There has been much debate about when Boeing took the wrong turn that led to its present downward spiral. That moment remains lost in the fog of time. But here is one of the first moments that we saw that its management was tearing down what had made Boeing great. I reported when it happened in 2014; here is a repost and revision.
“Boeing has always been less a business than an association of engineers devoted to building amazing flying machines. Sheer technical bravado–and at times an almost willful disregard for financial realities–have defined a company that designed the B-52 in a single weekend, wagered three-fifths of its assets on the 707, and launched the 747 when many observers (including FORTUNE) declared it potentially suicidal.”
— Journalist Jerry Useem in Fortune, 2 October 2000.
Jim McNerney was Boeing’s president and CEO from 2005 to 2015 and Chairman from 2005 to 2016 – its first-ever CEO without an engineering background. He is corporate royalty: Yale, Harvard MBA, time at McKinsey and GE, CEO of MMM – then Boeing. Today’s Boeing is his creation, for which he was paid over $100 million to build. Michael Kinsey’s definition of a gaffe “is when a politician tells the truth – some obvious truth he isn’t supposed to say.” There are few better examples than this during Boeing’s quarterly earnings conference on 24 July 2014. This was the year after problems with 787 cost Boeing tens of billions – caused by McNerney’s aggressive outsourcing of jobs away from Seattle’s skilled unionized workers.
Bloomberg News: “Jim, you have a birthday coming up next month. …Will you be at your desk, and has the Board approvide you staying on past age 65?”
Jim McNerney: “Yes, the heart will still be beating. The employees will still be cowering (laughing). I’ll be working hard; there’s no end in sight. We’re continuing to build the succession plan …But there’s no discussion of it yet. So you’ll still be asking questions of me.”
This is the mind of a modern American CEO. He was not kidding. Boeing’s executives worked hard to demoralize its workers (the most recent round earlier in 2014). McNerney exulted in his success. The disastrous 737 redesign is just the most recent result. Before that there were “Claims of Shoddy Production” of the 787 Dreamliners manufactured at Boeings South Carolina plant (part of the company’s shift to a non-union workforce). The Department of Justice is investigating.
In this Boeing stands with other corporate leaders such as those of Amazon, Nike, and Walmart in forging a new corporate-worker relationship: plutocrat and peon. It’s natural that their great success creates contempt for their employees. They have weakened or broken their unions. They converted much of their workforce into contingent, low wage, no benefit proles.
These executives are capitalists in the sense of living off America’s accumulated social capital. They are leeches. The greatness of America is shown by the length of time it has taken them to ruin formerly great companies such as GE and IBM, reducing them to shells of their former selves.
Unless we change America’s corporate structures, more companies will decay. It is built on law and custom, and under our control – if we have the will and wit to act.
This decay is part of the slow collapse of America’s institutions described in A new, dark picture of America’s future. These problems seem unrelated and overwhelming, but they have a common cause in our apathy. We have let slip the reins of America.
“A society does not ever die ‘from natural causes’, but always dies from suicide or murder – and nearly always from the former ….”
― Arnold Joseph Toynbee’s A Study of History.
For More Information
See Matt Stoller’s description of Boeing’s decline – driven into the ground by its senior executives.
Ideas! See my recommended books and films at Amazon.
- For Thanksgiving, Walmart shows us the New America.
- Nike swooshes us into a future of fewer jobs, low pay.
- Watch corporations strip-mine their future (and ours).
- While we sleep, corporate execs strip-mine America.
- How Corporations Bought Washington (it was cheap).
Books about this crisis of capitalism
See these two powerful books about this crisis by Wolfgang Streeck is sociologist, Professor and Director Emeritus at the Max Planck Institute for the Study of Societies in Cologne. See his c.v. and publications, his website and his Wikipedia entry. See reviews of his work here and here.