“...It made him sick to think that the value of his Boeing shares had tripled over the same period during which he’d watched the company get so comprehensively dismantled. But it was downright surreal to watch the stock price nearly triple once more during the two years after he left the company.”
These managers act like they do because it works in the short, and even medium term.
The corporate executives who had stock options when the stock did 9X made tens and maybe hundreds of millions of dollars.
If they don’t care about running the company into the ground and making unsafe planes, its worth it to them.
Until they get better people in charge or change the financial incentive structure. so that short term decisions get penalized, it will not change.
Boeing won’t fail. It is too systematically important and will be bailed out.
Gov’t can’t fix it. I will just impose more Wokeness to go along with shoddy design, assembly and inspection.
This one is somewhat new and novel.
But the “fault” of our system according to the world for decades has been everything incentivizes the short term outcome.
It’s a very familiar refrain and won’t be changing in our system ever. It is also the case for a very high percentage of our corporations.
A lot of Boeing’s issues predate the Biden era of wokeness.
As a future shareholder, the culture that brought us the Max is the peril. As folks posted above, the bean counters chose to frankenstein it instead of redesigning it when they had the chance. That is the scary part.
It does work in the short run, by the time the SHTF these people move on with tremendous riches.
The reason they use a short term management style is because, it’s all they know, it’s all they’ve been taught, it’s similar in many other industries.
A long-time successful company starts elevating people to management positions that do not know anything about the products the company makes, they strictly manage by the textbook and short-term profits.
A prime example is Apple Computer, at one time they fired one of the founders of the company and brought in a guy who was selling Pepsi to run a computer company, he proceeded to nearly bankrupt the company, to their credit Apple brought back the founder and he led a miraculous turn around, which is still going on.
The question with Boeing is how bad it will get, could they end up getting broken up and sold off because they are in for a world of trouble, if a couple more planes have structural issues and kill a bunch of people, Boeing will be forced to take some drastic actions.