| | | Stonecipher, who served as Boeing COO and later CEO, phrased it differently. “When people say I changed the culture of Boeing, that was the intent, so it’s run like a business rather than a great engineering firm,” he told the Chicago Tribune on Feb. 29, 2004. “It is a great engineering firm, but people invest in a company because they want to make money.” most unfortunate Alan Mulally was not the Boeing CEO after Frank Shrontz
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Boeing Spent Decades as an Engineering Marvel. It Has Fallen Hard.
By Kenneth G. Pringle
Sept 19, 2024
William E. Boeing, founder of the aerospace company, exclaimed at the sight of a frayed cable on one of his planes that he would “close up shop rather than send out work of this kind.”
CEO Kelly Ortberg, on the job only since Aug. 8, inherits a company full of figurative frayed cables. Questions about the company’s future are already popping up.
Boeing’s failure to reach a labor agreement with its biggest union last week was just its latest misstep this year, after pieces of a 737 Max jet fell off midair and two astronauts were left stranded in space. Boeing has halted production because of the strike, and is losing hundreds of millions a week, analysts say.
Boeing’s stock is down 40% in 2024 and, with $45 billion in debt and deep-seated safety concerns, a factory shutdown is the last thing it needs right now.
It’s a long fall for the company that Bill Boeing, a Seattle lumber baron, started in 1916 with a hand-built seaplane, whose B-17s won World War II and whose 747s epitomized American luxury. Safety-minded travelers once pledged, “If it’s not Boeing, I’m not going.”
These days, Boeing isn’t going anywhere,
“Not the start expected for new CEO Ortberg,” RBC analyst Ken Herbert noted.
Boeing declined to comment.
The dream of human flight dates at least to the ancient Greek myth of Icarus, who had safety issues of his own. Dream became reality when the Wright Flyer soared over dunes near Kitty Hawk, N.C., in 1903.
Boeing, swept up in the ensuing airplane craze, attended the nation’s first airshow in 1910. These marvels of the sky drew big crowds.
“Mostly they come out to see you crash,” one flier told him.
Boeing earned his flying license, bought a plane and had an idea. “We could build a better plane ourselves, and build it faster,” he told a colleague.
On June 15, 1916, Boeing took off from Seattle’s Lake Union in a wooden seaplane named Bluebill. A company was born.
After the U.S. declared war on Germany in April 1917, Boeing received its first government contract, for 50 planes. It was the start of a long, fruitful relationship. Safety was integral to the partnership. In 1921, the U.S. Army established its first in-plant inspection office at Boeing.
“Quality checks of materials and workmanship were performed from design to final acceptance of the product,” wrote historian Janet A. McDonnell.
In 1927, Boeing won the lucrative Chicago-San Francisco airmail route, carrying 36% of U.S. mail. In five months, Boeing’s planes “covered 72,000 miles without a single accident,” The Wall Street Journal reported. Safety became a byword, and a marketing tool.
“Fly with the mail,” invited a Boeing ad in the June 19, 1928, Seattle Star. “Boeing planes [are] built with the same care and vision required in military aircraft for dependability and safety.”
Meanwhile, Bill Boeing went shopping. He acquired Pratt & Whitney, Northrop, Sikorsky, and more, combining them into one vertically integrated colossus involved in every aspect of flying.
“Mr. Boeing,” the New York Times wrote on Dec. 16, 1928, “said the consolidation would result in an enlargement of the air passenger business and a general rounding out of aviation activities under centralized control.”
Where Boeing saw centralized control, others saw monopoly and price-gouging. Like John D. Rockefeller’s Standard Oil before it, Boeing’s company was broken up on antitrust grounds. Disillusioned, Bill Boeing sold his shares and quit the business. His eponymous firm, though now limited to manufacturing, would reach new heights as war again boosted its fortunes.
“Boeing reports that since Pearl Harbor it has doubled production of its long-range, heavy-hitting, flying fortresses, which are credited with the majority of the Japanese ships and fighter planes destroyed,” Barron’s wrote on April 13, 1942.
Boeing joined other U.S. plane manufacturers—including McDonnel and Douglas, still separate companies—in producing 300,000 military aircraft during the war, compared with Germany’s 100,000. Douglas dominated post-war skies until Boeing’s 707 roared into the jet age in 1954.
But it was the 747 “jumbo jet” with a piano lounge in its iconic forward hump, introduced in 1970, that “triggered a revolution in air travel,” according to the Museum of Flight in Seattle. It became the bulwark of international travel.
Boeing continued government work on such high-profile programs as the Space Shuttle and B-2 stealth bomber. By century’s end, however, it was hard-pressed by newly formed Lockheed Martin and Europe’s Airbus.
In response, Boeing acquired McDonnell Douglas, a $13.3 billion deal that created “a global colossus that united the world’s largest commercial-jet manufacturer with a military-aircraft powerhouse,” The Wall Street Journal reported Dec. 16, 1996.
Next day, the Journal wrote about Boeing’s challenge of absorbing McDonnell Douglas’ culture and CEO, Harry Stonecipher, described by some Boeing executives as “a good salesman.”
Today, the merger is often cited as the root of Boeing’s current problems, from ballooning debt to fatal 737 Max crashes. Safety, say critics, was sacrificed for profit.
Stonecipher, who served as Boeing COO and later CEO, phrased it differently. “When people say I changed the culture of Boeing, that was the intent, so it’s run like a business rather than a great engineering firm,” he told the Chicago Tribune on Feb. 29, 2004. “It is a great engineering firm, but people invest in a company because they want to make money.” Stonecipher didn’t comment for this article.
Boeing today isn’t a great engineering firm or a good investment. Ortberg, the latest successor to Boeing and Stonecipher, has many frayed cables to mend.
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