Freefall: A Reckoning for Boeing

Going against a big company like Boeing does not happen every day.

Raise your right hand.

Do you solemnly swear the testimony you're about to give is the truth,

the whole truth and nothing but the truth?

I do.

Boeing will fight you to the bitter end.

So what he was instructing people to do was violate rules and regulations

that they could be actually held liable, criminally charged for.

We could very well be putting the public at risk.

The intensity of the implications of what he was testifying about

made me take a pause.

John was a brave guy for speaking out.

But I personally thought to myself that this shit could get somebody killed.

We were scheduled for John to continue the deposition the next morning.

But at ten o'clock, John had not arrived yet.

So I called the hotel…

…and asked to be put through to his room.

And the phone just rang.

I asked if someone can go up

and do a check to see if he was still sleeping.

They said, "No, he's not there."

I asked, "Is his truck outside?"

And the manager came back on the phone and said she had gone out to his truck

and looked at him from the passenger side.

And that's when she called 911.

- -

Boeing has given the world yet another reason to fear flying.

Several of the company's new Dreamliner planes have caught on fire.

One of the Boeing 777's engines failed minutes after takeoff.

And this is my parents' house after a 777 engine blew up in the sky.

A hundred and twenty-nine passengers were evacuated.

Five people were injured.

Fifty injured after a flight lost control midair.

One passenger was killed from an explosion.

These are incredibly dangerous things that continue to happen.

When you see news story after news story, incident after incident,

you wonder how Boeing is still in the air.

I'm that kid that still looks up at airplanes every time I hear one.

"Oh my God!" Yeah.

I always loved aviation.

My dad worked on a F-14.

So I always would go to the gates and watch the airplanes fly off.

Growing up in the Seattle area, I always thought

that I would eventually work at Boeing.

I was very happy when Boeing recruited me out of school.

Boeing was a fantastic company.

If you had your Boeing shirt on, people would come up to you and talk to you.

It was just a sense of pride.

We have ignition. We have liftoff.

I was a rocket scientist for a long time,

but I wanted to move to airplanes.

And I wanted to work

in the best airplane manufacturer in the world.

Over a century, Boeing transformed travel across the globe.

The biggest aerospace company in the world.

Really, I was proud working for Boeing.

I'm still proud working for Boeing.

Boeing changed my life.

We were really poor growing up.

And the financial trajectory just totally changed.

Working at Boeing, to have a job there, it was really a badge of honor.

This is Boeing. They build airplanes.

And always there is one idea,

make everything just a little better than it really needs to be.

Boeing Company was very unique in that if there was ever a dispute,

the quality department made the final decision

as to whether or not to sign off on the work.

- Okay, so we're ready to go, right? -Yes.

You had, like, two or three eyes on everything that you did

to just make sure it was accurate.

I don't think that's gonna work. I really don't.

Back in those days, quality was the brakes of the system.

If there was a problem, quality managers stopped the line.

Management had your back.

-Have the guys stand by till we're ready. -Okay.

- -

Then all of a sudden, that whole atmosphere changed.

So what is it like to be the CEO? To arrive? What's day one there?

What did you find when you arrived at Boeing?

The approach was to start at the beginning.

That the culture needed a ground-up discussion.

- - The decline of Boeing.

You can trace a lot of it right back to the hiring of the CEO, Jim McNerney.

He seemed the perfect candidate.

He had gone to Yale to do his BA and gone to Harvard to do his MBA.

Jim McNerney looked like a U.S. senator from central casting.

Jim McNerney was a long-time executive at General Electric

and a protégé of arguably the most influential CEO of the 20th century,

a man named Jack Welch.

I'm part, like so many others are, of an American dream.

Jack Welch was the first CEO of a major American company

to focus on maximizing profits at all costs.

He was quick to institute outsourcing, offshoring, mass layoffs.

The best thing you can do to an employee,

as early as you know they're the bottom ten, let them know.

Famously, Jack Welch at GE would let the bottom 10% go every year.

Always have people nervous about their jobs.

With all of these strategies, Jack Welch turned GE

into the most valuable company in the world.

The kind of company that almost every other American corporation

looked up to.

And the Boeing board was no exception.

I knew I wanted to run something. I didn't know what it was.

When McNerney takes over, Boeing goes all in

on the Jack Welch-style "profits above all else."

He was also now tasked with developing a new airplane.

The new 787 hasn't been built yet,

but Boeing is so certain of its creature comforts,

it calls it the Dreamliner.

To design and build the 787,

it was going to cost approximately $10 billion.

But the Boeing board didn't want to spend that.

A source gave me internal documents

showing that Boeing's plan was to build this plane for $5 billion,

half of what it would normally have cost.

Boeing was always known for the engineering

and the building of their airplanes.

The real big shift was during the 787.

We found out that they were going to be outsourcing

major sections of the airplane to save money.

Mid-body section was built in Italy.

Wings and batteries from Japan.

From South Korea, wingtips and the aft fuselage parts.

The outsourcing was almost the entire airplane.

You knew that was gonna have a direct effect on safety and quality.

We no longer have the immediate control about the safety of those parts.

We just have to accept what is given to us and put them on the airplane.

Parts started coming in from these suppliers…

…and the plan was the plane would be snapped together in three days.

The first time Boeing joined the two fuselage barrels together,

somebody sent me a picture.

- -

There was a huge gap between the two.

The problem was that some of these companies

couldn't do what Boeing hired them to do.

They couldn't produce the parts they were supposed to produce.

It went horrible.

Too much of the airplane was outsourced.

Nothing snapped together.

And the delays were just one after the other.

So Boeing wanted to build a second 787 assembly line

in an effort to increase production.

Boeing had started in Seattle

and had never built a plane anywhere else.

This was a place where Boeing had

perhaps the most skilled aviation manufacturing workforce in the world.

But it was largely unionized.

And McNerney hated unions.

They cost Boeing more money.

And now in 2009, he's saying,

"Well, we're gonna build a second 787 line in South Carolina."

I am always proud to say we don't have unions in South Carolina

because we don't need unions in South Carolina.

This was, again, Boeing leadership making decisions,

not in the name of safety but in the name of cost savings,

in the name of corporate profits.

What have you learned from your engineers

about bringing it back and reconstructing the old Boeing

that we all grew up with?

Well, we're not going back to the old Boeing.

- Five, four, three, two, one. - …two, one.

- Cut! -

When Boeing set up the plants in South Carolina,

there was no aviation business there.

And so, of course, they didn't have experienced workers.

They constantly were sending experts from the Seattle area.

John Barnett was one of them.

When I first started with Boeing,

a group of us were standing around and talking about where you're from.

I was telling them that I'm from Louisiana.

One of my buddies popped off,

"Well, you're just an old swamp dog from Louisiana, ain't you?"

You know, from then on, I was "Swampy."

I was a quality manager in Seattle for 15 years.

I was actually one of the first quality managers

brought down to Charleston to help set up the new Dreamliner site.

As a quality manager, it's my job to make sure the airplane's built right.

John was a solid quality man, an airplane man.

We were both quality managers.

We were good friends.

I used to buy gator tail by the pound from John

'cause he was a Louisiana boy.

Me being a Southern man,

South Carolina was my opportunity to get close to my family.

We always said he was loud and proud.

You knew when he walked in the room because he was loud.

-Yeah, Swamp Dog. -

When I moved to Charleston and met John Barnett,

I could see that we were from the same cloth,

that quality doesn't take a back seat to anything.

John and I really got to know each other through our recruitment trips.

We would interview in excess of 100 people in a week.

We were told from the beginning