Why has the American manufacturing ace, Boeing, fallen into such a predicament?

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Due to heavy debts and severe losses, Boeing announced last Saturday a 10% staff reduction, forcing 17,000 employees to leave their jobs.

At the same time, a large-scale strike involving 33,000 Boeing workers has been ongoing for a month; the workers are demanding a 40% pay raise and the restoration of their previous fixed pensions, while Boeing executives only agree to a 30% pay increase and refuse to contribute to the workers' fixed pensions; both sides are at an impasse, unwilling to make concessions.

So far, the strike has caused Boeing economic losses of up to $5 billion and has halted the production of the Boeing 737 MAX, 767, and 777 aircraft, with the development plan for the 737X being completely shelved. The delivery delays caused by the production suspension have sparked strong dissatisfaction among global customers.

It should be noted that Boeing is facing a crisis of trust due to quality issues with the 737 MAX; now, with the added impact of delivery delays, Boeing's reputation is being rapidly depleted. This situation will not only allow Airbus to seize the opportunity to capture the market and expand its share but also help COMAC (Commercial Aircraft Corporation of China) to rise and mature quickly.

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As the saying goes: "Strike while the iron is hot."

So, the question arises, why has the mighty Boeing fallen into such a state? Clearly, it is not short of market or orders, so how could it have "suffered losses for six consecutive years, with a cumulative loss of nearly $30 billion, and negative operating cash flow"? It is a high-end manufacturing industry, so how could it not survive without borrowing every day?

What is the reason?The reason is that the economic structure of the United States is eliminating the environment in which "manufacturing can survive," turning it into a larger version of the United Kingdom. Due to excessive financialization and industrial virtualization, resources in the United States have been distortedly skewed towards industries such as finance, law, healthcare, and the internet after the year 2000. This has led to average incomes in these sectors being several times, even dozens of times, higher than in manufacturing. Consequently, the vast majority of high-quality talent and intelligent individuals in society have been drawn to virtual industries such as finance, the internet, and law, rather than the dirty and tiring manufacturing sector.

When the high-quality talent and intelligent individuals in society are all concentrated in virtual industries, the disaster for manufacturing begins. Due to the reluctance of high-quality and young people to engage in manufacturing, Boeing started hiring a large number of idle social elements, marginal groups, and even drug users into its assembly lines a decade ago.

Imagine that a group of employees without a sense of social responsibility, low quality, and uncultured, assembling aircraft, will have how many quality hidden dangers. This is the core reason for the surge in Boeing aircraft safety accidents in recent years, and there is no other.

Similarly, the entire middle management of Boeing lacks the input of fresh blood (whether it is mechanics, technicians, or those who understand production management), leading to chaotic management and extremely low efficiency at Boeing; the development of new models also lacks top leaders, confused thinking, and soaring research and development costs.

As for the top management? The top management focuses on stock incentives, busy pushing up Boeing's stock price in the short term, and then cashing out to seek personal benefits. No one cares about Boeing's physical operations and long-term strategy.

So, you might wonder how a top manufacturing enterprise with the highest profits in the world can lose tens of billions of dollars. It is precisely because of the chaos at the grassroots level with no one to manage it, the confusion and inefficiency at the middle level, and the greed and lack of restraint at the top level that have led to this situation.Of course, this is not solely Boeing's fault; it is the lament of the entire American manufacturing industry. As we mentioned earlier, when the vast majority of resources, including financial and human capital, are distortedly funneled into the virtual sector, how can the manufacturing industry possibly thrive? It's like trying to cook a meal without rice! When the United States over-financialized in the 1970s and allowed the internet, healthcare, and legal industries to grow without order in the 1990s, the fate of American manufacturing was already sealed.

Little did they know, it's not just Boeing; this year, most of the core American manufacturing companies (all of which are renowned high-end manufacturers) are on the brink of collapse. In September, Intel, which is on par with Boeing as a dual ace of American manufacturing, had to consider selling at a discount to Qualcomm due to accumulated losses of tens of billions of dollars.

If Boeing and Intel are in such a situation, it's certain that other American manufacturing companies are not faring any better. In 2023 and 2024, companies like Ford, General Motors, Texas Instruments, and U.S. Steel have all experienced significant losses or plummeting profits in their physical businesses. Some companies are still showing profits because their investment divisions have made gains from the stock market boom of the past two years.

For a high-end manufacturing company to rely on stock investments for profits, it's hard to say whether it's a cause for joy or sorrow.

The reason why the American manufacturing industry, or rather, the high-end manufacturing sector, has not completely collapsed is entirely due to the solid foundation laid over the past century and the perseverance of veteran engineers and technicians from the 1970s.In the financial powerhouse of the United States, with Wall Street and Jewish financial tycoons unscrupulously hollowing it out, one truly wonders how long they can continue to hold on.