How Boeing's Dreamliner Was Grounded

With the 787 in trouble, Boeing faces its worst crisis since it pioneered jets. Frank Brandmaier/DPA/Corbis

It was 22 years ago, and I was looking for Boeing's executive headquarters along a gray industrial strip with rusting railroad tracks alongside. Halfway down the strip, next to an aging plant that in World War II had turned out the B-17 Flying Fortress bombers, I found it: a modest but notably handsome building with touches of a 1930s-era airline terminal. The inimitable smell of burned kerosene was in the air: on the other side of the strip was Boeing Field, where every new Boeing jet was flight-tested. Nearby was a tired-looking afterhours joint called Joyce's Final Approach.

It wasn't the kind of impressive address you'd expect for a corporate icon. Yet it was here, driven by a gritty and unflashy company spirit of innovation, that became the birthplace of a surpassing American technical achievement—the jet age—and the place where the Boeing Airplane Co. emerged from provincial obscurity to become a brilliantly game-changing force in aviation.

I did not realize it then, but I was about to fall under the spell of Boeing's own Greatest Generation, the men—and, more significant, the culture—that produced, in the jet airliner, a machine that shrank the world, democratized air travel, and, for a while, made "Boeing" a universal generic. I was there to interview the small team of engineers, known as the aeromen, who created the Boeing 747, the behemoth soon to be christened the Jumbo by its passengers. I ended up being drawn much deeper into Boeing's history, back to when airplanes were made of wood and canvas.

Now, with the grounding of the 787 Dreamliner, Boeing is facing its worst crisis since it pioneered jets. The tangibles of the crisis are already apparent, paramount among them how to manage quality control of thousands of components outsourced from 135 sites around the world. But I am wondering how much this crisis, more fundamentally, has to do with something as intangible as corporate culture. How much did Boeing's defining ethos, its distinctively scrappy character, allow it to become the success it became? And, as important, has it lost its touch because, somewhere along the way, Boeing stopped being Boeing?

Most jetairliners, no matter who builds them, have the same basic form: wings sharply angled back from the fuselage and engines hanging beneath the wings in pods. Its genesis was in Nazi Germany, but as the war was ending in 1945 a team of aviation experts, code-named Lusty, was flown by the U.S. government to Europe to scoop up German scientific secrets. They discovered a vast research center disguised as a farm in the middle of a forest.

Among the Lusty team was a Boeing engineer and one of the most seminal minds in aviation history, George Schairer. Going through documents, Schairer came across a new formula for high-speed flight. It involved wings raked back like an arrowhead. Schairer immediately sat down and wrote a seven-page letter to his colleagues back at the Boeing plant in Seattle, sketching the wings and urging Boeing to try out the idea in a wind tunnel.

Boeing put the German high-speed wing in the wind tunnel and saw that the principle behind it was correct. That was the easy bit. Sorting out the details—how to attach the wing to an airplane, figuring out where to hang the engines on it—and then asking test pilots to fly the airplane proved extremely scary. Although the wing design promised, in one step, to double the speed of an airplane over those of the propeller age, it was a wild thing, difficult to tame and make safe. Yet in over little more than a decade Schairer and his engineers produced the world's fastest bomber, the B-47, and were on their way to producing the world's first truly great jet airliner, the 707.

Soon after I began talking to those who worked on the 747 more than two decades ago, it became apparent that their lives had been inhabited by a kind of incubus—a lurking, pouncing, tormenting genius called George Schairer. A very accomplished designer told me, "Ask my wife how I suffered under George Schairer. She'd say I almost died." But there was reverence in his voice.

By the early '90s, Schairer had retired, but I found him at his ranch-style house in a bucolic cul-de-sac, with his own dock and a view of Lake Washington on the more salubrious side of Seattle, 10 miles or so from Boeing Field. He invited me into his workshop. There was a fiberglass model of the hull of his sailboat on a table. The boat was causing him grief. He had been testing the model in his swimming pool, using fluid dynamics to figure out what was wrong.

"Do water and the air behave in the same way?" I asked him.

"No" he said, firmly. "Air is the easier of the two. Air is a terrible mess, but water is worse."

It was hard to match this gracious man with the irascible and capricious autocrat described by his protégés. But as I built up a fuller picture, it was obvious that Schairer was as far from being a company man, a respecter of organization plans and bureaucracy, as you could get. Deeply intuitive himself (he had been known to walk around an airplane with an aerodynamic problem and spot the flaw with one glance), he looked for breakaway independence of mind in others. Schairer's men out-thought the competition at every challenge. Until they created the 707, in 1954, the Douglas and Lockheed companies had dominated the airplane business; after the 707, the competition was left in the dust.

A B-17 bomber, before setting out on a World War II mission. Photoquest/Getty

Thornton Arnold Wilson was the kind of rogue talent that Schairer nurtured. Wilson, a blowhard with a notoriously profane vocabulary, told me that earlier in his career as an engineer he had been sent to MIT, like other rising talents, for a year as part of his grooming for high office. (Wilson, always known simply as "T," became the first engineer appointed president of Boeing at a time when it was nearly bankrupted by developing the 747.) A professor there told Wilson: "You send somebody back here every year, and they're always good. That's not unusual. IBM sends good people every year, General Motors, Eastman Kodak. But if you've seen one IBM guy, you've seen them all. The Boeing company hasn't sent two alike here yet."

Boeing's tolerance of mavericks was, I saw, a reflection of its roots. The Pacific Northwest was one of the last parts of the Union to be settled, lumber one of its earliest industries. Scandinavians came and thrived; their rugged independence stamped the landscape.

Boeing was founded in 1917, producing a few wooden-framed seaplanes from a red barn on a filthy Seattle backwater called the Duwamish River. When Boeing plants supplied thousands of bombers to the U.S. Air Force during World War II, the company was still thought to be provincial. But the generals who ordered new airplanes got a shock when George Schairer's first jet bomber left behind the pursuit plane assigned to track it. These hicks had invented the jet age.

The special chemistry of Boeing was one part the men and their originality of thought; one part a kind of corporate innocence that more than once left them outwitted by competitors with sharper elbows and lobbying skills in Washington, D.C.; and one part a stubborn adhesion to a place. Boeing Field resonated with the thunder of their own perfected science, the machines that increasingly became familiar at every airport around the world. This seemed like fulfillment enough: no need to swagger and strut, they seemed to feel; the jets are truly sexy and we own them.

It couldn't last.

A 1940s Boeing 314 Clipper seaplane takes in Liberty Island. Edwin Levick/The Mariners' Museum/Corbis

Eventually, aforeign competitor emerged, at first almost by stealth. The French thought up Airbus as a way of pooling European resources (individual European attempts to rival Boeing had fizzled) and produced the first twin-engined wide-body, the A300, in 1972. Boeing tolerated the A300 as a niche product. Then, in 1984, Airbus unveiled a smaller twinjet called the A320 and aimed it directly at Boeing's longest-lasting cash cow, the 737. In that model they took a technological leap by introducing a far more automated cockpit and a completely new way of flying the airplane, used until then only in military jets.

Even then, Boeing was complacent. In my regular trips to Seattle in the 1990s, I picked up a tone of disdainful Francophobia, almost a kind of anti-cheese-eating-surrender-monkey prejudice in Boeing managers, some of whom implied that the A320 was a step too far technically, a counterintuitive machine that was none too sound in its construction. Airlines, however, liked it, and so did passengers. Its cabin was wider than the 737's, and it was easier to load with cargo. It was obvious that without a serious revamp, the 737 would be outclassed.

At the same time, a change of corporate ambition was clear. Boeing was now much more than a maker of airliners. Its military business, including missiles and helicopters as well as airplanes, was growing; lobbying in Washington became a priority. Elected in 1996, the company's new president, Phil Condit, had been an engineer who took a gung-ho pleasure in pushing an airplane to its limits. As president, though, Condit had a much bigger idea: that to really make a mark, Boeing should merge with McDonnell Douglas, an aerospace conglomerate that included the rump of the old Douglas Airplane Co.

Condit achieved the merger in 1997. Some of the older generation of engineers that I had kept in touch with over the years admitted they were uneasy: Douglas, they felt, was too much in the hands of bean counters; pretty soon they grumbled that Douglas had taken over Boeing rather than the reverse.

Then in 2001, The Seattle Times ran a banner headline: "Boeing Bolts." The city was stunned. Condit had decided to move Boeing's corporate headquarters to Chicago, to the old Morton Salt skyscraper. The rationale was that the merger had made Boeing into much more than a world supplier of airplanes; it was a major defense contractor with widely dispersed plants, and Chicago was a more central place from which to manage them. Seattle was just another cog.

In Chicago, the primacy of Boeing's distinct engineering culture was fading. In 2003 Harry Stonecipher, a former president of McDonnell Douglas, came out of retirement to replace Condit (done in by corruption charges involving a Pentagon contract and by a serious loss of market share to Airbus). Two years later Stonecipher was also gone (done in by an affair with a Boeing executive), and the search for a more stable leader was on.

Among the aeromen, there appeared to be only one candidate to succeed Stonecipher: Alan Mulally, an alpha engineer and forceful salesman; he was a compelling leader and esteemed by his peers. Instead, the top job went to an outsider, Jim McNerney, whose résumé included Procter & Gamble, McKinsey, GE, and 3M. At GE, McNerney had been schooled in the hard-nosed methods of Jack Welch. (A year later, a disaffected Mulally became president and CEO of Ford, and is now widely regarded as its savior.) The direct line of succession from the aeromen had been snuffed out.

I returned to Seattle in 2006, invited to take an early look at a radical new project, the 787 Dreamliner. All that existed of it at that point was a mock-up of its cabin, always the first step in the process of wooing airline customers. When the 707 was launched in the 1950s, Boeing displayed uncommon cosmopolitan panache: they built a mock-up in an old coffee warehouse in lower Manhattan, and presented it complete with flight attendants and the sounds of a simulated flight; Charles Lindbergh himself attended.

The Dreamliner debut couldn't have been more different. The cabin itself was a knockout, a real generational leap in comfort with larger windows, mood lighting, an arching roofline, and cleaner, moister air. But the site of the mockup was odd, a featureless building hidden behind a furniture showroom in a rather dispiriting suburb of Seattle. And the commercial division's new executive quarters, nearby, were in a cookie-cutter steel and glass building that, inside, felt more like a bank, with people in cubicles silently staring at monitors and senior engineers in windowless caverns. More significant, the roar had been stilled: Boeing Field was miles away and the business of creating airplanes had become unmoored from the presence of them.

Later visits reinforced this feeling of a rather soulless place. In 2008 a long-running schism between the company and the machinists assembling the airplanes exploded into an eight-week strike that cost Boeing $100 million a day. Then Boeing decided to build a new production line for the Dreamliner in South Carolina—a step the union saw as management's revenge. Finally, in 2011, the company and the union came to a new four-year contract deal. By then, however, the Dreamliner production was badly snarled, and Boeing had to accept that the skill pool of the Seattle machinists was indispensable.

Then there is the Mulally question. Of course you can't put a value on an absence. But Mulally was a hands-on polymath with an instinct for where a screw-up was imminent. He made sure that bad news traveled up, rather than lay buried. He told journalist Karl Sabbagh, who followed Mulally's role in creating the 777, "I'm just living a dream. There just couldn't be anything more rewarding than being part of a team doing something as spectacular as a new airplane." Mulally's spirit was both rigorous and infectious, and he was clearly an exceptional leader. When machinists on the factory floor had a gripe, he listened—and acted. His departure left a hole in the air.

Am I making too much of the corporate aesthetic? Does the separation of management and product matter? Without doubt I had indulged a long romance with Boeing. My inner aeroman had enjoyed a vicarious ride with the jocks of the jet age, and I was as prone as any to sentimental flights of derring-do. I needed to remember that for all the magic that had been made here—and few things are more magical than making flight an everyday experience—those early jets were relatively crude machines. In its first decade the 707 had a series of crashes, any one of which today would have grounded the fleet.

Over the course of 40 years, jets have become far more complex machines and, because of their sophistication, far, far safer (the odds of dying in an airliner are 1 in 29.4 million). That complexity is a new kind of management test, and in the case of the Dreamliner one that Boeing has struggled with. Today the corporate realities of the 21st century leave little room for a small cadre of headstrong visionaries. These days, any thought of risk is disciplined by market size, the intensity of competition, and the bewildering complexity of technical advances. Can-do doesn't do in this environment. Decisions crawl through corporate channels, quarterly earnings are watched for weakness, risk avoidance is a brake on ambition and success.

But this isn't just any business, and Boeing isn't just a corporation. Boeing's originating genius was tied to that semi-mystical quality known as locus, and I do believe it shaped the way people thought. Boeing engineers had a particular approach to craft that engendered ingenuity, a fastidiousness about detail that could cohabit with a near-reckless will to break out of the box. That tension was managed. Sentimental or not, I believe the corporate move to Chicago weakened the tolerance for that unruly élan in which the product developed. The Morton Salt executives don't need to go down into the salt mines. The Boeing executives do, I am sure, need to smell the kerosene.