No this is not how Boeing has always operated. Boeing had a great engineering culture for most of its' history. A fundamental shift happened around the time that the company merged with McDonnell Douglas, a merger that was shepherded largely by the Department of Defense. Around this time began the "Financialization" of Boeing. The following is a good read on the shift within the company and how that new culture enabled the Dreamliner and the 737 Max debacles.
Has anyone written about how exactly the acquired company (McDonnel Douglas) was able to take over the acquiring company? Sounds like it would be an interesting story.
I also wonder if there are similar accounts of the same happening in other companies.
When a company seeks to acquire another company, the executives of the target company are sometimes promised and given a disproportionate share of management roles in the reorganized entity as enticement to grease the acquisition. The alternative is more expensive payouts. And of course, no matter which approach is taken, cash will be tight post merger so there'll naturally be an emphasis on cost cutting and "synergizing", which McDonnell Douglas executives were well practiced in, likely drawing favor from the board, despite that it was still 2/3rds Boeing post merger.
Also, despite the narrative, it may very well have already been the case that Boeing's culture was going down the gutter, its acquisition of McDonnell Douglas a reflection of that rather than the root cause.
EDIT: Here's a 2002 article that suggests it was all of these phenomena--disproportionate leadership roles, a claim to cost control expertise, a skittish board, and evolving business strategies. https://www.seattlepi.com/business/article/Hard-nosed-Stonec... Some former McDonnell Douglas executives, like Boeing President and COO Harry Stonecipher, were well placed to take control when the inevitable cash crunch happened. Stonecipher replaced the Boeing CFO with a GM executive. See also this contemporaneous 1998 article describing the same event: https://archive.seattletimes.com/archive/?date=19980715&slug... That article says it was Stonecipher and the board chairman, Phil Condit, who forced the CFO out for his overly conservative accounting. Condit, AFAIU, was also CEO at the time and had been CEO of Boeing prior to the McDonnell Douglas merger. In fact, Condit led multiple acquisitions before MD, which suggests to me he and Boeing were already following the "acquire rather than innovate" playbook.
Yes. There's was a good article on this recently. I've provided the original URL and outline URL to get around the login wall:
>In the eyes of many Boeing employees, McDonnell Douglas executives seemed to do disproportionately well out of the merger: Many were given senior positions following the acquisition, with the company’s head, Harry Stonecipher initially appointed chief operating officer and holding more than twice the number of shares in the company as Condit, who remained CEO. Stonecipher and John McDonnell, formerly the chair of McDonnell Douglas’ board, were now the two largest individual shareholders of the merged companies."
In a 2007 interview, Ron Woodard, the former president of Boeing’s Commercial Airplane Group, bemoaned the changes the merger brought with it. “We thought that we’d kill McDonnell Douglas and we had it on the ropes,” he said. “I still believe that Harry outsmarted Phil and his gang bought Boeing with Boeing’s money."[1][2]
https://newrepublic.com/article/154944/boeing-737-max-invest...
Matt Stoller also talked about this cultural shift that enabled Boeings problems in an article a year ago.
https://mattstoller.substack.com/p/the-coming-boeing-bailout