Remember how in the beginning of the year, we got a cascade of breaking news about problems with Boeing 787 Dreamliners? First there was a battery fire, then an oil leak, a fuel leak, engine cracks, a damaged cockpit window; then an emergency landing of an All Nippon Airways 787 followed by the airline's grounding of all 17 of the jets. On the same day Japan Airlines announced that they will stop flying their 787s as well. It must've made Qantas's execs feel real good about the cancellation of the 35-units order ($8.5 billion list price - nearly 10% of the projected annual revenue) back in August of 2012 due to endless quality-related delivery delays.
It was not the first time either that the largest aerospace company in the world gave up a painfully huge chunk of already budgeted revenue. In 2008 Boeing lost its bid for a $40-billion U.S. Air Force (!) contract to build 179 refueling aircrafts. Whose tankers won favors with the Pentagon? The French competitor's – Airbus (!). I recall reading at the time that Boeing's executives were so sure that the US defense order was pretty much in their American pockets that the celebration gala was already booked and catered. I also remember that many inside sources cited the higher quality and reliability of the European tankers.
There is a reason why I consider these Boeing's quality issues to be so distressing. First, the United States lost significant portions of international market shares in steel, heavy machinery, tools, household appliances, electronics, and consumer goods. The mere notion of an American TV set became a memory: I still remember how it made me feel reading in 1999 about the buyout of the last U.S. TV maker Zenith Electronics by South Korean LG.
The decades-long American automotive dominance (at one point 75% of the global supply) was first overtaken in the 1980s by the Japanese manufacturers with far superior quality and lower prices. Now, China became the world's leader in the production of motor vehicles (23% of the global market). Only the tremendous support of the US government keeps our carmakers in second place with an 11.8% share. Then again, the frequency of auto recalls are really getting out of control, so it's anybody's guess how long we will be able to keep this standing.
Even while all these repositionings were taking place, I kept saying that the national economy will not completely deteriorate as long as the US continues supplying the world with two types of products, which pretty much define our era – microprocessors (Intel still manufactures in Chandler, AZ and Hillsboro, OR) and airplanes (Boeing's facilities are 90% domestic). But now, with Boeing's value in an apparent decline, our country really pushes itself into a danger zone. I mean, a slice of the defense budget, funded by our own taxes, went, of all countries, to France!!!
How did it happen? Who's fault was that? It's everybody's fault (well, maybe it's the media's fault first and then everyone else's). In this celebrity-obsessed culture, merit-based standards have disappeared. No one wants to work and be rewarded according to their contributions into the final output, being it tangible products or services. No one cares about the quality of their work. And nobody looks into the future. Everyone wants to be rich and famous with a minimal effort, RIGHT NOW. US manufacturing is getting suffocated by bizarro day-trading patterns, market-driven executive bonuses, union bargaining, wide-spread ignorance, and laid-back work ethics. What quality? As a result, a few products and services still produced domestically have a very low value per dollar spent. From airplanes to… pretty much everything.
Yes, it's not just the industrial sector. Every step we take, we are confronted with bad attitude and terrible quality. Commercial and residential construction is slow and unpredictable. Most of NYC bridges are overdue for maintenance by decades. The cranes are falling onto nearby buildings, because City inspectors take bribes. It's common knowledge that there is no such a thing as a leveled house – they are all crooked, with slanted floors and uneven walls. It's not enough just to hire expensive contractors – if clients want the renovations to go smoothly and with decent results, they must supervise people who are paid $100-$250 per hour.
Most doctors don't want to think about the patients' specific symptoms - their primary concerns are billing the insurance and getting pharmaceutical "incentives." And that's why the US is the most overtested and overmedicated country in the world. Don't even get me started on the sales staff. If your mechanic tells you that the car will be ready in 3 hours, you would be wise to multiply that by 2. The food deliveries are always a hit-or-miss – every other order is messed up. But everyone expects tips, even if your dishes arrive upside down. The old doormen in my building used to not only know my name, but even recognize the frequent visitors. The young replacements cannot even associate my face with my apartment number – it's too much to ask.
My own receptionist, for God's sake, is too lazy to ask about the caller's business – she just gives me a name. And even that she doesn't care to get right. A 45 year-old man with a fairly deep voice called the other day. "Ted Fisher," he replied to her sleepy "Who's calling?" question. She patches herself through to my extension and says,"Patricia for you."
The Frustrated CFO 