To understand why Dreamliners catch fire, we must look all the way back to the immediate aftermath of the Cold War, when major defense contractors were facing the prospect of declining defense budgets and consequent diminishing profits. In response, William Perry, newly installed as Deputy Secretary of Defense in the Clinton Administration, presided over a series of mergers between the big firms, which produced an industry dominated by five giant “primes.” Perry offered handsome subsidies to the firms as encouragement to merge, promoting the initiative as beneficial to the taxpayer because it would cut down on wasteful overhead. Needless to say there were no such savings for taxpayers, and the resultant corporate oligopoly inevitably led to increased weapons costs. One of the mergers united Boeing, the world’s pre-eminent commercial-airliner manufacturer, with McDonnell Douglas, a pure defense company. Boeing was of course also a defense contractor, but top management had traditionally kept the civil and defense divisions separate for fear that the defense team might infect the civilians with their culture of cost overruns, schedule slippage, and risky or unfeasible technical initiatives. These habits were all very well when the taxpayer was footing the bill for cost-plus contracts that might or might not result in a useful product, but they could obviously have proved disastrous when it came to competing with the company’s own money in a free-enterprise market.
more from Andrew Cockburn at Harper’s here.