Editor’s note: Marketplace’s Mitchell Hartman went to Seattle to report on Boeing’s business practices in the wake of two deadly crashes and the worldwide grounding of its 737 Max airplanes. You can read entries from his reporter’s notebook here and here.
RENTON, Wash. — Ethiopia this week is expected to release its preliminary report into the crash of an Ethiopian Airlines Boeing 737 Max jet, in which all 157 people on board were killed. Investigators are looking for similarities to the Lion Air crash in Indonesia in October 2018, in which 189 people died. Aviation officials have grounded the planes worldwide.
The 737 Max debuted in early 2016 as a significant upgrade to Boeing’s popular line of narrow-body single-aisle mid-range jets. The 737 Max is more fuel-efficient and quieter than its predecessor, the 737 NG; the new planes cost airlines around $120 million each and the company has a record number on back order.
While Seattle and its suburbs are home to corporate giants like Amazon, Microsoft, Starbucks and Costco, Boeing is the region’s largest private employer. The company, which moved its corporate headquarters from Seattle to Chicago in 2001, employs 80,000 statewide and assembles most of its commercial aircraft here.
Boeing’s Renton factory complex, on the shores of Lake Washington just miles from Boeing Field southeast of Seattle, employs about 10,000 workers. Roughly two-thirds are union machinists who earn an average of $35 an hour, or $73,000 a year, before overtime.
It is here that Boeing assembles its best-selling — and currently grounded — 737 Max jet for airlines all over the world.
“This one is for Spice Jet in India, you’ve got China Southern, Royal Air Maroc in Morocco, Nordwind, Iceland Air,” said Jon Ostrower, ticking off the airlines whose new 737 Maxes can be seen from a bluff overlooking the Renton factory.
Ostrower publishes the online trade journal The Air Current. He’s been watching new 737 Max jets come off the assembly line and then crowd along the runways after they get painted and flight-checked.
“Airplanes are popping out at a record rate, literally tucked between buildings,” Ostrower said. “They’re up next to the Hyatt Hotel over there. Any spot you can find for an airplane, they’re sticking a Max right now.”
Ostrower said the new planes are piling up here because airlines aren’t taking delivery while the planes are grounded.
“This is Boeing’s cash machine,” Ostrower said. “These are airplanes that have been ordered over years. So even in this grounding, this operation is rolling along.”
Boeing declined a request for a recorded interview with Marketplace. In an email, a company spokesman confirmed that Boeing continues to produce 737s at a rate of 52 a month, which is the same rate as before the worldwide grounding. The company said it is “assessing how the situation, including potential capacity constraints, will impact our production system.” Meanwhile, it confirmed plans to increase production to 57 a month later this year.
Workers and retirees this reporter met outside Boeing’s Renton factory said they aren’t worried about the company’s airplane sales or financial health.
Ed Nye worked for 22 years as a field support analyst at Boeing and draws a pension from the company.
“There’s nobody cancelled an order yet,” Nye said. “There’s always been a bunch of threats. But they still have about 5,000 of them on order. Nobody else in the world has that airplane.”
The company benefits from a wellspring of goodwill in the region, partly because of the jobs and training it provides.
Hailey Yourst is grateful for the career launch she got at Boeing. She landed a company apprenticeship while still in high school and worked for Boeing for three years as a union machinist.
“I was one of the youngest females there,” Yourst said. “I worked my butt off — would average about $42 an hour, and then I would work about four hours of overtime every day, which is time-and-a-half, and then after 80 hours per week, it goes to double time.”
Yourst was laid off in 2017.
“I was one of the youngest on the floor, I had been there the shortest,” she said. “Most machinists never leave, so it was me or someone who had a job for 25 years.” Still, she said she landed another aerospace job within days, earning as much as she did at Boeing.
Some business leaders in Seattle worry about the hit Boeing could take from this crisis to its reputation and possibly its sales down the road.
“There definitely is a cringe aspect of it. Boeing is one of our biggest and most famous brands,” said Brian McGowan, CEO of regional economic development group Greater Seattle Partners. “Boeing’s been in business for over a hundred years. It’s a massive global company with a great reputation. Big companies tend to weather these things, and some of them come out stronger in the end.”
McGowan said the regional economy is less tied to the aircraft industry’s boom-and-bust cycles — and Boeing’s fate — than it was decades ago.
“The Puget Sound region is filled with not just Boeing, but contractors to Boeing, so it’s always going to be a major part of our economy,” he said. “But our economy is big and diverse. Two of the most valuable companies in the world, Microsoft and Amazon, are here, and neither of them are Boeing.”
Chris Mefford at Seattle economic analytics firm Community Attributes Inc. said to get back on track, Boeing has to address the safety concerns of pilots, airlines and regulators.
“Time is of the essence, and Boeing has to address these as soon as possible,” Mefford said. “No one is more committed to do that than Boeing, I’m sure. It’s a company with a ton of pride, and they are hurting internally over this whole challenge they’re going through right now.”