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View Full Version : 737 Max $25 billion hit to Boeing "Biggest corporate blunder ever"


Al E. Vator
18th Nov 2020, 00:32
Apparently all because somebody thought it would be a good idea to outsource programming and minimise the matter in ops manuals?

Surely didn't cut costs.

https://edition.cnn.com/2020/11/17/business/boeing-737-max-grounding-cost/index.html

DaveReidUK
18th Nov 2020, 06:21
Please do tell us who this "somebody" was.

Anti Skid On
18th Nov 2020, 07:24
Mr. Bean-Counter

macdo
18th Nov 2020, 08:25
Considering the loss of life and the misery caused to thousands, I'd say they got off light. A long dose of prison life for those responsible would have been a better (though unlikely) outcome.

Less Hair
18th Nov 2020, 10:32
The bad thing is that they wasted the budget that would have been needed for some successor.

Chas2019
18th Nov 2020, 10:38
macdo

i agree with you. as it turns out only 1 person lost their job over this fiasco.

atakacs
18th Nov 2020, 11:22
Less Hair

Nah... Would have gone into stock repurchase and optiosn. Why think long term when one can get paid handsomely short term ?!

Less Hair
18th Nov 2020, 11:24
Green light for RTS.

https://www.faa.gov/regulations_policies/orders_notices/index.cfm/go/document.information/documentID/1038501

Langball
18th Nov 2020, 12:39
Any loss of life is regrettable, but to call it the "biggest corporate blunder ever" is a tad much. What about Bhopal where nearly 4,000 lost their lives. Or even 'The Titanic'. I always think it's quite ironic that they have Titanic themes bars and make it out that it's something to be celebrated!.

Spooky 2
18th Nov 2020, 13:56
Chas2019

You don't have a clue of what your talking about.

infrequentflyer789
18th Nov 2020, 14:29
BP: So, $25 billion eh? Y'all want me to carry on holding this beer Mr Boeing?

RR_NDB
18th Nov 2020, 14:46
"Apparently all because somebody thought it would be a good idea to outsource programming and minimise the matter in ops manuals?"

Much worse than simply outsourcing. Organizational culture issue.

Clowns and monkeys played a role. Sad.

RR_NDB
18th Nov 2020, 14:51
"Surely didn't cut costs."

Sound lesson to bean counters as PIC and engineers merely PF's.

hoistop
18th Nov 2020, 15:50
Spooky 2

Can you give us a hint? Were there some more heads rolling? Scapegoats or those who deserved it?

what next
18th Nov 2020, 16:42
25 Bliion $ biggest corporate blunder ever? Ask Volkswagen! Their "Dieselgate" has cost them close to 35 Billion $ so far and it's far from over...

RR_NDB
18th Nov 2020, 16:52
@ Less Hair

"The bad thing is that they wasted the budget that would have been needed for some successor."

And the chinese virus completes the R&D outlook

Spooky 2
18th Nov 2020, 17:40
hoistop

I don;t feel that I should respond to this request for information, and I do not have all the ugly the details, but I can asure you people were quietly shown the door within the last six months, if not before. This of course is not to mention the thousands of employees that have lost their jobs from the combination of the MAX debacle, and Covid 19.

Slippery_Pete
18th Nov 2020, 20:40
Iím surprised it took this long to be honest.

Itís a 1960ís, 30 tonne first generation jet that has been patched and superglued for 60 years.

The NG has fundamental issues too. A woeful overhead panel, thrust-pitch couple problems, under engine clearance issues, an elevator which is vastly undersized, tail strike susceptibility because they refused to lengthen the gear, a trim wheel that spins like itís on crack but still takes inordinate amounts of time to move from stop to stop, the STS system... it goes on and on.

They just got lucky with the NG that the problems werenít exposed earlier.

I fly the NG, and it has a certain level of charm, but if youíve come from well designed aircraft previously, you can see it should have been retired to the scrap heap 30 years ago.

Boeing have learnt that cheapest option is never the cheapest option.

Al E. Vator
18th Nov 2020, 23:43
During the 787 introduction debacle, Joe Sutter (the original 747 designer) asked what the hell was going on at Boeing.
He wondered how a bunch of computer wizards could have made such a stuff-up and taken so long to rectify expensive errors, when decades before, his team introduced a revolutionary aircraft in record time, using slide rules!

There were inevitable issues for such a groundbreaking aircraft but they worked the problem and sorted it.

The 787 wasn’t that revolutionary but was a mess and you’d think the powers that be would’ve then learnt from their errors. However this warmed-over 1960’s rebranded Max aircraft is even less revolutionary and even more of a catastrophe!

Much like the lack of leadership/accountability being demonstrated by the outgoing US President, the heads of Boeing need to take charge like proper leaders should. They should stop passing the buck and take ownership to make sure this avoidable disaster never, ever happens again.

Poor old Joe would be rolling in his grave.

brak
19th Nov 2020, 00:04
The names of the 346 should be printed on every single Max as a tribute to them and honouring their lost lives and because of that the airplane is now safe to fly.
Is it really?

Spooky 2
19th Nov 2020, 02:56
Negan


Surely your not serious? If that were the case we would have airliners flying around looking like billboards. Grow up and get a grip on reality.

568
19th Nov 2020, 04:24
Spooky 2

Were these people "quietly shown the door" connected to flight technical,3-800 building or other departments?
Thanks.

Ben_S
19th Nov 2020, 08:26
You can't buy publicity like this special feature on BBC news. https://www.bbc.co.uk/news/extra/jDOe2y9Tbo/boeing-737-max

WB627
19th Nov 2020, 09:25
+1 :ok:, would you let your loved ones fly in one?

Chas2019
19th Nov 2020, 10:21
With the FAA and everyother similar agency from Europe checking up on safety its probably safe now. What I am concerned is Boeing tried to conceal the deficiencies of the MCAS system will it happen again? Did the right people get shown the door?

Chas2019
19th Nov 2020, 10:22
25 Bliion $ biggest corporate blunder ever? Ask Volkswagen! Their "Dieselgate" has cost them close to 35 Billion $ so far and it's far from over...
good point but no one died if the engine stopped working.

DaveReidUK
19th Nov 2020, 12:16
True, but the problem was about what happened when the engine was running.

Dieselgate (falsifying emissions levels) arguably contributed to the deaths of many more people than the Max killed.

oldchina
19th Nov 2020, 12:55
I've just been listening to an old interview with D P Davies (ex UK CAA flight test) about the 727 certification.
Apparently Boeing didn't come clean with the FAA and "together" they certified the plane with unacceptable stall characteristics.
There was one fatal accident. Boeing only fitted a stick pusher later at the insistence of the CAA, for Dan Air.
What's new?

Doctor Cruces
19th Nov 2020, 13:00
Chas2019

Of course it will. That's the corporate world today. Hide any deficiences to get the product to the market as soon as possible to make money. It's not just aircraft, it's everything.

Spooky 2
19th Nov 2020, 13:52
568

As far as I know, Flight Technical ss/was in the 2501 building. No further comments.

Loose rivets
20th Nov 2020, 01:43
Don't I recall the '74 taking Boeing to the brink?

568
20th Nov 2020, 01:46
Indeed you are correct.
Wing root had to be re-designed because of wing loading.

568
20th Nov 2020, 01:48
Spooky
Thanks for the response but my question was to see if that if any people who left were in the 25-01 and 3-800 buildings.
Thanks anyway.

George Glass
20th Nov 2020, 05:22
+1 :ok:, would you let your loved ones fly in one?

In a heartbeat.
But there are plenty of airlines I wouldnít let them fly with.
The pile-on on the Max has been loopy.

Momoe
20th Nov 2020, 09:04
In reply to Slippery Pete,

The fact that Boeing should have gone with a new from the ground up is indisputable. You can design out fundamental challenges through engineering (Porsche 911) but Boeing didn't use Porsche metrics, they went for the chinese model.

GlobalNav
20th Nov 2020, 16:25
The aircraft design isn’t the only thing the company should have started new from the ground up. It needs to become an excellent engineering organization again. Let the MBA’s and COA’s sell apples.

SMT Member
21st Nov 2020, 05:04
The most expensive corporate blunder was Deepwater Horizon and BP, which came in at a cost of around 65BN. But BP is a company which sported a 278BN turnover in 2019, vs. 76BN for Boeing in the same year. So as a percentage, Boeing are far harder hit with cost of 25-30BN.

Boeing spent around 3BN in 2019 on R&D. In the same year, Boeing spent 20BN on stock buybacks ...

His dudeness
21st Nov 2020, 07:36
Boeing, on the other hand, spent around 3BN in 2019 on R&D. In the same year, Boeing spent 20BN on stock buybacks ...

Gotta have your priorities....

Dieselgate killed people ? Get a grip on reality, as someone else wrote. An arbitrary limit on emission for a single vehicle will do no good as long as the amount of emitters is not limited. Would VW have not manipulated the cars but just have sold more of them, everything would have been "fine" and the level of emission would have been the same. And selling of "our" old cars to the 2nd and third world certainly does nothing to better the air....The potential hazard is there, sure, but neither lung diseases did get more prevalent nor did the emission readouts drop when most cars did where not driven during the lock down.(as quite few doctors, specialized lung researchers etc explained)

Flapsupbedsdown
21st Nov 2020, 08:58
For some reason if you tell the truth you'll be hanged!

Gullwings
21st Nov 2020, 09:18
Ref: The previous 'Oldchina' message: "I've just been listening to an old interview with D P Davies (ex UK CAA flight test) about the 727 certification.
Apparently Boeing didn't come clean with the FAA and "together" they certified the plane with unacceptable stall characteristics.
There was one fatal accident. Boeing only fitted a stick pusher later at the insistence of the CAA, for Dan Air.
What's new?"

If my memory serves me correctly it was also once a UK CAA Additional Requirement to have Stick Pushers fitted to early B737s (such as 737-200) prior to those aircraft being allowed to be put on the UK Register.

Less Hair
21st Nov 2020, 11:46
IIRC using full flaps on the 727 came out of fashion.

megan
21st Nov 2020, 12:47
D P Davies also refused to certify the 707

https://www.aerosociety.com/news/audio-the-d-p-davies-interview-on-testing-the-comets-boeing-707-britannia-brabazon/

Big Pistons Forever
21st Nov 2020, 15:06
X Boeing CEO Daniel Muileberg got a 60 Million dollar + severance package after the company imploded on his watch. Funny how there never seems to be any consequences for senior management when they totally screw the pooch......

WillowRun 6-3
21st Nov 2020, 15:27
Ex-CEO Dennis Muilenburg's severance pay and benefits were all set by his executive employment agreement, I think it's safe to say. But, indulging the "R" in R&N for a moment . . .

Suppose the Board took the position, when it ousted Dennis, that one of the typically very narrow grounds for terminating his contract "for cause" existed, which would have been sufficient legally to withhold the severance package. Doing that would have required a capacity, on the Board's part, to take him on in a courtroom (and pre-trial discovery before courtroom proceedings) and make the case, with actual evidence, that his acts or omissions were within the meaning of "for cause" in his contract. The higher the executive rank, the narrower the meaning of "for cause", too. (Yes, this SLF/atty is saying this based on practice experience.)

But terminating Dennis "for cause" would have meant that Boeing was then . . . litigating against itself. It had not yet resigned itself to being almost totally, perhaps utterly, unable to control events any longer. So while it still was in "damage control" mode, to a great extent anyway, before criminal inquiries and Congressional committee investigators and crash victim lawsuits and a potential class action suit by customer airlines' pilots and a suit by SWAPA and another by flight attendants, and oh yeah the FAA return to service process, and review panels, and all the other CAAs globally involved, it also would be trying to prove what role in wrongdoing its CEO had played. I don't think it was the appearance of throwing him under the bus that stopped the company from doing this. Rather, it was the necessity of defining what the company, through the CEO, had done wrong in the first place (again, by act or omission, either way).

If there had been what a colleague of mine used to call a "practical labor lawyer" around, maybe Boeing could have tried offering Dennis a quite modest part of the severance package, and a "wait-and-see" stand-still agreement, and only later assessed what role he had actually played in what wrongdoing would eventually surface. Although, Big Business hires gold-plated credentials in its general counsel offices, not practical-oriented minds.

Big Pistons Forever
21st Nov 2020, 16:19
WR 6-3.

I get the "what is" vs "what should be" will never change, but it still rankles that CEO get all the benefits but have no accountability for the consequences of their decisions. Especially where in this case the company culture of do everything fast and cheap and the quarterly stock price is the only metric that matters, came directly from the top....

Since you are a legal expert would you care to further comment on potential criminal liability for Boeing execs ?

PAXboy
21st Nov 2020, 17:01
Making the Stock Market their master is what led to the First Great Depression. Just sayin' ...

WillowRun 6-3
21st Nov 2020, 18:00
Potential criminal liability is a difficult call (and it's tempting to say my case resume doesn't have any criminal defense or prosecution experience on it, but that would be unSLF-like to say). It stands to reason that gross, deliberate misrepresentations (and maybe misstatements when it was legally required to report accurately) within the FAA certification process are a part of what the reportedly ongoing DOJ investigators are looking at, maybe the main part. There have been criminal prosecutions against corporate defendants for somewhat parallel misdeeds; on the other hand, neither WorldCom nor Enron were major defense and aerospace contractors, with major export trade balance impact, so . . . The fact, though, that the investigations appear to be still open, even after FAA okayed return-to-service, suggests decisions to prosecute yet could be made.

If I had to pick between being labeled authoritative or an expert, I'll go with the former every time. Based on, having experience yields reliability and a kind of professional sincerity that is more valued (or should be, anyway) than "expertise", which can be too easily manipulated. I'm saying this, because experience tells me that the CEO is nearly as much an agent as a principal - the direction of the enterprise was set by its Board. Which reflects and represents the major investors, institutional and otherwise. So seeing the CEO walk with riches - isn't it somewhat akin to the college football or basketball coach who earnestly tells recruiting prospects in their parents' living rooms that Coach will stay at the College for the next foreseeable years - then Coach leaves abruptly for the Much Bigger Bucks. CEOs can be expected to be moneyhogs, not saying it's "right" but it makes sense that it works out that way. Boards of Directors, though . . ..

When the Boeing saga this time around (after the KC-46 scandal, last time around) was peaking, didn't the Board either add some polished-resume personages from the nuclear Navy, or assign then-current Directors with that background more safety oversight and management roles? But like a big CVN it - the Company - doesn't turn quickly. Just ask the Starliner software crew. So yes, the bean-counter mentality rose to the very uppermost, topmost management and ownership ranks of the company - not just persons, minds also.

Still going in reverse order, what about CEO accountability? Well, didn't a lot of the staff cuts and anti-union moves happen while Dennis was CEO? - and so perhaps a way to change corporate practice in big and important companies is not so much the all-the-rage stakeholder capitalism....perhaps the better way - because it can realistically be effective - is to work to undo the missteps of the discredited CEO. Reopen the NLRB files, take another look at the issues with the 787 plant in S.C. And insist on another look, a lot more publicly, at the move of all production to S.C. - particularly after what to a non-engineer SLF looked like serious fuselage section joining problems. A discredited CEO can have a lot of bank account but if a lot of what he or she got paid to do gets taken back apart and discredited along with his or her name, maybe that is a roadmap to better CEO minds getting there, in the next term of years.

I still think the 727 was the best airplane ever to fly on, because I flew on 727s a lot as a youngster and teen and even into early adult years so that's a whole lot of salt to granularize.

568
21st Nov 2020, 23:09
Also take a look at the NLRB files from Seattle SPEEA circa 2013!

Consol
21st Nov 2020, 23:34
Slippery_Pete

Best synopsis of the B737 I've seen in a long time and brings me back to my B737 (4+5) course many years ago when I had a penny drop moment when the instructor explained that it was basically a 737-200 with a load of add ons sitting on top.