Boeing: How much trouble is the company in?
Boeing: How much trouble is the company in?
The US plane giant is under pressure from regulators and airlines, and its reputation is badly damaged.
"It's as if I'm watching a troubled child" is how Captain Dennis Tajer describes flying a Boeing 737 Max.
"The culture at Boeing has been toxic to trust for over a decade now," (Adam Dickson, a former senior manager at Boeing) says.
Five years ago Boeing faced one of the biggest scandals in its history, after two brand new 737 Max planes were lost in almost identical accidents that cost 346 lives.
The cause was flawed flight control software, details of which it was accused of deliberately concealing from regulators.
Meanwhile, further evidence of how production problems could endanger safety emerged this week.
The FAA warned that improperly installed wiring bundles on 737 Max planes could become damaged, leading to controls on the wings deploying unexpectedly, and making the aircraft start to roll.
If not addressed, it said, this "could result in loss of control of the airplane". Hundreds of planes already in service will have to be checked as a result.
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A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one.
Which car company did you say you worked for again?
A major one.
Why do you expect it to be different for any of them?
It's a sequence of quotes from Fight Club
They have to factor in the cost of the reputational damage too. But yeah, it’s all a dollar game.
Reputational damage is almost negligible in the modern market. Market capture in most hard-good industries, especially specialized industries like aerospace, is complete enough that you have very few options - sure, you could just not buy a Boeing airliner for your airline, but you have exactly two choices in large aircraft, and it's not like production is easily-scalable.
the first rule...
we don’t talk about Bruno