Requiem: How the Lazy-B Veered off the Runway

By David Brewster

Seattle has an identity crisis, as the Jet City fades. That was the implicit theme the other night at The Block Table discussion held at Folio Athenaeum Library in the Market. The guest speaker was the admired Boeing reporter for The Seattle Times, Dominic Gates, ably interviewed by Kenan Block (son of Bob Block, the affable founder honored by the name of The Block Table).

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In its ascendency, Boeing provided well-paying and stable employment for all levels of workers, thus creating the middle-class affluence of Seattle and spreading the city’s name across the world. Unlike Amazon, Boeing played a strong role in local public affairs such as at the Seattle School Board and in funding local arts. The old Boeing shrewdly bet the company (and drew great engineers) by introducing new airliners, the 707, the 727, and the 747. Bill Allen, a Montana lawyer, was an internationally revered CEO of the company, 1945-69. The company rode high on the post-WW II boom years, selling airliners and Pentagon contracts.

Eventually the company veered off the runway. As Dominic Gates recounted the story, the fatal moment came when Harry Stonecipher convinced CEO Phil Condit that Boeing was not a broadly beneficial plough horse, but rather a laggard in growth and stock value. The siren song of modern finance had been heard, and Boeing was seduced.

The fatal advice of Jack Welch of GE to focus overwhelmingly on shareholder equity was underscored by installing a “GE Board” at Boeing and the absence of quality-engineering Seattle representatives. That led to a decision, disastrous in the long run, to outsource a lot of manufacturing to other companies and, by threatening to move manufacturing of new jets elsewhere, thereby squeezing employees on wages and pensions.

https://www.postalley.org/2024/04/28/requiem-how-the-lazy-b-veered-off-the-runway/