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Jonathan O. Connell
Reporter covering economic development with a focus on commercial real estate and Trump organization
Dan Lamothe
Reporter covering the Pentagon and the US Army
Top economic advisor to President Bill Clinton, Dorothy Robyn was responsible for advancing the US aerospace industry.
Part of the job was not choosing sides between companies. But there was one exception: Boeing.
"This is the only company for which I can be a strong advocate," Robyn said Thursday. In competitions between American companies, the administration remained generally neutral. But Boeing's commercial aircraft division employed tens of thousands of Americans and its main competitor, Airbus, was in Europe.
"In the engine sector, you can not choose between GE and Pratt & Whitney. With Boeing, that's it. They are ours. It's the only area where we have a de facto national champion and where you can be an outstanding advocate. "
In its 102-year history, dating back to the beginning of the First World War, society and the country are building on each other, creating hundreds of thousands of jobs, equipping the United States advanced military aircraft and providing aircraft worldwide for the growth of passenger air travel and boosting US exports.
But now that Boeing and US regulators are being criticized for their slow response to the Boeing 737 Max 8 crash in Ethiopia, Boeing's mixed interests with the US government are being addressed. a new and careful examination.
There is a lot to examine.
For decades, US presidents have defended the company's interests, particularly over the last 30 years, by flying primarily on the two Boeing VC-25As that serve as Air Force One when the president replaces them.
President Barack Obama has hired Boeing board members to serve as chief of staff and secretary of commerce. Against the Republican opposition, he fiercely defended the Federal Export-Import Bank, which has subsidized so many airline sales to foreign carriers by offering loan guarantees that conservative critics have termed "Boeing Bank" .
"I must say that, given the number of planes I sell in the world, I'm expecting a golden watch for my retirement," Obama said at a Boeing plant in 2012.
President Trump seemed to have a chaotic start with the company, criticize Boeing Air Force One contract before taking office. But Boeing chief executive Dennis Muilenburg, while praising Trump's "business helmet," is committed to cutting costs and gaining favor with the president. Trump then made the unusual move to allow Muilenburg to make a phone call to an Air Force General who runs the Pentagon's largest weapons program. In December, Trump named Patrick M. Shanahan, a former Boeing executive, as acting Defense Secretary after the resignation of Jim Mattis.
President Barack Obama expresses himself in a Boeing factory in Everett, Washington, in 2012. (Ted S. Warren / AP)
And Trump's policies, which led to a sharp increase in US exports and increased military spending, have been beneficial for Boeing, which has seen its stock market triple since taking office, before falling during the first half of the year. last week's crisis.
Boeing was one of the major companies that spent money last year trying to influence US government decisions. The Chicago-based aerospace giant spent $ 15.1 million lobbying the federal government, employing about 100 lobbyists on its behalf.
In addition, Boeing's Political Action Committee made $ 2.4 million in donations to political candidates between 2017 and 2018, the eighth largest among businesses, according to the Center for Responsive Politics. Recipients included 329 current members of Congress.
The last few years have been particularly favorable to the financial results of the company. Boeing recorded a record In 2018, the business turnover of $ 101.1 billion, up 13% over the previous year, and about a quarter of that amount came from government procurement. In 2017, Boeing received approximately $ 23.3 billion in past taxpayer funded contracts, not including classified military funding. And its joint ventures with Lockheed Martin and Bell Helicopter Textron received $ 2.2 billion and $ 2.5 billion, respectively, in federal funding in 2017.
The company's shares hit a record $ 446 per share this month, before falling after the crash of Ethiopian Airlines flight 302 a week ago. He closed Friday just under $ 379 per share.
Daniel Auble, senior researcher at the Center for Responsive Politics, called Boeing "an excellent illustration" of "the undue influence of money in our political system".
In response to questions about the company's lobbying and campaign expenses, Boeing issued a statement in which he defended his practices.
"As the country's leading exporter and leading producer of commercial and defense aerospace products, there are a number of important policy issues at the federal, regional and local levels that could impact our business, our diverse workforce and supply chain. . Our team is dedicated to telling Boeing's story and supporting policies that advance the aviation and manufacturing industry in the United States in the communities where we live and work. "
Boeing's growth has clearly benefited the United States. Boeing remains one of the country's leading manufacturers, employing about 153,027 people in the United States at a time when Trump has made domestic manufacturing a top political and political priority. Boeing serves one of the largest exporters of goods in the country.
"Whenever the government is looking to increase exports, you will generally find that Boeing is heavily involved in all of its initiatives," said Andrew Hunter, Defense Sector Expert at the Center for Strategic and International Studies. "It was true in the Obama administration and it's true in the Trump administration."
Hunter said that in some cases the government enjoys close relationships with private enterprise, for example when agencies work with private sector scientists to develop new technologies.
"The risk, of course, is that when regulatory agencies work closely with a company over a long period of time, there is concern that this will undermine its independence," Hunter said.
Robyn, former adviser Clinton, said she was known as "Mrs. Boeing" in the White House for her intervention on various issues concerning corporations, from titanium imports to relations with unions of machinists. She said that the attention came from Clinton himself.
"If The Economist published an article about the Boeing-Airbus competition, he would highlight it and send it to my boss. . . ., "she said," He was everywhere, and everything was a matter of work. "
US transport authorities continue to ask why Ethiopia's Boeing 737 Max 8 crashed. Congress is asking for answers on the Federal Aviation Administration's monitoring of Boeing, especially after the FAA did not act faster to anchor its planes on the ground, but on the contrary waited until European regulators, Chinese, Australian and elsewhere have done so.
Muilenburg met with Trump twice a week after the crash of Ethiopia to reassure him about aircraft safety, raising concerns that the company could have an undue influence on security issues . Larry Kudlow, director of the Trump National Economic Council, said their conversation should not be misinterpreted.
Speaking as part of C-SPAN's "Newsmakers" program, Mr. Kudlow stated that Trump had sent a stern message to Muilenburg and that the decision to place the aircraft on the ground "does not make any sense." has nothing to do with commercial considerations for us, and all of this has to do with security considerations.
FAA Acting Director Daniel K. Elwell on "Today" on Friday defended the speed with which the US regulators grounded the device, claiming that it does not was not until after receiving additional information that they were convinced that a link between a Lion Air crash in Indonesia in October, also involving a Boeing 737 Max, and the 10th of March crash of Ethiopian Airways was "close enough".
"You have to establish more than just the feeling that two accidents are linked before you throw out a whole fleet," he said.
Deaths in the United States resulting from aircraft accidents remain extremely rare. In a speech at a forum on aviation safety last year, Elwell pointed out that the country had spent more than nine years, or about 90 million flights, without casualties.
In response to questions about the agency's relationship with Boeing, the FAA issued a statement in which it attributed its "excellent current safety record".
"The approach we have used over the years is the same one that has served us well. Safety is always and will be our top priority. "
Randy Babbitt, who led the FAA under President Obama from 2009 to 2011, agreed with this view. "Years ago, plane crashes were almost a thing of the past. It was like hearing about a car accident, "he said. "The reason there is so much attention around recent accidents is a proof of the safety of the system."
In addition, Boeing has long been a powerful supplier of aircraft to the US military, building nearly 100,000 aircraft for the Second World War. In recent years, Boeing has sought a greater number of military contracts, not without controversy.
Boeing signed several major defense contracts in the fall, marking a turnaround after losing competitions to move the F-35 fighter and B-21 bomber to Lockheed Martin and Northrop Grumman, respectively.
Boeing would also be the recipient of more than $ 1 billion requested by the Pentagon in Trump's 2020 budget proposal for the purchase of eight F-15X fighter aircraft. Senior Air Force officials have stated that they oppose this expense, saying that money would be better spent by buying Lockheed Martin more F hunters. -35, which, unlike the F-15X, are equipped to escape advanced anti-aircraft defenses.
The company, which is now the second largest defense supplier in terms of federal sales, appears to be concerned about the company's negligence and the fact that the company is meeting its obligations to the company. 39; army.
Will Roper, Deputy Secretary of the Air Force, told a House Services Subcommittee that he had been to Boeing last week after the Air Force had been alarmed by the amount of rubbish, tools and other items left behind. The KC-46 tankers that Boeing was delivering.
Boeing began delivering tankers in January, two years behind schedule and exceeding the budget by $ 3 billion. Foreign debris can be sucked up by aircraft engines and damaged or destroyed.
"To put it bluntly, it's unacceptable," Roper told the legislator. "FODs, or foreign body debris, are something we deal with very seriously in the air force. Our flight lines are impeccable. Our deposits are impeccable because debris is a security problem. "
Roper said he and other department officials had reviewed Boeing's correction plan and had come out satisfied. Boeing said, "Safety and quality are our top priority. We are committed to providing aircraft without FOD to our customers and we have put in place an agreed action plan. "
Shanahan, who has almost no government experience, has recused himself for issues related to Boeing. Pentagon officials have not responded to a request for comment.
The close relationship between the Pentagon and Boeing fits into a long-standing culture of revolving doors in which senior defense officials alternate between government jobs and defense subcontractors.
In 2004, Darleen Druyun, senior Air Force procurement officer, was sentenced to prison after confessing to having approved the purchase of 100 refueling aircraft from Boeing at an inflated price of approximately $ 20 billion to improve its employment prospects with the company. She also leaked exclusive pricing information to a competitor and helped Boeing get an additional $ 4 billion in thanks for hiring her daughter and future son-in-law.
Druyun pleaded guilty and acknowledged that he gave Boeing special treatment. The court records also showed that Boeing's leaders had also played a role, pushing the employment discussions after Druyun had suggested she had to wait. Boeing commissioned his own review of the scandal and discovered weaknesses related to his practices in recruiting former government employees.
In 2016, Boeing employed 84 former Defense Department officials as executives, board members or lobbyists, according to a report last year from the government oversight project. This far exceeded the 55 employees of Lockheed Martin, Boeing's competitor.
The report's author, Mandy Smithberger, said the revolving door posed the question of whether US authorities – including regulators – were reluctant to say no to Boeing, for fear of compromising their prospects for the future. the future they left the public service.
"This raises the question of whether they are struggling to protect their potential employment in the company when they leave the government," she said.
Despite the current malaise about Boeing's possible failures on the 737 Max, Trump has largely joined his predecessors to become a prominent seller of the company.
At an investor results conference in 2017, Muilenburg said about the company's relationship with the president: "We had the privilege of talking very openly with him on trade issues."
Six months earlier, in a speech to a Boeing plant in South Carolina in 2017, Trump concluded his speech to the crowd in these terms: "God bless you, God bless the United States of America. America and God bless Boeing. "
Damian Paletta, Christian Davenport, Karoun Demirjian and Aaron Gregg contributed to this report.
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