Case Study of Multinational Corporation: Boeing

Founded by William E. Boeing and George Conrad Westervelt in June 1916 as the ‘Pacific Aero Products Co.’, the early development and success of what became to be known as The Boeing Company shortly thereafter was closely allied to American entry into the theatre of the First World War in 1917. Boeing and Westervelt had been early pioneers in expediting the production of seaplanes relative to those produced by fellow manufacturer Curtiss. The rapid requirement for naval seaplanes immediately allowed Boeing to supply their first production aircraft, the Model C. Over 50 such aircraft were produced for the US Navy by 1918, and marked the beginning of Boeing’s longstanding and currently operable association with the US military.


Following the conclusion of the First World War, surplus military Boeing aircraft flooded the market, which heralded the birth of airborne transportation and logistical services. While the company continued to develop and supply aircraft to the newly established US Army Air Force (USAAF) including the PW-9 and P-12 fighters, by 1927, Boeing founded an airmail business, Boeing Air Transport (BAT). Much of these efforts were driven by a new civilian space for aviation technology as well as the need for Boeing and other aircraft manufacturers to provide a reliable stream of income and investment beyond government and military contracts. In 1934, following the passage of the Air Mail Act, BAT would transform into the airliner, United Airlines. The effect of the antitrust Act was to permanently separate air manufacturing and air transport. As a consequence, during the late 1930s, as the United States emerged out of the Great Depression, Boeing focussed their attention to competing with their rival the Douglas Aircraft Company in the civilian aircraft production market. However, despite Boeing’s early successes, it was the Douglas DC-3 which emerged as the aircraft of choice for carriers. A few years of difficult competition and circumstances for Boeing ended with America’s entry into the Second World War. Given Boeing’s ascendancy and effective founding in supplying the US military, it’s re-emergence as the pre-eminent aeronautical was established again through the USAAF’s desire for a rapid interceptor fighter and a heavy strategic bomber. The resulting P-51 Mustang and B-29 Superfortress proved pivotal in the deliverance of American victory in the pacific, not least the latter from which the atomic bomb was dropped. Boeing was the twelfth largest recipient of wartime production contracts, but also a driver in increasing female participation in the US workforce.


Indeed, while the Second World War saw Boeing aircraft deployed across warring continents, it was only after 1945 where the company went global. Military aircraft such as the F-86 sabre were exported to US allied nations and saw action in the Korean War. By 1957, Boeing introduced the 707 jet powered passenger aircraft, which contributed to air travel overtaking rail and sea journeys for the first time in history.


By 1960, Boeing had announced the successor to the 707. The 727 aircraft and freighter became the first commercial jetliner to reach 1,000 sales with over 50 operators across the world in its lifetime. However, conquering the skies was not the limit of Boeing’s ambitions. During the space race, NASA commissioned Boeing to develop and build the first stage of the Saturn V rocket, the vehicle by which man would reach the moon. Boeing’s golden age emerged soon thereafter. After falling short in developing a supersonic commercial aircraft with the successful flight of Anglo-French produced Concorde, Boeing’s 500,000 strong workforce set their efforts to producing the largest commercial, long range aircraft ever. The eventual launch of the Boeing 747 not only retained a threatened monopoly and alleviated a precarious financial situation, but became a culturally strong symbol of American modernity. Dubbed ‘the jumbo jet’, the 747, notwithstanding numerous improvements and upgrades, remains in active service with over 1,500 having been  produced. Two 747s were specially adapted to serve as the flagship of the US Air Force. Air Force One has served American Presidents since Ronald Reagan. 

As of 2017, Boeing is the largest global aircraft manufacturer and the largest US exporter by dollar value. In the age of financial globalisation Boeing managed to embrace the advance of new technologies and rise to be one of the top airplane manufacturing corporations in the world. As the flow of people is considered as one of the main aspects of globalisation, Boeing is with no doubt an important part in the mechanism of the globalising world. However, globalisation has still not reached its end point, and future prospects for Boeing are not showing stalling growth. 80% of the world’s population has never flown in an airplane, and Boeing, one of the few public companies with a 20-year-old plan, takes it as a positive sign for their growth in the context of globalisation.

 

Sources:

Boeing, ‘A Century in the Sky’, The Atlantic, <https://www.theatlantic.com/sponsored/boeing-2015/a-century-in-the- 1
sky/652/> [accessed 13 January 2019]

Peck, Merton J. & Scherer, Frederic M. The Weapons Acquisition Process: An Economic Analysis (1962) Harvard 3
Business School p.619

Elizabeth Gurdus, ‘Boeing CEO: Over 80% of the world has never taken a flight. We’re leveraging that for growth’, 4
CNBC, 7 December 2017, <https://www.cnbc.com/2017/12/07/boeing-ceo-80-percent-of-people-never-flown-for-usthat-means-growth.html> [accessed 13 January 2019]