Boeing’s stock price and financial success undermined the emphasis on technical achievements and innovation. William Lazonick, a Professor in Economics and Co-Director of the Center for Industrial Competitiveness at the University of Massachusetts in Lowell, Massachusetts, has written that Boeing’s attempts to profit undermined its efforts to protect the flying public.204 Lazonick’s research highlighted the fact that between 2013 and 2019, during the critical 737 MAX design, development, and certification process, Boeing spent $17.4 billion on stock dividends and an additional $43.1 billion on stock buybacks.205 Lazonick wrote that these investment strategies may have played key roles in Boeing not spending enough money on issues critical to the safe design and development of the MAX, including adequate testing and safety analyses.
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Financial and economic competitiveness also played a key role in Boeing’s eventual decision to re-engine an existing airplane rather than design a new airplane in choosing its next product. In 2011, the estimated cost of building a brand-new airplane hovered around $10 billion while the cost of re-engining the existing 737 NG to develop the new 737 MAX airplane was only about $3 billion, according to Richard Aboulafia with the aviation industry market analysis firm, the Teal Group.
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Multiple current and former Boeing employees who have contacted the Committee since our investigation began have relayed dismay at the path they believe Boeing has taken since its merger with McDonnell Douglas. They have described their excitement and enthusiasm at joining one of the world’s most esteemed companies decades ago. They were thrilled to be working with smart, intelligent, and dedicated colleagues. They viewed Boeing as an engineer’s paradise where they could innovate and create leading edge technologies where safety was always at the forefront of engineering decisions that were part and parcel of the business development process.
However, that emphasis changed slowly, but dramatically, over the years, according to these employees. The prowess of the engineers’ technical designs and innovative diagrams were replaced by the accounting acumen and financial decisions of business executives. Production schedules and monetary costs, not technical specifications and safety considerations, began to drive Boeing’s commercial aircraft programs, they say.
footnote 206 refers to
American Prospect, May 31, 2019, copy this link into a browser - for some reason it doesn't work otherwise.
https://prospect.org/environment/mak...holders-richer