Pontifications: I don’t know what to make of this

By Scott Hamilton

April 1, 2019, © Leeham News: One can’t help but think, a lot, about the two Boeing 737 MAX crashes and the facts that Boeing created the system, linked it to one sensor, not two, didn’t tell the airlines pilots about it, didn’t include it in pilot manuals, didn’t have a safety alert system as standard equipment, initially blamed the Lion Air pilots and reportedly lobbied Donald Trump not to ground the airplanes.

But my thoughts haven’t stopped here.

Happening at the same time

These decisions were made at a time when:

  • Boeing was still under water, so-to-speak, on the 787. The MAX program was launched in July 2011, at a time the 787 was three years behind schedule and billions of dollars over budget. The airplane had yet to enter service.
  • The 747-8 program was affected by the 787 delays because engineers meant for the 747-8 were retained by or diverted to the 787. The 747-8 was late and over budget. Engineering work outsourced proved deficient and had to be reworked, contributing to delays, by SPEEA engineers. The 747-8 proved to have a major flutter issue.
  • In January 2013, the 787 was grounded after two battery fires within weeks of each other. Boeing and the airlines were fortunate nobody was hurt. One fire, on a Japan Air Lines plane, happened on an empty plane on the ground. The other, on an ANA flight, occurred as the airplane took off. It made an immediate emergency landing and evacuation. Only a few passengers were injured on the slide evacuations. Had either plane been on a long distance flight at altitude, odds are both could have been lost, killing all aboard.
  • In 2011, Boeing won the US Air Force tanker context to develop what became known at the KC-46A. Development of the KC-46A tanker was beset by one delay after another. It’s billions of dollars over budget—all happening while the MAX was under development. The USAF recently stopped taking delivery due to poor quality control by Boeing. (Deliveries have since restarted.)
  • There was great pressure to fall within the development budget on the MAX (of $1bn-$2bn), which in itself is no surprise; and, as we now know, eliminate the need for pilot simulator training and keep to iPad-type training.

I just don’t know what to make of all this.

Was there a major breakdown in Boeing’s system converging all at once?

Or was this a case of a series of unconnected events converging all at once?

Taking on too much?

Four concurrent commercial airplane programs (the KC-46A being a hybrid between commercial and military) each had trouble.

Two of their last four airplanes have been grounded by regulators. A third airplane had such poor quality control the customer stopped taking delivery. Three of the four were years late.

What’s going on here?

Boeing resources were clearly stretched too thin. Billions of dollars were going out the door in cost overruns. Were bad management decisions made by the bean-counting McNerney regime?

Was there something systemic happening? Or just a run of bad luck and bad timing?

I know people will say bad luck is just a myth, but sometimes (as the saying goes) [stuff] happens.

Getting back on track

I have full confidence Boeing will get back on track. Just as the problems for the 787 and 747-8 were fixed, the QC on the KC-46A will be sorted out and so will the MCAS on the MAX.

Boeing is a solid company. Its employees are dedicated. It, and they, were going through a very rough patch.

There’s a new transition coming. Thousands of engineers, technicians and touch-labor employees retire in the next five years. The replacement talent pool will be stretched and the loss of institutional knowledge will be hard to replace.

The pending combination of Embraer will bring a good source of engineering talent that Boeing will need during the retirement phase. SPEEA may not like the work that will wind up in Brazil, but (lower costs aside), directing work there will be necessary.

Although the timing of the NMA, with a program launch in 2020, is really driven by keeping research and development investment steady so stock buybacks and dividends can be maintained, managing resources and not risking a repeat of the concurrent airplane programs effects outlined above is a factor. I vaguely remember statements in the past about not doing two concurrent programs again. I don’t remember which regime made the statement, though.

As I said, I just don’t know what to make of all this. Was it systemic or just a series of bad coincidences?

This will be debated for years to come.

168 Comments on “Pontifications: I don’t know what to make of this

  1. 787 batteries and MAX MCAS show afaics the same style of lackluster approach to designing.
    But their respective decision windows are years apart.
    On the other hand: my (personal) conclusion on the batteries was that this was a holdover from the Sonic Cruiser. Could MCAS have been a holdover from an older 737 change project from a similar window in time that was “ha, here we have” warmed up?
    I do wonder how many other “things” have been done in a similar environment but did not have a chance to stick their white bones out of the carcass?
    ( I’d place some of the tanker issues in the same box.)

  2. Scott, you’re brave to challenge Boeing. I know first hand via my journalism how the big end of town applies pressure. Salute, man!

  3. You nailed it again, I have like you “the gift of age”, i know you have not always been loved by BA exec, and this summary will not change this.
    But it is a summary of facts.


    • Your best friend is your biggest critic.

      If someone does not tell the Emperor he has no clothes, then it just gets worse.

      Strength of character was Lincoln who joined with his fiercest rivals to hold the country together.

      • Indeed, but you know the tendency – being illustrated by Trudeau v2 in Canada at this time.

        Undue pressure by PM on AG to over-rule decision of an independent prosecutor’s office, motivation is getting votes by helping a company that is in deep trouble because of several ethics problems.

        “Loss of trust between you and team” used to oust the officials who have principle.”)

  4. I am sure Boeing did not set out to make a poor plane. At the same time there seems to have been systemic weaknesses inherent in the corporate makeup:

    1 a willingness to bully the FAA into substandard oversight.
    2 an emphasis of short term profit taking over long term engineering integrity.
    3 an arrogance when dealing with all oversight parties that ‘Boeing knows best’ and even if it doesn’t then it does.
    4 Actually believing some of the most amazing hype that they themselves have written.
    5 a willingness to game every aspect of the regulatory system.
    6 engineering at a level that is too much about cost cutting at the expense of safety.

    This is a result of hubris and greed and to sort it out the senior team should be held to account. ‘Make an already safe aircraft safer’…… sickening

    • Well put.

      Add in not just gaming every aspect of the regulatory system, but the financial one as well.

      Some years back I was stunned to read that Slavery did not just affect the imprisoned, it was corrosive corruption the Slave owners.

      I think Boeing has succeeded in corrupting itself having lost the balance that we are all in this together.

      • Indeed, the ‘free lunch’ mentality reduces its ability to live well because its evasion and other dishonesty impairs its ability to think objectively which is what is required to live.

        I suggest the book How To Be Profitable and Mora for some coverage of that. The author has an article on that: https://profitableandmoral.com/moral-practical/.

        (Of course slavery is inefficient because it does not bring out the best in workers, and it requires an overhead of guarding.)

    • “I am sure Boeing did not set out to make a poor plane.”

      For the Max they seemed to have allowed processes to do so.
      It Was Go, Go, Go”: Boeing Rushed 737 MAX Design In Race With Airbus”
      “A technician who worked on wiring the 737 Max said that at the start of the project, “rushed designers were delivering sloppy blueprints” to him. His designs, to this day, still include omissions.

      His internal assembly designs for the Max, he said, still include omissions today, like not specifying which tools to use to install a certain wire, a situation that could lead to a faulty connection. Normally such blueprints include intricate instructions.” NY Times

      • The question is if you run a process you know is going to produce problems, then intended gets thrown out the window.

        All the excuses in the world don’t change something like Ford and the Pinto and the gas tanks.

        Well yes we know gas tank location can cause fires, but you arn’t supposed to get rear ended and if you don’t its fine, just fine.

      • I saw the problems as:
        – trying to implement new engineering tools while developing an airplane, something Boeing swore after the 777 effort they’d never do again
        – giving suppliers part of the financial risk then being held up by cheapskate/maneuvering ones who ‘cut off their nose to spite their face’ by delaying everyone’s cash flow including their own.
        – deluding themselves as to project progress, despite their military counterparts warning them from their recent tough experience

  5. One outcome I think would be reasonable would be a limit on grandfathering. If an aircraft is first certificated on year X, then any derivative produced for the first time, say, beyond year X+25 should be certificated as a completely new type from scratch. De-novo.

    There’s a reason why regulations change – presumably because we think the new regulations result in a better, safer aircraft than earlier regulations.

    Sure, keep building derivatives, but after a certain point, expect them to be certified like a new type, fully compliant with the latest state-of-the-art regulation.

    Fully expect Boeing (and to some extent Airbus) to fight tooth-and-nail about this, but it seems totally reasonable to me.

    • There are retroactive requirements for safety measures, the most immediate being the airworthiness directive that will mandate the forthcoming changes to the 737MAX MCAS system, longer term being things like expanded FDR data sets at least in some countries.

      There is a push to limit vintage of designs.

      However implementation has not necessarily been rational, and could be used for trade games as was suggested of Communist China regarding an airplane improvement several years ago.

      But keep in mind the problem with MCAS is not primarily due to age of the 737’s design, rather it is poor design and failure to update the safety analysis that would have highlighted risks of the morphed design.

  6. Did the Max become the victim of putting the cart before the horse.
    The decision by Airbus to build the NEO was a quite pedestrian process and once offered had substantial engineering and marketing data to substantiate the sales efforts.
    The Max on the other hand appears to have been a knee-jerk reaction.
    ” If Airbus can re-engine the A320, we can re-engine the 737″ approach.
    It does not apparently have had the usual period of gestation. They won a hat full of commitments for a paper airplane and then threw the problem at the factory to come up with a product at a price.

  7. I did an analysis of BCA ,the commercial aircraft arm of Boeing, current and previous CEOs
    Current Kevin McAllister, a metals engineer who came from GE Aviation Services
    Raymond Connor .MBA who worked in sales -marketing for Boeing ( started as a mechanic on the 727 program)
    James Albaugh , Civil Engineer who worked in the defense side of Boeing
    Scott Carson , a financial guy in BCA then sales, and Defense before that, especially space , missiles etc
    Alan Mulally . An aviation engineer with long record of leadership of Boeing aircraft programs especially 777.

    The last time BCA had an experienced commercial aviation engineer in charge was Mulally 98-2006

    • Maybe time for Boeing to ask Alan to come back and take a look at the 737MAX?

    • “The last time BCA had an experienced commercial aviation engineer in charge was Mulally 98-2006”

      The formative time for the 787. So much for “Boeing Engineer”.

      • Yes an airplane engineer but he didnt know everything about things outside his expertise either ,as Boeing outsourced huge proportion of the 787 – mostly in the wrong way
        “Boeing’s original leadership team for the 787 program,” write Tang and Zimmerman in an important case study, “did not include members with expertise on supply chain risk management. Without the requisite skills to manage an unconventional supply chain, Boeing was undertaking a huge managerial risk in uncharted waters.”

        So they have doubled down at BCA , having executives who know even less about a commercial plane. Albaugh who was in charge as the 737 max decisions were made, his first job for Boeing was at the Hanford Nuclear production site, presumably as a graduate civil engineer.

        • Whether the overall manager is an engineer or not doesn’t really matter in my view. the role of the project manager is not to know the ins and outs of the detailed design. they are there to make sure the experts do the right thing safely efficiently and on time. The concern for me is that the culture at Boeing in the last decade or longer has suffered from an emphasis on short term profit taking over long term engineering integrity. They have willingly accepted second best solutions in the interests of expediency and profits.

          They have backed this up with a willingness to game every aspect of the regulatory system, something they continue to do in this current predicament. They are betting on the whole thing ‘going away’ if only they face it down and do the bare minimum needed to get the grounding lifted.

          To me this is shameful but to them it is strictly business as usual.

          • Many don’t remember that it was a huge question if Boeing was going to ever do a new aircraft or just cash out.

            My take was Mullaly took the chance of what he could get (member, you can only do what the top allows you and a bit more but you are in a strategist jacket)

            He was told this is how we are doing it take it or leave it.

            He took it and we got a very good aircraft out of it in the end.

            When he took over Ford, he told them it was all or nothing and his contract read that way.

            Either total control to clean house and fix it or it was a waste of everyone’s time.

            Ford was the only mfg that went through the Great Recession without a government bail out.

            No, Mallaly is not perfect, but he did show you what you can do when you put the right person in charge to fix a disaster.

    • I’m not a fan of bean counters in Chicago but I don’t think that the problem comes from the fact that managers have not a significant commercial aviation engineering experience. Two counterexamples :
      – at Airbus : Didier Evrard who was a missile specialist before (successfully) leading the A350XWB project.
      – at Boeing : legend Malcolm Stamper who knew nothing about building aircraft before heading the 747 development from scratch (in about 3 years !!!). Bill Allen asked him in 1966 : “How would you like to build an airplane — in fact, the biggest airplane in the world?”. Stamper answered : “Mr. Allen, the only airplane I ever built had rubber bands on it.”
      “Do you or do you not?” demanded Allen.
      Stamper replied : “I’d welcome the challenge.”

      I agree with Scott to highlight the common fact of all Boeing problems : the 787 development which strained Boeing engineering resources.

      • Management set it up so those resources were strained.

        Cut backs, outsource and a totall lack of understaning of the costs of doing that.

        They sold a bill of good that there was a free lunch. There is not. Sooner or latter the pipper gets paid.

        • Society had a big part of it, any smart kid at school who wants to make a dollar chooses medicine, law or at least MBA. Then a lot of people look down at or avoid manual work, so skilled touch labor, if we had a true capitalist society, is so hard to find they are actually worth more than anybody else. Until the day you can pay people whar they’re worth nothing can change. IAM might, unwittingly, be BA’s savior.

          • Stamper had a degree in Electrical engineering and later a law degree
            And he was closely involved in commercial aircraft.
            “Stamper joined Boeing in 1962 as director of the company’s aerospace electronics operations. In 1965, he was elected company vice president and named general manager of the Turbine Division. -[ Sold to Caterpillar]
            A year later Stamper was named president and general manager of the 747 Division, where he was responsible for running the program from startup to the first flight, as well as overseeing the construction of Boeing’s Everett, Wash., facilities.”
            Only then after that success did he become CEO of BCA !

          • Martin: I was smart enough, I think you misconstrue both opportunity and background.

            Mine is solid blue collar and there was no shame in my world.

            I could have gone for a degree, I had the money and the grades, but I did not want to sit behind a desk. I liked working and with my hands.

            When I found the field that met both the intellectual challenge and my liking to work I was in hog heaven.

            If you are middle class or upper, that may be the push.

            There are an awful lot like me who would do better with trade schools, we are not suited to MBA or Lawyers etc.

            That is where the opportunity lacks and maybe society does play in.

            20% of the guys I went to high school were failing students. They tended to be car guys and would have been far better off sent down that track with enough math and writing to get by.

    • Which would put him right in the thick of the 787. He didn’t do Ford any favors either. So just saying having an engneer in charge is not exactly a panacea for Boeing’s ills.

      • The problem is not often the guy in charge. Its the information getting to the guy in charge.

        Program managers – who are not qualified to produce informed opinion, often do so. They should be renamed program clerks.

        Chief and principal engineers should be the backbone of any decision making and reporting structures. Program clerks can then support these people in the administrative role that their expertise is appropriate for.

        That means the guys at the top of the food chain are getting informed opinion with impact weighting as deemed appropriate from someone suitably qualified and experienced. Not some gormless idiot with an MBA that actually believes their own powerpoint hype.

      • Are you kidding? Mulally basically helped Ford get back to profitability and making good cars again.

        I think you have an axe to grind.

        • I often get demands for what is right vs what is wrong and I can’t answer it that way.

          I don’t need details, well I am sorry, its the details that not only drive the process they are what makes it work in the first place.

          So how do you get enough info upwards for the decisions without getting into the weeds? (those pesky details)

          Add in, why are you asking this question?

          If I know what is driving it I can narrow it down.

          Its frustrating. And people CYA to ensure they are not stuck with the decision. And that is because when a problem happens they want to throw the lowest level guy they can find under the bus.

  8. Good article and difficult yet interesting questions with no obvious answers as the article states.
    The tanker issue Could and should perhaps have been avoided as Airbus had won it fair and square the first time.The US and particularly Boeing has only themselves to blaim for that.

    The 748? Hindsight is a wonderful thing ,obviously they should have left the ( now defunct) VLA sector well alone.But they do at least have a good heavy freighter.
    787? I applaud them for ‘reaching for the stars’ and innovating.They just rushed it.Long term it will work out well I think.
    737MAX.Southwest put them in an armlock.

    Rather than rushing into a MOM project perhaps they should take time to reflect a little.Be less aggressive all round and perhaps look to a new management set up.
    When ready return with a NSA that overlaps with part of the MOM sector.

    • Philip: Airbus has never built a tanker to the US KC-X specifications. No one has any solid basis for saying how it would have come out.

      We do know it took the Australians 5 years to get their neutered vision fully operational.

      The 787 is a very good aircraft. It was not rushed, it was setup to almost fail by massive e management failures

      • BUT the RAAF Tanker is NOT an MRRT. They bought second hand A330 frames from QANTAS and did their own conversions with input from Airbus. It was a slow process but should no be used against the MRRT.

        • The second stage of Aussie tanker procurement.
          They first took Airbus / CASA built new frames.
          the next step expanding the fleet was converting used A330 frames.

          The delays apparently were dominated by Australia getting to grips with a tanker of their own.

          for a company that sees itself as the fount of tanker aircraft the “getting KC46 ready for use” performance is abysmal.

          And all the Airforce gets is s a frame few others want.

          • The first KC-30 should’ve been delivered in 2009 but was actually delivered in 2011, so that’s a 2 year delay in delivery. Then there was the 4 year remediation project (2011 to 20015) to get the boom functional enough for RAAF receiver certification. I wonder what the cost was for the extra 6 years of work?
            So, the KC-46 first delivery was 3 years late, but the first two phases of receiver certification testing were completed before delivery, which involved mostly boom fed aircraft. The KC-46 is currently in phase 3 receiver certification and recently passed fuel to an F-35. While the KC-46 currently might not meet a few of the KC-X requirements under all conditions, none of that seems to be delaying progress toward operational capability.

        • The last 2 airframes were a hurried purchase which needed to be justified to the general public as military assets. The real reason was an embarrassing series of (older) BBJ unavailability issues.

          • The 5 years do not include the conversion.

            Once it was flying it took 5 years to sort it out.

      • The bare aircraft and refueling installations were matured through the Australian KC-30A. Some special KC-X requirements were already available like the cargo deck and ohters are just military gear to add on. Boeing failed on the bare aircraft and refueling system.

        You may read the GOA report and see that the development risk was considered higher for Boeing. This point was not charged. The problem with the next twisted competition was developement risk was not factored into any calculations. Just look at costs for operating and maintaining KC-135 fleet one year longer.

    • Boeing knew they would lose money on the USAF contract. They are applying commercial aircraft thinking to military procurement. Lose money on the launch sales but make it up on follow on sales. The trainer win is more of the same. I think they are onto something.

  9. “I just don’t know what to make of all this” and neither do I. Perhaps commercial pressures have clouded the fact that aircraft are not products: that people can die if there are major flaws.

    I’ve known people at both companies A & B, have an equal respect for them. None would set out to produce unsafe aircraft; let’s see what the various US investigations reveal.

  10. We have a saying in Germany “Hybris comes before the fall” that I think very appropriate here. I’m not so sure though, that with the Max-Desaster we have already found the bottom. It is possible and a meaningfull change inside Boeing may happen, but I’m not convinced. Especially if the MCAS-fix is accepted and thus bigger financial problems avoided. I expect FAA will play along. Will the other authorities?

    Long term I should think it could actually be better for Boeing if they don’t. One should hope they dig deep to find the root cause and some of the buddy-lines between Boeing and FAA will get severed. I believe only a long delay or even a withdrawal of the international certificates will create enough pressure to actually change priorities at Boeing in the right direction.

    • “Hybris comes before the fall” is from the Book of Proverbs. In the King James Bible: “Pride goeth before destruction, and an haughty spirit before a fall.”

      • No, Boeing has not learned a thing. You can see from Muilenbergs initial statements how they really feel.

        That is the true Boeing management, anything post that is just spin.

  11. I think it is clear that Boeing (or, as seems to be discussed here, even more narrowly BCA) cannot be considered in isolation. There is simply far too much vague overlap between it and the FAA and, probably, other agencies (thinking of back as at least as far as the original tanker DoD case).

    Also, the FAA isn’t alone in being sub par. I posted a link in a recent thread about EU automotive regulatory failings (https://www.theguardian.com/environment/2019/mar/22/dirty-lies-how-the-car-industry-hid-the-truth-about-diesel-emissions) that echo the sorts of things discussed about the FAA. Also, in aviation back in 2012, EASA was criticised by the European Court Of Auditors over conflict of interest failings (https://www.eca.europa.eu/Lists/ECADocuments/SR12_15/SR12_15_EN.PDF). I don’t know what actions EASA may have since taken or how long before 2012 they were sub-par. But clearly these sorts of issues are somewhat widespread. For aviation specifically, is any major agency actually resourced sufficiently and sufficienty arms length and transparent to be worthy of being a ‘gold standard’?

    As for Boeing being good or bad, I’d discount the 747-8 issues but that aside I think there are 3 clear issues.

    First is the low cost approach that led them to lowball on the KC46 (surely would have a knock on on QC as now showing up), T-X etc., and not be as thorough as they should have with the MAX. Would be interesting to see when the first learning experience from this approach was available. If it was before they went ahead with further low cost efforts then it suggests hubris. If not, then maybe this is a phase they will have learned from for any new efforts.

    Second is that regardless of the sufficiency of regulatory oversight, it is simply unethical to ship products with life threatening flaws that proper engineering would have identified, as has happened with the 787 and MAX. Communications is probably bad inside the company and there is warranted bashing of ‘bean counters’ but these were engineering decisions that can only have been made with the sign off of engineers. The pattern strongly suggests to me that there are multiple bad apples and weak values within engineering at Boeing.

    Third, the confrontational legalistic approach they’ve developed this century, shown in taking Airbus to WTO and the recent C-Series case. Not directly impacting on engineering but must affect the culture.

    • Great point about the legalistic approach vis a vis C-Series. Many companies are at risk of their culture becoming too thin as they grow. Especially when coupled to heavier reliance on contracted out-sourcing, the concept of ‘us’ and ‘this is what we stand for’ can become abstruse and no longer clear.

      • And I think that is Boeing in a nutshell, far far far too thin talent wise.

        Its not the KC-46 was low balled, it was they put the F team on it – they only have one A team now.

        I am watching the TF-X as its wrapped up in a new production approach and system and how well that turns out is open questions. I don’t have a lot of faith.

        The Navy unmanned tanker and the 797 are all involved in the latter thinking on the new production approach.

        The KC-46 they just low balled and felt they could put Team F on it as it was easy. None of its easy.

        • From various comments I’ve read at one time or other USAF are no impressed with the F team. That might have encouraged Aisbus ond Lockheed t form their tanker JV?

          • I gather they need more free lance tankers and Boeing can’t provide what they have.

            Maybe Boeing could build the old 767 Tanker?

            More tankers means spare frames and Airbus can ramp up the A330 line.

            But completely true Boeing has not impressed the USAF and those guys are pretty easy as long as they have their shiny toys.

  12. What alarms me,is that Boeing all the years made good money, although there were all these things happening. And everybody is telling Airbus you percent margin is not good enough compared to Boeing… So, well now they focus on increasing margin…. I leave you alone with what all this MAY mean….

  13. What may be of some interest to you all, in today’s post on NY Magazine is an interesting bit about this on going investigation. Just thought that I would let you all know about it.

  14. The root cause of all of this is McD-D buying Boeing with Boeing’s own money.

    this led to the bean counter mentality that killed McD-D’s commercial business taking over Boeing’s more forward thinking and engineering oriented culture. the technology of the 787 was the last gasp of that engineering company, but it was screwed over by the corporate mandate to raise the stock price at all costs, hence the outsourcing with minimal oversight.

    now that they have been systematically raping the finances of the company in the name of “shareholder value” rather than reinvesting in the core competencies of the company for the last 15 years and the chickens have come home to roost.

  15. Boeing is similar to the General Motors of the 1975-1995 time period in that it is both (1) a very large scale entity (2) a technology company. Sooner or later the executive management of all large scale entities decides it is “necessary” (or just better for them) to go to war with their own employees. If the entity does not require highly skilled work then going to war with the workers might succeed , at least in the short term. If the entity is technology-based and needs not only highly skilled work but to have that work enthusiastically applied by dedicated personnel then going to war with the skilled personnel generally results in severe damage to the entity.

    I’ve also had the misfortune to run into ex-McDonnell Aircraft management types over the last 20 years and I am astounded that that organization managed to turn out so many successful aircraft and other systems. And that is redoubled as the books and memoirs of the skilled people who created those planes are published – the working conditions at McDonnell were absolutely horrendous and the pay scales ridiculously low given the fortune that the owning family was reaping in the 1960s and 70s. That type of management thinking has been utterly corrosive in every organization I have seen in the Midwest that made the mistake of hiring some “highly experienced managers” from M-D and it sounds as if the same situation now applies at Boeing.

  16. We are forgetting the roles of the board members. The roles ? They are responsible for risk management, corporate social responsibility, ethical issues and, above all, the preservation of the interests of all stakeholders, ie customers, consumers , suppliers, employees, communities, etc. ? But on this plane alone, what can be concluded? Their decision-making process, conservative, dusty, and psycho-rigid, led them to preserve the financial value of the shareholders. This practice, old, Anglo-Saxon, is no longer current for a global company. It is the conduct of the board members that is responsible for the current situation. But there is a big problem in this governance: Muilenburg is both the chairman of the board of directors and the chief executive officer !!! It concentrates all decision-making powers! And you only have to check the competence of the other members of the council: they give the jitters if we judge what they must have competence to face the stakes raised by Scott …

    • Boards are now an insular corrupted entities.

      McNenearny belonged to the group of big buck execs that wants to kill social security.

      That alone tells you how far its fallen.

      Not only scrape the last penny out of the dead mans eyes, take his fillings as well.

  17. Is it just Boeing ? What about the F35? And the dependence on Russia for so long to transfer humans to space. And what about the car industry?

    American manufacturing industry is ill .

    • American business is morally corrupt, not just ill.

      Ill can be cured, corporation is vastly harder.

      My 91 year old mother reminds me that things are cyclical, maybe it will turn. I don’t see it right now.

  18. The fact is Scott that Boeing is a victim of its own making, given their overly focused attention on financial manipulation to satisfy shareholders at the expense of employees, customers and the general public, 87 and Max in particular.

    Unlike Airbus which is a company focused on investing in its facilities and staff Boeing has focused its efforts on rewarding shareholders rather than the people that make Boeing what it was (i say was) a company focused on product and engineering excellence.

    Its 87 program will never make a return, the Max program is playing catch up and will continue to lose market share over and above the 60:40 or 57:43 split.

    Morally, Boeing’s management need to take a long hard look at themselves…short cuts have, arguably, lead to two airliners going down with the loss of over 300 people.

    As you say it’s hard to know what to make of this from such an august and storied company but something is definitely off, rotten. Financial engineering seems to be the order of the day at Boeing and has been for some time, in the way it treats its employees, suppliers and ultimately the general public (albeit this is a stretch given the thousands of Being aircraft that fly everyday…yet the inescapable fact is that management’s priorities are focused on a very narrow set of stakeholders…leading me to conclude that this sort of outcome was inevitable…

    • DN: as much as I agree with your main points, being a technician I am also a nit picker on details.

      The 787 will pay its costs, its returning a lot of cash now (not program retirement) – probably line number 1500-1800 it breaks even and goes cash positive (not sure if they are figuring interest in that!)

      787 is succeeding despite their best efforts to sink it. You have to ponder that as well.

      • I think you’re very much the exception in this regard TransWorld. Rule of thumb shows how difficult (impossible?) it will be to make a positive fist of the 87 business case. A loss is a loss no matter the accounting trickery at work.

        Leaving aside that it is beyond doubt a very fine aircraft Boeing has so far failed to demonstrate how it will generate any sort of return on this program. Given that it is already one of the most successful twin aisle programs in aviation history that is unpardonable and a serious failure on the part of the company’s management.

        Successful programs i.e. the 37 & 77 do not make the the sort of margins that Boeing need to make on the 87 program, well over 30% per aircraft it is commonly understood.

        • DN: I am not an accountant so I follow the 787 financials as best I can.

          For example, I don’t know if there is an interest aspect to the system (you could put 34 billion in the bank/buy bonds/invest in stocks etc) and even at the picker returns get a few percentages of interest return each month)

          That said, the deferred is coming down and they are making money on each aircraft sold.

          Yes they are in a dog fight with Airbus as that mid market area has 3 competitors in it.

          But break even is still at 1500 or so and they have sold that many 787s. You can figure they will sell (or make having sold) 10 a month for the next 10 years or longer.

          That is another 1200 (very ball park)

          It should have been well past that and agreed they mucked it up big time (maybe the biggest muck up in production history)

          Oddly it tells you how well they hit the target market its going to be a finance success despite the incredible handi cap it labors under.

  19. Trying to call in a bribe to POTUS.
    Was it ever a good idea?
    Was it ever going to work?
    This episode tells us all we need to know about the Boeing management.

    • Well POTUS has a real history of (ahem ) shady dealings.

      Well worth the try.

  20. I don’t have any deep knowledge of the Boeing company but it looks to me to have a major governance problem. Which should be sortable.

    A culture of safety has to come from the top. Possible ways to do this are to create a VP with responsibility for the safety of the products, at the same seniority as the VPs of Sales or Finance and also a board dedicated to safety decisions. There will be tensions between precaution and time to market. The job of the board is to manage this tension. If the company does its governance properly it will respect the decisions of the safety board. In general the board will set guidelines on managing safety decisions throughout the company with just the biggest decisions escalated to the board.

    This layer of governance will slow down development and cost the company money. The question is whether that cost is higher than the loss of Boeing’s reputation for the safety of its products.

  21. I am not too sure we can simply say this is a Boeing specific issue.

    If we go back twenty years, almost all of the new/derivative aircraft programs have had considerable problems. The stand outs have been the A350 (very long gestation period – nearly ten years) and up until the crashes the 737MAX.

    If we look at engines, Rolls Royce has had a horror run. To be honest I am not too sure why some of their engines are still allowed to continue to fly. If we asked questions about the QF A380 engine explosion quality management / control would be a topic for hot debate.

    There are broader issues here. The industry has been pushing the boundaries of technology and product development for quite a few years. For me the broader question revolves around the time pressures associated with certifying aircraft in this hyper product development environment.

    • Travel: As much as I agree on the RR Tent problems, the A380 engine blow out was more an industrialization issue.

      Nothing wrong with the setup, it was badly machined and got through.

      GE had the GenX shed the turbines, they had shifted to a shaft coating system that was suited to the requirements (or so they thought) of the quantity they needed to output.

      How you could fail so spectacularly is baffling, The good news was it happened fast.

      P&W has seen those same issues as has CFM on the LEAP.

    • I am sorry you are just talking nonsense. You discuss the standouts as being problems with the A350 programme? I would suggest that this has been one of the most well managed programmes in recent years. 10 years? I think not, I bet you are being selective there…. Costs on or around what was budgeted at $12-15bn and smooth entry into service. This does not compare with the B787 programme ($35bn++ and chaotic issues, terrible teens, batteries, 5 or 6 aircraft museum pieces or thrown away).

      Looking at neo vs MAX again we have a clear difference in success of the programmes. MAX was a very quick turnaround for an ambitious and more extensive update than the neo but as we are seeing this has been at a considerable human cost. So please do not attempt to tar all OEMs equally.

      Airbus has had its woes recently but since the A380 the one thing it has been strong on is bringing new and derivative aircraft through development efficiently and safely.

    • I’d be OK with your quip if you replace A350Mk1++ with 787. ( this puts it back in Boeing field.)
      A350 never was a technical problem but a PR warfare thing:
      you can’t run a real product against a meme monster and win on reason.

      • Duke: The point on the A350 was it morphed from REV 1 A330 to Rev 4, then became an all new.

        Airbus was caught flat footed and as they say in the US, Boeing snatched defeat from the jaws of victory (a US football team had a game won and then as I recall a lineman went the wrong way with the ball on a fumble (just fall on it dammit) and they lost a won game – fortunate it was the Dallas Cowboys and we all hate them so smiles on all but a few Texans)

        The A350 did have its issues and a huge amount of rework was done with their own terrible teens.

        Its still a well run program and they did it right overall. Of course they had a good example of how NOT to do it. Probably should pay Boeing royalties for that.

        While the engine issue are not an Airbus responsibly directly, that too has had its aspect and it was their program and no oversight.

        That went so far as A320 flying with iffy that could quit at any time depend on on another suspect engine (which applies to the Trend 1000 and its decedents)

        How much risk has RR put people into with the 1000? You hope if one engine goes the other one hold up? I call that rolling the dice.

        • Didn’t say anything about A350. But just looked up production list and there are 4 stored or non customer flight test. The 5th was a late sale to French Bee , yes it’s an airline.
          What terrible teens outside those are you talking about? It appears after those 5 they were delivered fairly promptly after first flight.
          Here’s the data, you should try looking at things like that some time

        • Hi TW

          Where does ‘The A350 did have its issues and a huge amount of rework was done with their own terrible teens.’ come from? This is simply not supported by facts. There were tranche1, tranche 2 and tranche 3 aircraft. All of them bar the first 3 test aircraft (I think) met the specs. The aircraft was so mature that they were able to look at PIPs to an already performing product on introduction.

          To suggest it was in any way similar to the B787 where there were multiple grossly overweight aircraft some of which were sold at a knockdown price (11 I think but I stand to be corrected) and some which were unsellable and broken up or given to museums (5 I think) is completely wrong.

          As it stands there will be three aircraft of the A350s which will not be sold, without looking, MSN1 which is retained to certificate changes, the first A35K as well for similar reasons and MSN4 which is a museum piece. All other early units are sold or in the event of some test aircraft in rework to be sold.

          Please do not suggest things that are simply not true, the A350 programme may have lagged slightly (certainly not 10 years) but the process of ‘pause and correct’ has worked in getting a mature aircraft out of the box.

          • If you read the history, at line number 17 they made huge changes.

            Something like 75%. Bjorn said it was interior stuff, I was never able to confirm that.

            Yes they saw it coming and they handled if like it should have been and well beyond Boeing’s huge debacle.

            But it also tells you that listing the teens is a very bad comparison as it afflicted both new aircraft.

            Its always a learning curve and the first ones are not desirable (Dr. Perters A380s anyone?)

            But Airbus would have been modding the A330 if not for Boeing pushing them over the edge.

  22. You forgot to mention the delays with the Starliner crew capsule program. In early March, SpaceX successfully launched and landed the Crew Dragon, the first commercially-built and operated American crew spacecraft to take off from American soil.

    The SpaceX mission was supposed to be followed by the launch of Boeing’s Starliner sometime in April, but new reports say the departure of the capsule has been delayed, possibly until August.

    According to Chron.com, there’s no official position explaining the alleged delay, but sources say the decision could have something to do with safety concerns raised by the American Space Agency and still unaddressed by Boeing.

    Then there is the Space Launch System. Recently VP Pence stated: “It is the stated policy of this administration and the United States of America to return American astronauts to the moon within the next five years,… I call on NASA to adopt new policies and embrace a new mindset,”

    Pence’s speech included what many interpreted as a swipe against Boeing, which has faced intense criticism for its delays in developing the core of the SLS rocket. “If our current contractors can’t meet this objective, then we’ll find ones that will,” he said.

    It seems that Boeing has a company wide problem, not just with its planes.

    • Valid. I would throw the KC-46 into that end, its all military issues no a 767 production aspects.

      I think there bench is so thin they are prioritize what they can allow to slip (KC-46) and using the F team and what needs addressed (MCAS suddenly) 777X (and the new production system)

  23. Very good article.

    As they say, you need to accept that you have a problem before you can fix the problem.

    It’s not bad luck, for the behaviour is symptomatic.

    I think it is right to say that the 787 is at the root of the problem. The 787 is no better than the A330neo but the 787 cost $50 billion whilst the A330neo cost $2 billion. What followed has been very well set out in this article.

    It’s not clear what happens next. The 737 MAX is the only profitable airplane they have. I think they will try and rush it back into service. But outside of America will it be allowed to happen? I don’t think so.

    I do think they need to shelve the NMA and do a NSA for service entry after 2027.

    Equally, I think they need to take their time fixing the 737 MAX. Trying to arm twist regulators and customers alike into accepting the 737 MAX back into service will be counter-productive. Perhaps keep the 737 NG going in the meantime.

    In other words, bite the bullet otherwise we are looking at death by a thousand cuts!

  24. All I can say is that culture begins and ends at the top.

    I don’t see senior management or the board “owning” this – but they do.

  25. Troubling indeed.

    Scott, could be interesting to outline what you think Boeing got right in the past 10 years?

  26. I’d add to the problem list that Boeing management does not understand that global warming /climate change will have a major effect on the industry and requires action now. The NMA isn’t the right choice for Boeing’s next airplane .

    • Boeing builds aircraft, the Government sets policy.

      Boeing can’t nor is responsible to change the world.

      At best they work to help make good policy but Airbus is going to make Aircraft as will COMMEC or United in Russian if Boeing does not.

    • @Jim

      Given what Boeing does how can it easily respond to climate change? The very nature of flying is the antithesis of going green. So where do you see the industry in 15-20 years time? Will we stop flying?

      I think this issue will lead to a major inflection point in the industry where flying on the cheap will relatively quickly disappear and the current growth will stop and the size of the market will then reduce dramatically. Effectively Boeing and Airbus will be left holding 50/50% of a non market. That is why they are not preparing for it as there is no palatable solution for them.


  27. My 2 cents… as (then) a (non-educated) software engineer dabbling in oil&gas drilling system. Picture…circa 1982-84. Angola, nigeria, congo (the real one), etc. Was not even 18y.

    As a ‘sample catcher’ (yes, that’s a job), i quickly became fascinated by the computers in the ‘mud-logging cabins’ i worked in — look it up 🙂 In a few shorts months i had graduated as the ‘guy who could fix those damn machines’ (HP computers reigned at the time). Meaning: debug all the programs to get what the geologists wanted to show the customers. Paris HQ was too far. Angola was at war. No easy communication. Had to use you ‘dick and knife’ as the french folks would say.

    The context was real-time data acquisition on Oil&Gas rigs in drilling operations (mostly offshore — rebels could not shell that far out :-).

    Some of it was (real) safety critical to detect ‘kicks’ — the drill bit hit a high pressure gas chamber and pushes real hard to get to the surface. You hit that a few hundreds yards down the surface, you have SECONDS to react and cut the mud flow coming back up. SECONDS.
    Otherwise, you have an eruption on the drilling floor =>fire, toxic H2S gas. The rig may even get lost.

    One critical rule you learn real, real fast: NEVER EVER EVER TRUST JUST ONE SENSOR. Never. Because when you activate remediation of the situation you perceive you are in, it may have dire consequence (in O&G = money, idle time, etc)… or you may simply miss the gas kick!!!
    The sensors were malfunctioning all the time for xx reasons… you had to think ‘system’ to model anything real. Not a sensor.

    In the unfortunate 737MAX situation, if what we read is true (let’s see what the official reports really say), that such a commanding/remediation system (MCAS) would activate on just one (AOA) sensor input, with limited or no counter checks… the guys / organizational system that authorized that have a problem.

    Hopefully, it’s limited to one team but to have missed that borders to negligence. In depth internal soul searching (and changes) are needed.

    Scott’s argument is… it could be systemic. Hum….

  28. Scott:

    Looking at this from a degree of seperatioin, its been clear for a long time that there is a systemic issue. While Boeing is the focus of our interests (along with the other Aircraft makers and suppliers) its something that has been a slow rolling disaster.

    Back in the day Ford built Rouge River Plant because it was the right place, not because of tax breaks.

    15 years ago I was cheering Boeing on in the Airbus suite (I have learned a lot since then!). Boeing was not getting those free lunch aids and Airbus was.

    Now, Boeing gets more in a single tax break than Air bu gets for 3 program launches. And they play states off against each other. Its a cold hearted ruthlessly cash generating machine now, not a Vocation.

    Is Muilenberg any better than McNenearney? We saw what came out of his mouth. He had to be hit with an 8 x 8 to start mouthing the right PR lines.

    You have put it well when you talk about Arrogance.

    People keep saying the FAA was the Gold Standard that they never were and its just flip ed to Boeing shooting itself in the foot. The FAA has acted the way it always did.

    The NTSB flat out said that the FLCH Trap was a bad setup, FAA and Boeing just ignored them.

    An Aviation Industry that once stood for more than money is now just about money.

    Something I have learned in 50 years of working.

    The People in the company can only be as good as the people at the Top let them. You can push the boundaries a bit, but in the main, very little.

    Boeing has lost that balance as have the majority of the companies that its the Workers, The company and the Country that are important.

    And not its not the shareholders, you keep those first 3 in balance and the shareholders do fine.

    You don’t and you have Syria and Pakistan.

  29. Scott, did anyone in Seattle mention to you any concern with 737 MAX cabling and wiring design or installation due to the rush to deliver MAX ? I am asking you this, because a few days ago, the NYT had an interesting article : “Boeing Was ‘Go, Go, Go’ to Beat Airbus” (https://www.nytimes.com/2019/03/23/business/boeing-737-max-crash.html) and a specific point in the article caught my attention:
    …”A technician who assembles wiring on the Max said that in the first months of development, rushed designers were delivering sloppy blueprints to him. He was told that the instructions for the wiring would be cleaned up later in the process, he said. His internal assembly designs for the Max, he said, still include omissions today, like not specifying which tools to use to install a certain wire, a situation that could lead to a faulty connection. Normally such blueprints include intricate instructions.”…

    Can the wiring issue mentioned in the article lead to loss or corruption of sensitive signals? Until we get from Indonesia a detailed explanation on what happened on the LionAir accident, I suspect (just a hunch) that something went wrong, not with the left AoA sensor, which had just been replaced/checked before the flight, but with something downstream the sensor which resulted in a constant 20° difference between left side AoA indicator and the right side one. Of course, interference with wiring is only one possibility and many other explanations for this 20° shift remain possible, including faulty software inside ADIRU etc. I am also puzzled by the fact that the fixes provided by Boeing last week leave this LionAir accident root cause (faulty left side AoA indication) untouched. The fix does address all other issues, but not this one. Is the frequency of this AoA indication default not higher on this aircraft type than on other types?

      • Absent a clear and comprehensive understanding of ALL the factors inpacting both accidents it is IMO premature to zero in on MCAS and fixing same.
        While it is clearly a part of the puzzle I am not convinced that there is no other gremlin(s) at work – wiring, data corruption etc. as many have alluded to in various threads on the LNA site.
        Scott, Boeing by its actions is clearly stating that MCAS is the problem – strange as this clearly imperils its legal stance vis-a-vis the multitude of legal actions to come – but are they truly convinced thhat is the case? They better be ready to demonstrate to all comers – FAA, EASA, et alia…

        • If MCAS is done right then data corruption is off the table. It does need to be nailed down, but its not life safety once its neutered.

          As for wiring issues, its called pilling on.

          You see the same thing in the recent 767 crash, suddenly pilots are complaining and it turns out about low pay not the 767.

          Ok, they can’t get a job with the big boys, maybe there is a reason.

          Of course there is pressure to get things into production, its one of those realities if there are not schedule it never gets done, push a schedule too hard and it gets to be a train wreck.

          MCAS looks to be far less about schedule and more about spin and lies and saving conversion costs as a lie you did not want to unravel (well those re gone now and the cost is the highest you can pay for 347)

  30. BrilliantI piece Mr Scott Hamilton!
    It was Mulally who dreamed up the Sonic Cruiser to stick it to Airbus, where the reaction (correctly) was laughter. His get out of that debacle was to rush the 87, new structure in composites, new organization using risk-sharing contractors to cut Boeing’s up front investment, and new engines. We saw how that worked out …
    When was it that Boeing corporate moved away from where the business mostly was, Seattle, to Chicago where the top guys’ job was making money? My belief is that the Boeing culture changed then. The top bosses no longer had any real interest in aviation, and less background.
    My guess is that the change in Boeing and the string of screw ups can be traced to that shift. As an olden days manager told me once, a company gets what the top bosses say is important. Boring has minted money …
    Can anyone think of a post-Chicago move project that went on time and had no serious problems?

    • Howard: You mis-understand how aircraft are developed.

      Boeing’s research showed airlines wanted a fast transport. There is a difference between wanting and buying though as it was clear that oil was staying up somewhere North of $45 a barrel.

      Either things change or Boeing has a solid proposal with numbers and the airlines run their numbers and, darn, it won’t work (or both)

      The 777 started out as a Tri Jet. That was what was allowed and not have to deal with ETOPs.

      The best 777 seller was the 300ER, that was Rev II with longer range.

      The 787-10 was not even on the radar (and the -3 never left the ground)

      The issue were spreading the 787 all over the globe and risk sharing and then the total loss of program control (which is a management foul up) – you still have to manage it and they did not (well they did latter)

      • A nit re your claim that the 777 was envisioned as a trijet.

        The 767 was envisioned to be a trijet, Boeing went so far as to label things L-R-C in the flight deck rather than the usual 1-2-3, to reduce cost when launching the trijet version.

        But ETOPS or such term quickly became accepted, so all B767s are twins. I was quite close to the program at that time.

        Given that I doubt that 777 was ever envisioned to be other than a really big twin.

    • Theres only 700 or so Boeing people in Chicago, while Washington state has something like 65,000 out of total 153,000, and nearly 7000 in South Carolina- mostly BCA.
      Boeing has other divisions apart from BCA , its Defense related business has 14,000 in Missouri , 12,500 in California, 7000 in Florida , and so on.

  31. Boeing is incorporated in Delaware. The incorporation laws there force company directors to focus on profits and shareholder value exclusively. It is actually illegal to consider the interests of other stakeholders like employees and customers, or to consider the effect of their decisions on communities and the environment. Shareholders sue and courts there will uphold these laws rigorously.

    If Boeing was serious about changing their culture they would start by moving their corporate registration to Washington State.

    • I think you are exaggerating what Delaware law might mean for companies.

      eg”Boeing announces details of $100 million employee education investment”
      ‘Boeing recently launched new workforce development programs, the latest step in fulfilling its 2017 pledge to invest $300 million in employees, infrastructure and local communities as a result of U.S. tax reform.”

      Doesnt sound like its illegal to do all that to me.

    • @Jan

      I think you are guilty of reading too much into what the incorporation laws say. Shareholder value (SV) is a term that means a lot of things and in particular it has no time limit. It does not require short-term profit taking and the idea of generating those profits at the expense of longer term health and wealth of the company is antithetical to the whole understanding of SV. In simple terms if the company invests in a project that generates a return (ie +ive NPV) it has created value in spite of the fact that cash flow on the project could be out flow today and the inflows many years into the future. So sorry I don’t think we can blame Delaware.

  32. Some time ago I commented in this space that it seemed like that despite Boeing taking over the failing company McDonnell Douglas more than two decades ago, that Boeing’s insistence on putting lipstick on a pig with a very McDonnell Douglas-like “life extension” for the long ago obsolete design and engineering still incorporated to some extent in 737s the same way the failed company did with its repeated (perpetual?) life extensions for its DC-9s (later MD-80s, 90s & 95 which was rechristened as the Boeing 717 after the “merger”); and its DC-10s (whose derivative was is called the MD-11) instead of an all new clean sheet design for an all new 21st century single-aisle aircraft seemed as if the McDonnell Douglas way of doing things had eclipsed Boeing’s – and that the company was well on its way to being Boeing in name, but otherwise was exhibiting behaviors and characteristics in its decision-making that was more “McDonnell Douglas”-like than Boeing.

    And, well, sadly here we are, with an aircraft derivative “life extension” well beyond what should’ve been for expedience and quick profits that puts the 737MAX on a trajectory to share a common perception of engineering and safety compromises that better resembles the troubled early years of the DC-10 (which had its fair share of incidents) than Boeing’s superior legacy of aircraft except the 787s, which relied on a different approach to its design and manufacturing featuring the outsourcing of critical work to “risk-sharing partners” that didn’t go exactly as well as originally envisioned and has since been modified, with some key aspects brought back in-house for the 777X program.

    Now toss in the failed effort to kill off the Bombardier C-Series (including its preposterous willingness to start a trade-war with our country’s largest trading partner and steadfast ally diplomatically and militarily) that then allowed its rival Airbus to scoop up the C-Series for peanuts, instead of Boeing taking over that program and running with it.

    So, again, it’s worth asking, who really took over whom?

    And if being Boeing in name only while otherwise going full-on McDonnell Douglas, which was the FAILING COMPANY whose commercial division was trounced by Boeing’s and Airbus’s products by the time its obsolete and rapidly commercially rejected portfolio only offered: a design dating back to a plane that took to the skies in the 1960s, the DC-9, with its MD-90 and 95 – and the other dinosaur whose designs date back to the 1960s, the DC-10, which its unsuccessful MD-11 is derived from?

    Oh, sure there’s been head-spinning, record profits in recent years using the McDonnell Douglas “approach” to pushing the 737 “to the MAX” – but at what cost for this shortcut to quick profits and successive years of ginourmous, multi-billion dollar stock buybacks?

    • You know, reading your comment makes me wonder why Boeing didn’t try to talk to Bombardier and turn the C-series into a joint venture early on in its development.

      Sure, they’d have had to pay more than Airbus did, but it would still have gotten hold of far more efficient replacements for the old 737-600 and -700 series in record time, and stretching the C-series to create a replacement for the -800 and possibly the -900 instead of the MAX would be a great idea (797-600, -700, -800, maybe -900 anyone?).

      That would have left Boeing free to launch the NMA far sooner (maybe around 2012-13) and make it a true 757 replacement, covering the gaps filled by the loss of the 737-900ER/757-200 all the way through 767-300 capacity scales. At a stroke, they would have challenged the A320neo with a newer, more fuel-efficient design produced in far higher numbers than before, gracefully retired the 737NG and created a new NMA to pummel the A321LR and XLR into submission.

      They missed a huge bet here, I think.

      • The C-series has a joystick that is a no go for Boeing.

    • Howard,

      I can’t disagree with the sentiment. As usual, spot on.

    • technically, McD bought Boeing with Boeing’s money and retained Boeing’s name. basically all the senior Boeing executives and the majority of the board of directors “retired” within a few years with sacks of gold and were replaced by McD senior mgt and board members.

      this type of “Reverse Merger” is also how America West airlines took over US Airways and called themselves US Airways (which had a better rep with customers) and then later “US Airways” took over American Airlines and called themselves American Airlines because AA had a better rep than USAir.

  33. Certainly pressure, which breeds sloppiness incuding failure to write down questions and new thoughts to look into.

    And shortage of staff means deadwood is not moved out. (Certainly some on the 787 program.)

    And perhaps confusion due shortfalls in leadership.

    (I don’t know how much retirements affected leadership, people like Harty Stoll and Dick Peale of 767 leadership would have retired by 787 time, there were good people left though.)

    • The 787 project was nothing but cargo cult and the conviction that Boeing could be better at the job than the gods ( at Airbus )
      All floated on PR. MAX isn’t all that different.
      Nice to see that kind of overblown self confidence coming home to roost after two crashes.
      But US culture appears to be elastic. No learning from forces applied.

      • ‘Cargo cult’ might describe what Boeing’s military division told everyone they’d done – gone through project reviews etc. without realizing reality.

      • For those not familiar with the ‘cargo cult’ story:

        An island in the South Pacific had much benefit from US military aviation operations in WW II.

        Then they stopped.

        So people put someone in a shack wearing headphones, with a microphone-looking device, to attract the airplanes back.

        When that didn’t work they escalated.

        But when their efforts were headed toward human sacrifice Australia stepped in and stopped the nonsense.

      • The 787-9 and 787-10 are by all accounts excellent planes, and the 787-8 probably would have been so if designed in-house as the -9 and -10 were (oops – I’m sorry – the -9 and -10 were “optimized” in-house). The business management of the overall project was a disaster, including the contracting-out of things which should not have been, but that is far from saying the original design and cost/benefit models are a “cargo cult”.

    • There’s also self-confusion.
      My policy is to sleep on a decision, whereas expediters will want a signature right away.

      Of course good teamwork – not groupthink nor political correctness, will catch errors because people are free to ask probing questions and others are not afraid to answer (whereas in a political environment people are afraid to be open).

      And did I say self-delusion?
      Like Boeing’s military division admitted to after a customer whacked it publicly in the city of its largest customer. (The Wedgetail fiasco, a 737-based surveillance platform for Australia.
      Despite the military division publicizing the error in a company publication the 787 program continued to evade the bad state of the project. (Finally someone got through to corporate top management who took action, including a realistic schedule for completion.)

    • “An American Airlines Group Inc flight manual for 737 MAX pilots dated October 2017 said the thumb switches had less ability to move the nose than the manual wheel.”

      I thought the thumb switches has full authority over the range, and priority over MCAS and speed trim.

      I’m also surprised the recovery procedure for an MCAS upset is not to just use the trim switches to trim the aircraft, and then turn off the power. Rather than turn off the power then use the manual wheel to recover trim.

      • That wheel is something of an issue.

        First its not in a good locaiton, down and to the right or left.

        Its also moving if MCAS or other flight computer tells it to and you have to flip a handle out.

        I think the idea is to rough trim it and then cut off the stab motors, stop the wheel and you don;t have to move it that much for fine trim.

  34. The wall of retirement hasn’t just crept up on Boeing and relying on Embraer to rescue them might not work. Are the talented Brazilian engineers going to be happy when they learn that they are earning far less than their American colleagues?Or are they going to leave and get jobs in Seattle or with Airbus or the Chinese?Or perhaps it could end up being a Daimler/Chrysler type of disaster?
    Airbus has talked of a a harvesting phase, this is a clear sign of eventual problems. Any technology company should always be developing something, the most important thing is that there are people still around to remind you what you did wrong the last time.

  35. Scott –
    From what you’re describing, I’d say there was a systemic disconnect between management, engineering and manufacturing. Bad luck may have made things worse, but bad luck alone is no explanation for the scale of the dysfunction that’s visible here.

    To use your own words about the MD-11 – that it was “classically ill-timed”, McDonnell Douglas also overlooked the arrival of a new generation of EETOPS-compliant engines, made the aircraft highly unstable around its pitch axis without any compensatory FBW, and failed to meet range targets. Bad luck it may have been, but it was compounded by factors under McD’s own control and outside the purview of mere luck- so McD made their own bad luck with that aircraft, so as to speak, and so has Boeing.

    • When I started, I would have runs of a week or two weeks where everything went wrong – anything I touched went bad.

      As I learned my trade, those streaks reduced to single events and those events I understood had a solution.

      Did my luck change? Nope

      What changed was I learned to avoid the traps and quickly recognized where the issue was and the path to solution, it simply did not get a chance to spiral.

      Boeing knows better, they created their own trap and then stepped into it. Its not about cowering workers, its about Competent Management.

      They get paid really big bucks and they should produce exceptional results.

      Of course the wool pulling is you don’t get what you are paying for.

      And humble my foot (putting it politely)

      • Boeing’s management has produced exceptional results,by taking huge risks,trading the company’s future and relying on Scott’s hard earned income tax to bail them out when goes wrong.

        • Now that is the truth. My mom lives down there as well and pays their way.

          Seems like at 91 she should not have to, but we are just grist to the mill.

          Scott is done with his house so he should be able to help them out more.

    • The MD11 was launched in 1985, they couldn’t anticipated Etops engines you talk about that didn’t go into service on the 777-300ER till 2004. The 11s real problem was the brand new rivals the 777 and 330/340 pair, and Macair being low on their performance promises.( They wouldn’t have had the computer design tools that came later for work stations instead of mainframes producing boxes of printout)

  36. @Scott,

    Whilst I respect the fact that you’re far more knowledgeable of the inner workings of Boeing, I find myself questioning your observation that “Boeing is a solid company.”.

    In my opinion Boeing exhibits a number of external symptoms typical of a company running its internal affairs in a very old fashioned way.

    In the normal run of events in a “solid” company, the proper place to raise safety concerns would be internally, without fear, resulting bonuses for a good spot, explanations and training otherwise. A spot that turns out not to be a problem is in itself not a waste of time, it’s a training opportunity that, if nothing else, keeps the internal safety monitoring mechanism well greased. This in itself is something that a solid company would want more than anything else. Toyota in particular are very keen on this approach to running a factory.

    In a company playing fast and loose with addressing concerns properly for itself, an employee would normal recourse to the industry’s regulatory body. If the regulatory body knows its stuff it would be able to handle such reports properly, without risking the employee’s identity. A regulatory body needs to be seen as a safe haven for whistleblowers.

    If the regulator isn’t paying attention only then would an employee be justified in going to the press, politicians, starting up independent legal action, etc. This is taking on a big personal risk.

    I think it quite odd that a number of former employees have taken, or are still taking, this third route. I acknowledge that there’s the possibilty of a background level of non-cases caused by general disgruntlement, but the occurances are puzzlingly persistent over recent decades.

    We’ve also got a regulatory body that has taken an increasingly hands-off, devolved approach to regulating Boeing. That makes it harder for Boeing employees to anonymously raise concerns with the regulator; Boeing *are* the regulator, and they know their own staff. The FAA would probably have to use Boeing-employed engineering expertise in assessing a concern anyway.

    All of this indicates that Boeing doesn’t have an effective, functioning, risk-free internal means by which employees can raise concerns. Which, if true, rather suggests that the people least likely to be informed of a design safety / quality problem is the company’s management.

    Flutter on the 747-8? How in this day and age of computerised simulation and decades of experience designing wings was that not spotted sooner?

    Coupled with the issues you raise in the article, and it’s not adding up to a solid basis for designing and manufacturing aircraft profitably.

    • That has me scratching my head as well.

      I guess you can be solid in the middle and bad at the top.

      Certainly the employees take a lot of pride in the work they do but they can only do as good a work as they are allowed.

      As I recall Boeing wanted to yank follow up inspectors at the plants who were the employees that caught things that should not get through.

      Some years back there was a book To Engineer is Human.

      It had to do with cutting corners until you got caught and then stepping back just to have it happen again.

      Maconda was the classic ugly confirmation. Something like 5 major safety system each that was compromised by BP.

      And with all of them failing, people dead and millions of gallons of oil into the environment.

      • “I guess you can be solid in the middle and bad at the top.”

        True, but it’s probably not sustainable. If you were in that situation with no sign of change for the better, and you had the choice, you’d get out of that business ASAP.
        There’s also the wider moral responsibility that all us engineers have – to not be party to something that’s wrong. Ok, that’s hard to demand of every single engineer when there’s mortgages to pay, children to feed, etc. But by staying on, one knows that it’s going to go wrong eventually.

        What if Airbus keeps expanding in the US? Will they be putting job ads in the Seattle Times?

        • Mathew: The dilemma is that moral or not, do you throw yourself under the bus and die and make no difference or do you keep your job and the needs of your family.

          I was on the pointy end of that when an office kept getting flooded with sewer regularly and nothing was getting done about it because the owner of the facility (it was leased) had lot of money in the bank that the office belonged to. It was so bad I kept rubber boots and gloves to respond to that when it flooded. I finally raised enough fuss it got handled. I was risking my job.

          I was single then, but I was poverty single.

          I was pretty desperate and gave up some outside work in that period because of the issues of health involved.

          Go up against a company and you loose and get no where?

          I am surprised at how many people do.

  37. I don’t think at all that it’s a stretch to describe many of these issues as knock-on effects of the 787 debacle.

    For most of the past decade, Boeing has behaved as if it were strapped for cash — and it probably was, despite all the free cash flow it was reporting. (Remember, Boeing uses program accounting, and program accounting can paper over a whole lot of short-term cash flow shortages.)

    Since 2014, it has run off more than 12,000 experienced employees (the vast majority of them engineers and supply chain managers) from its Puget Sound work force, and tried to replace them with cheaper, inexperienced replacements who lacked specific industry expertise and tribal knowledge.

    At the same time, it has yo-yo’d the size of its touch-labor workforce with a series of cost-cutting buyouts (in lieu of layoffs) followed by recalls and hiring binges.

    If you’re running on a shoestring budget — and running behind your competition — you’re going to make fundamental mistakes, and I don’t think it’s too much of a stretch to say that what we’re seeing at Boeing these days is a function of that reality.

    • In May, 2016 an analyst posted an article on Seeking Alpha (a web site geared to investors & the banking industry) stating that Boeing spent “nearly $20 billion over the past year” on stock buybacks.

      Meanwhile, in December, 2016 the Board of Directors at Boeing announced it authorized $14 billion share repurchase (aka stock buybacks) for 2017.

      This was followed a year later in December, 2017 when Boeing’s Board of Directors authorized $18 billion share repurchase for last year – which was then increased to $20 billion last December for the current year.

      That’s a total of $72 billion authorized for share repurchases for this “quick & dirty” snapshot re Boeing’s stock buybacks for the sample periods cited in recent years (2015-16; 2017; 2018; 2019)

      And these stock buybacks are in addition to Boeing’s regular quarterly dividend payments, which were increased to $2.05 per share this past December.

      Nope! Sure doesn’t sound like Boeing’s “cash strapped” if it can afford such breathtaking, head-spinning sums spent on stock buybacks and shareholder dividend payments ⚠️

      If only the Board of Directors and senior management was as zealous and laser focused on product quality for the reported rushed to market and apparently less intensive (as in lower cost) “self-certification” approach used for the 737MAX as it appears to be on ensuring availability of ever increasing billions to be diverted for annual share repurchases that serves only towards enhancing their own, and shareholders’, wealth with such princely sums that might’ve otherwise prevented incidents where the value for the losses of lives is incalculable had some of those precious resources instead been directed towards R&D and more intensive testing and evaluation of the model before it was “certified” for entry into revenue service in 2017.

  38. I am guessing part of the problem is an out of touch group of executives in Chicago. They should move back to Seattle where BCA and 70% of revenue resides.

  39. The point matters most:
    B787 had a major flaw with the batteries, which was just pure luck not to end in a total loss. We had two fires on the ground, Boston and London, and we had another fire just after takeoff.
    The system was self certified….and it was a skandal.
    The issue itself went down to production quality, suply chain management, construction processes, etc. – but the fact remain the battery system was not thought of beeing saftey relevant. If a B787 would have been lost, Boeing would have maybe gone, with 30bn$ spent on the B787.
    Now we have yet another grounding of B737Max, again we have a self certified system and this time we have 2 complete losses.
    This is unaceptable – didn’t they learn anything out of the B787 certification process?

    The design of MCAS is just so against the principles in civil aircraft design, i simply can’t belive Boeing did it this way.

    Boeing was designing great airplanes. B737 NG, B757/767, B777-200 and B77W were so sucessful and well designed airplanes, I don’t understand this could happen.

    • @Sah: The London fire was not the battery but the ELT (Emergency Locator Transmitter) in the ceiling. Ethiopian airliner.

      • Scott: It acualy was a battery for the ELT and an Li Ion as I recall, just not the main battery.

        And it did burn out a major part of the fuselage which should be sobbering to anyone as they are still there (in all aircraft) .

        In flight that would have been a total loss.

        No battery failure should propagate like that.

        Li Ion are famous for it and why they won’t let you ship em in passenger cargo.

        • @TW: London was only the ELT. Boston and Japan (ANA) were the batteries. The ELT was installed with a pinched set of wires that short-circuited. Totally unrelated to the batteries.

          • Scott:

            Unrelated to the Boeing aircraft main system batteries.

            It is related as the cells cascaded into a full blown fire in both cases.

            One problem is solved but not the other.

            Pinched wire or bad battery, that is why Li Ion are not allowed in pax cargo.

            The battery type is the central issue not just it being a battery.

            The aircraft battery is more active, but no Li Ion is immune.

            No battery should cascade into taking an aircraft down.

            If Ethiopian had been flying when that occurred it would have been a total loss.

            Its another safety issue that has not been addressed.

            Rare? Yep. So were AOA vanes (previously)

            New battery install and …………..

          • @TW I will try again.

            The 787 was grounded because of two lithium ion battery incidents: the JAL on-ground/empty airplane fire in Boston and the ANA take-off event (smoke, never confirmed open flames) that resulted in emergency landing and emergency evac. The ANA grounded the in-service fleet of 50 787s.

            The ET 787 on ground at London, also empty, was a fire at the ELT and not related to the battery fires of JAL and ANA. It did not result in grounding the fleet.

            End of story.

          • Here is the US FAA’s implementation of the Transport Canada AD for the ELT fire:


            The FAA estimated that 3,200 aircraft under its jurisdiction needed to be inspected, so it was an industry-wide issue. IIRC the investigation showed that power wires internal to the unit were being routed incorrectly such that when the waterproof cover was tightened down there was a chance the wires would be damaged, ultimately leading to a dead short on the battery pack.

    • “B737 NG were so sucessful and well designed airplanes, ”

      If you look back the NG certification already created rather high tensions between the Boeing/FAA and the other cert authorities. No idea how the US side regularly were able to
      entangle their opposition. I assume underhanded force applied.

  40. According to Dominic Gates, and Steve Miletich https://www.seattletimes.com/business/boeing-aerospace/grand-jury-subpoena-shows-sweep-of-criminal-probe-into-boeings-737-max-certification/

    “a federal agent served a grand jury subpoena Monday seeking information from an aviation flight-controls expert ”

    “The expert, Peter Lemme”

    “Lemme said the subpoena was served by a special agent from the Seattle field office of the Department of Transportation’s Inspector General.”

  41. There is another area where recently both Boeing (for the NG-800) and Airbus (for the A321) have armtwisted their respective Regulator agencies into approving self-complacent certification criteria : certified Max Pax ! In particular, the A321 presently is advertised at 240 pax, based upon computer simulated emergency evacuation drills replacing – because costly and dangerous – real life evacuation tests in 90 seconds. The price to be paid for in lost lives for such Regulator complacency remains unknown until the Bill comes on the table …

  42. The flow in the region of the Angle Of Attack sensors greatly exaggerates the angle. Furthermore, the flow is “sticky” with hysteresis. So when the sensor reports high AOA and the MCAS pushes the nose down, the excessive angle of flow at the sensor is slow to respond and the MCAS will continue to push the nose down.

    • Peter Lemme has written that the AOA feeds two separate system via two seperate sending parts (both on the same shaft)

      Ergo, it has to be the AOA as there is no common parts or circuits or computers involved with that data.

      AOA failures arre extremely rare (or were) and the question of scours is why so many in such a short time (two on the Lion Air and one on the Ethiopian Airlines)

      Something changed and we don’t know what it was yet.

      Lion could be a case of they pulled a suspect AOA and then it wound up back as a good spare (yes its known to happen)

      Indonesians have done the world a ugly service by not publishing the data as they get it.

    • In that same NYT article:

      “Days after Flight 610 crashed, Polana Pramesti, the head of Indonesia’s civil aviation authority, waited for visiting Boeing and F.A.A. officials to talk to her. As head of Indonesia’s version of the F.A.A., she wanted advice on whether to ground Max 8 jets in Indonesia. But the Americans, who did spend time with transportation safety committee officials, never came to her, she said.”

      And further down:

      “Only after the Ethiopian Airlines crash, Ms. Polana said, did the F.A.A. and Boeing become more responsive. On March 22, she had her inaugural teleconference with F.A.A. officials — the first time Indonesian officials received a precise explanation of how MCAS worked and how Boeing was planning to fix it, they said.”


  43. It’s becoming difficult to keep up with this complex issue.
    May I ask if the A320 requires a form of MCAS?
    Am not seeking to start a new A v. B fight.
    Just want to know.

    • No, not as such. In general the MAX control surfaces move directly as the pilot tells them too. MCAS is a system designed to intervene at at extremes of the flight envelope. This is because without it in those situation the MAX no longer behaves and feels as a non-fly-by-wire aircraft should so the computers take over.

      The A320 is totally fly-by-wire. In “normal-mode” inputs by the pilots are always taken as statements of “intent”. The aircraft computers then move the control surfaces to implement the “intent”, the computers are always in control and prevent the pilots from doing things like stalling the aircraft.

      The exception is if the A320 computers feel they can no longer cope in which case the aircraft reverts to “direct mode” where the control surfaces move directly as the pilot indicates.

      • Regarding the A320, it’s more complicated than that as far as I understand. Airbus groups its flight control modes into multiple categories, listed below-


        During normal law, it’s pretty much the way you said. But systems failures or sensor failures (not pilot inputs) can cause a plane to go to alternate law. When AF447 had its pitot tubes icing over, it was because the loss of airspeed and altitude sensor data that the flight control computers could no longer maintain normal law and shifted to alternate law, in which the pilots could stall the plane (and did, tragically).

        From what I understand, an A320 would be able to handle the issues faced by the MAX 8 unless there were multiple system failures on board.

    • There is only one example that I know about in the history of the A320, but I stand to be corrected.

      A Lufthansa flight, can’t remember the number, where two of the three vanes froze. The airplane in normal law did take the view that it was stalling and put the airplane into a 4000ft/min dive from about ~30,000 ft.

      The pilots were not allowed to pull up in normal law because normal law said they were stalling. So they disconnected something (? – don’t know). This switched the airplane to alternate law. They pulled up and got home.

      Beyond that I need to do more research.

    • A320 has full envelope control so no it does not have MCAS which is like a bandaid vs full authority FBW

    • Definitely a Rolls-Royce problem, and not the first time they’ve had engine reliability issues. But two out of two really does take the proverbial cake.

  44. I don’t see the point in regurgitating all this well ploughed ground. Of course these aren’t connected. Boeing has screwed up things over the years just like any company. I don’t recall ever seeing a long litany of Airbus screw ups over the years. I would love to see one someday on the site but I won’t hold my breath.

    • Your Logical Fallacy is “tu quoque”. Pronounced too-kwo-kwee. Literally translating as ‘you too’ this fallacy is also known as the appeal to hypocrisy. It is commonly employed as an effective red herring because it takes the heat off someone having to defend their argument, and instead shifts the focus back on to the person making the criticism.


    • I’m pretty sure Airbus’s miscues for its soon-to-end A380, A340, the original iteration of some early A350 models, and especially it’s currently slow selling A330-800neos have received every bit as much coverage by Scott and his colleagues in this space as Boeing has for its miscues on its programs.

      Ditto for Airbus’s still problem plagued A400M military transport.

      I became acquainted with Scott’s expertise 30 or so years ago when I began working at what was then a well known investment firm and came across Commercial Aviation Report during my weekly late Friday afternoon “research missions” after the market closed when the firm’s librarian offered me an opportunity to photocopy all of the pricey industry newsletters and other trade publications I either never knew existed until then, or couldn’t possibly afford on my own, plus other high caliber research reports from industry experts and leading analysts from rival firms that I would take home and read cover-to-cover during the following week until the next eagerly awaited Friday afternoon arrived.

      Then, after leaving Wall Street, and as soon as finances permitted, of all of the expensive publications available, including the “industry bible” published daily, Commercial Aviation Report was by far the most eagerly awaited publication I couldn’t wait to get my paws on at the very first opportunity during the years when I was working on several consulting assignments for airlines and other business with operations at New York’s JFK and LaGuardia airports, and a frequent, bylined contributor of columns and author of downloadable, comprehensive data reports for PlaneBusiness Banter.

      So, be it then, now or in the years in between, I have always valued and trusted Scott, and his colleagues at the publications he’s been affiliated with (Founded/Co-Founded) for his expertise and fairness in reporting or commenting about the good, bad, and everything in between regarding the aerospace and aircraft OEMs for their design, engineering, testing, performance, marketing/sales, managerial competence (or lack thereof) and financial successes – or failures.

      Does he express his opinions? Absolutely. But I challenge those whom seem to think he plays favorites to prove it as for nearly 30 years of being familiar with his work, I’ve yet to see anything but an exceptionally well informed expert calling things as he (and his equally talented colleagues) see it.

      And just to be clear: I have never met Scott; have neither a personal nor professional relationship with him; and have not received any compensation or other considerations in exchange for what was written in this reader’s reply post to your comments alleging that this publication is overly critical of Boeing in its coverage of the recent Boeing 737MAX incidents that resulted in the loss of life for hundreds of passengers and crew, or that his coverage and commentary would be any different if this had been a pair of Airbus’s aircraft instead of Boeing’s that crashed shortly after takeoff.

      To wit, and while it was not regarding incidents resulting in the loss of life, Scott was every bit as critical of the poor managerial decisions and failure to execute for Bombardier’s C-Series before that program was ceded to Airbus, as well as his many critiques of the family that still controls (via preferential stock) Bombardier.

      So, again, I dare those whom seem to think this publication exhibits a bias towards some OEMs over others, to prove it by providing examples along with reasoned, defensible arguments in support of their allegations.

      Otherwise, readers would be wise to take those misinformed comments with a grain of salt!

      If only every publication, be it industry focused, or mass market, were as accurate and reliable as this publication is…If only…

      Oh, btw, did I forget to mention that I’m only referencing the part that’s free…

  45. KC 46 deliveries halted again,sounds like they are basically talking about swarf.What are the commercial products like, without government inspectors opening up normally closed spaces and the workers under pressure to ramp up?
    Perhaps an avenue for those looking to cancel their orders.

  46. Yeh, saw that on NBC this morning, claims they turned off the system, but could not stop the dive, so switched it back on, not sure if blowback as postulated by Bjorn would be a factor at that point in time (details are sketchy), but could be a hammer blow for Boeing

    • I do wonder if this tells us anything about why BA needs more time to sort out the changes to the MCAS software. It looked like release was imminent, and then the delay… coincidence or not ?

      I can imagine if you’re short on altitude, gaining speed rapidly, and you’re finding it difficult to raise the nose by manually turning the trim wheel, you’d have to be tempted to turn the power on again to use the switches on the yoke to try to get the nose up.

      You turn it on to find MCAS immediately pushes the nose further down, and you’re in an even worse position.

      I wonder if anyone, at any point during certification / testing got in a simulator (one with a true reflection of fielded MCAS enabled), and tried the runaway trim checklist a few thousand feet off the ground, especially as that was the advice after the Lion Air crash.

      I still don’t understand why the ‘Yoke jerk’ to kill trim was changed ?

  47. Very important to address this issue. It was encouraging to read this report.

  48. Pingback: Recent Articles about Problems at Boeing, Including the 737-Max Series | Playing the Devil's Advocate

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