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Boeing's safety vs. cost-control culture may be what sent a fatal aircraft into the skies

Internal fight goes back to amalgamation with McDonnell Douglas, engineer says ( More...

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Colin Seftel 11
This 20 year old Fortune article is quite prophetic: Some quotes, 'In 1997, Boeing acquired McDonnell Douglas, the St. Louis competitor whose historic caution and conservatism had allowed Boeing to all but blow it out of the jetliner business. Several McDonnell executives now occupy surprisingly powerful positions in the combined company. These include former McDonnell CEO Harry Stonecipher, ... whose brand of tough-talking, show-me-the-money management strikes many of the Boeing faithful as noxious and shortsighted. His ascendance is flourished as proof that, as the joke around Seattle goes, "McDonnell Douglas bought Boeing with Boeing's money." More than one analyst uses the term "reverse takeover."'
'"If in fact there's a reverse takeover, with the McDonnell ethos permeating Boeing, then Boeing is doomed to mediocrity," says James Collins, co-author of the bestseller Built to Last, which used Boeing as a case study of sustained greatness and McDonnell as its "comparison company." "There's one thing that made Boeing really great all the way along. They always understood that they were an engineering-driven company, not a financially driven company. They were always thinking in terms of 'What could we build?' not 'What does it make sense to build?' If they're no longer honoring that as their central mission, then over time they'll just become another company." '
Steve Cutchen 3
Great link. Thanks.
skylab72 2
Good link indeed. I would suggest however that the roots of the "Boeing Vs Boeing" issues have still deeper roots in the history of the US aviation industry. It seems lost in the mists of time now, but immediately post-WWII Douglas, McDonnell, and Boeing all were "Engineers companies" who invested huge sums in new designs with little to no "support" from Uncle Sam. James McDonnell gambled his wartime military aircraft parts business on selling his XP-67 "Bat" to the USAAF or his F1H & F2H (Phantom & Banshee) to the Navy. J.S.McDonnell bet the company on engineering and won only enough business to still be in business for the second round of jet fighter development. With the savvy to leverage development money out of the Navy for the F4H Phantom II, which turned out to be a cash cow (5000 sold before 1980), McDonnell was cash-flush when Boeing, Convair, and Douglas locked horns over the "jet transition".

Douglas' engineering over bean-counter culture had near totally blocked Boeing's profitability in commercial airliners, and the legendary "Douglas Commercial" DC-3,4,6,7 series largely ruled the airways until Boeing got the jump on the jet-age with the 707. Even then, the DC-8 was gaining ground when it's little brother, the DC-9 turned out to be an engineering and marketing home run.

BUT... and here is where we run headlong into the origin of the "show-me-the-money management" style embedded in McDonnell-Douglas. The bean-counters at Douglas did not catch up with the engineers until the 76th DC-9 had been delivered to a customer. Now in that era, commercial aircraft builders expected development costs to be amortized between the 17th and the 25th aircraft, by then black ink should begin to dry. To their horror, the bean counters at Douglas discovered the cost of manufacturing those seventy-six DC-9s had not even been recovered in their sale price, much less any of the cost of developing the plane in the first place. They were in a hole about four hundred million 1976 dollars deep. Had not McDonnell been able to cover the shortfall, Douglas might very well have ceased to exist. To this day that corporate PTSD lives on in Boeing.

Engineering over bean-counter corporate culture pretty much died everywhere by the turn of the century.
Colin Seftel 2
"Engineering over bean-counter corporate culture pretty much died everywhere by the turn of the century." Except maybe at SpaceX and Tesla?
skylab72 1
For every rule, there is an exception. As you note, founder-run companies can always be that exception. So far Elon has not gone broke, and the prize he has his eyes on has incalculable up-side risk. So, I guess the question is, when does "enlightened self-interest" in a corporation become scary. I love Elon Musk watching, but I do have some sympathy for his investors...
ADXbear 4
I sold all my Boeing stock last year not wanting anything to do with this arogant company that has lost its way and reputation.. you guys blew it
Profits over human life. Ironic?
jet4ang 1
Capitalistic culture will never end and we see this rampant out of control climate in all major corporations. Greed is a human instinct, not a trait and as long as legal loopholes exist, innocent people will suffer.
David Beattie -1
Yes, we must END evil Capitalism! Of course, you will have to shut down Airbus too since it is also a publicly traded company and makes many people and corporations rich. Good luck switching to some of those great Communist designs like the Ilyushin 62!
gerardo godoy -1
How stupid to bash Capitalism!. It is the system that has made us live longer and make people realize their best. So You Communists who probably have not even read the Horror History of that defunct trash that made drumks by the millions and killed millions so a few bastards could live like kings or better., to say the least. Go preach your murdering system to another Galaxy, but beware the Galaxians will probably strip your *&^% before you get there. Sickos!!!
Mark Henley 0
A really sad story. Ultimately, Boeing's problems started way back when the board of Directors decided that competing with Airbus meant changing the company legacy from one run by engineers to one run by MBAs. I've talked with multiple airline pilots who have been around long enough to know the characteristics and construction of both the Boeing legacy aircraft and the Airbus aircraft, and they all say that Airbus is basically a throw-away aircraft before the first D-Check. Too bad BAC didn't figure out how to run commercials that pointed that out.
skylab72 1
It was before that see reply above.


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