Boeing, the Jumbo Exception

Almost any enterprise in the Pacific Northwest can be traced to the nearness of the materials it uses, or to the abundance of cheap power. The exception is the biggest of all, Boeing, which might just as well have set itself down any other place.

Boeing happened to Seattle simply because its founder was wealthy, impatiently curious, and lived there. William E. Boeing’s German-born father, a pioneer lumberman who owned more than a billion board feet of lumber on the Oregon coast as well as large holdings of iron ore in the Mesabi Range, died when his son was eight. Young Boeing didn’t get along with his stepfather, and after spending two years at Yale, headed for Seattle. Fascinated by the new air age, he bought a seaplane of his own, and cracked it up landing too sharply on Seattle’s Lake Union. When told that new pontoons would take weeks to build, Boeing decided to make his own plane. Before long his oneroom shop had thirty employees, and during World War I turned out training planes. After the war the company almost folded, but stayed alive by making umbrella stands, telephone booths, and hatracks.

Gradually Boeing put together a large enterprise that Uncle Samwould later break up: besides Boeing it included United Air Lines and United Aircraft, which made Pratt & Whitney engines and Sikorsky helicopters. When I was growing up in Seattle, Boeing himself seemed no longer much identified with his company (he left as board chairman in 1934). On the paper where I worked, we wrote about his thoroughbred horses and his yachts, of the 500-acre farm for his prize cattle, of the record prices he paid for Hereford heifers, of the 125-foot yacht he built in 1939 for $240,000, with a flying boat as atender. On his death in 1956, he left a $22 million estate, of which $2.5 million was in IBM stock, $2 million in du Pont, and over $2 million in cash in a Seattle checking account. But nothing in Boeing stock.

His name would become a household word the world over, and even echo in a London play, Boeing Boeing. First the globecircling flying boats, then wartime B-17s, Flying Fortresses, and B-52 bombers, and afterwards a succession of passenger jets—the 707, 727, 737, and finally the jumbo 747 would spread his name.

I always thought of Boeing as something of a playboy, whose name and fame came from others who did the work. But when I called on William Allen, who ran Boeing during its greatest expansion, the first thing he said to me was, “I don’t think Boeing ever got enough credit for what he did.”

Allen, though he too retired as board chairman several years ago, at seventy-five still turns up at Boeing headquarters early every morning when he is in town, neat in unfashionably narrow tie and button-down shirt. He was just a young lawyer out of Montana and Harvard Law when, for $50 a month, he took a job in the Seattle law firm that handled Boeing’saccount. Allen recalled to me how William Boeing bid, when no one else would, for a government contract to fly airmail from Chicago to San Francisco. The contract required Boeing to have twenty-six planes in operation by the following July 1. Boeing created a new company, personally lent it $750,000 to buy the planes, and then had Boeing Aircraft build them. Years later Boeing was called before a Senate subcommittee and scathingly cross-examined by Senator Hugo Black about the immense profits he had made on that airmail contract. “Boeing was very offended,” Allen recalls. “He sold his stock, and that was that.”

Allen, a high roller himself, could appreciate Boeing’s many gambles. Allen took over Boeing at a period of high turbulence in 1945, when he was forty-five. Lacking executive, engineering, and manufacturing experience, he first considered the invitation “the most ridiculous suggestion I ever heard in my life.” The day he took office, the government cancelled most of its B-17 and B-29 contracts, leaving Boeing with about two weeks’ work.

In order to keep its superb engineering staff together, Allen decided to build fifty “Stratocruisers,” though the company had no orders on the books, and the plane eventually lost money. Later Allen would gamble $20 million in company funds to build the prototype that would become the highly successful 707 and the Air Force’sK-135 jet tanker. The company would invest $300 million to build the three-engine Boeing 727, without having first tested the design with a prototype. The 727 would become the standard medium-range jet around the world. The earlier 707 launched the world into the commercial jet age, not only sweeping the skies, but sweeping from the seas the grand old transatlantic liners.

The Boeing company has several reputations. In its own industry, among airlines it serves, and at the Pentagon, its record for the imagination, dependability, and efficiency of its products is unmatched, and the company seems to have avoided most of the hard-selling scandals that some of its competitors have been caught up in. These achievements reflect the austerely autocratic character of William McPherson Allen.

But Boeing is strangely unloved in its home city of Seattle. In part this is because of the 144-day strike that Allen deliberately took in 1948, to break plantwide seniority and other work-rule holdovers from wartime contracts. Allen won, and in doing so, he told me (in a phrase that seemed to indicate his low views of unions), “threw out about 400 commies.” Long before the strike, employees who took great pride in Boeing’s reputation were nonetheless bitter at the absence of a retirement program; the one Boeing introduced in 1956 employees regarded as pretty niggardly.

Boeing dominates Seattle but has never taken much civic part in it, as if providing the city’s biggest payroll were all that should be asked of the company. And a sad mark was left on the city when Boeing s payroll fell from above 103,000 to around 40,000, where it seems destined to stay.

Allen’s most recent gamble, the jumbo 747, has yet to pay off. Its design was based on wildly overoptimistic projections by the airline industry of passenger mileage that would double and triple within the decade. With a good design and a competitive itch to be first, Boeing committed about $1 billion to the start-up and tooling of the 747, and to the building of a new plant north of Seattle which is the largest building by cubic content in theworld. The bay where the wings are fabricated is the size of a football field. Messengers travel around the plant on bicycles, and executives in golf carts. Every few yards, where arteries cross inside the plant, are regular octagonal stop signs. I toured the plant the day after touring a lumber mill, and by contrast it seemed almost hospitallike in its quiet, clean, airconditioned tidiness. But the jumbo 747 has proved too big economically for many airlines to digest, and the assembly line has slowed to two 747s a month. As I watched no. 277 being built, I was reminded that profitability won’t begin until at least no. 400.

A relentlessly dynamic company that always wants a piece of the future, Boeing once had another big gamble going, the supersonic transport. When Congress narrowly decided against putting up the funds to build it, Allen thought the decision “one of the worst disappointments in my life.” To him, it was not just business lost, but the first time in history the United States had deliberately decided not to keep up with scientific progress. Now, as Allen watches the supersonic Concorde’s problems, sees how Arab oil prices have changed the whole economics of flight, and realizes that few of his 747s might now be sold if the SST were competing for the market too, Allen considers Boeing lucky that the SST was never built.

— T.G.