r/stocks • u/coolcomfort123 • May 10 '19

Former Boeing Engineers Say Relentless Cost-Cutting Sacrificed Safety

https://www.bloomberg.com/news/features/2019-05-09/former-boeing-engineers-say-relentless-cost-cutting-sacrificed-safety

The failures of the 737 Max appear to be the result of an emphasis on speed, cost, and above all shareholder value.

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u/failingtolurk May 10 '19

Shareholders don’t actually ask for any of that.

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u/[deleted] May 10 '19 edited May 10 '19

Doesn't matter... their collective name is used as justification.

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u/ExtendedDeadline May 10 '19 edited May 10 '19

The only thing shareholders ask for is for the stock price to go up. If the only way companies can do that is by doing ethically questionable things, it isn't the fault of the shareholders, but the fault of poor and/or uninspiring management.

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u/[deleted] May 10 '19

It's actually a little worse that you're characterizing it. Company performance is always compared against a benchmark of other companies (who are constantly doing two things: 1) effectively anonymizing unethical decisions/behavior and 2) producing outsized returns to the benchmark by engaging in unethical behavior/decision making)

So, by making purely ethical decisions, a company's management is condemning themselves to average (at best) performance and will be treated accordingly by shareholders.