There are those who attribute Boeing’s ongoing quality control scandals to its decision to move its HQ out of its Seattle engineering base to Chicago in 2001. Others blame the 1997 merger with McDonnell Douglas for a dramatic change in company culture in favour of cost-cutting and upping shareholder pay-outs.

Kelly Ortberg, formerly of Rockwell Collins, is Boeing’s new CEO

Whatever the arguments, Boeing knows it has to get a grip, and part of the plan has been appointing a new CEO who started on August 8. Kelly Ortberg is a 64y-old engineer, and was recently CEO of avionics company Rockwell Collins, where he built a reputation for being a “man of the people” as well as a diligent executive with an eye for detail.

He says he is going to base his family in Seattle, and explains why: “Because what we do is complex, I firmly believe that we need to get closer to the production lines and development programs across the company. I plan to be based in Seattle so that I can be close to the commercial airplane programs. In fact, I’ll be on the factory floor in Renton today, talking with employees and learning about challenges we need to overcome, while also reviewing our safety and quality plans.”

It was only four months ago, on 16 April this year, that Boeing’s board blocked a shareholder proposal calling on the company to move its HQ back to Seattle. The question now is: will moving back to Boeing’s historic base and its main assembly plants be the silver bullet that will slay the company’s demons? Sceptics abound, but it seems the new CEO is not one of them.

The HQ move 23 years ago was a result of priority shifts driven by the merger with MDC, but it reinforced the culture change away from engineering prioritisation by locating the board 2,000 miles from the engineering front line. As if that wasn’t enough, in 2022 Boeing moved the HQ another 1,000 miles east to Arlington, Virginia, closer to Washington DC, lobbying opportunities, and the Pentagon.

So what? With today’s communications, distance should be no barrier to good management.

Well, that might be true for many big companies, but for an engineering-based manufacturer producing complex, high-tech machinery for a safety-critical industry, this move physically separated the engineering from the managers, accountants and policy-makers. The expression “safety-critical” – in the case of the airline industry – is not a piece of marketing-speak, it is a crucial selling point for the operators. In the early 2000s when fatal accidents happened significantly more often than they do now, airline reputations could be broken by a single crash, and they knew it.

Of course it’s not as simple as that. It never is. Much has happened to the commercial air transport and aerospace industries in the 27 years since the Boeing/MDC merger. The need for corporate adjustment to today’s business environment would have driven changes anyway.

To understand the forces at play around the turn of the 21st century, its helps to look back to the late 1970s, when the process of US domestic air travel deregulation – set in motion under the Carter and Reagan administrations – brought painful change to US airlines in the form of unfettered competition. At that time the US domestic airline industry alone represented 45% of the whole world’s air travel activity.

It took a couple of decades for the industry to adjust fully to deregulation, in the process waving goodbye to giants like Pan American and TWA, and ushering in a process of consolidation among the survivors that saw names like Eastern Airlines, Braniff, Continental, Northwest and multitudes of others swallowed up.

A little later, and more gradually, deregulation within the European Union single market began, and by the mid 1990s early examples of today’s ubiquitous low-cost carriers were spawned both sides of the Atlantic.

About the same time, aircraft manufacturing consolidation in Europe resulted in the creation of what would become a powerful multinational consortium, Airbus Industrie. Its gentle beginnings in the late 1960s led to the entry into service – with Air France in 1974 – of the world’s first twin-engined widebody, the A300. It was unique and very good, but conservatism among potential buyers meant it sold slowly. Nevertheless, its arrival signaled change, and its engineering standards would see the eventual demise of the confident US slogan “If it ain’t Boeing I ain’t going”. Gradually it became clear that the USA was no longer unchallenged as the world’s supplier of big jet aircraft.

Today, however, Boeing and all the other manufacturers should be laughing all the way to the bank. Air travel is doing well. By 2019, the year before the global covid pandemic hobbled air travel everywhere, the size of the global airline fleet and the volume of world demand for air travel had grown to be a multiple of the size of the 1990s market. Now, in 2024, covid is under control, the global demand for air travel is powerfully resurgent, and that demand shows no sign of being tempered by economic dark clouds nor environmental considerations.

If the industry and business environment are so different now, why the persistent calls for Boeing to get back to its roots? The manufacturer’s serious underlying problems became dramatically visible when, in 2018 and 2019, two of its new 737 Max aircraft crashed out of control, killing all on board. One crashed in Indonesia, one in Ethiopia. The cause of both accidents was a control software change developed by Boeing to modify – in a modest way – some of the new 737 marque’s handling characteristics.

External aerodynamic data input to the system – known as the Manoeuvring Characteristics Augmentation System (MCAS) – came from sensors near the aircraft’s nose that measured the aircraft’s angle of attack (a crucial measure of the wings’ lift-generating performance), and MCAS accordingly applied nose-down force – if required – by adjusting the horizontal stabilisers at the tail. But in both crashes, damage to the external sensors meant they sent incorrect signals to the MCAS, and it repeatedly pushed the nose down despite the pilots’ control inputs. The pilots did not know or understand what they could have done to counteract the nose-down force, and the aircraft dived to fatal impact.

The crux of the matter is that, in designing the MCAS and its associated sensor hardware, the manufacturer had ignored a basic maxim that aircraft designers are expected to adhere to, like the Hippocratic Oath for medical doctors: Boeing had not designed the MCAS to “fail safe”. That is, to work out what failures could occur, and ensure that if they did fail it would not lead to disaster. This could be done either by duplicating or triplicating the system and setting up a voting system to isolate a fault, or designing the system so the effects of failure can easily be overcome by other means. Boeing ignored this philosophy, and its only excuse at the time was that it did not see the MCAS as a safety-critical system.

The two official accident inquiries (Indonesian and Ethiopian) and the many parallel US institutional post-mortems uncovered shocking evidence about attitudes at Boeing – and at its overseer the Federal Aviation Administration. After the crashes it took about three years to discover that Boeing did not have a formal safety management system (SMS), a jaw-dropping fact that must have related to a belief within the company that although everyone else needed one, Boeing didn’t. It has one now.

For those who, like me, had watched Boeing for nearly 50 years as an aviator and professional aerospace journalist, this was breathtaking. It was not the Boeing we thought we knew.

That question again: would a move back to Seattle cure all the ills?

The Boeing Field, Renton and Everett locations around Seattle wield a powerful symbolic and historic influence, and a move there would signal a faith in the engineers, mechanics and Boeing traditional values. Ortberg clearly knows this. But what of the philosophy that drove the HQ relocation to Chicago, and eventually to Arlington? Does that need to die too?

At the time of the Boeing/MDC merger, Boeing’s Phil Condit remained the CEO of the merged company and MDC head Harry Stonecipher was appointed chief operating officer. Stonecipher, together with former MDC chair John McDonnell, owned a larger shareholding in the merged company than the senior Boeing men. The MDC influence on subsequent developments was dominant.

Soon after the HQ move to Chicago, Stonecipher confided to the Chicago Tribune: “When people say I changed the culture of Boeing, that was the intent, so it’s run like a business rather than a great engineering firm.” He was signalling the developing business philosophy of the new era: shareholders were king. Despite the banking crash of 2008, which should have imparted a message, that philosophy prevails today, along with CEO remuneration packages that launch company chiefs into a different galaxy from the one that their employees and customers inhabit.

Meanwhile Ortberg says he is moving his family to Seattle, with Boeing Commercial Airplanes, but the corporate HQ looks as if it is to remain in Arlington. How does that work? And will Ortberg, the “man of the people”, inhabit the same galaxy he does now?