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Shop on-line explodes. Why office buildings are not dead and will come roaring back. Comments on the pandemic

Blind Freddie can see 2020 has been a boom year for online shopping.

Shopify said sales for Black Friday were up 75%.

U.S. government figures show total e-commerce sales were up by 37 percent from July to September compared with sales in the same months in 2019.

Amazon’s e-commerce sales in that same period rose at 39 percent.

Amazon is on a hiring binge — unlike any other.  It’s expanded its work force by more than 425,000 from January to October, to more than 1.2 million people, mostly in the company’s warehouses and package handling centers.

The main onliners are Amazon, Walmart, Target, Shopify, Best Buy, eBay and Alibaba. They’re all overpriced. They’ve all done well in 2020. Notice that Shopify has done the best, by far.

I suspect they’ll all do better when they report their burgeoning Thanksgiving to Christmas sales. I own all except eBay, which I’ve never got my head around. The big surprise among the onliners is Etsy. Compare it to Amazon and Shopify. ETsy has done the best. Yet I’ve never been motivated by buy anything at Etsy. A hand embroided Covid mask? Christmas ornaments of my dog.

Allocation: I should be less in AMZN and more in SHOP, and maybe ETSY

Office buildings must come back

Office buildings are empty. But soon we’ll have a vaccine and the option of returning to our rented offices.

One prevailing school of thought says everyone will stay home and zoom in.

My contra thought is that the demand for office space will come back stronger than ever. To wit:

+ Zoom can’t replace the sheer excitement and creativity of solving the problem in person — at the office cooler, in the conference room or sidling up to someone’s messy desk.

+ Customer service drops dramatically when people work from home. There just doesn’t seem to be any incentive to be nice to customers if your dog is barking and your kid needs his diaper changed — now.

+ You can buy office buildings cheap.

+ You can finance them at interest rates so low you have to blink twice, pinch yourself. And wake up.

Some of us will get our shot soon

Meantime, don’t do stupid.

A dear friend traveled to a family funeral, as did many family from all over.

Then 20+ of them went to lunch to celebrate (or whatever you do at funerals).

Most people don’t eat lunch wearing a mask.

My friend got covid, brought it home to his wife and their two year old son.

Such a joy!

Will I ever fly a Boeing 737 Max?

I’ve written often that I wouldn’t. And here’s why.

On Sunday, the New York Times published a long story:

Boeing’s Saga of Capitalism Gone Awry

…Boeing’s failings continued once the Max entered service, in 2017. That year, company officials learned that a cockpit warning light that could have helped the pilots on the Indonesia and Ethiopia flights identify an MCAS malfunction wasn’t working in most planes. But the company didn’t inform the airlines.

And even after the crashes, Boeing executives, including the chief executive, Dennis Muilenburg, suggested that poorly trained foreign pilots, not the company, were to blame.

No single one of these transgressions was directly responsible for the crashes. But the cumulative effect was fatal. A company that once prided itself on safety above all else had abdicated its responsibility to the traveling public.

How could something like this happen at Boeing?

The company is an American icon. It helped usher in the age of commercial aviation and produced planes like the 747. Boeing’s World War II-era bombers were built in the factory where the Max was born. Boeing engineers helped NASA put men on the moon. The company builds Air Force One, the F-15 fighter jet, the Apache attack helicopter and more.

Yet in recent decades, Boeing – like so many American corporations – began shoveling money to investors and executives, while shortchanging its employees and cutting costs.

The changes began in 1997, when Boeing took over its chief domestic rival, McDonnell Douglas.

Led by Harry Stonecipher, McDonnell Douglas was a company that prioritized boosting share price as much as making airplanes. Mr. Stonecipher was an alumnus of General Electric and had learned under Jack Welch, the profit-obsessed chief executive who made G.E. the most valuable company in the world through merciless downsizing and financial engineering.

When Mr. Stonecipher became chief executive of Boeing in 2003, he brought G.E.’s model with him: He slashed costs, reduced head count, ramped up outsourcing and increased Boeing’s share buyback program and shareholder dividends.

“When people say I changed the culture of Boeing, that was the intent, so that it’s run like a business rather than a great engineering firm,” Mr. Stonecipher said in 2004.

Boeing moved its corporate headquarters to Chicago in 2001, lured by tax breaks and distance from its unionized work force near Seattle. When it came time to build the 787 Dreamliner, Boeing constructed its new factory in South Carolina, which had no aviation work force and little organized labor. Quality at the Dreamliner factory soon suffered.

In 2011, Boeing learned that American Airlines, one of its most important customers, was poised to place a major order for new jets with Airbus. Boeing had been considering designing a new midsize passenger jet, but the threat of losing out on the American deal forced the company’s hand.

Boeing decided to redesign the 737 — a plane that was introduced in 1967 — once more. To make the new Max more fuel efficient, Boeing needed bigger engines. But because the 737 was an old plane that sat low to the ground, those engines needed to be mounted farther forward on the wings, changing the aerodynamics of the plane. To compensate, Boeing introduced the ill-fated MCAS.

And even when the company knew that the software had caused the first crash, Boeing kept the Max flying until another plane fell from the sky. …

This March, my reporting partner, Natalie Kitroeff, and I interviewed Boeing’s new chief executive, another Welch protégé, Dave Calhoun. He appeared to hint that the pilots of the two doomed flights might have mishandled the software malfunction, and said the messages in which Boeing employees denigrated the F.A.A. and ridiculed their own colleagues were not reflective of a rotten culture. “I see a couple of people who wrote horrible emails,” he said.

It seemed that inside Boeing, little had changed.

Then, not long after our conversation, the coronavirus pandemic ground air travel to a halt. Airlines around the world canceled orders for hundreds of Max jets. Boeing laid off tens of thousands of employees and sold its corporate yacht, a symbol of corporate excess, for $13 million.

In March, the company extended a pause of its stock buyback program, stopped issuing dividends and cut executives’ salaries. Over the course of the year, Boeing implemented sweeping new policies to improve engineering oversight, promote transparency and encourage employees to flag safety concerns. There is even chatter that Boeing might sell its headquarters in Chicago, potentially setting the stage for a return to Seattle. The pandemic, it seems, is doing what the Max crisis couldn’t, and Boeing is finally demonstrating some humility.

Such changes might make Boeing more closely resemble the company that for so long embodied American ingenuity. But the true measure of change inside Boeing will be how its executives and engineers behave in the years ahead. Will they put safety first? Will they respect their regulator? Will they speak up when something seems off? Until all that happens, nothing will have really changed.

“It has been a tragic couple of years,” Michael Huerta, who was the F.A.A. administrator when the Max was certified, told me. “The best we can hope for is that they’re applying what has been learned, and that aviation will be safer in the future.”

The best we can hope for…. Sounds reassuring? You can read the full, gruesome Boeing story here.

Watching The Crown

My wife, Susan, and millions of others are watching Netflix’s series The Crown, which is all about the British Royal Family. The buzz in England is whether the real royal family is actually watching. The NYTimes had a speculation piece. It began with this delicious sentence:

If there were a TV show that portrayed your family as a clueless bunch of snobs and philanderers who helped drive a mentally fragile young princess to despair, would you watch it?

  

Don’t do stupid. Like do this. Click on the video link.

Thoughts on the Pandemic

Life: This morning I won at tennis. I don’t know why.

This afternoon the weather is wet, cold, windy, and noisy.

A honey-do. Change some lightbulbs.

Philosophy

When God closes a door, He quickly opens a window. Good philosophy.

When God closes a door, and then opens another door. Bad philosophy. You’re probably in jail.

See you soon. — Harry Newton