John Oliver Explains How Boeing's Problems Can All Be Traced to Stock Buybacks and Incompetence

This story originally appeared on Jalopnik.

When asked how Boeing’s recent door plug incident came about, company CEO Dave Calhoun cryptically explained “a quality escape occurred.” That kind of corporate doublespeak is indicative of the problem at hand. Boeing used to have quality, but it escaped, apparently sometime around when it merged with McDonnell Douglas in 1997.

For the last three decades, the company has spent substantial amounts of money buying back its own shares to pump up the stock price, and issuing dividends, instead of researching and developing new high-quality high-efficiency airplanes. The results have been catastrophic, as HBO’s funny Sunday night news man John Oliver explains.

Boeing: Last Week Tonight with John Oliver (HBO)

Corporate culture is a hell of a thing. The change of a CEO and the implementation of their priorities can completely undo decades of good will and earned trust. All of this began with the flawed strategy and lax controls of then-Boeing CEO Phil Condit, and has continued with all of his successors.

The desire to push R&D costs off to the company’s suppliers meant that Boeing was essentially building its planes from kits that weren’t designed together, didn’t fit together, and didn’t meet the standard of quality the company had once been known for. This move may have been a short-term boon for company profits, the share price, or for CEO bonuses, but the reduction in quality has given rise to the phrase “If it’s a Boeing, I ain’t going.” I’m not sure there has ever been a more aggressive about-face on a company’s view by the global public.

There was a time that Boeing could have waxed the floor with Airbus, but it rested on its laurels for far too long. Boeing’s under-developed and shoddily-assembled kit planes can kill people, and they certainly have.

As with almost everything bad in this modern shit sludge we call society, we can conveniently blame Ronald Reagan. Prior to Reagan-era deregulation, stock buybacks were considered illegal market manipulation. If a company wanted to boost its stock, it had to do something worth crowing about, like develop good fucking product.

Anyway, go watch Oliver explain it. It’s a good video.