Will Boeing become the next McDonnell Douglas?

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disconnectedradical

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Unread post17 Feb 2021, 17:26

https://aviationweek.com/aerospace/airc ... 14355e8b04

Having worked at Boeing as an engineer, I must say I can agree with a lot of the statements here. Corporate and engineering culture really went down after the merger. I really wish we can go back to the day when Boeing was still an engineer-led organization.

A common saying is that when Boeing merged with McDonnell Douglas, the McDD bought Boeing and made Boeing pay for it since with the distribution of stocks, McDD still ended up being majority stakeholder.
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Unread post17 Feb 2021, 18:22

disconnectedradical wrote:https://aviationweek.com/aerospace/aircraft-propulsion/opinion-will-boeing-become-next-mcdonnell-douglas?elq2=ea67b8013334473283f1df14355e8b04

Having worked at Boeing as an engineer, I must say I can agree with a lot of the statements here. Corporate and engineering culture really went down after the merger. I really wish we can go back to the day when Boeing was still an engineer-led organization.

A common saying is that when Boeing merged with McDonnell Douglas, the McDD bought Boeing and made Boeing pay for it since with the distribution of stocks, McDD still ended up being majority stakeholder.



thanks for the article, I have to say this is not my area of expertise. But I had heard of the "reverse hostile takeover" of MCAIR over Boeing a few times before.

as an outsider it looks like theyre just trying to redo the same thing all over. I admire their restraint in not naming the F-15EX the F-15Max or the block III SH the F/A-187. they just seem obseessed with wringing the last bit of performance out of the old designs, some of them inhereted and its just the same thing with their civil airline as well.

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they should be killing it with this, who even needs engineering
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sprstdlyscottsmn

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Unread post17 Feb 2021, 18:30

I saw the thread title and came to say what you guys already alluded to. Boeing can't "become" the next McDD because it already IS McDD and has been since the 90s.
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Unread post17 Feb 2021, 18:48

sprstdlyscottsmn wrote:I saw the thread title and came to say what you guys already alluded to. Boeing can't "become" the next McDD because it already IS McDD and has been since the 90s.


Image

Also in regards to my last post, I'm not trying to upset the gods of diversity (praise be upon them) I am simply pointing out what happens to organizations who puts that thing they were good at as a secondary concern to something else, anything else. the primary thing suffers. in some cases that is alright when they have a "cushion" and some ground to lose. but when things get tight...

well, my old mantra I learned when I was just 16 strike again:

What gets the job done is good, what gets in the way is bad.
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Unread post17 Feb 2021, 20:27

F-187 and F-15MAXX are catchy phrases!
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Unread post17 Feb 2021, 21:19

sprstdlyscottsmn wrote:I saw the thread title and came to say what you guys already alluded to. Boeing can't "become" the next McDD because it already IS McDD and has been since the 90s.


So again, this is word from some of the old time engineers passed on to younguns like me, so take it for what it's worth. Back in the day, Boeing CEOs generally came from an engineering background, but in the 90s with the McDD merger, the CEO tended to be more from a management or finance background without as much appreciation for engineering.

I really wonder just how long it will take to undo the damage. I really hope the NMA gets re-launched.
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Unread post19 Feb 2021, 04:20

https://www.forbes.com/sites/tedreed/20 ... r-tuesday/

Some say that even as the name disappeared, the McDonnell Douglas finance-first culture survived the 1997 merger, eclipsing Boeing’s engineering-first culture.


https://www.theatlantic.com/ideas/archi ... gs/602188/

For about 80 years, Boeing basically functioned as an association of engineers. Its executives held patents, designed wings, spoke the language of engineering and safety as a mother tongue. Finance wasn’t a primary language. Even Boeing’s bean counters didn’t act the part. As late as the mid-’90s, the company’s chief financial officer had minimal contact with Wall Street and answered colleagues’ requests for basic financial data with a curt “Tell them not to worry.”

By the time I visited the company—for Fortune, in 2000—that had begun to change. In Condit’s office, overlooking Boeing Field, were 54 white roses to celebrate the day’s closing stock price. The shift had started three years earlier, with Boeing’s “reverse takeover” of McDonnell Douglas—so-called because it was McDonnell executives who perversely ended up in charge of the combined entity, and it was McDonnell’s culture that became ascendant. “McDonnell Douglas bought Boeing with Boeing’s money,” went the joke around Seattle. Condit was still in charge, yes, and told me to ignore the talk that somebody had “captured” him and was holding him “hostage” in his own office. But Stonecipher was cutting a Dick Cheney–like figure, blasting the company’s engineers as “arrogant” and spouting Harry Trumanisms (“I don’t give ’em hell; I just tell the truth and they think it’s hell”) when they shot back that he was the problem.


Summarizes what’s wrong with the company after the merger. We had a really good reputation before the merger.
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Unread post19 Feb 2021, 13:04

disconnectedradical wrote:We had a really good reputation before the merger.

"If it's not a Boeing, I'm not going." - Me talking about air travel prior to the 737 Max fiasco. Full disclosure, I flew on 737 Max a few times, the first time was the airframes first commercial flight. It had that "new car" smell. Most comfortable flight I've ever had (I have never flown in a Boeing or Airbus widebody).
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Unread post19 Feb 2021, 16:58

I actually never even flew in a Boeing 787, but I've had plenty of 737NG experience since those were the workhorse of Southwest Airlines.

The infamous Darleen Druyun scandal in the 2000s resulted in the current KC-46 fiasco and also the awarding of SDB to Boeing. She was already under investigation in 2000 for speeding up payments to McDonnell Douglas in 1993 but still got on Boeing in 2002 or so.
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Unread post23 Feb 2021, 05:46

During the merger between Boeing & McDonnell Douglass.

How the eff did the Bean Counters end up taking over?
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Unread post23 Feb 2021, 12:00

a 2/3 stock equivalency for the McDD stock (for every 3 McDD shares you had you get 2 Boing shares) let to the majority shareholders of post merge Boeing being the McDD execs.
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Unread post02 May 2021, 15:49

https://crankyflier.com/2019/07/18/if-b ... rent-path/

Here’s hoping that NMA launches sooner than later.

Back to the McDD’s corporate culture infecting Boeing after the merger, I don’t know what it will take for this to reverse, or if it’s even possible at this point. With how McDD ran itself to the ground, and now it’s running Boeing to the ground, have to wonder if it’s a terminal decline.
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Unread post03 May 2021, 12:17

https://aviationweek.com/aerospace/manu ... ain-it-him?

Can Dave Calhoun Make Boeing Great Again? It Is Up To Him

It is official—Boeing has entered the Dave Calhoun era, and the U.S. aerospace and defense giant may never be the same. Then again, it might look a lot more like it did in the past.

“Boeing is now and will forever be an engineering company,” Calhoun declared April 20 at the annual general shareholders meeting. “We design, we build and sustain the world’s most advanced technology operating from the depths of the ocean to the far reaches of space.”

Any other day and that statement would be passed off as corporate rhetoric. But on the morning it was uttered, Boeing CEO and President Calhoun cemented his takeover of Boeing, with the board of directors raising the corporate retirement age cap for the CEO to 70 from 65. (Calhoun turned 64 this month.) Also of significance, Boeing announced that well-known Chief Financial Officer (CFO) Greg Smith—a 2011 appointee of then-Chairman and CEO Jim McNerney—will retire July 9. A search for a successor has started.

The moves collectively guarantee that the corner office overlooking the Chicago River is Calhoun’s to lose. Indeed, the directors he has helped line up were approved by a majority of shareholders at the annual meeting, despite a call by one major institutional investment advisor to vote against reappointment of Ed Giambastiani and Chairman Larry Kellner.

Some observers complain that stakeholders did not have time to digest the retirement-cap announcement, which came out hours before the meeting was convened and the board ratified it. But going into the shareholder meeting, industry insiders did not foresee trouble for any directors. Not surprisingly, the coming CFO change created the most proverbial shockwaves.

Smith, 54, is well regarded on Wall Street. While history will debate the degree to which Boeing lost its way on its march to becoming a “global industrial champion” under McNerney and his successor Dennis Muilenburg, Smith without a doubt oversaw the greatest spate of shareholder returns in Boeing’s century-plus existence.

Smith joined Boeing in 2008 and was long identified for leadership potential. After becoming CFO, his roles expanded with operational duties as executive vice president of enterprise operations, finance and sustainability. He even served as interim CEO between Muilenburg and Calhoun. “In our view, Greg Smith was well respected by investors and internally for his attention to detail and strong leadership in leading the financial enterprise,” said Jefferies analysts Sheila Kahyaoglu and Greg Konrad.

“Given how much praise CEO Calhoun had heaped on CFO Smith over the last year, the news that he is retiring may appear odd,” said analysts Rob Stallard and Karl Oehlschlaeger of Vertical Research Partners. “But after a decade running the Boeing finance department, Smith has had a good run, and the last two years have been particularly challenging. For Calhoun, Smith’s decision to step down presents an opportunity and a risk. While a Boeing outsider as CFO could bring a new perspective, this is a company that has tended to promote internally in the past.”

Was he pushed or did he jump? Financial analysts largely believe Smith is leaving on his own accord. Calhoun, who was a board member, became CEO in January 2020, but there was always a cloud of questions of how long he would stay, what he would try to do and who would replace him. Now, he could stay up to six more years, meaning Smith would be around 60 when he next gets a shot at the top. After being so close, waiting so long is unappealing to anyone in the C-suite crowd.

“He is well regarded and considered a strong leader,” Cowen analysts Cai von Rumohr, Scott McCrery and Dan Flick said of Smith. “Hence, he likely is hopeful of becoming a CEO.”

For sure, Calhoun owns Boeing’s fate, and there are many challenges. Aerospace intelligentsia continue to grumble about its halting efforts to develop a midmarket competitor to the Airbus A321XLR, as well as its supply chain management and U.S. Air Force KC-46A military tanker problems, and seeming capitulation of space leadership to SpaceX. Then there is disappointment among shareholders big and small, regulators, lawmakers and, most importantly, relatives of the 346 MAX accident victims.

To their credit, Calhoun and others now talk openly about their culture-change efforts. “The board is committed to continuing this refresh process, [a] culture of transparency and accountability, including through regular dialogue with our shareholders,” Kellner said. If they can do it, most stakeholders probably would be satisfied if they could just make Boeing great again.


I appreciate the effort, but we'll see if these are just empty words or it will be real changes.

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