AYESHA RASCOE, HOST:
Boeing was, for decades, regarded as one of the most reliable companies in the world, but its safety record has come under intense scrutiny in recent years, notably when a door panel came off one of its planes mid-flight in January. Now the aerospace giant faces multiple federal investigations, including a criminal probe, as questions mount over the way the company's run. We're joined by William McGee, an aviation expert with the American Economic Liberties Project, an antitrust advocacy group. Welcome to the program.
WILLIAM MCGEE: Thanks very much. I appreciate you having me on.
RASCOE: So you've been covering this industry for decades. How significant is Boeing, the company, and how big are their troubles right now?
MCGEE: Well, Boeing is rather irreplaceable for the United States. It's one of the largest defense contractors on the military side. And on the commercial side, it's really the last large aircraft manufacturer in the United States. So the hole that it would leave if Boeing didn't exist is huge, both on the economic side and on the defense side. But having said that, they are in a place they've never been before. They are in a world of trouble, and it's going to require a lot of work to fix the mess that Boeing has created.
RASCOE: Well, what are the root causes of Boeing's problems?
MCGEE: Well, in this case, we can pinpoint it to the late 1990s when Boeing acquired McDonnell Douglas. And that was an acquisition that - should be pointed out - that was strongly encouraged by the government. The Clinton administration was asking all the defense contractors to consolidate. They felt that post-Cold War, there were too many defense contractors. Boeing did things right for about 80 years. They basically let the engineers run the company. I'm not saying that the executives at Boeing in the past were more ethical, but I think they were much smarter and more practical. And they said, you know, this is an engineering-driven company, and we're going to let the engineers tell us what they need, and we're going to provide them with what they need.
Since then, they have done nothing but cut corners, erode safety, ruin the entire corporate culture there. And they've done all this in order to increase, you know, stock buybacks and increase the shareholder value, and that is not how you can run a company that does such vital life-and-death work.
RASCOE: So what steps must Boeing take to restore the trust of the airlines that buy their planes and the flying public?
MCGEE: I've been around the airline industry since 1985, and in all those 39 years, I've never seen the place that we're in now. The fact is that the damage is so deep that it's going to take a long time to dig out from this. This isn't something that can be turned around in six months. First things first, the CEO should have been long gone, but that's not enough. This isn't a matter of, well, we'll put a different face at the top, and, you know, we'll go on with business as usual. Everyone in the senior management team and everyone on the board needs to be replaced because they have created, over the last 25 years, a corporate culture that needs to be completely changed. And obviously, that's not something that can be done easily.
So we think all options should be on the table. At a minimum, the Federal Aviation Administration, which has not provided, in the past, enough oversight of Boeing, is going to have to dramatically increase that oversight, and they're basically going to have to babysit Boeing's operation for some time to come.
RASCOE: So can you talk to me a little bit about what pressures the government and the airlines can apply on Boeing right now to force changes?
MCGEE: Right now, we have three concurrent investigations from three different government agencies - the Federal Aviation Administration, the National Transportation Safety Board, which is an independent government agency that oversees safety, and the Department of Justice. And that part is unprecedented. So I think we need to let those three investigations play out, but there are some very hopeful signs. The FAA is showing that it is a different FAA than it has been in years past. I and many others have been very critical of the FAA as being sort of a captured agency. Now the FAA has been much more aggressive with Boeing, and that's exactly what we need. So we have to see what they come up with. Hopefully, that's not going to take too long because these investigations have been going on for a few weeks now.
But the other part of it is the airlines. You know, ultimately, they're the customers of Boeing. But the airlines' customers, of course, are the rest of us - passengers. And if enough passengers show displeasure and convey that to the airlines, that they don't want to fly on Boeing, you can be sure that the airlines will let Boeing know that.
RASCOE: That's William McGee from the American Economic Liberties Project. Thank you so much for joining us.
MCGEE: Thanks very much. I appreciate it.
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