Boeing says it can’t make money with fixed-price contracts
arstechnica.com
Boeing says it can’t make money with fixed-price contracts::"Rest assured we haven't signed any fixed-price development contracts, nor intend to."
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So either you suck at forecasting your own production, or you suck at production enough to not hit your forecast? And you want other people to pay you more because you don't have a good handle on your buisness?
As an employee at a production facility in the US, don’t think Boeing is unique in that regard.
These companies have gotten too big to work without exploiting their employees or inflating costs.
This problem could be solved with a co-op structure even within a free market. If ten workers in a co op produce $100 bucks of extra money, they all get voting power over ten buck, and as long as any new hires can carry their weight so everyone still gets ten bucks surplus to command, they will hire them if you follow the game theory incentives. Once companies get big enough to have diminishing returns, like a new employee could only produce 5 bucks of surplus, then hiring that person would make everyone have a smaller piece of the pie (adding him to our first ten means the share drops to 105/11 or 9.5 dollars.) If the pie(surplus) all goes to one person they can keep adding workers until the worker doesn't produce any surplus over the cost, bloating the departments. Because of this co ops tend to expand to peak productivity, (surplus per worker), rather that peak output (produce as much as we can until it becomes unprofitable to produce)
You are assuming two things:
In a small company, none of this is true.
This is a proof of theory, the same way capitalist economists show what options and game theory incentives exist. Its quite literally a textbook example. What I said about co ops is not a new claim, and im not gonna research the exact financials of the mondragon co op to make an example on lemmy lmfao. Also nowhere does my post suggest each worker is paid the same, thats not what surplus means. Nowhere do I assume the number of workers effects the market either, it effects production. Wow you really went out of your way to misread that.
Also that each worker supplies the same surplus. While forecasters will assume this, this is rarely the case in engineering.
All I said was 10 workers produce 100 dollars of surplus. Nowhere does that imply each produced 10 dollars. Only that their voting power commands 10 dollars of surplus. Read it again.
So you have a system that doesn't reward increased productivity between members, or even provides some metrics for measurement. You can have a successful project with non-performing members.
Co ops directly reward increased production, increased production would lead to increased surplus, and the surplus is democratically allocated, weather that's bonuses or investments, raises even if they see the increase is surplus as permanent. All of thats extra money that everyone gets to decide what to do with. Thats more incentive than ive seen more than most workers in top down systems get.
I don't see that getting implemented in an engineering company.
There are employee owned companies out there given the economics of creating an engineering company, but I don't see a co-op format scaling. At most, it is going to be employees choosing leadership.
Google Mondragon corporation and you can see a co op scaling up over history. You dont have to imagine, it's already happened and you can read about it.
Edit: and here's all their industrial co-ops under the one large Mondragon co-op. https://www.mondragon-corporation.com/en/we-do#negocioIndustria
I don't think they suck at forecasting...I think they are probably exceptional at forecasting but willfully lie about project costs when submitting bids for projects in order to come under the competition and win the contract. There doesn't seem to be any penalties for this, so why would they stop?
That happens all the time. I went through several government contracts where a company would come and under bid the current contract by a significant amount, win the bid, offer the current contractors 3/4 of what they were being paid and fill in the rest with new hires. There is no continuity between contracts so unless a bunch of the old contractors took a pay cut to stay on they would come in and start from scratch with all new processes and procedures and absolutely slow down productivity for all those they were supposed to be providing support.
If they're anything like other DOD contractors they make empty promises and straight up lies to get bids on contracts that they can't deliver on time on. They know they will fail these timelines but it makes them look good for that quarter so it doesn't matter to them.
The forecasts for FFP projects have competitive forces pushing them down. Many times they will underbid to win than hope everything goes perfect or they can find a way to weasel out of it.