Magnificent Flying Machines with Skill and Pride,

By Dan Goodgame/Seattle

When six-year-old Ellis Clark hears the whine of a jet and spots the stubby shape of a 737 overhead, he brags to his playmates, "My dad makes those!" So do many other dads in Seattle, where Boeing, the world's most successful aircraft company, has its home. And those workers share the pride that their children feel. Says Dean Thornton, president of Boeing's commercial-airplane division: "Out of 100,000 Boeing employees, there's not one who doesn't get goose bumps when he sees a 747 in the air. This isn't like making toothpaste."

Thornton and his colleagues have reason to be proud. Boeing's cruise missiles and AWACS radar planes are indispensable to the U.S. military, and the company's series of jetliners--descendants of the venerable 707--dominates the commercial airways. In fact, Boeing has manufactured 55% of all the passenger jets ever built in the free world. Thanks to a dedicated work force, astute management, attention to quality and a willingness to risk billions on research and development, Boeing shows no signs of losing altitude. Its sales soared last year by 32%, to $13.6 billion, while profits climbed even faster, by 45%, to $566 million. At a time when the U.S. suffers from a record trade deficit, Boeing is the country's No. 1 exporter of manufactured products, with foreign sales of $5.8 billion last year. Amid fears that America is losing its high-tech edge, Boeing is moving full speed ahead with a radically new passenger plane, code-named the 7J7, for the 1990s and beyond.

Since 1945, Boeing has had only two top men: William Allen and T.A. Wilson, who took over as chairman in 1972. Wilson, like Allen before him, has run a tough, efficient operation with very few frills. While many Seattle offices look out on picturesque Puget Sound and snowcapped Mount Rainier, Boeing's corporate headquarters faces a railroad track and an airstrip in a grimy industrial zone. A down-to-earth Missourian, Wilson, 65, has been known to drop in on the machinists' annual Christmas party with one of his wife's pecan pies. During the airline-industry slump in the early 1970s, however, he did not hesitate to lay off nearly two-thirds of the company's 148,000 workers.

Perhaps the most vital ingredient in Boeing's success is its willingness to bet billions of dollars, and sometimes the whole company, on new types of planes. In the late 1960s, Boeing executives risked more than $1 billion on the first jumbo jet, the 747, and nearly drove the firm into bankruptcy. A decade later Boeing rolled the dice again by investing $3 billion in the simultaneous development of two fuel-efficient, twin-engine jets, the trim 757 and the wide-body 767.

Now, even though sales of the 757 and 767 have been disappointing, Boeing is back at the drawing boards and wind tunnels working on the 7J7. Its selling point will be a revolutionary engine, called an unducted turbofan, that may increase jet-fuel efficiency by 35% to 45%. The new engine is expected to look like a futuristic eggbeater, bristling with twin sets of curved rotor blades that are exposed like propellers but face backward. Boeing is currently studying competing engine designs from General Electric, Rolls-Royce and Pratt & Whitney.

The projected launch cost of the 7J7 is so enormous--$10 billion--that not even Boeing can go it alone. To keep its exposure to between $1 billion and $3 billion, the company has taken the unprecedented step of seeking foreign investment. A consortium of Japanese firms has already agreed to kick in as much as $1 billion for 25% of the project.

The development of the 7J7 will be the responsibility of Frank Shrontz, 54, who became chief executive last month. A Harvard M.B.A., Shrontz will need all his financial skills to guide Boeing in the new era of $10 billion airplanes. To reduce the company's dependence on the volatile commercial-jet market, he intends to continue increasing business with the military and to lead Boeing into the high-profit fields of aerospace electronics and computer systems. He insists, however, that "what we know best is commercial aircraft, and we will stick with it."

Supreme as Boeing's reputation is, it is also fragile. On those very rare occasions when a Boeing jet crashes, a shudder not only of sympathy but of concern goes through Seattle. When a Japan Air Lines 747 went down last year, killing 520, the company sent a twelve-member team of investigators to the scene. Boeing later admitted that repair work it had once done on the plane's tail area had been faulty.

The tragedy shocked Boeing's employees. But it also seemed to redouble their determination to build the best and safest possible planes. Just ask workers like young Ellis Clark's dad Stanley, who installs 737 flight-control cables. Says he: "I watch something come in one door as thousands of parts and roll out the other door as a ready-to-fly airplane. There's a great satisfaction to that. I can say, 'That baby is mine.' "