Thursday , February 20 2020

Boeing staff emails show missteps of Max crisis response

And you thought Boeing Co. couldn’t possibly have another “what were they thinking” 737 Max moment.
Last week, the airplane maker released a stunning batch of internal messages that paint a disturbing picture of employees’ efforts to avoid more rigorous scrutiny of the troubled Max and ensure only minimal training was required for pilots. The employees derided certain airline customers, spoke of deceiving the Federal Aviation Administration (FAA) and expressed concern about technical issues with the simulators for the Max. “This airplane is designed by clowns,” who in turn are “supervised by monkeys,” said one company pilot in a message to a colleague. A 2013 document emphasizes the need to downplay the impact of a new flight-control software system to avoid greater certification and training requirements; that same software system has been blamed for two fatal crashes of the Max, which prompted a worldwide grounding that still persists.
In a statement, Boeing said it regrets the content of these messages and apologised to the FAA, Congress, airline customers and the flying public. There’s no way to sugarcoat the contents of these messages; they’re terrible. It’s another black eye for Boeing’s alleged dedication to safety and quality.
Both the company and the FAA indicated that there were no new safety issues raised by these messages, and while that’s a relief, it misses the point. I almost had to laugh at other lines in the Boeing statement where the company says it “proactively” brought these communications and other documents to the FAA’s attention in December and that it did so “as a reflection of our commitment to transparency and cooperation with the authorities responsible for regulating and overseeing our industry.”

Cash Crunch
In October, Boeing handed over a similar batch of messages to regulators from what appear to be some of the same employees. That disclosure came about a year after the first Max crash and eight months after the company reportedly turned in the documents to the Department of Justice, with then-CEO Dennis Muilenburg unfathomably disclosing at his Congressional testimony that he wasn’t fully aware of their contents until the messages were disclosed publicly. It defies reason that no one at Boeing knew in October that the company was sitting on another mountain of troubling messages. Regardless, there is nothing remotely “proactive” or transparent about handing this latest batch of messages over to authorities and releasing them to the public at this point in time. This strikes at the heart of the deep-rooted cultural problems at Boeing. I think one of the employees described it best in a June 2018 message:
“It’s systemic. It’s culture. It’s the fact that we have a senior leadership team that understand very little about the business and yet are driving us to certain objectives. It’s lots of individual groups that aren’t working closely and being accountable. It exemplifies the ‘lazy B.’ Sometimes you have to let things fail big so that everyone can identify a problem.”
That employee likely didn’t foresee the crash of a Lion Air-operated Max jet in October of that year or a subsequent Ethiopian Airlines crash in March, but Boeing has in fact failed big and everyone has identified the problems. The question now is whether the company is in a position to fix things. This latest batch of troubling messages was reportedly turned in to regulators on the same day that Muilenburg was ousted as CEO and replaced with board member David Calhoun, who officially starts in the top job next week. Calhoun has been a Boeing board member since 2009 and previously spent nearly three decades at General Electric Co., so the culture of profit-driven aloofness that the employees describe reflects just as much on him as it did on Muilenburg. If the board didn’t know about these messages before they were turned over to regulators and Congress in December, it suggests they weren’t asking tough enough questions.
Boeing earlier this week reversed course on training and said it would recommend that pilots of the Max spend time in flight simulators, rather than relying solely on computer-based programs. I said at the time that it was hard to give the company too much credit for this recommendation more than a year into the Max crisis. I now wonder if it wasn’t the damning nature of these messages that tipped Boeing’s hand. Far from being “proactive,” Boeing amazingly is still finding itself caught flat-footed by the twists and turns of the Max saga, and it has no one to blame for that but itself.

—Bloomberg

Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News

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