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Commercialization

The Shifting Fortunes Of Boeing

By Keith Cowing
NASA Watch
April 10, 2020
Filed under
The Shifting Fortunes Of Boeing

New document reveals significant fall from grace for Boeing’s space program, Ars Technica
“Six years later, the perception of Boeing’s bid for the lunar cargo contract is much changed. Of the four contenders, it had the lowest overall technical and mission suitability scores. In addition, Boeing’s proposal was characterized as “inaccurate” and possessing no “significant strengths.” Boeing also was cited with a “significant weakness” in its proposal for pushing back on providing its software source code. Due to its high price and ill-suited proposal for the lunar cargo contract, NASA didn’t even consider the proposal among the final bidders.”

NASA Watch founder, Explorers Club Fellow, ex-NASA, Away Teams, Journalist, Space & Astrobiology, Lapsed climber.

28 responses to “The Shifting Fortunes Of Boeing”

  1. DJE51 says:
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    Considering that Boeing is the Prime Contractor for ISS, the rejection of their bid is remarkable. Regarding ISS, “As the prime contractor, Boeing was responsible for design, development, construction and integration of the ISS and for assisting NASA in operating the orbital outpost. Boeing built all of the major U.S. elements. The company also prepared every ISS U.S. component for space flight at the Space Station Processing Facility at Kennedy Space Center, Fla.”

    Boeing has been the gold standard in space modules and systems for decades. However, their performance regarding both SLS and Starliner is coming home to roost. The baton has been passed.

    • fcrary says:
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      I’m not sure where that quote comes from, but I don’t think it’s entirely correct. The Destiny module was the last one Boeing built, and it was delivered in 1998. The Tranquility module, built later, was funded by ESA, built by Thales Alenia, and later turned over to NASA as part of the NASA-ESA cost sharing agreement. That means Boeing hasn’t built a space module in 22 years. A company can change quite a bit in two decades.

    • Brian_M2525 says:
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      Yes, fcrary is correct. In fact, some of the top NASA managers overseeing the Boeing work on ISS said especially in the 1990s that Boeing failed to put their top team on the program. Modules were completed without the proper paperwork and certification (I still do not know how the Node 1 flew but the NASA people overseeing it were as complicit with Boeing in letting things pass). Everything got drawn out; costs skyrocketed, they wound up having to go to ESA/Alenia for Nodes 2 and 3 and the Cupola and wound up cancelling modules like the US Hab because they could no longer afford the Boeing cost growth. The last 15 years they had a NASA manager who seemed to look the other way. Boeing likes to suck every last dollar from the US taxpayer and it is a lesson that other contractors have now learned. NASA has to go the ‘commercial route’ with companies like Space X in order to get product and meet commitments at reasonable cost and on a reasonable schedule. Its more completion form than cost +. In completion you tell the contractor what to do and give them milestone payments as they meet commitments. In cost + they get paid more the longer they draw out the program and the more people who work on it. The NASA people don’t generally have any more experience and so their ability to oversee and supervise is limited.

  2. Paul Gillett says:
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    Potentially, the 2020 business version of “The Decline and Fall of the Roman Empire”.

    While personally pessimistic, I still hope that Boeing will (even at this late juncture) get its act together. Given the company’s history, achievements and contributions to aviation and space exploration, it deserves a better fate.

  3. fcrary says:
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    I suppose it’s worth saying that reviews tend to use rather understated language. Saying that a proposal had no “significant strengths” is a very strong statement for a review. If you tried to translate that from the way reviews are written and into modern, colloquial English, it might involve some words Keith doesn’t like us to use in NASA Watch comments.

    • Not Invented Here says:
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      Is it that bad? The other bids only have one to two “significant strengths”, is there a big gap between 0 and 1~2?

      • fcrary says:
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        From the proposal reviews I’ve been involved in, yes. The difference between zero and one or two is a big deal. I’ll admit that I’ve only been on panels to review much smaller NASA proposals, but I think the rules are similar.

        The “excellent” rating is supposed to go to proposals with major (significant) strengths and _no_ major (significant) weaknesses. Even one, single major weakness usually drops a proposal down from “excellent” to “excellent/very good”. After that, the ratings are a balance between the number of major strengths and weaknesses the reviewers identified.

        Boeing’s proposal was reviewed as having no significant strengths, three significant weaknesses, plus five weaknesses and four strengths which were not identified as “significant.” (Probably meaning minor strengths and weaknesses in the terminology of the reviews I’ve been involved in.) That review basically said there was nothing significantly good about the Boeing proposal and three things which were significantly wrong with it. That sort of review makes a proposal virtually unfundable.

        The worst part is that I’ve seen review panels toss in a fairly minor strength as a major one, just because they don’t want the review to be too much of a slap-down. They aren’t supposed to, but when they don’t, it means they either really hated the proposal or that they were being unusually serious about playing by the rules.

        The top two, SpaceX and Northrop Grumman had, two significant strengths and no significant weaknesses, and one significant strength and one significant weakness, respectively. If you score that like soccer matches, SpaceX won 2-0, NG came in with a 1-1 tie, SNC lost 0-1 and Boeing came in losing at 0-3.

  4. JJMach says:
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    I am reminded of an old adage: “Do not rest upon your laurels, for nothing wilts faster than laurels rested upon.”

  5. Winner says:
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    It seems that Boeing is financially (short-sightedly) managed these days. Quality is not their top priority anymore. In addition to their space business recent quality issues, look at the 737 MAX.

  6. Michael Spencer says:
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    Boeing has been an American success story, an American treasure, and a company that we do not want to lose. It is home to much of our technical and engineering prowess.

    I am hoping that the management of this American marvel can find a way forward.

    • fcrary says:
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      Boeing has done some very impressive things, but from what I’ve read, their more recent, senior management is the current problem. Issues which have been mentioned include a focus on short-term profits, a management culture partially inherited from MD after a merger, and moving management to Chicago and away from the company’s sites where the real engineering and fabrication work is done (making senior management less in touch with the core work being done and with the core workers.) I’m afraid you’re hoping that the senior management will discover their own flaws and reform themselves. I am not optimistic about that happening.

      • Michael Spencer says:
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        Actually I’m not hoping for anything specifically. I’m simply taking the larger, historical view.

    • Jeff2Space says:
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      This is a company whose management thought it was perfectly acceptable to buy back $43 billion of its own stock since 2013 instead of spending that money on engineering next generation products (as evidenced by the 737-MAX instead of building a new type to replace it). This is not the same management that “bet the company” to give us the 747. Hoping it will reform itself (from Chicago, distant from all actual engineering) is wishful thinking, IMHO.

      • fcrary says:
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        To be fair, the 737 MAX wasn’t a completely moronic decision. With good flight software, it wouldn’t even have been a bad idea (although not a great one.) But I can’t forgive the people who decided that, given two redundant sensors, the flight software should only pay attention to one of them. I can understand people making mistakes and I wouldn’t blame them for that. But having redundancy but deciding not to use it is beyond the pale.

      • JJMach says:
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        A common complaint I hear about big businesses is that they used profits to buy back stock. In and of itself, I don’t see it as an evil, but you rightly point out: “as opposed to spending that money on X.”
        Stock buy-backs are a form of reducing debt (reducing future dividend payments), which is–pardon the pun–often in your best interests. If you are in the design phase now, and have that covered, but know that you’re going to have to lay out a lot of capital to upgrade your production facilities and hire on more staff in a number of years, it makes sense to buy down your debts now and free up that cash later, when you need it.
        On the other hand, if your products are being cited for poor engineering and worse quality control and testing, then yeah, you probably have more critical things on which to spend your profits than getting rid of debt.

  7. sunman42 says:
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    This is pure speculation. but I wonder how much of an effect siting the corporate HQ in Chicago, away from any of the divisions that actually execute, has had on effective and efficient management at Boeing. And though it’s been 23 years since Boeing absorbed Douglas to become BDS, it was only three years ago that BDS HQ moved to the DC suburbs. Maybe there was something to the old model of the corporate executives being close to the “factory floor” for design, build, and test. I guess that might be another way of saying that Boeing outperformed its US competition when corporate management actually knew something about the business.

    • spacegaucho says:
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      There have been some interesting articles about how the culture has changed at Boeing. Apparently, after the McD merger the “bean counters” became ascendant over what had been a more engineering dominated culture. At the airplane division, senior engineers were being let go as a cost saving measure because they were dealing with a mature technology. Similar things have occurred at NASA. It is interesting that Boeing lost out to SpaceX which, since it is not publicly traded, seems to have a strong engineering culture.

      • Zed_WEASEL says:
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        As long as Musk is in control. SpaceX’s goal is not ROI, it’s viable settlements on Mars and other off Earth locations.

        Also it is very unusual that a CEO of a company understand the tech the company is making enough to be also the CTO. Musk is more less doing that at SpaceX and Tesla simultaneously.

        • Christopher James Huff says:
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          It’s also a bit unusual for the CEO to sleep on the factory floor. Musk’s degree of involvement would probably be somewhat disastrous if he wasn’t so familiar with the technology involved.

          Even so, it’s probably not the most effective approach…though I can hardly blame him, and it’s certainly better than Boeing’s approach of putting the corporate leadership as far as possible away from the rest of the company.

          • Michael Spencer says:
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            Musk had no previous knowledge of rocket design and construction. It’s all OTJ, and all the more remarkable for it. Great example of focus and hiring smart people.

  8. SouthwestExGOP says:
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    Having been in the aerospace biz since 1978 has given me some perspective. There are many “Boeings” around, the various divisions do interact some but the people that build airplanes are normally very different from the people that do spacecraft (in my experience). The pyramid does come to a point at the top and decisions made there to cut corners and save money do get down to the factory floor.

    Many “Boeing” people were absorbed in acquisitions – many of the Boeing people here in Houston worked with me at Lockheed, etc. Over a few years they may absorb some Boeing culture but many organizations go for years, with the people in them doing similar jobs but changing badges every couple of years.

    A lot of the mistakes that Boeing has made have also been made over and over again by various organizations – commercial and government. Hopefully lessons learned on StarLiner will be examined at every aerospace effort, including StarLiner in a few years – when they have not had problems in a while. That is when the urge to cut corners and save money will resurface.

    • Jeff2Space says:
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      All of those smaller Boeings are being led by the same management in Chicago who approved of the company buying back $43 billion of its own stock since 2013 instead of investing that money back into all those smaller Boeings. I’d say it’s time to literally break up Boeing into those smaller Boeings.

      • fcrary says:
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        That sort of problem isn’t entirely limited to Boeing. I get nervous when I see people giving great value to LM’s Skunk Works. I don’t think the management and corporate culture there are anything like what they were when Kelly Johnson set it up in the 1940s. I don’t think _any_ company can really claim they do great things just because they did great thing decades ago.

  9. Bill Housley says:
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    We’ve already talked about this here a lot, but…yeah.

    These are the kind of things wherein we might say of a less experienced company or foreign space agency that it is an embarrassing failure, but understandable. Coming from the venerable Boeing they are devastating from a reputation standpoint. Then, having the highly respected NASA say of anyone the things that were just said of Boeing are far worse.
    Someone pointed out earlier that in all their history with NASA, Boeing hasn’t done their own software development, NASA did. It helps us understand something far more disturbing…namely that Boeing Space may have lost its ability to reliably self-expand. This has to be corrected, even if they survive the problems with Starliner, or they cannot compete in a moving industry filled with aggressive and innovative rivals over the next several decades.

  10. William Bormann says:
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    The sad fact about Boeing: they’ve become experts at manufacturing capital. I can only hope those experts in Chicago are waking up to this fact.

  11. MAGA_Ken says:
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    The slobbering praise of Boeing by Gerst was sickening to read. Boeing was just as bad six years ago as it is now.