Posted on 03/16/2024 7:44:34 AM PDT by CondoleezzaProtege
…Yeah, things aren’t looking good for the plane manufacturer. And we must ask — where did it all go so wrong for Boeing?
Well, it probably all began in the summer of 1997.
Boeing wanted to establish dominance and show the world who was boss in the airline industry. So it decided to acquire another plane manufacturer called McDonnell Douglas. It was a massive merger worth $14 billion.
Now after the merger, the new entity retained the Boeing name. It was expected since it was Boeing that splashed the cash. But the problem was that the culture of McDonnell Douglas seeped in. And that changed the face of Boeing completely.
See, the Boeing of the pre-merger era was called an ‘engineers’ company’. The ones who made these flying machines called the shots. Costs didn’t matter and it was only quality and design that did. They wanted to ensure that only their best ideas took to the skies. Safety was paramount. And the Chief Financial Officer who was answerable to Wall Street about costs didn’t care much about trying to impress the bankers either.
But after the merger, everything changed.
The CEO of McDonnell Douglas actually became the CEO of Boeing. A chairman with no aviation background, but who’d worked in General Electric, was also appointed. The company started paying attention to creating shareholder value which was hardly a priority earlier. And as one article put it, “Now, a passion for great planes was replaced with a passion for affordability.” Boeing even turned to outsourcing critical operations. Sure, it made the balance sheet ‘asset light’, but, it came at the cost of quality…
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It actually goes to the MBA programs before 1960. Those programs taught to get profit today and not worry about tomorrow, to cut the lower 10% of the performing people every year to scare the upper performers into more performance, to produce products at the lowest quality possible for the lowest cost, and to sell products at the highest cost. It taught monopolies are to be sought after, to buy competitors and reduce downward pressures on prices and upward pressures on quality which will only increase production costs.
The MBA programs killed America, which is why I never hire anyone with an MBA. There is far too much risk that they have learned these terrible business practices that kill companies. The MBA crowd are nothing but corporate raiders. They seek short term gains to look good at the expense of long term survival. They refuse to fund long term research and development, so the company becomes weak, anemic, and dies. I call it the ‘MBA 3/5 Plan’: They have a 5 year plan but they, personally, are out in 3 years with all the value of the company in their pockets, leaving the company with nothing.
When I worked at Martin Marietta, we purchased the GE aerospace wing from Jack Welch. His managers brought one thing with them which was helpful: every product line must be in the top three of their market or have a plan to get there in three years - or get out of that business. Helped weed out losing ventures.
The same thing happened when Weyerhaeuser bought Willamette Paper. Or as we used to say -they bought us with our money.
Well said!
Yep. Cant say that people werent warned that there are some positions you really need the best and brightest , not just passing quotas and checking boxes.
I knew in 1998 Boring would go down, when they hired a woman I knew in a high position at their new headquarters in Chicago. She was a highly skilled bull shitter. Very pretty but no good intellect.
United is moving towards Airbus which is the best possible solution for both companies.
Pretty sure the DEI and a CROSS DRESSING CEO, which is a MENTAL DISORDER is doing Boeing in.
Yes, McDonnell Douglas didn’t give a rip about quality. Only about profit.
30 years ago?! Nah. Honestly most of the problems they’re running into are ground crew maintenance issues. Now maybe there’s something wrong with the planes and the maintenance is harder to do right, but tightening the bolts on a plane that’s been in service for years isn’t a Boeing problem.
bttt
Yeah, as soon as I saw “GE”, it explained a lot.
So planes like the DC3 and MD80 actually weren’t really reliable, safe workhorses for decades?
The authur seems to ignore the necessity of competing with Airbus, and producing fuel-efficient airplanes they could actually sell at prices customers could afford. That had a bit to do with the merger. I’ll accept the idea it didn’t work well to combined the operations and cultures of two companies that were each built around making products their own way. But it’s nonsense to blame management for insisting on economic viability.
I worked with the defense arm of Boeing. They were horrible. They only cared about their award fee.
I also had a feeling Boeing was in trouble when I saw all those “Dreamliner” ads that were all about diversity. Pretty sure that was around 2000 or so.
Boeing ruined Boeing.
“Helped weed out losing ventures.”
It also killed innovation since innovation is a cost center and not a short term profit center.
Rolls Royce is the jet engine leader today and they don’t give a damn about rankings next to anyone else. They do R&D.
So, you are going all the way back to the ‘90’s to blame capitalism instead of the DIE/Woke crappola introduced in last decade?
What a troll.
“So, you are going all the way back to the ‘90’s to blame capitalism instead of the DIE/Woke crappola introduced in last decade?”
DEI is nothing but a shiny coating on already bad business practices. If those practices were not in place already, DEI wouldn’t even have a home. Strong, well managed, companies do not have DEI.
Unless Boeing is doing your maintenance/inspections for you under contract.
My Dad reported to Jack Welch in his later years. I have some correspondence from Welch in the family archives.
Dad graduated from Valparaiso University with a mechanical engineering degree, and spent nearly his whole career with GE.
As things went, he became a sales engineer for GE, with frequent trips to Dayton, Scehectady, Singapore, and many other places.
As a youth I saw Ira Magaziner come to our home to spend an evening or two. Dad died in 1992, so would never have seen the merger mentioned here. His chief area of focus was hermetic motors. Brief case, slide rule, and table-lined paper. He worked hard, and I had nice suburban homes growing up.
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