The Boeing Co. is one of the world largest manufacturing companies and the largest exporter in the U.S. Recent years, it has suffered a series of problems. Its solution to these problems causes more problems.
- In 2010, Airbus introduced A320 neo, a single aisle plane similar to Boeing 737. Instead of designing a new plane to compete with Airbus, Boeing chose to upgrade the 737 to 737Max. It would save money and could be introduced sooner. It tried to make minimum changes to save pilot training.
- To compensate for the dynamics of bigger engines and wing location, Boeing used the software MCAS, which is used in military aircrafts activate correction at low speed.
- FAA has a long practice to rely on manufacturers to perform some safety analysis. Boeing did not inform the FAA of the existence of MCAS.
- On 29 October 2018, an Indonesian Lion Air 737Max crashed, Boeing blamed it on the lack of experience of third world airline pilots.
- It was later found the problem was due to MCAS.
- FAA calculated the possibility of 15 crashes in the life of the whole fleet of 737Max, i.e. about 1 in two years.
- Boeing was allowed 150 days to fix the problem, well within the statistical allowance.
- On 10 March 2019, another 737Max of Ethiopian Airline crashed due to similar circumstances, the MCAS was to blame.
- 737 Max was grounded from March 2019 to December 2020.
- Boeing made radical changes in its operations. Instead of making the plane itself, it designs a plane, outsources the manufacturing of parts then brings the parts to Boeing facilities for final assembly. It sells planes around the world. To satisfy the buyer countries, the parts of a plane are outsourced around the world. Based on the philosophy, in 2005, it sold its Wichita plant, which became Spirit AeroSystems, to outsource production.
- In January 2024, a door plug came off Alaska Airline’s 737Max. It was manufactured by Spirit. Spirit was not at fault in this case. Boeing did not fix the door plug properly.
- Now, Boeing wants to buy back Spirit s with Boeing, to ensure quality control.
- Before the latest accidents, Boeing was so successful. To ensure better returns to shareholders, there was rumor that the CFO would be promoted to CEO.
- The accidents ended such speculation.
COMMENTS:
Air planes move at high altitude and high speed. Any accident would likely result in casualties and reported all over the world. High precision in design and manufacturing are essential. Just as in investing, past performance does not guarantee future results. Congress's approval of changes shown be taken with a grain of salt, especially if this is due to industrial lobbying.
Scott Kirby, CEO of United Airlines said that Boeing had great engineers and workers, they should be left to do their job, and finance will take care of itself.