Boeing!
The official Boeing episode. A complete analysis of the Boeing company and their...fiascos, of late.
Welcome back to Brooke in the Air, and this week’s topic, BOEING. We have a good amount to cover spnlet’s jump in. Shall we?
OVERVIEW
First thing is first, an overview. Boeing is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, and missiles worldwide. The company also provides leasing and product support services. Boeing is among the largest global aerospace manufacturers; it is the fourth-largest defense contractor in the world based on 2022 revenue and is the largest exporter in the United States by dollar value. Boeing was founded by William Boeing in Seattle, Washington, on July 15, 1916. The present corporation is the result of the merger of Boeing with McDonnell Douglas on August 1st of 1997. As of 2023, the Boeing Company's corporate headquarters is located in the Crystal City neighborhood of Arlington, Virginia. The company is organized into three primary divisions: Boeing Commercial Airplanes (BCA), Boeing Defense, Space & Security (BDS) and Boeing Global Services (BGS). In 2021, Boeing recorded $62.3 billion USD (€56.1bn) in sales. Boeing is ranked 54th on the Fortune 500 list (2020), and ranked 121st on the Fortune Global 500 list (2020).
HISTORY
The Boeing Company was started in 1916, when American lumber industrialist William E. Boeing founded Pacific Aero Products Company in Seattle, Washington. Shortly before doing so, he and Conrad Westervelt created the "B&W" seaplane. In 1917, the organization was renamed Boeing Airplane Company, with William Boeing forming Boeing Airplane & Transport Corporation in 1928. In 1929, the company was renamed United Aircraft and Transport Corporation, followed by the acquisition of several aircraft makers such as Avion, Chance Vought, Sikorsky Aviation, Stearman Aircraft, Pratt & Whitney, and Hamilton Metalplane.
In 1931, the group merged its four smaller airlines into United Airlines, yes that same United Airlines. In 1934, aircraft manufacturing was required to be separate from air transportation. Therefore, Boeing Airplane Company became one of three major groups to arise from the dissolution of United Aircraft and Transport; the other two entities were United Aircraft (later United Technologies) and United Airlines.
In 1960, the company bought Vertol Aircraft Corporation, which at the time, was the biggest independent manufacturer of helicopters. During the 1960s and 1970s, the company diversified into industries such as outer space travel, marine craft, agriculture, energy production and transit systems.
In 1995, Boeing partnered with Russian, Ukrainian, and Anglo-Norwegian organizations to create Sea Launch, a company providing commercial launch services sending satellites to geostationary orbit from floating platforms. In 2000, Boeing acquired the satellite segment of Hughes Electronics.
Boeing 737-MAX under construction at the Everett factory complex
THE MCDONNELL DOUGLAS MERGER
In December 1996, Boeing announced its intention to merge with McDonnell Douglas, which, following regulatory approval, was completed on August 4, 1997. The delay was caused by objections from the European Commission, which ultimately placed three conditions on the merger: exclusivity agreements with three US airlines would be terminated, separate accounts would be maintained for the McDonnell-Douglas civil aircraft business, and some defense patents were to be made available to competitors. In 2020, Quartz reported that after the merger there was a "clash of corporate cultures, where Boeing's engineers and McDonnell Douglas's bean-counters went head-to-head", which the latter won, and that this may have contributed to the events leading up to the 737-MAX crash crisis. But we’ll get to that.
In May 2022, Boeing announced plans to move its global headquarters from Chicago across from United Airlines headquarters on Willis Tower, to Arlington, Virginia, a suburb of Washington, D.C. The company said that this decision was made in part to concentrate on its defense work with "proximity to our customers and stakeholders." In other words, congres and the pentagon.
After the February 2024 Alaska Airlines Flight 1282 737-MAX door-plug near-catastrophe and other incidents, all under increased scrutiny by federal regulators, media and air travelers, one shareholder proposed relocating the corporate headquarters back to the Seattle area in hopes of getting engineering and quality control teams on-site access to key decision-makers. Boeing's board soundly dismissed the attempt.
In February 2023, Boeing announced plans for laying off approximately 2,000 of its workers from finances and human resources.
Then in May of 2023, Boeing acquired autonomous eVTOL air taxi startup Wisk Aero.
The company's four main divisions are Boeing Commercial Airplanes; Boeing Defense, Space & Security; Boeing Global Services; and Boeing Capital.
Boeing B-52 Stratofortress of the United States Air Force landing in Guam
Boeing Commercial Airplanes (BCA) builds commercial aircraft including the 737, 767, 777, and 787 along with freighter and business jet variants of most. The division employs nearly 35,000 people, many working at the company's manufacturing facilities in Everett and Renton, Washington (outside of Seattle), and South Carolina.
Boeing Defense, Space & Security (BDS) builds military airplanes, rotorcraft, and missiles, as well as space systems for both commercial and military customers, including satellites, spacecraft, and rockets.
Boeing Global Services (BGS) provides aftermarket support, such as maintenance and upgrades, to customers who purchase equipment from BCA, BDS, or other manufacturers.
Boeing Capital appeals to investors and manages corporate funds among other duties all dealing with finance.
DEFECTS AND CRASHES
In 2018 and 2019, two Boeing 737-MAX narrow-body passenger airplanes crashed, leaving 346 people dead and no survivors. In response, aviation regulators and airlines around the world grounded all 737-MAX airliners. A total of 387 aircraft were grounded. Boeing's reputation, business, and financial rating suffered after the groundings, as Boeing's strategy, governance, and focus on profits and cost efficiency were questioned. In 2022, Netflix released an exposé, Downfall: The Case Against Boeing, claiming Boeing's corporate merger with McDonnell Douglas led to the crashes through a disintegration of workplace morale.
In June 2020, the Federal Aviation Administration found several 737-MAX defects that Boeing deferred to fix, in violation of regulations. In September 2020, the U.S. House of Representatives concluded its own investigation and cited numerous instances where Boeing dismissed employee concerns with a 737-MAX flight stabilizing feature (MCAS) that caused the two fatal accidents, prioritized deadline and budget constraints over safety, and lacked transparency in disclosing essential information to the FAA. It further found that the assumption that simulator training would not be necessary had "diminished safety, minimized the value of pilot training, and inhibited technical design improvements". On January 7th, 2021, Boeing settled out of court in order to pay over $2.5 billion after being charged with fraud over the company's hiding of information from the safety regulators: a criminal monetary penalty of $243.6 million, $1.77 billion of damages to airline customers, and a $500 million crash-victim beneficiaries fund.
In September 2022, Boeing was ordered to pay a further $200 million (€180M) over charges of misleading investors about safety issues related to these crashes. In March 2023, Boeing disputed in court filings that the victims of Ethiopian Airlines Flight 302 (the 2019 crash) experienced any pain and suffering in the final six minutes as the plane was nosediving into the ground, citing "speed of sound" as a defence. Boeing's claim was described as "preposterous" by Huffington Post:
Passengers aboard the plane, the plaintiffs argued in court, "undeniably suffered horrific emotional distress, pain and suffering, and physical impact/injury while they endured extreme G-forces, braced for impact, knew the airplane was malfunctioning, and ultimately plummeted nose-down to the ground at terrifying speed."
Southwest Airlines’ Boeing 737-800 in Dallas. Southwest are the biggest users of the 737.
While the investigations into the crashes of the 737 MAX were proceeding, the Boeing 777X, the company's largest capacity twin jet and the largest ever built, made its maiden flight on January 25, 2020, but also experienced problems. Following an incident during flight testing in 2021, the estimated first delivery of the aircraft was delayed until 2024. After further technical problems were discovered in the aircraft in 2022, the release was delayed again until 2025, six years after the original date.
Primary Boeing Everett factory
On January 5, 2024, on Alaska Airlines Flight 1282, a door plug blowout occurred on a 737-MAX 9 jetliner after the plane had reached just over 16,000 feet, leaving a door-sized hole in the fuselage and the aircraft made an emergency landing at Portland International Airport successfully with several people onboard injured, although all had subsequently been "medically cleared". The FAA mandated immediate inspections of all 737 MAX 9s fitted with door plugs, thereby grounding 171 aircraft. United Airlines found loose bolts on jets grounded by the FAA, raising questions about possible systematic problems with the Boeing 737 MAX 9. The FAA announced on January 12 that it was expanding its scrutiny of Boeing, with a production audit of the 737 MAX 9. On February 6, the National Transportation Safety Board (NTSB) released a preliminary report indicating that four bolts used to secure the panel had been removed, and appeared not to have been replaced, at Boeing’s primary factory in Renton, Washington.
In March 2024, the Justice Department opened a criminal investigation into the Alaska Airlines blowout. In March 2024, CEO Dave Calhoun and board chairman Larry Kellner both announced they would be stepping down from their positions.
ENVIRONMENTAL IMPACTS & BIOFUELS
In 2006, the UCLA Center for Environmental Risk Reduction released a study showing that Boeing's Santa Susana Field Laboratory, a site that was a former Rocketdyne test and development site in the Simi Hills of eastern Ventura County in Southern California, had been contaminated by Rocketdyne with toxic and radioactive waste. Boeing agreed to a cleanup agreement with the EPA in 2017. Clean-up studies and lawsuits are still in progress.
On July 19th of 2022, Boeing announced a renewed partnership with Mitsubishi to innovate carbon-neutral and sustainable solutions.
The airline industry is responsible for about 11% of greenhouse gases emitted by the U.S. transportation sector. Aviation's share of the greenhouse gas emissions was poised to grow, as air travel increases and ground vehicles use more alternative fuels like ethanol and biodiesel. Boeing estimates that biofuels could reduce flight-related greenhouse-gas emissions by 60 to 80%. The solution blends algae fuels with existing jet fuel.
Boeing executives said the company was collaborating with Brazilian biofuels maker Tecbio, Aquaflow Bionomic of New Zealand, and other fuel developers around the world. As of 2007, Boeing had tested six fuels from these companies, and expected to test 20 fuels "by the time we're done evaluating them". Air New Zealand and Boeing are researching the jatropha plant to see if it is a sustainable alternative to conventional fuel.
The former Santa Susana Field Laboratory is a 2,850-acre rocket engine and energy test center. Just about every major U.S. space program owes part of its success to the field lab in California's Simi Hills. Boeing bought the land and secured the future of nearly 2,400 acres as permanent open space habitat to benefit wildlife and the community.
FEDERAL CONTRACTORS
In 2008 and 2009, Boeing was second on the list of Top 100 US Federal Contractors, with contracts totaling US$22 billion (€19.8B) and US$23 billion (€20.7B) respectively. Between 1995 and early 2021, the company agreed to pay US$4.3 billion (€3.9B) to settle 84 instances of misconduct, including US$615 million (€554M) in 2006 in relation to illegal hiring of government officials and improper use of proprietary information.
Boeing secured the highest-ever tax breaks at the state level in 2013.
Boeing's spent US$16.9 million (€15.2M) on lobbying expenditures in 2009. In the 2008 presidential election, Barack Obama "was by far the biggest recipient of campaign contributions from Boeing employees and executives, hauling in US$197,000 USD (€177,000) – five times as much as John McCain, and more than the top eight Republicans combined".
CORPORATE IDENTITY
Boeing has a corporate citizenship program centered on charitable contributions in five areas: education, health, human services, environment, the arts, culture, and civic engagement. In 2011, Boeing spent US$147.3 million (€133M) in these areas through charitable grants and business sponsorships. In February 2012, Boeing Global Corporate Citizenship partnered with the Insight Labs to develop a new model for foundations to more effectively lead the sectors they serve.
The company is a member of the U.S. Global Leadership Coalition, a Washington D.C.-based coalition of more than 400 major companies and NGOs that advocate a larger International Affairs Budget, which funds American diplomatic and development efforts abroad. A series of U.S. diplomatic cables show how U.S. diplomats and senior politicians intervene on behalf of Boeing to help boost the company's sales.
In 2007 and 2008, the company benefited from over US$10 billion (€9B) of long-term loan guarantees, helping finance the purchase of their commercial aircraft in countries including Brazil, Canada, Ireland, and the United Arab Emirates, from the Export-Import Bank of the United States, some 65% of the total loan guarantees the bank made in the period.
Boeing has been accused of unethical practices (in violation of the Procurement Integrity Act) while attempting to submit a revised bid to NASA for their lunar landing project.
WAR PROFITEERING
The firm has been criticized for supplying and profiting from wars, including the war in Yemen where its missiles were found to be used for indiscriminate attacks, killing many civilians.
During the 2023-2024 Israel–Hamas war, demonstrations sought to block shipments of weapons for the Israel Defense Forces at Boeing facilities in St. Charles, Missouri, Tukwila, Washington, and Gresham, Oregon. Students at Florida State University, University of Washington, Saint Louis University, University of Missouri–St. Louis, and Washington University in St. Louis called for their institutions to break partnerships with Boeing.
Students on a hunger strike at Brown University named Boeing among the list of corporations to divest from. The company rushed 1,000 small diameter bombs for the first week of Israeli air attacks on Gaza that were shipped from a US Air Force base by the Israeli Air Force. Research estimates that Boeing has made between $50 billion (45 mld. €) to $100 billion (90 mld. €) from weapon sales to Israel.
In March 2024, this month, five protesters in solidarity with the Palestinian cause were arrested on felony charges after blocking entrances to a Boeing facility in Heath, Ohio.
FINANCE
For the fiscal year 2023, Boeing reported earnings of US$2.242 billion, with annual revenue of US$77.7 billion. Boeing's share price on Wall Street fluctuated greatly with a monthly high of $267.54 and a monthly low of $176.25 per share.
Between 2010 and 2018, Boeing increased its operating cash flow from $3 to $15.3 billion (€2.7 to 13.78B), sustaining its share price, by negotiating advance payments from customers and delaying payments to its suppliers. This strategy is sustainable only as long as orders are good and delivery rates are increasing.
From 2013 to 2019, Boeing spent over $60 billion USD (€54B) on dividends and stock buybacks, twice as much as the development costs of the 787.
In 2020, Boeing's second quarter revenue was $11.8 billion (€10.6B) as a result of the pandemic slump. Due to higher sales in other divisions and an influx in deliveries of commercial jetliners in 2021, second quarter revenue increased by 44%, reaching nearly $17 billion (€15.3B).
In 2022, Rory Kennedy made a documentary film, Downfall: The Case Against Boeing, streamed by Netflix. She said about the 21st-century history of Boeing "There were many decades when Boeing did extraordinary things by focusing on excellence and safety and ingenuity. Those three virtues were seen as the key to profit. It could work, and beautifully. And then they were taken over by a group that decided Wall Street was the end-all, be-all."
On May 5, 2022, Boeing announced that it would be moving its headquarters from Chicago to Arlington, Virginia in the Washington, D.C. metropolitan area. Additionally, it plans to add a research and technology center in Northern Virginia.
As of 2022, Boeing is headed by a President who also serves as the chief executive officer. The roles of chair of the board and CEO were separated in October 2019.
Dave Calhoun is the outgoing president and CEO after the corporate coup ousted him.
THE EVERETT FACTORY
Officially called the Everett Production Facility, is an airplane assembly facility operated by Boeing in Everett, Washington, United States. It sits on the north side of Paine Field and includes the largest building in the world by volume at over 472 million cubic feet (13,400,000 m3) and covers 98.3 acres (39.8 ha).
Boeing 747 assembly area and primary factory in Renton, Washington - next to the paint department
The entire complex covers approximately 1,000 acres (400 ha) and spans both sides of State Route 526 (named the Boeing Freeway). The factory was built in 1967 for the Boeing 747 and has since been expanded several times to accommodate new airliners, including the 767, 777, and 787 programs. More than 5,000 widebody aircraft have been built at the Everett factory since it opened.
Boeing main factory complex in Everett
The Boeing Everett complex sits on 1,000 acres (400 ha) in southwestern Everett, about 22 miles (35 km) north of Seattle. It includes up to 200 separate buildings and facilities, mostly on the north and east sides of Paine Field's main runway, and straddles both sides of State Route 526 (named the Boeing Freeway). The complex includes a fire station, a medical clinic, a gymnasium, on-site security, and seven restaurants and cafes. As of 2022, Boeing has 30,000 workers at its Everett site who are scheduled in three shifts, primarily during daytime hours. The company is the largest employer in Everett and Snohomish County.
The main assembly building (pictured above), immediately north of the Boeing Freeway, covers 98.3 acres (398,000 m2) and is organized into six production lines that are separated by walls, offices, and other spaces. It is the world's largest building by volume at 472,370,319 cubic feet (13,376,037.9 m3) of interior space according to Guinness World Records; the building is large enough to fit all of Disneyland or 75 American football fields. The production lines move at a rate of 1.5 inches (3.8 cm) per minute and are guided by 26 overhead cranes that move along 31 miles (50 km) of track. These cranes are suspended along the roof trusses, which are 300 to 350 feet (91 to 107 m) long and are supported by columns that are 90 feet (27 m) tall. A network of pedestrian and utilities tunnels span 2.33 miles (3.75 km) under the factory floor; employees also use a shared fleet of 1,300 bicycles and tricycles to move around the factory floor.
The main building is 114 feet (35 m) tall and has six hangar doors that are each 82 feet (25 m) tall and 300 to 350 feet (91 to 107 m) wide. The doors have a six-part mural that was recognized as the world's largest digital image in 2006 by Guinness World Records. The building has a central ventilation system but lacks air conditioning; it is instead cooled by opening the doors for outdoor air. The building is heated through residual warming from employees and equipment, including the 1 million overhead lights in the factory. An urban legend states that clouds used to form inside the main building due to its size prior to the installation of upgraded ventilation systems. Adjacent buildings include a composite wing manufacturing plant with 1.2 million square feet (110,000 m2) of floor space; paint and seal buildings; and an auxiliary fuselage assembly plant for the Boeing 777X.
Boeing cranes and primary production lines
The north side of the factory complex is connected to the flight line at Paine Field via a taxiway that crosses over the Boeing Freeway west of Airport Road; airplanes are towed from the factory to flight line facilities at night to avoid disrupting traffic. The south side includes a set of three paint hangars, a delivery center with conference rooms, and parking spaces for airplanes. The flight line area connects to the main runway at Paine Field, which is 9,010 feet (2,750 m) long and is the only one at the airport that can accommodate jetliners. The runway has also used for commercial service since the opening of a new passenger terminal at the airport in 2019. Additional spaces for parked airplanes are on the west side of the runway and southwest of the main building; Paine Field's short crosswind runway has also occasionally been used to park airplanes since 2010; the runway and an adjacent taxiway have been leased to Boeing from the county government to store airplanes.
Boeing 787 Dreamliner under construction - issued to JetStar
CURRENT PRODUCTION RUNS
767
The Boeing 767 is a mid-size, wide-body, twin-engine, jet airliner. First introduced in 1979 to complement the larger 747, the aircraft was capable of carrying 218 passengers in a typical three-class configuration over a range of 5,990 nautical miles (6,890 mi; 11,090 km) and a cruising speed of Mach 0.80 (530 mph, 851 km/h, 470 kn).
767-300F (freighter)
KC-46 Pegasus (military tanker)
777
The Boeing 777 is a large-size, wide-body, twin-engine, jet airliner. Production of this plane began in 1993. As of November 2023, the factory is being retooled to produce the 777X, the next-generation of the aircraft. The 777-9 provides seating for 426 passengers and a range of over 7,285 nmi (13,492 km; 8,383 mi).
These are the 777 variants currently in production as of 2024:
Production of passenger variants ended in 2017 after its successor, the 787 Dreamliner, entered service in 2011. Freighter and military variants remain in limited production.
737-MAX
Oh, the MAX.
The Boeing 737-MAX is a mid-size, narrow-body, twin-engine, jet airliner. Production of the aircraft is expected to continue in the second-half of 2024. This will be the fourth production line for the Boeing 737 MAX and will be the first 737 model not produced at the Boeing Renton Factory. The line will replace the discontinued Boeing 787 line at the factory.
Boeing Renton, Washington factory - specialized for narrow-body airliners and military derivatives.
In January 2024, the FAA announced it would not grant any production expansion of the 737 MAX as a result of the in-flight loss of a plug door panel of a MAX-9 jet.
TOURS
Following several months of unofficial visits, Boeing began offering factory tours with the first rollout of the 747 in 1968. The first year of tours had over 39,000 visitors, which later grew to 55,000 annually by the 1980s; a dedicated tour building was constructed in 1984 and later replaced by the Future of Flight Aviation Center in 2005. The new center has a theater, exhibits, a Boeing Store gift shop, and café. As of 2020 over 150,000 people come each year to visit the factory. The Boeing factory tour was suspended from 2020 to 2023 due to the COVID-19 pandemic and has not resumed in 2024.
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This blog will be updated as new information becomes available.
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