Can Boeing Recover at All?
Every company can be victim to their own bad decisions. Boeing, however big it may be, is no exception to this rule.
During the late 90’s, after much discussion, Boeing merged with McDonnell Douglas, making the new Boeing one of the biggest, if not the biggest, civil and military aircraft in the entire world. This newly formed company had increased production capabilities, headcount, and R&D expertise.
There was, however, one major problem.
While Boeing, headquartered in Seattle, was primarily engineering-led, with quality excellence as a core value, McDonnell Douglas, headquartered in Chicago, had a strong eye for finance and shareholder value. Their quality record is in the eyes of everybody.
If you know anything about Business Management, you know this is a brewing issue. Spoiler alert: it was.
As Boeing’s finances kept on improving during the early 2000’s, there was growing discontent among former Boeing employees regarding these changes, since the practices they’d been used to for decades were suddenly turned around.
So much so, that the main HQ was moved to Chicago, away from the production facilities.
This discontent, however, was not simply due to resistance to change. Major quality control measures were replaced in exchange for cost-cutting prodcedures that would increase the company’s profit margins by just a few points.
This has, naturally, yielded the results we see nowadays. Unfortunately, this was not so clear to Boeing’s executives back then.
During the past decade, a collection of mishaps at Boeing, namely the 737 MAX tragedies, put Boeing’s dominant position in the market at risk, as well as their finances under tremendous difficulties.
Today, Boeing finds itself in a deep process of purging their internal structure and processes to balance out the vision towards profits, but also not cut expenses on quality controls, spare parts, and workforce.
Most notably, their remarked their commitment to quality by taking advantage of the FAA’s oversight of their 737 MAX production lines. Additionally, the recent Union conflicts in Seattle pushed them to take serious cost-cutting measures to their management practices — allowing their finances to heal but production not suffering from it.
Ultimately, Boeing is heading on the right track.
Could it have been easier? Absolutely. Sometimes, however, companies and executives need to be pushed to the verge of falling to realize they need to change. While Boeing is taking a series of hard pills, I believe it’s only the beginning for tremendous (and safe) growth.
I write more about the future of Boeing here: https://notjustplanes.substack.com/p/its-never-been-safer-to-fly-a-new?r=tvrfu
