A generation ago, any list of America’s most admired manufacturers would have had Intel and Boeing near the top.
Today, both are on the ropes. Intel has suspended its dividend, slashed jobs and capital spending, and is a takeover target. Boeing has been hobbled by investigations into crashes and a midair mishap, production delays and a strike. A breakup or bankruptcy are no longer unthinkable.
In the past five years the combined market value of the two has fallen by half. More than just an ordeal for shareholders, this is a potential disaster for the nation.
The U.S. is in a geopolitical contest with China defined not just by military power but economic and technological prowess. Leaders from both U.S. political parties say they are on the case, pushing for tariffs and subsidies.
Whatever their merits, these measures don’t address the fundamental problem that Boeing and Intel represent. The U.S. still designs the world’s most innovative products, but is losing the knack for making them.
At the end of 1999, four of the 10 most valuable U.S. companies were manufacturers. Today, none are. The lone rising star: Tesla, which ranked 11th.
Intel and Boeing were once the gold standard in manufacturing groundbreaking products to demanding specifications with consistently high quality. Not any longer.
Neither fell prey to cheap foreign competition, but their own mistakes. Their culture evolved to prioritize financial performance over engineering excellence, which also brought down another manufacturing icon, General Electric.
