Month: November 1999

Unholy Trinity

It’s been a bad week for Microsoft. I can’t say I’m not pleased.

On Nov. 5, the Justice Department ruled that Microsoft violated antitrust law by bundling its Internet browser with Windows and pressuring computer makers to buy the combined package. Pundits are calling this an overwhelming defeat for Microsoft, and talking about the beak up of the company along the lines of the break up of AT&T. In reality, the final ruling won’t come until February, and Microsoft has the option of either settling (which would halt the antitrust case in its tracks) or pursuing a long appeals process, which could take at least a year–if not three or four–before any sanctions could be imposed on the company. And the penalties will be small–a few so-called “conduct guarantees” or rules that Microsoft would have to follow in its business dealings.

Conduct guarantees formed the core of Microsoft’s consent decree with the Justice Department in 1995; that consent decree headed off a full-blown antitrust investigation. The core of the decree was Microsoft’s promise to keep its applications software unit completely separate from its operating systems unit in all ways. Anyone who works at Microsoft can tell you that this division was never seriously implemented by the company.

Even now, the likeliest scenario for a “break-up” of Microsoft would follow the same lines as the 1995 consent decree–it would involve a separation of the company into three units: an applications software unit (Word, Excel, Office, etc.), an operating systems unit (Windows), and an Internet browser unit (Internet Explorer). But enforcing and monitoring the separation would be impossible, and both Microsoft and its shareholders know it. Immediately after the ruling was announced, Microsoft’s stock price took a small dip, and then continued to climb.

Nevertheless, it’s fun to watch Microsoft being grilled by the Justice Department, and it’s instructive to read the internal company memos, e-mail, and the testimony of Microsoft’s sorely abused customers and competitors.

Just as entertaining has been the flurry of bad press for Boeing. You have to be reading the Business section of the local papers very closely to find all these tidbits, but it’s well worth it.

While everyone waits for details on what caused the recent crash of the EgyptAir 767, more and more evidence is surfacing about Boeing’s shoddy assembly-line practices.

A $5 billion lawsuit filed by two whistle-blowers paints an interesting picture of the Boeing work ethic. According to the suit, when Boeing decided to speed up its production lines starting in the late 1970s, Boeing employees were forced to work under tight production schedules with little or no training. As a result, throughout the 1980s and early 1990s, workers on the 767 line routinely performed shoddy work and even sabotaged some of the planes. They overtightened bolts, knowingly used flawed materials, and purposefully damaged planes destined for customers in Asia, out of frustration at their supervisors and their work environment. According to the suit, Boeing workers were also pressured to falsify safety inspections. And when inspectors rejected damaged or corroded parts, supervisors ordered them to approve the parts for use anyway. Of particular interest is Boeing’s “Best Fit” policy, which meant employees were to use hammers, pry bars, uncalibrated tools–in short, any means necessary–to make non-standard parts fit.

This could account for why the Army grounded all 743 of its Boeing-built Apache helicopters last week. The reason: a faulty tail rotor assembly will have to be replaced on 400 of the helicopters, which will cost taxpayers about $13.5 million.

This could also account for Boeing’s most current production headache: a near shut-down of the 767 and 747 production lines at the Everett plant. To save time and speed up production, Boeing workers at a Spokane factory took a short-cut that violates FAA safety regulations. They used an unapproved, highly flammable, spray-on glue on the air ducts systems installed in Boeing’s 747, 767, 757-200, and classic 737 planes. To comply with FAA regulations, the ducts on all of these planes will have to be inspected and coated with non-flammable materials, which means taking each plane apart and looking at up to 155 separate ventilation ducts on each plane. Not that they’ll do it–short cuts can occur anywhere.

… Like with the bolts that attach the tail fin of the jet to the fuselage. Last week, Boeing admitted that tail bolts on a number of its 767s were under-torqued (i.e., loose). The problem stems from machinists using two separate machines together to torque the bolts, without having the two machines calibrated together. Only one of the tools had been recalibrated recently (in 1992). Evidently, there’s no way to know how many loose bolts–or tail fins–are rattling around in the friendly skies.

The company is still reporting FOD problems with new Boeing jets. FOD–short for “foreign object debris”–can include hammers, rivet guns, screwdrivers, T-bars, bolts, pry bars, rags, and any other loose material found sealed up and banging around inside the airplane, its engines, or its wings. One Boeing worker was quoted recently in an Everett Herald article: “For almost every plane that goes to the flight line, we get a kitchen-sized garbage bag back full of FOD.”

Then there’s the thrust reverser problem. Thrust reversers deploy when a plane is landing, and they help slow it down on the runway … unless that plane is a Boeing 767–in which case the thrust reversers may deploy while the plane is still in the air. This caused the crash of a Lauda Air 767 eight years ago in Thailand, killing all 223 passengers and crew. The EgyptAir 767 had one of its thrust reversers deactivated just prior to its fatal flight.

Which brings us to the central fuel tank controversy. The 1996 crash of TWA Flight 800 off Long Island, NY, has proved to be a nightmare for Boeing. After years of insisting that a “missile” hit the plane, Boeing was recently forced to release a 16-year-old internal report that detailed problems with the flammability of center fuel tanks on its airplanes–the very problem the National Transportation Safety Board is investigating as the cause of the TWA crash. If the NTSB rules that faulty design or construction of the central fuel tank was the cause of the crash, Boeing stands to lose a lawsuit filed by the family members of those who died in the TWA crash. Of course, if Boeing had released the report 16 years ago or altered the fuel tank design, the TWA 800 crash might never have happened.

So far, speculation about the cause of the EgyptAir crash has centered on two theories: sabotage (involving a sudden decompression of the cabin) or mechanical failure, particularly of the electrical system. Of course, decompression might have happened as a result of “mechanical failure,” too. The whistle-blowers’ lawsuit mentions that 767s were assembled with a floor assembly jig that was obsolete and uncalibrated; allegedly the jig was used to jam fuselage panels into place, often resulting in “improper alignment of major sections of the fuselage.” This conjures up the vision of panels simply twisting off the plane after years of flight stress–without the helping hand of a terrorist’s bomb. Boeing, of course, likes to point out that the 767 line has an excellent safety record; perhaps that’s about to change.

It almost seems cruel to mention that Boeing recently lost two major sales to Airbus, but it’s no mystery why. And for the first time ever, Airbus’ order backlog is larger than Boeing’s.

As much fun as it is to watch Boeing twist in the wind, it’s even more fun to see Nordstrom sweating. Immediately after the recent elections, Steve Eugster, a new city council member in Spokane, WA, requested a copy of a secret lease agreement between Nordstrom and the developers who built the controversial River Park Square mall in downtown Spokane…with HUD money. Folks who remember the parking garage debacle here in Seattle may recall that Nordstrom worked out an even sweeter deal with the city of Spokane–instead of receiving a few stalls in a parking garage, they got the prime location in a federally funded shopping mall. So far, Nordstrom and the mall developers, Citizens Realty and Lincoln Investment, have been able to keep the lease secret under the excuse that it contains “proprietary business information,” but Eugster, who ran on a platform opposing the mall, will now have legal access to the lease documents. Hopefully, he’ll make them public soon.

My holidays haven’t been this fun in a long time. Do I dare hope there’ll be more trouble in the wings for Microsoft, Boeing, & Nordstrom?

One Planet

An estimated 13 million people marched for peace in Colombia on October 24, the opening day of new peace talks between the government and the Revolutionary Armed Forces of Colombia (FARC). There were 2 million marchers in the capital of Bogota, while over a million protested in Medellin. Millions more filled the streets of 57 cities and towns across the nation, bearing banners that read simply “No Mas.” Their main demand was for an end to the killing of civilians by the military and paramilitary groups, who were responsible for over 80% of the political killings in Colombia last year. Many peasants and townspeople elaborated on the “No More” message, wearing T-shirts and bearing signs that read: “No More Massacres,” “No More Unemployment,” “No More Torture,” and “No More Gringo Military”–the last in reference to the increasing presence of U.S. military personnel, weapons, and money in Colombia to provide support to the corrupt Colombian military. Currently, the U.S. Congress is debating a bill that would boost military aid to Colombia to $1.5 billion; last year’s total was $289 million, which made Colombia the third-largest recipient of U.S. military aid. The U.S. aid package is being touted as money for the drug war, but the Drug Enforcement Agency’s chief administrator, Donnie Marshall, has testified before a House subcommittee that the FARC “are associated with drug traffickers, providing protection or extorting money from them. But from the point of view of the DEA, we judge the FARC from the point of view of enforcing the law. And at the moment we haven’t come close to the conclusion that this group has been involved as a drug trafficking organization.” Nevertheless, Sen. Jesse Helms is trying to push enormous amounts of money into the civil war in Colombia in the name of “the drug war.” Colombian President Andres Pastrana, however, supports the DEA’s position: “The FARC has always said they are interested in eradicating illegal crops.”From: “Millions march for Colombia peace, BBC News, 10/25/99; “Paramilitaries’ influence in Colombia welcomed by some but feared by others,” NPR, 10/7/99 (from a transcript); and “DEA Clears FARC,” CounterPunch, 9/1-9/15/99.

On October 20 the Indonesian parliament elected a president, but it wasn’t B.J. Habibie, Suharto’s hand-picked successor. And surprisingly, it also wasn’t Megawati Sukarnoputri, the popular granddaughter of Sukarno and the woman that everyone assumed would win the election. When Habibie lost a vote of confidence and agreed to step down, his supporters in parliament scrambled to find a replacement candidate–anyone but Megawati. They turned to Abdurrahman Wahid, a Muslim intellectual and a “moderate” who is a close associate of General Wiranto, the man who really runs Indonesia. Wahid was acceptable to the military, to conservative Muslims, and to businessmen: he won 373 votes–just 22 more than he needed to win. Megawati had 313 votes. Stanley Roth, an official with the U.S. State Department, was quick to praise Wahid: “This is a man, clearly, the United States can work with.” Immediately after the election results were announced, people took to the streets in several cities and towns around the country to protest in support of Megawati. Banks and government offices were burned in Solo, central Java, in South Sulawesi, in Northern Sumatra, and in Bali, a stronghold of Megawati support (she is part Balinese). In Jakarta, thousands of protesters fought police with rocks and Molotov cocktails, while police fired rubber bullets and used tear gas to disperse crowds. Protesters burned part of the Jakarta Convention Center. In response, the parliament quickly moved to elect Megawati Vice President to put an end to the unrest. Her influence, however, will be minimal. Last week, Wahid named the members of his new cabinet and revealed his preference for a military-style government ala Suharto. Notably, Gen. Wiranto will move into a new, more powerful position as Co-ordinating Minister for Political and Security Affairs. Wahid also named three other generals to cabinet posts.From: “Muslim Cleric is Elected Indonesia’s President,” LA Times, 10/21/99; “Megawati supporters go on rampage countrywide after election defeat,” Agence France Presse, 10/20/99; and “Neat trick, but balancing act will create problems,” Sydney Morning Herald, 10/27/99.

An update in the Pinochet extradition process: a British magistrate ruled on October 8 that Pinochet can be extradited to Spain to stand trial. But Pinochet won’t be leaving England any time soon. His associates in the Chilean government have been unsuccessful in persuading British Home Secretary Jack Straw and Prime Minister Tony Blair to release Pinochet from custody, so Pinochet’s lawyers have filed a habeas corpus petition with London’s High Court. This will set off a second round of appeals that could last another year. This second appeal will challenge the extradition order itself; the first appeal dealt with the legality of Pinochet’s arrest and detention under British law.

Shame on Michel Barton, spokesman for the U.N. Office of the Coordinator for Humanitarian Assistance. On October 14, he told a reporter for The Irish Times “…we don’t believe that people in their thousands have been killed and their bodies buried or thrown in the sea. If this had been the case we would have found evidence by now. Presumably all the missing people are in West Timor or still hiding in East Timor’s mountains.” What he neglected to tell the reporter is that no U.N. investigative team has yet entered East Timor to investigate the killings, even though the U.N. Commission on Human Rights said it would send a team over a month ago. Gathering evidence has been left to the Australian military, which admits that it isn’t able to do the job properly. In addition, witnesses and Australian military personnel report that the militias took great care to hide the number of people they killed. One strategy included burning bodies, loading the charred corpses onto trucks, and dumping them into crocodile-filled lakes near Suai, a coastal town 60 miles southwest of Dili. In another instance, victims from Maliana were hacked to death with machetes, trucked to the coast, loaded on a boat, weighted with sandbags, and thrown into the sea. U.N. peacekeepers have often reported reaching sites of alleged massacres and finding lots of blood, piles of abandoned personal effects, a few scattered body parts, but no corpses. And they have no training and no equipment to search for and exhume bodies. Presumably, the U.N. can’t spare any investigators from Kosovo … nor can it be honest about its own dereliction of duty. In the meantime, U.N. peacekeepers have accounted for only half of the 850,000 people who lived in East Timor prior to the militia attacks.From: “UN official doubts Timor massacre stories,” Irish Times, 10/14/99; “Evidence is there, but where is the U.N. team?” Sydney Morning Herald, 10/16/99; and “A Killing Ground Without Corpses,” Washington Post, 10/22/99, p A01.

 

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