The ‘This Week in Business History’ Series on Supply Chain Now shares some of the most relevant business and global supply chain events from years past. It will shine a light on some of the most significant leaders, companies, innovations, and even lessons learned from our collective business history.

In this episode of ‘This Week in Business History,’ Supply Chain Now Host Scott Luton shares the story of the founding, growth, and recent challenges of Boeing.

In July 15, 1916, William Boeing and Conrad Westervelt founded Pacific Aero products just one month after they piloted the B&W ‘Bluebill’ into the air above Lake Union in Seattle. In 1917, the company was renamed the Boeing Airplane Company. Although the name is the same as what we know today, the company would go through additional changes before becoming the company we know as Boeing today.

Scott Luton (00:03):

Good morning, Scott Luton here with you on this edition of this week in business history. Welcome to today’s show on this program, which is part of the supply chain. Now family programming. We take a look back at the upcoming week, and then we share some of the most relevant events and milestones from years past, of course, mostly business focused with a little dab of global supply chain. And occasionally we might just throw in a good story outside of our primary realm. So I invite you to join me on this. Look back in history to identify some of the most significant leaders, companies, innovations, and perhaps lessons learned in our collective business journey. Now let’s dive in to this week in business history.

Scott Luton (01:01):

Hello, and thanks for joining us. My name is Scott Luton and today we’re focused on the week of July 13th. Several large corporations got their start this week in past years, but we’re going to dial in on one in particular, a Titan in the aviation industry on July 15th, 1916. We in Boeing and George Conrad Westervelt would incorporate Pacific Aero products in Seattle, Washington. Let’s learn a lot more about William Boeing, the namesake for what would be a pioneering behemoth in the aviation industry and beyond really William Edward Boeing was born in Detroit, Michigan or not Tobar first 1881. His father Wilhelm left Germany when he was 20 years old to chase fame and fortune in the United States. Wilhelm Boeing did well, especially in the timber and mineral industry, but tragically. He died at the age of 42 due to influenza. The year was 1890. His son, William Edward Boeing was eight years old.

Scott Luton (02:15):

And the oldest of all the siblings as William got older, he was sent to school in Switzerland and then later at Yale, but he didn’t graduate and more formal education did not appeal to William Boeing much like his father Boeing was more interested in adventure, ambition and fortune. He’d leave Yale and new Haven Connecticut in 1903 without graduating and Boeing would cross the country and arrive at grays Harbor Washington about grays Harbor. So grays Harbor is roughly 80 miles West of Tacoma. And back at the beginning of the 20th, 20th century, it became one of the biggest lumber capitals of the world. And lumber is what would attract William Boeing to the area. He had inherited some valuable land near grays Harbor. So Boeing set out to learn the lumber industry founding the Greenwood timber company, w within months he caught on fast and was successful enough to purchase more Timberland in the area.

Scott Luton (03:28):

In fact, Boeing’s lumber enterprise would ship a lot of lumber back to the East coast via the newly completed Panama canal, which had opened for business in 1914, he would even finance expeditions across the region, including Alaska. You could say that the lumber industry was very kind and lucrative for Boeing, but it wouldn’t be where he’d make his Mark in history. Six years after Boeing had arrived on the West coast, a pivotal event in business history took place in 1909. William Boeing would visit the Alaska Yukon Pacific exposition. He wouldn’t be alone over 3.7 million people would attend the exposition by the time it was over. So why was Boeing’s visits so important? You ask it was at this world. We are that William Boeing would see his first manned flying machine and thus would be born Boeing’s fascination with aircraft, but he was not content.

Scott Luton (04:36):

Just seeing the aircraft. Boeing just had to get a ride and experience flight firsthand. This was one of the reasons he traveled South to attend the Los Angeles international air meet in 1910. This event was the first aviation meet in the U S on the second aviation meet. At that point in the world, Los Angeles national air meet withdraw an estimated two 26,000 people. Some have said that the event is what launched the Ava industry on the West coast of the country. The event featured several famous aviators of the time. Glenn Curtis, Charles Willard, and the star of the show was Louis Paul Hahn from France. In fact, Paul Hahn was the only aviator at the show that agreed to give Boeing a ride for three days. William Boeing waited for his turn to go up, but he’d be disappointed. Louis Paul Hahn would leave the show before giving Boeing his rod that same year in 1910, Boeing would purchase a wooden boat manufacturing plant on the Duwamish river. Seattle. This plant would eventually be transformed into an aircraft manufacturing plant.

Scott Luton (05:59):

A few years later, Boeing would be introduced to us Navy, Lieutenant Conrad Westervelt. They were both infatuated with flying and became close friends, not long into their friendship. Boeing and Western felt would finally get their shot to ride in an aircraft above Lake Washington. We and Boeing would end up taking, uh, taking flying lessons and would purchase his own plane. His first in 1915, Boeing purchased a model T a from the Glenn L. Martin company. The aircraft was somewhat affectionately nicknamed the flying bird cage. It was a sea plane that was seemingly held together by a bunch of war of wood and wires. Not only did Boeing and his team of employees find a variety of flaws in its construction upon delivery, but the flying bird cage would crash on a test flight with the heap of junk sitting at sitting in his plant and with his burning desire to do nothing but fly, fly, and fly.

Scott Luton (07:07):

We in Boeing had a choice to make, he could order all the replacement parts for his flying bird cage, and then sit on his hands for months. There was no Amazon prime at the time for aircraft replacement parts or Boeing, and his team could jump into the aircraft manufacturing business and do it themselves. Well, you can probably guess what they chose to do, right? They went to work and not only did they work on the flying bird cage, but they built new airplanes as well. On June 15th, 1916, we in Boeing, Conrad Westervelt and team made a test flight of what would become the first ever Boeing plane. It was a single engine biplane sea plane called the BMW model B N WB for Boeing and w for Westerville, but its nickname was blue bill. It had a maximum speed of 75 miles per hour, a range of 320 miles.

Scott Luton (08:06):

And it was built for a crew of two and they built a second one that was called Mallard. So you had blue bill and Mallard and on July 15th, 1916, we in Boeing and Conrad, Western felt founded Pacific Aero products. Blue bill and Mallard were eventually sold to the New Zealand flying school. After the U S Navy turned down an opportunity to purchase the aircraft. This would become Boeing’s first international sale. The first of many, many more to come in late 1916, the young Pacific Aero products company would encounter its first big challenge. Conrad Western felt was still serving in the us Navy and he was transferred to the East coast, which back in 1916, he might as well have been transferred to the moon. Thus Conrad Westerfield would resign from the company. Of course, Conrad still had his good friend, William Boeing’s best interest in mind. And he recommended that Boeing apply with the us Navy to become an aircraft supplier.

Scott Luton (09:13):

This was a shrewd move as the first major income that the company would make would come from these key contracts with the U S military Pacific Aero products, which we in Boeing would rename as Boeing airplane company in 1917, it would begin building a variety of military aircraft for the U S one of the first orders was from the us Navy for 50 sea planes. And as we moved into the 1920s and thirties, this led to a variety of other orders, such as patrol bombers, but beyond building planes, Boeing got into the business of providing airline flights in 1931. The company bundled several small airline companies into a larger single airline that became known as, as United airlines. Yes, the same United airlines that exist today with a fleet of over 800 planes over $43 billion in revenue in 2019 between air mail, passenger service and aircraft manufacturing, William Boeing had built a large enterprise based on all of these separate ventures.

Scott Luton (10:26):

Boeing airplane company went through a variety of name changes in 1934. The entire enterprise was called United aircraft and transport corporation. In that same year, the U S government passed the air mail act in June, which included provisions that call for companies to separate the operation of airlines from the manufacturing and production of aircraft right away Boeing’s United aircraft and transportation corporation was a target. And we in Boeing was forced to split the enterprise up into three distinct entities, United airlines, which naturally entailed the airline operations, Boeing airplane company, which took over all manufacturing operations in the Western United States. This is what becomes the Boeing company. And that brings us to the third entity United aircraft corporation, which took over all of the manufacturing operations in the Eastern United States.

Scott Luton (11:32):

United aircraft corporation would become the global behemoth United technologies corporation also referred to as UTC UTC would grow into a large public company with revenues of $66 billion in 2018 before merging with Raytheon in 2020, you gotta hand it to William Boeing who would be instrumental to not only building the Boeing company, but United airlines and United technologies corporation as well. But the forced separation of Boeing’s enterprise must have stung. We in building a good bit in the months that followed William Boeing would resign as company chairman and sell all of his stock in the company that bore his name. While we in Boeing would chase a number of other pursuits. He did keep a promise to stay available to the company and advise on occasion. This was critical in world war II where Boeing airplane company would be a major supplier of instrumental aircraft, like the beast 17 flying fortress and the [inaudible] super fortress over 12,000 of the iconic B seventeens would be built from 1936 to 1945 and almost 4,000 B 20 nines would be built from 1943 to 1946.

Scott Luton (12:58):

Boeing airplane company certainly helped the allies win world war II, but after the war, the company would turn its attention to changing air travel. As we know it, an overwhelming majority of aircraft, and then in the late 1940s were propeller driven, both military and private sector for that matter great Britain and the Soviet union were early pioneers when it came to using turbo jets for its civilian airliners British manufacturer, the Hamelin had an early hit with the comment. Joseph Stalin ordered the Soviet aircraft industry to dive head first into turbojet aircraft, which resulted in the two you one Oh four, which was in service for about 20 years across the communist bloc of countries. Boeing airplane company though, would light the industry on fire with its next big product. The dash 80 Boeing’s plan was pretty smart, given it strong relationships with the U S military company leadership wanted to develop an innovative aircraft that could fill two roles, one serve as a jet airliner of choice to the airline industry industry and to serve as the air refueler that the United States air force would need to replace its propeller driven air refuelers.

Scott Luton (14:24):

Then currently in service, the dash 80 prototype impress many and test flights in 1954. In fact, the United States air force wasted no time and place an order for 29 KC one 35 strata tankers, which is what the military variant of Boeing’s dash 80 would be called. Interestingly enough, when I served in the non air force back in the early two thousands, we had KC one 30 fives in service at McConnell air force base in Wichita, Kansas, and believe it or not, Boeing’s KC one 35 stridor tanker is still an active service in the air force is inventory here in 2020 remarkable really, but back to 1954. So with the dash 80 Boeing had its military order, but selling to the private sector, airlines was a different story. Airlines were heavily invested in profitable per propeller driven operations. Moving the turbo jets would require transformation, especially with infrastructure, but Boeing led by its then president, bill Allen would overcome the airliners objections as well as fierce domestic competition from rival Douglas aircraft company and the, and Boeing would sell the civilian version of the dash 82 pan American airlines.

Scott Luton (15:50):

The aircraft was called the seven Oh seven. It was a four engine jet with swept wing design. And Boeing had agreed to add four inches to the width of the fuselage, which allowed for six abreast economy seating. Very important to the airlines Pan-Am would become our would begin rather regular seven Oh seven service on October 26th, 1958. Over 1,700 sevens would be built until 1979, all for commercial airlines and another 800 or so 700 sevens would be built for military purposes, the seven Oh seven wasn’t the first commercial jetliner in service, but it really was the first to be widespread. Thus the seven Oh seven is regularly credited with the aircraft that ushered in the jet age. In fact, a saying was inspired by how a seven Oh seven dominated the skies back in the sixties and seventies quote, if it ain’t Boeing, I’m not going in the seven Oh seven.

Scott Luton (16:58):

Also help pave the way for what would become one of the world’s most iconic aircraft, the Boeing seven 47, which would become the highest selling commercial aircraft of all time. Truly the Boeing company would transform air travel with the adoption of the seven Oh seven in the late 1950s. But Boeing would go on to make a wide variety of innovative contributions to industry, including the ch 47 Chinook and the ch 46 senile helicopters, the lunar roving vehicle and the lunar orbiter for NASA, the early Saturn five rockets that were critical to the Apollo programs of the sixties and seventies. The silo launched Minuteman missile and the innovative seven seven Dreamliner is still very popular today in the airline industry, the Boeing company would officially move its headquarters from Seattle to Chicago in 2001. And recently the company has hit some tougher times. COVID-19 of course is wiped out much of the demand for both air travel and new aircraft, but perhaps more damaging to the Boeing brand has been the seven 37 max.

Scott Luton (18:19):

This was a narrow body aircraft that Boeing had rolled out in 2017, but tragedy hit lion air flight six, 10 crash on October 29th, 2017, killing all 189 passengers and crew Ethiopian airlines flight three Oh two crash on March 10th, 2019 killing all 157. People aboard both flights were on a seven 37 max following the second accident. The global fleet of seven 37 were grounded by authorities and production was halted by Boeing as of January, 2020, even worse on May 5th, 2019, the wall street journal had reported that Boeing leadership had known about certain system issues related to incidents the incidence. And they’d known about it a year before the first crash earlier in July, 2020 with the global fleet of seven 37, still grounded, Boeing conducted a few test flights with federal aviation administration members own board, which reportedly showed the platform fixes no word yet as to when the seven 37 max may be able to fly once again.

Scott Luton (19:40):

And the amount of damage to Boeing’s reputation is also still to be seen regardless of the current challenging environment, the Boeing company has changed the world William Boeing’s company that was launched back on July 15th, 1916 would go on to become one of the most innovative and successful companies in the world. Early on William Boeing understood his company’s role in business history decades ago. He stated quote, people want to ride on airplanes more and more. Each day we are trustees of a veritable revolution in quote, that revolution that was the jet age continues to fuel the current revolution in the digital age. And beyond that wraps up our look at the week ahead from a business history standpoint, the formation of the Boeing company certainly stood out to us. But what do you think there were no shortage of big stories during the week of July 13th in history?

Scott Luton (20:48):

What stands out to you? Tell us, shoot us a note to Amanda at supply chain. Now radio.com or Hey, join our supply chain. Now insider’s group own LinkedIn and share your feedback and perspective there. Hey, we’re here to listen. I hope you’ve enjoyed this fifth edition of this week in business history focused on the week of July 13th. And on that note, be sure to check out a wide variety of industry thought leadership at supply chain. Now radio.com fondness and subscribe wherever you get your podcasts from on behalf of the entire team here at supply chain. Now, Hey, this is Scott Luton wishing all of our listeners, nothing but the best do good give forward and be the change that’s needed. And on that note, we’ll see you next time here on supply chain. Now

Speaker 2 (21:57):

[inaudible].

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Scott W. Luton is the founder & CEO of Supply Chain Now. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and a 2019 “Top 15 Supply Chain & Logistics Experts to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. Follow Scott Luton on Twitter at @ScottWLuton and learn more about Supply Chain Now here: https://supplychainnow.com/

 

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