Lots has happened in the meantime – but now, in December 2019 there are two new milestones: first Boeing halted the production of the 737 Max and only a few days later, finally… CEO Dennis Muilenburg was fired.
German Spiegel (and a few others) reported on December 23rd, that Boeing CEO Dennis Muilenburg “stepped back” – while most international media reported that he was fired – including details about the call in which the board members made the decision and the call Muilenburg received from Calhoun, who informed him that he was “out”.
New York Times:
“On the call, the board members, who were scattered around the country preparing for the holidays, made the unanimous decision to remove Mr. Muilenburg.
Even though they got the important facts right – that it is unlikely anything major will change, there is quite a difference between “getting fired” and “stepping back”…
Muilenburg had become “famous” for probably one of the worst cases of crisis managements in this century. He also became known for not giving the crashes priority attention (“third world incidents”) and partially blaming the pilots for the crashes. His strategy of denial and coverups was known to be driven by his legal advisors who tried to increase their chances for a smooth trial. Boeing executives had known about the aircraft’s (Boeing 737 Max) problems and the deadly risks associated to them. For not reacting properly to the first crash – they are responsible for the victims of the 2nd crash and belong in front of a jury. Muilenburg getting fired is hopefully just the beginning of their “lesson”. Maybe, at some point they will display true empathy for the victims and show real regret.
(May 2019) Boeing executives seem to finally have reached the breaking point – and start to step down from their high horses. While this might be a major step into the direction of ending the crisis, it might be coming to late to save the 737 Max:
“Barclays’ survey of airline passengers says many people will avoid the 737 Max “for an extended period” once the aircraft is flying again.” https://www.cnbc.com/2019/05/07/barclays-downgrades-boeing-survey-shows-fliers-will-avoid-737-max.html
Signs of a direction change at Boeing:
Strategie to return the 737 Max to service: “… plans to “turn the fleet back on” once regulators clear the Max to fly. Other topics include pilot training, software updates and a public campaign to bolster the jet’s bruised reputation.”
Admitted that the lack of transparency has caused (additional…) problems: “We know that we have a number of areas where we need to improve, including transparency,” Johndroe said in an interview.”
Boeing’s folding to the pressure follows recent discoveries that the airplane builder had known about the 737 Max issues before, between and of course after the two crashes that killed 346 people.
“Boeing has admitted that it knew about a problem with its 737 Max jets a year before the aircraft was involved in two fatal accidents, but took no action.”
Business Insider: Boeing’s CEO is beefing up his legal team as it braces for 737 Max crash lawsuits.
The joint governmental review of the Boeing 737 Max, led by the US`FAA has started yesterday (April 29th). For May 23rd, the FAA has invited global aviation regulators to discuss the “un-grounding” of the (now…) infamous Boeing 737 Max. These dates are critical milestones for Boeing, the suffering airlines, air-travellers – and even Airbus.
The crisis might cost Boeing billions in shareholder value (the company prefers to refer to it as “an estimated cost of one billion in actual expenses”) and has shown weak crisis management and/or arrogance in managing the issue. One of the ethically more concerning tactics of Boeing is sticking to the statement “(the crashes) were caused by a series of events” leaving room to delegate some of the responsibility to airlines and even the deceased (hero-) pilots.
From the beginning, Boeing’s strategy to deal with the crisis was to cover up and look for “quick fixes” (software patches…). The families of the victims of the first crash were fobbed off with the legal minimum of USD 90.000. Would the first crash have been examined properly, the second one could have been avoided. But hey, “third world pilots and airline”, right…?
The crisis communication of the aviation (and military) giant was weak at best and obviously dictated by lawyers and the attempt to conserve shareholder value. While “the plot keeps thickening” and whistle-blowers are applying additional pressure on Boeing’s public image, concessions seem to be appearing: For the first time, real changes are entering the discussion. A safety feature, that used to be an outrageously priced option is now standard on all Boeing 737 Max:
Recent details uncovered by the WSJ make it harder for Boeing to keep the network of lies intact and hide the lack of empathy for the victims (the deceased air-passengers). But even Boeing’s customers, the airlines, are suffering devastating losses because of the incident. They are in a “no-win” situation, they have to “swallow the loss” and stick with Boeing. The obvious alternative, Airbus is no real option, since their orders are booked out all the way into 2024 – and there is no way to pass the waiting list – like these guys seem to be dreaming about: https://www.cnbc.com/2019/04/29/emirates-looking-at-possible-airbus-option-after-boeing-737-max-grounding.html
And even Airbus is keeping very quiet about the crisis – hoping Boeing can resolve their issues rather sooner than later: “Airbus outgoing chief executive Tom Enders expressed hopes Boeing and US Federal Aviation Administration would soon resolve a crisis over the grounding of the 737 MAX and said the two planemakers stand together on safety. “Accidents like the one in Ethiopia create doubts for safety, not just concerning one manufacturer of aircraft but all manufacturers, for the public,” Mr Enders told shareholders on Wednesday. “We never compete on safety. We learn from it but don’t compete,” he told an annual shareholder meeting. https://www.businesstimes.com.sg/transport/airbus-chief-hopes-boeing-and-faa-can-resolve-737-max-crisis-soon
Boeing boss denies reports 737 Max safety systems weren’t active: https://www.theregister.co.uk/2019/04/30/737_max_mcas_angle_of_attack_caption_deactivated_reports/
Mistake 1: designing a new aircraft would have been too costly, oversize engines were bolted onto the 737, causing severe aerodynamic challenges for the airframe designed 40 years ago. Additionally changes to improve fuel efficiency were applied.
Mistake 2: a software was developed to keep the aircraft “flyable”
Until here, everything is fair game and ok in terms of business decisions. The criminal energy started to show after that:
Mistake 3: For cost saving reasons, pilot training for the 737 Max was declared unnecessary by Boeing – with the explanation that “it is still the same aircraft”. Some instructions were given through a one hour iPad lesson. Proper flight simulators for the 737 Max still do not exist today. The manuals with instructions on how to operate the airplane are insufficient “to a criminal degree” as some US pilots complained.
Mistake 4: The true crime: Safety equipment, that could have helped to manage the results of the faulty MCAS, was declared an extra option with a hefty price tag. It was offered to airlines at USD 90.000. However, the airlines where not given any credible explanation why they should order it – since they considered the aircraft safe and airworthy.
Mistake 5: where the evil starts: 737 Max crash number one (Philippines Lion Airline), was hushed up (“3rd world country”, “2nd rate pilots”) and victim’s families received the minimum possible compensation. There were no consequences taken, consequences that could have saved the lives of 157 Ethiopian Airlines crash victims.
Mistake 6: After crash number two, Boeing tried similar hush-hush tactics as after the first crash and issued a cold and superficial (first) letter of the CEO
Mistake 7: (by FAA) Allowing Boeing to self-certify their airplanes and stalling the grounding of the 737 Max, the US was the last country to ground the aircraft.
Mistake 8: In frantic efforts to fix the situation, Boeing hastily put together a software patch (for an airplane…) that failed to receive approval by the (now wide awake.. ) FAA. European agency made a statement with “no show”
How the Boeing story might be told…
– First, there was a crash (Indonesia), the media briefly gets excited, That’s it. Nobody mentions the red flags about the MCAS that pilots had already been concerned about, nobody mentions the struggles of the poor pilots, unprepared to deal with the system – and Boeing is very quiet. Hardly anyone mentions the victims.
– Then, there is a 2nd crash… People are wondering about the similarities, the FAA approval and the aircraft Boeing 737 Max in general. Broad media and public attention rises, a criminal investigation is started – and Boeing’s crisis management goes public with a “letter of the CEO”… Hardly anyone mentions the victims, except the usual news-worthy grieving family members at the crash site. EVERYONE talks about Boeing’s share-price. Money 1, Moral 0
The media storm and with it the public interest will calm down after a few weeks, eventually the 737max will be declared “safe” again and those responsible for the mayhem return to “business as usual”… A minimal long-term impact for Boeing is to be expected. Will airlines cancel their orders for the 737max or Boeing aircraft in general? Most likely not: For the airlines it is a no win situation: they can’t just go over to Airbus and order the desperately needed planes for their fleet. Airbus’ A320neo family is sold out all the way until 2024. WSJ And passing the waiting list will not be easy: Airbus will (naturally…) charge premium prices to those desperate enough to try.
And what about the passengers who are now hesitant to “fly Boeing”? They will easily beconvinced to travel in 737 Max planes again – by aggressively low priced flights. At prices, that airlines will be able to offer supported by Boeing of course. Money 1, Moral 0. Or… by prices “back on normal level ” after increasing them first:
The problem stems back to engine blades made by UK-based Rolls Royce and used in Boeing’s 787-10 Dreamliner aircraft, the Trent 1000 TEN. Meanwhile, the timing couldn’t be worse for Boeing. The Chicago-based jetliner maker continues to deal with the fallout from the grounding of its 737 MAX plane amid two separate crashes that call into question the safety of the aircraft.
The next big topics/questions – as the scandal develops:
When will Boeing switch into admitting mistakes, take responsibility and apologize? You think never? I disagree, it will only be a question of time – the public attention has passed the tipping point and there is no place for hush hush tactics anymore.
How will the FAA manage to stay away from the crisis? They have already made a few good steps in the right direction – but will they manage to let this crisis enter history as the “Boeing crisis – and not the “Boeing/FAA” crisis? How deeply have they (FAA) been involved in the cover-up? https://lnkd.in/dSTFG4q
What would have been the expert steps for Boeing in terms of Crisis Management and what can be done now to control the damage?
Which moves are the airlines going to take to get reimbursed from Boeing and how are they re-winning the passenger`s trust?
How will the criminal investigation play out? Now that there are hundreds of people dead, families destroyed and everyone worried about air-travel? Have the cost savings and “cutting corners” been driven by greed or incompetence? Why did it take a 2nd crash for the world to wake up?
Is the over 40 years old design of the airframe up for today’s tasks? (I think yes, but the aircraft needs to be thoroughly reviewed and pilots properly trained.) https://lnkd.in/daVBATZ
How have the pilots been trained so far and are there simulators available for this aircraft? https://lnkd.in/dSmRKRU
The FAA used to and is outsourcing airplane certification to Boeing and was reportedly dragging their feet when it came to grounding the 737 Max-fleet. The FAA coziness with Boeing long-standing practice that has allowed both plane- and part-makers to certify their own work as meeting airworthiness standards is coming under scrutiny. Unfortunately, no major changes to this pattern can be expected – due to the (underfunded) budget situation of the FAA: “It’s been hard for the agency (FAA) to keep pace with pay” in private industry, Goldfarb said.
Good, thorough backgrounder on the Boeing crisis (history/prologue, criminal decisions and their causes, FAA and political influences):
“Committing to putting a new engine that didn’t fit on the plane was the corporate version of the Fyre Festival’s “let’s just do it and be legends, man” moment, and it not surprisingly wound up leading to a slew of engineering and regulatory problems.”
Tanked “hasty” approval attempt for “software patch”
In frantic efforts to fix the situation, Boeing hastily put together a software patch (for an airplane…) that failed to receive approval by the FAA. European agency made a statement with “no show”:
Looks like Boeing’s launch of the “Software Patch” for the 737 Max did not go too well…
– EU agency is said to have skipped 737 Max meeting in snub to Boeing. The break between FAA and overseas authorities on the initial decision to ground the plane, combined with worldwide public furor and a U.S. criminal probe of the Max certification, “all make it hard for us to see how foreign regulators can avoid coming back with their own questions and doing some of their own due diligence,” Seifman said in his report.
– One pilot group walked away from the event feeling that Boeing needs to do more work on a new 30-minute iPad course, followed by a test, that is intended to help pilots of the older generation of 737 planes prepare for the Max. The newest version of Boeing’s workhorse single-aisle jet debuted less than two years ago.
Last Wednesday Boeing held a launch event to introduce their software patch for the 737 Max. Some pilots walked out, the EU regulation agency “no-showed”. Today, CNN announced that the new software was not approved and will need more work, without disclosing why…
“Time is needed for additional work by Boeing as the result of an ongoing review of the 737 MAX Flight Control System to ensure that Boeing has identified and appropriately addressed all pertinent issues.”
“… Boeing confirmed to The Washington Post that it had found a second software problem that the Federal Aviation Administration has ordered fixed – separate from the anti-stall system under investigation in the two crashes, and that had led to the aircraft’s worldwide grounding.
That additional problem pertains to software affecting flaps and other flight stabilization hardware and is therefore classified as critical to flight safety, said two officials who spoke on condition of anonymity to discuss the ongoing probe. “
– Both crashed airplanes “lacked optional safety features that could have saved the lives of 346 people. (angle of attack indicator and an angle of attack disagree light)—indicators that Boeing offers only at an additional cost.
However, the real end to the crisis will only come with transparency, honest empathy with the victims and taking responsibility. There will be no “quick fix” with a software patch.
This Bloomberg article gives a perspective on what might actually become the beginning of the solution. Once investigators and public start focusing on “Sensors Linked to Boeing 737 Crashes Vulnerable to Failure” there could be end of the crisis in sight.
Sensors Linked to Boeing 737 Crashes Vulnerable to Failure
Angle-of-attack devices hit by birds, airport equipment
Review of public databases reveal at least 140 incidents