Pontifications: Congressional hearings on Boeing dominated by grandstanding–but damning documents revealed

By Scott Hamilton

  • Senate hearing largely theater.
  • House hearing has grandstanding, but substance, too.
  • House reveals some damning documents.
  • Muilenburg claims no knowledge of legal strategy, but top lawyer reports directly to him.

Nov. 4, 2019, © Leeham News: Last week’s Congressional hearings about the Boeing 737 MAX crisis was just as I expected: theatre, lots of grandstanding, little substance and testimony that elicited little in the way of new information.

The US Senate hearing was a perfect example of playing to the television by many Senators.

The House hearing certainly had its share, but in more lucid moments, some House members produced new documents that were especially damning to Boeing.

Boeing CEO Dennis Muilenburg and John Hamilton, VP and chief engineer, did no harm to Boeing, which was probably the prime objective. (Hamilton is no relation to me.)

Muilenburg did harm to himself, however, and some Members of Congress landed some damning blows.

Senate hearing

The Senate hearing produced nothing new. The Senators didn’t offer documents or information that could contribute to finding out anything or which could lead to fixing the myriad of contributing factors to the certification of the MAX, development of MCAS and the two accidents.

Montana Sen. John Tester was spot on when he observed Muilenburg “pivoted” on direct questions, noting that as a politician, he, Testor, “knows a pivot when I see it.”

Texas Sen. Ted Cruz, former courtroom litigator that he is, drilled Muilenburg on the now-infamous Forkner text messages.

But otherwise, the Senators’ performance seemed geared more for their five minutes on TV than in any real interest in safety matters. Wide shots later showed several empty Senator seats—those having left after their five minutes of TV time.

House hearing

The House members did their share of grandstanding, too, but they took their job and this hearing far more seriously than the Senate (a low bar, to be sure).

The questions to Muilenburg and Hamilton were far more pointed, far more substantive and confrontational. Some House members produced documents that had not been previously revealed, some of which were especially damning to Boeing’s approach to developing and certifying MCAS.

There were repeated calls for Muilenburg to resign and one that he give up his compensation ($23m last year). It’s tough to tell how much of this was theatre and how much of this was genuine (although, clearly, one suggestion from a former CEO/mid-size business owner was obviously sincere).


Muilenburg’s responses, however, were cringe-worthy.

The Board of Directors sets his compensation, he repeatedly said. The Board of Directors removed his chairman’s title.

This coming from the same man who repeatedly said he’s accountable and the buck stops with him.

Muilenburg may be technically correct in both responses, but there is nothing preventing him from donating his compensation to a victim’s fund or scholarships or something. He’s rich enough already that he can afford to do so.

He can also submit his resignation, something he says he hasn’t done.

Regardless of the merits of either suggestion, his passing the buck to the Board had terrible optics.

But, like the infomercial, that’s not all.

“I know nothing”

When asked about Boeing’s legal strategy, reported in newspapers, that it wants to move all lawsuits out of the US to Indonesia or Ethiopia, where liability awards are a fraction of those in the US, Muilenburg professed complete ignorance. He acknowledged awareness of the newspaper reports.

Off camera, the incredulity of a couple of the House members was clear.

I couldn’t agree more.

How Muilenburg, the president, CEO and at the time also the chairman, could not be aware of Boeing’s legal strategy is beyond belief.

Let’s go back to May 1, when Boeing announced Michael Luttig would handle all MAX legal matters. The press release said:

Boeing names Luttig senior counselor and senior advisor

Boeing today named J. Michael Luttig to the newly-created position of counselor and senior advisor to Boeing Chairman, President and CEO Dennis Muilenburg and the Boeing board of directors. Brett Gerry succeeds Luttig as general counsel. Both changes are effective immediately.

Luttig, 64, who has served as general counsel since joining the company in 2006, will manage all legal matters associated with the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents. He also will serve as counselor and senior advisor to Muilenburg and the Boeing board of directors on these and other special matters. Luttig continues to hold the title of executive vice president and remains on the company’s Executive Council.

“During his 13 years of service at Boeing, Judge Luttig has built the finest legal team in the world and delivered an unparalleled record of success for the company,” Muilenburg said. “Judge Luttig is not only a brilliant legal mind, but also a critical voice on all the important issues and opportunities facing our company.”

“He continues to be a trusted partner and advisor as he steps into this new role.”

Luttig is counselor and senior advisor to Muilenburg. He will manage all legal matters relating to the Lion Air and Ethiopian crashes. He remains part of the executive council.

And Muilenburg claims he knows nothing about legal strategy?

It’s mind-boggling.

Boeing HQ did not respond to a request for comment.

The missing links

There were, however, some missing links in the hearings: the FAA and Congress itself.

Recognizing that these hearings were about listening to Boeing, nevertheless the few questions about the FAA’s role in the certification and review of MCAS and the MAX was not adequately pursued. Unfortunately, Muilenburg stuck to the messaging that Boeing complied with regulations and ADOs (the designated FAA representatives that are Boeing employees) did their jobs.

This was an opportunity for Muilenburg to say things could be done to improve the system and offer concrete examples.

It was also a chance for Muilenburg to hit home the fact that if Congress wants the FAA to do more, Congress needs to fund the FAA adequately.

Of course, this would have been politically incorrect and I understand why he wouldn’t want to go down this rabbit hole.

But Congress is every bit as culpable. When the FAA can’t even get its own reauthorization act approved by Congress, which would not only fund safety but improvements to Air Traffic Control, Congress deserves to be tagged.

Of course, Congress won’t do this sort of navel-gazing.



80 Comments on “Pontifications: Congressional hearings on Boeing dominated by grandstanding–but damning documents revealed

  1. I suspect Boeing board are content to leave Muilenburg to receive all the body blows until they can say, we’re drawing a line under this mess and are moving on.

  2. Are all airline stage payments suspended? Ryanair has stopped theirs, so you can imagine things getting worse very quickly compared to the early days when Boeing was only waiting for the final stage payment.

  3. Since this has progressed to a grand jury and possible criminal case I suspect that any information, thoughts will be volunteered or spoken out of the court room that can be avoided. “Anything you say can and will be used in evidence against you” so best not to say anything that can be misconstrued by prosecutors. All the talking and information and arguing will be done in court that can lock people in jail where fast thinking attorney’s can handle it. There is no such thing as a ‘chat to clear things up’.

  4. ” He’s rich enough already that he can’t afford to do so.”

    I think you mean ‘can’.

      • Scott: You keep saying that, you should turn it off and then experience the freedom of making your own screw ups!

        • TW, We don’t know what specific Grammatical angles Microsoft uses to attack writers prose with. They hide it in their software, with internal spelling tables, and grammatical rules. They don’t abide by the official Oxford English Dictionary in all instances. What may be approved spelling in Europe may not be approved in America and vice versa. Think of how colour is spelled, or do you take a holiday or have a vacation? Microsoft is always trying to blame the writers for any mistakes first. Bill Gates should step down. He makes too much money on lousy software. They didn’t have the popup screen working correctly in MS Win ver 7 and were fined by Europe. But, American just lets them off.
          in 2012 when Microsoft was caught not displaying a browser ballot screen to users of Windows 7
          in 1998 the (1) lack of interoperability information, and (2) incorporation of Windows Media Player with the Windows operating system.
          I could go on, but, I only write with Unix and open source now. Windows has lost market share and will continue to do so.

          • News Flash: Bill Gates has not been CEO of Microsoft since 2008.

  5. The Seattle Times recently reported:

    Muilenburg met with the families of crash victims Tuesday night after his session in the Senate, and at one point in Wednesday’s hearing his voice cracked briefly with emotion.
    “We wanted to listen,” he said with a stricken look. “Each of the families told us the stories about the lives that were lost. Those were heartbreaking. I’ll never forget that.”

    Meeting privately with victim’s family members could not have been an easy thing at all. I’m actually surprised (in a good way) that he actually did it.

    This doesn’t mean I think he’s handled this MAX crisis well at all though.

  6. So, which “court” (another political court? An actual legal court? The media court? The court of public opinion?) actually looks most likely to bring Boeing and Muilenberg to open, honest, detailed and consequential account?

  7. Scott, In your headline you mention damning documents. I didn’t watch the House hearings. I was reading, waiting for a bit more mention of the documents, but, didn’t see anything. Do you remember which congressmen made mention of new documentation, or can add some color on what they found out?

  8. I was foolish enough to expect something more. The interrogation of the facts was superficial at best. When DM stated that they had followed all necessary certification why was this not followed up. Surely there are pertinent questions such as:
    Grandfathering arrangements and the desire to avoid as much certification as possible
    Pressure brought to bear on the FAA both directly and indirectly to reduce the level of oversight and speed up certification
    The constant pressure to reduce the powers of the FAA by Boeing
    And many many more

    In spite of the ‘grilling’ DM came across as either evasive or incompetent. He has a thick neck indeed, it is almost as though he perceives himself as above the law.

  9. There.is​ no​ question​ Boeing​ CEO​ should​ go…. And.no!w!! He.has​ no.credibility and​ He.is.branded a​ corporate​ tool​ and.murder.​ The​ Board​ looks.worse every.day​ he.stays…. Joe.and Jane​ Public​ lose.respect and​ distrust​ Boeing​ more.with.each passing​ day.​ He​ wants.to​ stay​ to.fix.this…. There.is​ nothing​ He.can​ fix…. Boeing​ must​ ​engineer​ MCAS​ the​ way​​ it​ should​ have​ the.first​ time!!!!
    Dennis​ is​ incapable​ of.the.real fix​ And.that​s​ the.loss of​ experienced​ personnel and​ the​ horrendous​ly​ toxic​ culture​ that​ Boeing.CEO​ crawled up​ from!!!

    • Mr Muilenburg must stay till the mess is cleaned up because the new CEO will need a clean start. It’s hard to imagine a CEO being on top of every little detail. At some point the MCAS used two sensors and the MAX also had a sensor disagree alert, like the NG, that they accidentally removed but were going to reintroduce. If they just left one feature: that the MCAS responds only to two sensors, even if they had not have mentioned MCAS in training manuals but seemingly at the last moment before certification they seized defeat from the hands of victory.

      • I never got that.

        If you created the mess or allowed it to continue (aspects of both here I believe) then how are you qualified to clean it up?

        You don’t believe its a mess, lip service at best (and as we saw oblivious at best ala total denail)

        So no, can him, the board as well and start with a group who actually believe safety is important not just a thing to mouth platitudes about.

        Would you put Atilla the Hun in charge of Romes defense?

        • Muilenburg didn’t create the situation that lead to the MAX mess, he just didn’t notice it in time or clean it up in time.
          A whole range of high paid executives, engineers and positions would have failed along the way as well. Muilenburgs only real problem is the failure to ground after the Lion Air 610 crash when the issues would have come out after the preliminary report months before ET302.
          Clearly someone screwed up at Boeing with MCAS design and it wasn’t Muilenburg. They’re fortunate they’re not known to the world. Of all of the 7 problems with the MCAS/MAX: (1 the belated removal of duplicate sensor triggering to eliminate false triggering, 2 repeated unlimited applications of down trim, 3 the belated increase in MCAS power and activity at lower speeds, 4 sensor disagree alert accidentally removed, 5 not including MCAS in pilot manuals, 6 the ineffectiveness of manual trim high speeds with elevator deflection, 7 Tardy communication to FAA) ONLY ONE really matters: the failure of Boeing engineers to use both alpha sensors for MCAS triggering. Its absolutely flabbergasting. The Three(3) most critical of these seven(7) flaws were absent as design flaws and were deliberately introduced as minor software modifications to a superior previous system at the last minute before certification for inexplicable reasons. They almost defy common sense. I just couldn’t even imagine someone being that stupid as to not use both alpha sensors.

          • ” They almost defy common sense. I just couldn’t even imagine someone being that stupid as to not use both alpha sensors.”

            I must say i don’t think so based in my experience of what organizations can do to themselves when they are very dysfunctional. This have the signs of groups inside Boeing that don’t talk to each other, silos of information inside the company. Left hand does not know what right hand did.
            And that is a Muilenburg responsability.

        • “Would you put Atilla the Hun in charge of Romes defense?”

          A question of loyalty.
          If you have his loyalty to do the job I’d set him to work on Romes defenses. ( he exploited the shortcomings, didn’t he? )

      • “Mr Muilenburg must stay till the mess is cleaned up because the new CEO will need a clean start. It’s hard to imagine a CEO being on top of every little detail. ”

        Louis Gallois didn’t need any favors done for him before he took over the debacle at Airbus – and he succeeded. So it has been proven to be possible. Unfortunately, the USA does not produce excellent leaders such as Louis Gallois, so I won’t be expecting any “Super-Man” to come in and take charge. I expect Boeing’s next leader will be an another empty suit like all the rest. Seriously…just what does anyone really think that a Boeing Board led by a Hedge Fund Manager is capable of finding and empowering the type of leader needed to dig Boeing out of its mess and change its culture?

        From all the problems Boeing has had this year, it has become apparent to me that Boeing’s Engineering Culture has atrophied too much to be revived by any means at Boeing’s disposal (or any means it would use): it is dead and gone. The slow and steady cultural erosion that began under Frank Shrontz in ~1990 under “Working Together” is now complete. What took almost 30 years to destroy will not be rebuilt by any set of events other than those which laid the foundation for Boeing’s First Rise: the near unlimited spending and government-forced discipline neccesitated by World War 2 and the Cold War. I don’t see this happening again.

        • Can’t argue that.

          I would like to see it different but impossible to not agree. sigh.

        • Uh, but Airbus is not operating under those conditions. What is lacking that the US is not producing excellent leaders? I’ve seen visionary ones — like Steve Jobs. I think we still have the capacity to produce those.

          • The intelligence of a country converge to the one of its journalists.

            I also don’t think with current massive education and communication levels you can produce different people even less leaders. Many of good leaders had idiosyncratic experience.Had personality some “larger than life” and all of them had flaws due to that, Rough edges, but that implied a certain level of work quality, vision.

            Right now everyone is an egg or in a way to be, and companies are looking for eggs. Go with the flow.

  10. Boeing keeps insisting no errors were made getting to MCAS and they are getting away with that answer. Mullenberg should be asked if he believes the implications of these statements? If he believes that that in the design and safety analysis of MCAS v1.0, a secondary flight control that:
    * had no redundancy on the trigger channel
    * had near unlimited authority
    * and failed in a mode that that lead to loss of control… twice

    That in that entire process no mistakes were made, that effectively Boeing feels this was one of those inevitable glitches that happen when building a complex product. That a similar thing could be happening again right now and again they would feel no errors are being made.

    I actually suspect they don’t feel that way and the position is just legal. But I think even as a legal strategy it is flawed.

    • Actually Boeing now says they made mistakes

      But they say the process is just fine though we are tweaking it but we are happy the way the FAA did things.

      Now take out of that what you can.

      • Yes. The M word passed DM lips
        “Muilenburg acknowledged, “We made some mistakes” when developing MCAS.”
        And more :
        “Representative Rick Larsen of Washington state, where Boeing builds the 737, asked Muilenburg to name three mistakes Boeing made.
        Muilenburg quickly listed Boeing’s failure to disclose for months that it had made optional a cockpit alert flagging disagreement between the airflow sensors. “We got that wrong,” he said.

        and another
        Representative Peter DeFazio, who heads the House Transportation and Infrastructure Committee holding Wednesday’s hearing, blasted Boeing for a “lack of candor” and pressed Muilenburg on why MCAS was vulnerable to a single point of failure.”

        Its not clear from the Reuters report that all these questions were answered or there was the ‘Dennis pivot’ away.

  11. Scott:

    I have another take on Muilenberg.

    He is just a pretty face, a patsy, puppet does what the Janitorial Board tells him to do.

    If we go with the fact he really is clueless and tone deaf then that explains everything!

    Maybe the thinking part of your brain is removed when they make you CEO.

    It then all begins to make perfect sense.

    I was told in my career that I was a technician and not a politician.

    But even I am better than that. Downright sad is what that is and says.

    You want someone more clueless (granted I did not care nor trired) than I was as your CEO, phew.

    • My read on Muilenberg used to be different. I don’t know what it is now. But I was very critical of the previous CEO, who was an MBA. The Max was his child. My conspiracy brain suggested that the fix for the Max was the type of fix someone from the fighter division would introduce and understand. So, I was thinking that Boeing might have known what a disaster the Max was potentially when they brought in Muilenberg, an engineer. He might have come in to either toss or figure out how to salvage the Max program. He embraced it. It’s hard for me to believe that he, an engineer, didn’t know everything there was to know about the liabilities of the Max project, the most significant program at the company. But I also think that everyone convinced themselves that the Max was much more than it was — which I still believe is an old airplane driven by new engines that don’t fit (the proverbial socks on a rooster). It’s a lemon. They believed their own hype. And I think that his performance at the hearings is a clue of something serious. It was dishonest. Above all, it was dishonest to shareholders. To me, such brazen dishonesty was more than an indication of lawyering (though this is indeed something to take into account). It meant he didn’t care and that things might not be going well for the Max or Boeing.

      • Yep, if the MAX was ‘solved or mended’ then the hierarchy could afford some degree of mea culpa about the past, as it stands there is an edginess to the whole senior team that suggests all is not well. There is more to come out re either past actions or the recertification which is forcing this quite ridiculous behaviour.

    • “He (Muillenberg) is just a pretty face, a patsy, puppet does what the Janitorial Board tells him to do.

      If we go with the fact he really is clueless and tone deaf then that explains everything!”

      Not a bad Hypothesis, but I’ve seen Boeing Management act like this before and they were some very smart and capable people (even if some of them were terrible people). So…here’s another Hypothesis that I think fits even better and was supplied to me by a Psychiatrist I know who actually used to treat Boeing, MACDAC, NASA and Lockheed execs: Xanax and Faith. Yep, ya’ ever wonder how these guys remain so emotionally detached and keep insisting that everything will be fine? Well…now you know how a lot of them do it and it would not surprise me if it applied to most all them did it like that.

      I’ve been prescribed Xanax and it is the most profound drug I have ever taken. When I’ve taken it, I have become absolutely “Detached” without even the remotest possibility of getting upset. In fact, when I have taken Xanax I have become so “Detached” – so blase about the world around me – that I could have easily rationalized something like MCAS. And think about it – a lot of Corporate Executives eat this Xanax (and drugs like it) like it was candy. Personally, I took about 5 Xanax and then threw the rest of the bottle away – I just couldn’t stand what it did to my “Inner State” (I became a Zombie inside).

      But taking Xanax did have one good outcome: it taught me that anyone who unemotionally accepts the untenable on a daily basis is either a sociopath, or on drugs.

  12. Given that it’s increasingly difficult to say that Boeing won’t go bankrupt, that a bankruptcy would be massively disruptive, and that resolving the bankruptcy to best possible degree would likely require intervention from the US government and political system, aren’t these sorts of hearings something of a sideshow that’s threatening to distract us all from what is economically more important?

    It’s already been well established that many bodies have failed catastrophically, surely it’s worth a scan over the near term from here and see if there’s anything urgent that has to be done to ensure what’s left of the industry can continue to operate? we don’t want to wake up one morning to find Boeing has disappeared and half of world aviation is grounded.

    • Looking at Boeing’s value and its earnings, I just don’t see any possibility it goes bankrupt.

      Where is AP Roberts when we need him?

      I believe your debts have to exceed your assets. At something around 100 billion, Boeing debt is trivial even with a few billion of MAX losses thrown in.

      • Yes . The yearly revenue is in excess of $100 bill, the orders backlog could exceed $1 trill. The physical assest are massive.
        This is no couple of floors of hipsters in an office park/loft somewhere valued in the billions but bleeding cash and requiring more rounds of ponzi investors money to keep going.

        • Why would a company with all of this going for it gamble it on the Max? Just look at a pitiful picture of that ancient, mid-century nose decked out in those brand new, 21st century engines jutting out, almost un-shadowed by the the forward edge of the wing. Compared to other, contemporary, sleek aircraft, it’s a bleak embarrassment. It’s more like a desperate, Hail Mary pass than the product of an arrogant, aerospace giant. Why? Like I said before, I can’t even imagine the reclusive, racist, war profiteer Howard Hughes giving such a sad, out of touch performance before Congress. But today’s contemporary executives, who really risk nothing and have created nothing — who compile massive wealth even in the midst of drastic failure! — are more like Soviet era functionaries than proud American entrepreneurs.

          • Real Steve: As I have told my wife many times, you are attempting to interject logic into this.

            Think of it as the Titanic. Prudence says go way South or very very slow.

            But, as you think you are unsinkable what rises to the top is go North as its the great circle route, go fast as our image is at stake.

            So the go thing to make the stock rise higher faster is your driving goal, then you loose sight of reality. Throw in arrogance/obliviness and that is your end result.

            How many examples do we need, its human nature

        • The physical assets of Boeing count for nothing, really. It’s saleable product that counts. An asset that isn’t being used to make a saleable product is an expense, a profit draining overhead. No business can survive that long term.

          • Mathew:

            Oh come on. Sheese Louise.

            You don’t think Airbus or Comec would not buy Boeing in a heartbeat if we let them?

            Yes its Boeing’s products that make those facilities worth what they are. But you have taken one product and zeroed out all other, it don’t work that way.

            So, F-15, F-18, P-8 (C-17 Support) – Satellites, Chinook, AH-64 , 767 and KC-46, 747-8, 787, Red-hawk, Unmanned Carrier Fueler, V-22, ULA

            And you say all Boeing facility are worthless?.

            Lets just go nuts and say the MAX never flies again. That affect Renton Only. How much of Boeing is Renton?.

            Would it hurt? Sure. BP is still in Business though arn’t they?

            Pure unadulterated nonsense and that assumes MAX does not fly which is a stretch that exceeds the vastness of the Universe.

          • Physical assets like these count for nothing?
            Global Services
            Military fast jets at St Louis and other sites
            Military helicopters
            Satellites used to be known as Hughes
            Boeing Capital.
            Some people are stuck in the 60s over what Boeing does

      • If the public gets used to Boeing lost glance, they might comclude now is a good moment to sell.
        – if the stock stabilizes at e.g. 2017 levels
        – the book value of 600 737MAX is rationalized
        – the 777-9 miss-uses grandfathered certification
        – 787 deferred costs didn’t go away
        – airlines want serious compensation
        – no stock buy backs / dividents are foreseen,

        then the situation changed. And firing the board/ forgiving Boeing is no longer the only option.

        • keesje: Did Boeing do anything illegal?

          You can assert that Boeing should not be allowed to make the changes they have on a 777, but as the FAA has approved it, unless they violated clauses it is legal. Where was EASA? .

          I won’t even argue on the grandfather clause should not be allowed. I agree actually.

          But did Boeing twist the FAA’s arm and what are the limits allowed?

          747-8? That is as much all new as the 777x.

          Should something like the 737 even be allowed to be certified in a new version?

          As far as I know Boeing did all that was legal (legal and right are not the same thing)

          But is at the regulator level that occurs, and Boeing will use it till they are not allowed to.

          And where do you cut it off? 767 not allowed upgrades? What upgrades.

          Or should 737 100-600 just be grounded as no longer meeting modern air specification? (of course you have to have a transition grandfathered period for that)

  13. RE Boeing since MDC and Jack welch virus. Return with us now to those thrilling days of 2004- 2006 and the gang in charge.

    I seem to recall that during that time frame – Boeing had two ‘ executives’ join club fed for several months. And in 2006, Boeing paid a few hundred million in fines due to getting caught screwing over the Gubbermint. A bit of the profit is the main priority.

    And about that time Mr Littig joined – he was previously on the short list for SCOTUS.

    The book Turbulence came out- the story as seen thru the eyes of the worker bees.

    The a few years ago- an update of Turbulence came out..

    And of course the CEO is unaware of the ‘ cost ‘ mantra re moving litigation to saved costs?

    Agree with the ‘ I see nutting- I know nutting ‘ but I am responsible except that the Board pulls the strings..

    Why do I hear the tune 76 Trombones in the background ? ( RE Music Man )

  14. As the biggest exporter, high tech employer, DoD supplier in defense focussed USA, Boeing could for years steer them all. Guide rulemakers, self-certify, fund politicians, NASA, push DoC, hug presidents, play apart tax authorities, dominate Bank of America. To go where they wanted to go.

    As long as they exported, dominated NASDAQ, paid dividents and produced tear pulling media on their heritage, they could get away with about everything. And they did.

    Now everyone is watching, boldly scruntinizing, but mostly accessory too. Except China and Europe, feeling used because they relied on FAA certifications. And they not only stick to the rules, they are looking where they came from, and why.

      • Not surprisingly that people believe that kind of articles. Know nothing, learn nothing from todays journalism.

        Banking have been one of most regulated enterprises ever. I am not even talking that is the ECB and FED that “manage” credit levels = printing money.
        Btw ask yourself 2 things:
        Why housing prices are usually taken out of inflation statistics that appear in newspapers?
        Why the housing bubble did not appeared in inflation statistics?
        And now the present:
        In case you did noticed the result of Government quantitative easing is that the stock exchange is very inflationed. Does that appear anywhere in the news?
        You can bet when the thing crashes the fault will be also “lack of regulation” because that is the reason newspapers exist.

        • Still the GFC was preceded by “easing” in general and on supervisory control complemented by “debudgeting” of controlling institutions. See the parallels?
          Would repackaging trash credits and redistributing them under the high ratings of the packager have been allowed?

      • Bubba, Excellent article, thanks for the link. MCAS is the focus of 737-MAX’s problems. If SW Airlines hadn’t arm twisted Boeing to not build a plane that needed any additional simulator training, I wonder if MCAS would have been built at all? Maybe another solution as in a stick pusher would have been developed, with the additional simulator training costs for airlines to give their pilots? Little mention is given to Boeing’s offer to SW Airlines, of $1,000,000 per airplane, if the 737-MAX needs additional simulator training. That works out to nearly three quarters of a Billion dollars, if you have a fleet the size of SW (750 planes, all 737’s). SWA was the launch customer for Boeing’s 737-MAX and has a great deal of influence on their 737 designs. If Boeing had included a description of MCAS in their 737-MAX differences ipod training, would pilots have asked more questions? What is this MCAS software that kicks in near a stall, and takes over the stabilizer? I only can tell if I have a true runaway stabilizer after 10 seconds? There’s no other way to tell? I’m sure some pilots would ask for more training, if they were told about MCAS from the beginning. That would trigger the three quarters of a Billion dollar charge to Boeing. That had to be on the mind of someone at Boeing, when writing the new flight manual for the MAX. So, why isn’t the million dollar deal per plane, that SW Airlines got from Boeing attracting more attention? That’s one of the root causes of the MCAS ‘solution’.

        • From the book follow on to ” Turbulence” titled “Emerging from Turbulence ”

          When I say I changed the culture of Boeing, that was the intent, so it’s run like a business rather than a great engineering firm.

          It is a great engineering firm, but
          people invest in a company because they want to make money.

          Harry Stonecipher, 2004, former CEO of The Boeing Company, reflecting on the late 1990s

          IMHO- That sums up the MAX SW airline issue

          • It is a great engineering firm, but
            people invest in a company because they want to make money

            Carefully applied Pavlovian conditioning. 🙂

            markets act more on redistribution ( massive ) than on created value add ( low to zero )

  15. Matthew, the kind of contingency nobody dares to think about, let alone discuss on a respected forum..

  16. Why don’t politicians just do a tiny bit of research? The average pprune leeham reader would have got some answers even if only by omission.

    • re grubbie -Has to with bribes- er lobbying, plus election times and have their staff very busy doing other than the peoples business re budget, economy, funding favorite ‘ programs ‘ , and of course always need more money for FAA, spotted owls, co2, chemtrails, anti nuclear, etc

      affects both sides, and many- most hearings are kabuki theaterto get video clip for their locals.

      Congress has the same problems as boeing re non conformists and careers.

      So sad . .. and from turbulence

      ” When I say I changed the culture of Boeing, that was the intent, so it’s run like
      a business rather than a great engineering firm. It is a great engineering firm, but
      people invest in a company because they want to make money.’

      Comment from Harry Stoncipher approx 2004

    • Grubbie, it’s not that they don’t know better…
      For example.. A Congressman who is also a pilot writing after the Etheopen accident blaming the foreign pilots.
      He gets a lot of money from the Transportation lobbies each election cycle.
      So, is he going to say anything against Boeing? No, he’s going to support them no matter what.

      • While I don’t disagree on the politicos, even one that works

        1. There are a billion issues aside from Aviation, Climate change, pollination, trade, oil well blowouts, lead in water, health care, drugs, vaping, opioids – military, foreign policy, dozens and hundreds of local issues etc etc.

        2. Getting elected (House of Representative is in constant funding to do so) good or bad, its a constant election campaign.

        Its amazing anything gets done or even works.

        And lastly, you try it, let me know how it works out.

        Easy to sit back and pot shoot but try to be the pointy end of the spear and what it doers to you and your world and family.

        People hate politicians, well folks I got news for you, if not for politicians we would still be swinging on vines in the Forrest.

    • Mr Calhoun is also a GE Jack welch ‘ intern’- and we know how that management style has worked. Profit uber alles-

      The three most import things at Boeing are Profit ( aka shareholder value ) and the other two dont count.

      • It gets worse

        Boeing whistleblower raises doubts over 787 oxygen

        found on bbc.com

        ” A Boeing whistleblower has claimed that passengers on its 787 Dreamliner could be left without oxygen if the cabin were suffered a sudden decompression.

        John Barnett says tests suggest up to a quarter of the oxygen systems could be faulty and might not work when needed.

        He also claimed faulty parts were deliberately fitted to planes on the production line at one Boeing factory.

        Boeing denies his accusations and says all its aircraft are built to the highest levels of safety and quality.

        The firm has come under intense scrutiny in the wake of two catastrophic accidents involving another one of its planes, the 737 Max.

        Mr Barnett, a former quality control engineer, worked for Boeing for 32 years, until his retirement on health grounds in March 2017.

        From 2010 he was employed as a quality manager at Boeing’s factory in North Charleston, South Carolina…”

        goes on

        this link might work


  17. The following shows how far self-regulation went. FAA claims that 110.000 hours of certification work were spent in the 5 years of development of the MAX. Looks massive, not? But look at this. Assume 2000 working hours per year in the US (in Europe it would be 1600 but that is another story). That is 55 person years in 5 years. Or just 11 full time independent people supervising MAX development. Assume a (generous) salary of 200k$ per year for the FAA staff. That is 11 Mio $ total in FAA certification costs. That is just 0.3% of the say 4 Bio$ 737Max development costs. It is a ridiculously low 0,004% of the sales value of the Max (currently at about 5000 sales and say 60 Mio$ a piece). Yes, it is LESS THAN HALF of Muilenburg’s renumeration in 2018 of 23.5 Mio$. Even adding material costs or overheads hardly changes this big picture. Why all this talk that certification became too expensive and we need further deregulation? In soccer, basketball and baseball, all very competetive sports, we have referees to ensure the game is played by the rules. Often a few referees on at most a dozen or two players in the field. In the US system that supervises airplane development almost nothing is left. Pathetic, I cannot find another word.


    • Reading your analysis made me think of the recent study done by Microsoft, where productivity increased by almost 40% when they only worked 4 days a week, I wonder if 1600 hours per year in Europe is worth more than 2000 hours per year in US

      • I sometimes think so too. It is well known that if you make sure people are intrinsically motivated they are much more productive. If you push people to make many, many hours, they will try probably just try to play the system they are trapped in without actually doing too much effort. But better use this blog to focus on the topic it was meant for – in this thread the MAX story and the industrial-regulatory-political system around it.

        • Yep, that was me at the end.

          After 10 years of no raises and high production, I decided to find out what would happen if I slowed down (retired in place – my sanity was going).

          Nothing, they were so oblivious to what I did they only trotted me out to their world when it was high profile, the rest of the time they had not a clue what I did.

          So I quit and in the next few years as things I took care of behind the scenes falls apart, they will pay hugely, but cover it up as nothing we can do about it.

          There is a whole generation of us who have bailed out, no we won’t go to Bali Bali but will clunk along caring out a quiet life.

          I just hope it holds together long enough for me to die of old age.

          Then its someone else s problem entirely.

      • “Reading your analysis made me think of the recent study done by Microsoft, where productivity increased by almost 40% when they only worked 4 days a week, I wonder if 1600 hours per year in Europe is worth more than 2000 hours per year in US”

        I suspect that each day is 10 hours not 8, thus the same hours-month-year.

        But less time in getting to and from work. I worked that schedule for two years in the mid 90’s at Boeing- Monday thru Thurs.

        felt it was more productive- and missed a lot of the daily commute rush on workdays also.

    • Got to figure in the other costs beside salary so I’d guess overall cost more likely somewhere in the $30s and maybe this could balloon out wildly but even if it did, quite right, it seems a very small amount for such a critical (both safety and reputation wise) function.

      Perhaps more to the point for me, the number of hours spent feels very low. Does anyone know, is it?

    • One year of his incentive bonus that he now foregoes for 2019 could have DOUBLED the staff on MAX certification for all the 5 years they were needed….Or, otherwise stated, the FAA certification costs of the MAX were less as one year of his bonus.

    • From The Seattle Times


      “No one was hiding anything. It was a set of engineering decisions that ended up being wrong,” he said. “There is no question the fundamental assumption we designed around was flawed with respect to how a pilot would react.”

      If it’s correct that BA started working on a modified MCAS immediately after the Lion Air crash, why didn’t anyone think to question the ‘fundamental assumption’ ?

      I hope at some point in the future we get the entire timeline of MCAS development into the public domain so that lessons really are learnt from these disasters.

      Perhaps BA could pass DM’s incentive bonus across to the FAA to help fund MAX certification.

      • JakDak, With 2 AOA sensors being used, Boeing only needs one shot of .6 degree change to achieve feel-abiltiy certification and have the 737-‘MAX fly like the 737-NG? If that’s true, then why did they put 2.5 degrees of change, and multiple series of 10 second firings of MCAS in the first place? Something here doesn’t add up. I want to see the data. Don’t you?

        • Richard

          As a programmer, I’d love to see the source code of each, and every version of the MCAS software, I’d like to understand the reasoning behind the code. I’d like to ‘diff’ each version to understand what has changed, and exactly when it was changed.

          I would hope that the DOJ / FBI enquiry would be doing exactly that.

          I would want to interview every programmer that worked on the code to understand where they got the specification from, what their understanding of the specification was, if they were able to question the specification, and if so, who with, and what was the outcome of any such questioning.

          If you are going to make peoples lives dependent on software, you have to make absolutely sure that you get the software right.

          If we are to learn anything from the MAX disaster, we need to understand how the MCAS software was written, tested, and implemented.

          • JakDak, I’m with you 1000%. I’ve spent most of my life programming also. There has to be over a million lines of code or more on the 737 now in the avionics bay, sending signals here and there. I’d love to toss the main control code into an auto-flow program, that would flowchart out all of the decision logic with parameters. At least then, more people could take a look to see if there are any faulty assumptions. Someone really added on MCAS without proper review. That much is obvious. They assumed the Speed Trim System had passed certification, so we’ll just tweak this value here, ignore these limit switches here, rewire the stab cutout switches, make it only activate for 10 seconds at a time and we won’t need to do any more analysis or testing. I still can’t imagine this was an engineering blunder. Too many people had to have ignored the overall sequence, or it was hidden from view in the software as all programming changes are. That’s why I like the idea of a printed flow chart that people can see. Programmers have enough trouble seeing logic paths from source code. Flow charts are much easier to follow logic and decision paths. I wish software accidents had the review that aviation accidents do. Usually the only details reported are “it was a software bug / glitch / hic-cup”. I can’t learn to not make the same mistake from that.

          • Richard

            When I first leant to code, we had to draw/write Nassi–Shneiderman diagrams before we were allowed anywhere near a keyboard. The diagrams were checked before we were allowed to code !

            The programming language used for the code was independent of the diagram, if your diagram was correct, you could then have five different programmers write code in five different languages, and it would all work.

            I’ve said it before I think if you’re writing a safety critical piece of software, you should have a good grasp of the fundamentals of the system that you’re writing code for.

            If you’re writing accounting software, you should understand the basics of accountancy, but if you’re writing software for aircraft, I think you should have a PPL at the very least.

            I can’t see a programmer with a PPL looking at the spec, and saying to himself that the angle of attack input going from one value to off the scale almost instantaneously would be in any way valid input.

            If the spec didn’t say it, you’d ask “What is the valid range for angle of attack, how many degrees positive to how many degrees negative?”

            Of course it’s quite possible that the programmers were limited by the hardware that they were writing code for, the processor/memory/io may have meant that they were very constrained in what they were allowed to write.

            But in my book, if the logic/code is required, and it doesn’t fit the processor/memory/io available, you call a halt, you find a different way to do it, new hardware if necessary… but of course that means more time, money, recertification …

            I really don’t like the idea that the latest MCAS is based on 2 AOA sensors, and if they differ by a set amount, MCAS is disabled. If this happens in flight what are the pilots to do, divert to their closest airport, and land immediately, or continue, and get engineering to look at it when they get there.

            If MCAS is required, it’s required end of.

            I really don’t like the idea of getting on an aircraft where you are relying on a statistical probability that it’s unlikely that the aircraft will need MCAS in normal flight.

            If MCAS is required, implement it correctly, if it’s not required, remove it.

      • Yes! $10mln to add FAA / Boeing implementation of the JATR recommendations on the 777-9 type certification, review non safety critical component classification, their novelty and make sure system integrity is assured under all conditions. Awesome!

  18. Interesting 2 paragraphs on FAA/Boeing re-certification process in this American Airlines CEO interview. You have to read between the lines. I’m sure a lot of folks here have been in the situation. We need it done by this date. As a programmer, I can’t tell you how many times, I’ve been trapped in a Dilbert cartoon, with the manager saying we need it by this date, I’m not sure exactly what we need, but, start now to save time, and I’ll get you the full spec’s after the due date, and then you can reprogram the whole project in 24 hours. You can imagine the result. If I have tight specs up front, I can write good code. If I have to rewrite code over and over, because of multiple changes to the design, at some point, I have to
    erase the black board and start over. Otherwise, the resulting program is a nightmare to maintain and probably has hidden bugs.
    (Doug Parker, American Airlines CEO)
    The F.A.A. has been very forceful in saying, “We will decide whether or not it’s safe.” They’ve been adamant about that, which I think is exactly the right stance to take. They have set certain conditions to make that assessment. Boeing doesn’t appear to be meeting the F.A.A.’s deadlines.

    It’s not the F.A.A. changing the condition. It’s the manufacturer either setting too aggressive a view as to when they will have the conditions met, or not being able to deliver what they said they were going to deliver. Whatever the result, the F.A.A. is not changing their requests, but the aircraft still continues to slip in certification.

  19. The Technical Advisory Board has released a preliminary summary report to the FAA, according to a report to Congress. I feel like I’m trying to decipher a Federal Reserve Chairman’s testimony to Congress. Very few details, just very vague, overall statements. I find myself agreeing with Ralph Nader, that the detailed data needs to be published on the 737-MAX problems, before it’s returned to service, so that independent experts can verify claims made by Boeing and the FAA. I hope the Technical Advisory Board, ends up, issuing a well documented report to the public.
    “The TAB is also recommending “additional future activity” and FAA has agreed, according to the summary.”
    “The TAB identified several items that need to be completed prior to return to service, including final data submittals and document revisions,” the FAA said in its summary to Congress. The items weren’t identified in the FAA document.

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