Boeing's big gamble

April 08, 1994

On Feb. 8, 1933, a revolutionary new aircraft lifted off the ground at the Boeing Aircraft Company's Seattle, Wash., test field and took to the skies on its maiden flight over Puget Sound. Dubbed the Model 247, the plane's cantilevered all-metal wings, stressed-skin construction, retractable landing gear and wing-mounted engines with aerodynamic cowls made it the most advanced commercial airliner ever built -- and at a gross weight of 12,650 pounds, the biggest as well.

As the sleek craft was put through its paces, a Boeing engineer was said to have remarked proudly: "They'll never build them any bigger."

In fact, within a few years the Boeing 247 had been eclipsed by even larger and faster airliners, and the company effectively withdrew from the market for commercial transports for the next three decades. Then in 1952, in a bold gamble that would make aviation history, Boeing President William M. Allen, a former corporate counsel who had no engineering background, decided to plunk down $15 million -- more than the company's entire net worth at the time -- to develop the first American-made commercial passenger jet. The 707, as the model was known, launched the commercial jet age and set Boeing on a course that would make it the world's leading manufacturer of jet airliners, a position that it has held to the present day.

Now the company is again gambling to retain America's dominance of the industry. Faced with stiff competition from the European manufacturing consortium Airbus Industrie, Boeing has sunk $4 billion into developing its latest bird, the model 777 (since 1933, all Boeing passenger planes' model designations have ended with the numeral 7). The 777 will be the largest twin-engine transport ever built, with a cargo and range capacity comparable to the 747 jumbo jet, but with half as many engines and requiring only two pilots to fly -- thus reducing operating costs by 25 percent.

Building a new plane is always a risk, but the 777's problems also include the current soft market for jets and the plane's absolute need for an expedited federal clearance to fly over water -- without which it will be difficult for the company ever to recoup its investment. The 777, which was designed entirely by computer and assembled without mock-ups, also could develop unforeseen glitches when it begins flight testing in June.

Thus the stakes are enormous both for Boeing and the U.S. Aircraft are America's biggest export, and Boeing is the largest U.S. exporter. Whether the 777 flies or fails could determine the shape of the industry leader well into the next century.

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