Excuse my language, but why is Boeing such a shitty corporation?
Their planes are literally falling apart in the sky.
At least six Boeing planes have had parts fall off this year—including an exit door in mid-flight. A whistle-blower has accused Boeing of a “criminal cover-up” of its safety failures.
But beyond this one company, Boeing’s descent is a case study in how American capitalism has become so rotten. Let me explain.
I’m old enough to remember when people used to say “If it’s not Boeing, I’m not going.”
But in 1997, everything changed when Boeing merged with McDonnell Douglas and became the only major maker of commercial aircraft in America. With no domestic rivals, it no longer needed to stay on the cutting edge of innovation.
Executives at Boeing who once specialized in engineering were replaced with Wall Street types who looked down on the engineers. One money-hungry CEO described those who cared too much about the integrity of Boeing’s planes, and not enough about its stock price, as “phenomenally talented assholes.”
To keep Wall Street happy, Boeing began spending billions on stock buybacks that pumped up the value of shares—money that could have been spent on safety and innovation.
It doled out hundreds of millions on campaign contributions and lobbying to lower safety standards, rake in massive government contracts, and boost its bottom line.
To cut costs, Boeing outsourced roughly 70% of its design, engineering, and manufacturing rather than rely on its experienced union workforce.
To further undercut its union, Boeing opened an assembly plant in South Carolina, a notorious anti-union state. Executives reportedly told managers not to move any unionized employees there.
This quest for profit resulted in massive quality control problems that were reported by engineers and machinists, but allegedly ignored by management. All of this inevitably led to the deadly safety issues Boeing faces today.
And because of Boeing’s monopoly-like power, it has been largely immune from any repercussions for its poor performance.
Boeing made it seem like it was punishing executives who led it astray by firing them, but still rewarded them with “golden parachutes” on the way out.
Folks, Boeing’s troubles should serve as a cautionary tale. It’s reflective of broader trends in our economy over the past forty years. Monopolization. Wealth siphoned off to rich shareholders at the expense of everyone else. Cutting corners on safety to save a dime. Bashing unions. All while spending big money lobbying the government.
Boeing may have become a shitty company, but that doesn’t mean we have to put up with it.
The government has the power to increase antitrust enforcement to bust up big companies — something that we are already starting to see in other industries.
It should also attach strings to government contracts and subsidies to ensure that private corporations are working in the best interest of the country, and not just their bottom lines.
It should ban stock buybacks, which were illegal before the Reagan administration, so profits are put back into improving the company, including the safety of products, rather than solely padding investors’ wallets.
Union power should be rebuilt, so that workers can once again act as a countervailing force to Wall Street.
And we should continue the fight to get Big Money out of politics.
It’s not too late to reverse course and chart a new flight path.
Read it on Robert Reich’s blog.
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