The rise and fall

Currently Playing: Boeing’s downfall is worse than you think

https://bit.ly/4AuxVq2 — Check out Zapier and try the new TypeSafe Jev integration to build faster AI-powered workflows for things like lead scoring, inbox triage, support routing, and more. Jev makes fast decisions instead of generating text, and Zapier lets you plug those decisions directly into your automations—no code required. #ad #ZapierPartner Learn more about Bedrock: https://www.girdley.com/bedrock Get the 2-minute cheat sheet for this video → https://girdley.com/youtube 👇 SUBSCRIBE for more business breakdowns https://www.youtube.com/@Michael-Girdley?sub_confirmation=1 ------------------------------------------------------------------ ► Get my weekly letter to business owners: essential insights to run, grow, and stay ahead in your business → https://links.girdley.com/newsletter-yt ► For sponsorships or inquiries please reach out to: Contact@girdley.com ► Do you have a hat I should wear in a video? Send it to us: Contact@girdley.com ► Free events on all things small business: https://links.girdley.com/lectures-yt ► Deep dives on businesses for sale: https://www.youtube.com/@AcquisitionsAnonymousPodcast ► Follow me on Twitter/X: https://x.com/girdley ------------------------------------------------------------------ For decades, Boeing built its reputation around engineering. After World War II, leaders like Bill Allen were willing to make enormous bets on new aircraft, including the Dash 80 that eventually led to the 707. That mentality continued through aircraft like the 737 and 747, and later the 777, where engineers, suppliers, and other teams worked together to build one of Boeing’s most important airplanes. The turning point in this Boeing story came as the company’s priorities began to change. Boeing merged with McDonnell Douglas in 1997, and executives associated with a more financially driven management philosophy gained enormous influence. Boeing increasingly focused on unit costs, return on investment, shareholder returns, outsourcing, and moving management farther away from its engineering base. The 787 became one example of the consequences: Boeing outsourced nearly 70% of its design and development, then struggled with suppliers as the program ran years late and billions over budget. Then Airbus forced a critical decision. Instead of developing a clean-sheet replacement for the 737, Boeing upgraded the existing aircraft into the 737 MAX. Larger engines changed the airplane’s characteristics, and Boeing introduced MCAS as part of its solution. The system depended on a single sensor, while pilots in many situations weren’t told about MCAS in their manuals. Lion Air Flight 610 and Ethiopian Airlines Flight 302 subsequently crashed, killing 346 people, and the 737 MAX was eventually grounded for roughly 20 months. But what happened to Boeing wasn’t confined to the 737 MAX. The transcript traces continued manufacturing and safety problems through the Alaska Airlines door-plug incident in 2024, the FAA’s findings about Boeing’s safety culture, labor problems, billions in losses, and Boeing’s eventual decision to buy Spirit AeroSystems back after selling its 737 fuselage operation years earlier. For me, the larger business lesson from the rise and fall of Boeing is about incentives and competition. Cost discipline and shareholder returns matter, but a company can create enormous long-term problems when financial optimization starts undermining the capabilities that made the business exceptional in the first place. Boeing’s story shows how cultural deterioration can take years to become visible—and how difficult it can be to reverse once it spreads through an organization.