We have clearly moved in a direction where profit is prioritized far above quality and safety in virtually every realm of society. This recent string of embarrassing and damaging incidents is the latest flareup in what has been a brutal five-plus years for Boeing. A pair of major plane crashes involving MAX planes in late 2018 and early 2019 caused major reputational damage and a series of investigations against the company, but it appears that Boeing didn’t change course. In October 2018, a Lion Air MAX plane crashed in Indonesia, killing all 189 people on board, followed by an Ethiopian Airlines MAX crash in March 2019 that killed all 157 people on board. Numerous countries, including the United States, decided to ground the MAX following the second major crash. It’s a fairly obvious point, but if those two major crashes had occurred in the United States, American media would be endlessly discussing them. However, because they occurred in India and Ethiopia, relatively little attention was paid to them stateside. Certainly Boeing did not receive the kind of reputational damage in America that they are currently suffering. In the months following the crash, Boeing posted its largest-ever quarterly loss, followed by a string of public relations moves designed to rehabilitate the company’s image. Boeing’s board of directors created a permanent safety committee to oversee its aircraft and then fired its CEO and top executive over the following months. After spending over a year redesigning the MAX, the U.S. FAA lifted the grounding order of the 737 MAX in November 2020. Then, in 2023, Boeing began delaying delivery of their 737 MAX 7 due to non-compliant fittings, followed by reports that their 737 MAX planes were having continual mishaps. Then, the Alaska Airlines incident happened in January, causing a spotlight to come back on the company and its practices. The Barnett death and subsequent speculation have only heightened the turmoil. After digesting all of this recent controversy, one wonders, “How did Boeing get to this place? How did they go from being a once-unassailable company to one with its reputation in the toilet?” It’s a universally applicable shift from being focused primarily on the quality of the product to being primarily concerned with massive quarterly profits above all else. In the last decade, Boeing has spent more than $40 billion on stock buybacks and distributed almost $22 billion in dividends to shareholders. Experts point to the 1990s as the period when Boeing’s corporate culture shifted. “In the early 90s, Boeing was really an engineering company run by engineers,” said Bill Lazonick, an economics professor at the University of Massachusetts Lowell. However, things changed dramatically in 1997 when Boeing acquired a rival plane manufacturer, McDonnell Douglas, in what was the 10th-largest merger in American history at the time. According to Lazonick, McDonnell Douglas was “shifting their company to shareholder values” and Boeing followed suit. To show their commitment to this new philosophy, Boeing named former McDonnell Douglas head Harry Stonecipher as CEO. Stonecipher was once quoted as saying, “You can make a lot of money going out of business.” That is not a philosophy you want to see injected into a company that needs to have such a high priority on safety. Stan Sorscher, a former Boeing engineer and union representative who worked there during the merger, said the company’s shift in strategy was obvious. He remembers a conversation with an executive who told him that the deal would redirect the company towards “cost-cutting and investor focus.” Pierson, mentioned earlier in the article, puts it more bluntly. “Why are we having all of these production quality defects?” he asked. “I think the simple answer is the company is continuing to rush production to get planes out the door.” Through all of their turmoil beginning in 2018, Boeing’s executives and shareholders raked in huge dividends and stock benefits. It illustrates the perverse incentive system when everything is so closely wedded to the stock price and shareholder returns. We often see this in industries where the consequences are less dire than when an aircraft crashes, but Boeing is an extreme example of how the constant chasing of profit can easily corrode a company’s foundational purpose. We have clearly moved in a direction where profit is prioritized far above quality and safety in virtually every realm of society. The severity of the consequences of this mentality may vary, but it is a wildly inhumane, extreme way of orienting an economy. Boeing has made conscious decisions that should have them facing serious consequences. However, in a system that prioritizes profit so far above everything else, there is a real question if they will face legitimate consequences. That should make anyone with a conscience question if it’s remotely sustainable to have our priorities so far out-of-whack. 17
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