Undue focus on profit led to Boeing’s fall from the sky

THE Seattle-born Boeing Aerospace has certainly fallen on bad days, thereby giving jitters to US defence, civil aviation and Wall Street investors. The iconic Boeing had been on a monopoly-like takeover spree of St Louis, Missouri headquartered McDonnell Douglas-MD (August 1997) since after the simultaneous demise of the USSR and First Cold War.

Today, it faces an existential threat as it is afflicted by technology failure, quality and safety issues of product, high financial loss and, now, the unheard of labour trouble in the cradle of the world's capitalism. In fact, the latter arguably constitutes the gravest threat to the recovery of Boeing Company any time soon in the cut-throat competitive aviation market.

History shows that in the perilous industry of aviation, even the best of flying machines have crashed and corrective measures initiated subsequently. When the brand new Boeing 737-MAX crashed in 2018 and 2019 in quick succession, the bosses of the famed US manufacturer pooh-poohed it, trying to pass the blame for the fatal mishaps and the deaths of 346 persons aboard on to pilot error even before the accident inquiries had made their findings.

The worst act was that many detected an unusual "nexus" between the behemoth Boeing Company and US government officials of the National Transportation Safety Board (NTSB) and the Federal Aviation Administration (FAA). An eerie feeling grew that not all was well with Boeing and someone somewhere was shielding some unpardonable wrongdoings of the manufacturer for the sake of profitability, corporate greed and monstrous money-making Wall Street stock market investors.

Nevertheless, when the failure and gross misdemeanour of the famed aeroplane-maker became too brazen to be hidden, Boeing capitulated owing to the sheer pressure of the enlightened American air transport passengers whose acquaintance with aviation is like the developing world's familiarity with the rickshaw and the rickety bus.

Boeing had been caught red-handed and had to plead "guilty of criminal fraud" charge. In July 2024, the US Department of Justice determined that the company had violated an agreement that had protected it from prosecution for more than three years.

Boeing's luck has run out and now it is penance time. Serious acts of omission and commission are tumbling out of the cuPunjaboard. The latest is production stoppage owing to labour unrest on pay, perk, privilege and contract renewal terms.

An additional salvo against Boeing was fired by the NTSB on September 27. It issued "urgent safety recommendations" for some B-737, including the embattled MAX line, warning that critical "flight controls could jam", especially when "applied during landing, or rollout, causing loss of control or departure from runway." The NTSB recommended that Boeing should urgently come up with an alternative solution and warn the pilots about it.

The moot question today is: why and how an institution like Boeing, known for flight safety, tech quality and enduring long-haul comfortability, has come to such a sorry state of affairs. The answer, after going through the open source record of the last five decades, appears simple but deplorable and avoidable.

After the August 1997 MD and Boeing merger, the latter was elevated as the largest aerospace company in world, with 2,38,000 employees and backlog exceeding $100 billion. Boeing's Phil Condit became the Chairman and CEO, and MD's Harry Stonecipher became the President.

It, however, soon became a contrast of two biggies. Condit's psyche was that of a high-tech engineering company's rock-steady boss, harping on quality product automatically attracting customers in commercial aviation.

Stonecipher, on other hand, was a high-profile marketing salesman passionate about maximising profit, with an eye on the interests of Wall Street investors to pump up stock and multiplying money rather than maintaining machine quality on which depended hundreds of lives in air. It's a titanic contrast of cultures between a techie who is an integral part of the industry and that of a trader whose ethos and ethics banked on quick buying and selling to make billions of dollars.

From "courage, will, perseverance and skill" of the "Boeing family" of the "industrial house", the former MD boss tried to transform his new company to imbibe "teamwork" of a "trading house". Angry old-timers quipped: "When MD guys came in, they just went through them (old Boeing engineers) like a knife through butter" and appeared "hunter killer assassins and Boeing Boy Scouts."

Newcomer Stonecipher soon became the de facto number one. He inducted a former General Motors executive to handle Boeing's finance to make it a "shareholder-friendly company" despite the conscientious protestors' reasoning: "Have you ever seen a bean-counter build an airplane?"

Henceforth, Boeing aircraft had to follow "return on net assets" (RONA). The high-tech aircraft started turning into fast-moving consumer goods (FMCG) in 1997. Twenty-seven years down the lane, the results are there for all to see.

The FAA, NTSB and US Congress are all worried and use strong language owing to the meteoric descent of Boeing from its glorious flight path of 100-plus years. But the USA today is no longer the industrial powerhouse. It is a price-conscious, profiteering traders of glorious predecessors. No wonder, the US aviation industry's downhill as chicken has come home to roost.

The founder of the company, William E Boeing, is a forgotten hero. The man is known for perfection, accuracy, precision and intolerant of shoddy work in the workshop. The saying goes that the founder "exclaimed at the sight of a frayed cable on one of his planes that he would close shop rather than send out work of this kind." The successors of that great predecessor obviously cannot fit into his shoes as they are too big and broad for them.

Hence, unless Boeing goes back to its original job of "aircraft manufacturing", which made it the world leader, the marketing messiahs can never bring the company back to flight safety, tech quality and product durability to win the trust, faith and confidence of the users of the Great Boeing of yore.

Views are personal