By Michael Lombardi and Jay Spenser
Higher fuel costs and increased competition in the 1970s shifted airlines' focus from luxury to economic efficiency. In response, Boeing's near-sonic airliner proposals gave way to new-generation subsonic jetliners, such as the 757 and 767 (above), which used technology to achieve greater fuel efficiency.
It was the bleakest time in Boeing's history. The United States was at war, the global economy had turned down, and the world's airlines -- especially the U.S. majors -- were struggling to survive. At Boeing, employment took a nosedive even as the company worked to redefine the future of flight.
This might sound like recent history, but it isn't. It happened more than a quarter-century ago, and it all came to a head in 1971. That year, Boeing logged an anemic 89 airline orders for commercial jets because of the global recession. Just 50 were for the 737 -- 19 of those from the U.S. Air Force -- and three for the brand-new 747. Today seen as enormously successful, the models were troubled programs back then, with high development costs still to be paid down.
The bitterest blow came early that year. On March 3, 1971, Congress pulled the plug on the U.S. Supersonic Transport (SST), a national technology initiative launched by President John F. Kennedy. In one fell swoop, Boeing's flagship commercial program was dead. These factors had a nearly catastrophic effect on Boeing employment in the Puget Sound, Wash. region. From a 1968 high of 101,000 workers, the figure dropped by the end of 1971 to just 38,000. So great was the economic impact that a now-famous billboard read: "Will the last person to leave Seattle please turn out the lights."
Boeing's savior in those troubled times was its president, Thornton A. "T" Wilson, a brilliant engineer and natural leader who had come up through the ranks. Surveying his company's situation, he realized that Boeing would fail unless drastic action was taken. Informed decisions needed to be made about what could go and how to plug together what remained.
Wilson stepped up to the plate. Reducing employment so drastically was the hardest thing he ever did and he felt personally the economic hardships that so many valued colleagues would experience. But it had to be done and his prompt actions saved the company.
Wilson was named Boeing chairman in 1972 on the retirement of William M. "Bill" Allen, a legendary figure in U.S. aviation. With his company once again in the black, Wilson pursued diversification strategies to make Boeing less vulnerable to the swings of the highly cyclical airline business. New Boeing subsidiaries sprouted in the fields of computers and construction, and unusual Boeing products came to market that included hydrofoils, rapid-transit trains and power-generating windmills.
In 1973, meanwhile, an embargo by Middle Eastern nations constricted the world's oil supply and drove prices sharply upward. The Persian Gulf Crisis later in the decade sent the price of jet fuel even higher.
In this changing world, Wilson and his senior engineering leaders set about to redefine the future of commercial aviation. Together they placed Boeing Commercial Airplanes firmly on course to profoundly alter air travel through the wise application of emerging technologies.