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Boeing’s Shift from Engineering Excellence to Profit-Driven Culture: Tracing the Impact of the McDonnell Douglas Merger on the 737 Max Crisis

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Boeing’s journey, particularly with its 737 Max, reflects a dramatic shift in the company’s core values and operational philosophy, a change significantly influenced by its late-1990s merger with McDonnell Douglas. This pivotal event marked a departure from Boeing’s storied commitment to engineering superiority and a safety-first mindset, pivoting towards a business model heavily emphasizing cost efficiency and rapid production, often at the expense of product quality and safety. (www.airguide.info) More...

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robjrc
Rob Cavanaugh 33
This is my first post here and will be my last but my 30 years with the Boeing company were rewarding and memorable as I participated in some amazing programs (that I still can’t discuss with anyone). I retired in 2010 and the last 5 years was involved in the post MDAC merger transition. I witnessed a certain amount of arrogance with the “other side” and it seemed they were less concerned with blending our expertise. I decided to retire earlier than planned when I found out they were going to eliminate my retirement medical plan. My impression was that when it came to the management structure MDAC seemed to “take over”. This point is substantiated when the CEO of MDAC became the CEO of the Boeing Company. This is just my opinion as an old aerospace worker. 😉. I hope Boeing can emerge from this crisis as the company it once was.
garylpage
Gary Page 14
I'll add to this comment. I worked for Boeing Phantom Works for a couple of years in the late '90s, as the MDAC merger was going on. I worked in the east, by myself, as a "facilitator" for Boeing's relationship with a prime contractor, so I wasn't really surrounded by the Boeing corporate culture.

I was on what was called the "Management Payroll" as distinct from the "Engineering payroll" and I was told that prior to the merger, MDAC moved a lot of people on to their "Management Payroll" in order to have them placed in supervisory positions post merger. I was also told that Stonecipher would NEVER become CEO of Boeing. In the end, MDAC took over Boeing and ran it into the ground just as the same crowd had run MDAC into the ground.

It is very sad. Perhaps there is some hope that events of recent years will allow Boeing to return to its former state. I hope so.
rlbaldwin
Richard Baldwin 48
Sustaining a concept of engineering excellence is no easy feat. Boeing owes much of its earlier success to one of the most important (and yet mostly invisible) company aspects, the "Boeing campus", i.e. the greater Seattle area. It was here where the majority of engineering, manufacturing, parts suppliers and manufacturers, and yes, even executive management lived and worked. During those days, executives "walked the floor" in the plants, engineering buildings, and supplier's buildings spreading the important concept of excellence to all. With the decapitation of the company, when its executive level departed for Chicago, the impact was not immediately noticed. It would take years for product quality to inherit this loss of management oversight to be realized in the form of life-threatening features. I have no idea how Boeing restores its legacy heritage of product quality, but the Boeing trajectory would be an excellent case to decompose in university business classes.
M20ExecDriver
M20ExecDriver 12
That concept will never be taught in the likes of Harvard, MIT or Drexel. It's these same universities that espouse the traits that have brought down big companies like GM, Ford, Chrysler and others.
bkoskie
Billy Koskie 41
Compare how Boeing performed when they rolled out the 777 and the 737 Next Generation (both pre-merger) and every plane since then (post-merger) - 737 Max, 777X and 787. Late, QA/QC problems, manufacturing problems, etc. The merger is root cause of Boeing no longer putting making great, safe planes first. Why merged companies ever adopt the philosophy of the acquired company always stuns me. And yet it happens often.
awinn
Alan Winn 28
you so correct Billy, the merger badly damaged Boeing's engineering superiority and a safety-first mindset! The McDonnell-Douglas used to make fun of Boeing engineers and management by calling them "boy scouts". The result is 737 Max, 777X and 787 problems, and enormous cost overruns.
charleslindberg
The 787 was pre-Muilenburg. The merger did not cause the 737 max fiasco it was former CEO Dennis A. Muilenburg. The 787 had some early growing pains with the batteries but has been problem free since then with zero hull losses and zero fatalities. Boeing needs to get started on a composite replacement for the 737 if it wants to stay in business. The 787 has been a winner all the way.
genojoy
Gene Joy 40
It's not just Boeing. And not just aviation. There has been a sea change in morals and ethics in business in general. Planned obsolescence was the mantra. It's just unfortunate that in this case lives can be at stake so it rightfully garners more attention. Remember when a refrigerator would last 20 years? Or more? It's not Boeing or M-D....it's a societal shift.
at10uation
Russell Hodin 14
If by "societal" you mean the Wall Street ethos, then I agree. Otherwise it's anything but societal. In the past, no consumer intentionally chose a shoddy product by any metric other than price, and even with cheaper products you received years of valued service. Wall Street has leaned on profitability so hard that the average consumer (and now airline passenger) cannot confidently expect value for their hard-earned dollar. Caveat emptor, to the Nth degree.
druck13
druck13 29
MCAS wasn't needed just because the aerodynamics changed, it was needed to pretend it was the same aircraft as previous 737s and avoid having to give pilots difference training (which was not required to move from the A320 to the A320neo). So it wasn't just the MCAS was implemented in an dangerous way (relying on a single sensor, too great control authority on the vertical trim), but it's entire concept was fundementally unsafe. Only a company with no regard to the lives of passengers could have signed off on such a devious scheme.
donnnell
donnnell 12
I see many parallels between what's happened to Boeing and what happened to my employer (most notably in top management and the engineering departments). When I started, our management philosophy was, make this company THE company people want to do business with. That slowly changed to, maximize short-term shareholder profits, regardless of the long term cost. When corporate officers can float away on multi-million dollar golden parachutes, it's only a matter of time before the whole company folds. (Sorry for such a bummer comment)
CaptJohn1
CaptJohn1 11
Sadly they did go from the greatest engineering company in the aviation business to just another company run by MBA's.
charleslindberg
Boeing is a great example of how one man, former CEO, Dennis A. Muilenburg can ruin a company. He put timetables and profits over safety and is directly responsible for the two 737 max crashes. All the punishment Dennis A. Muilenburg got was fired and a $ 62 Million going away present. If CEO's could be put in jail for manslaughter, Muilenburg would lead the list.
bingobanner
Russ Brown 10
I grew up just over the hill west from boeing. I remember in the late 40s when they tested jet engines it would keep me awake at night. I spent a lot of time in the "projects" war time housing for boeing and shipyard workers. 70 years ago when you quit or graduated from high school, Boeing was where you went first.
The current situation just makes me sad.
4gloriajohns
Gloria Johns 35
I was so proud to see the conversation in this thread remain on topic and at a level of intelligence to make it interesting and engaging. And then 1mooneymite followed by frequentflyguy had to bring up DEI and point the conversation in the direction of blaming diversity for mistakes made at Boeing. In other words, it's women and people of color who are screwing things up. You have to wonder if people aren't just using DEI, which most don't understand, as an excuse for white people's mistakes; after all, 61% of the workforce at Boeing is white, while 9% is Black. So, just using basic math, what are the odds that mistakes made in manufacturing are committed by nonwhites? But the real point is that this is an aviation-centered website. I wish that ignorant rabble-rousers would stop using it as their personal dumping ground for controversy. I think they should be called out every time and made to feel as small as they are. Maybe then they would be reluctant to keep doing it.
jeffcreek
jeff creek 5
That is the greatest comment I have read here in the 3 years that I have been reading the squawks.
d0ugparker
Doug Parker 21
“The shift from engineering excellence to profit-driven culture”

is equivalent to

“How the unspoken, toxic American culture teaches corporations to lie and get away with it.”

Change the culture.
avphotos
Greg Weir 7
The damage done to the Boeing Brand is huge, the bean counters have no respect for the talented engineers and workers that made the company what it was before the disastrous 737 Max program. I hope the bean counters realise that the new way of doing business does not equal profits.
CrowleyKenai
Charles Henry 2
Sadly, this corporate value shift isn't confined to aerospace. I'm seeing it in my own company and the industry in which my wife is employed as well.
M20ExecDriver
M20ExecDriver 6
My two cents, the only reason Boeing is still in business is the national defense angle. Any other industry run by the bean counters would have been defunct long ago. The capitalism that built this country died a long time ago.
SteveTarr
Steve Tarr 5
Leaders and culture are ultimately the responsibility of the board. Board group dynamics may cause them to develop group-think and don't-rock-the-boat. A long-term company like Boeing requires long-term thinkers on the board to step up.
wd73383
WD Rseven 6
The article is repetitive and its substance could be stated in one paragraph, but it's all true
navigator48
navigator48 4
I was thinking the same thing. Made me wonder if it was written by ChatGPT or another AI program.
kimlikakis
KIM LIKAKIS 3
Absolutely what I was thinking, too. Repetitive, redundant, poorly written.... gotta be AI.
ltullos
Larry Tullos 3
My thoughts exactly. I was about to post a note to the author to see if he had an editor, but I think most of them have been replaced by Grammarly or other AI.
TiredTom
Tom Bruce 6
oh boy..."if it's Boeing..I'm not going"
heysoundude
Greg Kusiak 7
Well, not sure it’s noted by most people, but I have a friend who books/schedules his flights so that he can avoid the brand new 737s. If it’s an Airbus, he’s at ease.
gomedoc
Jon Schwartz 5
gone are the guys with the white shirts, horned rim glasses plastic pocket protecters and skinny ties...maybe too much dependence on computers and spreadsheets and less on slide rules and hands on computation?
lvenable
lvenable 21
Computers and spreadsheets are not the problem. They are just tools that people use. I worked at Boeing Everett from 1967 to 1974 and it was a proud and effective manufacturer. The 747 was a monumental accomplishment. When the bean counters from MD took over, the culture changed and the results are finally becoming obvious to the public. Take note of the number of engineers that left the company in 2022, because of changes to their retirement benefits. If you want to see another parallel, look at what happened to Outboard Marine Corp when the engineers who built the company passed the baton to marketers.
gomedoc
Jon Schwartz 6
I can't argue with you but in my field, the loss of direct human contact and responsibility thru computerization has lead to many more errors than the computers that are replacing this human interaction were suppose to cure....
bluebullet
Robert Burness 1
I was a customer of Boeing Computer Services in the 1980-2002 time frame. BCS provided top notch, world class software. Always impressed by the competency of the staff I was amazed when they dropped support of their premier product, EIS (Executive Information Services), at the whim of a female exec they brought in to trim all the "low hanging fruit". That to me was the beginning of the end for Boeing.
redmdz
Mike Ziemann 6
There was plenty of "engineering excellence" at McDonnell Douglas as well, prior to the merger. This was the company that produced some of the greatest, and most successful, fighter jets in history. That doesn't happen with a "just good enough" company culture. Could the merger have contributed to a change in company culture at the "new" Boeing? Absolutely. But the author's assertion that McDonnell Douglas brought nothing but trouble and rot to the company is rather lacking in substance to back it up.
Ohio2Montana
Ohio2Montana 9
Aviation companies always under estimate the chaos of mergers. The merging of company cultures affects employees for their lifetime at the company.
rosswarner
Ross Warner 2
McDonnell Douglas had better avionics and better cross platform commonality at the end. The 717 (MD-95) and MD11 avionics are the same. Contrast that to 737 and 747-400 avionics. Mergers for sure cause issues, but a lot of market factors in play. Great article in aviation week years ago with the opinion that the Bombardier CSeries was the moment each side had to choose their path. Easy for airbus to re-engine, hard for Boeing. Bombardier had the plans up to a -900 variant which was 757 territory. Boeing was in the works to buy that program before the dropped it and sued. Blaming a dead company from Long Beach for the current issues seems to serve no productive purpose other than to deflect from actual needed improvement. Boeing could do so much better.
jwmson
jwmson 6
As a lifelong "If it ain't Boeing, I'm not going" person, I have to agree on this. Fire all the old MacDoug execs and return the HQ to Seattle.
1mooneymite
1mooneymite 7
Unfortunately, as they say, "You can never go back". The culture shift has matured and is now bearing rotten fruit. There has to be a revolution. Boeing's name may survive, but it's present culture wll not/cannot.
billy98102
William Henley 1
Yes!!!
godutch
godutch 8
Each paragraph repeats the same opinions by the author over and over and over...just stated differently. We get it already!
avionik99
avionik99 -4
The author sure hates Boeing and is not afraid to say it, is he?
awinn
Alan Winn 7
I do not think so, just is very upset by the fact that mangement is not doing what they have to do to fix Boeing, and return it to its glory.
godutch
godutch -3
Read this article by the same author (Aram Gesher). It's all about Airbus. He's an Airbus fanboy: https://www.airguide.info/what-to-expect-in-2024-new-airplanes-seats-and-airport-upgrades-for-passengers/

[This comment has been downvoted. Show anyway.]

bdjam
Brian James 16
365 dead bodies say otherwise. No matter what the agenda in the reporting, the facts remain. Boeing has succumbed to a profit forward business model
godutch
godutch -8
I got that in the 1st paragraph...old news.
TiredTom
Tom Bruce 3
no...in this case..it's true
godutch
godutch -7
Not exactly...
picky
picky 2
I beg to differ. The steel company I work for, 33k employees publicly traded, safety is #1, then profits #2. When a fatality happen, one too more, we had a company wide stand-down.
clyde714
clyde714 2
Wow, this sounds a lot like what happens at Danaher acquired companies. Those companies made their mark in their businesses by having the best engineers, state-of-the-art designs, customer-first philosophies, and well-compensated employees. Danaher comes in and says "You're fat, and we're gonna ring some increased profit outta ya". Danaher is a profit-first, everything else a distant second, company. And so the result is just like Boeing's - questionable product reliability, dissatisfied employees, and loss of long-term customers. Weird how the execs at both companies can't connect the dots between engineering excellence (even if it costs a few bucks extra), product quality, employee satisfaction (again, even if it costs a few bucks extra); and the resulting customer retention rate and profitability.
jeffault24
Jeffrey Ault 2
I worked at the Boeing plant in Wichita late 80s to 1999, never would I have dreamed, even in a profit driven environment like that, they would do what they did in 2004, and sell out to a Company like SPIRIT!?!? Kind of REGRET that decision now???
knackersblue
Bevan Cobbe 2
Agree!
hereiam2
Bill Green 2
Business, politics and money. Sadly nothing will change.
yr2012
matt jensen 5
Give me a break. The merger was consumated in 1997. Just about all those engineers from McD-D are retired by now. The blame belongs with Boeing. All those "old" engineers used slide rulesm not computers. Boeing voluntarily moved from Washington to Illinois to be closer to their #1 customer - United
https://simpleflying.com/mcdonnel-douglas-boeing-merger/
21voyageur
21voyageur 10
Sorry but no "freebie" on this one. The merger was a sea-change event driven by financial intent with the winner determining core corporate culture. In other words, stockholders (including executive management) being the customer and not the flying public. Is the last chapter of the Boeing saga to be implosion? I hope not - competition is good - but the early signs are apparent. Too big to fail? That myth has been dispelled. My 2 cents.
astro4000
I worked at MDCAN and when a jig required adjusting due to QA failing it, I would send it to the tooling room and it just sat there for months, when I asked why so long, I was told the person who knew how to do the adjustment and modifications retired and nobody there knew how to do the repair BECAUSE the union does not allow fellow employees to train the new employees so we were screwed.It was finally sent out to Ft Erie contractor that could do it... that whole exercise took months before my department got the jig back. So there is a lot of blame not only to mgt. but unions too!
astro4000
So the talent was gone and here we are today.
RickBennette
Rick Bennette 3
If it's on Boeing, then I'm not going.
huntbay
Nick Abate 3
Unfortunately it is becoming true. Went to Europe a month ago on a a350. fantastic.
huntbay
Nick Abate 3
If it's not Boeing, I'm not going..... No one says that anymore. it's a shame.
sheldonlang
Sheldon Lang 2
There's a very good reason for that. I don't remember that phrase, but as retired very frequent flier, I made it a point to avoid any 737. Airbus is now known as the much safer and more comfortable alternative. Good ole USA and the almighty buck. It's going to continue biting companies in the aft section.
RWSlater
Ron Slater 2
How ironic that the very next article in the flight aware email is this >> https://aeroxplorer.com/articles/lufthansa-grounds-two-airbus-a321-freighters-after-cracks-discovered-in-fuselages.php
HarrySchluderberg
The only thing Boeing’s upper management has left to brag about is their manic attention to Boeing’s workforce “diversity”.
flybd5juan
Juan Jimenez 1
Same reason we lost in Vietnam -- useless, braindead beancounters.
stratofan
stratofan 0
The root cause of a lot of their problems can also be traced to what happens when union clowns force a company to cave to their demands. A mentality of I'll get around to it, or that is not my job, does not help, either in production, or maintenance with the airlines that use the end product. Of course, the MSM does not help either, with their "Let's pile on" approach. You hardly ever hear them magnify the problems Airbus has had, and they have had their share as well. That said, it is amazing how many "Learned pundits" in the MSM suddenly become aviation "experts" when a problem occurs.
helensreekumar
Not only Boeing,corporate greed has taken over the very basic idea that the costomer or consumer comes first is long gone,extreme liberal culture and greed is wreaking havoc.

[This comment has been downvoted. Show anyway.]

Snailspace123
Greg Mills 5
https://popular.info/p/loose-bolts-open-door-to-racism
gomedoc
Jon Schwartz -6
I hope you are correct but loss of meritocracy like racism is very subtle and insidious in the pernicious rot they cause society.....but another reason people should be hired on the basis of merit not skin color (besides the obvious racism of racial essentialism)........no society has so far survived this kind of tribalism.....

Tribal people are incapable of developing a settled and prosperous society because the principles of meritocracy will not be decided on their skills but on their tribal or ethnic associations with someone else-VDH

“Nothing is more deadly to achievement than the belief that effort will not be rewarded, that the world is a bleak and discriminatory place in which only the predatory and the specially preferred can get ahead.”-George Gilder
gomedoc
Jon Schwartz -8
I do not know the impact DEI etc has had on Boeing. I do know that somewhere somehow someway in the mix of this mess is a government law, regulation, tax or tariff that is distorting their business model creating unintended consequences, perverse incentives and economic disparities......and it is not just in Boeing.......it is pervasive in our society....
Dgoldenberg
David GO 4
It is not a government law, regulation, tax or tariff. It is likely just pure human greed. Senior management at public companies have an incentive to focus on the short term. Investors these days focus on the short term and want their stock price to go up. Boards award stock to senior management. Everything is geared to the short term. This is capitalism and greed. Human nature. In fact we probably need some sort of government intervention to prevent this short-term thinking, particularly when it comes to companies that produce essential products where short term thinking may cost lives. We can't leave it to the "market" to sort this out. I know this won't be a popular statement, but sometimes we do need to legislate against human greed.
ed7778
Dennis Stockton -5
DIE. Don't forget DIE.

[This comment has been downvoted. Show anyway.]

Snailspace123
Greg Mills 4
Please don’t buy into that right wing qanon bs.

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