Boeing could represent the biggest indictment of 21st century capitalism



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An experienced professional pilot and a software engineer with over three decades of experience has just written the most damning account of the recent Boeing 737 fiasco. At one level, author Gregory Travis explained to us in detail why a particular aircraft model, once synonymous with reliability, had become a technological trap. But ultimately, his story is a parable of all that is wrong with 21st century capitalism; Boeing has become a company that embodies all its worst diseases. Its business model is totally unsustainable – a model that has consistently ignored the risks of excessive relocation, the pitfalls of an engineering divorced from the basic research and development function, the dangers of "demodularization" and the perverse incentives of the "Shareholder capitalism", according to which security is essential. concerns have been repeatedly sacrificed on the altar of greed. It is also a devastating attempt by a company that once represented the civil aviation summit, whose dominance was gradually eroded as its toxic links with the US military intensified. In this sense, it reflects the decline of America as a manufacturing superpower. And finally, it shows a company displaying a total loss of human perspective in the "man versus machine" debate.

The essence of Travis's analysis is that "design shortcuts" lead to security risks. The latest version of the Boeing 737 aircraft, previously known for its reliability and ease of use, has become a high-tech disaster. The machines have exceeded the man. And even worse, the aviation industry regulator, the Federal Aviation Administration (FAA), outsourced security / certification functions to Boeing itself. So there was no early warning system to prevent the tragedy that resulted.

Travis largely limits his analysis to 737. But his article illustrates long-standing pathologies at Boeing and the FAA.

Let's look first at the last problem: the FAA suffers from a reduction in the funds granted by the Congress (the Daily Beast said that "the budget of the agency for 2019 has actually reduced by 1.7% the funding allocated the Air Safety Bureau "), as well as the corresponding loss of aeronautical expertise. many of its senior managers have migrated to the private sector. Of course, there is nothing new for the FAA, which has a sad history of hemorrhagic staff since the time of the Air Traffic Controllers / Reagan Collective Termination (Cost Control) strike, as well as the adoption of neoliberal measures, supposedly based on the market. performance incentives quite inappropriate for a regulator primarily responsible for flight safety.

Having become more "industry friendly" and lacking sufficient human and financial resources to do its job well, the FAA has been forced to delegate much of its regulatory oversight and certification functions to the air sector itself (" self-certification ") and has thus become a case study on" regulatory capture ".

Boeing's failures resonate with the public in a way that no complicated financial fraud is possible. It takes a certain level of technical expertise to understand how the toxicity of a financial derivative is a danger to an economic system; but everyone instinctively understands the tragic impact of a plane crash, such as the convicted accidents of Lion Air and Ethiopian Airlines 737.

The seeds of Boeing's destruction were probably planted well before the 737 accidents. The warning signs were already evident in the 787 Dreamliner program ten years ago, which is still characterized today. by repeated defects in engine design and cost overruns. In a Harvard Business Review article, professors Gary Pisano and Willy Shih highlighted for the first time the dangers of Boeing's demodularization:[T]The transition from aluminum alloys to carbon fiber composite materials has changed the game. The old rules of modular design could not fully take into account the transmission of stress and system-level load – something that Boeing did not understand at first. "

Boeing failed to do it right because the company had moved large parts of its design and manufacturing facilities to disparate parts around the world, too far geographically to be able to control everything properly. As a result, she encountered assembly problems. (such as the Alenia Aeronautica Horizontal Stabilizer in Italy and the Mitsubishi Heavy Industries Wing Box in Japan). A major redesign and modifications were needed, and the program suffered significant delays, "write Pisano and Shih.

As one part of the aircraft was manufactured in Italy and another in Japan, management was not able to quickly assess the resulting design and engineering flaws before the launch. Even after the resolution of the initial launch delays, the Dreamliner story was characterized by repeated reminders and cost overruns.

Relocation, of course, is not new. In our new world of globalized capitalism, multinational corporations such as Boeing are constantly looking for global opportunities for labor arbitration, which have the positive effect of reducing unit labor costs, fattening profit margins and thereby exploit the price of the company's shares of management compensation, regardless of the underlying performance of the company itself in the real world). These are all part of the pathologies inherent in the increasingly financialized "shareholder capitalism" of the United States (see here for more details).

But Boeing's problems go beyond that. It is a company that has always been very successful in the highly competitive civil aviation market since the 747 jumbo jet ("Queen of Heaven") dominated for the first time about 50 years ago. The 21st century, however, has been less favorable to the company, its failures being increasingly exacerbated by its growing and increasingly toxic links with the US defense industry.

These links began in the late 1990s, when the US Department of Defense helped to organize the merger of Boeing and McDonnell Douglas, the latter major supplier of combat aircraft in the United States. Far from being the "largest, most powerful, widest and most admired aerospace company in the world", as promised at the time of the merger by John McDonnell, president of McDonnell Douglas, the Pentagon's corrupt practices have quickly started to infect the new set. entity. In particular, the 787 outsourcing strategy proved to be a fiasco, which even Boeing CEO Jim Albaugh was forced to concede in a Seattle Times report.

But the Seattle Times also revealed that the decay lasted well before the 787 debacle, citing Boeing's internal report, written in 2001 by Dr. L.J. Hart-Smith, just five years after the merger. Hart-Smith described the disastrous economic effects of excessive outsourcing that began to afflict Boeing almost immediately, especially as his ties with the military grew. Franklin "Chuck" Spinney and Pierre Sprey, long-time defense analysts, explain these problems:

"The so-called fallout from defense spending can convey the perverse effects of the economically-politically motivated, politically motivated Military-Industrial-Congress Complex (MICC) in the global economy." general[.] The MICC not only subsidizes unnecessary cost growth at the Pentagon, but its activities are reflected throughout the economy by absorbing limited investment and human capital; corrupt the practices of science and engineering; distort the content of research on a large scale; while offering incentives for inefficient production and management practices (for example, excessive outsourcing for political reasons – aka political engineering practices explained here and here), not to mention the politicization of industrial management . "

Contacts with the Pentagon often mean the death of a civil company because of the incentives inherent in its "cost-plus-cost" contracts, as well as the geographic payment of manufacturing facilities in as many regions as possible possible from the country to maximize congressional political support for increasingly expensive military boondoggles – what Spinney and Sprey call "political engineering". Both of these factors distort business practices to drive up costs, thereby reducing waste and reducing security. In contrast, in a traditional civilian model, profit margins are better secured by reducing costs as much as possible in order to maximize results.

As Boeing's ties with the military grew, his poor business practices grew. The 787 Dreamliner is still struggling with production issues and there is no indication that Boeing has corrected them. The company has failed to re-enter basic manufacturing and R & D to solve the initial problems highlighted by Shih and Pisano (on the contrary, because the company is increasingly transferring its production to China to preserve its market share there). This month alone, the New York Times reported that "the [Charleston, South Carolina-based] The factory, which makes the 787 Dreamliner, suffers from poor production and poor control that threatens to compromise safety. A former quality manager, John Barnett, a whistleblower who had been with Boeing for almost three decades, urged New York. Times: "I have not yet seen a plane leave Charleston to indicate its name. He recalls that Boeing initially transferred some of its operations to the state of "labor law" of South Carolina. undermine the strength of its unionized workforce in the state of Washington, which has had a negative effect on the overall quality of its products.

Added to this is the recent debacle of the 737, where Boeing visibly neglected the safety risks when designing the new model, "in the manner of an anti-stall system that played a role in two accidents ", as the same article in the New York Times indicates. But the genesis of the 737, written by Gregory Travis (a 30-year-old pilot and a 40-year-old software engineer), was once known for its "reliability" and relative "technological simplicity." the fact that "market forces and technology have pushed the 737 towards larger and larger versions with increasing electronic and mechanical complexity".

The main problem, Travis notes, was the overhaul of the engine. Engine size has been increased to improve the 737's overall fuel efficiency, but it has become too bulky to be housed at its traditional location on the aircraft. The enlargement eventually required an engine extension well in front of the wing. That changed the relationship between the engine's "thrust" and its center of gravity, which, according to Travis, led the 737 to "soar" or lift the nose … a little too much for comfort when the use of power at already high angles of attack. He violated the oldest of the aviation guns and probably violated the certification criteria of the US Federal Aviation Administration. "

"Angle of Attack", as defined by Travis, refers to the angle between the wing and the relative wind blowing on it. The more a pilot raises the nose of the aircraft, the higher the angle of attack and the higher the wing lift, until reaching the stall limit angle of attack; suddenly, the wing ceases to rise completely (because the relative wind the airflow over the wing is disastrously separated from the surface of the aircraft). wing). That's why an aircraft that adds an extra "nose-up" force to the nose when the pilot only asks for a slight increase in the angle of attack (that is, to (ie, the pitch-up angle) is so dangerously unstable because it can lead to a fatal stall situation. it was probably the cause of both accidents.

Blatant violations of the basic aerodynamic principles should have prompted the FAA to intervene to force a reworking of the Boeing's latest incarnation in 737 (the "Max 8") to minimize security risks. But there were two problems:

  1. Making the necessary hardware changes would have been extremely expensive (to the point where Boeing should have built a brand new aircraft, instead of simply changing a popular aircraft, then safe and easy to fly)
  2. As noted above, the FAA was already out of date and was starting to allow Boeing to "self certify" its own aircraft.

Rather than designing a completely new plan, the "solution" in point 1 was to install even more software, in this case the "Maneuverability Increasing System", or MCAS, for short. The goal, writes Travis, was to allow computers to push the nose of the plane down when the system thinks the plane could exceed its angle of attack limits; it does this to avoid an aerodynamic stall. Boeing put MCAS in the 737 Max, as bigger engines and their location make it more likely to stall in a 737 Max than previous models. Unfortunately, the MCAS software "solution" was a totally incompetent and dangerous band-aid that used the computer to counter (or perhaps more correctly, to mask) the dangerous tendency of the aircraft to lift the nose too much. and to get the stall situation where the computer takes over from the driver to solve a problem initially related to a hardware problem.

With respect to point 2, as described by Travis:

"As planes became more complex and the gap between what the FAA could pay and what an aircraft builder could pay was getting bigger and bigger, more and more Engineers migrated from the public sector to the private sector. Soon, the FAA no longer has the internal ability to determine whether the design and manufacture of a particular aircraft were safe. For example, the FAA told aircraft makers: "Why do not you tell your staff if your designs are safe?"

You can immediately identify parallels between the 2008 global financial crisis and the Boeing crash. Like the FAA with Boeing in 2008, our global monetary authorities, regulators and rating agencies did not have enough resources and expertise to properly examine the activities of Wall Street financial engineers. They have been forced to accept the mathematically unfounded models of banks' "value-at-risk" literally to justify the strength and fundamental security of their newly created derivatives, insofar as the valuation of the underlying assets jacents followed a "normal" distribution scheme. Of course, these derivatives did nothing of the sort, because the price history did not allow to establish a really normal diagram; As a result, the calculations on which the risk management was based were catastrophic, as finally recognized former Fed Chairman Alan Greenspan.

Likewise, the MCAS software "solution" supposed to "solve" the technical problem of the new 737 failed because it was based on an imperfect paradigm: no software can fundamentally repudiate the principles of aerodynamics. And in both cases, the regulation and insufficient financial resources granted to the authority prevented it from intervening before the disaster. As a result, the FAA did not emphasize the risks of the new anti-stall system when it certified the "new and improved" 737 Max 8 as being seaworthy about two years ago, according to the FAA. the Washington Post. This is because Boeing had already attested to the aircraft's ability to fly (as Wall Street models minimized the possibility of a "black swan" discontinuity in financial markets, which concerned at the green light).

As a result, both Boeing and the many financial institutions after 2008 suffered "collapses". Also note in each case that increasing complexity becomes the enemy of effective regulation and, ultimately, security considerations. In both cases, they ignored what Travis and others call the KISS principle: "Stay simple, stupid".

Another interesting dimension of Boeing's calamity is the perpetual "man versus machine" debate that tells the story of capitalism since the time of the Luddites. Contrary to what is commonly said, Luddites were not just technophobes, pushing the forces of progress. They were highly skilled craftspeople, protesting that their livelihoods had been displaced by automation, imposed and displaced as expendable products with virtually no consultation with the business owners themselves.

Similarly, in the new Max 8 plan, the new MCAS software was introduced without the pilots being informed of its main features. The main feature of MCAS is that it is enabled without driver input. Even worse, according to The Verge, "the two aircraft that crashed lacked safety features that could have provided crucial information to the crew because they had been sold as options by Boeing, according to the New York Times . "

The major problem with MCAS is that it effectively eliminates the human dimension of the flying sensation, as shown by Travis:

"In the old days, when the cables connected the pilot's controls to the flying surfaces, you had to go up very hard if the plane was adjusted to go down. You had to push hard if the plane was adjusted to go up. With computer monitoring, orders lose their natural meaning. In the 737 Max, there is no real "natural feeling" …

"There is only one artificial sensation, a sensation that the computer wants the drivers to feel." And sometimes, it does not feel so good.

"When the flight computer adjusts the aircraft to descend, because the MCAS system thinks it is about to stall, a set of engines and jacks pushes the pilot control columns. It turns out that the flight management computer can put a lot of strength into this column – in fact, a force such that a human pilot can quickly run out while trying to pull the back column, try to tell the computer that this really should not happen." (Underlining added.)

MCAS computer software imposes a driver beyond its physical capabilities. And it's true that in modern long-haul commercial flights, computers do most of the actual flying, redundancy is normally built into the system to allow humans to bypass the software if the pilot discovers a problem. The newly incorporated MCAS system is distinguished by the fact that it denies the ultimate sovereignty of the pilot or, as stated by the author: "This deprives pilots of the ability to react to what is before their eyes."

Travis finally evokes Kubrick's "2001: The Odyssey of Space" to indicate a bit of the magnitude of the technological dysfunction created here by Boeing: "Look up, HAL." "I'm sorry, Dave, I'm afraid I can not do that.

The main difference between the two situations is that, in Kubrick's masterpiece, HAL, the computer, was eventually neutralized by human action when circumstances required it and so was disabled. before more disaster can strike. The problem implicit in Travis's Max 8 images is that we may have pushed this technophilia too far in the direction of computers to the point where the current pilot can no longer control modern-day HAL.

Boeing's pathologies illustrate the dangers of innovation for innovation. But society is symptomatic of a much bigger problem: we are launching the "progress" of Silicon Valley entrepreneurs, even if they produce autonomous cars (which cause fatal accidents), multifunctional smart phones (which threaten our privacy), advanced technologies drones (which immobilize airports), or any type of extreme automation in the workplace that degrades the role of man.

The Boeing 737 crashes ultimately reflect an absolute confidence in the power of the machine, a factor that creates its own dystopian nightmare of the 21st century worthy of a Philip K. Dick novel. We do not view technology as an artificial invention designed to help us, but as an autonomously set condition that has little to do with human behavior. This lack of integration means that complexity overwhelms us rather than improving our quality of life. It makes us comfortable. Labor is only a cost element to replace, if possible, by a robot; it is no longer considered a source of demand. The same mindless mentality that considers regulators as a useless burden that clogs the operations of the "free market"; or security is an optional feature that should not be allowed to interfere with the bottom line; where the needs of employees are subsidiary to the profits of shareholders and management; and the army has priority over the needs of the civilian economy.

Boeing unfortunately embodies so much of our current economic and social dysfunction, with predictably lethal consequences. But it is not alone or unique by an effort of imagination.

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