Boeing on the Verge of Collapse?

The aerospace giant gobbled competitors and won cozy ties with government officials, contributing to a poisoned corporate culture now on the brink.

This commentary was published in partnership with Unherd.

In 1997, Boeing was the toast of Wall Street. The company had just overcome regulatory hurdles to merge with McDonnell Douglas, making it the largest jet airline manufacturer and the second-largest defense contractor in the world, a behemoth with over 200,000 employees and sprawling factories and plants dotted around the US. Boeing, as one financial journalist beamed at the time, is “also one of the nation’s biggest exporters, which makes it sort of like the State Department of American industry.”

These days, prospects for the aerospace giant are decidedly less sunny. Boeing’s star has tumbled following a series of disasters involving faulty engineering and rushed designs that have proven deadly. The structural defects extend to its finances, and the company is hemorrhaging cash. In response, Boeing’s CEO has just decided to shrink the company and sell assets.

According to a turnaround plan announced last week, Boeing intends to raise about $15 billion in shares and convertible bonds. The news comes just ahead of plans to lay off 17,000 workers, or about 10% of the company’s workforce.

Its labor troubles are far from over, however. Last month, about 33,000 unionized Boeing employees went on strike, with labor representatives upset over stagnant wages and downsized benefits. Striking members of the International Association of Machinists and Aerospace Workers have turned down an initial offer from Boeing for a 25% raise over four years.

Workers have angrily demanded higher pay and better retirement benefits, noting that the company has long prioritized executive compensation and stock buybacks while ignoring safety concerns to rush assembly lines. Those complaints are hardly new. The firm, which began as a Seattle-based aircraft maker, was once a bastion of creative engineering with a proud company culture. Boeing reportedly designed the B-52 bombers over a single weekend. The 737 airline, originally produced in 1966, was such a marvel of engineering that it remains in production today.