Leeham News and Analysis
There's more to real news than a news release.
The Rise and Fall of Boeing, And The Way Back
By Scott Hamilton
Sept. 10, 2025, © Leeham News: The sequel to my book Air Wars, The Global Combat Between Airbus and Boeing, published today on Amazon (US and selected international markets, including France, the UK, Germany, Japan and elsewhere).
The Rise and Fall of Boeing And The Way Back recounts Boeing’s rise to dominance over the piston airliner era of Douglas Aircraft Co. and Lockheed as the modern jet age began in 1958. Boeing captured more than 60% of the market against Douglas and its corporate successor, the McDonnell Douglas Corp. (MDC). Europe’s upstate, Airbus Industries overtook MDC and in the 2000 decade it passed Boeing to become the Number 1 supplier in the world of commercial jetliners.
Conventional Wisdom of Boeing’s decline
Conventional wisdom marks the 1997 acquisition by Boeing of McDonnell Douglas as the beginning of Boeing’s decline, with Harry Stonecipher—the CEO of MDC who became president and COO of Boeing with the merger being named as the villain. As with most such thesis, the story is more complex. Rise and Fall explores the history of Boeing since the 1997 merger through the 737 MAX crisis, attempts by David Calhoun, named CEO in January 2020, to repair and restore Boeing, and the naming of his successor, Kelly Ortberg to complete the job Calhoun couldn’t do.
Ortberg was named CEO in August 2024, eight months after a door plug on a new Boeing 737-9 MAX blew out minutes after take-off. Only by luck and skill was disaster averted for those on the aircraft. But it sent Boeing into yet another new crisis that cost Calhoun and the CEO of Boeing Commercial Airplanes their jobs and upheaval at the Board of Directors.
Ortberg’s arrival was 34 days before the contract with the powerful labor union, the IAM 751, expired. Members rejected a contract and walked off the job for 57 days. Boeing came close to bankruptcy during this period.
Surviving the strike by the narrowest of margins, Ortberg now is rebuilding Boeing, restoring trust and charting a path for the way back to greatness.
Rise and Fall continues the story told in Air Wars.
The Rise and Fall of Boeing, And The Way Back, is available here.
Air Wars, The Global Combat Between Airbus and Boeing, is available here.
I will order the book- I’m sure it will be a winner in the real history and I’ve known Scott for over a decade. As to the downfall of BA due to Stonecipher and other McDonnel -Douglas and Jack Welch – it will be interesting as to how deeply he has dug into that. The following is a true story- and I was the perp.
The following is a true story – humorous- and satirical
Happened in the year 2000 and a few years following
And I was the perp. I did contact the editor of the site
now known as Satirewire – and he simply asked to be credited properly. His original story was
about AT&T
++
Way back in the year 2000- I found a great piece of satire re IBM on the What I didn’t know then was that it had been modified from another site
( Now called Satirewire ) about AT&T
Yahoo stock board.
So I changed a few names to real execs at Boeing- and
posted it on the Yahoo BA stock board blog.
Boeing got so many emails saying is this
REAL ? that the corporate office had a person using her real name and
Boeing address on Yahoo stock board to explain that ONLY Boeing had official employment numbers !
It gets better- a few years later, I made a shareholder proposal for the Annual meeting
and as was the process, my wife and I were treated quite well with reserved seats at the
meeting. We were assigned a courtesy employee mainly to keep me away from the Press. It turned
out she was the person who had posted at the direction of the CEO! She was still chuckling !!
What follows is real-with a few name address redactions.
—–Original Message—–
From: “Koehler, Thomas J” <tho … To: "'xyzabc'"
Subject: RE: A little humour Date: Thu, 6 Jan 2000 11:22:18 -0800
XYZ :
This is just a note to let you know your message to Harry Stonecipher has
been received.
For what it's worth, you've re-confirmed for me that just about anyone can
pass along misinformation or sorry attempts at humor in the internet age!
Tom Koehler Executive Communication Company Offices
– – – – – – – – – –
Mon, May 29, 2000 1
From:XYZABC Sent: Wednesday, January 05, 2000 2:33 PM
To: philip.m.condit …..
Cc: james.b.dagnon—— jerry.l.calhoun;
Subject: A little humour
I found this on the IBM message board written initially about Mr
Armstrong of AT&T. I couldn't resist changing a few words as shown
below, and posting it on Yahoo. As it turns out, I have
received several queries as to " is this for real ? ". Same thing happened
on the IBM yahoo pension board. This does NOT bode well for how
employees and others view the company or its executives.
(XYZABC)
more follows in reply
BOEING ANNOUNCES STEEP CUTBACKS Tukwilla Wa *** –
Boeing will reduce its workforce by an unprecedented 120 percent by the
end of 2000, believed to be the first time a major corporation has laid off
more employees than it actually has. Boeing stock soared more than
1 point on the initial news release. The reduction decision, announced
Wednesday, came after a year-long internal review of cost-cutting
procedures, said Boeing Chairman Harry Stonecipher.
The initial report concluded the company would save $1.2 billion by
eliminating 20 percent of its 140,000 employees.
Employee Reduction Plan
From there, said Stonecipher , “it didn’t take a genius to figure out that
if we cut 40 percent of our workforce, we’d save $2.4 billion, and if we cut
100 percent of our workforce, we’d save $6 billion. But then we thought,
why stop there? Let’s cut another 20 percent and save $7billion.
“We believe in increasing shareholder value, and we believe that by
decreasing expenditures, we enhance our competitive cost position and
our bottom line,” he added.
Boeing plans to achieve the 100 percent internal reduction through layoffs, attrition and early retirement packages.
To achieve the 20 percent in external reductions, the company plans to
involuntarily downsize 22,000 non-Boeing employees who presently work
for other companies.
“We pretty much picked them out of a hat,” said Stonecipher Among firms
Boeing has picked as “External Reduction Targets,” or ERTs, are;
Northrup Grumman, AMR Corporation, parent of American Airlines, Rolls
Royce, and Perkins Coie.
Boeing’s plan presents a “win-win” for the
company and ERTs, said Stonecipher, as any savings by ERTs would be
passed on to Boeing, while the ERTs themselves would benefit by the
increase in stock price that usually accompanied personnel cutback
announcements. “We’re also hoping that since, over the years, we’ve
been really helpful to a lot of companies, they’ll do this for us kind of as a
favor,” said Stonecipher.
Legally, pink slips sent out by Boeing would have no standing at ERTs
unless those companies agreed. While executives at ERTs declined to
comment, employees at those companies said they were
not inclined to cooperate.
“This is ridiculous. I don’t work for Boeing. They can’t fire me,” said Kaili
Blackburn, a flight attendant with American Airlines.
Reactions like that, replied Stonecipher, “are not very supporting.”
Inspiration for Boeing’s plan came from previous cutback initiatives, said
company officials. In January of 1999, for instance, the company
announced it would trim 40,000 jobs over two years.
However, just a year later, Boeing said it had already reached its quota.
“We were quite surprised at the number of employees willing to leave
Boeing in such a hurry, and we decided to build on that,” Stonecipher
said.
Analysts credited Stonecipher’s short-term vision, noting that the
announcement had the desired effect of immediately increasing Boeing
share value. However, the long-term ramifications could
be detrimental, said Bear Stearns analyst Beldon McInty. “It’s a little early
to tell, but by eliminating all its employees, Boeing may jeopardize its
market position and could, at least theoretically, cease to exist,” said
McInty.
Stonecipher, however, urged patience: “To my knowledge, this hasn’t
been done before, so let’s just wait and see what happens.”
END !
So what really changed since then ??
Congrats Scott.