What would have happened if Boeing’s CEO had rushed to Ethiopia last March to stand beside his Ethiopian Airlines counterpart after the crash of a 737 MAX that claimed 157 lives? If at that early moment he had delivered in person a message of contrition and deep sorrow for the victims and their families? If his company decisively had asked operators to stop flying the MAX out of an abundance of caution until investigators learned more about what caused the second crash of the aircraft in less than five months?
If Dennis Muilenburg had done all that, might he still have his job—and might one of corporate America’s greatest crises have been avoided?
Our industry desperately needs a strong Boeing, and just a year ago it appeared to have one. Muilenburg was Aviation Week’s Person of the Year for 2018, and with good reason: A push into the lucrative aftermarket business was accelerating and major Pentagon contract wins were rejuvenating its defense business. Profits were soaring, and the company’s stock value had more than tripled in three years as Boeing returned mountains of cash to shareholders.
Yes, investigators were probing the crash of a Lion Air MAX in Indonesia that had taken 189 lives, but operational issues, not fundamental flaws in the airliner’s design, were seen as the most critical links in the accident chain. The FAA had determined the aircraft was safe to fly while Boeing devised a software fix for its Maneuvering Characteristics Augmentation System (MCAS).
Then it all changed. Boeing’s public image was battered as it came to light that most airline pilots did not even know of the existence of the MCAS, which triggered both crashes. Boeing’s timelines on the MAX’s return to service proved overly optimistic again and again, vexing customers. Hundreds of undelivered 737s filled up the parking lots near Boeing Field. Relations with the FAA grew testy. And a firestorm of media coverage—some fair, some overly sensational—painted a picture of a company being run by sharp-elbowed and tone-deaf lawyers. The contrition came, but it was late and sometimes appeared calculated.
Muilenburg was fired on Dec. 23 and will be succeeded on Jan. 13 by longtime board member David Calhoun. But his departure hardly will cure what ails Boeing. The company still has to get the MAX back into service. When that will happen is anyone’s guess. It also needs to figure out a next-generation airplane design to compete with Airbus, which has had phenomenal sales success with the Neo, particularly the A321 version.
There are two broader issues at play: culture and governance. Numerous industry veterans believe Boeing’s culture has been infected with arrogance and an emphasis on profits and shareholders over engineering excellence and innovation. The company’s website boasts that Boeing has returned nearly $50 billion to shareholders in dividends and share repurchases over the past five years. Would it not have been better to reinvest some of that in cutting-edge products? Muilenburg, who spent his entire career at Boeing, did not create that culture. He is a product of it. Remember that his mentor, former CEO Jim McNerney, promised “no more moonshots” after the bills for the 787’s delays started mounting.
It is hard to foresee meaningful reform if Boeing’s governance is not fixed. Muilenburg may be gone, but the board of directors that presided over this mess is still in place and sorely needs an overhaul. Can we really expect anything different if the same group keeps calling the shots in the boardroom? Former Continental Airlines CEO Lawrence Kellner, the board’s new chairman, has work to do.
Calhoun, the new CEO, is capable and respected. He spent 26 years at GE and ran its aircraft engines business. He has served on Boeing’s board since 2009 and was a finalist for the CEO position before McNerney got the job. However, that was 15 years ago, and Calhoun has not worked a day job in aerospace since he left GE to run Nielsen in 2006. At 62, will he stay for the long haul? Or will he stabilize the company and groom a younger successor who can take over in 1-2 years and guide Boeing toward making its next momentous decision: when to launch a next-generation narrowbody airliner?
The aviation industry needs a robust, responsible Boeing. It needs a vibrant, reliable competitor to Airbus, and safe and sustainable new aircraft. It is time for some more moonshots.
—Joe Anselmo, Editor-in-Chief
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Comments
Stonecipher broke Boeing, and in order to fix it, it needs to go back to being what Boeing was, a group of engineeers masquerading as a company.
The financial engineering, stock buybacks, etc. must end.
Boeing should save passengers to have to cross the Pond for flight up to 9 hours on narrowbody and slow A320neo and A321XLR designed for ne hour hops.
The huge crisis of Boeing could have been avoided, had Boeing applied a more forthcoming Communication Strategy in "The Court of Pubic Opinion" and with the other Stakeholders (CAAs).
By Boeing respecting the internationally agreed professional communication protocols - that were not respected by the other parties involved - Boeing created the impression of being insensitive to the pain of those that suffered the aftermath of these two tragic accidents.
Boeing should have more aggressively and proactively counteract the stream of emotionally loaded partial information that eventually created the atmosphere of public lynching against a "Large Corporation".
At the same time Boeing should have acted more aggressively to resolve the related technical issues that were observed even before the accidents.
These actions were however going against the internal Hierarchic Dictatorial Culture of Boeing.
Of course, ..."Hindsight is 20/20".
Will Boeing (and not only Boeing - I have witnessed it in other Corporations too) change its internal Hierarchic Dictatorial Culture to more effectively act against similar future events?
That is a good Question.
Second they must continue the cultural change already begun by having separate engineering and commercial chains of command, no financially biased interference in the design and manufacturing processes.
Third (and hardest) accept that the 737 and 767 are past their 'sell by' dates. The time and effort invested in both the NSA/FSA and the NMA needs to be harvested and turned into new airframes fit for the coming environmental scenario, which may already be with us.
Boeing's luster has been tarnished because they put Profits ahead of People's lives. By the time lion Air had crashed there were already enough Pilot complaints about the MCAS system to warrant an investigation, but Boeing ignored it.
There are Three items that need to be addressed for the flying public to have their faith restored in Boeing, and this HAS to happen before their next airplane is developed.
1. Safety Critical systems should not require upgrades. In the case of these two crashes they only had one sensor and no disagreement alert. Boeing tried to sell these as "enhancements" again tying to drive profits by selling "extra's" that turned out to be requirements.
2. Boing cannot continue the "Blame game" and point the finger at everyone else until everyone else proves themselves innocent. Boeing need to be proactive role in ensuring that they do not have a problem before pointing fingers.
3. Boeing needs to ensure that their training programs are comprehensive and complete, not some 5 minute ipad quiz.
There needs to be a public reset at Boeing to refocus on engineering excellence, not looking at how great the stock price is doing. As TJ Watson once said, and I'm paraphrasing, "If you look after your customers, look after your products and look after your employees, your stock will look after itself.
Coincidentally, *what* is going on with the website? It doesn't seem to have been updated after the big fanfare of its release - it's still buggy, slow and there's a lot less content available online (or at least easier to find) than the previous version. I can't see how this site "update" and no fixes is helping the Aviation Week brand.
To be regarded as a great company in the 2020’s and decades beyond,
Boeing must be seen as a major force in the airline industry in
reducing the industry’s fast growing carbon dioxide emissions. These will reach a billion tons a year in 2020. That’s 50% more than were forecast 10 years ago and on their way toward doubling or tripling. Boeing will need to purge their board and top tier management of those who disbelieve that climate change is caused by human
activities
Jim Krebs, Jan.7, 2020
To be regarded as a great company in the 2020’s and decades beyond,
Boeing must be seen as a major force in the airline industry in
reducing the industry’s fast growing carbon dioxide emissions. These will reach a billion tons a year in 2020. That’s 50% more than were forecast 10 years ago and on their way toward doubling or tripling. Boeing will need to purge their board and top tier management of those who disbelieve that climate change is caused by human
activities
Jim Krebs, Jan.7, 2020
Finally I echo Myke Predko's thoughts on the AvWeek website : hardly any content available to a standard AW subscriber.
Sad to hear that the revised AW is squeeze on the basic subscriber.
Boeing Engineering had already designed a change which eliminated the single point of failure leading to MCAS sudden and repetitive activation, however it was considered as a costed option. I can tell you that Engineering won't develop such a change unless they are far from satisfied with the original design. How many MAX had the change embodied before delivery ?
Should this change been considered as mandatory on the initial FAA Airworthiness Directive second accident may have been avoided.
I concur with general comments about overwhelming financial domination on big corporations (too much influence of CFOs) but if you are manufacturing freezers or umbrellas your decisions do not kill people.
Yes, AW&ST, the plant, the stooge, who publicly gave and continues to give credibility to Boeing without disclosing that they have a too close a relationship with Boeing. AW&ST carried on its propaganda operations for Boeing in the media, through it's so-called journalism.
In helping Boeing in its marketing, its politics and in other aspects of Boeing's business areas.
AW&ST also acted to discredit opponents or critics Boeing, again, never disclosing their vested interest in the 737 MAX product.