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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
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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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. ð. I hope Boeing can emerge from this crisis as the company it once was.
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.
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.
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.
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.
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.
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.
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.
