New book looks at Boeing's 'Turbulence'

Between 1997 and 2003, Boeing employees seemed trapped in corporate hell.

In the years after the 1997 merger with McDonnell Douglas, they suffered through mass layoffs, heavy outsourcing of their jobs, relentless cost-cutting and a dizzying pace of change.

Meanwhile, a seemingly rudderless management let rival Airbus soar past Boeing to become the world's top plane maker, and shocking ethics violations on the defense side debased the company's reputation in the U.S.

A new book charts in detail how that corporate turbulence devastated the morale and poisoned the attitudes of employees. It documents a sense of betrayal reaching from the factory floor to the management offices.

The book quotes former top Boeing executive Ron Woodard uttering a refrain that's common among Boeing production workers and engineers, yet nevertheless startles when asserted by someone who was in the inner leadership circle in 1997, when then-CEO Phil Condit made the deal with then-McDonnell Douglas CEO Harry Stonecipher:

"I was dead-set against the merger," Woodard said. "Harry outsmarted Phil and bought Boeing with Boeing's money. We were all just disgusted."

The book is "Turbulence: Boeing and the State of American Workers and Managers," published by Yale University Press.

Written by University of Colorado professor Edward Greenberg, University of Puget Sound professors Leon Grunberg and Sarah Moore, and Patricia Sikora, head of a corporate-research firm in Colorado, it's an academic book, with research data gathered using National Institutes of Health funding and illustrated in bar charts.

Yet it's well-written and shows a firm grasp of both the aviation business and the competitive forces pushing Boeing management to act as they did. For anyone working at Boeing — especially the company's current leadership — it should be a must-read.

The authors gathered their data by recording the attitudes of Boeing employees in four confidential surveys done in 1997, 2000, 2003 and 2006, and in follow-up interviews. Employees were randomly selected from a list provided by the company. More than 3,000 workers participated in at least one of the surveys.

The research spans the worst period in the company's recent history, including the devastating impact on the business of the 9/11 terrorist attacks in 2001.

Between 1997 and the 9/11 attacks, Boeing shed 24,000 jobs in Washington state. Between 9/11 and mid-2004, it shed 27,000 more jobs.

Since 2004, the company has been on the upswing again and has added back 20,000 of those lost jobs. And though Boeing is struggling to get its new 787 Dreamliner into service, that jet's sales success — fully evident by the time of the authors' final survey — undoubtedly lifted employee spirits.

Yet the authors note that their 2006 data reveal "lingering damage from the most turbulent years."

"A decade of tumultuous change had taken its toll," they said, citing employee comments that revealed "powerful feelings of loss and regret at the change in Boeing's identity, mingled with anger at the more ruthless behavior of top executives. ... Many employees became disenchanted with Boeing and began to distance themselves emotionally from the company they had once admired."

The arc of disenchantment in the surveys rings true to this reporter, who has covered Boeing since early 2003.

Back then, it was hard to find an employee with anything positive to say about management and easy to find many filled with intense anger at their bosses and utterly pessimistic about Boeing's future.

That has changed since, thanks to the Dreamliner. But the authors are correct: Negative feelings and distrust certainly linger among the production workers, who bore the brunt of the layoffs, and the engineers, who see the 787 outsourcing model threaten even their high-level jobs.

"Outsourcing of skilled work will destroy the company," comments one anonymous manager. "The business model is flawed. No one will know how to develop, build or support our products."

"We are giving away the farm," commented a veteran engineer.

Perhaps Jim Albaugh, the current CEO of Boeing's commercial-jet division, read those comments in an advance copy of the book. In the past year, he's been publicly agreeing with that position and promising to rein in the outsourcing of high-level work.

Albaugh has his hands full undoing the ill will of earlier years. One of his predecessors emerges as a favorite villain from the employee surveys: Harry Stonecipher, who after the McDonnell Douglas merger became Boeing president and later CEO, is seen by many as destroying the culture of Boeing's commercial-airplane unit with his ruthless focus on costs.

In a 1998 speech at the Seattle Rotary Club, Stonecipher warned employees to "quit behaving like a family and become more like a team."

"If you don't perform, you don't stay on the team," he said.

The authors of "Turbulence" note that this notorious family-to-team metaphor "was repeatedly brought up by employees in numerous interviews and comments, even several years later."

The most damning evidence of the psychological impact of this new hard-edge management comes in surveys of those who were laid off from Boeing in the worst years and chose not to return.

Though this group lost their jobs, the authors' data show improvements in health, fewer drinking problems and less depression compared with those who stayed at the company.

"Leaving Boeing was like walking out of a cave into the light," said one former employee.

The authors offer the opinion in their conclusion that a company cannot long thrive if the relationship between management and employees remains at best strained and at worst hostile.

If Boeing management agrees, then winning back employee trust ought to be very high on its agenda.

In the next few years, Boeing's leadership will make a far-reaching decision about where it will place future airplane work. And in 2012, the machinists and the engineering unions negotiate new contracts.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com