Last paragraph is a bit melodramatic. Here's what's publicly known:
- Boeing is a 'too big to fail' corporation with a significant source of revenue coming from the government. 40% in 2024¹, billions of dollars of public funds! Just a bit more and it would be mostly state-funded.
- They're the 4th biggest American defense contractor, so they're likely seen as vital for securing state power by many in the government.
- The government is not a good allocator of funds, free market competition works a lot better for creating the best product.
Using Ockham's razor, here's my guess what happened: To get in this position in the first place, there will have been a fair bit of lobbying and "greasing the wheels" involved. Boeing eventually found themselves in a position where they got government contracts, no matter what. Leadership got complacent, they didn't really compete anymore because they didn't have to. This was when Musk came in and disrupted the space industry. But at that point, company culture was likely already too far down the drain for quick fixes. The situation would already be much worse for their space division, if not for the fact that they have such good relations with NASA and the government. NASA basically covered for them and played down the seriousness of the issues for weeks. And even now, they're not having SpaceX rescue the astronauts immediately, which would be even more embarrassing for Boeing. Instead they're bringing them back together with the already planned SpaceX Crew-9 flight next year. Boeing keeps getting away with black eyes, there aren't enough consequences despite all the serious issues.
> - The government is not a good allocator of funds, free market competition works a lot better for creating the best product.
This is irrelevant here; the only people buying most of the products that Boeing makes are governments or airlines (many of which have government backing, because countries find it advantageous to have an airline). Without government, there's just no Boeing, or SpaceX, or Lockheed Martin, or Airbus, or...
The problem ultimately goes back to 1996 when Boeing was more-or-less taken over by McDonnell-Douglas management, and quality engineering took a back seat to quarterly results. Everything, from bad QA to "greasing the wheels" with lobbyists, ultimately goes back to someone with an MBA deciding that those behaviors were worth it for the stock price increase.
And to be fair, they were... until they weren't. But by then, the guy with the MBA has either left or divested, and it becomes someone else's problem.
SpaceX's success can be in a large part contributed to the fact that they don't have a bunch of retirement and pension funds demanding a chunk of the profits every quarter regardless of actual market space performance.
Blackberry's revenue peaked in 2011, and things didn't really appear to be hopeless in 2014, with the iPhone 6. Apple had gone through roughly 3 major hardware revisions (3G, 4, 6) before RIM's hopelessness was reflected in their yearly revenues.
I'm not unconvinced that organizational rot in a slower moving company like Boeing took 3 decades to fully spoil the org.
Blackberry failed because they didn't spend 5+ years building a complete mobile OS that carried all the amazing stuff that desktop OS had at the time (top tier, networking, graphics multi tasking etc.). By the time the iPhone launched, all the competitors were already screwed.
I think the point is that "Internet experts" (derogatory) believe they are being knowledgeable and clever when they ascribe any and everything that goes wrong with a Boeing product to McDonnell Douglas.
I believe there's also an element of "MBA bad, engineer good" resentment of management at play.
But the real truth is much more nuanced, no matter how satisfying it is to drop pithy one-liners about the MD merger.
I worked at Boeing. The reason people attribute McDonnell Douglas is because it caused a fundamental shift in leadership expectations.
It was clear as day on the ground that something had switched, suddenly every conversation was about minimizing cost. Every meeting was about maximizing value. Efficiency above safety.
I cannot overemphasize that it really did fundamentally shift the language, the incentives, etc. I started having to prove I needed vms to two different business panels.
Sometimes you are right, the root cause is too simple, but I was there for this one. It really was that simple this time.
I like this: "MBA bad, engineer good". As a joke: If you ask an LLM trained on HN discussions to describe, in its best "cave man speak" how to HN views MBA vs engineer, you will get exactly this phrase.
It is also crazy to me that people speak as if Boeing is "falling apart", but managed to produce many successful models since the MD merger, including the amazing 787.
This is Hacker News; I assume we're here to have thoughtful, curious discussions concerning topics of business (YCombinator, after all) and most things computers ("Hacker" News).
Dropping the McD one liner meme is neither thoughtful nor curious and it certainly doesn't explain anything.
It's like saying a McDonald's Big Mac is made of bread, beef, lettuce, and some mayonnaise like that's some conclusive end-all be-all. That's cool, but are we actually going to speak about something worth the time of day?
"It certainly doesn't explain anything" is some irrational hyperbolic bullshit. You're talking nonsense. Of course it explains something. Listen to people who actually worked at Boeing. One of the dudes who worked there just replied in this thread. This is not a stupid internet meme. This is reality. I recommend you watch the documentary: "Downfall: The Case Against Boeing".
The fact that SpaceX demonstrated, without a doubt, that reuse of a first stage was viable in December 2015, and that we still do not have any clearly reusable first stage from anyone else tells you the whole industry is complacent and juiced up on the fat margins of launching a first stage up, then chucking it in the ocean, and then asking for money for another first stage.
That's true but it also speaks to the fact that Space X is incredible. Not nearly as bureaucratic and innovating like crazy. The new Raptor engine alone is mind boggling in it's simplicity.
China has at least one Falcon 9 clone in testing stages (that one that accidentally launched during static fire a while ago) and many new-space rocket companies have reusable vehcles in pipeline (eq. Rocketlabs Neutron). Even Europe is going to do that - eventually. :P
That is exactly my point. It has been 10 years and aside from some small baby steps, no incumbent has declared clearly and vocally that reusability is the future. They're all in denial. The Russians, the Chinese, Europe.
Maybe at one point really early on the external tank was planned to be reused, but it was expended in every launch of the shuttle with no provisions for re-usability. They even stopped painting it within a few launches.
I'm sorry this was downvoted. It is probably a bit too pithy for HN.
I think you raise a good point even if there are some "technicalities" about it.
Real question: I'm not an aerospace geek. The term "first stage" has probably changed at lot in rocket science in the last 50 years. From the NASA Space Shuttle to SpaceX Falcon 9, has the definition changed? From my elementary school memories, the Space Shuttle used a giant center rocket and two booster rockets that we expendable, but you are definitely right that the Space Shuttle "thing" (no idea how to call it) was used over and over again, (somewhat) safely. Something that I don't know: Where Apollo programme capsules reusued? I assume no.
The space shuttle had three main components - the orbiter (white and black space plane with the crew and cargo), the external tank (rust brown on all but the first few flights), and a pair of solid rocket boosters. The orbiter had three engines and received its propellant (oxygen and hydrogen) from the external tank. At launch, the solid rocket boosters (SRB) and the main engines were all running so technically they can all be considered part of a “first stage”. The SRBs would expend their propellant in around two minutes and separate. They dropped into the ocean, slowed via parachute, and were recovered by boat and refurbished. The three space shuttle main engines would continue to burn for several more minutes until the external tank was depleted. The ET would be discarded and burn up on reentry. Then the orbiter would use two small rockets with internally stored hypergolic propellants to boost up to its intended orbit.
Apollo/Saturn had a much more traditional staging design where the first stage booster would run then drop off, then the second stage booster would run, then drop off, etc. There exist other rockets like the Atlas which had what they called a “stage and a half” design where the center stage burned for a long time and there was an outer “ring” stage that dropped off after a shorter time while the center stage kept going.
After going to the moon, the only part of the entire Apollo/Saturn rocket that came back was the command module capsule with the astronauts and moon rocks. These were completely torched and affected by salt water and were not designed to be reused. Reentry from the moon is significantly faster than reentry from low earth orbit.
The shuttle orbiters were refurbished and reused. It was a very difficult, expensive, and time consuming process to get an orbiter ready for another flight.
All of that is to say that the picture is blurry for the shuttle regarding first stage reusability. Yes the SRBs and orbiters were reused and were lit at launch. The ET was in use at launch but discarded. In my opinion it’s sort of not that interesting to argue what is and isn’t first stage on the shuttle because the elements just don’t map cleanly.
The design of the system with the SRBs, tank, and orbiters being adjacent to each other is considered by many to have been too dangerous in retrospect. This design was a factor in both shuttle disasters - the SRB shooting fire at the ET causing it to explode on Challenger and cracked foam falling away from the ET during launch and hitting the leading edge of the orbiter wing for Columbia. If they were stacked vertically rather than adjacent, those specific failure modes would not have been possible.
All this is irrelevant. The shuttle required so much inspection, refurbishment, and repair that it was little more than the world's largest and most expensive piece of political pork for a giant PR stunt. Contractors were selected so that every state had a contractor making shuttle parts in order to bribe congressional reps into supporting the massive boondoggle.
Each launch cost almost half a billion dollars in 2010 money. The Falcon 9 is reportedly $60-65M per launch.
SLS was just more of the same, welfare for all the states with contractors who grew fat and happy off the shuttle contracts. There was no technical argument whatsoever for reusing such ancient technologies.
Each RS25 engine cost $35M to refurbish for use in the SLS. For the cost of building TEN falcon 9 engines, NASA refurbished one RS25 engine.
And yes, of course it was absurdly dangerous to rely on not just one but two solid rocket motors of which there is no control whatsoever except for slight thrust vectoring...
I understand the costs were higher. Albeit, it could be called a political stunt, did it not provide a lot of employment? So, while inefficient was it not a good thing (in at least the short-term, the long-term could be debated).
My understanding of the federal government of the US is that it is mainly a subsidizer of their national military-industrial complex. Something I would call: military-industrial socialism.
With that said, it is just more of the same in a different era. 1930s and the Empire State Building: to re-invigorate the economy, Eisenhower and the interstate highway system: to provide a stronger national defense, etc
Even more stark, the raptor 3 supposedly costs <$500k to build, so you can get around 70 (almost two full starship stacks worth) for the price of refurbishing one of those engines.
> From my elementary school memories, the Space Shuttle used a giant center rocket and two booster rockets that we expendable
That's incorrect. The orange "giant center rocket" had no engines, it was an external tank which held the propellant burned by the orbiter's main engines. The SSMEs were on the "Shuttle thing" and were reused.
Let's be realistic though, it's nothing to do with the 'Silicon Valley mindset'. It's just the classical route to dethroning a poor-performing incumbant - hire good talent, throw lots of money at reasearch and stay focused on the smallest targets where you can demonstrate the biggest progress.
Despite his projected persona, Musk would love nothing more than to get to the position of being the bloated encumbant supplier with guaranteed government contracts regardless of results.
>Despite his projected persona, Musk would love nothing more than to get to the position of being the bloated encumbant supplier with guaranteed government contracts regardless of results.
I'm impressed you can keep saying this nonsense despite how SpaceX operates being pretty well documented.
We do have a large number of wealthy people who are all about that and I find it mind boggling. What kind of idiot decides that the most important thing to them after they already have over a billion dollars is to get more? Why not try to do new risky things that are unlocked by that money? How're they really just all about a "number go up" game?
Fortunately it seems that we also have quite a few wealthy people that actually want to use their money to fund and do new and innovative stuff.
Musk has done some impressive things for himself. Along the way he’s helped out society. Now it seems as though he’s done with that and cares more about changing it match his image.
Your say that believing the downfall of Boeing is reflective of the downfall of all of society is "melodramatic", and then spend the rest of your post explaining how Boeing's failures are exasperated by failures in government and other organizations. You defeat your own argument.
There US Army generally has one tourniquet that it’s deemed best. The CAT by North American rescue. Every Soldier is awash in these things. They hand them out like candy on Halloween. And rightly so.
But the Government has to buy them from businesses that meet certain characteristics. Woman owned, etc. That’s a great thing, right?
In this case however, that female owned business is the guy who invented the things wife. Who he sells them to at a mark-up. Who then sells them to the government.
Economy of scale? Ya! They are the number one buyer and pay the most. Honestly, who cares though, it’s only a couple million a year. Drop in the bucket.
How did Boeing fail? Death by a thousand cuts. That same story probably plays out across the entire supppy chain. Every part, every product, every supplier. Compounded over and over again.
That sounds like embezzlement in the USSR but painted with capitalism colors. Quid pro quo siphoning at every layer, undetectable as a whole, but a giant boulder of dead weight for the system.
> - The government is not a good allocator of funds, free market competition works a lot better for creating the best product.
Government aquisition is a monopsony (market dynamic where there is one purchaser who wields all the power) which means "free market competition" doesn't exist. This causes lots of negative consequences. Here's a discussion of the topic in the context of defense but a lot of the same surely applies to space.
This idea of neverending public-private partnerships, where Congress dumps money into the same tiny group of companies for decades and gov agencies just sit around finding new things for these same companies to build (over budget and way too late), was always going to get to a breaking point of dysfunction. Whether it's military or infrastructure or whatever.
The gov created this environment and the private companies protect it because it's big money and grease it so it's the only option (like selling the bullshit idea "no one else can do what [Boeing] does cuz we huge staff counts and billions").
They both enable each other
And people are too scared to have a system that encourages new smaller companies take part because they don't have fancy sales pitches or fail early prototypes or take longer to get to Step A. And everyone criticizes them to death. So the only option is to get bought by Boeing or Lockheed, who then do really good at Step A just to fail a Step C and D and E.
I fully agree. There has to be some disruption to allow a healthy competition to exist. This will allow at least the possibility for better companies to thrive. At present the behemoth contractors are propped up by the fact that people will always say the small upstarts can't scale enough to meet the needs of the massive purchaser. Companies like SpaceX on the space side and Anduril on defence are showing that innovation is possible in these industries, and that small companies have something to offer. In both cases they probably got more of an audience in government than the average startup because of high-profile connections (Musk and Thiel respectively). It would be great if the playing field were set up such that others could also innovate and disrupt without having that leg up.
In the late 00's there were billions on the table of junk contracts for parts service training with crazy pricing to the USAF.
I would speculate that when those got shaken out, (and likely some space contracts sniped away by SpaceX) Boeing did not make any adjustments for the revenue loss and simply tried to continue on their original bloated trajectory but instead cutting every corner possible along the way.
> Boeing is a 'too big to fail' corporation with a significant source of revenue coming from the government. 40% in 2024¹, billions of dollars of public funds! Just a bit more and it would be mostly state-funded.
SpaceX (as of a year or two ago) was getting 45%+ of its funding from the US government.
And then there's the $900M in subsidies SpaceX asked for to provide rural internet access via starlink...
> The government is not a good allocator of funds, free market competition works a lot better for creating the best product.
That doesn't explain why their civilian aircraft aren't just not the best product, but have gone completely to shit over the last decade or two. The 737 max is the most notorious example here, as it's their most recent development and has never been good from the start - but reporting suggests that the engineering on their formerly-good lines has been going downhill also, and it's only the fact that they started out as good products which means they've taken longer to fall as low.
And there's very little government revenue for the civilian aircraft design and manufacturing side of the business. It's all free market competition.
> gone completely to shit over the last decade or two
Has the 777 and 787 done this? I don't think so. Yes, Airbus has many competitive aeroplanes in adjacent categories now, but that does mean the originals (and their many sub-models) from Boeing have "gone completely to shit".
My more thoughtful reply: I think "too big to fail" gets a bad rap on HN. In my view, for any sufficiently large country+economy, at some point, your top 3-5 defense contractors will be considered "too big to fail". No way around that. Depending upon the size of your country+economy, this is true for steel manuf also, but probably just the top 1-2.
Has anyone with great expertise in Boeing considered the effects of a break-up? I'm not sure why Boeing needs so many different industries under one roof -- space, civil, military, plus others.
- Boeing is a 'too big to fail' corporation with a significant source of revenue coming from the government. 40% in 2024¹, billions of dollars of public funds! Just a bit more and it would be mostly state-funded.
- They're the 4th biggest American defense contractor, so they're likely seen as vital for securing state power by many in the government.
- The government is not a good allocator of funds, free market competition works a lot better for creating the best product.
Using Ockham's razor, here's my guess what happened: To get in this position in the first place, there will have been a fair bit of lobbying and "greasing the wheels" involved. Boeing eventually found themselves in a position where they got government contracts, no matter what. Leadership got complacent, they didn't really compete anymore because they didn't have to. This was when Musk came in and disrupted the space industry. But at that point, company culture was likely already too far down the drain for quick fixes. The situation would already be much worse for their space division, if not for the fact that they have such good relations with NASA and the government. NASA basically covered for them and played down the seriousness of the issues for weeks. And even now, they're not having SpaceX rescue the astronauts immediately, which would be even more embarrassing for Boeing. Instead they're bringing them back together with the already planned SpaceX Crew-9 flight next year. Boeing keeps getting away with black eyes, there aren't enough consequences despite all the serious issues.
¹ https://www.seattletimes.com/business/boeing-aerospace/why-u...