Pontifications: Boeing Board needs major shake-up

Jan. 13, 2020, © Leeham News: Today is David Calhoun’s first day as the president and CEO of The Boeing Co.

To say that he’s got his work cut out for him is an understatement.

By Scott Hamilton

I’ve put together a list below, which probably is only half of the important tasks at hand. Most of this list is obvious and doesn’t need any additional reporting because of all the coverage in 2019.

This column is focused on another task that should be, and in the view of many, must be done.

Boeing’s Board is preoccupied with the MAX crisis, but on the theory it can do more than one thing at a time, it need to also turn its attention to some introspection.

Introspection

As I wrote Oct. 7, Boeing’s predicament over the MAX was a long-time in the making.

The Board of Directors is culpable because of policies established as far back as 1997, when Boeing and McDonnell Douglas merged. I wrote Dec. 23 that remaking the Board should be a priority. Today, I outline some specific ideas.

The annual meeting is in April.

Now is the time to start a house cleaning at the Board level that is so clearly needed.

It’s not just because of the MAX crisis, although this obviously is the catalyst.

The board is entrenched, filled with people who have been on it too long.

The board set the policy in which shareholder value trumped all other priorities at the company.

In fairness, this began with the 1997 McDonnell Douglas merger. Every board since then perpetuated this policy. This Board pledged that 100% of free cash flow would be returned to shareholders. Research and development funding was, in the view of some (including noted consultant Richard Aboulafia), starved from product development.

Because of the billions upon billions of dollars lost or deferred in the 787 and 747-8 programs, the belief was that shareholders needed to be rewarded for sticking in there. It was a laudable goal, but it was carried to extremes.

Only investigations will determine if there was a definitive link between prioritizing shareholder value at the expense of development—and safety—of the MAX. There certainly is anecdotal evidence supporting this theory.

Who the Board needs

The Board does not have a single person versed in aerospace engineering and safety.

Admirals Edmund Giambastiani and John Richardson are from the nuclear Navy. Certainly their experience in nuclear safety is nothing to sneeze at. But it’s not aerospace.

The aerospace safety committee created by the Board in August and announced a month later consists Larry Kellner, the former CEO of Continental Airlines, Giambastiani, Richardson and Lynn Good, CEO of an energy company.

These four may know how to navigate among safety regulations, but they aren’t aerospace engineers or aviation safety experts. (During Kellner’s five years as CEO, there were only one fatal accident at Continental. One involved a ground mechanic being sucked into an engine. One other accident involved a 737 skidding off the runway and catching fire. Nobody died.)

Eight of the 13 Boeing Board members were on the Board when the MAX program was launched in July 2011 by then-CEO Jim McNerney. Calhoun was named to the Board in 2009. One Board member was named in 2007 and another in 2004. Everyone one of these Board members were in place when Dennis Muilenburg was named chairman, president and CEO. Lynn Good also falls into the latter action.

The tenure of these and other Board members speaks of entrenchment. They endorsed and perpetuated the policies and values that today have come under scrutiny because of the MAX accidents.

Boeing’s shareholder value priorities and returns masked internal problems that converged in the MAX but which were present in the 787, 747-8, KC-46A and on the space sides of the business.

Board needs shake-up

The Board needs a major shake-up.

Calhoun and Kellner, now the CEO and chairman respectively, aren’t going to be tossed overboard nor are they likely to step down. Giambastiani, having chaired the Board probe into the MAX accidents, safety and culture, has valuable knowledge—now—of the problems.

The other old timers (ie, pre-2012), who were involved in the approval of MAX and setting shareholder value and cost-cutting policies that anecdotally may have contributed to the system that are targets of MAX accident investigations, should go.

It would be best if they decided not to seek reelection to the Board in April. Absent this, they should not be renominated. (Each Board member stands for reelection annually.) Stepping down is the honorable thing to do for the better good of the company.

Who should replace the five I suggest should step down?

  • A former airline pilot of the stature or experience of Chesley Sullenburger;
  • A safety expert of the stature of John Cox or a former crash investigator of the National Transportation Safety Board;
  • A former official of Transport Canada, bringing a foreign regulator perspective to the Board;
  • A representative of SPEEA, the Boeing engineers union; and
  • A representative of the IAM 751, Boeing’s touch-labor union.
  • Also: adding a recent airline or lessor executive for a more recent perspective than Kellner’s. Boeing’s relationship with airlines and lessors is awful. Willie Walsh, the CEO of IAG (parent of British Airways and other European carriers) has been mentioned. Walsh retires down in June. But his “Slasher Walsh” reputation may be seen as perpetuating Boeing’s long history of focus on cost cutting that now is part of the MAX probe.
Radical steps needed

This is a radical proposal, especially the two union reps.

Calhoun, who as a Board member since 2009 is part of the culture and priorities problem, has come under fire in many quarters (including this one, see here and here) for his insider status and ability to make necessary culture changes.

Like Nixon going to China, Calhoun has the opportunity to do the unexpected and radically change direction of Boeing. Adding the first three people to the Board brings aerospace and safety experience that is lacking.

Adding the two union reps brings direct hands-on experience and input to the Board that never existed.

The restructuring of engineering reporting recommended by Giambastiani following his committee’s internal probe is good but doesn’t go far enough. The engineers now have a direct reporting line to an officer who directly reports to the CEO. But the Board will depend on the CEO to bring them information.

A SPEEA rep—and one from IAM 751—would serve as a check on the CEO. They also can bring issues to the Board that aren’t covered through the new reporting line. This includes the production line worries discussed during Congressional hearings by an IAM whistleblower. (Even though the basic complaint went to Dennis Muilenburg, the CEO ousted last month, and to the Board, it is debatable whether the complaint got the serious attention 20/20 hindsight suggests it should have.)

Boeing remains in crisis. Even after the MAX is recertified and deliveries resume, the impact of the crisis will take years to resolve.

Radical steps need to be taken. And this includes at the Board of Directors.

Calhoun’s Baker’s Dozen

 

 

 

 

115 Comments on “Pontifications: Boeing Board needs major shake-up

  1. Boeing’s Commercial Aviation Portfolio:

    In the Year 2003:
    B-737, B-747, B-757, B-767, B-777, and B-787 development

    In the Year 2019:
    B-737, B-777, B-787

    • They actually produce the 767F, the 767-2C, the 737NG for Pegasus and the 747-8F line is still Active.
      The B-787-10 could need next generation engines and become the 787-10ER and thus be a formidable Aircraft replacing the 787-9, 777-300ER on most routes they fly. The 737MAX is a bit like a Ford Crown Victoria (and almost as old) and need to be replaced by an A321neo competitor built by robots. It can be either narrow or wide body depending on Boeing production cost and customers willingness to pay. Udvar-Hazy can easily tell Boeing what he will pay for specified payload/ranges for a give reliability and fuel burn.

    • Perhaps three is enough.

      Airbus has only the A320, A330, and A350.

      Boeing does need to replace the MAX, however.

      • Last 737NG went down the line many months back, an out of sequence plane for KLM. All 3 commercial FAL at Renton switched over to the Max ( with a low volume line for the P-8).
        The last 737NG for Pegasus, a Turkish carrier, had its test flight around Aug 2018.

        • What’s the story behind that last KLM ship, please? I believe I’ve seen refs to it carrying the MSN of an earlier airframe that was somehow DBR during manufacture/assembly. Has anyone a chapter & verse account perchance..?

          • KLM 737-800 NG LN 7542 was the last ‘out of the building’

            LN7592 was the ‘last’ by production numbers Skymark 737-800
            https://simpleflying.com/last-boeing-737-ng-klm/
            “The aircraft was due for delivery earlier this year but the hull had been tapped incorrectly and had to be exchanged by the supplier, Spirit Aerosystems.”
            perhaps someone could indicate what ‘tapping’ is , if indeed its a ‘thing’

            Sounds like unrecoverable production error , but not like the 787 part fuselage at Charleston which was ‘dropped’.

        • Duke… – further, simple ‘tapping’ is cutting an internal thread for a (parallel-shank) screw or threaded bolt, which obviously has to be aligned correctly, but in this context might be short-hand for another fastening process or other requirement? (I don’t see it being a ref to fitting ‘taps,’ ie valves or faucets.) Perhaps A N Other commenter can tell us?

      • Yes, maybe even 2 families is enough. One 737MAX replacement (180-250/300 seat depending on choice of narrow or widebody) and the 797-9/-9LR/-10ER (the LR and ER with new generation Engines like the RR Ultrafan or GEnY).
        The 777-9 is a tad Heavy already and now with the FAA finecombing all certification reports is might gain in safety factors and empty mass.

  2. I’d argue a bit differently. Most notably I find the above list far too international and supplier lite.

    Respected airline pilot with experience across multiple Boeing and Airbus product and who is fully aware of the standard of piloting and training worldwide, check. Is this Sullenberger? Maybe. But I’d be more inclined to see if there is someone from APac who fits the bill.

    Ex-crash investigator, check. But safety should never, ever come even close to being something any safety Board member needs to get tough with. It absolutely must be something everyone in Boeing simply gets. So I’d like the ex-cash investigator to be someone with combined experience in another useful Board level field.

    Ex Transport Canada rep? I’m really not so sure. If it needs to be a regulator rep then I’d aim for a much more arms length person than someone from next door Canada. But I think having a regulator rep on board, given the way the FAA have deferred to and been way too cosy with Boeing, could come across as more of the same. There should be more than sufficient contact with regulators through all other channels to mean this is not necessary. But, I would look at someone with an ICAO background.

    Union reps, perhaps. Good on paper but how would it work in practice? Don’t want things to get too confrontational. So depends on the characters and way things look to be heading with the Unions.

    Now the key member(s) not listed above, to represent the suppliers. With so much of each aircraft outsourced to suppliers and with so much trouble in recent years down to the dreadul mess Boeing made of all of this there must be, I’d say, 2 members representing them. One from the US, one from overseas. My guess is someone from Spirit for the US and one from a trade body for international.

    The ex-airline / lessor should also be at least 2 members, one from each, oneNorth American, one overseas, both well respected and known to be impartial. I think these are by far the most important nominations as they are the ones with real heft toward Boeing.

    Plus of course, 1 or 2 banking/markets/finance/insurance background members and someone with experience in trade negotiations, customs, cultural values etc worldwide.

    If, once all of these are selected the Board looks solid but lacking creativity, find someone who isn’t and is respected enough to keep them on their toes. A “Blue Sky Strategy” type. I would hope that the supplier reps would bring some of this.

    • The following is/was real as it was posted and sent in 2000
      perhaps it needs a bit updating??

      From:xxxxxxx Sent: Wednesday, January 05, 2000 2:33 PM
      To: philip.m.condit@boeing.com
      Cc: james.b.dagnon@boeing.com; jerry.l.calhoun@boeing.com;

      Subject: A little humour
      I found this on the xxxxx message board written initially about xxxxx
      I couldn’t resist changing a few words as shown below, and posting it on Yahoo. As it turns out, I have received several queries as to ” is this for real ? “. Same thing happened on the xxxxx board. This does NOT bode well for how employees and others view the company or its executives. xxxxxxxx

      BOEING ANNOUNCES STEEP CUTBACKS
      Tukwilla Wa – Boeing will reduce its
      workforce by an unprecedented 120 percent by the end of 2000, believed to be the first time a
      major corporation has laid off more employees than it actually has. Boeing stock soared more than
      1 point on the initial news release. The reduction decision, announced Wednesday, came after a
      year-long internal review of cost-cutting procedures, said Boeing Chairman Harry Stonecipher.
      The initial report concluded the company would save $1.2 billion by eliminating 20 percent of its
      140,000 employees.
      Employee Reduction Plan From there, said Stonecipher , “it didn’t take a genius to figure out that
      if we cut 40 percent of our workforce, we’d save $2.4 billion, and if we cut 100 percent of our
      workforce, we’d save $6 billion. But then we thought, why stop there? Let’s cut another 20
      percent and save $7billion.
      “We believe in increasing shareholder value, and we believe that by decreasing expenditures, we
      enhance our competitive cost position and our bottom line,” he added.
      Boeing plans to achieve the 100 percent internal reduction through layoffs, attrition and early
      retirement packages. To achieve the 20 percent in external reductions, the company plans to
      involuntarily downsize 22,000 non-Boeing employees who presently work for other companies.
      “We pretty much picked them out of a hat,” said Stonecipher Among firms Boeing has picked as
      “External Reduction Targets,” or ERTs, are; Northrup Grumman, AMR Corporation, parent of
      American Airlines, Rolls Royce, and Perkins Coie. Boeing’s plan presents a “win-win” for the
      company and ERTs, said Stonecipher, as any savings by ERTs would be passed on to Boeing, while
      the ERTs themselves would benefit by the increase in stock price that usually accompanies
      personnel cutback announcements. “We’re also hoping that since, over the years, we’ve been really
      helpful to a lot of companies, they’ll do this for us kind of as a favor,” said Stonecipher.
      Legally, pink slips sent out by Boeing would have no standing at ERTs unless those companies agreed. While executives at ERTs declined to comment, employees at those companies said they were
      not inclined to cooperate. “This is ridiculous. I don’t work for Boeing. They can’t fire me,” said Kaili Blackburn, a flight attendant with American Airlines.
      Reactions like that, replied Stonecipher, “are not very supporting.”
      Inspiration for Boeing’s plan came from previous cutback initiatives, said company officials. In
      January of 1999, for instance, the company announced it would trim 40,000 jobs over two years.

      However, just a year later, Boeing said it had already reached its quota. “We were quite surprised
      at the number of employees willing to leave Boeing in such a hurry, and we decided to build on
      that,” Stonecipher said.
      Analysts credited Stonecipher’s short-term vision, noting that the announcement had the desired effect of immediately increasing Boeing share value.

      However, the long-term ramifications could
      be detrimental, said Bear Stearns analyst Beldon McInty. “It’s a little early to tell, but by eliminating all its employees, Boeing may jeopardize its market position and could, at least theoretically, cease to exist,” said McInty.
      Stonecipher, however, urged patience: “To my knowledge, this hasn’t been done before, so let’s just wait and see what happens.”

      ++++

      The original can be found re AT&T years ago at
      http://www.satirewire.com/content1/
      ” AT&T TO CUT WORKFORCE 120 PERCENT”

  3. “will determine if the was a definitive link”

    Possible typo @Scott? I think I know what you meant.

    • Microsoft spelling and grammar check really is useless sometimes. Fixed.

      • Turn off the grammar check (keep spell check) and you too can turn out brilliant articles!

        Grammar check is useless, my biggest issue is the space and seeing the mistakes. Larger format I do better at.

        Grammar check is someone else s idea of how it should be expressed, and whoever did it is not a famous author! There is a reason they wound up their career on the grammar program team (boring) .

        So, turn it off and go wild.

  4. I entirely agree with this article. Boeing must be rebuilt from the top down and the bottom up. Will it happen? Not unless the shareholders are willing to forgo short term gain. In other words, the directors will not fall on their sword. They will have to be removed, but I don’t think the shareholders will be willing to do it.

    You could argue that it’s already too late. Boeing backlog 5440, Airbus backlog 7480. Boeing 42%, Airbus 58%.

    But then, Boeing’s backlog is very, very iffy whilst Airbus’ backlog is reliable. Even if the MAX is allowed to return, I think it’s return will be slow. Airbus will increase their share with the A321 and Russia and China will gain share as the MC-21 and C919 go into production.

    The crystal ball says Boeing’s share of the market will fall well below 30% by 2025.

    Boeing is already subject to significant state subsidy. But it’s been used to keep the shareholders happy. I think Boeing will need even more state subsidy but the state must insist that it is used to rebuild Boeing.

    • “But then, Boeing’s backlog is very, very iffy whilst Airbus’ backlog is reliable. ….
      The crystal ball says Boeing’s share of the market will fall well below 30% by 2025.
      ….
      Boeing is already subject to significant state subsidy. But it’s been used to keep the shareholders happy. I think Boeing will need even more state subsidy but the state must insist that it is used to rebuild Boeing..”

      I think that is a step too far to accept, even duscuss, for most, at this stage. Not saying it’s not the truth.

      In the subscriber article above I see Leeham is playing with fire also, even discussing a future of Embraer without Boeing. What is suggested? Some one else joining up with Embraer? Spirit? Collins, A JV with both? LM? What’s best for Embraer..

      • As I think you know, in the aerospace industry, decisions or no decisions made today take effect some years later.

        If Boeing are to rescue this they need to start know. The problem is I don’t think it will happen. Hence the crystal ball.

        It’s your choice not to discuss it. But I take the opposite view. So I agree with the article. The process of rebuilding must start now.

        I’ve said it before, a new NSA, 180 to 240 seats, with a carbon wing and a metal fuselage. A 787-9ER and 787-10ER with a new wing and Trent XWBs to be followed by UltraFan. Not perfect by any means, but it does mean Boeing will put up a fight.

        • Agree with you Philip, and the Trade Macho Man, when he finds out the $ numbers are published by the WTO within the next 3months. It ain’t Funny!

        • “”787-9ER and 787-10ER with a new wing and Trent XWB””

          Boeing often used short wings. Because it’s cheaper?

          The 787-10 with the same MTOW as the 787-9 is only a poorly stretched version and for that it’s expensive. Maybe a reason why it’s not ordered much.

          How much fuel efficiency could the XWB provide? Maybe not enough to make it work, otherwise why didn’t Boeing do it already.

          Hard to beat more comfortable A330 and A350.
          Will it beat the CR929?

      • “”In the subscriber article above I see Leeham is playing with fire also, even discussing a future of Embraer without Boeing. What is suggested?””

        My suggestion. Embraer said it itself, they can produce the E2 much cheaper than the A220. They should stick to it alone and be patient, especially now that the MAX future is very uncertain.

        We often forget about the sale prices of aircraft but that’s very important. Same like the ATR-72 vs Q400.

        I think there is room for both the E2 and the A220-300.
        The A220-500 will win vs A320, that why a A320plus will come.

        Boeing could come up with an re-engined B717 stretch. Should have done it long time ago.

        • No. Embraer can produce all the planes ‘cheaper than A220’ they like . Its selling them is the problem. The order outlook isnt strong , they need Boeings $4 bill or so to keep their other businesses growing.
          The delay in approving the JV also helps Boeing cash flow

        • I also like the 717, but its time has passed. The A220, ERJ-E2’s and MRJ’s are of a new generation. Boeing should have kept it, stretched it and implemented a simplified 787 FBW and new systems with a new wing and used that knowledge for the development of a NSA or the 797. That would have allowed them to support their customers while the 737MAX’s are AOG. The top brass really focused on increasing the margins and volumes of 737’s and focus went on aftermarket with Aviall and KLX, stopping the C-series and buying Embraer. That put to focus away from designing a great 737 successor all the way to production. Most likely have Boeing designed 50 different 737 successors in its computers but stopped when $bn’s should be spent.

  5. Over the last decade Boeing declared 100 times safety comes first and close conversations are ongoing with the worlds airlines to fully understand how to add value.

    But it is not what was happening. Boeing only listened to themselves & stockvalue killed all discussion.

    Safety & marketshare were taken as a given instead of as a variable and government relations were stronger then ever.

    • don’t watch their lips curl but look at their knuckles gnurl.
      i.e. lips moving ~= lie.
      what are their fingers working on?

  6. Yes, the board needs to be rebuilt from scratch- making a clean sheet board -after all , the entrenched directors did not deliver on governance-given the Max situation and rubber stamped the buy back et al without investing in new planes. I would suggest that some one like Alan Mulally could be looked at for the Chairman and a CEO who has integrity as a principal value re the #1 job :safety.
    The safety committee may be headed by Mulally or some one truly independent from the industry. Also Boeing needs to put in place a financial policy of prioritising cash flow application- Capex, investment in tech and R$D, dividends for signalling growth prospects to the market /debt management and then share buyback if there is room for it after meeting all long term commitments to make Boeing a strong player in the Industry with a 50/50 share as a minimum.

  7. Sadly, it will be a cold day in hell before any union reps or union alumni sit on the board at Boeing (or really any major US manufacturer) _not_ because it is a bad idea (it isn’t), but because it is antithetical to the billionaires first, screw the peons US business model.

    almost all major European manufacturing companies have union (or at least labor) representation on their board and in general it has been a good thing.

    I think all of your above suggestions are great, but I think there should be a few additions also..

    there needs to be some representation from the supplier side, one to represent the super suppliers like Spirit and one to represent the little guys.

    there should be at least 2 members representing the customer community (lessors and airlines)

    Finally there ought to be someone to represent the flying public (not sure _how_ to do this, perhaps randomly select a million miler from each (major) airline’s frequent flyer programs to serve as a non voting advisory committee.

    • In Europe it is common but ran different in different countries. In some the Union “often men with big bellies” just sit and listen without any legal responsability, in other they “work” and are members of some commites (not the compensation commitee), often does the Chairman double check with the union guys information he gets from the CEO forcing the CEO to have union leader meetings before board meetings making sure the Chairman gets the same information from the CEO and the union guys on the board and those meetings can be really productive. In some countries the central union administration buy a series of courses for employee representatives to the Company board so they actually can perform useful work and not (just sit and proctect their legal rights)

      • in the US there was actually the case where for the Chattanooga Tennessee VW plant, VW _wanted_ the union and _wanted_ union representation on the management council and the State threatened to take away their tax subsidies that they had used to lure VW to the state if they did that in order to protect their “right to work” insanity.

        politician actively working against the working man and the company. sad but true.

        • Yes, I don’t think the US is not ready yet to work with the reasonable unions. US companies are more used to fight unions like the UAW even though they share the same destiny of the company making money selling competetive products and services. The board of directors are more likely to invest in advanced SAP modules and big data Oracle analysis packages to figure out what happens on the shop floor than go down and meet the Union leaders and let them show and tell them.
          Germany also have a cooperation “Betriesraat” that is a bit separated from the unions where management and specialists work together figuring out how to best solve problems (like increasing performance of the Product to get better prices/kg or produce them quicker and safer with new tooling).
          I heard of companies going on strike in the US, then send all white collar down to the shop floor, they then discover problems unions been complaining about for years and order the fixes to be implemented and after the strike is over the shop floor workers can satified see the problems solved and cash in the new salary. (Then hum along for another 12 years until a new strike in necessary to get a new round of office workes down on the shop floor).

  8. Scott, I concur with your “Calhoun’s Baker’s Dozen” list.

    One more thing though:

    “We regret the content of these communications, and apologize to the FAA, Congress, our airline customers, and to the flying public for them,” Boeing said. “The language used in these communications, and some of the sentiments they express, are inconsistent with Boeing values.”

    From https://www.seattletimes.com/business/boeing-aerospace/boeing-internal-documents-reveal-culture-of-deceit-to-keep-down-costs-of-737-max/

    Don’t shoot the messenger !

    Boeing mustn’t scapegoat the people that made these comments, they must sit down with them, and LISTEN to the issues that they are raising.

    “Would you put your family on a MAX simulator trained aircraft?” from the same article.

    Boeing must go back to building quality aircraft, 787s from Charleston must be built to the same standard as 787s from Everett.

    I understand the very long to-do list Calhoun has, but if I was him, I’d make very certain everyone at Boeing could talk to me directly about any safety concern in complete confidence. Boeing just cannot have another issue where safety is clearly a lower priority than profit/stock price.

  9. “(During Kellner’s five years as CEO, there were only two fatal accidents at Continental. One involved a ground mechanic being sucked into an engine. The other involved a 737 skidding off the runway and catching fire. Nobody died.)”

    Maybe I’m reading this wrong, but if nobody died, why was it a fatal accident?

  10. @Scott – “…there were only two fatal accidents at Continental. One involved a ground mechanic being sucked into an engine. The other involved a 737 skidding off the runway and catching fire. Nobody died.”

    Should be “only two serious accidents at Continental”?

    • I think we an understand what Scott meant even if the phrasing is wrong.

      What are we, the Grammar Police?

      Some of us English is not their native language, I think we give em a break as it snot easy to do it right even for native speakers.

      • No ,I don’t understand what he means.

        Did the mechanic who got sucked into the engine die? It’s not clear. Was there one fatality or no fatalities?

        There is nothing wrong with asking for clarification.

        • Fixed. One fatal (the mx sucked into the engine). The other had injuries only.

          • This is a general discussion about Boeing and its need to deal with its future.

            While I was an engineer/technician and picky about tech details even I can handle figuring out the less fact based aspects of life.

            I am not sure if I should pat myself on the back or just go beat my head against a wall.

  11. I have recently read, I believe from the assembly line guy who retired due to the unbearable situation, that Boeing introduced team shaming sessions when deadlines haven’t been met. I would add to the tasks for Calhoun, to find out who in the management came up with that idea and who approved of it and fire them instantly.
    To resort to official shaming policy in such a safety critical environment is beyond anything tolerable. And if Calhoun finds himself part of the approval chain for such measures, he should nail himself to the wall of shame.
    From all the internal communications and information surfacing, this bit to me is the most shocking.

  12. Hi Scott,

    I would raise questions about the ability of Boeing’s safety committee selectees to effectively lead and develop a just culture of safety, particularly one where the impact of organizational culture and managerial incentives are understood as a contributing factor. Admiral Richardson in particular has had some very negative press about his handling of the response to those Navy ship crashes of a few years ago. A vastly different situation, but if even half of what has been reported is to be believed then it is not a great endorsement of Boeing embracing the need to address organizational deficiencies that start at the top. Bringing ‘accountability’ without addressing chronic under-resourcing and a culture that does not realistically allow speaking out is not the type of lesson Boeing needs to learn to get them back on track.

    https://www.propublica.org/article/navy-commander-tainted-investigation

    https://www.propublica.org/article/blame-over-justice-the-human-toll-of-the-navy-relentless-push-to-punish-one-of-its-own

  13. I like the Union Reps idea.

    The rest needs done and I think you can come up with categories (supplier is a good one I think)

    It will take even more pain or someone who can see the future. I don’t hold out a lot of hope –

  14. Fire the royalty of the American oligarchy? We can’t have this.
    Average pay for these guys and most large corps. is about 325K. Not sure how many hours they put in a year.
    What was there response after the LionAir crash? Did they dig deep into the development of MCAS and request all the emails? Why didn’t they ground the MAX after LionAir? They should have been the people to have access to all the information.

  15. While veryone including is trying to blame individuals in the Boeing board, the problem is bigger. There has been a longer term tendency to position the FAA as bureaucracy, weakening US Aerospace Industry development, wasting money.

    There was wide support reducing FAA influence and budgets.

    https://gama.aero/wp-content/uploads/AIA_GAMA_Senate_Leadership_Letter_FAA_Reauthorization.pdf
    https://www.gao.gov/assets/690/683649.pdf

    As evidenced by the latests mails releases, giving Boeing engineering the feeling they could push FAA around at their liking.
    https://www.seattletimes.com/business/boeing-aerospace/boeing-internal-documents-reveal-culture-of-deceit-to-keep-down-costs-of-737-max/

    Viva Google for making it hard to re-write history. Firing the Boeing board isn’t solving the bigger system issue.

    • Keesje hit the nail. 40 years of Thatcherism and Reaganism suggesting that government is bad and markets and business is good led to this. In countries like the US this led to a situations where most if not all checks and balances in markets are gone. This led to the situation that the cost of the 5 years in which the FAA put 110.000 hours into MAX certification, say at 100$ per hour for an FAA specialist that makes @ 2000 hours/yr 200k/yr, equals a paltry 16% of DM’s 60 Mio$ once-off exit package. Even if material costs or overheads need to be added – this imbalance is absurd. Completely absurd. And don’t use the argument that more control leads to good old USSR style state planning. Even a boxing match has 1 umpire – to regulate a match between 2 persons. 50% overheads to ensure rules of the game are complied with, and no one will argue boxing is not competitive.

    • Keesje:

      Thank you, I had the same reaction. Boeing is going to deal with the employees over the FAA comment for doing what Boeing does as a mater of policy?

      Whoeeee!

      Firing the board though is the first step (or getting rid of them however it is done)

      Change starts at the top, it can spread, but only if nourished by the top that is our policy.

      Yes there is a lot to fix but you have to start at the top.

      I can’t occur from anywhere else.

  16. I totally agree that the Board needs a complete shake-up. It is also beyond time to bring in someone like Carolyn Corvi and/or Alan Mulally.

  17. The two fatal accidents at Continental included one where nobody died?

  18. Scott – ‘…two fatal accidents at Continental. One involved a ground mechanic being sucked into an engine. The other involved a 737 skidding off the runway and catching fire. Nobody died…’
    Forgive me, but is that none, one, or two fatal accidents?

  19. (During Kellner’s five years as CEO, there were only two fatal accidents at Continental. One involved a ground mechanic being sucked into an engine. The other involved a 737 skidding off the runway and catching fire. Nobody died.)

    How can an accident be ‘fatal’ if nobody died?

  20. So being objective about all the board members, what particular expertise does Caroline Kennedy and Nikki Haley bring to the board. This is not a facetious question.

    • Nikki, as former UN Ambassador, would have lots of international contacts. I certainly can see this. Kennedy, former Ambassador to Japan, not so much.

      • The time as UN Ambassador is so short , 1 year, to not really be worth anything in the ‘international contacts game’.
        The contacts she would have in the White House – if they are still around- would have made more sense and of course South Carolina is where Boeing has some of its 787 plants

        • I agree with Duke and I don’t think she is remotely got anything to offer to the Boeing board, in fact I think arguably she is a major negative.

  21. The idea of putting union or labor representatives on the board is especially laudable. These should be nominated by the unions and change every other year.

    I have worked in and with large German companies and 50% of their boards are union/labor representatives with the chairman holding the golden vote. It has worked very well for the companies as labor is especially prone to take the long term view while the capital representatives tend to have a short term profit view.

    Boeing would also be well served by having a Chinese member of the board. That country will be its largest customer for the next decades.

    • The German system is more of a ‘two tier system’ with an executive board ‘above’ the supervisory board ( with union and stockholder representatives).

      In practice, with the largest companies , the Chairman of the Supervisory Board is the one with the most power .

      Just to think ‘Rhineland capitalism’ is much the same as the standard american type board but with some labour reps is a misunderstanding.
      The Supervisory boards job is to ‘supervise’ the executive board – who run the company but also outright clash between the two is avoided and a consensus is preferred.
      From reading Handelsblatt, they misunderstand the western sytem as well , making the common mistake that the Board ( or ‘fiducaries’ ) can act only in the interest of the stockholders, which just isnt true. Doesnt mean that some companies favour the stock prices above all, especially when the executives are compensated with stock well above their pay packet, as Muilenberg was with his outrageous exit package

    • Other than the short term for Union rep, I agree. Less Chinese specif than at least one other non Western, ie. an international representative.

      I think two to four years for the Union reps and an overlap so that you do not loose both at the same time. Develop some expertise and mentor the next woman or man coming on.

      There is good reason for experience but also for turnover.

      It would be a good idea for the whole board to turn over every 5 years at most as a point of discussion.

      Not at the same time but per the union, overlapped.

      • I suggest a recently ( within last two -three years ) retired union member who was one of the technical fellows – types – no particular name but one of that group
        would be appropriate. And the ‘equivalent’ experienced but retired IAM types for board members.
        And for a two year term

        Unfortunately, it would take a major change in corporate policies, and it is now too late for shareholder proposals, BUT in certain cases, such issues CAN be formally brought up.

        One might check the SEC site- much of which is public record to see what has been submitted- approved- pending re Boeing annual meeting.

      • Boeing like many companies used to have a ‘ classified” board- which means that approx 1/3 of the board was up for election every year. But that was changed as I recall about a decade ago as a result of a shareholder proposal.

        So now every member is up for election every year IF I recall correctly without bothering to go dig up their annual report and proxy for last year- which can be found on boeing site.

    • Perhaps union participation at board level needs to be accompanied by a positive, very positive, move to encourage widespread share ownership by all employees, if such not part of BA’s DNA…

      • One of the problems often cited with corporate governance is reward based on shares. It makes the board act in bad ways, and it’d make employees do the same.

        Ultimately what shareholders need is a whole engineering team who will make hard decisions untainted by the thirst for money or subject to personal risk. It should be shareholders alone who take financial risk; that’s their job.

        It’s the board’s job to develop and understand the capabilities of the engineering team they’ve got and to choose market sectors that they think they can successfully target and make profit. Right now one can easily conclude that they’re not good at building aircraft. After all it’s not just the MAX; KC46, Apache, 787 are all suffering quality problems and 747-8 and 777x haven’t been sales hits. Perhaps they should concentrate on drinks trolleys, or maybe air stairs.

      • Nope – any grunt level employee who has much over 10 percent of his/her net worth or pension or 401k or similar in the company he works for is not paying attention to the real world.

        Over a decade ago ( i haven’t checked recently ) Boeing employees had collectively about 20 percent plus of outstanding shares in their company 401k plans.

        Come time to vote on their holdings, few realized that if only 10 percent of the 401K holdings voted, by default , all boeing holdings in the 401k plan would automatically /collectively be voted the same way/percentage on any issue . It was NO secret to those who bothered to read the proxy ..

        • Yes, it’s reasons like this that pension schemes in other countries don’t work this way.

        • Bubba – thank you for that; Reagan’s buddy Margaret Thatcher would have disapproved, given her penchant for a share-owning democracy (blind to the fact that excluded those with no spare capital to invest…).

  22. Before people, the most important thing is to remake the Board rules.

    Muilenberg was board head and CEO at same time!? how is this even possible. That is the negation of what a board should be. Board rules need to change.

    One of them should be that a CEO can’t be promoted to the board without going out of Boeing for say 4-5 years. No kick upstairs.
    This endogenous game network is very detrimental to a company.

  23. If one were to ask how do you get from Boeing today to a productive, profitable and trusted Boeing tomorrow, the answer might be “you don’t want to start from here”… Wholesale changes in the Board membership is a good idea, and I like the theme of Scott’s suggestions.

    For me though the question is, where would the money stream come from to support such a board in their remodelling of Boeing? We all know that Boeing need at least one, possibly 2 new moonshot programmes, they need to do them properly independent of funding considerations and they need time. Based on observations of how well things have gone over the past 20 years, one might conclude that Boeing’s product development has been forcibly stuck in the dark ages. They seem to be in very poor condition to take the fight to Airbus. Boeing may very well have some good engineers, but they’re not flourishing at the moment.

    Airbus are in a bit of a bind. I’m sure they don’t want Boeing disappearing – the duopoly has been “comfortable”. To preserve that might mean easing off the development pedal, give Boeing the space to recover. At the same time environmental concerns are becoming more prominant in policy making here in Europe, and these need to be preempted. It’s better to be seen to already be heading in the right direction than being told to do so… So Airbus probably do need to develop, and develop hard, lest they become susceptible to future political problems.

    For instance, taking short haul flights is now becoming a social problem (a bit like drink driving). That might eventually severely reduce demand for A320 / 737 class aircraft. Airbus are fine – they’ve got a ton of profitable orders to deliver. Boeing might scrap the MAX and get an NSA together, just as the world market shrinks significantly.

    • During May of last year, Bjorn wrote an article called “Why I wouldn’t hesitate to fly on the MAX after the fix”. He opined that the engineers must be told that “this time there’s no pressure” and if Boeing hasn’t learned their lesson,there should be “no mercy “. 6 months later the CEO was sacked after Boeing was publicly admonished for pressurising the FAA.
      Last week, we hear that the Trump administration is trying to pressurise the EASA by threatening Airbus, this idea can only have come from Boeing.
      Bullying the regulators is not in Boeings interests and is largely what caused the problem in the first place. Boeings management has not learned anything and there should be no mercy.

  24. During May of last year, Bjorn wrote an article called “Why I wouldn’t hesitate to fly on the MAX after the fix”. He opined that the engineers must be told that “this time there’s no pressure” and if Boeing hasn’t learned their lesson,there should be “no mercy “. 6 months later the CEO was sacked after Boeing was publicly admonished for pressurising the FAA.
    Last week, we hear that the Trump administration is trying to pressurise the EASA by threatening Airbus, this idea can only have come from Boeing.
    Bullying the regulators is not in Boeings interests and is largely what caused the problem in the first place. Boeings management has not learned anything and there should be no mercy.

    • Yes he did write that, didn’t he! Given the advice of Boeing’s own employees, I wonder if he’s changed his mind?

      I’m not sure that the rumoured pressure from the Trump administration is down to Boeing. I think that this is the first sign that the government has realised they’re very close to having to sort out Boeing themselves and have worked out how expensive that would be (possibly trillions when it’s all said and done). Basically it would be a disaster for Trump if Boeing failed and had to be bailed out.

      But yes, if that’s what the administration did it’d be a disaster for Boeing.

    • In fairness to Bjorn, he was reflecting the common pilot view that the MAX is a good aircraft and would be safe to fly once the MCAS issues were addressed. That view has never really changed among the pilots who actually fly the aircraft. He also saw those issues as engineering tasks for which the solution was known and not difficult to implement.

      Since then, we have seen the scope of the process be expanded well beyond the causes of the accidents. That process has also become so diffuse that we no longer know what exactly is required for recertification.

      Bjorn also was referring to the engineering process with the “no mercy” comment, they had to get it right this time, under the assumption that they didn’t the first time due to production pressure. Since then we have learned it was more complicated than that, there was 4 year period between MCAS inception and modification, and multiple teams involved who did not consult with each other. Plus other factors and assumptions that contributed.

      Boeing engineers now feel that they have it right, but we won’t know for sure until it’s tested by the regulators. We are all anxiously awaiting that event, not just Boeing.

      I think probably the US administration has a legitimate concern about the economic impact of the regulation, and will be asking whether it’s really justified. Those questions are not out of place, but Boeing was not the entity to be asking them.

      Overall, I think everyone involved has shown extraordinary patience, given the original tasks and the amount of time that has now gone by. But I also think everyone wants a good and safe outcome, so most likely we all just have to continue waiting.

      • Let me try to paint a picture…

        Think of a tire. The tire being the concept of a plane, say the original 737. After a couple of years the thread has worn down and it is rethreaded. This time with a bigger profile and mounted on a somewhat larger vehicle. All is well until the tread is worn down again. Now a more clever and even bigger thread is put on and it goes to an even bigger and more powerful vehicle.

        After a couple of weeks the tire goes bang. Turns out the carcass was not only overloaded but fatigued. As a matter of fact it is found that it is not strong enough for this kind of vehicle. Now we find that it’s not one tire but thousands, and it’s not one that failed but a couple, and everybody is using them…

        In my view the two fatal crashes are only a symptom of a much larger problem. The 737 design is overstretched on all ends and completely outdated. The board will have to accept this truth and admit that launching the MAX was probably the worst and most expensive decision in the history of mankind. Will they? I don’t think so. And because they won’t the only ending that I envision here is chapter 11.

        With the worn out tires, nobody would have any doubt they need to be replaced by shiny new tires of the latest generation. The same conclusion should apply with the MAX, and the only thing that is stopping everyone is the inconceivable financial damage.

        • “”the only ending that I envision here is chapter 11″”

          What will happen with the 800 MAX?

        • Gundolf, as your opinion this is fine, but there is no evidence to suggest any analogy with a worn or fatigued structure.

          The evidence is that the MAX was a good design that was received well at introduction. It delivered the performance that was advertised. Airlines and pilots both liked it. They certainly do not view it as something they are forced to fly to avoid financial damage.

          It had flaws in the programming of the MCAS software, and those flaws contributed to two accidents, but we know that MCAS was not the sole contributing factor in either. Well documented pilot error played a role in both. Well documented maintenance errors played a role in the first, but not the second.

          In fact we know that it was possible to have an MCAS activation in level flight without an accident. And we know that there was no other major public concern with the MAX, before this all began.

          With the MCAS flaws corrected, it should be as successful as it was before. This is probably what the board believes, what airlines believe, what pilots believe, what engineers like Bjorn who have studied it believe, because that is the outcome supported by the existing evidence.

          There are almost 300 million flight hours of experience with the basic 737 design. All with trim wheels, all with the original FCC design, which is now improved. It has a good overall record.

          Isn’t it an older design, and aren’t newer designs better? Yes to both, absolutely. That does not make it unsafe or uncompetitive or unprofitable, or something that airlines purchased only reluctantly. They purchased it because they saw it as best meeting their needs.

          • Rob,

            No evidence! Where do you live. How can you start a post with that.

            It must be dual master. The left hand not knowing what the right hand is doing. But then that’s why the MAX flight deck went into meltdown as explained by the FAA’s emergency AD, issued after the Lion Air crash.

            But then you have said there is nothing wrong with dual masters. Others think it’s a bug, indeed a catastrophic bug. I think it’s a bug, a catastrophic bug.

            But in your mind, no evidence.

            Got it.

          • Philip, these are your opinions, not evidence.

            The flight deck meltdown theory is not supported by the fact that the cockpit voice recorder was able to record the sound of pages turning in the QRH. Alarms went off in the cockpit, yes, but for the most part it was calm.

            The most talking was done with regard to the ATC course corrections for the holding pattern established by the captain at 5000 feet. No mayday, no pan-pan. The crisis began very quickly after the first officer took command, there wasn’t much time after that.

            The FAA emergency AD was alerting pilots to the possibility of un-commanded nose-down trim due to AoA sensor failure, as a result of MCAS. It modified and reinforced the use of the runaway trim procedure, which had only partially been used on the Lion Air flight. It doesn’t mention flight deck meltdown at all.

      • “”I think probably the US administration has a legitimate concern about the economic impact of the regulation, and will be asking whether it’s really justified.””

        $$$ again SMH
        the Trump administration is guilty too,
        347 people died.

        The MAX needs to follow regulations, ALL regulations,
        the jackscrew from Walgreens too.

        • Not Obama? you continue with political propaganda. The fact that a company failed as it did has only to do of how it works. It is Boeing that is responsible for its products. It is called Boeing 737 MAX not Boeing-FAA 737 MAX.
          Boeing failed because more of stup idity than $$$.

          $$$ matter, there are no ejections packs in commercial aircraft. You can now do transatlantic routes with 2 engines instead of 4 because the reliability increased substantially by all those evil people seeking $$$ but the difference is not zero between 4 and 2 but it is so minimal.
          Engineering is always a compromise and where is the border is difficult to get.

          My point is even the regulation says X, if Boeing thing that needs X+Y to be safe it is their responsibility to do that.

          Regulation risks to be used as an excuse to not do due diligence.
          It risks also to form a culture dependent solely on regulation.
          If i can pass it i am safe. A bit like credentialism in education.

      • Rob, I think the major problem now is that, since MCAS was revealed to exist and found to be very badly implemented, other problems have emerged.

        Wiring loom issues, only recently revealed, with an unacceptable risk of catastrophic short circuits.

        Rudder cables routed past the engines without adequate shielding from fragments thrown off by a disintegrating blade disk. With no changes made since the NG to this routing, the new engine position partially negates the protection.

        The manual trim wheels are unusable if the aircraft is badly out of trim, and it takes approx 10,000ft of altitude loss to deal with it.

        There’s now a body of evidence that there’s a poor cultural attitude to regulatory requirements in Boeing, dating back a long time in the MAX development. It is not unreasonable to enquire how extensive this is throughout the company, and what impact this might have had on regulatory compliance work.

        Boeing just don’t seem able to guarantee to make aircraft of all sorts properly anymore. There’s been widespread dissatisfaction with 787s from one of the plants making them. The US military have, variously, sent back new Apache helicopters and KC46 tankers, brand new and unfit to be in the air due to a variety of problems including FOD.

        Given all this, is it any wonder that the scope of the process has been expanded from “just fix MCAS”? Is it not reasonable that the whole aircraft be looked at again, end to end, with fresh eyes?

        Some Boeing engineers might feel like they’ve got it right, but that’s irrelevant. It’s now down to regulators, whom Boeing have treated like dirt for a long time, to decide whether or not Boeing have got it right. Guess how predisposed they’re going to be to give Boeing an easy ride.

        And no, I disagree about everybody being patient. Spirit have now fired a load of staff. Even the grounding by regulators around the world was an exercise in losing patience with Boeing and the FAA. Airlines have lost patience and are demanding compensation. And the victims’ families are being made to wait a dispicably long time for full settlement from Boeing.

        • Matthew, I think the issue is that these are all broad generalizations to justify the extended and unprecedented grounding of an aircraft.

          Aircraft are not generally grounded due to a potential wiring issue, the issue is corrected via directive. Or for engine placement adding vulnerability to rudder cables, again the solution is determined and the issue is corrected by directive.

          The trim wheel issue has existed and been known for decades, but never before offered up as a reason for grounding. It’s not a concern for the pilots who have to fly the aircraft, they understand (or should) the importance of trim and the effect of airspeed.

          If you get to the point that trim wheels don’t work, you’re already in trouble. Apart from ET302, there has never been an accident due to trim wheels inoperative, in some 50 years and 300 million flight hours. And in ET302, the cause was very clear, overspeed of 100 to 150 knots at low altitude.

          With regard to other military programs, one could also point to the F-35 program, which has had numerous setbacks, but each one addressed and solved in turn, which is the normal course of action. Boeing has done that the same as Lockheed.

          Looking at the aircraft with fresh eyes is fine, but then let’s ground all aircraft and do that, shall we? Obviously we would not do that without a compelling reason. But in the case of the MAX, since it’s already grounded, it’s become sufficient to suspect the existence of possible problems, to keep it grounded. That process could be continued indefinitely (although I don’t believe the regulators will actually do that). It’s why we generally require evidence before acting.

          In normal circumstances, the MCAS-related causes of the accident would have been addressed and the MAX returned to flight. Then if people want to bring up other issues, they can each be investigated in turn. But they need a basis in other than speculation, to keep the aircraft grounded.

          Reporting is that Lion Air settlements were nearly complete in November, so a little more than a year. In the meantime Boeing gave each family $145,000, along with aide to their communities. The settlements were expected to be in the range of $1.2 million per family, but they are confidential.

          Compare that to the Lion Air compensation of $92,000, which was the minimum allowed, with a required non-litigation clause, that is now widely believed to have been illegal. But typical for Lion Air which has used those tactics before. There has been almost no focus on Lion Air, but they had a very large responsible role in the accident, and have behaved far worse afterwards.

          Lastly by patience, I meant patience with the regulators. Boeing is not in control of the present delays, the regulators are. So it’s really up to them. I’m hopeful we are nearing the end and can finally have some resolution to all the speculation. We’ll know definitively what the problem determinations and solutions were. That will help to settle much of the discussion.

          • The MAX wiring has to be fixed before it flies again, apparently.

            You’re saying that the approach to ensuring that pilots don’t have concerns about the trim wheels is to ensure that the ones who do die?

            The F35 programme has had problems, but AFAIK none of them are due to the aircraft not being built according to design, or the design being just downright dangerous.

            The whole point of the MAX debacle is that it’s not normal circumstances. It’s come about because a company has not been operating in a manner expected of an aircraft OEM. Even Scott (or was it Bjorn?) has used the word “unprecedented” in previous articles, and I whole heartedly agree with that view. If events are unprecedented then that suggests that the “normal” ways of dealing with issues do not apply. It’s therefore perfectly reasonable for a body such as EASA to respond erring on the side of safety, rather than on the side of being “nice”, or “flexible”. Afterall it’s their reputaion too that’s on the line.

            Boeing might think that payouts for the Lion Air crash are complete, but I rather suspect that the victim families feel otherwise. And no word on the families of the victims of the Ethiopean crash?

            As for patience, Ok, yes I agree that everyone recognises that the regulators have a job of work to do here. But I think that to some extent that’s missing the point about regulators. Legally, one has no choice but to be patient with them. Try flying an aircraft without their approval and see what happens.

            I think that if the US administration or Boeing or whoever start expressing frustrations with regulators, especially those like EASA, CAAC, Transport Canada (i.e. not the FAA) there will be no positive result other than deeper entrenchment. Having concluded independent (or perhaps because of) of FAA advise that the MAX had to be grounded, the likes of the EASA, CAAC are within their own territories the ultimate gatekeepers. If they get this wrong and a MAX crashes, this time it’s on their watch and their conscience. Vague blandishments from Boeing and the FAA that the aircraft is safe won’t serve to allow EASA personnel to preserve their reputations in that hypothetical circumstance of unknown probability.

          • Matthew, there is no reporting on the Ethiopian settlements, other than the families rejected Boeing’s initial offer of settlement. They have been given the $145,000 same as Lion Air. Also the involvement of Ethiopian Airlines is complex because agreements between insurers mean that any settlements will be linked with those of Boeing. So attorneys are evaluating which legal paths will yield the greatest benefit for the families.

            The F-35 has had numerous safety-related issues and has been grounded because of them. But the groundings were resolved quickly and efficiently, which is the more normal outcome.

            I don’t agree with the characterization of the MAX as dangerous. I think that’s a preclusion that could be used to drive an indefinite process. But the ultimate test of that will be in the airworthiness directives that are required for recertification. So we have to wait, but the wait is not without cost.

            I agree that a rupture of regulator unity wouldn’t serve anyone, and is worth some delay to preserve unity. I just want to see that findings are evidence-based and will yield actual benefits in safety improvements.

          • Rob – I think that, rather, the issue is that these broad generalizations do little to justify the (re) issue of airworthiness approval, for which FAA should generally require evidence before acting.

          • Boeing has compiled a large body of evidence, in terms of flight and simulator testing. including evaluation by airline pilots and regulators. There is no shortage of evidence for those issues that were contributing factors to the accidents.

    • I think Bjorn’s view that the MAX is nose happy and all the pilots need to do is push the yoke down is now in tatters. Bjorn also said we all needed to move on, implying that the MAX would be certified with weeks, perhaps days.

      It was quickly followed by the FAA issuing a broadside at Boeing. That was then followed with the firing of Muilenberg. Soon after Boeing handed over additional documents that are damning with regard to the design of the MAX. We now know the content of those documents. Indeed they are damning.

      But this article is about the future. I remember posting that Boeing still had the engineering talent but management were not allowing the talent to be used. A Jones said I was wrong. I now believe A Jones is right. The talent has long left.

      Boeing must rebuild. In particular, it must rebuild it’s engineering talent. Having rebuilt it’s engineering talent it must show the necessary respect. But to do that it needs a willing board. This board is not willing.

      With regard to the MAX. Some in the Boeing lobby still have the perception that it will return and be a roaring success. Perhaps the board believe that. If they do, and are not removed, Boeing is dead meat. The MAX might return, but it won’t be a roaring success.

      This article is right, the board need to go. Boeing needs to be rebuilt with a heart and soul that radiates engineering excellence. Will it happen? I have grave doubts.

      • OK- you have about 5 days left to get proposed names of replacement- new directors to Boeing- along with proof you and or friends in combination have at least 3 percent of Boeing stock

        Details can be found at Boeing.com and last years annual report and proxy data published .

        Go to it !

        • I do take your point.

          But as they say if you don’t start you don’t finish. It’s got to start now. If it takes another 2 years for Boeing to start changing then it’s too late.

          Boeing can achieve a lot in 2 years, but I do take your point,

        • May I add. I’m retired.

          But with regards to the words of Boeing employees who complained and were not listened to. I know, I’ve got the scars to prove it. I know.

          Even so, change must start today.

          This is not America v everybody else. This is commonsense v stupidity.

    • How do you know what pressure the actual engineers fixing things on the MAX are or are not under? Just because Boeing has been pressuring externally high up doesn’t necessarily mean they’ve been doing it internally lower down. OK, I do think it is likely, given the culture that has emerged. But I operate to specific evidence.

      As for flying on a revised MAX, I don’t yet have any trust at all in Boeing, nor do I have 100% trust in the FAA but I must have trust in the regulatory system worldwide if I’m to fly as no other person(s) or body is capabale to tell me if an airliner is safe. So, especially if multiple agencies worldwide all have thorough look see of the revised MAX before approval, I would fly on it. I read Bjorn at the time as having this as an implicit assumption.

      • Of course Bjorn assumed that, but he also specifically assumed that Boeing would change their attitude. Its now 6 months later and this appears not to be the case. Also we have also now read the emails prior to the Lion Air crash. The real dirt is going to be after that crash and prior to the Ethiopian one.

        • Boeing absolutely has made an effort to improve, they wouldn’t have done all the flight and simulator testing on the new software if they were not serious about improving it.

          The e-mails mostly concern the flight simulator program and the extent of pilot training, not the MAX itself. Also almost all the negative comments are from one person made in private, and were not communicated to Boeing.

          It’s notable that this person belittles Boeing, the FAA, and pretty much anyone apart from himself. He felt he was smarter than everyone else, and thus didn’t need to respect them. But that was not endemic to others at Boeing. I’m sure they were as horrified to read those comments as everyone else.

          • Rob:

            Talk is cheap, what counts is the doing.

            So far it has all the hall marks of Lip Service on the public issue and then they send off the last CEO with a full paycheck that is higher than the compensation for those who died on Boeing’s screw up.

            The emails do nothign but reflect the same attitude Boeing has to the regulators and the employees. You reap what you sow. In this case Arrogance and Disdain.

            We have seen nothing on the illegal removal of the lightening protection strips on the 787 wings.

            Each day they make another set of wings compounds that.

            The last CEO goes off with a pay check higher than what they are paying gout to the people killed on the MAX crashes. That speaks volumes.

            So, no, this is the long run and the real change if it occurs, not lip service.

          • TW, investing substantial time in flight testing is doing, not talking. All the negative comments originate from one person. There is not a pattern of those comments being visible throughout Boeing.

            The CEO exit compensation was locked-in long before the crash events. It’s common in the US because a fired CEO may never work again, due to the high visibility of failure. We all find executive compensation and payouts frustrating, but Boeing has a contract with the CEO.

            The 787 lightning protection is under review and there will be a new ruling at some point, either upholding Boeing’s analysis or denying it.

            The wing surface only had protection panels over the engines, to serve as a sweep area when a strike is swept to the fuselage during flight. The strike areas, including engines and wingtips, are all still protected, that has not changed. So the FAA will need to decide if the swept area protection can be safely omitted. The effects of lightning sweep are less than the effects of the initial strike.

            Boeing was wrong to anticipate the ruling and alter the manufacturing before it was issued. There will likely be some kind of penalty for that. Also if the appeal was based on the change already being in place, that lacks relevance and would not be a reason to alter the ruling. The only relevance is a scientific basis, and that’s being investigated now.

          • I’m not comfortable with conflating Boeing improving with Boeing making efforts to fix what’s wrong with the Max. Different issues. Illogical.

          • Rob – in truth, what could Boeing have done but test new software? Just say ‘No’?

          • In this framework, Boeing is negligent for not acting, but also deserves no credit and is still blameworthy for acting. No way to win in those circumstances.

        • I agree that their public actions (eg the pressuring of the FAA tail end of 19) aren’t significantly qualitatively different to spring 19. But the point remains, just because this is how they behave publically with interested parties doesn’t necessarily mean this is the way engineers at the coalface are being dealt with. It may be but it may not. What evidence do you feel points the way you are suggesting.

  25. Apparently Calhoun is in line for a $7 million bonus when the MAX flies again.
    What are Boeing thinking? They are obsessed with money. If Calhoun really needs this sort of incentive to focus, then he is the wrong man for the job.

    • On the other hand, given the scale of the problem, getting the MAX back into the sky in a manner to everyone’s satisfaction would be cheap at $7million. An outside consultancy would charge way more than that. Hint to Boeing; it is going to cost more than $7million to fix the MAX.

      By Leeham’s own reckoning some months ago it has already cost more than the development of a whole new aircraft… If we find that the MAX still isn’t flying in 2023 then a new aircraft would have been quicker, probably.

      • A better way to frame it, if US$7mn is deemed reasonable (obviously a different question) would have been that his remuneration would be US$7mn, or whatever it is maximum in total, but that he would forfeit US$7mn if he fails to return the MAX to service in the specifie timeframe.

        I agree though that US$7mn is not much in context if it gets the job done, even if it looks ethically questionable and I think Calhoun really ought to recognise that, for all involved, he should be doing this for zip extra. And I don’t see Calhoun pressuring in shortcut ways that senior Boeing people clearly have in recent times, given the extent of scrutiny that Boeing and the FAA are now under.

    • 7 mln $ for bringing MAX to service. No rush, no pressure. At all. Here we go again :/

      • Damned if they did not expect me to show up at work and do my job before I quit.

        I guess the rules are different up high.

        Ok, I will show up for 10 million, but if you actually want me to do something then its another 5 million.

        Oh, and those tough problems, that is a special case of its going to cost you 7 million on top of the rest.

        The rich get richer and I quit.

  26. $7 million would undoubtedly be a bargain, but what would it make Calhoun do differently? I can only see it adding to the pressure to make more bad decisions. As if he wasn’t already aware of the importance of getting the MAX back in the air.

  27. Calhoun has been there for a decade, contribution / approving a flawed certification process & draining a company slaved by stock value.

    Now he is paid extra to solve te problems he’s been part of. While people that did their job are laid off.

    If he doesn’t succeed he probably gets paid also.

    Hello US citizens, forget what you were told / learned. Your pay system needs an overhaul.

    • Stop press! Several US senators have also noticed this illogical and perverse incentive.

    • keesje,

      If you think Calhoun’s pay package is strange, then consider what happens a lot of American companies when the whatever technical development project they are working on is successfully completed: many of the employees are considered excess and terminated. I saw this happen after the 777 Development Project and was stunned as to what message was being sent to the workers: that project and company success results in unemployment.

      When employees discover that working hard, completing the project and insuring company success results in their being sent to the unemployment line, then what do you think will be the ultimate outcome? It’s such a bizzarre situation that it makes me recall all the craziness that occurred with Soviet Manufacturing.

  28. Of course Bjorn assumed that, but he also specifically assumed that Boeing would change their attitude. Its now 6 months later and this appears not to be the case. Also we have also now read the emails prior to the Lion Air crash. The real dirt is going to be after that crash and prior to the Ethiopian one.

  29. If aircraft crew can sue Boeing for lost wages caused by mismanagement of the MAX, how about the workers at Spirit?

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