12/09/2003: 
Criminally Absurd
Jet Lag, How Boeing blew it
By Douglas Gantenbein, Slate
What explains Boeing's fate? In a word: greed. Or rather, two words: greed and hubris. Boeing was in many ways a perfectly successful company in the mid-1990s, dominant in commercial aviation with a thriving sideline in military and space contracts. But the company had also become arrogant and lethargic, unwilling to update production-line techniques that had barely changed since B-29s were built on the same Lake Washington site where 737 and 757 aircraft are made today. And Boeing was not about to acknowledge that upstart Airbus, the European-based jetliner maker, posed any real threat.
Against this backdrop, the newly arrived CEO Condit decided what the company needed was freedom from the boom-and-bust cycle prevalent in commercial aviation. The solution: Go after more government dollars by enhancing its military side, and let taxpayers foot the bill for product development, something Boeing has to finance itself when building jetliners. In 1997, Condit embarked on a buying spree. Boeing snapped up military contractors such as the aerospace and defense units of Rockwell Collins and merged with McDonnell Douglas. With McDonnell Douglas, Boeing also absorbed a different culture, one in which it was de rigueur to pull every lever to win military contracts, and annual profits were enshrined as the ultimate prize.
Boeing will be out of the commercial aircraft business in 10 years. To leapfrog Airbus, Boeing needed to roll the dice. Instead, its new culture of soaking the taxpayers for military goodies while playing it safe on the commercial-aircraft front may have cost Boeing its future and blown a hole in the U.S. economy that never will close.
