http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/01/05/bloomberg_articlesLXAZQI0UQVI9.DTL

The only thing on Fox I can find about Boeing is their union issues which was brilliant PR on either Fox's or Boeing's part.



[Edited on January 5, 2012 at 12:07 PM. Reason : a]

1/5/2012 11:58:46 AM

This is what happens when the gov. cuts spending. What do people think happens with tax dollars??

i think a trillion $$$ are expected to be cut from the defense budget over the next 10 years, this kind of thing is going to be more common.

Maybe when commercial spaceflight starts to ramp up, companies like Boeing might reopen some plants, but in the meanwhile, that's a lot of high-skill workers out of jobs, and they won't be working for their local McDs i don't imagine.

On the bright side, when Ron Paul gets elected, we can expect to see even MORE people out of jobs.

1/5/2012 12:07:09 PM

From what I read, the closing wasn't due to a lost contract.

The defense budget actually isn't getting cut, it just won't grow at the same exponential rate it has been.

and the immediate military scale backs are mainly in personnel, while equipment development will likely still continue to increase.

1/5/2012 12:18:22 PM

Quote :

"i think a trillion $$$ are expected to be cut from the defense budget over the next 10 years, this kind of thing is going to be more common."

We need to cut a lot more. We don't need any more war machines, we need things that actually improve people's lives. No one said the transition would be easy, but if you recognize that a perpetual warfare state is bad for the U.S. and bad for humanity, then the painful transition is necessary.

If we stop taking so much of what people earn, it will get invested. I'm not just talking about the ultra-rich, either. If you make 40k a year, a very substantial chunk is going to the government, and that's money that would otherwise be going right into the economy.

1/5/2012 12:22:02 PM

This was a plant converting 767s to fuel tankers.

You realize that by using 767s, they drive down the manufacturing costs making commercial flights cheaper?

The majority of defense spending doesn't go directly to the war machine, a very large chunk goes to research and manufacturing that has ripples throughout society that DO in fact benefit us all.

Surely you must have realized how interconnected these things are.

Quote :

"then the painful transition is necessary."

transition to what? It's not a given that making massive amounts of people jobless then saying "now you are free!!!" will actually making anything better. It would most likely lead to a spiraling collapse actually.

1/5/2012 12:32:33 PM

So your view is that people will simply give up the will to live, create, and produce, and everyone is going to die off?

Humans have been around a long time. They're not going to give up that easily. They're resilient, they will develop solutions, although I'm not going to speculate on what they may be.

Quote :

"The majority of defense spending doesn't go directly to the war machine, a very large chunk goes to research and manufacturing that has ripples throughout society that DO in fact benefit us all."

I know that you've expressed the opinion that all innovation originates in government, but that's wrong. Innovation is consumer driven, as it should be.

Besides, what happened to "alternative energy" and "going green"? Boeing manufactures some of the biggest gas guzzlers known to man.

[Edited on January 5, 2012 at 12:39 PM. Reason : ]

1/5/2012 12:36:59 PM

^^ so, because there will be some pain in fixing the massive problem we have created, then we should not even attempt to fix that problem

1/5/2012 12:47:08 PM

^^

Innovation usually isn't consumer driven. The old joke is if people were asked what they wanted in the 1800s for transportation, they'd of asked for a faster horse. The incentive is consumer driven, but not the creation process. There needs to be well lubricated paths to disrupt the entrenched status quo in industries otherwise they stagnate.

1/5/2012 12:54:59 PM

Quote :

"The majority of defense spending doesn't go directly to the war machine, a very large chunk goes to research and manufacturing that has ripples throughout society that DO in fact benefit us all."

Fascinating times we live in when the left is hawking the Military-Industrial Complex.

1/5/2012 1:34:14 PM

Yes, the creation process is profit-driven, rather than consumer driven.

1/5/2012 1:39:40 PM

^is profit consumer driven?

1/5/2012 2:01:11 PM

^

Not when you get government contracts

1/5/2012 2:13:48 PM

I mean, the entire aerospace and defense industry has been taking a beating at the hands of budget cuts for years. It may not seem like it to outsiders, but private industry usually runs pretty lean (compared to govt.) and cuts in budget usually means a loss in jobs.
In many cases (due to the nature of its history) defense and aerospace are heavily linked. Every aerospace and defense company has been closing plants, laying people off, scaling back, etc... for years now since the defense budget has been shrinking. Even more so in preparation for sequestration. The government is,the biggest customer....and without them, the entire industry shakes.


As was mentioned before....these jobs disappearing arent ones that can be replaced by opening a walmart or mcdonalds. These are your engineers, accountants, electricians, software devs, getting the boot.




Not trying to argue for or against defense acquisituons. Just saying that a lot of people always scream to stop defense spending, without realizing unintended consequences. Sometimew you get what you ask for.

[Edited on January 5, 2012 at 2:57 PM. Reason : L]

1/5/2012 2:51:35 PM

Those are the people most likely to be able to find work. Maybe it's a blessing in disguise - who wants to live in Kansas anyway?

[Edited on January 5, 2012 at 2:53 PM. Reason : ]

1/5/2012 2:53:28 PM

Eh, I'm not getting into that debate. Ill just say "you should work in an industry I approve of instead" is a difficult thing to hear as justification if you just lost youe job because of budget cuts.
Also, that town/community in kansas is now going to shrivel up and die once all those engineers leave.

1/5/2012 3:01:58 PM

Quote :

"but private industry usually runs pretty lean (compared to govt.)"

It's still not as lean as it should be and is just as bad I imagine when you are on the government dole. I've worked in several Fortune 500 companies and they are the farthest from lean I've ever seen. Most of them are staffed with lots of people who do nothing but go to meetings and draw paychecks.

Fuck if you are going to do that why just start subsistence farming and give the paycheck to someone who will further themselves or the company.

Granted I'm around disgruntled ex-Fortune 500 company men daily, so I'm a bit biased.

[Edited on January 5, 2012 at 3:05 PM. Reason : a]

1/5/2012 3:04:21 PM

...always room for improvement. Just saying, you get what you ask for sometimes

Quote :

" Most of them are staffed with lots of people who do nothing but go to meetings and draw paychecks."

that sounds like every air force base ive ever been to. Conversely, I bust my ass at work in the private sector

[Edited on January 5, 2012 at 3:18 PM. Reason : L]

1/5/2012 3:07:40 PM

Quote :

"You realize that by using 767s, they drive down the manufacturing costs making commercial flights cheaper?"

Please, please, please, link to at least one site attempting to make this claim. I'm not saying it's wrong, but there are so many moving pieces that happen between the time Boeing decides to build another block of planes to the time you get charged for a plane ticket that I can't possibly fathom any credible neutral observer has run the math on this one. It's standard Lockheed/Boeing/EADS talking point that if the quantity of the jets go down the incremental cost of them go up but they never say how much of this is due to economies of scale loss and how much of it is due to the profit the private companies want to take on the contract.

Quote :

" The old joke is if people were asked what they wanted in the 1800s for transportation, they'd of asked for a faster horse. The incentive is consumer driven, but not the creation process."

Weird, and yet the most creative company in the world gave us the iEverything without us really asking for. The desire to stream netflix was determined by government dollars?

Fuck, inventors have been inventing a product to sell to to markets for...well, forever. This is mind blowing ideology to say that consumers don't drive innovation.

Quote :

"Fascinating times we live in when the left is hawking the Military-Industrial Complex."

Hey, whatever it takes to bow to Lord Keynes and get this whole aggregate demand point shifted to get us back to full employment. Because it's certainly better to employ people making instruments of death and war than it is for them to live off the savings they saved until they find a job(wait).

Quote :

"It may not seem like it to outsiders, but private industry usually runs pretty lean (compared to govt.) and cuts in budget usually means a loss in jobs"

It's not that they run lean. It's that they are often employed building shit that no one else has built and they have no idea if they can do it or not. Pushing the envelopes of technology can't be budgeted for no matter how many initiatives Dr. Carter and that whole crew releases saying the acq community has to get better at what they do. Why do you think cost+ is so prolific with these mega acquisitions needing new technology? Companies have only a vague idea what type of problems they will run into despite all the modeling and sim they do.

I'm working on projects now where we bid against a big OEM not to be named that they came in at at more than 3x what we bid organic. They don't perform at 3x the level we do, hell, in general they don't perform at .75 the level we do. But up until recently the government simply didn't have talent like us (because we were all in the private sector) and had no clue how to value what they were paying for.

Quote :

"Not trying to argue for or against defense acquisituons. Just saying that a lot of people always scream to stop defense spending, without realizing unintended consequences. Sometimew you get what you ask for."

The government stops taking money from the taxpayer to give to a certain industry and jobs will be lost? You don't say! Look, distortions to the market take a long time to work out. Ideally, government cuts defense spending, consumers taxed less, more disposable income to spend, private companies respond to that demand and hire up all the laid off people to build different things. Basic Austrian business cycle economic concepts.

1/5/2012 7:12:14 PM

Quote :

"Weird, and yet the most creative company in the world gave us the iEverything without us really asking for. The desire to stream netflix was determined by government dollars? Fuck, inventors have been inventing a product to sell to to markets for...well, forever. This is mind blowing ideology to say that consumers don't drive innovation."

I never said government did innovation. The innovative companies do, and most innovative companies do so by being innovative--not asking customers what it is they want.

Hence my comment about the faster horse. It was out of context for the conversation.

[Edited on January 5, 2012 at 7:40 PM. Reason : a]

1/5/2012 7:39:45 PM

Corporations are not obligated in any way to serve the public interests. Its the shareholders, stupid! (I should trademark that phrase if it isnt already trademarked). End of story. The mayor should have gotten a legal agreement protecting the plant's workers before doing the bidding of a corporation.

1/5/2012 8:20:35 PM

Quote :

" Corporations are not obligated in any way to serve the public interests."

Which becomes a huge problem when the corporations are as powerful or more powerful than the public/government.

1/5/2012 9:05:22 PM

Quote :

"Corporations are not obligated in any way to serve the public interests. Its the shareholders, stupid! "

The beautiful thing is, shareholders ARE the public.

1/5/2012 10:33:02 PM

either that or foreigners

1/5/2012 11:09:52 PM

If corporations set about to destroy wealth, they go out of business. No need for government to try and intervene to fix this bad business models.

1/5/2012 11:17:04 PM

I bet Boeing knows if the plane takes off.

1/5/2012 11:54:34 PM

Quote :

"The beautiful thing is, shareholders ARE the public. "

LOL

1/6/2012 12:16:54 AM

who are they, then, oh wise one? dogs on the moon?

1/6/2012 8:58:17 AM

So my best friend works for Northrup and from what he's told me there is pretty much zero accountability for deadlines, budget etc. when working on gov. Contracts. Once secured there is virtually zero accountability to deliver results. Thia is in sharp contrast to the expectations for private contracts. I have heard exactly the same thing from friends who work at other companies like IBM, from my fathers experience at GE, from my uncle who worked at the pentagon for a decade, and many more. If there's a reduction in military spending some corporations will suffer but it's ultimately for the best.

1/6/2012 9:28:13 AM

Quote :

"So my best friend works for Northrup and from what he's told me there is pretty much zero accountability for deadlines, budget etc. when working on gov. Contracts. Once secured there is virtually zero accountability to deliver results."

So... that's not true. Programs/contracts lose funding, get cancelled, go up for congressional review/GAO, aren't renewed, etc... if they don't meet their deadlines and blow past their budget.

Shit....the Nunn-McCurdy provision, as it relates to weapons programs, states that any program that grows in cost over %15 of the original estimate has to go before congress. And if the program grows up to %25, it gets terminated unless the secretary of defense can explain why the program is needed. Most programs that are spiraling out of control cost/budget wise don't even get to this point, as they are cancelled much earlier.

Your friend lied to you.

1/6/2012 9:54:13 AM

and if those projects get killed does that mean that NG never gets another gov't contract? of course not. NG just got free money and didn't even have to deliver a product or fulfill the contract. must be nice. sounds like "zero accountability" to me

[Edited on January 6, 2012 at 10:24 AM. Reason : ]

1/6/2012 10:24:30 AM

That's kind of what I was saying. Even if they fail to deliver on time or on budget it's not as if they haven't already gotten paid or that it will adversely impact the ability of a corporation to land another contract down the line.

Government work is massively inefficient, slow, etc. Work contracted out by the government has about the same expectation in terms of efficiency from all the (admittedly anecdotal) things I've ever heard. Some of the stuff one of my old roommates used to tell me about his Dad's paving company and the DOT work was pretty sickening.

Say a project gets cancelled 3 years in and Boeing just doesn't have that job anymore. So what, do they really care? Probably not, they'll likely get selected for another contract down the road or for the project replacing the one just cancelled.

Maybe DOD runs a tighter ship than most gov. agencies, but I've never heard anything to make me think so.

[Edited on January 6, 2012 at 10:45 AM. Reason : asd]

1/6/2012 10:38:03 AM

Ummm, what? Contractors are still held accountable to the provisions of their contract. If they don't deliver the gusto, they can absolutely be fined or have to pay money back to the government.
The reputation of the company is also called into question. Past performance on contracts comes up every single time contractors are answering government RFP's.
If NG didn't deliver for a ship they produced, of course the Navy is going to question that during the next contract bidding cycle.

Seriously, where are you guys getting this shit from? What kind of contracts have you EVER seen in your entire life that operate the way you're describing them?
Whatever... I'll at least give you guys the respect of saying I'm sure it happens...somewhere

[Edited on January 6, 2012 at 11:08 AM. Reason : a]

1/6/2012 11:04:17 AM

EMCE, I'm going to defer to you since if I recall you work for one of these companies, I'm just going off anecdotes.

The only other thing I want to bring up is that for a lot of these larger contracts, there are only a handful of companies capable of doing it. What are there, like 10 companies that get the bulk of government defense contracts?

1/6/2012 11:13:56 AM

sure. if NG screws up, congress will reconsider them next time and go to boeing. who screwed up before. sure, if they screw up bad enough, they'll get fined, but if the contract just gets cancelled, and that's that? that's just free money to a big company. it would hurt a small guy who doesn't get a lot of gov't contracts. but the big guys? ha!

1/6/2012 11:14:26 AM

Yeah, there are only a few large companies capable of handling projects of a certain size (in my opinion). And just a few that get the majority of those contracts I.e., northup grumman, bae, lockheed, ratheon, csc, ibm.
One way the government diversifies is with SBIRs, or by writting in verbage in the contract saying "the large comoany has to subcontract x% of work out to small business, x% to women owned businesses, x% to veterans, etc..."

1/6/2012 11:27:51 AM

Yup, which leads to further inefficiency since they aren't merit based, but based on qualifiers like minority owned.

Politicized spending or spending used to further an agenda is a terrible policy. It's just as bad as investing government pension money not in what will yield the best rate or return or a stable rate of return, but rather investing in something because it's politically popular with the party in power.

Anyway, point being I have a lot of issues with the way that government agencies award contracts and spend money.

1/6/2012 12:33:43 PM

You wont hear me say that the acquisition and procurement process isnt horribly broken on many, many, many levels.

1/6/2012 12:58:50 PM

http://www.nytimes.com/2012/01/05/business/boeing-to-shut-wichita-plant.html

Quote :

"Mark Bass, a vice president for a division in Boeing’s military business, told reporters on Wednesday that the plant, which Boeing has run for 80 years, was too large and inefficient to be competitive as the Pentagon cut costs. He said other contracts for modifying and maintaining military aircraft were winding down, and a Boeing study concluded in November that the plant’s business “would continue to erode.” He said the plant had 97 buildings and stretched across two million square feet, but it must compete for maintenance work with smaller companies operating out of two aircraft hangars. Boeing maintains the president’s planes, known as Air Force One, at the Wichita plant. Company officials said some of the modification contracts, for airborne command and logistics-support planes, were ending, and plans for updating B-52 bombers had not materialized as expected. Mr. Bass said labor costs at the plant were higher than at rival sites."

1/6/2012 2:57:56 PM