CNN asks the relevant Boeing question

There’s an engineer from County Kerry, Ireland who did something similar to fix a new version of the Boeing 747 12 or 13 years ago. There was a flutter in the wing tips that they couldn’t eliminate during the test flights, that in the past would have required a major redesign of the wing at a cost of millions of dollars and years of delay to correct. This guy reprogrammed the flight control system to automatically input counterbalancing control forces and saved the day.

Of course, I suppose you could say that Dr. Fitzgerald’s ingenuity in providing a cheap software fix instead of doing the costly work of properly redesigning the faulty wing, just emboldened the Jack Welch-trained MBAs already in place at Boeing.



Harry Stonecipher was a VP at General Electric in the 1980’s and also a Welch protege before he moved on to McDonnell Douglas.

Interesting that Phil Conduit decided to move the Boeing company headquarters because he was an opera fan and the Lyric Opera of Chicago was far better than Seattle’s offerings. Crazy stuff!




The official reason was “to be closer to our customers”. United is in Chicago, American was, iirc, in Dallas, and Delta in Atlanta. I thought it was because Condit had honked up so badly he didn’t want to show his face around Seattle. Now, Boeing has observed how forgiving of Lockheed’s sloth DoD is, vs airlines that expect delivery on time, on budget, and the planes to work correctly, so they apparently decided the future of Boeing is suckling on the government t3at.


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Seattle is a heck of a place for headquarters. Most business is in the east. Every trip takes 4 hrs on an airplane.

From Chicago you can be most places in under 2 hrs. Spend evening at home with family. Get early flight. Have meeting and fly home often in time for dinner and time with kids. Far more practical for much business than Seattle.

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And yet, Microsoft, Starbucks, F5 Networks, Amazon, Eddie Bauer, Costco, and flox more have HQ operations in Seattle, or nearby in King County. That is why Condit’s excuse for moving to Chicago didn’t quite wash. Another reason was, if “getting closer to their customers” was the reason, by moving to United’s HQ, would American and Delta feel snubbed? Alaska is the only one headquartered in Seattle, and Boeing had been there long before Alaska was founded. Seattle was neutral ground. That matters because many of us realize how fragile the “JC” ego is.


To bring this more directly into an investing type of discussion…


Except that almost the entire company was already in Seattle. That created a weird bifurcation where the bosses were in Chicago but the people who actually did the work were in Seattle.

If he was inside the plane , than yes, that is insider trading. But if he was sucked outside the plane, than no, that would not be insider trading.



Except a significant portion in St. Louis after the acquisition of McDonnell Douglas, once the largest employer in the state. Not to mention the huge operation in Wichita–now sold to Spirit I guess.

Internal meetings are easy to do by zoom. Backed up with a phone calls, emails, texting, and occasional travel. Customer meetings usually have to be in person.

Yes, you expect some operations to slowly move from Seattle to Chicago. Or where ever.

Yes, those companies that mostly do business on the West Coast are fine there. But its miserable to do business in the east.

And how has that close-to-customer management style worked out? The 777 was the last new design before the Welchian take over. The 777 arrived on time, on budget, and a customer took delivery of the very first airplane off the line. It has now become the biggest selling wide body jet of all time.

The first post-take over plane built with the new management techniques of having the bosses safely in Chicago was the 787. The 787 was wildly late and wildly over budget.

Boeing opened a new assembly line in South Caroline using Jack Welch Approved™ management techniques of using low-cost, inexperienced, non-union labor. Turns out, the inexperienced, non-union labor wasn’t very good at building airplanes and they had to be fixed by experienced union labor in Puget Sound.

The first eight or so planes off the line were such steaming heaps of garbage they could not be sold. In fact, Boeing was not able to deliver 787s with the specs their customers ordered at all. This lead many airlines to delay deliveries in hopes of getting the specs they needed or simply moved onto Airbus. I saw one analysis that concluded Boeing lost so much money on the 787 they would unable to break even over the life of the program.

Which brings us to the 737 Max. After years of dithering and watching the Airbus’s A320 eat their lunch, Boeing decided to overhaul an ancient airframe instead of a clean sheet design. In order to make the new one fly like the old one, engineers inserted code into the flight computer that could over ride the pilot’s input in certain situations. However, somebody made the decision not to tell the pilots. That sounds like a marketing decision to me. I can’t figure out why else you would do that. I read an estimate the other day that that one decision cost them approximately 1,000 aircraft in sales.

However you slice it, being close to customers isn’t the thing that sells airplanes. The thing that sells airplanes is delivering airplanes that customers receive on time and don’t crash.


Couldn’t disagree more. “Meetings” are things which are set up in advance, formally or informally agendized, stately and usually polite confabs where some communication is exchanged but not much gets done.

By contrast, engineering huddling in the halls, sales people sitting them at lunch, designers chatting around the water cooler, executives actually knowing their workforce and knowing who to trust: that’s what breeds success.

Meetings. Ha. There’s a reason they’re so widely lampooned.


No question that engineers do better when they work in groups. But surely you don’t mean to imply they need to surround the CEO’s office. Sure you need people to travel and spend time with the rest of the team. But all must be the same place? I don’t think so. Every company deals with that. Its fundamentally a communications problem.


How would you rate Boeing’s management since the move to Chicago?

Would you say customers love the proximity more than they hate the never ending string of avoidable disasters?

Does the knowledge that Boeing’s marketing team have shorter flights make for the news that the plane you ordered and is years over due is an unflyable piece of garbage?

Boeing is not the posterchild for management success. The Jack Welch acolytes managed to turn it from by far the largest commercial airplane manufacturer in the world to a distant No 2. And in a fairly short time frame as well.

In other words, moving to Chicago to make it easier for the marketing team has been really, really ineffective.


You probably know better than I do. Clearly they need to get their act together.

We live in a world of constant change. Its important to get the corporate culture to adapt to new requirements. I think we all wish them well. Some fine tuning seems to be in order.