civil war will destroy our ideals. So, while I’m a little shocked when called an enemy of America, I refuse to return rhetorical fire.

The real enemies are those who gain influence from our discord, and the collaborators who profit from it. I don’t know how to oppose them, yet, but give thanks to those whose sacrifice gives me the freedom to try.

Gary Tewalt Finally your pen has made some sense. Let us all gather some more sense and repair this swamp. Where to start is somewhere on the next page. Let’s turn it.

Erik Dolson Ha! Gary, you HAVE to know that turning the page together would be easier if the first sentence from YOUR pen wasn’t that my beliefs are nonsense. Right? (smile)

Gary Tewalt Say, what duty did your dad have. What ship. WWll ? Etc. T

Erik Dolson Hull Platte Dolson was a second leutenant in the U.S. Navy charged with supply operations in the Phillipines.

Gary Tewalt Oh. Not much pressure on him huh. Lol. That was a tough environ. Still that way in Nam era. We were in Manila when two of our guys dropped a life boat in the night and went awol. Our chopper found the boat several up a Chanel completely destroyed by natives. Those men were never found.

Erik Dolson Gary, in the original of my post, before this morning’s edit, I referred to Viet Nam. You and I lost a friend last week who served there, Dave Byrum. I deleted that section because it diluted what I wanted to say about December 7.

But I still think it’s important.

I did not serve in Viet Nam because my lottery number gave me a pass. I did not believe in that war, either. At the same time, I was so ashamed of those who greeted soldiers and sailors with contempt upon thier return from Viet Nam. It was so wrong for so many reasons, not least of which was the sacrifice that you and your fellows made when over there.

Despite the outcome of that conflict, your sacrifice was no less than our father’s in WWII. Though the world had changed, the courage and valor of soldiers had not, and there were and are many heros. John McCain, John Kerry, Robert Meuller, and you, Lynn Johnston, Dave Byrum. All of you.

This is part of the reason why I feel I squandered the sacrifices made. Because I was not vigilant enough to say often enough, “Wait! These are fellow Americans! We’re on the same side!”

I am a wordsmith by trade and know better, but let labels guide my thinking. “Conservative,” “liberal,” “socialist” right-winger.” But at this moment, and because of a revelation I had yesterday in the office of the current editor of your local newspaper, I choose to not take the easy path of dismissing you with a label.

I need to know why you and I disagree about what seem to each of us to be obvious fundementals. Because I do believe my country — your country, our country — is being attacked in a way that could destroy everything you and my father and our forefathers fought for.

So, Gary, here I am. And I’m going to start by saying I’m sorry for my past ommissions, and thank you for all that you’ve done.

~ Erik

Boeing may be screwed

By Erik Dolson

Airplane manufacturer Boeing announced earlier this month that a safety committee had been formed on the board of directors after two crashes of the company’s 737 Max aircraft took 346 lives.

A safety committee! On the board! Thank god. Shareholders and passengers alike can fly much relieved.

I’d like to add a couple of other suggestions, distilled after talking to current and former Boeing employees over the last few months.

First, fire CEO and board chair Dennis Mullenburg. These tragedies occurred on his watch, and he lost all credibility while repeating the demonstrably false “safety is our top priority.” The crash of two 737 Max planes due to faulty software, faulty systems, and faulty processes made that claim absurd. Mullenburg is partly reponsible for the aggressive focus on profit that led to these tragedies.

Boeing exists to make a profit. Safety is central to that goal, but not the primary. Ask any employee who answers to a Boeing manager who himself or herself is under intense pressure to reduce costs on a regular basis.

The 737  Max was a bit of a kludge in the first place, an end run around regulations that would have required a completely new certification if Boeing had fielded an entirely new design. Recertification would have been expensive and caused delays, adding even more expense. So, Boeing told regulators and customers essentially that the 737 Max was “the plane you know and love, only better!”

But the company had installed new engines on the plane, and placed them farther forward. The engine pods cause lift when the nose of the plane is pointed up. The new location resulted in forces that pushed the nose up even further. This “divergent condition” can eventually cause a stall, and the airplane to fall out of the air.

Normally, a divergent condition is not allowed in passenger aircraft, which are supposed to return to a stable position if no forces are applied to the pilot’s controls. So Boeing came up with software that pushes the nose down when sensors indicate a stall is imminent.

It appears a sensor malfunctioned in the two planes that crashed. The airplane “thought” it was nearing a stall, and pushed the nose down. Pilots repeatedly tried to pull the nose up, but the planes were stronger and persisted, until they flew into the ground.

The central questions here are why didn’t Boeing catch this problem before people died, and can it be fixed?

I suggest that Boeing didn’t catch the problem because of the “culture” within the company. The end run around certification set the ball in motion. Constant pressure to cut costs and speed up development added momentum. So did the policy of not requiring and then informing airlines that pilots would need more training on the new systems.

These decisions were not the result of “safety is our number one priority.”

Can the planes be fixed? Certainly more sensors can be added (ONE!? Boeing allowed planes out the door with a single critical sensor!? There should have been three!). The software is being modified to give pilots more control.

The FAA in the United States may allow the 737 Max to fly again soon. After all, Boeing has a huge lobbying force in Washington D.C. Money matters.

However, transportation safety agencies in other countries may require that the plane not have a divergent condition at all, and/or that pilots be able to recover the plane from any flight situation with the software completely inoperable. Can the 737 Max do that?

Can the 737 Max recover from a near stall with the current engine design without software assistance? Can Boeing recover if only the FAA certifies the plane and it can’t fly in other countries? Would anyone fly on the plane?

The problems for the 737 Max go deeper than a software glitch, and the troubles at Boeing will not be fixed by adding a safety committee to the board of directors. At some point, the plane and the company may require a more significant change in design.

If not, I suggest that the entire Boeing board of directors and top management be on the plane as it goes through the more extreme flight tests. Then shareholders and passengers alike would be assured that the planes are as safe as they can be.

Foolish fuel funsters

Tesla pickup, art from Gear Junkie

by Erik Dolson

Well, that happened a lot sooner than I thought it would. Pickup drivers blocking access to charging stations for electric vehicles.

Fighting the future is natural, I suppose, and no one wants to be a dinosaur (did they really become diesel fuel belching from those truck exhausts?) either.

Now, I’m not going to suggest this ill-considered “protest” is the result of efforts by Marathon Oil or Koch Industries or the American Petroleum Institute to delay the electrification of transportation. That would be baseless and irresponsible. Maybe they used Facebook.

Industries in America are certainly capable of such chicanery, as the sugar industry blamed fat for obesity, cigarette makers had “scientists” deny the link between smoking and cancer, and Facebook paid PR firms to say they just want to bring people together while working on anti-semitic smears against George Soros.

Morals don’t scale nearly as heavy as profit when it comes time to weigh the gold.

But pickup owners blocking charging stations? Hey, guys? (Call it sexist, but I just don’t see women doing something this juvenile). I have a hobby that burns more fuel per mile than the thirstiest of your rigs, and I have a big diesel to get me there and back. I love my truck just like you love yours, though if the new Tesla pickup can pull an 11,000 pound trailer, I might want to look into that torque monster.

But I’m willing to let the electrics have their share of the road. Unless that damn Prius doing 54 miles an hour won’t get out of the fast lane. That’s not his share of the road, that’s mine.

But even if it was the Russians who started this (they are pretty good at sowing this type of discord), one does have to wonder what you truck owners intend. What exactly are you thinking, here? What’s your goal? What’s the outcome?

Yelling obscenities at people driving an electric vehicle, and preventing them from getting their fuel? I don’t get it. Are you defending a lifestyle? Depriving them of choice so you can gaurantee yours? Just having fun with a little harmless bigotry? Defending America? These are Teslas, men, probably with as much U.S. sourced content as your Dodge Ram, Ford F250 or Chevy 3500.

Do you really think that tractor trailers pulling tankers are less susceptible to disruption than power lines? Do you really think when the tipping point comes and there are more electrics on the road than diesels, and you continue this stupid, childish behavior, you won’t pay a price? Do you really think that in depriving others of freedom of movement, you won’t sacrifice yours?

Or are you just being manipulated by those who profit on oil into doing something that isn’t really in your own interest?

You’ve been selected for … !

by Erik Dolson

Marriott Hotels has selected me for a special, low cost vacation. Windham Hotels wants me to view a resort property and tell all my friends (both of you)  how great it was. Credit Card Services is giving me a low, 6 percent interest rate on my Visa and Mastercard balances. To top it off, someone is going to give me better health insurance at NO ADDITIONAL COST!

All that by noon today. By bedtime, especially around the dinner hour,  I imagine I’ll have received another four or five spam calls. Up until now I would listen to the pitch, ask questions, hoping the caller would put me on a list that says that calling my phone number was a giant waste of time, and after all, time is money.

Then I was on the phone with James, a gentleman who sounded like he was in India.

“You just want to take my time!” he yelled after I asked him for the fourth time to tell me which credit card he was talking about. He cut the connection before I could say that his call and others I’d received today cost ME time, and aggravation. Good thing I am on an unlimited plan.

James and those on the other end of spam calls are just trying to eke out a living wherever their call center is located: India, The Philipines, South Carolina. I doubt it’s a high paying gig, but since I can’t get to his boss, or the boss’s boss, I’d hoped there was a feedback loop somewhere and they’d stop letting me waste their time as they wasted mine. It was about all I could do.

But James caused me to think again about “time is money.” So is electricity. And bandwidth. Battery usage. I wondered if there is anyplace in the system where AT&T and Verizon might be making money off spam. Because, after all, they make money off nearly every other use of bandwidth (at one time those were “our” airwaves. Another story).

Given that AT&T and Verizon are happy to store our information and share it with the U.S. government if asked (as a run around the law prohibiting the government itself from doing so), it’s not unreasonable that they know who is flooding the world with and profiting from the spam.

Could it be that AT&T and Verizon sell me service and then sell me to others? Why don’t I get a cut of that deal? Does spam take up bandwidth that AT&T and Verizon have said is in such short suppply? Could they stop spam, and if so, why don’t they? It’s not unreasonable to think they’re making a profit from the calls somehow. Someone is, or the calls would not exist.

Yes, there are other telecoms and they are not innocent. But sometimes you just want to aim at the head of a snake.

Spam calls are not just an annoyance. We should not have to go to lengths to block, screen, or otherwise avoid these intrusions into our lives. At one time, with landlines and later for unlisted cell phones, unasked for intrusions were illegal. They could be again. Perhaps it’s time for a person of authority to take an interest.

Free speech, you say? Nothing is free in a market economy. Spammers have just shifted the cost onto  me. They call my phone again and again and again, running down my battery and stealing my attention. I’d like it to stop. Time is money, and I don’t have enough of either one.

Oil men put Santa in chains

By Erik Dolson

Merry Christmas.

It’s that time to turn away from the scourge of Trump and look for kinder, gentler souls. Recent news gives us many candidates, but we’ve heard enough about foreigners with names like Putin or Erdoğan or Assad.

Fortunately, we can focus much closer to home on Gary R. Heminger, Chairman and CEO of Marathon Oil, and the Koch brothers, David and Charles,

These oligarchs are or soon will be responsible for killing thousands of innocent people around the world, many right here in the U.S. These three, especially, are attempting to get Americans to burn an additional 300,000 to 400,000 barrels of oil per day. Read more…

Lost in Spaaaaaace

By Erik Dolson

Tesla Roadster prototype (CC BY-SA 4.0)

NASA Chief Jim Bridenstine said that Elon Musk smoking pot on a podcast was “not appropriate,” that it “did not inspire confidence,” and may have prompted a safety review of both Musk’s SpaceX and Boeings United Launch Alliance.

The companies are vying to ferry astronauts into space.

Here’s an alternate point of view, just for discussion. Maybe the NASA chief has it backwards.

Read more…

Democrats are screwed

By Erik Dolson

Donald Trump won the midterm elections yesterday. Democrat victory in the House of Representatives gives Trump exactly what he needs for the next two years to win the presidency in the year 2020.

Trump said as much when he congratulated Nancy Pelosi, presumed to be the new Speaker of the House. Trump said that Pelosi deserved the Speakership, and added that he might give her a few Republican votes on key issues in the future.

Trump thus sets himself up as a dealmaker, ready and willing to cooperate with the other side. Trump actually believes Read more…