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?
Comment on Boeing says it can’t make money with fixed-price contracts
agitatedpotato@lemmy.dbzer0.com 8 months ago
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?
krayj@lemmy.world 8 months ago
Whiskey_iicarus@lemmy.dbzer0.com 8 months ago
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.
Sir_Kevin@lemmy.dbzer0.com 8 months ago
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.
jimbolauski@lemmy.world 8 months ago
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.
there1snospoon@ttrpg.network 8 months ago
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.
agitatedpotato@lemmy.dbzer0.com 8 months ago
This problem could be solved even with a co-op structure even withing a free market. If ten workers in a co op produce $100 bucks of extra money, they all get ten and as long as any new hires can carey their weight so everyone still gets ten bucks bonus, they will hire them. Ones 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. If the pie all goes to one person they can keep adding workers until the worker doesn’t produce any surplus over the cost.
KevonLooney@lemm.ee 8 months ago
You are assuming two things:
In a small company, none of this is true.
agitatedpotato@lemmy.dbzer0.com 8 months ago
This is a proof of theory, the same way capitalist economists show what options and game theory incentices exist. Its quite literally a textbook example.
HobbitFoot@thelemmy.club 8 months ago
Also that each worker supplies the same surplus. While forecasters will assume this, this is rarely the case in engineering.