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Damning emails threaten Boeing’s reputation with the flying public

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Via Financial Times

When former Boeing chief executive Dennis Muilenburg appeared before Congress in October, he repeatedly said that safety was at the core of the culture at America’s largest exporter. More than 100 pages of damaging internal messages released late on Thursday tore at the heart of that assertion.

The documents, which Boeing disclosed to regulators and congressional committees investigating the causes of two fatal crashes of its 737 Max aircraft, have called the company’s values into question

They show some Boeing employees discussing attempts to mislead aviation regulators, while others worried about “a culture of ‘good enough’” or choosing “the lowest ranking and most unproven supplier . . . solely because of bottom dollar”. 

Still other employees said they would not put their own families on the 737 Max, the aircraft at the centre of Boeing’s growth strategy.

Greg Smith, who became interim chief executive in December after Boeing’s board fired Mr Muilenburg, emailed its workforce on Friday to stress that the messages only involved “a few employees” out of the roughly 150,000 workers at the company. But some say the messages point to a broader cultural problem at Boeing. 

“Some airline leaders who I have spoken to still believe there is not yet sufficient evidence of organisational or cultural change,” said John Strickland, a UK aviation consultant.

The documents became public just as Dave Calhoun, who takes over from Mr Smith as Boeing’s permanent boss next week, is looking to provide a fresh start. They threaten to make it harder to convince regulators, elected officials, the flying public and US federal prosecutors that Boeing is driven by safety, not profits.

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“It solidifies that this is a widespread cultural problem in Boeing for many, many years,” said Bjorn Fehrm, an aeronautical and economic analyst at the aviation consulting firm Leeham.

Mr Fehrm said the cultural shift began two decades ago when Boeing merged with the defence contractor McDonnell Douglas and the latter’s chief executive, Harry Stonecipher, took the reins. 

Mr Stonecipher emphasised the importance of improving the company’s financial profile, a trend that continued when Boeing hired Jim McNerney, an acolyte of Jack Welch, the cost-cutting chief executive of General Electric, for whom Mr Calhoun also worked for many years.

‘Designed by clowns . . . overseen by monkeys’

FILE PHOTO: The cockpit of Jet Airways Boeing 737 MAX 8 aircarft is pictured during its induction ceremony at the Chhatrapati Shivaji International airport in Mumbai, India, June 28, 2018. Picture taken June 28, 2018. REUTERS/Abhirup Roy/File Photo
© Reuters

Messages released on Thursday show Boeing employees discussing the 737 Max aircraft and its flight simulators:

“I still haven’t been forgiven by God for the covering up I did last year.”

“Would you put your family on a Max simulator trained aircraft? I wouldn’t.” “No.”

“Am not lying to the FAA. Will leave that to people who have no integrity.” “I’m sorry, that is not acceptable. Your integrity is priority 4.”

“I just jedi mind tricked this fools. I should be given $1,000 every time I take one of these calls. I save this company a sick amount of $$$$.”

“I’ll be shocked if the FAA passes this turd.”

“This airplane is designed by clowns who in turn are supervised by monkeys.”

Boeing apologised:

“These communications do not reflect the company we are and need to be, and they are completely unacceptable.”

Boeing has been criticised for rushing to update the 737 rather than build a new jet in order to avoid losing orders to archrival Airbus.

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The redesigned version of the plane had heavier engines that were mounted differently on the wing, and Boeing designed a flight-control system to counter the effect, calling it the Maneuvering Characteristics Augmentation System, or MCAS. That system was implicated in the two crashes in five months over 2018 and 2019, which killed 346 people.

Boeing did not want to recommend simulator training for pilots because it substantially increases the cost for airlines. The newly released emails show the company was aware that if it emphasised MCAS was a new function, “there may be greater certification and training impact” which would add to the cost of the Max.

“The arrogance demonstrated in these emails and the indifference to the regulatory structure and the safety of the product are more than alarming — they are deeply disturbing,” said Jim Hall, a former chair of the US National Transportation Safety Board.

Line chart of Share price ($) showing Boeing shares hit by 737 Max crisis

The messages could also play into pending litigation against Boeing.

“I think this is going to open them up maybe even to criminal liability,” said Zemedeneh Negatu, an aviation financier and former adviser to Ethiopian Airlines. “If they had released this early on, fessed up . . . maybe they would have been given the benefit of the doubt but now this is going to complicate their life even further.”

Boeing has said that information such as the messages released on Thursday were not relevant to the legal cases brought by families of those who died on the two Max crashes, said Bob Clifford, the lead attorney for families in the Ethiopian Airlines 737 Max crash.

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But Mr Clifford said the memos show that Boeing employees knew of major problems with the Max and that the company’s culture prevented them from reporting them. “That type of responsibility goes straight to the top,” he said.

The messages also look likely to hurt Boeing with two other key groups: pilots and the flying public. Jon Weaks, head of the Southwest Airlines Pilots Association, said on Friday that “the continuing flow of information emerging about the Boeing 737 Max supports our position that Boeing was not forthcoming and truthful about the aircraft, a situation that is still causing losses in earnings and flight time for our pilots”.

Trent Ross at Ipsos, the pollster, added: “When a crisis strikes that impacts a company’s core reason for being, that crisis will have a very deep impact” with the public.

Boeing said in a statement on Friday that it would “fully support” any additional review from the Federal Aviation Administration stemming from the messages. Mr Calhoun will have to contend with the fallout.

His team’s challenge now, said Andrew Charlton, managing director of Aviation Advocacy, “is how do they send a message that they’ve turned over a new leaf?”.

Additional reporting by Tanya Powley in London

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