I lead a double life and in my other manifestation I am but a humble merchant who hawks his wares at a public market in a little mountain town that is crammed with tourists every summer. Our little winery seems to make products that those enjoying the clean air and drop-dead stunning landscape like to add to their experience. Therefore, every Saturday morning from April to October I lug about a thousand pounds of wine, a tent and my computer an hour over a mountain pass and do some business.
Although airplanes and wine seem like disparate paths I am amazed at how they often intersect. It seems like whenever I go to an aviation event all anyone wants to talk about is wine and vice versa.
So, inevitably my aviation life became a topic of conversation with the charming young lady who sells naturally dyed clothing on the patch of pavement next to me every Saturday. Joanne (not her real name) brightened instantly when I told her that my computer was open to my other world (borrowing free Wi-Fi from the hotel whose parking we were taking). It turns out that she’s Bill Allen’s great-step-granddaughter.
Now many of you recognized that name instantly. For those who didn’t, Allen was the legendary president of Boeing who ushered in the jet age and brought the B-47, B-52, 707, 720, 727, 737 and 747 to market first as president from 1945 to 1968 and then as chairman until 1972. It would be hard to imagine a single person whose decisions have made a larger impact on the whole world and especially the world I occupy to deliver these words.
Now, Joanne, who wouldn’t know a rudder from a spoiler, wasn’t even born when Allen died in 1985. But she was able to list off his accomplishments in a torrent of pride that showed how deeply Boeing runs through her family tree even to this day. It was a pride shared with the thousands of skilled engineers, line workers and pilots who gave form to Allen’s genius of forging a market that had never existed before. Although Boeing wasn’t the first to fly a jet airliner, it caught up fast, and I think we can confidently call Allen the father of modern jet air travel.
And for clarity, Allen was a lawyer. He was not a pilot or engineer and he knew his place. He honored and fostered the skills and passion of all those people in the collective effort to shrink a world by orders of magnitude for civilians. That same technology was also used to project the power of the nation that made such an effort possible. Today, he would be appalled at what has become of his legacy.
By all accounts Boeing has traded that pedigree of innovation and brilliant execution for a cost-conscious model that puts shareholders at the top and pits employees and whole departments against each other in a race to the bottom. It’s one of those “too big to fail” companies that has forgotten that there is no such thing.
The horrible missteps of the past decade, including the recent door panel exit, have made the world’s biggest engineering and manufacturing company a punchline on late-night television. So far, the traveling public continues to get on board the ubiquitous Boeings but honestly, how many more mishaps will it take to change that?
The current situation has been predicted for decades since Allen retired and a series of mergers and acquisitions turned Boeing into a stock market listing instead of the world leader it has been and should be.
Several decisions have been milestones on that journey. There was moving the head office to Chicago (Chicago?) and more recently the outskirts of Washington, D.C. There was also the creation of a branch plant in the right-to-work state of South Carolina to build its current flagship 787, which infuriated the deeply entrenched union staff in Seattle.
But more than anything, it was the sale of its key manufacturing facilities in Wichita to Spirit Aerosystems that had aviation pundits wagging their fingers 20 years ago at the number-crunchers who saw cost savings in contracting out construction of the biggest part of the airplane.
Spirit builds the fuselages of the 737 MAX in the former Boeing facility and ships them by rail to Renton, Washington, for final assembly with other parts that have been built all over the world. The door plug that blew off on Jan. 5 was built in Malaysia, but it wasn’t to blame.
Boeing and Spirit workers combined for a manufacturing debacle that began with shoddy rivet work in Wichita and ended in Renton when bolts that hold the door plug in didn’t get installed. At this point it’s hard to determine which facility is worse, but Boeing has apparently decided it’s Spirit’s so it’s trying to buy its old plant back.
There are some positives to the plan. One of the issues with the airplane that came to be operated on Alaska Flight 1282 was that Spirit’s manufacturing record system is completely different from Boeing’s. Presumably the acquisition would fix that and maybe help the hordes of FAA inspectors, who will be monitoring every move that Boeing makes for years to come, with their paperwork.
But there’s a lot more for Boeing to do to fix this than buying out a scapegoat. From what I can tell, the front office malaise that first infected Boeing decades ago has sickened the whole company. Unraveling all that will take the kind of leadership that has apparently been absent in that time.
Meanwhile, let me tell you a little more about Joanne. She was pregnant with her first child when I stumbled out of my car at the crack of dawn (farmers’ market folks apparently don’t need to sleep) and started setting up for market day beside her for the first time last April. As her future family grew she never missed a market and she never complained about the physically demanding tasks at hand. At the same time her product line expanded and improved in quality and her many friends and other market vendors were never far away if she needed help, which she never did.
As the big day drew near we all just assumed she would literally fold her tent and get on with creating a family, but she was always there. One morning in September, she and her husband pulled in and I jokingly said: “Shouldn’t you be having a baby?” She glanced up and said: “I had him,” and out of the car came a baby carrier with an impossibly tiny five-day-old miracle who made his debut at the market. They set up quickly and efficiently as always and never missed a beat for the next few weeks as the market wound down for the season.
Little William did his part and stayed at the market with his mom, with Dad adding backup as required. He drew attention to the normal needs of newborns but otherwise napped and generally didn’t create a fuss. I think his great-great-grandpa—and namesake—would have been proud but not surprised.
In examining Boeing’s challenges, your valid point about cost-cutting, outsourcing, and the 737 MAX issues underscores communication gaps. While the idea of re-acquiring Spirit for collaboration and quality control makes sense, and I agree on the buy back, it’s met with controversy from the government, airlines, and competitors presently dependent on Spirit, not to mention the challenge of dealing with negative public opinion.
Focusing solely on Boeing’s leadership oversimplifies industry complexities. Accountability is crucial at all levels, but if the improvement message hasn’t reached every corner of Boeing, from upper to middle management and down to every associate, it’s a serious concern.
This prompts questions about the current operational structure. Without detailed changes, considering “closing shop” becomes an option, impacting America’s economy, aerospace industry, and stakeholders. However, we recognize this scenario is unlikely, even if it sounds like a late-night punchline.
In essence, Boeing should prioritize improving communication, accountability, and operational efficiency. It’s a gimme. Then enhancing communication channels, strengthening accountability, implementing comprehensive training programs, reviewing the operational structure, engaging stakeholders, developing a strategic PR plan, and collaborating with the government and industry. These measures aim to enhance public opinion, operational procedures, and overall organizational effectiveness. Boeing is too important to fail.
Your suggestion’s, Raf, for Boeing’s salvation are akin to rearranging the chairs on the Titanic. Until Boeing pulls their head out of the sand and starts to smell the rose’s nothing will change. It is what it is Raf. Reality is hitting home in a big way.
Mr Sierra’s suggestions are excellent and would definitely result in a rebound both in quality and culture in the company. I would only add that the whole process ought to be energetically publicized every step of the way. A new commercial announcement every few months showing the latest quality efforts would go a long way toward rebuilding public trust. In these times public perception is often more important than reality. Just look at politics if you don’t believe that. Operating the “rebirth” of the corporation in full view of the public would also show the growth of the culture that most folks think this company needs and produce a perception of a concern for the flying public. Aside from that addition, Mr. Sierra’s suggestions are perfect. Boeing should hire him.
And I will point out here that I often disagree with Mr. Sierra. But he is right in this instance. His suggested process would work – and work well.
Regarding an engineer as CEO… I am the son of two engineers. I can tell you that while engineers “live” their occupations more than most, the mere title of engineer does not guarantee or even suggest any higher level of competence than any other occupation or set of training. I would argue that its the individual, not their chosen profession that matters.
You sound like a politician.
A Democrat or Reublican?
*Republican
Makes no difference, a politician is a politician.
In my experiences, top-down communication usually isn’t a problem. It’s bottom-up communication that needs improving, and is actually the most important form of communication. If the individual engineers aren’t able to freely express their concerns, no leadership will be able to make effective decisions. And that’s where Boeing’s move of HQ hurt them.
Improving and enhancing accountability begins at the very top. Heads should be rolling at the top, not in the middle or at the bottom. This was purely a leadership issue that got Boeing to where they are now, and it won’t be fixed without changing leadership, including the BoD who allowed Boeing to get into this position.
“Boeing is too important to fail.”
And the USG won’t let that happen. What’s a few more trillion added to the national debt?
Bill Allen was quite a leader in the aviation world and at Boeing in particular. He allowed the aviation oriented people to do that in which they excelled by realizing what kind of company it actually was. As an aside, many here know that he was quite alarmed after Tex Johnston barrel rolled 367-80, which is at Udvar-Hazy, in 1955 because Boeing had a HUGE financial investment in this prototype. The present leadership should study his actions as they might actually learn something.
Thanks for an excellent column, Russ.
Ditto that. Thanks Russ.
Yep … Boeing’s shortcomings notwithstanding … I found this article and Joanne’s story uplifting.
Thanks, Larry
Thanks.
Those mergers and acquisitions that turned Boeing into just a “stock market listing” and away from being a world leader? I believe one raises its ugly head above all the others: McDonnell Douglas. The same cost-cutting, stock-market-valuation-above-all approach that gave us the DC-10 now seems firmly entrenched at Boeing.
I’ve heard that accusation about McDonnell Douglas numerous times, Robin. I’m here to tell you that I worked at McDonnell Aircraft 50 years ago on an early F-15 (when I was in the USAF). The atmosphere there was just like what was described for the early Boeing period. Jim McDonnell was still alive and his company was focused on one thing … producing the finest product at the best price they could offer. They pumped out thousands of F-4 Phantoms and, later, F-15 Eagles in its many variations. Few would question the quality of those military airplanes.
Same thing for Douglas, Northrop, Grumman, et al. Where it all went wrong was when the bean counters figured out that acquisitions and mergers (sometimes divesting, as in Spirit Aerosystems) could increase the ‘bottom line.’ THAT is where the problems started. McDonnell became McDonnell Dougles then Boeing. Northrop became Northrop Grumman and etc.
The pressures of the external world played a hand in it, too. Some of the mergers and acquisitions were the lesser of two evils … combine or die. There wasn’t enough business to go around OR other competing companies were nipping at their heels so they HAD to become more efficient. The Government keeps wanting more and more for less and less, titillates the companies with huge contracts and then welches out on ’em … witness 132 B-2 bombers becoming 21. The Companies had no choice but to streamline. When the founders of each Company left, other business type people came in and ruined it all. The problem is that in the ever-important quest for efficiency gains, they forgot about their core competencies and sacrificed quality for quantity (ergo profit).
The ONLY way to fix it is to get back to becoming a “family” of people dedicated to a clear and distinct purpose … NOT to produce as many airplanes on unreasonable timelines at less cost than the competition.
There’s your problem.
Excellent article Russ. Gave me a good lift this morning before I go out and pound some rivets on my airplane.
In your case, it appears that executives and plant works are clearly aligned on objectives. Well done.
Thanks, Robert
Part Two: Bill Allen’s Case: Argument Against an Engineer as Boeing CEO
Why an Engineer Might Not Always Be the Best Choice: While some believe only engineers can lead a company like Boeing due to their technical understanding, the case of Bill Allen challenges this notion. Despite lacking an engineering or pilot background, Allen successfully led Boeing through a challenging period.
Bill Allen: Success Beyond Engineering
• Strong Leadership: Allen possessed exceptional leadership qualities, effectively inspiring and guiding the Boeing team.
• Business Acumen: Though not an engineer, Allen gained considerable knowledge of the aviation industry through his legal work for Boeing, starting in 1928. This understanding allowed him to make informed decisions about the company’s future.
• Team Building: Recognizing his limitations, Allen focused on building a strong team of talented individuals, including engineers, surrounding himself with the expertise needed for success.
Beyond Technical Expertise:
While understanding airplanes is crucial, a CEO requires a broader skillset:
• Leadership: Guiding and motivating a large team effectively.
• Business Sense: Managing finances, making strategic decisions, and ensuring smooth company operations.
• Communication Skills: Clearly and effectively communicating with diverse audiences, both internal and external.
• Vision: Having the foresight to see the big picture and plan for the future.
The Takeaway:
Bill Allen’s story demonstrates that while engineers play a vital role at Boeing, they are not the sole candidates for CEO positions. The most successful CEOs often possess a strong combination of leadership, business intelligence, and other relevant skills, regardless of their specific technical background. Finding the right leader for a company transcends solely focusing on engineering experience. Although some people thinks the present leadership has run amuck.
The problem is that Boeing has NO leadership, The executives see Boeing as their Cash Cow.
Exactly. That’s why I feel they need to ax a good portion of the executive “leadership” to turn the company around.
RAF–once again, you NAILED IT! I must admit–after reading your initial post, I lumped it in with the rest of the “hand-wringing”–“It’s LEADERSHIP’s FAULT!” (never mind that an airplane is a collective design, incorporating the skills, problems, and opportunities of:
–The MARKETPLACE
–GOVERNMENT REGULATION
–ENGINEERING PROFICIENCY
–THE NEEDS OF THE BUYERS OF THE AIRCRAFT
–THE SKILL NEEDED TO PROCURE PRODUCTS FROM ALL OVER THE WORLD, AND ASSEMBLE THEM INTO AN AIRCRAFT CAPABLE OF MEETING NEEDS ALL OVER THE WORLD.
–ACCOMPLISHING ALL THESE GOALS AND MEETING THE NEEDS AND EXPECTATIONS OF THE STOCKHOLDERS AND LENDERS.
It’s a real “balancing act.”
You erased any doubts I may have had with the excellent post above. A CEO need not be a pilot–or a mechanic–or an engineer–but they DO need to be able to take suggestions, designs, and plans from everyone else in the company. Boeing has done that very well–becoming the largest builder of commercial aircraft in the world. I’m sure that this will lead to an extensive consideration of every design, department, and administrative structure within Boeing.
Frankly, wouldn’t it be nice if GOVERNMENT was as accountable and introspective as private enterprise? To narrow it down to the aviation theme here, GOVERNMENT hasn’t had a good record at building commercial airliners as “Private Enterprise”. Look beyond our own borders–the USSR, China, and even Britain and France have tried building aircraft for government-owned aircraft in government-owned and government-run factories. That hasn’t turned out well, either.
Thanks again for the excellent insight, Raf!
“Frankly, wouldn’t it be nice if GOVERNMENT was as accountable and introspective as private enterprise?”
Well, if government is being compared to Boeing, there isn’t much difference between the two at the moment, except that it’s the government that is holding Boeing accountable.
Everyone likes to complain about government accountability and how private enterprise is better, but there are plenty of private enterprises that have much worse accountability than government. At least government can theoretically be held accountable through elections.
Very nice article Russ. I appreciated your insights regarding Boeing, but I appreciated more having my heart warmed learning about little William and Joanne.
Thanks, Rick
Russ pretty much nailed it. Now what was that about wine?…
Russ–the difference between your winemaking enterprise and Boeing is that you don’t have employees. I’m guessing that YOU cultivate the grapes (or buy them from a known local vineyard)–and YOU do the actual crushing, fermentation, bottling, and as you mention–SELLING the product at the local farmer’s market. As such, YOU bear sole responsibility for the quality of the finished product.
Comparing your own local enterprise with a worldwide aviation business is hardly the same. It would be more analogous if you had to oversee every step in the supply chain of production and distribution of your product. A jetliner is made up of hundreds of thousands of parts–produced by hundreds of thousands of people. You can STRIVE for perfection, but you can be sure that of all of the hundreds of thousands of employees (and the even HIGHER number of employees from subcontractors (from the metal used on the aircraft to the electronics to the electrical and hydraulic systems) SOMEONE is going to make an error.
Blaming “top management” for the error is ludicrous. Boeing–like almost all manufacturers–buys products from all over the world for its aircraft–the best they can do is to set a standard–inspect the production of the part–do random testing on the part–and develop a suggested maintenance schedule and life limit on the part.
To blame “top management” for the failure of a comparatively simple subassembly is like trying to blame NASA Flight Director Gene Kranz for the “failure” of Apollo 1 & 13 missions. (Google “the Kranz Dictum”). To paraphrase–he said “We screwed up. It could have been in design, build, or test. From this day forward, Flight Control will be known by two words–“Tough” and “Competent.”
After the Space Shuttle Columbia accident in 2003, the new NASA administrator quoted these exact words in response to a question by the media of “what should be done.” He ended with Kranz’s words “These words are the price of admission to ranks of NASA, and we should adopt it that way.” In other words, “look even harder at our existing inspection program.”
There was no call to “fire the NASA Administrator” after the Columbia accident. There was obviously an investigation–and I’m sure that even MORE tests on assemblies were done–but there was none of the “Top management is at fault” as voiced by the barking dogs calling for the ouster of Boeing top management.
Calling for the ouster of the head of one of the leading aerospace companies in the world due to failure to detect a failed part is like blaming NASA Flight Director Gene Kranz for the failures of Apollo 1.
I wasn’t trying to compare my winery to Boeing. I was just describing how I met Joanne. But you are correct. We have purposely designed it as a hands-on operation from start to finish and there’s no question who’s to blame when things go wrong:)
OH MY GOD! Now every time I drink wine … I’m gonna picture Russ Niles walking around inside a wine crushing barrel with dirty feet 🙂
How do you think they get that proprietary flavor?
That’s the premium stuff, Larry. Out of your price range….
🙂 🙂
And that’s what I like when doing business with small firms! As Pres. Harry Truman said–“The buck stops here!” In small wineries, the owner/vintner IS responsible–for EVERYTHING.
That isn’t possible as the company, the process, and the work force gets larger. Even with an unlimited budget, NASA has had its problems with contractors, support staff, and manufacturers–problems WILL happen–despite the best efforts of “top management.” Do the best you can–demand the same from every worker–but when problems DO (inevitably) happen, no need for “falling on your sword” if you did everything possible to prevent it.
Calling for the head of the CEO of Boeing because of the failure of an assembly worker to follow directions isn’t reasonable. If that were true, NOBODY would want to advance within the company.
Now–back to the wine(!)–I fly a King Air–all over the U.S. and Canada. I have a well-stocked wine cellar, and like to sample and collect wine from places I’ve been, created by people I’ve come to know. Do you have a provision for ordering for shipment to the U.S.?
Jim,
The tragedies within NASA came largely from a failure to recognize the risks in play. The tragedies at Boeing are from errors of execution. Not noticing that a software had been developed with a fatal flaw. Not installing few bolts. So if the risks/outcomes are known and recognized, the question becomes why didn’t the people execute their tasks correctly? Usually, it is because of an environmental influence, and it is management (and even more so leadership) to creates the workplace environment.
That’s not to excuse an individual worker from making an individual error, but if/when systemic problems are uncovered (and I believe that’s the case here) one must look higher up in the organization for a positive corrective action. The individual contributors won’t be able to move it across the finish line.
When it comes to business philosophy and management style, I think Southwest Airlines has it right: The management takes care of the People. The people take care of the Customers. The customers will end up taking care of the stockholders.
If/when management starts to prioritize taking care of the stockholders, everything slowly unravels. For the long-term success of a company, management’s first responsibility MUST be to take care of the employees. Because if they don’t, nobody else will, and in not a lot of time, it all falls apart.
Yes, it’s easier to see in a service-based industry like air travel than it is for a manufacturing firm (the public buys plane tickets, they don’t buy Boeing airplanes) but ultimately it still holds true.
Great piece, and great writing Russ. Thank you for this.
Thanks, David.
There’s been plenty of talk about the change in culture at Boeing when it merged with McDonnell Douglas in 1997. That culture change exacerbated the issues that led to the engineer’s strike at Boeing three years later.
I was one of the striking engineers (the write-ups of my experiences are still in the AvWeb archives). One point I recall is that the engineers who retired before 1997 just couldn’t understand our lack of loyalty. They didn’t realize the culture and corporate attitudes had changed so much.
Frankly, I don’t see much hope. Whatever changes Boeing makes, it’s STILL going to emphasize “enhancing stockholder value”…which means to reduce costs to increase profits.
Nothing wrong with that, really. The problem is, Quality Control is expected to reduce its costs as well. And the quickest way to reduce QC costs is to do less of it…..
Good editorial Russ. It reminds me of the time I sat next to Igor Sikorsky’s grandson on a cross-country commercial flight. He had some really interesting stories of his grandfather that filled the trip. A similar work ethic and visionary leader. But I digress. I differ in your opinion about whether Boeing is too big to fail. You fear it is not, but I fear it is, and for three reasons:
1) The government, or more correctly the military, needs Boeing and cannot afford to let it fail;
2) America needs Boeing for the simple reason that we cannot swallow having to buy all our commercial airliners from a foreign company. And;
3)
Neat. I interviewed Sergei, Igor’s son. Quite the family dynasty.
Well, my fat fingers managed to find the “Post Comment” button halfway through my message. Arrghh!
Good editorial Russ, but I differ from your opinion about whether Boeing is too big to fail. You fear it is not, but I fear it is, and for three reasons:
1) The government, or more correctly the military, needs Boeing and cannot afford to let it fail;
2) America needs Boeing for the simple reason that we cannot swallow having to buy all our commercial airliners from a foreign company. And;
3)The world needs Boeing because Airbus simply cannot build the number of planes needed for the future of air travel.
Unfortunately, while I think it is too big to fail, I fear it is actually too big to SUCCEED. Bill Allen guided the company through tough times, but at a time when the company was much smaller and more concentrated, primarily in the US. Today, the business is spread across the world, is working in multiple specialties (civilian, military, aerospace and computer technology, to name a few), and managing workforces and governments from totally different cultures. All this while trying to keep the stock holders happy. I’m not excusing the management. They have taken their eyes off the ball and have failed miserably in guiding the company. I have my own theories about what it may take to right the ship, but my main fear is that it is simply too big and complex to actually return to its former stature. At any rate, I don’t see anyone in the upper management at this time that is up to the task. Just my two cents…..
Just one more comment, Russ. What wine(s) do you produce? Any vintages we should know?
We make Marechal Foch, Ortega, Cabernet Sauvignon and Malbec. The Foch and Ortega are cold hardy varieties that you’ve never heard of that give us a crop in cold winter years while the more tender varieties recover (I’m in British Columbia). 2018 and 2020 were good years for this area.
Well, in the thick of saving Boeing and the world of aviation, the conversation took a steep turn. Suddenly, Canadian wines swooped in for a quick overhead approach. Russ and Marni Niles’, “Edge of the Earth” vineyards became a welcomed runway for this diversion.
As I said in the blog, Raf, the two subjects don’t seem to be mutually exclusive:)
Ah, okay. I’m a fan of a couple Washington state Cabs and Malbecs, so would be interested in trying yours someday. I hope the droughts and forest fires up in your area don’t get you.
Our wines mirror Washington State wines but they have a little more acid and fruit expression. When it all comes together it’s pretty good. Fires have had an effect (I have some very smoky Foch from 2021) fingers crossed we get another few feet of snow in the mountains to blunt drought but the big problem is climate change. Jet stream has shifted in winter and it occasionally draws deep Arctic air about as far south as the border. We had -22 F in our vineyard and at the border, about 100 miles south they had -20 in mid January and it all but wiped out the crop except for my cold hardy varieties. Fingers crossed:)
The most important thing that the guy at the top does is as” Keeper of the Culture”.
No matter how good or how bad that culture might be, the culture that exists within a business emanates from the top.
Some bean counters are horrible culture keepers and have horribly hurt Boeing in the process.
Boeing’s failures are not 100% bean-counter driven, though the percentage is close.. What really changed the culture was when Seattle Unions began to be more demanding and management at the time decided to run and hide from the problem, instead of figuring out how to negotiate with them that they were in a global battle with Airbus rather than just Boeing workers against Boeing management. The Execs fled to Chicago (CEO’s wife probably liked it there..) and non-union factory in North Caroline “green-lighted” as safe backup in event of strikes in Seattle. Add in foreign “offsets” needed these days to sell airplanes overseas (we buy your parts, you buy our airplanes..) and the original Boeing formula for success was broken. Angry workers in Seattle about losing jobs to NC forgot who they were competing with, and new management began focusing on the pennies… Sad…
Fingers point, blame takes its flight,
But shared the burden, shared the light.
Some reap more, some sow the seed,
Yet all partake, in word and deed.
Remember this, in triumph’s hour,
Or when shadows descend and devour:
Don’t sever the hand that offers bread,
For severed hands leave all unfed.
Raf … you need a job ! 🙂
Larry-
You need some wine!
Thanks for a good hearty chuckle this AM, John. 🙂
You been talking to my wife?
Hey Larry! Sounds like you might be mistaking this retiree for someone still stuck in the 8-to-5 grind. While I appreciate the career advice, these days I’m all about soaking up knowledge from AVweb’s wise owls like yourself, not filling out applications or playing corporate ladder snakes and ladders. My current mission, if you will, is to build an army of the coolest friends this side of the Prime Meridian. Think “quality over quantity,” like a single malt scotch compared to a frat party keg. So, unless you’ve got a hidden stash of friendship coupons or a map to the fountain of youth, I’m afraid I gotta politely decline your get-a-job recommendation. See you at Oshkosh, excuse me, Airventure.
In that more than 70% of Boeing’s stock is held by financial institutions, nothing will change with the upper leadership and the Board of Directors until these financial institutions come to the table and demand a leadership change. And I don’t see these institutions doing anything until the stock price drops close to 140 or less. You have to remember the folks running these financial institutions are bean counters themselves; everyone an MBA like Boeings leadership. The situation might be akin to the lemur migration.
Good comment. “Boeing picked up some momentum in 2023. The trick in 2024 will be to try and maintain that momentum, even as parts fall off its airplanes.” The Motley Fool.
Nice article Russ and well received observations. As the saying goes about wealth, ‘from shirtsleeves to shirtsleeves in three generations.’ Perhaps the cycle can reset with this latest?
Russ, not a bad article! Your writing is coming along nicely! LOL
I would like to toss a new idea into the “barrel” here for comment:
The influence of GE’s Jack Welch upon American business culture.
Several commenters here suggest that the “Boeing Issue” goes beyond engineering conciousness in management, beyond simple tennants of market competitiveness, beyond the direct functions of Quality Assurance and Quality Control (do you understand the difference?), and beyond the relationships at multiple levels between managers and “the managed”. I agree. My suggestion here is that itis an issue of “culture”.
Leaders like Bill Allen, “Kelley Johnson (Lockheed), Jim McDonnell, and many others were “code-heros” (concept first developed by Ernest Hemingway). Their leadership skills glistenned in each example of their adherence to a personal “code” and the folks around them “got the messsage” or moved out of the way. Results: a solid, formidible company culture that was goal oriented (making money is NOT a goal!). In short: a “culture”.
Jack Welch pitted company culture against structural costs. Focus on core competencies. Be the very best at what you do or stop doing it. Each manager should function to produce five times the income that he costs the company or he should be cut. At first, we saw a positive business model that preached growth and quality, but growth first. Then, over time, this ruthless focus on cost accounting began to remove value – a little at a time. Coupled with modifying our supply chains to reduce cost by invoking JIT manufacturing, we adopted – blindly – a new business culture of first “control your costs”.
In my opinion, we are paying for the Jack Welch philosophy at numerous American companies today, not just Boeing. And how do we free ourselves from this “anaconda of cost accounting” ? We need new leadership. Not just new managers, but new leadership – “code-heros”. Our priorities need to become goals. And if it is instilled throughout the company, it becomes the culture – a crucible for leadership at all levels.
Right On! Too many Leaders (MBAs ?) today know the cost of everything and the value of nothing.
John, you’re right.
When I was retiring from the USAF in the 80’s, several companies were “courting” me for programs they were running. Having worked at Edwards AFB for over 15 years, I was familiar with the ‘culture’ of each of ’em. I didn’t even bother sending a resume to Boeing — even back then — because I had seen where they’d hire people one day and when they were done with ’em, they just laid ’em off. Get out! Contrast that with Northrop (before Grumman) who I knew was a phenomenal Company .. and who I ultimately accepted a position from. Sure enough … 12 years later when my layoff time came, I found out they REQUIRE you to go to something they call redeployment … to see if another open position would fit your skills and druthers. That saved me and took me to a full second career. I believe that one of the reasons they’re that way is a lack of a union, among other reasons.
Someone pointed out that what happened with all of the mergers is that these then mega companies became too big to succeed. I agree.
Boeing Needs a General, Not a Jack: Why Patton Would Lead Better Than Welch
The recent turmoil at Boeing demands a leader who can not only navigate complex financial and technical challenges but also inspire and unite a workforce facing immense pressure. While both Jack Welch, former CEO of General Electric, and General George S. Patton stand out as strong figures, their leadership styles present vastly different possibilities for Boeing’s future. While Welch’s legacy is steeped in ruthless efficiency and shareholder value, I firmly believe that Patton’s brand of leadership offers a more promising path forward. 😊✌️
Brilliant piece, Russ. Hopefully it gets broader dissemination than just Avweb.
And now I’ve been given yet another reason to visit British Columbia again.
Did you get to the Okanagan, Lars? A five hour drive from Vancouver but definitely worth it. Truly one of the most beautiful places in the world.
John Caulkins brought up an important distinction between quality control and quality assurance. Many might think of quality control, quite correctly, as the process of inspecting the output of any production to ascertain if it meets specifications. Inspecting every single unit output as such would be quite expensive.
Quality assurance is intended to build robust statically based metrics measuring the the variability of a production process versus the established criteria for acceptance. So in the MAX door plug blow-out, Q.C. mentality would require that every door plug, in every fuselage, before delivery to a customer, be inspected for the placement and maybe the correct tork of the four retaining bolts.
Q.C. mentality might dictate that when the Boeing workers removed the four retaining bolts from the door plug that they be placed in conspicuous containers/positions so that the interior of the fuselage could not be installed without their replacement.
Sounds simple but it works. Fault of the Board and CEO? Yes. They should emplace top senior executives to drive Q.C. enhanced practices throughout.
Russ, it has been too sad to watch Boeing succumb to the bean counters and the chairman make decisions on their stock value/portfolio. This is the under lying reason for the two Malaysia 737 crashes.