Did Stock Buybacks Knock the Bolts Out of Boeing?

You’d think that Boeing would not compromise on safety, given that one small production error or software glitch could down a plane worth hundreds of millions of dollars while killing hundreds.

But you’d be wrong.

by Les Leopold

On January 5th, a door plug blew out of the side of a Boeing 737 Max 9 plane flying for Alaska Airlines from Portland, Oregon, to Ontario, California. (A door plug is a section of the plane’s fuselage bolted in to take the place of an optional emergency exit. It is meant to be an integral part of the plane’s body.)

Miraculously, during the twenty minutes it took for the plane to circle back and land, no one was sucked out of the gaping hole. But for two decades leading up to the incident, wealth has been sucked out of the company via legalized stock manipulation to benefit Wall Street and Boeing CEOs.

Since 2013, the Boeing Corporation initiated seven annual stock buybacks. Much of Boeing’s stock is owned by large investment firms which demand the company buy back its shares. When Boeing makes repurchases, the price of its stock is jacked up, which is a quick and easy way to move money into the investment firms’ purses. Boeing’s management also enjoys the boost in price, since nearly all of their executive compensation comes from stock incentives. When the stock goes up via repurchases, they get richer, even though Boeing isn’t making any more money.

As a result, Boeing has two missions: 1) Produce profitable and safe products for their airplane-buying customers, and 2) Produce stock buybacks for Wall Street and CEOs. Unfortunately, for the rest of us, these missions are in conflict.

Finding the money for stock repurchases inevitably leads to cost-cutting. Most often, the first move is to lay off as many workers as possible. But other more subtle strategies include cutbacks in preventive maintenance and environmental controls, the outsourcing of work to lower-wage firms, skimping on health and safety protections, and underfunding quality control. The goal is to become lean and mean, skating out to the very edge of cost reductions without jeopardizing the product. Or, well, at least not harming it too much.

You’d think that Boeing would not compromise on safety, given that one small production error or software glitch could down a plane worth hundreds of millions of dollars while killing hundreds of people in one blow. But you’d be wrong.

Boeing is a world leader in stock buybacks. Between 1998 and 2018, the plane manufacturer also manufactured a whopping $61.0 billion in stock buybacks, amounting to 81.8 percent of its profits. Add in dividends and Boeing’s shareholders received 121 percent of its profits. (Data compiled by William Lazonick and The Academic-Industry Research Network, from Boeing 10-K SEC filings.)

How much is that really? Well, according to Lazonick and Mustafa Erdem Sakniç, writing in The American Prospect in 2019, Boeing, facing the obsolescence of its 737 planes, could have created an entirely new airplane from scratch with fully modern technology. Instead, the company decided to re-engineer the older model, name it the 737 MAX, and save $7 billion dollars. Perhaps not coincidentally, the $7 billion dollars “saved” is the amount of the stock buybacks Boeing made each year between 2013 and 2019.

Rather than reinvesting more deeply in the company’s products, Boeing chose to pay off stockholders and Boeing executives. In the three years before Boeing software glitches caused two 737 MAX crashes in 2018 and 2019 that killed 346 people, Boeing’s CEO Dennis A. Muilenburg received $95.9 million in gross pay. Lazonick and Sakniç report that nearly all of it was via stock incentives, since his annual salary never exceeded $1.7 million. (Perhaps again, not coincidentally, a Texas court ruled in October 2022 that the passengers killed in the two 737 MAX crashes are legally considered “crime victims.”)

And just to make sure that stock buyback production would always be a top CEO priority, Boeing announced that “beginning in 2014, a significant portion of our named executive officers’ long-term incentive compensation will be tied to Boeing’s total shareholder return as compared to a group of 24 peer companies.” If shareholder return is the metric used to judge executive performance, stock buybacks become an executive’s most valued tool.

What CEO could possibly resist pushing stock buybacks, given that nearly all of his or her income is based on stock incentives?

Of course, every CEO, especially in the airline industry, will say that safety is their top priority. If pressed about stock incentives, they say there is no conflict between stock buybacks and safety. They say that the door plug blow-out had nothing at all to do with years and years of massive stock buybacks, nor all the cost-cutting to find the money for those repurchases.

Give me a break!

Between November 1998 and January 2024, Boeing filed 491 Worker Adjustment and Retraining Notifications (WARN) amounting to approximately 45,000 layoffs. This is in a company with about 140,000 employees. Might those layoffs have had something to do with why the FAA grounded 171 Boeing 737-9 MAX airplanes after the door plug blew out of the fuselage? Might that be a reason why the FAA is now investigating “manufacturing practices and production lines, including those involving subcontractor Spirit AeroSystems, bolstering its oversight of Boeing, and examining potential system change?”

And it gets worse, because Boeing’s subcontractor, Sprit AeroSystems, subcontracted the faulty door plug production to another facility based in Malaysia, reports the National Transportation Safety Board. Good luck with that investigation.

Will government regulators have the guts to expose the chain that connects Wall Street-induced stock buybacks to cost cutting to layoffs to subcontracting to safety problems? The jury is out.

While the door-plug investigation will certainly put the spotlight on Boeing, the problem is systemic. In research for my book, Wall Street’s War on Workers, we found that more than 30 million workers have lost their jobs in the last three decades due to mass layoffs. Money that could have been spent on research, development, safety, and employee compensation in all kinds of industries was instead used to enrich shareholders. Literally trillions of dollars in stock buybacks have killed jobs and corporate reinvestment, leading to countless production problems throughout the economy. And that’s in addition to how workers, their families, and their communities have suffered indirectly during mass layoffs.

It’s a massive problem. Overall, approximately 70 percent of all corporate profits go into stock buybacks, up from 2 percent in 1982. (Data compiled by the Academic-Industry Research Network.)

Until stock repurchases are outlawed, as they essentially were before 1982, Wall Street and its CEO partners in corporation after corporation will continue to deploy what Lazonick correctly calls a license to loot.

Next time you stuff yourself into an airline seat that is ridiculously cramped, just remember that seat you’re sitting in was shaped by stock buybacks. And if you get a coveted exit row seat to stretch out a bit, you’d better think good thoughts about the underpaid, overworked, sub-contracted workers who may have made the door.


Les Leopold is the executive director of the Labor Institute and author of the forthcoming book Wall Street’s War on Workers: How Mass Layoffs and Greed Are Destroying the Working Class and What to Do About It. This work is licensed under Creative Commons (CC BY-NC-ND 3.0). Republish and share widely.


Just another mid-winter Saturday at Strawbery Banke, with skaters gracefully gliding over the ice, while being reflected in… what’s this? The waters of Puddle Dock? After a torrential rainstorm the night before, followed by a high tide, the zombie inlet staged a comeback on January 13th.


UAW Chief Says Billionaires—Not Migrants—Are Real Threat to Working Class

by Olivia Rosane

United Auto Workers president Shawn Fain argued that the current fear-mongering around the U.S. border with Mexico is an attempt by the wealthy and political elites to divide workers.

The remarks came in a wide-ranging speech at the UAW’s National Community Action Program Conference in Washington, D.C. on Monday, in which Fain repeated the union’s call for a cease-fire in Gaza, confirmed plans for a 2028 general strike, and laid out a vision for a wider U.S. political movement led by the working class.

“They try to divide us nationally by nationality,” Fain said. “Right now, we have millions of people being told that the biggest threat to their livelihood is migrants coming over the border. The threat we face at the border isn’t from the migrants. It’s from the billionaires and the politicians getting working people to point the finger at one another, when in reality, we’re all on the same side of the war against the working class.”

Fain added that the issue of immigration was personal to him because his grandparents had traveled between states to get jobs as autoworkers and become UAW members.

“They went somewhere else to find a better life. That’s all these people are trying to do,” Fain said.

The UAW has emerged as a major leader in a reinvigorated U.S. labor movement after its “stand up” strike won historic contracts against the Big Three automakers in 2023. As part of the final deal, the UAW negotiated a shared April 30, 2028 expiration date for all three contracts, opening up the possibility of a May Day strike. Fain has previously called on other unions to coordinate their contract expiration dates for the same date to allow the working class to “flex our collective muscles.”

Fain repeated and strengthened that call on Monday, endorsing a general strike.

The U.S. has not seen a mass, cross-union walkout in decades, according to The Guardian, and Fain argued that this was a mistake.

“We have to pay for our sins of the past. Back in 1980 when Reagan at the time fired PATCO [Port Authority Transit Corporation] workers, everybody in this country should have stood up and walked the hell out,” Fain said. “We missed the opportunity then, but we’re not going to miss it in 2028. That’s the plan. We want a general strike. We want everybody walking out just like they do in other countries.”

Fain said the union’s success in 2023 gave him hope.

“We shocked the billionaires,” he said, “and you know what that tells me? That if we can do things we’ve never tried before as a new UAW, we can win things we’ve never won before.”

He also pointed to the 75 percent support the strike had from the U.S. population.

“Our issues are the public’s issues,” he said.

Fain said that the union’s fight was larger than just its own contracts. For example, he noted that the union had failed to end the two-tiered system for retirement benefits. Those hired after 2007 receive a 401(k) with matching contributions instead of a pension and post-retirement healthcare, as The Detroit News pointed out. Fain argued that the UAW could resolve this in part by broadening the fight for retirement security to include the whole nation, though he said they would continue to push the Big Three as well.

“Either the Big Three guarantee retirement security for workers who give their lives to these companies or an even bigger player does: the federal government,” he said.

He added: “We can’t just fight for good contracts for our members alone. We fight for a society—from union contracts, to federal legislation, to our political system as a whole, that serves the working class and poor, that serves the people. We fight for a political program that serves humanity, not the inhumane interest of the wealthy and corporate greed.”

He also criticized the wealthy for using issues like gender identity, sexual orientation, race, and nationality to divide the working class, and it was in this context that he criticized the scapegoating of immigrants. He also emphasized the UAW’s history of backing civil rights and environmental justice.

“We have to, as a union, lead in the area of environmental safety,” Fain said. “It does no good to bargain for another dollar an hour or another week’s vacation, if on the vacation you take you can’t swim in the lake, because it’s dirty, and you can’t breathe clean air.”

Further, he emphasized the importance of international solidarity. The UAW was also the largest union at the time to officially demand a cease-fire in Israel’s war on Gaza, a demand he repeated Monday to chants of “cease-fire now!”

“We don’t stop our fight for justice at the workplace. We don’t stop our fight for justice because it’s not the right time. When and where there’s a war, whether it’s in Vietnam or Gaza, we call for peace,” Fain said.

The UAW has not yet endorsed a candidate for president in the 2024 election. Fain criticized former President Donald Trump on Monday, telling reporters he was “pretty much contrary to everything we stand for,” according to The Guardian. But he did not endorse his presumptive opponent President Joe Biden.

“We have to take the issues that matter to the working class and poor, and we have to make our political leaders stand up with us,” Fain said. “Our message in doing this is simple: Support our cause, or you will not get our endorsement.”


Olivia Rosane is a staff writer for Common Dreams. This work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.


Our Wandering Photographer drifted over to Ward 2’s polling place on Tuesday. Who turned up in his viewfinder? None other than Murph himself, seen here, somewhat ironically, on the right. Known formally—though formality would be out of character—as Michael Murphy, Murph has, for years, been one of the Gazette’s stalwart Distribution Volunteers.


Wednesday Was Elizabeth Gurley Flynn’s Day In Court

We are pleased to present the following press release from Mary Lee Sargent, Andru Volinsky, and Arnie Alpert, edited only to reflect the passage of time since its arrival. — The Ed.

The controversy over the State’s installation and removal of a historical marker for 20th century labor activist and civil libertarian Elizabeth Gurley Flynn was aired in Merrimack County Superior Court on Wednesday, January 24th.

At issue was the State’s motion to dismiss a legal complaint filed by the historical marker’s sponsors, Arnie Alpert and Mary Lee Sargent, who claimed that the State violated the law and its own policies when it ordered the marker removed based on political objections to Flynn’s politics from Governor Chris Sununu and Executive Councilor Joe Kenney.

In a legal complaint filed on August 7th, Alpert and Sargent’s attorney, Andru Volinsky argued that there is nothing in the law or the guidelines of the Department of Natural and Cultural Resources (DNCR) which provide for historical markers to be removed “on grounds of political or personal ideology.”

Representing DNCR, which administers the Historical Marker Program along with the Department of Transportation, the Attorney General argued that Alpert and Sargent lacked legal standing to file their complaint because they suffered no personal harm from the State’s action.

Born in Concord to an Irish immigrant family on August 7, 1890, Elizabeth Gurley Flynn was already a well-known speaker before reaching her twentieth birthday. As a member of the Industrial Workers of the World, a labor union which sought to organize workers without regard to race, sex, or national origin, Flynn crisscrossed the country lifting the spirits of striking workers, raising funds for their defense, and helping to organize textile, mining, timber, and other workers to win better pay and working conditions. A staunch defender of women’s equality, Flynn also became a strong advocate for free speech and was among the founders of the American Civil Liberties Union.

At the age of 46, Flynn joined the Communist Party at a time the group was campaigning against fascism and promoting a “popular front” in support of President Franklin Roosevelt’s New Deal. She soon rose to prominence within the party, for which she was indicted, tried, convicted, and sent to prison under the Smith Act.

It was Flynn’s communist associations which aroused the ire of Governor Sununu and Councilor Kenney after the Division of Historical Resources (DHR) installed the Flynn marker.

Alpert and Sargent worked for months researching and gathering support for the historical marker, all the while following DHR guidelines. After giving its approval to the Flynn marker in 2022, the DHR unveiled the Flynn marker on May 1, 2023 at a ceremony organized by Alpert and Sargent. Two weeks later it was gone, apparently moved to a Department of Transportation storage facility. According to internal DHR messages the plaintiffs discovered in a right-to-know request, the order for the marker’s removal came directly from Gov. Sununu.

According to the DHR, historical markers are meant to educate the public about people, places, events, organizations, and innovations that “had a significant impact on its times and has demonstrated historical significance.”

“That is certainly an apt description for Elizabeth Gurley Flynn,” commented Sargent, who spent decades teaching American and women’s history at the university and college levels in Illinois and New Hampshire.

For Alpert and Sargent, the marker’s removal ironically gave more notoriety to Elizabeth Gurley Flynn than might have occurred had the State left it alone.

Also ironically, the Courthouse where the January 24 hearing was held sits within shouting distance of the site where the marker used to be and from the home where Flynn was born.


“… they have capital; they have the power of the government, the slugging community of the capitalist class; they have the power of the state; they have the power of international capital—and we have but our power of organization.”

– Elizabeth Gurley Flynn

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