54 THENEWYORKER, NOVEMBER 18, 2019
Since their daughter died, Michael Stumo and Nadia Milleits shares with a precision that rivals
any jet that rolled off the assembly line
in Boeing’s heyday,” Maureen Tkacik
wrote recently, in The New Republic.
Between 2013 and 2019, Boeing paid
out $17.4 billion in dividends, more
than forty per cent of its profits. In
his last three years as C.E.O., McNer-
ney received eighty million dollars.
Despite the stock rise, Richard
Aboulafia, a prominent industry ana-wearing a dress shirt tucked into shorts.
One of the coalition’s board mem-
bers was Stan Sorscher, an engineer at
Boeing and an official of the engineers’
union. Boeing was far larger than the
small companies Michael advocated for,
but he viewed it as a sort of “national
champion” that the country should have
more of. At a time when many U.S.
manufacturers were losing market share
to global rivals, Boeing was the coun-
try’s largest exporter.
But the company was in tremendous
flux. When Sorscher first went to work
there, in 1980, after earning a doctorate
in physics, he marvelled at its culture,
which emphasized quality improvement
and communication. Managers held
regular meetings for engineers to ad-
dress problems; engineers worked di-
rectly with suppliers; teams shared re-
sources, knowing that the gesture would
be reciprocated. The planes that Boe-
ing was developing—such as the 777,
its first jet to use significant computer
controls—were a success, with few prob-
lems after launch.
In December, 1996, Boeing an-
nounced that it was buying a struggling
rival, McDonnell Douglas, for thirteen
billion dollars. Sorscher is one of many
Boeing employees who have identified
the merger as the moment when Boe-
ing went from being led by engineers
to being led by business executives driven
by stock performance.
Sorscher recalled a labor-manage-
ment breakfast, shortly before the merger,
at which a top Boeing executive said
that the company would reduce spend-
ing on a program that employed engi-
neers to find improvements in the
process of making planes. Sorscher, a
member of the union’s bargaining unit
at the time, pointed out how much
money process improvement was sav-
ing the company.
The executive tipped his head back,
as if thinking how best to explain basic
economics to a clueless scientist. Finally,
as Sorscher recalled, the executive said,
“The decisions I make have more in-
fluence over outcomes than all the de-
cisions you make.” Sorscher told me, “It
was: ‘I can’t help but make a billion dol-
lars every time I pick up the phone. You
people do things that save four hundred
thousand dollars, that take one shift out
of flow time—who gives a crap?’”
Three years later, the engineers’ union
went on strike over bonus pay and cuts
in health coverage. James Dagnon, an-
other Boeing executive, said that engi-
neers had to accept that they were no
longer the center of the universe. “We
laughed,” Sorscher recalled. “This is an
engineering company—these are com-
plex, heavily engineered products. Of
course we’re the center of the universe.
But he wasn’t kidding. We didn’t get it.
Who is the center of the universe? It’s
the executives.”
In 2002, Sorscher, who had started
working for the union full time, made
his case to a Wall Street analyst in Se-
attle, arguing that bottom-line business
models did not apply to building air-
planes. The analyst cut him off. “You
think you’re different,” he said, accord-
ing to Sorscher. “This business model
works for everyone. It works for ladies’
garments, for running shoes, for hard
drives, for integrated circuits, and it will
work for you.”
Taken aback, Sorscher said, “Let’s
build an airliner with this business model.
If it works, you and everyone who looks
like you will be happy. And if I’m right,
then we’ll all be very unhappy.”
In the spring of 2004, Boeing started
designing the 787 Dreamliner, a three-
hundred-and-thirty-passenger jet. The
following year, the company named a
new C.E.O., Jim McNerney, a Harvard
M.B.A. who had worked at Procter &
Gamble, McKinsey, General Electric,
and 3M. According to Sorscher, under
McNerney engineers were discouraged
from voicing concerns. “What we heard
five thousand times was ‘Follow the
plan,’” Sorscher said. “ ‘Your job is to
follow the plan, and if you can’t follow
the plan we’ll fire you and get someone
to follow the plan.’”
By the time the 787 was ready, in
2011, the program was three years late
and tens of billions of dollars over bud-
get. A year later, after the airplanes’ bat-
teries displayed a tendency to catch fire,
the fleet was grounded for three months.
Nonetheless, the company’s finances
thrived. Between 2005 and 2015, the
share price more than doubled, owing
in part to Boeing’s aggressive repur-
chasing of its own stock. “The com-
pany has developed fail-safe systems
for smoothing earnings, beating ex-
pectations and jacking up demand for