Boeing Shares Plunge and Recover Post Plane Crash

[Jimmy Higgins]

NEW YORK, NY -- Shares in Boeing Aerospace dropped substantially after over 150 people died while using its product. This follows a relatively recent crash in Indonesia of the same product that killed another 189 people. The stock for one of the two main aerospace corporations in the world was down upwards of 13.5% after the second model 737 Max 8 plane failed to stay in the air and effectively killed everyone on board because of said failure.

However, shares for the besieged company recovered to just half its maximum loss when traders agreed that the death toll and crash of two of Boeing's best selling model just wasn't big enough of a problem to justify a nearly 14% drop in share value.

"The magic number is 1,000," noted Aerospace expert Dan Altimeter. "Once you lose 1,000 people, then you start pressing through that 15% share drop metric. Until then, sure, the stock will drop. But this is capitalism, and capitalism has attention deficit disorder! Remember Merck and Vioxx? The Dow doesn't."

Boeing spokesperson Ronald Speaksmore read aloud a statement regarding the recent hit to the stock value. "We want to assure everyone that there is absolutely no reason to worry about the stability of our stock. While this recent incident has alarmed some, it is important to remember that these incidents occurred in third world nations and most investors will forget about them in a short period of time and our stock will recover."

 

[Worldtraveller]

You should submit this one to the Onion!

 

[Copernicus]

Stock prices in Fortune 500 companies are driven largely trading algorithms, so there was a stampede to sell Boeing stocks as soon as news hit the market. Those same algorithms will trigger a buying spree, once the falling stocks reach a certain threshold. Stock analysts try to rationalize these buying patterns, but they usually have very little to do with human judgment. Like so many of our aircraft, the stock markets are on autopilot.

 

[Jimmy Higgins]

Stock prices in Fortune 500 companies are driven largely trading algorithms, so there was a stampede to sell Boeing stocks as soon as news hit the market. Those same algorithms will trigger a buying spree, once the falling stocks reach a certain threshold. Stock analysts try to rationalize these buying patterns, but they usually have very little to do with human judgment. Like so many of our aircraft, the stock markets are on autopilot.

This then leads to my point about Merck and Vioxx. Sure, you have the immediate response, but in the end, the Market doesn't give a fuck. Over 300 people dead. It'll be alright.

 

[Copernicus]

Stock prices in Fortune 500 companies are driven largely trading algorithms, so there was a stampede to sell Boeing stocks as soon as news hit the market. Those same algorithms will trigger a buying spree, once the falling stocks reach a certain threshold. Stock analysts try to rationalize these buying patterns, but they usually have very little to do with human judgment. Like so many of our aircraft, the stock markets are on autopilot.

This then leads to my point about Merck and Vioxx. Sure, you have the immediate response, but in the end, the Market doesn't give a fuck. Over 300 people dead. It'll be alright.

I don't honestly believe that. I worked for 25 years at Boeing, and this kind of accident devastates everyone. It isn't just their own welfare or fortunes that they are thinking of. There is a very strong culture of safety there. Not everyone is a Martin Shkreli.

I fear that this crash was caused by a very buggy new flight control system, just like the Lion Air crash. If so, then the pilots of this aircraft should have been prepared to shut down that system the moment the aircraft started to plummet. However, it will take some time before we know what the real cause was. It doesn't help to jump to hasty conclusions. Right now, the companies have to deal with the horror that families and loved ones of the victims are experiencing.

 

[Jimmy Higgins]

Stock prices in Fortune 500 companies are driven largely trading algorithms, so there was a stampede to sell Boeing stocks as soon as news hit the market. Those same algorithms will trigger a buying spree, once the falling stocks reach a certain threshold. Stock analysts try to rationalize these buying patterns, but they usually have very little to do with human judgment. Like so many of our aircraft, the stock markets are on autopilot.

This then leads to my point about Merck and Vioxx. Sure, you have the immediate response, but in the end, the Market doesn't give a fuck. Over 300 people dead. It'll be alright.

I don't honestly believe that. I worked for 25 years at Boeing, and this kind of accident devastates everyone. It isn't just their own welfare or fortunes that they are thinking of. There is a very strong culture of safety there. Not everyone is a Martin Shkreli.

I fear that this crash was caused by a very buggy new flight control system, just like the Lion Air crash. If so, then the pilots of this aircraft should have been prepared to shut down that system the moment the aircraft started to plummet. However, it will take some time before we know what the real cause was. It doesn't help to jump to hasty conclusions. Right now, the companies have to deal with the horror that families and loved ones of the victims are experiencing.

This is Boeing's statement:

“Safety is Boeing’s number one priority and we have full confidence in the safety of the MAX. We understand that regulatory agencies and customers have made decisions that they believe are most appropriate for their home markets. We’ll continue to engage with all of them to ensure they have the information they need to have confidence in operating their fleets or returning them to service. It is also important to note that the Federal Aviation Administration is not mandating any further action at this time, and based on the information currently available, we do not have any basis to issue new guidance to operators.”

Yes, it is a little too early for final condemnations, but clearly, there appears to be risk. Which is why Europe is taking these out of flight until that risk can be assessed. Boeing is clearly in the PR saving mode. I'm sure there are lots of upset people right now at Boeing, but that isn't the face that is showing up.

 

[J842P]

Stock prices in Fortune 500 companies are driven largely trading algorithms, so there was a stampede to sell Boeing stocks as soon as news hit the market. Those same algorithms will trigger a buying spree, once the falling stocks reach a certain threshold. Stock analysts try to rationalize these buying patterns, but they usually have very little to do with human judgment. Like so many of our aircraft, the stock markets are on autopilot.

This then leads to my point about Merck and Vioxx. Sure, you have the immediate response, but in the end, the Market doesn't give a fuck. Over 300 people dead. It'll be alright.

I don't honestly believe that. I worked for 25 years at Boeing, and this kind of accident devastates everyone. It isn't just their own welfare or fortunes that they are thinking of. There is a very strong culture of safety there. Not everyone is a Martin Shkreli.

I fear that this crash was caused by a very buggy new flight control system, just like the Lion Air crash. If so, then the pilots of this aircraft should have been prepared to shut down that system the moment the aircraft started to plummet. However, it will take some time before we know what the real cause was. It doesn't help to jump to hasty conclusions. Right now, the companies have to deal with the horror that families and loved ones of the victims are experiencing.

I'm sure everyone at Boeing is devastated. But quite frankly, every corporation like Boeing is exactly like Martin Shkreli. The individuals working there don't really matter. Boeing wouldn't be Boeing if it didn't act like Martin Shkreli.

I am certain that Joe Paterno and the Penn State football staff are personally very much against child rape. That didn't stop Penn State Football, the institution, from shielding Jerry Sandusky from child rape for a very long time. Even if all the individuals there personally abhor child rape.

 

[Copernicus]

I don't honestly believe that. I worked for 25 years at Boeing, and this kind of accident devastates everyone. It isn't just their own welfare or fortunes that they are thinking of. There is a very strong culture of safety there. Not everyone is a Martin Shkreli.

I fear that this crash was caused by a very buggy new flight control system, just like the Lion Air crash. If so, then the pilots of this aircraft should have been prepared to shut down that system the moment the aircraft started to plummet. However, it will take some time before we know what the real cause was. It doesn't help to jump to hasty conclusions. Right now, the companies have to deal with the horror that families and loved ones of the victims are experiencing.

This is Boeing's statement:

“Safety is Boeing’s number one priority and we have full confidence in the safety of the MAX. We understand that regulatory agencies and customers have made decisions that they believe are most appropriate for their home markets. We’ll continue to engage with all of them to ensure they have the information they need to have confidence in operating their fleets or returning them to service. It is also important to note that the Federal Aviation Administration is not mandating any further action at this time, and based on the information currently available, we do not have any basis to issue new guidance to operators.”

Yes, it is a little too early for final condemnations, but clearly, there appears to be risk. Which is why Europe is taking these out of flight until that risk can be assessed. Boeing is clearly in the PR saving mode. I'm sure there are lots of upset people right now at Boeing, but that isn't the face that is showing up.

That was put out by the PR department, and it reflects the official corporate position. It's not that money is the only thing driving that position. The fact is that they simply don't know what caused the crash yet, but they have the black boxes and will probably have a preliminary report relatively soon. Personally, I don't think that there is much danger of a repeat of the Lion Air crash, since the remedy is fairly well known--turning off the anti-stall flight control system. What they need to do here is determine whether that was the issue. The FAA should have taken a more precautionary approach, but Donald Trump's administration is not known for its support of regulatory actions. From what I know of the company, they will pull out the stops to fix the problem, once it is identified. There will certainly be a lot of company-internal debate over whether it even makes economic sense to oppose grounding those airplanes. The perception that the company is trying to cover up an issue like this will do far more economic damage, and there is no way that they actually can cover it up, even if they wanted to.

...
I'm sure everyone at Boeing is devastated. But quite frankly, every corporation like Boeing is exactly like Martin Shkreli. The individuals working there don't really matter. Boeing wouldn't be Boeing if it didn't act like Martin Shkreli.

Have you ever worked for a large engineering company? The individuals actually do matter a lot. It is true that greed does drive the behavior of some individuals within any large corporation, but my experience of the company is that there is a lot of pushback against ignoring safety in order to save time or money. They are acutely aware of, and proud of, their culture of safety, and that is usually reflected in the way they approach disasters of this sort. I can't say much about Muilenburg himself as the CEO, but he has an engineering background. I don't see him as a Shkreli-like character, but he is not the only person making decisions on how to handle this matter.

I am certain that Joe Paterno and the Penn State football staff are personally very much against child rape. That didn't stop Penn State Football, the institution, from shielding Jerry Sandusky from child rape for a very long time. Even if all the individuals there personally abhor child rape.

We are all aware of the fact that large institutions make bad policy decisions, but analogies are considered fallacies for a reason. This kind of comparison doesn't necessarily apply to all, or even most, large enterprises. I'm one of the last people to defend Boeing management, but my experience with the company suggests that they are well aware of the danger inherent in letting aircraft continue to fly that they consider unsafe. Safety reputation is more important than short term profits for an aerospace manufacturer. Shkreli was only concerned about making money regardless of reputation.

 

[untermensche]

The market assumes things will be righted.

The market has no connection to human emotion beyond greed.

 

[RVonse]

Looks like a great buying opportunity to add some Boeing in my 401k and IRA accounts.

Thanks for the heads up Jimmy!

 

[Copernicus]

Before anyone thinks that I'm taking the position of an apologist for Boeing, I want to make clear that I think all of those 737 Max 8 and 9 planes should be grounded. The FAA is derelict in its duty, and the Trump administration seems to be a significant part of the problem. My expectation right now is that Boeing CEO Muilenburg may lose his job over his handling of this crisis. From what I have been seeing, there have been reports from pilots in the US of similar problems with the MCAS flight control system. Boeing had a software solution in place that could have been deployed at the end of January, but talks between the company and the government caused that date to be moved to late April. (And it is possible that Trump's government shutdown had something to do with this, not to mention his failure to appoint a new head of the FAA.)


The problem may be that the MCAS system in place when the aircraft were deployed relied on just a single sensor for the new anti-stall system. On the face of it, that strikes me as a very risky strategy, since there was no redundancy engineered to mitigate that single-failure point (obvious in hindsight). Really bad design, and I wonder whether there was some company-internal controversy over it before the aircraft was rolled out. All of those planes should be grounded until the new software, which relies on multiple sensors, is deployed to all aircraft. In fact, I think that the safety certifications should be pulled at this point--something that has not yet even been done in Europe. The European groundings are only temporary, pending an investigation, but this aircraft needs to be recertified. Moreover, there ought to be an investigation of company records to determine whether there were concerns over the single-sensor dependency before the decision to roll out the aircraft.

 

[untermensche]

You would think these things would show up in flight testing and simulations of the flight software.

What the fuck?

 

[bilby]

It's very clear that the entire aviation industry needs to be phased out worldwide as soon as is practical.

To that end, no new aircraft should be built; and older models should not under any circumstances be replaced - if airlines want to continue to operate, then they must be forced to do so with only their existing fleets.

Further, each airline that continues to operate should be required to fly at least thirty additional crew on every flight, to file documentation with the FAA showing that every action taken by the pilots and other aircrew complies with regulations in an auditable way. The airlines should also be required to pay to the FAA sufficient fees to employ any staff deemed necessary by the FAA, to audit and file these large volumes of reports.

Oh, sorry. That kind of stupidity is only expected of the nuclear power industry.

Carry on.

 

[barbos]

https://talkfreethought.org/showthread.php?17139-indonesia-LionAir-crash
That is an original thread. We don't know if it is MCAS yet. Circumstances are similar to LionAir, but some witnesses say there was a smoke coming from the plane. If it IS MCAS then Boeing and FAA should be in deep trouble. As I originally said, problem is with plane failing to make pilots aware of what it is doing and why and then give pilots an easy option to override.

 

[Copernicus]

I had lunch with some Boeing colleagues today and got more insight into what is happening with the Max 8. It turns out that the original design of the 737 had a feature that automatically cut out the anti-stall system. When the pilot pulled back sharply on the yoke, that would take the aircraft to manual control. The new system installed on the Max 8 and 9 removed that feature and replaced the cut-out with two switches that need to be set. So some pilots may be pulling back on the yoke, expecting the autopilot to shut down, and forgetting to use the switches. There have been more incidents with the anti-stall system after takeoff in the US, but pilots have always managed to shut down the autopilot when that happened. Moreover, the yoke is now much harder to resist than it was in the past, if the pilot does not override the autopilot. An investigation must still verify that this was the problem with the Ethiopia crash.

The new system actually uses two sensors, but the software was designed to rely on readings from just one of the sensors. The new fix, which was originally supposed to be deployed in January, has more redundancy built into the system so that the MCAS has to resolve discrepancies. However, the fix has yet to be fully tested before deployment. So the new date is set for next month (April).

I had hoped that Boeing CEO Muilenburg, with his background in aerospace engineering, would be better than past CEO McNerney, who came out of Finance. Unfortunately, Muilenburg had no real experience with commercial aviation. He came out of the McDonnell Douglas side of the corporation and had all of his experience with military programs such as the P-8. He reflects their cost-cutting mentality to running a business, so they have lost a lot of senior engineers, not to mention quality control people. In my opinion, that also degraded the quality of the advanced technology capabilities. That probably has little to do with the immediate problem, but it can make responses to crises of this sort more difficult to handle.

At this point, Boeing is going to have to eat the cost of the loss of business for all of its customers that have grounded aircraft. Until this happened, the 737 Max was extremely profitable for them--one of the best selling commercial aircraft.

 

[TSwizzle]

I had lunch with some Boeing colleagues today and got more insight into what is happening with the Max 8. It turns out that the original design of the 737 had a feature that automatically cut out the anti-stall system. When the pilot pulled back sharply on the yoke, that would take the aircraft to manual control. The new system installed on the Max 8 and 9 removed that feature and replaced the cut-out with two switches that need to be set. So some pilots may be pulling back on the yoke, expecting the autopilot to shut down, and forgetting to use the switches. There have been more incidents with the anti-stall system after takeoff in the US, but pilots have always managed to shut down the autopilot when that happened. Moreover, the yoke is now much harder to resist than it was in the past, if the pilot does not override the autopilot. An investigation must still verify that this was the problem with the Ethiopia crash.

The new system actually uses two sensors, but the software was designed to rely on readings from just one of the sensors. The new fix, which was originally supposed to be deployed in January, has more redundancy built into the system so that the MCAS has to resolve discrepancies. However, the fix has yet to be fully tested before deployment. So the new date is set for next month (April).

Very interesting. I also read somewhere that this aircraft has the MCAS because the center of gravity of the plane shifted due to a heavier engine installed further forward on the wing. If true, isn't that a design flaw in itself ? Just curious.


Also, I heard that Boeing were going to deliver aircraft with a dog installed in the cockpit. The pilot will be there to feed the dog and the dog will bite the pilot if he touches anything. (The old ones are the best ones. )

 

[barbos]

I had lunch with some Boeing colleagues today and got more insight into what is happening with the Max 8. It turns out that the original design of the 737 had a feature that automatically cut out the anti-stall system.

It contradicts to what was reported after LionAir crash. MCAS did not exist prior to MAX and the main reason for it is the the more powerful off center engines in the MAX which could cause plane to stall. It seems Boeing did not think it was a big deal and would always work, so much so that they did not bother to describe in the manual, other than mentioning its name. What you describe is something else probably autopilot which I think can be turned off that way.

PS: Looks like Trump suspended 787 MAX and Boeing agreed. And EU suspended it too.

 

[Copernicus]

I had lunch with some Boeing colleagues today and got more insight into what is happening with the Max 8. It turns out that the original design of the 737 had a feature that automatically cut out the anti-stall system.

It contradicts to what was reported after LionAir crash. MCAS did not exist prior to MAX and the main reason for it is the the more powerful off center engines in the MAX which could cause plane to stall. It seems Boeing did not think it was a big deal and would always work, so much so that they did not bother to describe in the manual, other than mentioning its name. What you describe is something else probably autopilot which I think can be turned off that way.

PS: Looks like Trump suspended 787 MAX and Boeing agreed. And EU suspended it too.

Barbos, MCAS (Maneuvering Characteristics Augmentation System) systems have been around for a while now. They are associated with fly-by-wire aircraft and were first introduced to commercial aviation by Airbus, I believe. So I don't know where you got this idea that it did not exist prior to the 737 Max aircraft. News articles have referred to the role of this particular system in the Max 8 crashes, so it might be that some reporters think they were some kind of new feature of that aircraft. I don't know. The term "autopilot" is a less general term for a variety of systems, so people do talk interchangeably about "turning off the autopilot" and "turning off the MCAS". You can also say "flight control system" "anti-stalling system". If Boeing did not think the system would always work, then why did they previously have a different method for turning it off during a malfunction? Engineers always worry about failure points, and previous aircraft have had multiple and triple redundancy for such systems. I don't know why this one relies on just one of two sensors to prevent stalls.

If the anti-stalling system was the cause of the latest crash, it is likely that the pilots were relying on the method for previously turning it off--pulling back forcefully on the yoke. It is possible that they changed the design because of the nose-heavy configuration of the Max 8.

 

[barbos]

Barbos, MCAS (Maneuvering Characteristics Augmentation System) systems have been around for a while now

Not according to everything on the internet.

MCAS was introduced by Boeing on the 737 Max 8 because its heavier, more fuel-efficient engines changed the aerodynamic qualities of the workhorse aircraft and can cause the plane's nose to pitch up in certain conditions during manual flight.

https://phys.org/news/2019-03-ethiopian-airlines-mcas-boeing-max.html

It did not exist prior to MAX 8, and it was not described in the MAX 8 manual. And it certainly does not exist in any other plane, which simply warn pilots about stall and expect pilot to react.

 

[Copernicus]

I had lunch with some Boeing colleagues today and got more insight into what is happening with the Max 8. It turns out that the original design of the 737 had a feature that automatically cut out the anti-stall system. When the pilot pulled back sharply on the yoke, that would take the aircraft to manual control. The new system installed on the Max 8 and 9 removed that feature and replaced the cut-out with two switches that need to be set. So some pilots may be pulling back on the yoke, expecting the autopilot to shut down, and forgetting to use the switches. There have been more incidents with the anti-stall system after takeoff in the US, but pilots have always managed to shut down the autopilot when that happened. Moreover, the yoke is now much harder to resist than it was in the past, if the pilot does not override the autopilot. An investigation must still verify that this was the problem with the Ethiopia crash.

The new system actually uses two sensors, but the software was designed to rely on readings from just one of the sensors. The new fix, which was originally supposed to be deployed in January, has more redundancy built into the system so that the MCAS has to resolve discrepancies. However, the fix has yet to be fully tested before deployment. So the new date is set for next month (April).

Very interesting. I also read somewhere that this aircraft has the MCAS because the center of gravity of the plane shifted due to a heavier engine installed further forward on the wing. If true, isn't that a design flaw in itself ? Just curious.

The Max series is nose-heavy compared to previous 737s, so that likely led to the design changes. One general criticism I heard at lunch today was a concern that Boeing is packing a lot of new technology in old airframes designed for different systems in order to avoid extra expense. Maybe they should have redesigned the airframe for this iteration, but that would have produced production delays and possibly priced the aircraft out of the market.

Also, I heard that Boeing were going to deliver aircraft with a dog installed in the cockpit. The pilot will be there to feed the dog and the dog will bite the pilot if he touches anything. (The old ones are the best ones. )

Nope. You are reproducing an old joke from Airbus. I first heard it during a tour of their factory in Toulouse. What the engineer told us was that the ultimate cockpit design would be a panel with a single big red button on it and a dog chained to the panel. The dog would be there to keep anyone from pushing the button.

Boeing and Airbus had different philosophies about fly-by-wire. Boeing's position was that the pilot should always be offered as much control as possible, whereas Airbus wanted to automate everything. Engineers used to stress that to us in briefings on new technology. Most problems are caused by pilots not understanding what the automation systems are doing. I once saw a very interesting lecture by a chief engineer on poor choices in cockpit design on both Airbus and Boeing aircraft. Design of the flight deck is a really big deal at Boeing, so these problems with the 737 Max series are causing a lot of grief. I wonder if these problems would have occurred if they had made a stronger effort to keep experienced engineers on the job.