Speaker 1: All Zone Media. Welcome to Kadappy here, a podcast about
Speaker 1: things falling apart and how to put them back together again.
Speaker 1: I'm your host, Mia Wong. This is a story about Boeing.
Speaker 1: I'm going to lay my cards on the table from
Speaker 1: the start. I'm from Chicago, but my family is from Seattle.
Speaker 1: Some of my aunts and uncles worked for Boeing in
Speaker 1: the eighties. Of the airline side. Some of our closest
Speaker 1: family friends worked there for much, much longer than that.
Speaker 1: I grew up on the periphery of this industry and
Speaker 1: I have never seen the people in it and the
Speaker 1: people who have left as angry as they are now.
Speaker 1: People are pissed, and they should be. In the last
Speaker 1: six years, Boeing has killed three hundred and forty six people.
Speaker 1: In the years to come, they may well kill more,
Speaker 1: and not a single one of them had to die.
Speaker 1: This is how it happened. What is Boeing. The short answer, obviously,
Speaker 1: is that it's a company that may both civilian and
Speaker 1: military airplanes. It also does some other things, including working
Speaker 1: on space travel, but that's not our media concern here.
Speaker 1: The long answer, however, and it's the long answer that
Speaker 1: we need, is that Boeing is the poster child for
Speaker 1: the post World War Two labor, corporate, militarist alliance. Boeing
Speaker 1: itself was a sometimes uneasy alliance of workers, engineers, and
Speaker 1: the army that made civilian and military airplanes. This is
Speaker 1: also not a terrible description of the entirety of the
Speaker 1: postwar United States, with the proviso at the airplanes that
Speaker 1: the US is making, we're dropping bombs at Vietnam. The
Speaker 1: unwinding of Boeing that we're all watching today as doors
Speaker 1: fall off of planes and more and more grounded, is
Speaker 1: the unwinding of that America. Here I turned to the
Speaker 1: anthropologist David Graber from his book The Utopia of Rules quote,
Speaker 1: I think what happened is best considered as a kind
Speaker 1: of shifting class allegiances on the part of the managerial
Speaker 1: staff of major corporations from an uneasy de facto alliance
Speaker 1: with their own workers to one with investors. As John
Speaker 1: Kenneth Galbraith long ago pointed out, if you create an
Speaker 1: organization geared to produce perfumes, dairy products, or aircraft usel lodges,
Speaker 1: those who make it up will, if left with their
Speaker 1: own devices, tend to concentrate their efforts on producing more
Speaker 1: and better perfumes, dairy products, or aircraft usel lodges, rather
Speaker 1: than thinking primarily of what will make the most money
Speaker 1: for shareholders. What's more, since for most of the twentieth century,
Speaker 1: a job in a large bureaucratic megafirm meant a lifetime
Speaker 1: promise of employment, everyone involved in the process, managers and
Speaker 1: workers alike, tended to see themselves as sharing a certain
Speaker 1: common interest. In this regard over and against meddling owners
Speaker 1: and investors. This kind of solidarity across class lines even
Speaker 1: had a name. It's called corporatism. One mustn't romanticize it.
Speaker 1: It was, among other things, the philosophical basis of fascism. Indeed,
Speaker 1: one could well argue that fascism simply took the idea
Speaker 1: that workers and managers had interest in common, that organizations
Speaker 1: like corporations or communities formed organic holes, and that finances
Speaker 1: were an alien, parasitic force and drove them to their
Speaker 1: ultimate murderis extreme, even in its more benign social democratic versions.
Speaker 1: In America or Europe, the attendant politics often came tinged
Speaker 1: with chauvinism, but they also ensured that the investor class
Speaker 1: was always seen to some extent outsiders, against whom white
Speaker 1: collar and blue collar workers could be considered, at least
Speaker 1: to some degree to be in united common front. Now,
Speaker 1: as a product of the united Front between workers and managers,
Speaker 1: the corporative system of the post war era had a
Speaker 1: very different conception of what a corporation is. It was
Speaker 1: a social entity composed of a variety of classes and
Speaker 1: had an obligation to take care of them. It had
Speaker 1: an obligation to its workers, to its engineers, to its customers,
Speaker 1: and even to its country. By absorbing unions into the
Speaker 1: corporate system, the system itself had been forced to adapt
Speaker 1: a more sociological self conception that vastly differed from the
Speaker 1: ways corporations both view themselves and behave today. As Grayburn notes,
Speaker 1: this class coalition largely wrote capitalists out of the equation,
Speaker 1: reducing them to merror holders of stock, not managers. In
Speaker 1: Boeing's case, those managers were engineers at basically all levels
Speaker 1: of the company. Now we must note here that in
Speaker 1: the post World War two era engineers were extremely powerful,
Speaker 1: and this is not just true of capitalist nations. So
Speaker 1: the US to some extent had an early start on
Speaker 1: the power of engineers in the running of New Deal
Speaker 1: programs like the Tennessee Valley Authority. Engineers are powerful in
Speaker 1: communist countries as well, and it's true in quasi socialist
Speaker 1: countries that had just liberated themselves from the old European empires.
Speaker 1: These engineers were both extremely well paid and very influential
Speaker 1: everywhere you can find them, from Belgium to Peru, and
Speaker 1: the only real difference is whether they were trained by
Speaker 1: the Americans or the Soviets. Now, the fact that you,
Speaker 1: the listener, are not reporting to an engineer right now
Speaker 1: at your job is assigned that they didn't exactly hold
Speaker 1: on to power. In fact, the last vestiges of this
Speaker 1: class of extremely powerful engineers aren't really even in Boeing
Speaker 1: at all. The most prominent remain of the Great Engineering
Speaker 1: International is Shi Jim Ping, who is part of a
Speaker 1: class in China known as the Red Engineers. If you
Speaker 1: want to know more about the Red Engineers, we unfortunately
Speaker 1: do not have time to really go into them here,
Speaker 1: but c Joel Andreas's book Rise of the Red Engineers
Speaker 1: for the most famous treatment of them. Now in China,
Speaker 1: the Red Engineers effectively seized control of the states and
Speaker 1: were the kind of second generation that ruled back the
Speaker 1: social changes of the revolution from the Maoist period. In
Speaker 1: the US, the story is a bit more complicated. In
Speaker 1: some places, the engineers as a class were rolled up
Speaker 1: and brutally destroyed in a war with a newly ascended
Speaker 1: finance class. In others, engineers, feeling the disciplining effects of
Speaker 1: the market, effectively engineered their own destruction. The latter engineers
Speaker 1: leading the company to financial ruin is to some extent
Speaker 1: the story of Boeing, But to get there we need
Speaker 1: to take a look at how the worker management alliance
Speaker 1: Graber described came a part. I have talked at length
Speaker 1: on this show about the economic crisis of the seventies
Speaker 1: in which everything, the entire consensus that had held the
Speaker 1: post war era together fell apart. One of the key
Speaker 1: elements is that in the nineteen seventies, manufacturing becomes zero sum.
Speaker 1: If manufacturing put increases in one country, it can largely
Speaker 1: only come at the expense of production somewhere else. This
Speaker 1: is the product of a general crisis of structural overproduction
Speaker 1: and structural under consumption. This meant that it was no
Speaker 1: longer possible to incorporate everyone into the capitalist welfare system
Speaker 1: while also retaining corporate profits, and so someone was going
Speaker 1: to have to lose everything. It was either going to
Speaker 1: be the capitalists or the workers. And the people who
Speaker 1: lost everything, as I think we're all aware of living
Speaker 1: in the world that we do now, were the workers
Speaker 1: whose power was systematically destroyed. But that largely the story
Speaker 1: of the destruction of unions and the destruction of the
Speaker 1: leftboard broadly is a story for another day for our purposes.
Speaker 1: The important class that was destroyed in the period of
Speaker 1: the seventies is the class of managerial engineers, and these
Speaker 1: engineers were destroyed by a takeover of Corporate America by
Speaker 1: the shareholders the Corporatist Alliance had previews held at Bay.
Speaker 1: The takeover of Corporate America by finance schools had two mechanisms.
Speaker 1: The leveraged buyout, better known as corporate rating, was carried
Speaker 1: out by people like Michael Milkin, and the internal movement
Speaker 1: of executives from inside the corporations themselves, led by people
Speaker 1: like Jack Welsh. We will meet both of these people
Speaker 1: in detail later in this story, but the details of
Speaker 1: the process of how exactly the finance schools came to
Speaker 1: control Corporate America turn out to be extremely important because
Speaker 1: Boeing is destroyed by both of the two mechanisms coming
Speaker 1: together at the same time. Now, as the eighties dawned,
Speaker 1: the world lived in fear of a new kind of
Speaker 1: financial device, the leveraged buyout. The exact mechanisms of the
Speaker 1: leveraged buyout are slightly complicated, but the short version is
Speaker 1: that Michael Milken, a bond salesman who who I eventually
Speaker 1: am going to do a fall behind the bastard's episode
Speaker 1: on because oh my god is the evil and there
Speaker 1: simply is not space to elaborate on all the stuff
Speaker 1: that he did here, including the off that eventually is
Speaker 1: going to send him to prison, figured out a way
Speaker 1: for a person or a group too, with very little
Speaker 1: actual cash on hand, to very quickly take on an
Speaker 1: unbelievable amount of debt, use it to buy a company,
Speaker 1: and then sell that company for parts to pay back
Speaker 1: the debt, pocketing the difference as profit. This was an instant,
Speaker 1: existential danger to a corporate America. Previously, corporate takeovers were
Speaker 1: extremely difficult. Attempting to get two hundred million dollars to
Speaker 1: buy a company required you to have two hundred million
Speaker 1: dollars on hand. But now with the leveraged buyout, a
Speaker 1: group of yahoos with a tiny amount of money could
Speaker 1: simply buy a company for higher van stock price, loot
Speaker 1: it for parts, and destroy it. This completely changed the
Speaker 1: balance of power between shareholders and corporations. One of the
Speaker 1: best accounts of this era is from the anthropologist Karen
Speaker 1: Hoe in her book Liquidated in Ethnography of Wall Street.
Speaker 1: The book was a product with the field work she
Speaker 1: did at a Wall Street investment bank in the nineties.
Speaker 1: And I really cannot emphasize this book enough. This book
Speaker 1: is incredible. Everyone should read. It is a book that
Speaker 1: genuinely changed my life. And one of the things that
Speaker 1: she talks about is this moment, the moments of leverage buyouts,
Speaker 1: and the way that it is constantly brought up by
Speaker 1: the people that she is working with at this bank
Speaker 1: when she's doing her when she's doing her anthropological field work. Everyone.
Speaker 1: She talks about this moment where the corporate waters really
Speaker 1: got going, as the moment the shareholder revolution began. Now,
Speaker 1: we talked earlier about how in post war America the
Speaker 1: corporation was a social entity with responsibilities to its workers
Speaker 1: and country for the shareholders running the new shareholder revolution,
Speaker 1: corporations had exactly one job, getting them more money to
Speaker 1: raise stock prices. They called this shareholder value. And now
Speaker 1: the disciples of shareholder value were able to wield the
Speaker 1: ability to simply buy companies out wholesale and bend them
Speaker 1: to the ends of shareholder value directly. This is what
Speaker 1: is known as the shareholder revolution. Now, do you know
Speaker 1: what else is a revolution in the ways that y'all
Speaker 1: experience capitalism and mass culture at our jobs. It is
Speaker 1: the products and services that support this podcast. We're back.
Speaker 1: The first thing that the corporate raiders and the disciples
Speaker 1: of shareholder value did when they started to take over
Speaker 1: companies was look at the balance sheets of a company
Speaker 1: and destroy everything that didn't immediately look to the Wall
Speaker 1: street goruls like they made money. Now, what are the
Speaker 1: assets on a balance sheet that do not immediately increase
Speaker 1: stock price? Because again, they look like costs. Right. The
Speaker 1: two assets that don't immediately contribute are funds allocated for
Speaker 1: research and development and pensions, the darlings of the workers
Speaker 1: and engineers who comprise the previous corporatist regimes. Mass layoffs followed.
Speaker 1: Companies were reduced to debt financing mechanisms for the corporate
Speaker 1: raiders who took on the debt to acquire them were still.
Speaker 1: As Karen Hoe observes, even companies ran by the old
Speaker 1: elite were forced to embrace the same methods the raiders
Speaker 1: were using, because the only way to keep the raiders
Speaker 1: from buying your company was by increasing your stock price,
Speaker 1: and the only way to increase your stock price was
Speaker 1: to appease the shareholder value fanatics. Control of corporate America
Speaker 1: had shifted from the old managerial work reliance to the
Speaker 1: new shareholder value financiers. Now, the problem with the shareholder
Speaker 1: value people running companies is that they are viscerally physically
Speaker 1: incapable of long term planning. Don't take my word for it,
Speaker 1: here's Karen Hoe quote to actualize their central identity as
Speaker 1: being immediately responsive to their own changing relationship with the market,
Speaker 1: including employees, products, and so on. Their strategy is, in
Speaker 1: a sense, to have no strategy. Ironically, having no long
Speaker 1: term strategy is contradictory and potentially self defeating in that
Speaker 1: investment banks often find themselves making drastic changes, only to
Speaker 1: realize months or weeks later that those changes were unnecessary, premature,
Speaker 1: and extremely costly. For example, in chapter five, I describe
Speaker 1: how investment bankers and because of their access to sensitive
Speaker 1: proprietary information, are not only fired in an instance, but
Speaker 1: must leave the physical premises of the building within fifteen
Speaker 1: to thirty minutes. Given how crucial the control of knowledge
Speaker 1: and the protection of inside information are for Wall Street
Speaker 1: investment banks, it seems self defeating that they do not
Speaker 1: praise any freemium on loyalty. Despite the fact that firms
Speaker 1: try above all to enforce secrecy, they accept it maintained
Speaker 1: this volatility in revolving door policy. To make this clear,
Speaker 1: what carrot Ho is describing is that investment banks, on
Speaker 1: the one hand, turn over like a third of their
Speaker 1: staff every six months, and yet also they are so
Speaker 1: reliant on the secrecy of this proprietary information that they're
Speaker 1: using to make their investment decisions that they are kicking
Speaker 1: the people. They are firing out of the building in
Speaker 1: like fifteen minutes, so they don't have time to plan
Speaker 1: or leak information. But again they're also just firing these
Speaker 1: people on mass, so they're defeating the entire point of
Speaker 1: their operations. These people cannot plan ahead, and the reason
Speaker 1: that they cannot plan ahead. Isn't just that they're sort
Speaker 1: of like naked disciples of pure increase in stock price.
Speaker 1: What Liquidated describes is that these people believe that they
Speaker 1: are effectively constantly reacting to near instantaneous market changes. Right.
Speaker 1: They can't sort of make any kind of long term
Speaker 1: plan because the market is the thing that's making the plan,
Speaker 1: Like this sort of mythical abstraction of the market is
Speaker 1: what is doing all of the actual allocations. So they
Speaker 1: just have to sort of like sit there and have
Speaker 1: no plan and quote unquote respond to what the market
Speaker 1: is doing. Now, large corporations have always, to some extent,
Speaker 1: acted as long term planning engines because they have to.
Speaker 1: Corporations have to do things like research and developments, they
Speaker 1: have to plan product lines, they have to make long
Speaker 1: term decisions about resource allocation, the shareholder value. People are
Speaker 1: incapable of giving a shit about any of this because
Speaker 1: all they care about is immediate stock price movement, because
Speaker 1: they think that immediate stock price movement reflects the will
Speaker 1: of the great efficiency planning engine of the market. And
Speaker 1: you could begin to see here why it would be
Speaker 1: a bad idea if these people who literally cannot create
Speaker 1: long term plans, did something like, for example, take control
Speaker 1: of the world's largest manufacturer of commercial aircraft. Now, the
Speaker 1: shareholder value people also believe that people are effectively interchangeable.
Speaker 1: And they believe this because and this is a very
Speaker 1: key part of why the shareholder value people and why
Speaker 1: these sort of financed people have reshaped the world the
Speaker 1: way they do. They have reshaped the world in their
Speaker 1: own image. And all of these sort of investment bankers
Speaker 1: are interchange right. All of these fucking bankers are fired
Speaker 1: all over the time, and they move from firm to firm,
Speaker 1: and it is fine for them. But the thing is,
Speaker 1: you can't do this with the design of your entire
Speaker 1: aircraft because unlike in finance, where every single one of
Speaker 1: these clowns is really just a replacement level bozo whose
Speaker 1: qualifications are being able to stumble through the chain role
Speaker 1: and vaguely remember calculus, kiss, ask, and play golf, aerospace
Speaker 1: engineers actually do a difficult job and it requires extraordinarily
Speaker 1: large bodies of embedded knowledge to do this job correctly. Now,
Speaker 1: bringing in a bunch of people who think you can
Speaker 1: just fucking replace aerospace engineers will have no negative influences
Speaker 1: on Boeing in the future. Pay no attention to the
Speaker 1: man behind the mirror. Everything is fine. Do you know
Speaker 1: what else is fine? It is the products and services
Speaker 1: that support this podcast. And we are back the shareholder
Speaker 1: value fanatics. The investors who are now taken control of
Speaker 1: corporate America also believe that mass firings make companies more
Speaker 1: valuable because it makes them more efficient. They believe that
Speaker 1: offshoring makes a company more valuable because it makes it
Speaker 1: more efficient. It doesn't actually matter what the effect these
Speaker 1: moves have on the company and its ability to produce
Speaker 1: products and its ability to produce money. It doesn't matter
Speaker 1: at all, because that's how the people who can control
Speaker 1: stock prices by buying the stocks think the world works.
Speaker 1: And so if you do these things, the stock price
Speaker 1: will go up. All quote unquote. Creating shareholder value means
Speaker 1: is convincing a bunch of dipshit quants working one hundred
Speaker 1: and twenty hours a week that your company is valuable,
Speaker 1: so they buy it for a higher price. And these
Speaker 1: are the people who reshape American capitalism to their whims.
Speaker 1: Now importantly for our story, they're also the people who
Speaker 1: ran the second phase of the corporate rating era. The
Speaker 1: mergers and acquisitions boom through the nineties and really to
Speaker 1: this day, Wall Street bankers began to encourage companies to
Speaker 1: buy out other companies as a mechanism of raising their
Speaker 1: stock price. This is, you know, the acquisitions and mergers
Speaker 1: and acquisitions. They also heavily push merging companies together in
Speaker 1: the nineties. The buzzerod behind this was quote unquote synergy.
Speaker 1: Buying companies or merging companies could quote leverage synergies between
Speaker 1: companies to grow shareholder value. Outside of the shareholder value
Speaker 1: fantasy lands, most of these mergers and acquisitions either did
Speaker 1: nothing to help the company if the acquisitions were small,
Speaker 1: or were a complete disaster that destroyed both companies. The
Speaker 1: bankers who orchestrated these mergers and acquisitions didn't give a
Speaker 1: shit though, because they got paid on commission. It did
Speaker 1: not matter to them what happened afterwards. All that matters
Speaker 1: is that the deal goes through. And this is where
Speaker 1: we returned to Boeing because in nineteen ninety seven Boeing
Speaker 1: made an acquisition that would fuck the company forever. They
Speaker 1: bought one of their longtime rivals, an aircraft company known
Speaker 1: as McDonald Douglas. Now hitherto Boeing had been relatively insulated
Speaker 1: from the shareholder revolution. McDonald douglas, however, was not it's CEO.
Speaker 1: Was a man with the incredible name Harry stone Cipher.
Speaker 1: Stone Cipher is different from most aerospace executives because he
Speaker 1: wasn't a McDonald douglas corporate man. He came from Jack
Speaker 1: Welch's General Electric And it's here we need to introduce
Speaker 1: the other mechanism through which the shareholder revolution was realized,
Speaker 1: a new breed of CEOs led by the man himself,
Speaker 1: Jack Welsh. Now we are not going to spend an
Speaker 1: enormous amount of time talking about Jack Welsh in this episode,
Speaker 1: because cool Zone Media podcasts Behind the Bats has three
Speaker 1: hours of episode about this man, which you should go
Speaker 1: listen to their good The short version of it that
Speaker 1: we're going to give here is that Jack Welsh is
Speaker 1: the man who invented the bass layoff. He was one
Speaker 1: of the first CEOs to figure out that again, you
Speaker 1: could raise stock prices by selling off profitable divisions and
Speaker 1: firing workers who are making the company money. Because shareholders
Speaker 1: are ideologically driven maniacs who would believe Welsh's manipulated balance
Speaker 1: sheets that showed the company was doing better than ever,
Speaker 1: even as it sold off all of its assets. He
Speaker 1: was also one of the first people to start practicing
Speaker 1: mass outsourcing, replacing workers directly employed by General Electric with contractors.
Speaker 1: Soon he was outsourcing entire divisions. Offshoring followed. Welsh moved
Speaker 1: jobs from highly paid and highly trained union employees in
Speaker 1: the US to ununionized workers in places like India and Mexico.
Speaker 1: I think people generally kind of understand that offshoing lowers quality,
Speaker 1: but why does that actually happen. It's not about something
Speaker 1: like the natural skill of the workers, which is the
Speaker 1: way it can kind of be presented in these sort
Speaker 1: of nationalist accounts. It is about the level of violence
Speaker 1: that can be inflicted on people. In places like India
Speaker 1: and Mexico and China, there is an extraordinary amount of
Speaker 1: violence that can be inflicted on the working class. And
Speaker 1: because of this violence, because of their ability to destroy
Speaker 1: unions and because of their ability to force people into
Speaker 1: poverty by taking their land, people get paid less money
Speaker 1: to work faster, And those people who are being paid
Speaker 1: less money to work faster with worse training are going
Speaker 1: to be worse at a job than people who are
Speaker 1: paid more to do it better, slower. And Jack Welch
Speaker 1: wants this. He wants to sell shitty, low cost products
Speaker 1: because they're cheaper to make than anything that actually works.
Speaker 1: The long term consequences of this are a disaster. Welch
Speaker 1: drove General Electric, one of the greatest engines of American
Speaker 1: capitalism for a century, into the ground, even after a
Speaker 1: massive government bailout in and it barely exists today. Harry
Speaker 1: Stone Cipher, the CEO of the company Boeing was about
Speaker 1: to buy, said this about Jack Welch quote, Certainly, Jack
Speaker 1: Welch is one of the great leaders in my mind.
Speaker 1: And of course he was selected as CEO of the
Speaker 1: Century by Fortune magazine a couple years ago, and of
Speaker 1: course about twenty years ago that same magazine coined the
Speaker 1: phrase neutron jack, and of course they vilified him at
Speaker 1: every turn. Neutron jack, by the way, refers to like
Speaker 1: a neutron bomb, because effectively, what he was doing was
Speaker 1: firing all the workers and leaving only the sort of
Speaker 1: like physical capital assets, like leaving all of the machines intact,
Speaker 1: which is what a neutron bomb is supposed to do.
Speaker 1: Let's go back to the quote. Quote. Jack had a
Speaker 1: style that was one of trying to change the environment,
Speaker 1: not to just deal with the environment. So he inspired people,
Speaker 1: so he certainly won. So Stone Cipher is a disciple
Speaker 1: of Welch. He immediately starts running the Jack Watch playbook,
Speaker 1: and though and behold, McDonnell douglass was failing when Boeing
Speaker 1: bought it for fourteen billion dollars. And again, like Boeing
Speaker 1: at this point controls like sixty five percent of the
Speaker 1: commercial aviation market, McDonald douglas controls like five. Right, so
Speaker 1: this should have been like Goliath eating David for breakfast,
Speaker 1: but the merger didn't go as planned. Instead of the
Speaker 1: massive Boeing running the tidy McDonald douglas, McDonald douglas executives
Speaker 1: effectively hijacked Boeing and installed themselves in positions of power.
Speaker 1: Stone Cipher and his Padre shareholder value fanatics began to
Speaker 1: consolidate their position and drive out the previous Boeing regime.
Speaker 1: The capstone of this project was moving Boeing headquarters from Seattle,
Speaker 1: where he had been since William E. Boeing founded the
Speaker 1: company in nineteen sixteen, to Chicago, as a way to
Speaker 1: shift the physical center of power of the company away
Speaker 1: from Boeing's engineers and workers and towards the McDonald douglas
Speaker 1: finance goals. Then they began to run the Jack Walsh
Speaker 1: playbook on Boeing in earnest. Every single account of stone
Speaker 1: Cipher's takeover that I've written quotes this exact same line quote.
Speaker 1: When people say I changed the culture of Boeing, that
Speaker 1: was the intent, so that it's run like a business
Speaker 1: rather than a great engineering firm. And what stone Cipher
Speaker 1: is really talking about here, and what everyone is really
Speaker 1: saying when they talk about, you know, the culture shift
Speaker 1: Boeing in this period, what this really is is a
Speaker 1: change in the balance of powers between the engineers and
Speaker 1: workers who actually make the planes and the finance goals
Speaker 1: who own the company. Stone Cipher wanted to crush the
Speaker 1: engineers and workers so he could run Boeing like a business.
Speaker 1: And what he says like a business, he doesn't actually
Speaker 1: mean run it like a business. He means run the
Speaker 1: company like a finance guy. And finance guys don't build planes,
Speaker 1: which is what Boeing had previously been doing. Finance guys
Speaker 1: create shareholder value. Which is to say that they make
Speaker 1: stock prices go up. So if you're just trying to
Speaker 1: raise stock prices, you don't actually need to make an airplane.
Speaker 1: You can outsource the different parts of building the airplane
Speaker 1: to a bunch of random shops around the world who
Speaker 1: work extremely fast, don't have much of idea of what
Speaker 1: they're doing, and do a terrible job long term. Of course,
Speaker 1: this is an absolute disaster. There are very good reasons
Speaker 1: to keep the production line for something as complicated as
Speaker 1: commercial aircraft, in house efficiency, consolidation of knowledge, quality control,
Speaker 1: et cetera, et cetera. But outsourcing is great for his
Speaker 1: stock price, and it's the Jack Welsh model selling shitty
Speaker 1: products for cheap works, kind of if you're General Electric
Speaker 1: making a light bulb. But when Boeing uses these same
Speaker 1: principles to build an aircraft, people begin to die. And
Speaker 1: in the next episode we are going to tell that
Speaker 1: story how Boeing killed three hundred and forty six people.
Speaker 1: It could happen. Here is a production of cool Zone Media.
Speaker 1: For more podcasts from cool Zone Media, visit our website
Speaker 1: coolzonemedia dot com, or check us out on the iHeartRadio app.
Speaker 1: Apple Podcasts or wherever you listen to podcasts, you can
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Speaker 1: in episode descriptions. Thanks for listening.