Boeing, once a symbol of American aviation power and the power of a great American power, is now mired in controversy and financial trouble. Rival European Airbus has surpassed its market dominance. It's all down to Boeing's focus on safety and quality.
There are a number of complex factors behind Boeing's decline, including lax quality control, a preoccupation with profits and growing shareholder concerns about threats to their investments.
There is a problem with quality control
Investigations into two 737 MAX crashes in 2018 and 2019 have exposed serious disregard for quality control measures within Boeing and the FAA. The U.S. Senate Commerce Committee reported on faulty wiring of Boeing planes, poor manufacturing processes, concerns from engineers and technicians, and a "culture of silence" under repression.
The Maneuvering Characteristics Augmentation System (MCAS) was reported to be a key factor in the MAX crash, which led to tragic consequences due to hasty development and inadequate testing. The revelations shattered public trust and raised serious questions about Boeing's safety commitments.
The dilemma and loose bolts of the MAX 9 aircraft
On January 5, 2024, Alaska Airlines Flight 1282, a 737 MAX 9 aircraft suddenly dropped its hatch at an altitude of approximately 16,000 feet while en route from Portland, Oregon, to San Diego, California. A quick decompression caused the windows to shatter and one passenger to be injured, but fortunately no further injuries were caused. The flight ended in a safe and emergency landing in Portland.
In the aftermath of the incident, the FAA launched a thorough investigation and found that the failure of the hatch was not an isolated incident, with "many" loose bolts found on Alaska Airlines and United's other MAX 9 aircraft. This raises serious concerns about potential safety hazards across the MAX9 aircraft.
In response to the FAA's findings, Boeing issued an advisory calling for an immediate inspection of all MAX 9's hardware for looseness, particularly in the door and rudder control system areas. Alaska Airlines and United Airlines both grounded their MAX 9 fleets while conducting thorough inspections and implementing corrective actions.
On January 24, the FAA issued an announcement temporarily banning the expansion of production of the Boeing 737 MAX aircraft. This could have far-reaching and serious consequences for Boeing. But at the same time, the FAA has approved an inspection process that airlines must perform, paving the way for the grounded MAX 9 to return to service.
Profit race
Driven by fierce competition from Airbus, Boeing has adopted an aggressive strategy of cutting costs and speeding up production cycles. With such a strategy, Boeing began to cut corners in key areas such as quality control and employee training. Back in 2021, Boeing faced a tough challenge, agreeing to pay more than $2.5 billion in fines after it was accused of "conspiracy to defraud" the MAX aircraft and the U.S. F.A. on defects.
U.S. Attorney General Merrick Garland declared: Boeing employees were involved in a shocking scheme to deceive the FAA, putting passengers and crew at risk. The Justice Department accused Boeing of withholding important information from regulators about flight control system failures.
Nadia Echchaoui, who lost her husband in the Ethiopian Airlines crash, lamented, "Not a single penny of this settlement can bring back our loved ones. The family expressed anger and sadness, questioning how Boeing was prioritizing profits over passenger safety.
Boeing CEO Dave Calhoun expressed "deep regret" and vowed to rebuild trust. Boeing's financial losses are also enormous, including $243.6 million in criminal fines, $1.77 billion in airline compensation, and $500 million in compensation for the families of crash victims. However, the damage to Boeing's reputation and future sales from the MAX crash is immeasurable.
The pressure to meet ambitious deadlines and appease shareholders has led to such a culture. In this culture, speed of production takes precedence over quality, and profit is sometimes more important than safety. Concerns about safety and quality raised by employees turned into professional "suicide". This "toxic" environment ultimately compromised the safety of Boeing's products and led to a series of accidents that plagued the company.
For example, Boeing's North Charleston plant that produces 787 aircraft has been facing various production problems. Boeing workers filed more than 10 whistleblowers and safety complaints with the F.A., describing issues such as manufacturing defects, debris left in the plane, and persuading employees not to report violations. Others have sued Boeing, saying they have been retaliated against by Boeing for pointing out problems in production. Boeing employees even said bluntly: they will never be ready to fly on a 787 plane.
John Barnett, a former quality manager at Boeing who retired in 2017 after nearly 30 years at Boeing, found strings of metal flakes hanging above flight control system wiring on several 787 aircraft. He said it would be "catastrophic" if these sharp metal fragments penetrated the wires. Barnett had filed a complaint with regulators and said he had repeatedly urged his superiors to remove the metal chips. But they all refused and transferred him to another department of the plant.
Shareholder anxiety and a culture of concealment
The troubles and consequences for Boeing are quick and severe. The company's share price has plummeted from a high of $440 in 2019 to around $200 today. Excluding the epidemic factor, the lowest time also reached about $120. This reflects a rapid loss of investor confidence. Shareholders are deeply concerned about the company's leadership, its ability to restore public trust, and its future profitability. The grounding of the 737 MAX, billions of dollars in compensation paid to airlines, and the prospect of hefty fines from regulators have cast a shadow over the company's financial prospects.
To add insult to injury, Boeing's internal culture of concealment was revealed. Internal emails and communications show attempts to downplay concerns about the 737 MAX to regulators and airlines, further eroding public trust and fueling accusations of Boeing's arrogant attitude. This lack of transparency further damages Boeing's image, making it more difficult for Boeing to regain public trust and rebuild its reputation.
Boeing's road to recovery has been challenging. It must overhaul its quality control, implement strong security measures, and foster a culture that prioritizes integrity over profits. Rebuilding public trust requires a sustained commitment to transparency and accountability, addressing issues head-on rather than obfuscating. Addressing shareholder concerns requires a clear action plan with a greater focus on long-term sustainability rather than short-term gains.
Looking to the future
Boeing's historic contribution as a pioneer in the global aviation industry is undeniable. However, its recent troubles are a stark reminder that when greed and complacency take hold, even the most iconic companies can get into trouble. The road to regaining leadership in the aviation industry will be long and difficult, requiring a fundamental shift in corporate culture, a relentless focus on safety and quality, and a rebuilding of trust with all stakeholders. Only then will it be possible for Boeing to spread its wings again.
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