13 September 2009
In 1975 the MBTA (Massachusetts Bay Transportation Authority) had just taken delivery of new streetcars from Boeing subsidiary Vertol. Though sleek and high-tech, the streetcars were maintenance nightmares that were not working as advertised and the MBTA was planning to sue Boeing. One Saturday morning, Robert Kiley, the chair and CEO of the MBTA, was alone working in his office when he was called downstairs as he had a visitor. Arriving alone, was Boeing CEO Thornton "T.A." Wilson.
Kiley took Wilson up to his office and Wilson offered to do whatever it took to restore Boeing's good name with the MBTA as he told Kiley he felt Boeing should not have strayed into businesses it didn't know as well when it acquired Vertol in 1960. T.A. Wilson offered to do whatever it took to fix the streetcars and if they failed to do so to the MBTA's satisfaction, Boeing would repay the MBTA's entire investment in the project- about $45 million in 1970-dollars.
In the end, the streetcars couldn't be made to work and Boeing repaid the MBTA its full investment in the project.
Source: Boeing Versus Airbus-The Inside Story of the Greatest International Competition in Business by John Newhouse. Alfred A. Knopf Books, 2007, p5-6.
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