Air Crash Thread: Boeing MAX and Other Problems

[Eunos_Cosmo]

For discussion: Share repurchasing/stock buyback in the context of an under/badly developed airplane:

From 2013 up to and after the 737 Max crashes, Boeing repurchased something like 41,000 shares of it's own stock. Based on it's current price, that is equivalent to ~$15bn. Their board had authorized up to $20bn per year for share repurchasing. Per Wikipedia, the entire 737 Max program development cost was $2-3bn.

Is it troubling for anyone else that an airplane manufacturer spends substantially more money on buying stocks than developing airplanes? Their average total R&D spending is around or less than $4bn/year. I know that producing shareholder value is a responsibility for a publicly traded company. But isn't Boeing in the business of making airplanes? This is my biggest problem with the West's current fixation with finance-based capitalism - the money seems to be the only ends worth considering. It's not just Boeing, it's a lot of companies.

 

[Dotini]

For discussion: Share repurchasing/stock buyback in the context of an under/badly developed airplane:

From 2013 up to and after the 737 Max crashes, Boeing repurchased something like 41,000 shares of it's own stock. Based on it's current price, that is equivalent to ~$15bn. Their board had authorized up to $20bn per year for share repurchasing. Per Wikipedia, the entire 737 Max program development cost was $2-3bn.

Is it troubling for anyone else that an airplane manufacturer spends substantially more money on buying stocks than developing airplanes? Their average total R&D spending is around or less than $4bn/year. I know that producing shareholder value is a responsibility for a publicly traded company. But isn't Boeing in the business of making airplanes? This is my biggest problem with the West's current fixation with finance-based capitalism - the money seems to be the only ends worth considering. It's not just Boeing, it's a lot of companies.

From its inception until its acquisition of (Trojan horse) McDonnell Douglas, Boeing has been all about high quality engineering and manufacturing. Since then, it has been less about that and more about money and finance. Sadly, a total transformation of its corporate management culture has taken place.

 

[Liquid]

From its inception until its acquisition of (Trojan horse) McDonnell Douglas, Boeing has been all about high quality engineering and manufacturing. Since then, it has been less about that and more about money and finance. Sadly, a total transformation of its corporate management culture has taken place.

Why and how did this take place?

Just curious.

 

[Exorcet]

For discussion: Share repurchasing/stock buyback in the context of an under/badly developed airplane:

From 2013 up to and after the 737 Max crashes, Boeing repurchased something like 41,000 shares of it's own stock. Based on it's current price, that is equivalent to ~$15bn. Their board had authorized up to $20bn per year for share repurchasing. Per Wikipedia, the entire 737 Max program development cost was $2-3bn.

The MAX was an upgrade.

The 787 according to Wiki cost over 30 billion, more than Boeing's allotment for stocks. Upgrading a plane is cheaper than buying a corporation.

https://en.wikipedia.org/wiki/Boeing_787_Dreamliner

 

[Eunos_Cosmo]

The MAX was an upgrade.

The 787 according to Wiki cost over 30 billion, more than Boeing's allotment for stocks. Upgrading a plane is cheaper than buying a corporation.

https://en.wikipedia.org/wiki/Boeing_787_Dreamliner

What I'm pointing out is that the MAX was a cheap shortcut to compete with the A320 Neo and I argue the result of flawed corporate incentives. Stock buy backs are all about short-term returns to boost CEO compensation packages. Developing good airplanes (like the 787) takes time (10+ years in the case of the 787) and substantial money. In the absence of the opportunity to do share repurchasing, a company like Boeing would, IMO, likely spend more money on R&D. Maybe an all-new airplane to replace the 737?

 

[Exorcet]

What I'm pointing out is that the MAX was a cheap shortcut to compete with the A320 Neo and I argue the result of flawed corporate incentives. Stock buy backs are all about short-term returns to boost CEO compensation packages. Developing good airplanes (like the 787) takes time (10+ years in the case of the 787) and substantial money. In the absence of the opportunity to do share repurchasing, a company like Boeing would, IMO, likely spend more money on R&D. Maybe an all-new airplane to replace the 737?

I don't necessary disagree with you on evaluating Boeing's priorities, but in an ideal world you'd want the plane to be cheap. It's a good thing for everyone. That Boeing spent more money on something else isn't really an indicator of anything besides the cost of business perhaps. The 787 cost time and money not just because of quality but because of delays and developmental problems. Good and cheap does exist:

https://en.wikipedia.org/wiki/Boeing_F/A-18E/F_Super_Hornet

https://en.wikipedia.org/wiki/Boeing_737_Next_Generation

But it can often fall victim to uncertainty. Focusing on the case of the MAX, there was also a time component. Airbus was making sales to Boeing customers in the [then] present as you mentioned. That pressure wouldn't go away if Boeing wasn't able to focus on share repurchasing. It's the primary reason for the MAX's existence too since a new plane was under consideration by Boeing previously.

The MAX program was mismanaged, but I think we do benefit from hindsight at least a little bit. I don't take issue with Boeing pursuing a shortcut if it works and is safe. Would things have worked out differently if Boeing was under different constraints? While that's a possibility, I don't think predicting what's more of less likely can be done very easily.

 

[ROAD_DOGG33J]

What I'm pointing out is that the MAX was a cheap shortcut to compete with the A320 Neo and I argue the result of flawed corporate incentives. Stock buy backs are all about short-term returns to boost CEO compensation packages.

They can do that but they also increase the share price for other stockholders. And if the company believes their stock is valued too low, it might be a good idea.

In the absence of the opportunity to do share repurchasing, a company like Boeing would, IMO, likely spend more money on R&D. Maybe an all-new airplane to replace the 737?

The 737 MAX seems like a better option for them, except they rushed production and overlooked necessary safety aspects.

 

[TenEightyOne]

What I'm pointing out is that the MAX was a cheap shortcut to compete with the A320 Neo and I argue the result of flawed corporate incentives. Stock buy backs are all about short-term returns to boost CEO compensation packages. Developing good airplanes (like the 787) takes time (10+ years in the case of the 787) and substantial money. In the absence of the opportunity to do share repurchasing, a company like Boeing would, IMO, likely spend more money on R&D. Maybe an all-new airplane to replace the 737?

You're missing the point of the 7x7 programmes, I think. The 787 was designed to land at airports that the 747/777 couldn't use but to still have the 777's range. Interestingly the instrument ratings are the same as they share a cockpit.

The 737 goes where the 737 can go with a shorter range. There's a hull that can do that, there's no need to reinvent it when the materials and construction are always evolving in any case. What was needed were new, super-efficient engines, and that was the thrust (hur hur) of the MAX programme. The problems came with the implementation of MCAS in that new-engined plane. MCAS could and should have been safe. If Boeing had spent 8bn instead of 3bn on MAX I daresay they could still have had this problem given the management climates in their company and the FAA.

 

[Eunos_Cosmo]

Personally, I don't see how the MAX is an option at all. The engines don't fit.

 

[TenEightyOne]

Personally, I don't see how the MAX is an option at all. The engines don't fit.

That just required changes to the landing gear. The same thing was done for "Next Generation" 737s including the -800, it doesn't cause any problems. Having FBW software to override disaster-envelope situations shouldn't be a problem either - the 800 does it to an extent and all Airbus aircraft do it. The problem with MAX was the way the software was implemented in terms of design, information, error reporting systems, and Boeing's expectations of pilot reactions in an emergency.

 

[Swagger897]

Personally, I don't see how the MAX is an option at all. The engines don't fit.

The engines haven't fit since they switched to CFM's during the 733 production in the 70's... As @TenEightyOne said, that hasn't stopped them ever since the 900 ER NG models were made.

The MAX is simply the response to the 321LR and XLR's. Boeing hasn't shown any clear driving force into produce the 757 remake yet, and Airbus is trying desperately to finally kill it off. I'd say that the 787 has really slowed their progress down from doing such, and we'll potentially see it arrive sooner than later in drawings as more airlines push for one. Ed Bastian has already pushed them as the cost of the 757/hr keeps rising that a replacement is soon needed.

 

[TenEightyOne]

A whistleblower has made some dramatic claims about the safety of the emergency oxygen system on 787s. Boeing deny the claims, I'm guessing the FAA will be doing some random testing to put the story to bed. BBC.

 

[Swagger897]

Sounds like nothing but hot air.. People also don't realize that the O2 supply is limited to roughly 25 minutes and then it's gone.

Plus, the cartridges are (should be unless shortcuts are taken) checked regularly during normal inspections. I can't see how aircraft made several years ago should be of any worry today if they've been checked since then.

E: this is also the same plant that went on strike iirc

 

[Dotini]

Further to this it seems that the cracks are in the "pickle forks", part of the assembly that attaches the wing to the fuselage. They're supposed to take 90,000 cycles without failure, that's the entire lifetime of the aircraft.

My contacts currently in Boeing assure me this is a real problem. Not too sure how much credence to give Prof. Simon, but his graphics are useful to understand the "pickle fork".

 

[TenEightyOne]

Sounds like nothing but hot air.. People also don't realize that the O2 supply is limited to roughly 25 minutes and then it's gone.

Agreed, although a system that delivers 0 minutes would be of concern

As you say it's limited in any case - I think the civil requirement is only 10 minutes? Enough time to get below 10,000 feet in the case of emergency depressurisation, but not enough to ride out a significant fume event in total safety.

Plus, the cartridges are (should be unless shortcuts are taken) checked regularly during normal inspections. I can't see how aircraft made several years ago should be of any worry today if they've been checked since then.

I thought that too. The only issue I could think of would be one where the system returned an "OK" in a duty test but didn't deploy in the parameters of a real scenario. That strikes me as very unlikely.

My contacts currently in Boeing assure me this is a real problem. Not too sure how much credence to give Prof. Simon, but his graphics are useful to understand the "pickle fork".

The Independent suggest that 5% of the 1,100 NGs examined so far have been found to have the cracks. Aircraft with over 30,000 cycles must be examined within 60 days while aircraft with more than 22,600 cycles must be inspected within another 1,000 cycles. Given that the part is a "lifetime" part at 90,000 cycles this is just more bad news for Boeing. The story hasn't gained the kind of news traction that the two MAX accidents have but airlines and fleet buyers are sure to be less and less impressed with Boeing as time goes on. That could hurt Boeing when it comes to getting new orders or setting a price.

 

[Barra333]

The story hasn't gained the kind of news traction that the two MAX accidents have

It will if one fails and a wing falls off.

 

[TenEightyOne]

It will if one fails and a wing falls off.

Definitely. I get the feeling that the FAA don't think that's going to happen, if they did then all 737 NGs within the duty parameters would be grounded. Wouldn't they? Hmmm.

 

[Barra333]

I would back the EU to ground planes before the FAA.

 

[UKMikey]

https://www.independent.co.uk/trave...ndow-southwest-airlines-ryanair-a9210171.html

 

[TenEightyOne]

https://www.independent.co.uk/trave...ndow-southwest-airlines-ryanair-a9210171.html

Is that the specific variant used on the 'NG' 737s or will it reach more widely to the Airbus aircraft that use similar engines? I also wonder how this affects the military Boeings using the similar engine. I have to say I'm not an expert on the minutiae of the variant engine specs

 

[UKMikey]

Is that the specific variant used on the 'NG' 737s or will it reach more widely to the Airbus aircraft that use similar engines? I also wonder how this affects the military Boeings using the similar engine. I have to say I'm not an expert on the minutiae of the variant engine specs

I haven't read it all the way through but here's the NTSB report.

 

[Barra333]

Is that the specific variant used on the 'NG' 737s or will it reach more widely to the Airbus aircraft that use similar engines? I also wonder how this affects the military Boeings using the similar engine. I have to say I'm not an expert on the minutiae of the variant engine specs

The article says the problem *part is considered part of structure, not the engine. So I would expect that any uses of those models of airframe would be affected, largely independent of engine spec

EDIT: stupid autocorrect

 

[TenEightyOne]

The article says the problem last is considered part of structure, not the engine. So I would expect that any uses of those models of airframe would be affected, largely independent of engine spec

I read it more as being a problem with the engine casing's own containment of a flying fan blade, the NTSB recommendations to the FAA linked by @UKMikey seem to back that up.

 

[Swagger897]

Sigh.... MM placing the blame on Boeing for something that's at fault with CFM/GE instead. Yes, the Nacelle is part of the airframe, but the compressor section is part of the powerplant, which still has its own casing and that's part of CFM/GE, not Boeing. It is up to both Boeing and CFM/GE however, to issue AD's to the owners of the aircraft & engines to fix to maintain their airworthiness.

What I'm more surprised about, is how there is little info on what Southwest was (not) doing during their inspections. Usually any fatality caused by mechanical issues gets traced back to the maintenance personnel who did the job and they get their necks rung out. Unless that report was already filed, I haven't seen anything about it.

 

[MIE1992]

From its inception until its acquisition of (Trojan horse) McDonnell Douglas, Boeing has been all about high quality engineering and manufacturing. Since then, it has been less about that and more about money and finance. Sadly, a total transformation of its corporate management culture has taken place.

There are too many entities where something similar can apply - insofar that you could make a Mad-Libs script out of your post. Truly, neoliberalism is a scourge, and is as much of an existential threat now as communism was during the Cold War (or at least how the USSR, the PRoC, and NK interpreted it), and fascism during WWII. I believe most, if not all modern problems these days can be traced to the machinations of neoliberalism and its followers.

I don’t think it is the very existence of capitalism that is the problem, however. But I believe neoliberalism is why capitalism gets a bad rap among some demographics these days. Perhaps in order for capitalism to live, neoliberalism must perish.

 

[TenEightyOne]

There are too many entities where something similar can apply - insofar that you could make a Mad-Libs script out of your post. Truly, neoliberalism is a scourge, and is as much of an existential threat now as communism was during the Cold War (or at least how the USSR, the PRoC, and NK interpreted it), and fascism during WWII. I believe most, if not all modern problems these days can be traced to the machinations of neoliberalism and its followers.

Aeroflot's air safety record was going to talk to you about this, but for some reason it never arrived.

 

[TenEightyOne]

Boeing will temporarily halt MAX production. Presumably the orders are slowing down while the certification problems are ironed out.

 

[NotThePrez]

Boeing will temporarily halt MAX production. Presumably the orders are slowing down while the certification problems are ironed out.

Admittedly I haven't kept up with this story in a while, but I'm surprised Boeing is still building the MAX to begin with. I figured all the bad press from the accidents would've cancelled any potential purchases.

 

[Slapped]

Boeing will temporarily halt MAX production. Presumably the orders are slowing down while the certification problems are ironed out.

Or Boeing has run out of parking space.

 

[Grayfox]

Or Boeing has run out of parking space.

Or they cant fix the issue without a large redesign.