Thread by @matthewstoller

1. Today I wrote about how a merger in the 1990s pushed by the Bill Clinton administration helped lead to the 737 Max fiasco. Massive seemingly unrelated social problems often seem to comes back to monopoly. mattstoller.substack.com/welcome

2. For much of the 20th century, Boeing was an incredible company, "less a business than an association of engineers devoted to building amazing flying machines.”

Its engineers conceived of the B-52 in a weekend. A weekend!

3. Boeing made miracles.The 737 started coming off the assembly line in 1967, and it was such a good design it was still the company’s top moneymaker thirty years later. Ten upgrades that worked. An incredible product for humanity.

archive.fortune.com/magazines/fort…

4. The engineers, civilian engineers with deep integrity and professionalism, were in charge. But in 1993, Defense official Bill Perry told defense contractors to merge, and had the Pentagon subsidize the mergers. This was the last supper. theamericanconservative.com/articles/ameri…

5. And this began the fall of Boeing. In 1997, Boeing bought McDonnell Douglas, a company run by financiers. This killed competition in aviation. And somehow McDonnell Douglas execs came out on top. They started pillaging the civilian engineering culture at Boeing.

6. The joke in Seattle was, "McDonnell Douglas bought Boeing with Boeing's money." Financialization came. An analyst noted, "Some of the board of directors would rather have spent money on a walk-in humidor for shareholders than on a new plane."mattstoller.substack.com/welcome

7. In 2005, Boeing brought on as CEO James McNerney, a former General Electric exec trained by Jack Welch on how to ruin industrial companies with finance. He did, launching the ill-fated 737 Max project.

8. But even before that, Boeing was falling apart. Immediately after the merger, the company began radical offshoring, both to cut costs and to curry favor with other counties. Want a Boeing plant? Buy some 747s! That's a bad way to design an airplane. chuckspinney.blogspot.com/2011/02/why-bo…

9. The 787 Dreamliner, the first civilian plane designed after the merger and with the new fancy Harvard Business School oriented "cost-cutting," ran over cost by $12-18 billion. That's a lot of money, even for Boeing. And it had safety problems. chuckspinney.blogspot.com/2011/02/why-bo…

10. The key decision for the 737 Max wasto upgrade the 737 model. That way, airlines would be able to buy the plane and not have to retrain their pilots, as pilots must be re-certified for a new aircraft model but don’t have to be recertified for upgrades of old models.

11. But sticking new engines on an old frame wasn't safe. So what did Boeing do? Go back to the drawing board right? Ha. That was the old Boeing. The new Boeing patched the problem with a software bandaid. And basically lied about it. spectrum.ieee.org/aerospace/avia…

12. The civilian division was taken over by the corrupt military procurement guys. The engineers were so angry that they... unionized and struck. But they lost. "We weren't fighting against Boeing," said the union leader. "We were fighting to save Boeing."

13. The current CEO, Dennis Muilenburg career is overseeing one failed bloated project after another in defense, greased by crooked lobbying influence and top level military officials coming in and out of the defense space. The corruption ruined the civilian division.

14. The 737 Max was the worst of all worlds. Monopolization through the merger, and corruption from the defense base, and financialization through GE and Wall Street influence. The engineers doing the software patch were paid $9/hour! bloomberg.com/news/articles/…

15. The net effect of the merger, and the follow-on managerial and financial choices, is that America significantly damaged its aerospace industry. And I don't see how Boeing survives in its current form. Who trusts this company? How much liability will it carry?

16. How can the company sell 737 Max planes? The brand is toxic. Eventually the government is going to have to step in, as it did with Lockheed in 1971, and restructure the company. mattstoller.substack.com/welcome

17. Flight is a gift to humanity and we threw it away so people on Wall Street could have more zeros on a spreadsheet. That's not real wealth, it's fighting over social hierarchy by short-sighted greed heads. And now, planes fall out of the sky. mattstoller.substack.com/welcome