Boeing says it can’t make money with fixed-price contracts::“Rest assured we haven’t signed any fixed-price development contracts, nor intend to.”
Fuck you Boeing. You fuckers have stacked cash hand over fist for fucking decades milking the fucking government and the American people like goddamn cattle. The endless growth has to end. The endless greed has got to end.
Flying Blind is a spectacular book, as much about the financial engineering that doomed GM and Boeing and many others took as their compass;, the safety and quality just the inevitable cost of cutting corners.
https://www.penguinrandomhouse.com/books/646497/flying-blind-by-peter-robison/
Jeez, if you can’t make money off of defense industry contracts, you should probably just hang it up.
They can, they just use cost-plus contracts so they make money no matter how far off schedule or budget they end up.
Doing work with government, I understand why - ten billion different stakeholders to wrangle, strained budgets (probably not as big of an issue in defense but rampant throughout the rest of gov’t), lawmakers changing things mid-project that have a material effect on how the project is carried out, and endless redtape throughout the process. I don’t propose FF for gov projects either because inevitably they violate our assumptions by not getting their shit in order which kills the timeline, adds a ton of overhead, and results in a change order anyway which then just starts the whole process of approvals all over again.
I was under the impression that those sweetheart deals were getting hard to come by, but I don’t work bids.
So either you suck at forecasting your own production, or you suck at production enough to not hit your forecast? And you want other people to pay you more because you don’t have a good handle on your buisness?
As an employee at a production facility in the US, don’t think Boeing is unique in that regard.
These companies have gotten too big to work without exploiting their employees or inflating costs.
This problem could be solved with a co-op structure even within a free market. If ten workers in a co op produce $100 bucks of extra money, they all get voting power over ten buck, and as long as any new hires can carry their weight so everyone still gets ten bucks surplus to command, they will hire them if you follow the game theory incentives. Once companies get big enough to have diminishing returns, like a new employee could only produce 5 bucks of surplus, then hiring that person would make everyone have a smaller piece of the pie (adding him to our first ten means the share drops to 105/11 or 9.5 dollars.) If the pie(surplus) all goes to one person they can keep adding workers until the worker doesn’t produce any surplus over the cost, bloating the departments. Because of this co ops tend to expand to peak productivity, (surplus per worker), rather that peak output (produce as much as we can until it becomes unprofitable to produce)
You are assuming two things:
- Each worker is paid the same
- The number of workers in the company affects the market for their products
In a small company, none of this is true.
I don’t think they suck at forecasting…I think they are probably exceptional at forecasting but willfully lie about project costs when submitting bids for projects in order to come under the competition and win the contract. There doesn’t seem to be any penalties for this, so why would they stop?
That happens all the time. I went through several government contracts where a company would come and under bid the current contract by a significant amount, win the bid, offer the current contractors 3/4 of what they were being paid and fill in the rest with new hires. There is no continuity between contracts so unless a bunch of the old contractors took a pay cut to stay on they would come in and start from scratch with all new processes and procedures and absolutely slow down productivity for all those they were supposed to be providing support.
Then perish.
It sounds like Boeing is shit at forecasting. Maybe hire better analysts.
