Boeing’s crash course | Business Standard News

FLYING BLIND: The 737 Max Tragedy and the Fall of Boeing

Author: Peter Robison

Publisher: Doubleday

Pages: 336

Price: $36

In October, a federal grand jury indicted a former Boeing test pilot named Mark Forkner, accusing him of deceiving the Federal Aviation Administration and scheming to defraud airlines during the development of the 737 Max, two of which crashed within five months of each other, killing 346 people.

Identifying a chief villain has a way of simplifying complex narratives. But while Mr Forkner does appear to have hoodwinked regulators and misled customers, he was hardly the one most responsible for the two 737 Max crashes in 2018 and 2019.

As Peter Robison demonstrates, ultimate blame for the crashes lies with the highly paid executives who waged a decades-long campaign to transform Boeing from a company “once ruled by engineers who thumbed their noses at Wall Street” into “one of the most shareholder-friendly creatures of the market,” a company that “celebrated managers for cost cutting, co-opted regulators with heaps of money and pressured suppliers with Walmart-style tactics.”

Through archival research, the benefit of the extensive reporting on the crashes and their aftermath, and interviews with many of the key players, Mr Robison has produced an authoritative, gripping and finely detailed narrative that charts the decline of one of the great American companies.

Boeing’s importance to the country’s economic and industrial story is hard to overstate. During World War II, its factories outside Seattle were “making more than a dozen B-17 Flying Fortress bombers in a single day,” Mr Robison writes. After the war, Boeing turned its attention to the growing commercial aviation market and began producing planes that would revolutionise air travel, including the 707, 727, 737 and the 747. Boeing engineers helped NASA land men on the moon, and the company remains a major military contractor and the maker of Air Force One.

Much of Boeing’s success came from its ability to produce reliable airplanes. But a crucial part of what made the company great was its exceptional corporate culture. Authority inside Boeing rested with aeronautical engineers, not finance executives. If someone working on the design of a new plane spotted an opportunity for an improvement, the change was made, even if it meant costly delays. What mattered most was getting it right, and ensuring that Boeing planes were as safe as they could possibly be.

Then, around the turn of the millennium, Boeing lost its way. Mr Robison accurately traces the beginning of Boeing’s downfall to the 1997 acquisition of McDonnell Douglas, then run by Harry Stonecipher, an unpleasant chief executive who relished cost cutting and had little patience for deliberative engineers.

Mr Stonecipher became chief executive of Boeing and promptly turned the company’s attention toward the matter of generating profits for shareholders. Payrolls were slashed. Union labour was shunned. Technical work was outsourced to cheap contractors. The transformation accelerated under Boeing’s next CEO, Jim McNerney.

Mr Robison homes in on crucial moments during the eight years it took to design, certify and produce the 737 Max, revealing how at each turn, a fixation on profits led Boeing employees to make catastrophic choices.

There was the decision to redesign the 737 instead of designing a new jet, obliging the company to update a plane that had been introduced in the 1960s. There was the introduction of poorly designed software, MCAS, which wrested control of the plane from the pilots. And there were the numerous instances when Boeing employees, including Mr Forkner, played down the importance of MCAS to federal regulators and airlines, leaving pilots unaware of the new software until after the first crash. All the while, as Boeing executives skimped on the development of the Max, they shovelled billions of dollars back to shareholders in the form of buybacks and dividends.

There is an understandable temptation to look for silver linings in the wake of tragedy. When the causes of the crashes are so clear to see, the culture inside Boeing so obviously broken, the regulatory apparatus so glaringly inadequate, how could fundamental changes not be in store?

Mr Robison finds little reason for optimism. While Boeing has accepted responsibility for one of the crashes as part of a settlement, no one at the company besides Mr Forkner has been charged with a crime. Even with hundreds of families in pain, Boeing’s reputation tarnished and the FAA’s credibility in tatters, “the managers,” Mr Robison writes, “men who heaped on the pressure, reaped the rewards and then disappeared when the whole deadly blunder was exposed — never paid any price.”


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