Our guest today, investigative reporter Peter Robison, says there's another story behind the 737 tragedy. In a new book, he writes that in recent decades, The Boeing Company changed from a company run by engineers who insisted on quality to one that prized profits and shareholder value over safety and embraced strategies of cost-cutting, outsourcing, union busting and co-opting regulators. The impact on the redesign of its 737 aircraft, he writes, was disastrous.
Peter Robison is an investigative reporter for Bloomberg Businessweek. His book is "Flying Blind: The 737 MAX Tragedy And The Fall Of Boeing."
ROBISON: The culture really started changing in the late 1990s, and that's a period when I was also a beat reporter for Bloomberg News covering Boeing, so I saw it firsthand. And the CEO at the time, Phil Condit, was very drawn to the bold vision of capitalism that he saw from especially Jack Welch at General Electric. Jack Welch was pioneering another way to run a manufacturing company, and his way was about services and financial engineering and mergers and acquisitions. And so from that point, the commercial airplane side of the business was considered just one piece of the business, that Boeing would find its future following the GE model. And that's when Boeing moved its headquarters from Seattle to Chicago, and that really symbolizes the shift from manufacturing to financial engineering.
ROBISON: Sure. So - but historically, Boeing's planes had succeeded because of communication. They - probably the last great airplane Boeing built was the 777. And for that airplane, Boeing created the slogan, working together. And it got these giant teams together every month to talk about their piece of the airplane because every small piece of the airplane contributes to the whole. And that had been Boeing's historic style.
The problem in the minds of people who wanted to pursue the standard corporate playbook was that it's more expensive. It's more expensive to have cross-functional teams. It's expensive to communicate and to have people traveling. And also, Boeing's unions had a lot of clout. And being based in Seattle gave them that clout collectively. So over time, Boeing moved work - pieces of the work to different states. They often moved the work to states that were nonunion. And the example you gave with the simulators is that Boeing simulators had been based in a training facility close to Boeing's headquarters, so if an engineer had a question of a pilot, they could walk over to the simulators and run through the procedure and check it out. Boeing moved the simulators to Miami and started hiring more non-union pilots and more contractors, which eroded the communication.