THE BOEING 707 STORY
Boeing, now a leading manufacturer of commercial aircraft, was, at the end of WWII, a non-entity in the business with a market share of 1%. The company knew how to build bombers and specialized in military aircraft sales, success in the commercial market had eluded them. While competitors Lockheed and Douglas were cashing I on the ‘peace dividend’ turning out Constellations and DC 4s, at Boeing they referred to the drop-off in military orders as the ‘Peace problem’. Caught between WWII and the cold war, military contracts, Boeing’s bread and butter, were down and so were earnings. For his company to survive and thrive, Boeing President William Allen needed a revolutionary airplane to break into the commercial market.
Allen explored the idea of a commercial jet production using the experience gained on the design and building of first jet powered bomber, the B-47, The swept back wings and pod mounted engine concept could be carried over to a new passenger jet.
On his way to the UK for a demonstration of the new British de Havilland jet powered Comet Allen stopped in Wichita for a ride new Boeing designed new b-47. Cruising in the stratosphere at 600 mph was a heavenly experience when compared to the slow, vibrating the DC-6 prop planes he flew on business trips to Chicago. If he wasn’t totally convinced about the future of jets at Wichita, he was after the agonizingly slow return flight over the Atlantic in a propeller-driven plane. “I thought we’d never arrive,” (he must have been flying on one of those lumbering Boeing Stratocruisers). Allen returned to Seattle with a vision for Boeing; jet flight was the future of commercial aviation and Boeing would lead the way using its bomber experience to produce a commercial jet.
THE PROP-LINER BLUES. From the leading edge of the wing to the cockpit bulkhead engine the pounding of engine cylinders and whirling props mercilessly pounded passenger eardrums. the best seating was located at the rear of the plane.
Photo by permission Propfreak http://www.airliners.net/search/photo.search?id=943006
HE BET THE FARM
THE LONG SHOT
Few shared his vision. Boeing’s competitors, Douglas Aircraft and Lockheed, looked at the development price tag, the risk, financial, and technical, and shelved any serious thought of passenger jets. Boeing was on its own.
Undeterred Allen proceeded with preliminary design and in 1952 announced that its order book was open for the new Boeing 707. Airline executive clicked their slide rulers and shook their heads’; the costs per seat mile were astronomical. Money was tight; airline companies were already mortgaged up to their tail fins paying down new propeller plane purchases. Sticker shock set in; Boeing’s new 707 cost $4.5 million a copy versus $1.8 million for a new prop driven DC 7. American Airline’s president C.R Smith summed it up. “We can’t go backwards with jets… I’m interested in cheap transportation.” (The Chosen Instrument M Bender S Altschul p 170)
Even if they were mildly interested, purchasing aircraft from Boeing required a leap of faith no one was willing to take. The company’s dismal record in commercial aircraft (Boeing had lost money on virtually all its airliners) placed the company on the bottom of the airlines vendor list.
One last problem, – money, Development of a prototype 707 would consume all of the profit the company had made since the end of the World War II. No customers, no money, no problem, at least for a determined William Allen. Between tax write offs and a raid on equity he scrapped up enough cash to cover development cost. The move came with substantial risk according to Boeing archives, Allen and his management are said to have “bet the company” on a vision that jet aircraft were the future of commercial aviation. The bet; $ 16 million to build one prototype airplane, a large sum in 1952 that drained ¼ of the company’s net worth and left Boeing in a precarious financial position. If Allen got it right, Boeing’s would prosper. If he failed, according to company historian Michael Lombardi, “The Company would be done.”
Under the circumstances Allen could have called the 707 project off; no one would have blamed him if he did. Placing the company’s future on a single product with no orders on the books was reason enough. However that was not the plan, and Allen, who had the instincts and nerves of a high stakes poker player, never wavered in his vision that a new jet age was just around the corner and Boeing was going to cash in.
On May 14 1954 the 707 prototype, nicknamed Dash 80, rolled out of the hangar for its first public viewing. It dazzled the crowd, with its space age looks including pod mounted engines and the swept back wings of a modified jet fighter. The first test flight took place on July 15 1954. Bill Allen wished the test pilots good luck and walked away – a little stooped noted test pilot Tex Johnston, “At this point, that $16 million gamble was a heavy burden” . When Johnston released the breaks the plane leaped forward accelerated rapidly and was airborne by mid-runway. After a steep climb to 12,000 feet Johnston tested the plane’s controls and handling. It was a dream to fly, quiet and vibration free. Back on the ground a relieved Allen gave the flight crew a warm welcome. “He stood straight and tall as we shook hands,” recalled Johnston. “That $16 million burden had somehow become a bit lighter. The feel of his handshake and his words of congratulation will remain with me forever.” One year later, Johnston took to the air again for a performance that again astonished the crowd and shook Bill Allen to his core – it would be fifteen years before he could talk about it again.
 Tex Johnston jet age test pilot p 186
Three years after introducing his new 707, William Allen had burned through $16 million of stockholders equity and had yet to sell one plane; his vision stood on the edge of failure. It was about to be rescued by his chief test pilot, a natural showman with a bag of aerial trick perfected during his barnstorming days in a flying circus. Tex Johnston’s plan to make the new 707 famous involved some risk, mainly getting fired, so Johnston kept silent waiting for a chance to show the plane off.
On the afternoon of August 7, 1955, over 200,000 spectators congregated on the shores of gathered on Lake Washington to watch the speedboat races. William Allen ordered ‘Tex’ to take the plane up and give the hometown crowd a look at the new 707. The buying crowd was there also. On a yacht, anchored offshore, Allen and his executive team were entertaining the heads of virtually every major airline in the world. In town for a conference, they came to get a good look at the plane Boeing had staked its future on.
Well they got it. Approaching the lake at a speed of 490mph, altitude 200 feet, Johnston took the big screaming jet over the race course for an for a thrilling up close look. – Then to everyone’s surprise the 707 suddenly started climbing and began rotating on its axis. It’s long, swept-back wings rotating around the body in a barrel roll. Aviation executives gasped as the plane flew briefly upside down in a slow, languid roll. Then, just in case no one had noticed, Johnston made a shallow dive down to 300 feet and did it again.
A dazed Bill Allen felt sick as he watched his $16 million dollar investment flip through the air flying upside down seemingly out of control. Either something was wrong with the plane or the pilot had lost his mind. He turned to a friend for some heart pills. His distress was understandable; you just don’t do that with an airliner; fighter jets perhaps but not a 128-foot-long, 160,000-pound plane with four heavy jet engines and a 130-foot wing span.
The next day a seething Allen gave Johnston hell. The test pilot held his ground, ” I was selling your plane“ he told Allen, “I didn’t do anything the plane couldn’t’ do…it was never in an unsafe condition.” (100 years of Boeing Russ Banham) No doubt about it, Johnston put the 707 on the map…Or, as an aviation friend reassuringly told Bill Allen, ”Tex has just sold your plane for you.” within a month Boeing received its first order from Pan Am.
Pan Am President Juan Trippe
THE 707 TAKES OFF
Just as sales of the 707 started to take off, Douglas moved in with a slightly larger DC 8. Donald Douglas strategy was to let Boeing do the heavy lifting then move in with a better plane and steal their orders. in 1955 the strategy was working, airlines were switching their orders from Boeing over to the larger DC 8. A stunned Allen, who had started the jet race, was not about to let Douglas cross the finish line first.
To gain market share the Boeing president agreed to meet individual airline design demands. Need a bigger engine? We can do that; need the plane stretched, widened, short ranged, long ranged? no problem. Plane by plane Allen wore Donald Douglas and his DC-8 down. By 1956 the strategy was paying off with the 707 outselling the DC-8 by a margin of three to one. The dual was costly but Allen had the deeper pockets and outlasted Douglas. The good news, Boeing would sell over 1,010 707’s, Douglas only 556 of its DC-8 – the bad news, because of the design changes the 707 would never be particularly profitable.
In the long run, Bill Allen’s vision paid off. Boeing went on to become the world’s leader in the design and production of commercial jets. Under Allen’s leadership, Boeing built the 707, 727, 737, and 747–four of the most successful airliners in aviation history.
It takes courage to wager a company’s future on your vision and a new technology. It takes fortitude to stay the course when all looks lost.. When asked why he took those substantial risks, Allen said, “We felt strongly that it was high time some American manufacturers took the plunge and got jet transport off of paper and into the air”(Boeing Frontiers). Allen and the employees of Boeing showed us how it’s done.
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