Brace for Impact: Boeing's Most Recent Scandal
Boeing faces a crisis as safety concerns and a decline in engineering standards raise questions about its future. The company, criticized for a shift in corporate culture after its 1997 merger with McDonnell Douglas, must address safety issues and restore an engineering-focused approach under the leadership of CEO Dave Calhoun to prevent further decline and maintain competitiveness against Airbus.
As yet another controversy surrounds Boeing, a general consensus of sliding standards and unnecessary cost-cutting orchestrated by selfish shareholders and middle managers has taken a hold. Financial markets echo public consensus with Boeing's stock price now steadily decreasing (an 11% fall in the immediate aftermath), questions are now being asked of Boeing. Is Boeing in the midst of a slow decline? Why have they lost their ‘engineering’ approach which gave them the edge through the end of the 20th century? Is it possible for the aviation giant to come crashing down?
The newest incident tells a familiar story. An unused emergency door blew off a brand-new Boeing 737 MAX 9. (different from the MAX 8 involved in previous disasters). Only good fortune prevented casualties, yet Boeing may still pay a heavy price. Upon further inspections of other aircraft of the same model, loose bolts were found, resulting in the grounding of all 171 MAX 9 aircraft. This is not the first time a Boeing 737 MAX has had safety issues. Two MAX 8 crashes, different from the newer MAX 9 (Lion Air Flight 610 and Ethiopian Airlines Flight 302) were primarily caused by faulty flight stabilisation software which led to the grounding and subsequent overhaul of the software. It is clear now that safety standards have degraded significantly in Boeing's new generation of aircraft.
There is a common consensus that Boeing has faltered ever since their 1997 merger with McDonnell Douglas. Instead of being led by engineers, Boeing corporate culture was replaced with the McDonnell Douglas’ cost-cutting, deadline-oriented approach. Maybe more intense competition throughout the 90’s forced the change or perhaps Boeing was just an unfortunate victim of corporate America’s focus on maximising shareholder profit. Either way, it was a grievous error and now Boeing is facing serious, almost existential, challenges.
Boeing has absorbed McDonnell Douglas’ poor workplace culture which was unfortunately lax on safety. McDonnell Douglas historically had a poor safety record, in particular the DC-10, sometimes known as the Death-Cruiser, had a deadly reputation, especially in the early 1970s. The most infamous incident came in 1974 when Turkish Airlines Flight 981’s cargo door blew off just outside Paris, killing all 346 crew and passengers on board. Devastatingly this cargo door issue had already been identified after a previous crash (American Airlines Flight 96) but McDonnell Douglas decided not to fully redesign the locking mechanism. Lawsuits followed and McDonnell Douglas lost serious trust from the public. Sadly, it seems their culture has led Boeing to make similar mistakes.
Fortunately for Boeing they may simply be too big to fail, for now. Their only other competitor in commercial aviation is Airbus and both are largely funded by often illegal government subsidies. The two companies have effectively sold every major commercial jet currently in service. IfBoeing were to ever fail it would give Airbus a monopoly over an industry which is infamously difficult to break into as a new firm. Obviously, this would be disastrous, no competition would inevitably lead to higher prices for airlines, lower quality standards and a disincentive for innovation. Boeing is lucky to be prized by the US government, given only relatively light fines and a non-starter criminal proceeding for their negligent safety regulations with the MAX 8. This does not mean Boeing will succeed indefinitely. If there is not a dramatic cultural shift within the company, they will simply keep losing ground to Airbus until they cannot keep going. The new CEO, Dave Calhoun, in charge of Boeing since the start of 2020, must deal with these challenges effectively, safety must be put first and a return to the engineering approach must be emphasized.
Written by Nicholas Stanfield