After 346 people were killed in two separate crashes, the Federal Aviation Administration refused to allow any Boeing 737 Max jets in the air for more than a year and a half.
Boeing’s former CEO defended the company’s safety record after the deadly incidents, and implied some of the blame lay with insufficiently trained pilots. But in the new book “Flying Blind: The 737 Max Tragedy and the Fall of Boeing,” journalist Peter Robison argues changes in corporate culture and government oversight led Boeing to prioritize profit over safety.
Robison, who’s an investigative reporter for Bloomberg, joins Chicago Tonight for a conversation.
Below, an excerpt from “Flying Blind.”
When I visited Boeing’s headquarters in Seattle for the first time as a Bloomberg News reporter in 1998, I was excited to meet the engineers who’d created these essential machines and the business leaders lionized in bestsellers like Built to Last and In Search of Excellence. What I found was a place at war with itself. The acquisition of McDonnell Douglas a year earlier had brought hordes of cutthroat managers, trained in the win-at-all-costs ways of defense contracting, into Boeing’s more professorial ranks in the misty Puget Sound. A federal mediator who refereed a strike by Boeing engineers two years later described the merger privately as “hunter killer assassins” meeting Boy Scouts. At the time, with world-beating companies like General Electric in ascendance and the federal budget in surplus, it was hard to credit the engineers’ dark fears about the future of the company they also so clearly loved. No workplace is perfect.
It’s become sadly apparent that at Boeing—as at so many other places—the assassins won. Some of the very people who ran McDonnell Douglas into the ground resurrected the same penny-pinching policies that sank their old company. Borrowing a page from another flawed idol, Jack Welch’s General Electric, they executed what today might be called the standard corporate playbook: anti-union, regulation-light, outsourcing-heavy. But pro-handout, at least when it comes to tax breaks and lucrative government contracts.
The Boeing that Muilenburg joined as a college intern a generation ago was created by driven engineers who wanted, as he did then, to design the world’s best airplanes. They called themselves “the Incredibles.” He rose through the ranks of a company that, instead, rewarded financial wizardry and aped GE’s tactics—right up to the point where both became cautionary tales. Rather than investing in new aircraft, Boeing’s leaders poured more than $30 billion of cash into stock buybacks during the MAX’s development, enriching shareholders and ultimately themselves. Muilenburg made more than $100 million as CEO, and he left with an additional $60 million golden parachute.
What happened at Boeing reflects the same forces that have roiled corporate America since the Reagan revolution ushered in an era of imperial leaders like Welch, obsessively focused on stock market investors. The same year that Boeing bought McDonnell Douglas, the Business Roundtable, a lobbyist for the largest U.S. corporations, did away with any pretense that employees, customers, or communities also had important voices. The group declared that the first duty of any company was to shareholders; everything else would follow, as if by some natural law. In 1997, this new statement of purpose was uncontroversial enough that few newspapers even carried a story about it. It was the fulfillment of a long shift away from the communitarian ideals that had dominated American politics, economy, and culture from the New Deal of the 1930s to the Great Society of the 1960s. That consensus was just starting to fray when Milton Friedman, the Reaganites’ favorite economist, argued what was then still the contrarian viewpoint in the New York Times Magazine in 1970: “The social responsibility of business is to increase its profits.”
From FLYING BLIND: Inside the 737 MAX Tragedy and the Fall of Boeing. Copyright © 2021 by Peter Robison. Published by Doubleday, an imprint of The Knopf Doubleday Publishing Group.