• Boeing Engineer Says Corporate Culture Change Behind MAX Issues

    From Larry Dighera@21:1/5 to All on Mon Jul 8 07:21:05 2019
    [Bean-counters kill hundreds for a $]


    Boeing Engineer Says Corporate Culture Change Behind MAX Issues

    Russ Niles
    July 6, 20190

    A spokesman for the union that represents some of the workers who
    build Boeing airplanes claims the company’s shift to a “cost-cutting”
    corporate culture has isolated employees, alienated suppliers and
    customers and ultimately underlies the problems it’s having with its
    current airplanes, including the 737 MAX. Stan Sorscher, of the
    Society for Professional Engineering Employees in Aerospace (SPEEA),
    wrote an opinion piece for the Seattle Times on Friday https://www.seattletimes.com/opinion/what-will-it-be-boeing-great-airplanes-that-generate-cash-flow-or-great-cash-flow-period/
    outlining the causes and effects of Boeing’s corporate evolution. “The cost-cutting culture is the opposite of a culture built on
    productivity, innovation, safety or quality,” Sorscher wrote.
    “Boeing’s experience with cost-cutting business culture is apparent.”

    He claims Boeing shifted its emphasis from employee empowerment and collaboration to one of earning maximum return for shareholders. He
    claims that pointing out issues on the factory floor brands workers as troublemakers and therefore stifles the inherent desire of most
    workers to ensure product quality. He also said cost cutting, which is appropriate for some businesses, is the antithesis of a
    “performance-driven” model that governs complex manufacturing. “This cost-cutting culture is the opposite of a culture built on
    productivity, innovation, safety, or quality,” he wrote. “A
    high-performance work culture requires trust, coordination, strong problem-solving, open flow of information, and commitment to the
    overall success of the program.” --------------------------------------------------------


    What will it be, Boeing? Great airplanes that generate cash flow or
    great cash flow, period?

    July 5, 2019 at 1:10 pm
    Gabriel Campanario / The Seattle Times

    By Stan Sorscher
    Special to The Times

    Employees come to work to do their jobs. We aren’t usually aware of
    workplace culture, even over a span of years.

    We learn culture from co-workers and managers when they make decisions
    and demonstrate problem-solving skills. Leadership messages affect
    thousands of decisions that add up to success or failure of the

    For many years, Boeing competed with Airbus and other producers for
    airline customers based on performance of its products. As a recent
    news report put it, Boeing now competes for investors with Exxon and

    Boeing rose to the top of the airplane business as an engineering
    company, focused on performance of its products. Boeing made bold
    decisions that “bet the company” and prevailed over competitors.

    In the ’90s, Boeing business culture turned to employee engagement,
    process improvement and productivity — adopting the “quality” business
    culture that made Japanese manufacturers formidable competitors.

    In the late ’90s, Boeing’s business culture shifted again, putting
    cost-cutting and shareholder interests first.

    Some business cultures are well-suited to commodity-like products but
    are a bad fit with performance-driven products.

    Ask a financial analyst, “Are airplanes commodity-like or

    Business instinct is to cast the question as a market transaction.
    Airline customers worry about price, delivery dates, training costs,
    spares, maintenance and other factors, but, overall, those
    considerations come out very close in the end. The last major
    innovation in air travel was the jet engine in the 1950s. A business
    analyst would say the airplane business is “mature,” the products are standardized, innovation is slow, so airplanes are commodity-like.

    Now ask a different question: “Are the design, development, testing
    and manufacture of airplanes commodity-like or performance-driven?”
    Whoa. Tough question.

    Actually, making airplanes is performance-driven.

    Success or failure of an airplane program turns on productivity. The
    first airplanes off the production line sell at a loss. Costs come
    down over time, the quicker the better. If your business model
    emphasizes productivity, employee engagement and process improvement,
    costs go down faster. This was the essence of the “quality” business
    model Boeing followed in the mid-’90s. The 777 had the best “learning
    curve” in the business.

    On the other hand, if your industry is mature, and your products are commodity-like, business-school theory says a cost-cutting model is appropriate.

    Wal-Mart perfected its particular version of the cost-cutting business
    model. Amazon adapted that model to its industry. Boeing has adapted
    it to high-end manufacturing. These companies are super-stakeholders
    with market power over their supply chains. The point of this business
    model is that the super-stakeholder extracts gains from the
    subordinate stakeholders for the short-term benefit of investors.

    Subordinate stakeholders are made to feel precarious and at-risk. Each
    supplier should see other suppliers as rivals. Similarly, each work
    location should know it competes on cost with rival work locations.
    Each state or local government should compete for incentives against
    rival states.

    In this model, subordinate stakeholders never say “no” to the
    super-stakeholder — not workers, not suppliers, not state

    This cost-cutting culture is the opposite of a culture built on
    productivity, innovation, safety, or quality. A high-performance work
    culture requires trust, coordination, strong problem-solving, open
    flow of information and commitment to the overall success of the
    program. In a high-performance culture, stakeholders may sacrifice for
    the good of the program, understanding that their interests are served
    in the long run.

    In the productivity-based 777 program, it would have been
    career-limiting to withhold negative information from managers. They
    needed timely information to find a solution as far upstream as

    According to Boeing’s annual reports, in the last five years Boeing
    diverted 92% of operating cash flow to dividends and share buybacks to
    benefit investors. Since 1998, share buybacks have consumed $70
    billion, adjusted for inflation. That could have financed several
    entire new airplane models, with money left over for handsome
    executive bonuses.

    Boeing’s experience with its cost-cutting business culture is
    apparent. Production problems with the 787, 747-8 and now the 737 MAX
    have cost billions of dollars, put airline customers at risk, and
    tarnished decades of accumulated goodwill and brand loyalty.

    Stakeholders throughout the industry want our trust restored. This is
    a leadership moment for Boeing executives and its board of directors.
    Will Boeing make great products, which generate cash flow, or will it
    continue being a company that generates great cash flow — and makes

    Stan Sorscher was a physicist at Boeing for 20 years and has been on
    staff at the Society of Professional Engineering Employees in
    Aerospace union since 2000.

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  • From jgrove24@hotmail.com@21:1/5 to Larry Dighera on Fri Jul 26 11:40:24 2019
    On Monday, July 8, 2019 at 9:21:14 AM UTC-5, Larry Dighera wrote:
    [Bean-counters kill hundreds for a $]


    Boeing Engineer Says Corporate Culture Change Behind MAX Issues

    If its Boeing, I AIN'T Going !

    The skies around ORD seem to have more MD-80s and 90s now.


    The grounding of Boeing Co.’s 737 Max narrow-body jet has led Middle Eastern airline Emirates to divert normally globe-trotting Airbus SE A380 superjumbos onto 40-minute trips to replace lost capacity.

    Emirates is using the double-deckers for flights from Dubai to Oman, which at 211 miles are the shortest anywhere with the model, after sister carrier FlyDubai reduced services following the idling of its 14-strong Max fleet.
    Muscat was among the destinations hit as FlyDubai cut 17% of services in response to the grounding of its Max 8 and 9 aircraft, according to a statement from the short-haul airline in March. Frequencies have been pared to three a day from five, using
    Boeing 737-800 planes typically seating 174.

    Emirates, which sells tickets on FlyDubai jets via a so-called code-share arrangement, is operating two of its own flights daily with A380s that carry 519 people. That’s 159 more per trip than the Boeing 777-300s it previously used, and which will
    continue to operate a third daily service.

    Demand on the Muscat route is high, an Emirates spokeswoman said.

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