Dennis Muilenburg, Boeing’s chief executive, seriously underestimated the company’s plight in the run-up to the Boeing 737 Max crisis, which led to his formal firing on Monday. The problem with the Boeing 737 Max triggered two fatal crashes that killed 346 people, and the damage and cost are expected to exceed $10 billion, according to several analysts. It will take years for Boeing to recover from the trouble.
Mr. Mullenberg was stripped of his job as boeing’s chairman in October, but the company remains confident in his ability.
Last month, David Calhoun, who took over as chairman of Mr. Mullenberg and will take over as chief executive in January, praised his predecessor for saying that Boeing’s board saw Mr. Mullenberg as the right leader to bring the 737 Max back to fly.
Still, Calhoun and Boeing’s board eventually lost patience with Mr. Mullenberg’s mistake, as did the company’s regulators and customers, so much so that on Sunday local time, Boeing’s directors finally decided to replace Mr. Mullenberg.
Error one: Misjudged the severity of the 737 Max problem
Mr. Mullenberg’s poor response to the crisis began early.
After the crash of a Lion Air Boeing 737 Max in October 2018, there were signs that a safety system designed to prevent the plane’s stall may have been a major factor in the accident.
There was a problem with the safety device on the crashed plane the day before. Although the pilots were able to land on earlier flights, their problems gave investigators a first look at the cause of the accident.
However, Mr. Mulenberg and Boeing officials believe better training and small software updates will solve the problem, and they do not recommend that the planes be grounded.
In March, aviation authorities around the world began ordering the suspension of the 737 Max after another Ethiopian Airlines Boeing 737 Max crashed.
But Boeing urged the Federal Aviation Administration (FAA) to allow it to continue operating, and Mr. Mullenberg, testifying to Congress in October, said the company believed the aircraft was safe as long as additional training was provided for, and that it was premature to ground the aircraft without more real evidence. Regarding the crash, Mr. Mullenberg admitted it was a mistake.
The post-incident investigation also suggested that Boeing’s miscalculation of the 737 Max may have begun long before the two accidents. While the plane was still in the certification process, Boeing pilots sent messages to each other questioning whether the safety system was working properly.
Recently, a Boeing whistleblower testified to Congress that he had tried to warn his superiors about the production line before the Lions and ElS planes crashed, only to be ignored.
Mistake 2: Missed the Deadline again and again
After the second crash of the 737 Max, Boeing promised to find a solution “in the coming weeks.”
But that proved too optimistic. Boeing missed one “deadline” after another to get FAA approval to get the aircraft back on flying.
Worse, in the eyes of its customers and investors, Boeing doesn’t seem to know how complicated the process of getting approval is going.
Earlier this month, FAA Director Stephen Dickson told Congress that the model would not be ready for service until some time in 2020. Until now, however, Boeing has insisted it will be approved by the end of the year.
The patience of airline customers is fading.
“Airlines regard time as money. The longer they fly back, the more they feel they are eligible for compensation. “It’s a wits and says, ” said Cai von Rumer, an aviation analyst at Cohen.
There is no closer relationship between Boeing and Southwest Airlines. Southwest Airlines has never flown any other aircraft except the 737. It has more Boeing 737 Max aircraft than any other airline.
The efficiency of flying a single type of aircraft is at the heart of its business model. As recently as October, however, Gary Kelly, Southwest’s CEO, said he advised management to at least look into buying non-Boeing aircraft.
“I’ve made it very clear that we’re not happy with our situation,” Kelly said. ”
Error 3: Indefinite shutdown
Richard Aboulafia, an aviation analyst at Teal Group, said the erosion of Boeing’s relationship with the FAA, the US Congress and its airline customers ultimately led to Mr Mullenberg’s ouster. They have publicly criticized Boeing’s handling of the crisis.
The last mistake came last week, when Boeing announced it would suspend production of the 737 Max indefinitely, a sign that the company could no longer predict when the model would resume production.
The decision highlights a problem that will continue to plague Boeing, whose overly optimistic schedule has prevented it from managing production.
During the suspension, the company continued to produce the 737 Max aircraft, albeit at a slower pace. However, since the FAA did not authorize the re-launch of the aircraft, no aircraft was delivered.
Boeing’s ambitious timetable for the 737 Max’s re-launch has kept the aircraft on stock, giving suppliers false hope that production will not be disrupted.
Boeing said it would not cut jobs, at least for now. But it did not say how long the shutdown would last or how much it would cost. Without a clear timetable, suppliers cannot draw up plans to deal with shutdowns.
Credit rating agencies downgraded Boeing’s debt, citing increased uncertainty.
“If there’s one last straw, it’s a shutdown plan that doesn’t explain anything,” Aboulafia said. “