Boeing Sells 0 Planes on First Day of Paris Air Show v. 123 for Airbus, Yet Boeing Still Pushing for More Weakening of FAA Standards Via Greater Use of Computer Testing

Boeing execs must be smoking something very strong.

The manufacturer first tried blaming pilots for its two 737 Max crashes, even after groundings by airline regulators showed they thought something was wrong with the plane. Even as of this week, CEO Dennis Muilenberg has only gone as far as admitting to being “not consistent” in how Boeing conveyed information to regulators, airlines, and the public. And the apology was limited to the aircraft lights!

Muilenburg is still standing because he has the support of his board…a situation reminiscent of John Stumpf’s final days at Wells Fargo, where the embattled CEO stayed long after his sell-by date thanks to misplaced loyalty.

Muilenburg and his allies on the board appear to think that the Boeing 737 Max debacle will eventually blow over despite major customers continuing to suffer during peak travel season by having 737 Maxes mothballed, the continuing uncertainty as to when the plane will be allowed to fly again (even if the FAA gives a green light relatively soon, what about foreign regulators?), and continuing doubts about the airplane’s safety among high-profit business travelers.

And the latest stories don’t offer any cheer. For instance:

Airbus, in blow to Boeing, to launch new long-range jet Fox

Boeing employee: I would not put my family on a Max plane right now KIRO Radio

But even though Boeing directors have been telling themselves that the FAA is joined to Boeing at the hip and customers have no where to go (at least for years) given that Airbus can’t displace Boeing any time soon, the critical second assumption is not looking so good. Boeing’s most important audience, its buyers, have given the airline maker a loud wake up call by refusing to place any orders at the first day of the Paris air show.

From CNBC:

Boeing knew the Paris Air Show would be slow, but this may have been worse than they expected. On day one of the show, Boeing did not announce a single new order for any of its airplanes, while Airbus recorded orders and options for 123 planes, according to the aviation consulting firm IBA.iQ.

On top of that, some customers are coming awfully close to calling for Muilenburg’s head. From the Seattle Times:

One of Boeing’s biggest 737 MAX customers sharply criticized the company’s handling of the crisis resulting from two recent crashes, and raised the stark question of whether Boeing Chairman and Chief Executive Dennis Muilenburg will be forced out as a result.

In an interview at the Paris Air Show, Avolon Chief Executive Dómhnal Slattery, who runs the third-largest airplane leasing company in the world, said the additional bad news in Paris on Monday of a delay to the 777X program will only feed “the swirling debate: whether Muilenburg will survive all of this.”

“I think he has the support of the Boeing board,” Slattery said. “But our view here is that Boeing have failed to win the media communications battle. They are forgetting about the most important constituency, which is the hundreds of millions of potential passengers.”

He said the refusal of Boeing to fully and publicly accept its share of the blame, an approach that has produced awkward moments with Muilenburg seemingly bound by legal restrictions from being too plain-spoken, has damaged Boeing’s reputation, especially overseas.

“You can understand that as a legal strategy,” Slattery said. “But if you play that out to its Black Swan scenario, there’s a scenario that says the aircraft program gets canceled.”

And in a continuation of Boeing’s tone deafness, the manufacturer is acting as if nothing has happened and it can continue down the path of further weakening FAA oversight and streamlining, as in reducing, its safety checks by relying more on computer models. From Reuters:

Boeing Co engineers are reducing the scope and duration of certain costly physical tests used to certify the planemaker’s new aircraft, according to industry sources and regulatory officials.

Several Boeing 777X aircraft are seen in various stages of production during a media tour of the Boeing 777X at the Boeing production facility in Everett, Washington, U.S., February 27, 2019. REUTERS/Lindsey Wasson
But the strategy could be at risk if regulators and U.S. lawmakers probing two deadly Boeing plane crashes require even more rigorous safety tests before certifying new aircraft as passenger-worthy.

As Boeing kicks off the year-long flight testing process on its new 777X, its engineers will cut hours off airborne testing by using computer models to simulate flight conditions, and then present the results to the U.S. Federal Aviation Administration (FAA) as part of the basis for certification, according to two people with direct knowledge of the strategy….

For Boeing’s proposed twin-aisle jetliner, known internally as NMA, Boeing’s Test & Evaluation group is developing the technology to replace costly and labor intensive physical safety tests used for decades – such as using machines to bend the wings to extreme angles and shaking the fuselage until it cracks – with computer modeling, according to three people with knowledge of the matter, including an FAA official.

Boeing really seems not to get how much trouble it’s in. The last thing it needs to be moving forward right now are changes in its certification process when it just had a massive de facto self certification failure. Recall an important Seattle Times story that described how the FAA greatly weakened supervision in 2004, and how over time, Boeing became aggressive in exploiting the new system.

It’s stunning that Boeing seems not even to understand that the multiple failures of its MCAS software (plane trimming down more aggressively than pilots could reverse, resulting quickly in a 40 degree nose down; barmy decision to rely on only one angle of attack sensor) resulted at a minimum from the software developers not understanding the engineering issues remotely well enough to devise sound remedies. For the purposes of this post, it doesn’t matter precisely how that came about, merely that it’s evident at Boeing that the the coders don’t understand how planes work remotely well enough to put their hands up and say “Does that make sense?” And it also suggests that the coders were given bad specs, which points to breakdowns on the engineering side.

Moreover, with it having become obvious that Boeing has captured the FAA, if Boeing were to succeed in getting the FAA to agree to reduce its physical testing any time soon, it would give foreign regulators an excuse to insist on doing their own certifications, not just for the return of the Max 737, but going forward. Having to get approval from multiple regulators (even if they were “certification lite” on specific issues) would put Boeing at a huge disadvantage to manufacturers who would face only one certification because their regulators were still trusted. As Marshall Auerback said via e-mail, ” I’m sure they are popping champagne at Airbus today.”

Consider this corroborating evidence from the Boeing employee on KIRO:

Stuart argues that Boeing CEO Dennis Muilenburg inherited a range of issues from previous leadership. These issues include bad relationships with suppliers. He said previous leadership “despised engineers.” And he says he would hate to see Muilenburg go. Still, he doesn’t not describe a pleasant environment at work.

The way management kind of works is we never really know who our managers are sometimes,” he said. “We get shuffled around so much that our job codes, our job titles, everything changes. Because they are trying to make progress.

Now in fairness, Boeing does have a point. The physical tests are so crude and costly that rather than run them enough times to know where the tolerances are, engineers would build in a large margin of safety so as to not have to run tests a ton of times. As software developer and pilot Gregory Travis explained by e-mail:

It’s much cheaper to use simulators to train pilots, to use computers to analyze structures, etc. The proponents of simulation don’t openly talk about the economic benefits but they will argue, with some justification, that the computer allows a much higher frequency of testing. For instance, you can simulate a dozen engine failures at takeoff in a simulator an hour whereas you’d be hard pressed to practice two real engine failures an hour in a real airplane.

Same thing with fatigue cycles — a computer can simulate decades of cycles on an airframe in a few hours of CPU time whereas doing so with real airframe can take years (as it did for the Comet airliner)

The REAL payoff from computer analysis and simulation is the opportunity to value engineer the crap out of the airframe. By that, I mean to say to get the structure as close to the certification requirements (for strength, etc.) as possible without violating them.

For example, most commercial airliners must be shown to withstand a positive G-factor of 2.5 with a safety margin of 1.5. Meaning the airframe must be able to tolerate 2.5 Gs without any damage and it must be able to go to 3.75 Gs (2.5 times 1.5) before anything starts to break.

In the old days, engineers would just kind of guess at how strong they needed to make certain structures, like the wings, in order to meet those requirements. And then they would test their assumptions by putting the wings in a big tool that bent the wing until the wing broke, hopefully well in certifiable territory.

Now you can imagine that building a wing and the jig to bend it until it breaks is a terribly expensive thing to do. Why not have a computer:

a) Spit out the numbers that tell you EXACTLY how thick the wing spar needs to be so that it won’t fail at 3.75 Gs but will fail at 3.76 Gs — meaning it meets the certification requirements and not an inch more.
b) Self-certify that it’s calculations (the computer’s) are correct.

Planes like the venerable DC-3 were significantly “overbuilt” with regard to the certification requirements and regulations because the engineers at the time had no easy way of knowing how close they were to the requirements. And what they could do involved destructive testing (breaking wings, drop tests, etc.) that were hugely expensive. So they had a habit of coming up with numbers and then adding a generous amount of “Jesus Padding” to them. For example, if they thought that the wing spar needed to be 1/4” thick to satisfy the requirements (much less survive what they hoped would be only ONE drop test*), they’d make it a 3/8”th thick instead.

This added weight and expense to each aircraft produced. But at the insurance (for the engineer’s career) that it was going to be strong enough not only to pass the destructive tests but to not come apart in flight at loads below the certification criteria.

Modern computer modeling now tells them that the wing spar needs to be exactly 3/16”th thick to (barely) meet the certification criteria. And there’s no necessity to “drop test” the airplane to make sure that’s right. The computer is never wrong :0-(

* Drop tests are just one of many possibly destructive tests. It involves literally dropping the entire aircraft from 9 feet up in the air onto the ground and ensuring that nothing breaks. The engineers want the first drop test to go well so that they don’t have to do any more. Thus there is a lot of encouragement to overbuild things like the wing spars, the landing gear (onto which the airplane is dropped), etc. If you don’t have to worry about failing the drop test (because the computer is going to simulate it with numbers the computer comes up with) that incentive disappears.

Drop tests are of course not the only test. There are others like the bend-the-wing-until-it-snaps test. The manufactures hate these tests because they are so expensive. Thus the HUGE impetus to be able to replace physical tests with computer simulations and call it a day.

That’s what we’re moving to. The end of the “overbuilt” aircraft. Because overbuilt isn’t efficient.

But the simulations aren’t always what they are cracked up to be. Travis points out:

The problems with the 737 MAX’s aerodynamics didn’t fully manifest themselves until they actually flew the plane. Initial wind tunnel testing and computer simulation showed that the pitch up problem wasn’t bad. It was only when an actual test pilot flew the actual plane that they realized how significant it was.

And that “inefficient” overengineering has saved lives. For instance:

China Airlines 006 comes to mind. This was a 747 that experienced engine failure in clouds. Because the pilot did not counteract the failed engine with sufficient rudder input, the aircraft rolled, inverted in the clouds, and passed well out of its never exceed speed. During the recovery, the airplane experienced G-loads in excess of 5 Gs — well beyond the certification criteria requirements.

The aircraft managed to land at San Francisco where several critically injured passengers were treated. On inspection, most of the left elevator was found to have dynamically disassembled (meaning it was gone) and the wings themselves were both bent upwards by two inches.

Nevertheless, the airplane was restored (the bent wings were left as-is) and returned to revenue service for another 12 years.

If the structure had been designed and built to only meet the certification requirements (i.e. by a computer), as opposed to being overbuilt, I would venture to say the wings would have come off.

Boeing is still relentlessly out to squeeze fatter margins out of its airplanes when it ought to get its house back in order on its commitment to safety, which is in turn the result of a commitment to good engineering. It’s becoming clear that that will take a considerable effort given how engineering is no longer valued and worse, people are shunted about to make which makes knowledge transfer even harder.

No one wants to believe that national champions can go into a tailspin, but Boeing is testing that assumption awfully hard. If it doesn’t get its priorities sorted out soon, expect its dive to accelerate.

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66 comments

    1. The Rev Kev

      Yeah, about that-

      https://www.airforcetimes.com/news/your-air-force/2019/06/13/kc-46-refueling-system-flaws-will-take-years-to-fix-and-cost-hundreds-of-millions-of-dollars-gao-says/

      As for the 737 MAX, I can’t see the solution as being a matter of rebranding, like Trump suggested, by calling the 737 MAX by another name such as the 737 NEW. I am willing to bet that this bird won’t be flying till next year and although it may not be totally a failed design, the Europeans, Russians and Chinese among others have been gifted nearly a year in development time and production time which money cannot buy.

      Reply
    2. Fazal Majid

      Military contractors are utterly corrupt and it was inevitable the gangrene would consume the entire company after Boeing bought McDonnell-Douglas.

      Reply
    3. zer0

      Exactly.
      “Boeing execs must be smoking something very strong”
      Yup, greenbacks garaunteed no-bid contracts vis-a-vis DOD budget. Some billions worth.

      Reply
      1. Yves Smith Post author

        *Sigh*

        Making shit up is against our site Policies.

        Military sales are only ~ 30% of Boeing’s total revenues. Not remotely enough to carry the company.

        And the margins on the military side are normally in line with the commercial side:

        The company reported solid profit margins — 11 percent in the commercial-airplane unit and 11.3 percent in the defense division. Boeing raised its guidance on the commercial side’s profit margins to 11.5 percent for the year.

        https://www.seattletimes.com/business/boeing-aerospace/boeing-reports-strong-earnings-and-plans-increase-in-767-production/

        Reply
  1. XXYY

    Why not have a computer:

    a) Spit out the numbers that tell you EXACTLY how thick the wing spar needs to be so that it won’t fail at 3.75 Gs but will fail at 3.76 Gs — meaning it meets the certification requirements and not an inch more.
    b) Self-certify that it’s calculations (the computer’s) are correct.

    Computer-aided design is certainly a thing, I’m not saying it isn’t. But there are a couple of gigantic assumptions involved in CAD:

    (1) That the calculations performed by the CAD system are error free under all conditions. This is extremely hard to be sure of in software having real-world complexity, and generally remains an unsolved problem in the industry; and

    (2) That the reality represented in the software matches the reality of the world. For example, simulated carbon fiber behaves exactly like real carbon fiber across all conditions of vibration, temperature, loading, manufacturing defects, etc. This is generally a safer assumption for established materials and structures, and a less safe one for new materials and unfamiliar designs, which tend to appear in newer aircraft.

    I would say the proper use of CAD is to allow one to iterate faster toward a final design. An improper use of CAD is to substitute for real world testing, since part of what you’re verifying during tests is the CAD system itself.

    The idea that CAD simulations of a structure (or a whole aircraft) is being discussed as an alternative to testing is terrifying. The point of testing is to discover things you don’t know about. These will not show up in simulations.

    Reply
    1. vlade

      Indeed. There are actually methods how to get the best of two words, but they end up being somewhere in between the pure CAD and the real-world only. IMO they are still worth it.

      For the example in the post, it’s basically “computer says 3/16” “, so you do a real component with 3/16″, and stress test it. Repeatedly. If it works, it still saves costs long term, as you now know you can do 3/16 instead of 3/8”, but you still incur the expenses (including time) of physical testing.

      All good engineers use models (physical laws are models. Even for physical laws, lots of this involves partial differential equations, most of which can be solved only approximately, for given initial conditions – and a small change in initial conditions can lead to large difference in results). All good engineers understand that models have limitations, and generally build it into the result.

      Management, unfortunately, assumes that models are reality. This was true in finance, but is becoming true in real world engineering, unfortunately. It does not help that unis produce a lot of “engineers” that have no understanding of how things actually work. They know that if they put X into a formula, that says Y, and they can use it..

      Reply
    2. Jim A.

      Yes, the less a new design is like the ones that were used to create the modeling software, the less accurate the modeling software will be. New designs, materials, operating parameters will all make the modeling less accurate.

      Reply
    3. PlutoniumKun

      What’s often forgotten is that the tests themselves have to be tested to ensure they are accurate.

      As an example, in the early days of aviation it was standard to assess wing strength by tying weights to the wingtips to test deformation. In early WWI lots of German airmen died when wings ripped off during maneuvers that should have been within design criteria. It took a while for the engineers to work out that their test didn’t take account of torque on the wings in certain types of aerodynamic conditions (the early wings were often single spar designs). Since then its been standard to use two or more spars on all wings to resist torque effects.

      While computer modelling can be very accurate when dealing with ‘known’ engineering, you’d really wonder how it could be depended upon when assessing novel materials or aerodynamic designs. For example, the F-35 is now apparently limited to Mach 1.3 (its designed for 1.8) because the radar absorbing external materials apparently can’t take the stresses. Presumably, this was modelled during construction, but the real world seems a little different.

      Bottom line, I’d only be happy in a plane that’s been subject to computer safety modelling only after a generation of parallel testing to ensure its fully calibrated.

      Reply
    4. Math is Your Friend

      “(2) That the reality represented in the software matches the reality of the world. For example, simulated carbon fiber behaves exactly like real carbon fiber across all conditions of vibration, temperature, loading, manufacturing defects, etc. ”

      This also assumes that the aircraft has been properly and precisely assembled with no errors, and that maintenance has been flawlessly performed on schedule with correct genuine parts and products meeting the assumed specifications.

      There are a myriad of accounts of substandard assembly, counterfeit parts, incorrect maintenance, incorrect but similar parts, flawed design, unanticipated environmental stresses, improper repairs, incorrectly performed safety inspections, mistakes in washing aircraft, specified components failing to perform as expect… all of which I have seen as causes of failure in air accident reports spawned by aircraft incidents, many of them hull loss events (aircraft destroyed).

      Any of these can render the simulation inapplicable, after certification.

      At the least, such a change would seem to call for a mandated increase in the ‘margin for error’ in setting safety specifications.

      Reply
      1. Max Peck

        I assure you that aerospace engineers are fully aware of the issues you raise. See, for instance, any paper on simulation-based probabilistic risk assessment.

        It’s not a question of people being naive – it’s a question of how many failures per million flight-hours you (and the flying public) are willing to tolerate. The only way to make that number zero is not to fly. The realized number of failures per million flight hours has been steadily decreasing for decades, even including the 737 MAX accidents.

        I would add this: there is no way to design an airplane without having to guess/predict/simulate how it’ll behave in real service, because you can never exactly reproduce real service conditions in a test. There is always an element of educated guessing.

        Reply
    5. ChrisPacific

      Yes, I was going to make a post on the importance of testing simulation/model error, but I see it’s been explained well already on this comment thread.

      I cannot fathom what Boeing thinks they are doing with this. Lots of us who work in much less safety critical fields would never dream of doing what they are proposing. Yet they expect us to continue flying on their planes? I suppose in late stage oligopoly/monopoly capitalism we might not have a choice, but I don’t think we are quite there yet.

      Reply
      1. Dirk77

        Yes. I’m wondering how they could have found a group of engineers incompetent enough to backup something like this. But perhaps it was the more common case of management being tone deaf to their engineers. I seem to recall the first shuttle disaster in ‘86 had a similar dysfunctionality coming to a head.

        Reply
  2. Ignacio

    If overengineering saves lives the point of software self certification is…

    Boeing biggest problem is broken confidence and the solutions proposed look like a headlong rush to nowhere.

    Reply
  3. Peter

    I wonder – is that company in such dire straits that it cannot afford a good PR team advising them not to come up with BS that deteriorates customer confidence any further?
    The arrogance of the Bo(e)ing team is breathtaking.
    There is one advice – If you are in a hole, stop digging.

    Luckily, living in Europe, the companies I use fly Airbus…

    Reply
    1. J7915

      I worked for a sucontractor of Boeing, assembly of 757 fuselage sections. It was always “THE BOEING COMMERCIAL CO”. per the Boeing workers who came to familiarize themselves with our tooling and then they hauled it off to Seattle.

      Reply
  4. AEL

    There is a big problem with modern composites. Depending on how the exact circumstances of their manufacture, they can vary wildly in strength. This difference in strength is invisible until it fails. I suspect the computer simulations don’t account for “hungover operator” assemblies.

    Reply
    1. Lambert Strether

      And I bet there are plenty of hungover operators at the South Carolina plant, which sounds like a hellhole.

      Link on composites? I’m concerned about them too, but they’ve been in use for some time….

      Reply
    2. PlutoniumKun

      It always seems to take a generation to shake out the manufacturing issues of a novel material. Composites of course are not new in aircraft – the Mosquito was a wooden composite design. The reason why nobody used the Mosquito as the basis for civilian aircraft was, so far as I know, concerns that they couldn’t be certain that the laminar wings (essentially a sandwich of alternating layers of plywood) could be made consistently enough for civilian safety standards.

      Often bike manufacturers lead the way with testing lightweight materials. Aluminium frames hit the peloton in the early 1980’s and were eagerly adopted by the pro’s, but it took until the late 1990’s that they became consistently strong and safe enough for mass consumer use (Cannondales used to be called ‘Crack’n’Fails’ by many a rider). Carbon fibre bikes came along in the 1990’s, but it was at least 15 years before mass produced bikes became consistently strong – as with aluminium, the problem was consistency in manufacture, not the nature of the material. An off the peg carbon fibre bike frame is now just as reliable as an old steel frame, but it took them a long time to get there.

      While its not very pleasant if a bike falls apart on you on a big downhill, its not nearly as horrible as being in a plane. While composites are now mainstream on big and small aircraft, there are still occasional issues – in the case of this Cessna accident a few years ago, the issue was blamed on high humidity levels during manufacture.

      Reply
      1. fajensen

        Often bike manufacturers lead the way with testing lightweight materials

        …. So far keeping trauma nurses, orthopaedic surgeons and dentists very gainfully employed!

        Even us employees are mildly entertained when His/Her Leadership* shows up with a story to tell, while all covered up in plaster and reams of those clips the surgeons use instead of stitching when doing “bulk work”.

        *) Triathlon and Mountain Biking has replaced Golf as the management sport.

        Reply
  5. Synoia

    On top of that, some customers are coming awfully close to calling for Muilenburg’s head

    And he survives, in part, because he holds two position, CEO and Chairman of the Board.

    Personally, it seems impossible for the Board to oversee the CEO, when the Chair of the board is simultaneously the CEO.

    This appears rotten, and appears a significant contributor to the very questionable behaviors of US executives who hold these two positions.

    Reply
    1. Robert McGregor

      Muilenburg as simultaneously CEO and Chairman of the Board

      Why would a huge public company have one person in both jobs? Boeing is not a family-controlled company! It is not “Trump Inc.” That just seems blatantly foolish, or corrupt, or both.

      Reply
  6. Summer

    “And in a continuation of Boeing’s tone deafness, the manufacturer is acting as if nothing has happened and it can continue down the path of further weakening FAA oversight and streamlining, as in reducing, its safety checks by relying more on computer models.”

    Tone deaf? It’s like the monotone drone of a warped ideology. This greed and incompetence has people literallly falling from the sky to their deaths. It’s raining dead bodies and the Boeing execs are worried about it raining money.

    These execs are part of the same culture.

    https://www.theguardian.com/technology/2019/jun/18/libra-facebook-cryptocurrency-new-digital-money-transactions

    The company claims it will not attempt to bypass existing regulation but instead “innovate” on regulatory fronts…”

    Reply
    1. polecat

      Maybe forcing these $$$grubing Execs.. AND Boeing’s board of Directors to ‘test’ fly the 737 MAX .. or any other new design/software/system, without the aid of knowledgeable pilots .. just the software alone (After all.. who needs training, right guys?)… under real life and death conditions, and return by the skin of their teeth, might force the fear of Manna above all else, into their thick, obtuse skulls !
      Give em a taste of their own malfeasance, and see how THEY like it !

      Reply
  7. Synoia

    Boeing is still relentlessly out to squeeze fatter margins out of its airplanes when it ought to get its house back in order on its commitment to safety, which is in turn the result of a commitment to good engineering.

    No, this is not why Boeing is trying to reduce weigh from over engineered components. The primary reason for reducing weight is to reduce fuel consumption to reduce lifetime costs of operating the Aircraft. The cost of a tone of aluminum is trivial in comparison to the weight of the fuel saved over the life of the aircraft by eliminating that ton of weight.

    Two examples of why:

    If I recall correctly, A fully laden Boeing 747 weighs 150 tons at take off, of which 75 tons is fuel. When the aircraft reaches cruising altitude 50% of the fuel remains.

    I flew once on a 747 from Miami to Cape Town, on the death of my Mother. Again, If I recall correctly, the 747 did not reach cruising altitude until we were passing Rio De Janero in Brazil.

    If engineering can reduce the dead weight of the Airframe, they have done their jobs well.

    Reply
      1. Synoia

        Yes, and the connection between removing weight to fuel efficiency to customer costs is connected through a chain of pieces.

        The direct materiel weight removed is not the major saving, the operational life fuel efficiency is the objective.

        Reply
      2. Synoia

        In the discussion of removing weight, I’d be more concerned about potential errors in the software simulating the “real world” My first question on reading that was “how was the software tested.”

        Reply
        1. d

          Well based on what I do (testor) its usually based on what the creators think it should do. Now thinking that relates to the real world, in one word,no. Now some times thats because some customers/users opinion of what needs to be done and how it should work (which tends to ignore what was working and fixate on addressing what they think will fix their problem, even when they don’t know if what they will actually address their needs. And as a developer I thought what we needed was the dwin function (basically do what I need, not what I think I need)

          Reply
          1. Synoia

            One of the major software suites in aerospace, possibly then only one, is Catia, from Dassault Systems.

            Understanding their test regime would be interesting, if possible.

            Reply
    1. none

      There’s a saying among military contractors that the great thing about software is that it’s the only way to add costs without adding weight.

      Reply
  8. TimH

    https://www.bloomberg.com/news/articles/2019-06-18/british-airways-parent-signs-accord-to-buy-200-boeing-max-jets?srnd=premium

    “Boeing Co. announced its first deal for 737 Max jets since a March grounding that followed two deadly crashes, landing a $24 billion agreement with British Airways owner IAG SA.

    The airline group signed a letter of intent for 200 of the single-aisle planes, Boeing said in a statement Tuesday. IAG, led by a former 737 pilot, would take delivery of the planes between 2023 and 2027 assuming the deal is formalized.”

    Reply
          1. MIke

            No, BA is entirely privatised and is just one part of the Spanish-owned IAG.

            BA and its predecessor, BOAC have always been a Boeing-favouring airline. In the 19500s and 1960s they lobbied hard for American aircraft even when the UK still produced entire airliners. Amongst other planes they killed:

            The VC-7 which would have been the first big four-engine jetliner with a TransAtlantic range – BOAC said its Conway engines were unproven, then as soon as the VC-7 was killed, turned around and demanded money from the UK government to buy inferior Conway-powered 707s;

            BOAC bad-mouthed the Bristol Britannia turboprop long after its teething problems had been solved ensuring it sold badly and came late to market just as jets were taking over.

            The Vickers VC-10 was designed and built to a BOAC specification for the ‘hot and heavy’ routes through East and Southern Africa. When the plane was built, BOAC said it was more expensive than the 707 which was much less capable on those routes. In doing so, they pretty much killed off the UK civilian airliner industry.

            Reply
          2. Synoia

            I believe BA was cut off from the Government’s money sometime in the Thatcher era. When we flew BA, it was referred to as Bloody Awful. My mother tried all the alternatives.

            Reply
    1. Yves Smith Post author

      The current 737 Max customers are in a vise. Boeing is offering concessions on new buys to make up for the costs of the grounding. It may later leak out what sort of price cuts Boeing has given (or have to be included in the 10K for this year, which won’t be out till sometime in 1Q next year).

      The fact set is so bad that these customers could almost certainly win hard cash damages if they went to court, but a protracted trial, or even the filing of a suit, would further damage the image of the Max and thus the airlines that bought them.

      Reply
    2. The Rev Kev

      “assuming the deal is formalized”

      That’s a lot of qualification in that simple phrase. As Lambert would say, ‘assuming’ is doing a lot of work here.

      Reply
  9. Edward

    There may be a problem not just with Boeing’s credibility, but also America’s credibility. The United States has been demonstrating incompetence for years, such as with the 2008 crash or the F-35 program or the health care system.

    Reply
  10. Roy G

    MCAS is a fitting analogue to the MBA mentality; a narrow set of rules and parameters that can easily be perverted, thus steering the plane/corporation straight into the ground.

    Reply
  11. Tyronius

    I keep seeing the argument that Boeing’s problems only began when they bought McDonnell Douglas and were henceforth ‘corrupted’ by the Defense Department culture. This is blatantly wrong, or am I the only one who remembers the B-17 or B-29, among literally hundreds of other Boeing DoD projects?

    The problem is corporate capture of America’s political system, of which regulatory capture of the FAA, SEC, FDA and many others are symptoms rather than proximate causes.

    Reply
    1. johnf

      The B-17 may have been a military project, but I think it had just the opposite effect on Boeing. Its designers thought Murphy was an optimist. It had a lot of redundancy and margin, and could survive a tremendous amount of battle damage. I would argue that Boeing airplanes have been as safe and reliable as they are because they used to build bombers.

      Reply
      1. The Rev Kev

        Amen to that brother. Here is a selection of shots of shot-up B-17s that still made it back to base – along with their grateful crews-

        https://www.google.com.au/search?q=b-17+damage&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiYtM7JrfTiAhWNT30KHVqpBpEQ_AUIECgB&biw=1600&bih=755

        The DC-3 mentioned was also the same way and it had a reputation among pilots as being a very “forgiving” plane when it came to pilot error. It is such a great airplane that it continues to fly to this day-

        https://en.wikipedia.org/wiki/Douglas_DC-3#Douglas_DC-3_today

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        1. dcrane

          Amazing. One of the images toward the bottom mentions a plane that left with 10 aboard and came back with 11, the extra one being the body of a radioman that was thrown aboard during the midair collision that damaged the plane.

          Reply
    2. Yves Smith Post author

      The information you present does not disprove the thesis. Even now, commercial aircraft sales, even after the McDonnell Douglas purchase, are ~70% of Boeing’s total revenues. The military sales would have been even a smaller % of total sales before that.

      However, and I am not familiar enough with the history of these companies to know how this happened, McDonnell Douglas was the de facto acquirer. Its management came out on top and displaced Boeing top brass. So their way of doing thing was imposed on the old Boeing culture.

      Reply
      1. Dirk77

        Boeing bought both MD and the defense and aerospace part of Rockwell in 1996-1997.
        The Boeing CEO before and after the transition was Phil Condit, who later got booted from a scandal. Ex-MD CEO Stonecipher then took over before he also was booted in a scandal. I recall that Condit was big into shareholder value, so the writing was on the wall over 20 years ago. Also, any scorn for engineers is not recent. Boeing itself brought to the merger that processes were everything; people thus not so much. And this is true – partially. I’m sure Boeing is not alone in thinking that.

        I think NC and their readers have it right: Boeing is merely the latest victim of our free market capitalist system reaching its logical end. The only difference is that safety is very important for what they build. Thus all the news coverage.

        Reply
        1. Yves Smith Post author

          Again, I don’t know the history of this merger and its aftermath at all, but a famous case of a place coup by an acquired company was Salomon Brothers, which was bought by the giant commodities trader Philipps Brothers.

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  12. rtah100

    I don’t think BA (technically IAG) will go through with the Boeing order. They have placed it at a time of weakness for Boeing, extracted an excellent price and will now go to Airbus and say “Match this…!”

    From a straw poll of colleagues, none of us would fly with BA on the 737 Max….

    Reply
    1. John A

      TBH, Airbus has a full order book and is more likely to be able to offer a take it or leave it price to BA, were they to attempt that.

      Reply
  13. VietnamVet

    Global Monopolists won. They own governments. But they have existential problems. The ancient Brahmin superiority and corresponding contempt of the lower classes remains ingrained. They are shortsighted. The only thing that matters is short term profits. The only way to turn Boeing around is spend money to end the toxic workplace, assure communication up and down the hierarchy and reassert the primacy of engineering and science over finance. In the past, Empires self-destructed and civilization restarted all over again. If the human species is going to survive the nuclear age in a time of climate upheaval; Boeing and all human institutions must learn to cooperate and face reality. Democracy, equality, honesty, and the rule of law must be restored.

    Reply
  14. RBHoughton

    The big British Airways order for 737s published today is amazing for a cash-strapped company. There is more ‘blood is thinker than water’ about it that commercial common sense.

    I suspect it is an aspect of the new economic thinking that the really big companies have promoted. They approve monopoly business over competition and making the world safer for our core capitalists.

    Reply
  15. John Beech

    Latest news is Boeing sells 200 of the 737 Max airliners! Reported as $24B at retail. I’m thinking that’s a nice bit of business and I am very happy for USA USA! This is good for America and jobs.

    Reply
    1. The Rev Kev

      Great news that! Wonderful news. But what countries will let that bird overfly their own countries without some serious inspections first? Will British Airways 737 MAXs be able to overfly the EU countries at all? If not, you will have a plane that can only fly between the UK and the US – and maybe Canada. The FAA has no mandate in the EU remember.

      Reply
  16. Inode_buddha

    I’m listening very intently for any sound of Boeings board singing the praises of the “Invisible Hand”.

    Reply
  17. EoH

    Economic “efficiency” is about reducing cost and increasing profit. It’s a financial exercise that often conflicts with real world needs. Like comparative advantage, taken to the extreme, it makes a system increasingly vulnerable to failure.

    Resilience, OTOH, is an attribute that keeps real world processes working. Complex traffic systems, for example, need it to function. Increasingly complex aircraft need it to remain safely in the air and on schedule.

    Management’s job is to balance such conflicting factors. Boeing is a stellar example of the failure to manage that conflict. That it’s CEO and board members remain oblivious to that – and would remain in office despite any bankruptcy Boeing might be forced into – suggests it is emblematic of systemic failure.

    Reply

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