Boeing and the Bean Counters

by John M Repp

John Hart-Smith was a man well respected in the field of aerospace engineering, specifically in the craft of designing the manufacturing of an aircraft’s fuselage. In his obituary notice, The Seattle Times tells of how he tried to wake up Boeing management in a 2001paper about the dangers of their “corporate business culture of outsourcing, cost-cutting and downsizing”. Hart-Smith also wrote technical papers, and later whimsical stories featuring Winnie the Pooh making fun of managers not paying attention to quality control.

In the mid 2000’s, he criticized the Boeing plan to build the 787, calling it flawed and predicting that it would prove very costly. He turned out to be right. In the last few years, Boeing has barely been able to deliver half as many jets as Airbus, when in the past, they could deliver about as many as Airbus and usually a few more. In October of 2024, the company had a debt of $58 billion dollars.

Boeing management ignored and then sidelined Hart-Smith.

Hart-Smith saw what happened to McDonald-Douglas with its similarly flawed corporate culture. After Boeing merged with McDonald-Douglas in 1997, we who worked at Boeing at the time believed the McDonald-Douglas corporate culture had become dominant at Boeing after the merger.

After that, we started calling many of the new managers “bean counters” since they were not engineers but MBA’s i.e. Master of Business Administration. Their main concern was cutting costs and to achieve that, they used outsourcing i.e. sending to work out to other companies which did not have the unions and large overhead. That method led to the “downsizing” of Boeing. All this was happening at about the same time as Boeing moved its management headquarters to Chicago in 2001, claiming a Chicago location was more central to their customers, as if the world was not round.

In Boeing machine shop in Auburn, WA, at one time, the largest machine shop in the world, where I worked as a machinist and later as a machine-tool programmer, my supervisor had been a machinist and a programmer, before he became a supervisor. He knew exactly what we were doing out in the shop and upstairs where we were writing programs. After I retired, I heard from fellow workers I knew who still worked in the shop that Boeing management put a business school graduate in the shop as a supervisor, a man that had never been in a machine shop before in his life. That bean counter could record the hours worked and the parts produced but could not supervise our work in the shop.

Sadly, this approach to management is too dominant in American corporations where the interests of the stockholders and the profits of the corporation is considered the most important task. That must change for Boeing to recover. They need to have engineers at the top, who understand what they are producing, especially a product like an airplane where people’s lives are at stake.