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[Text/Observer Network columnist Gao Tianwei]

The American astronauts, who have been stranded in space for nearly two months, have finally finalized their return home, but they have to change spacecraft.

In the early morning of August 25, 2024 Beijing time, NASA (National Aeronautics and Space Administration) announced that the two astronauts who set off on Boeing's Starliner in June this year and were stranded at the International Space Station because the spacecraft malfunction has not been completely eliminated, will change to the Dragon spacecraft developed by Boeing's competitor SpaceX and return to Earth in February next year; the Starliner spacecraft will return separately in an unmanned state.

As a project that was officially launched 10 years ago, with a total cost of nearly 6 billion US dollars (of which Boeing lost at least 1.5 billion US dollars), and the first manned flight was delayed by 7 years, it is regrettable that the Boeing Starliner spacecraft ended up like this.

This is another heavy blow to Boeing following issues such as aircraft quality and supply chain management. The "first son of the United States" has become the subject of global discussion and ridicule.

In fact, from the "great changes in the past 20 years" to the Starliner spacecraft project, many of Boeing's operations were not black and white before the problems were exposed, and even coincided with the trends of some domestic companies. This requires us to pay close attention and even be vigilant.

What are the “Boeing problems”?

1. Profit first, technology second

Boeing's "20 years of great change" began at the turn of the century when Boeing and McDonnell Douglas merged and McDonnell Douglas people took control of the new company's top management. Its governance characteristics are that it highly emphasizes profits and returns to shareholders, but tends to be conservative in technology research and development, or in other words, technology serves profits.

One typical case is around 2010, when the emergence of new aircraft engines made it possible to develop a single-aisle passenger aircraft that matched them (my country's C919 project was launched at this time). Faced with this opportunity, Boeing did not develop new products, but chose to deeply modify the Boeing 737, which had been in existence for 40 years, to squeeze out the aircraft's structural and performance potential to adapt to the new engine, thereby joining the competition at a cost far lower than developing a new model.

Facts have proved that Boeing's technology is indeed amazing, and the overall performance of the Boeing 737 MAX is not inferior to much younger competitors. However, the hidden dangers and problems brought about by this were gradually exposed, and everyone should be familiar with the details.

However, these criticisms are based on hindsight. From a basic business perspective, a company that can bring returns to shareholders is a good company, and Boeing's thinking seems to be fine. In the 2010s, Boeing's stock price doubled to new highs, and the company was regarded as an excellent practice by many business schools and investment institutions.

The hype came to an abrupt end only after the 737 MAX aircraft encountered major problems in 2018 and Boeing's performance in the aerospace field declined. If Boeing had been lucky and nothing had happened, would everyone have been aware of these problems?

2. Over-trust in the system and over-optimization of talent

Boeing is now widely criticized for its practice of constantly "optimizing" talent in order to control costs over the past 20 years, for example, hiring two freshly graduated engineers to replace a veteran with decades of experience, or letting foreign designers from Moscow and other places replace the American team.

But subsequent developments soon slapped them in the face. According to former Boeing employees, the biggest difference between new and old employees is that new employees can often only "meet the needs of their superiors", while old employees are good at avoiding other issues that their superiors have not raised or considered.

The result is that in actual applications whose complexity far exceeds "superior requirements", the works of novices are full of problems, while the works of veterans are more stable and reliable. After all, human experience is an irreplaceable and valuable resource.

But looking back at the original logic of Boeing management, it makes sense: aerospace products should pursue highly standardized, mass-produced, and simplified manufacturing, just like the automotive industry. That is, with the help of information technology and modern management methods, novices only need to have basic professional skills to do the job, thereby greatly reducing corporate costs - it just seems that Boeing thought this matter was too simple.

3. Production is carried out in multiple locations, with varying levels of quality

Whether manufacturing airplanes or spacecraft, Boeing has shown a trend of global multi-location layout of supply chains and manufacturing plants over the past 20 years.

The drawbacks of the multi-point layout have now been fully exposed. According to some retired Boeing engineers on the Internet, each supplier has its own customary workflow, interface and even user interface, which greatly increases the coordination and integration costs of the OEM, both in terms of technology and time.

Some people also "speak up" for the decision-makers at the time: First, there are many excellent suppliers in the huge supply chain system (such as Chinese suppliers), why do they always focus on individual negatives? Second, some states in the United States have outstanding advantages in terms of taxation, laws, etc., and the costs offset by setting up factories there are not seen by everyone? Third, NASA and other financial sponsors have votes, nepotism and other considerations, and "hand-picked" certain suppliers. Can you still go against them?

It seems to make some sense.

But Boeing’s mistakes over the past 20 years may be mainly due to its underestimation of the complexity of the aerospace industry. Out of “good intentions” in pursuit of financial performance, it did some “bad things” based on methods that may be common but not necessarily suitable for the industry.

Lessons from Boeing

The pursuit of efficiency is the top priority of an enterprise, but the criteria for measuring efficiency should not be limited to short-term, direct economic returns. The story of Boeing tells us that efficiency must be viewed from a long-term and overall perspective.

my country's aerospace enterprises, whether state-owned or private, in addition to daily operations, also shoulder the historical mission of climbing the peak of science and technology, enhancing my country's comprehensive national strength, and benefiting the people. In particular, state-owned enterprises, by their nature, determine that national interests are the highest criterion for enterprises. Therefore, enterprises should have a high level, determination, and bottom line, and realize themselves in the continuous service of the vast majority of the people, the largest market.

In conjunction with this, measures such as patient capital, mixed ownership, and relaxed market access should also be followed up in a timely manner to guide and encourage my country's aerospace companies to develop responsibly and orderly.

How to treat talents is the second lesson Boeing leaves us.

Although many industries have seen the trend of "newcomers replacing old people" and "AI replacing real people", the Boeing case shows that talent is still an indispensable resource in the aerospace industry. In addition to Boeing, SpaceX, as a positive case, is also inseparable from the skilled and passionate team that Musk has recruited from all walks of life. Therefore, treating employees well is treating the delivery quality of the company well.

For example, Thomas Mueller, SpaceX's "No. 1 employee", led the development of a 300-ton thrust rocket engine before joining the company in 2002, and led the engine team to help Musk realize his dream of rocket reuse. Looking around the world, even today, this experience belongs to only a very small number of aerospace engineers.

Boeing is the first party responsible for the problems exposed by the company, but the regulators are also to blame. Taking some key aerospace software as an example, a former Boeing employee reported that the regulators only confirmed that the software had the required functions, but did not conduct critical testing on the software to expose defects, resulting in the aforementioned "novice works" being able to pass smoothly, but in practice, failures occurred frequently.

Such an assessment is obviously too lax. As the representative of the public interest and the final gatekeeper of personal and property safety, the regulatory authorities should raise their position, take responsibility, and establish a comprehensive and effective review mechanism, rather than just going through the motions.

Boeing, as a century-old company with strong technical and management background, has encountered many setbacks in its search for shortcuts and reforms, which proves the difficulty of aerospace to reach the edge of human capabilities. Compared with Boeing, Chinese companies are generally young and have less experience. When trying to make breakthroughs or even "overtake on the curve", they should be more rigorous, cautious, detailed and practical.

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