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ElLobo
Participant ○○○

Corporate America Icons, Boeing and GE, what went wrong?

It's interesting that two GIANT technologically advanced companies, Boeing and General Electric, have both struggled in the 21st. century, but for different reasons.  The two are especially related today, given that the new GE engines, used on the Boeing 737Max airliner, led to the engineering problems that resulted in the 2 recent crashes that have grounded the Max.  Those problems, IMO, are a direct result of a change in the corporate culture at Boeing, where those particular chickens have come home to roost!

This Atlantic article, "The Long Lost Flight That Sent Boeing Off-Course", from November, succinctly describes the change in corporate engineering culture at Boeing whenever Boeing merged with McDonald Douglas in 2000.

This article, "How Decades of Bad Decisions Broke GE", from CNN Business, describe the demise of GE.

Here are the stock prices for BA and GE since Jan 1, 1999.  Since then, BA has returned 14% (average annualized, CAGR) to date, GE has lost -2.25%.

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14 Replies
ECEPROF
Participant ○

Re: Corporate America Icons, Boeing and GE, what went wrong?


@ElLobo wrote:

It's interesting that two GIANT technologically advanced companies, Boeing and General Electric, have both struggled in the 21st. century, but for different reasons.  The two are especially related today, given that the new GE engines, used on the Boeing 737Max airliner, led to the engineering problems that resulted in the 2 recent crashes that have grounded the Max.  Those problems, IMO, are a direct result of a change in the corporate culture at Boeing, where those particular chickens have come home to roost!

This Atlantic article, "The Long Lost Flight That Sent Boeing Off-Course", from November, succinctly describes the change in corporate engineering culture at Boeing whenever Boeing merged with McDonald Douglas in 2000.

This article, "How Decades of Bad Decisions Broke GE", from CNN Business, describe the demise of GE.

Here are the stock prices for BA and GE since Jan 1, 1999.  Since then, BA has returned 14% (average annualized, CAGR) to date, GE has lost -2.25%.


 Add Sears, K-Mart, Radio Shack, etc. I understand that US Steel opened some plants and closed them again after 6 months because it could not compete with cheap steel from other countries even after tariff was imposed.

This why investment decisions should be made not backward looking PV simulations but forward looking. Since no one knows which one will bubble up and which ones would go down, VTI makes sense because the portfolio automatically will adjust.

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ElLobo
Participant ○○○

Re: Corporate America Icons, Boeing and GE, what went wrong?


@ECEPROF wrote:

@ElLobo wrote:

It's interesting that two GIANT technologically advanced companies, Boeing and General Electric, have both struggled in the 21st. century, but for different reasons.  The two are especially related today, given that the new GE engines, used on the Boeing 737Max airliner, led to the engineering problems that resulted in the 2 recent crashes that have grounded the Max.  Those problems, IMO, are a direct result of a change in the corporate culture at Boeing, where those particular chickens have come home to roost!

This Atlantic article, "The Long Lost Flight That Sent Boeing Off-Course", from November, succinctly describes the change in corporate engineering culture at Boeing whenever Boeing merged with McDonald Douglas in 2000.

This article, "How Decades of Bad Decisions Broke GE", from CNN Business, describe the demise of GE.

Here are the stock prices for BA and GE since Jan 1, 1999.  Since then, BA has returned 14% (average annualized, CAGR) to date, GE has lost -2.25%.


 Add Sears, K-Mart, Radio Shack, etc. I understand that US Steel opened some plants and closed them again after 6 months because it could not compete with cheap steel from other countries even after tariff was imposed.

This why investment decisions should be made not backward looking PV simulations but forward looking. Since no one knows which one will bubble up and which ones would go down, VTI makes sense because the portfolio automatically will adjust.


Boeing has only one competitor, Airbus, while GE has two, Rolls Royce and Pratt & Whitney.  The barriers to entry in the airplane business are astronomical.

This Off-Topic thread wasn't about investing, per se.  Besides, which of these two tech giants looks to be the better investment, going forward? 8-)

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steelpony10
Participant ○○

Re: Corporate America Icons, Boeing and GE, what went wrong?

         El - BA. We’ll hold it for another year or so as a growth holding. If the current dilemma (or worse another bad revelation) doesn’t show clear progress towards a resolution in 2021 out it goes. If another market sale occurs before then sayonara. You can’t win them all.

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ElLobo
Participant ○○○

Re: Corporate America Icons, Boeing and GE, what went wrong?


@steelpony10 wrote:

         El - BA. We’ll hold it for another year or so as a growth holding. If the current dilemma (or worse another bad revelation) doesn’t show clear progress towards a resolution in 2021 out it goes. If another market sale occurs before then sayonara. You can’t win them all.


Again, it was more of a rhetorical question than anything else.  My OP was more for the storyline behind  the events that caused the demise of one tech giant, GE, but probably not the other, BA.  Some, recently, are wondering ifn the 737Max problems will lead to the demise of Boeing.  That won't do it, based upon this related article:

"How the Bizarre Economics of Airplanes Raises the Stakes of the Boeing Fallout"

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yogibearbull
Valued Contributor

Re: Corporate America Icons, Boeing and GE, what went wrong?

Same GE-Safran engine is used in Boeing 737 MAX and Airbus A320neo. So that engine isn't the problem and GE-Safran is now going to produce more of them for A320neo. When 737 MAX is cleared to fly, Boeing may find shortage of those engines.

How Boeing placed those engines in an old air frame and tried to fix aerodynamics by anti-stall software MCAS is what caused the problem for 737 MAX.

GE has been doing fine lately, thank you.

YBB
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ElLobo
Participant ○○○

Re: Corporate America Icons, Boeing and GE, what went wrong?


@yogibearbull wrote:

Same GE-Safran engine is used in Boeing 737 MAX and Airbus A320neo. So that engine isn't the problem and GE-Safran is now going to produce more of them for A320neo. When 737 MAX is cleared to fly, Boeing may find shortage of those engines.

How Boeing placed those engines in an old air frame and tried to fix aerodynamics by anti-stall software MCAS is what caused the problem for 737 MAX.

GE has been doing fine lately, thank you.


Yup, I know, Yogi.  Again, my point, on this Off Topic forum, was more on the cultural problem, at Boeing, over the last 20 years.  It was interesting, at least to me, the problems that GE had over that same time period.  Neither were 'technical' problems.  Both companies are high tech.

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gilvkona
Explorer ○

Re: Corporate America Icons, Boeing and GE, what went wrong?

Yogi, I think you over simplifying the problem.  We wouldn't be having this discussion if the AoA sensor didn't fail.  I think Boeing screwed up in either not disclosing or knowing how bad it would be if the sensor failed.  Certainly the MAX software didn't account for this.  And they let everyone down by not providing sufficient training.  I think those things will be remedied and the MAX will fly again.  They also now will have two computers comparing sensor input so that's another good approach.

Hindsight being 20-20, it is so sad they just didn't build the new narrow body airplane instead of trying to modify the 737NG with the larger engines.  That plane would be out now and I'm guessing it would be a step ahead of the A320NEO.  But BA was bleeding money with the 787 being late.  Who knows.  I sure hope all goes well with the return to service of the MAX.  I understand test flights with the regulatory agencies starts next week.

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ECEPROF
Participant ○

Re: Corporate America Icons, Boeing and GE, what went wrong?

AI is the new high tech. Manufacturing is old. But, the manufacturing can also AI to solve many of their problems.

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ElLobo
Participant ○○○

Re: Corporate America Icons, Boeing and GE, what went wrong?


@gilvkona wrote:

Yogi, I think you over simplifying the problem.  We wouldn't be having this discussion if the AoA sensor didn't fail.  I think Boeing screwed up in either not disclosing or knowing how bad it would be if the sensor failed.  Certainly the MAX software didn't account for this.  And they let everyone down by not providing sufficient training.  I think those things will be remedied and the MAX will fly again.  They also now will have two computers comparing sensor input so that's another good approach.

Hindsight being 20-20, it is so sad they just didn't build the new narrow body airplane instead of trying to modify the 737NG with the larger engines.  That plane would be out now and I'm guessing it would be a step ahead of the A320NEO.  But BA was bleeding money with the 787 being late.  Who knows.  I sure hope all goes well with the return to service of the MAX.  I understand test flights with the regulatory agencies starts next week.


Some insight on this subject. 

The point of this particular thread is that Boeing would not have had this problem had the Max came out before 2000!  Real engineers would not have let it.

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ElLobo
Participant ○○○

Re: Corporate America Icons, Boeing and GE, what went wrong?


@ECEPROF wrote:

AI is the new high tech. Manufacturing is old. But, the manufacturing can also AI to solve many of their problems.


AI high tech won't move 230 people 6,000 miles at 35,000 feet in the air, powered by AI jet engines! 8-))

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pudman
Participant ○

Re: Corporate America Icons, Boeing and GE, what went wrong?

A lot of folks in Seattle, especially employees of the Lazy B, believe that it went off course the day it moved HQ to Chicago. I have a lot of family and friends that were/are Boeing engineers and they all say that the company culture changed - for a number of reasons. The main one seemed to be it went from a long term  engineering quality production mode to a more short term profit concerned bean counter one. This has been a constant and consistent refrain since the move. I enjoyed working there so very long ago but, based on what I've heard over the past 20 years or so, wouldn't now.

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ElLobo
Participant ○○○

Re: Corporate America Icons, Boeing and GE, what went wrong?


@pudman wrote:

A lot of folks in Seattle, especially employees of the Lazy B, believe that it went off course the day it moved HQ to Chicago. I have a lot of family and friends that were/are Boeing engineers and they all say that the company culture changed - for a number of reasons. The main one seemed to be it went from a long term  engineering quality production mode to a more short term profit concerned bean counter one. This has been a constant and consistent refrain since the move. I enjoyed working there so very long ago but, based on what I've heard over the past 20 years or so, wouldn't now.


From my OP:

"This Atlantic article, "The Long Lost Flight That Sent Boeing Off-Course", from November, succinctly describes the change in corporate engineering culture at Boeing whenever Boeing merged with McDonald Douglas in 2000."

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pudman
Participant ○

Re: Corporate America Icons, Boeing and GE, what went wrong?

Yeah, that.

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ECEPROF
Participant ○

Re: Corporate America Icons, Boeing and GE, what went wrong?


@ElLobo wrote:

@ECEPROF wrote:

AI is the new high tech. Manufacturing is old. But, the manufacturing can also AI to solve many of their problems.


AI high tech won't move 230 people 6,000 miles at 35,000 feet in the air, powered by AI jet engines! 8-))


True. My wife flies 10k Miles one way every year to pay the property taxes and also to do the maintenance of her home there. But, safety is an important aspect. This is where AI will help. Engine is just a dumb mechanical device but it's control is more important. I can go into more details because I am engineer first before I became a professor. But, not here.

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