“Selling on a Global Basis – Transparency A Must”!! -BOEING – #57

Boeing has been incurring problems in building a quality plane ever since they decided that in order to grow, they would need to move their headquarters and production facilities out of their well-established Washington State location where they could have expanded with 1ample real estate availability. Instead they chose to move their Headquarters to Chicago and above all commit to outsourcing key parts for their leading new plane models and assembly functions all over the U.S. The result of this decision, guided by the young Turks with their power-point presentations that looked good on paper, but did not involve any contingency plans, both for upside and downside contingencies.

Yes, gone is the experience that was part of Boeing’s core employees who served the company with dedication and loyalty evident in every function.  I can vouch for their excellent communications abilities as a supplier to a key area (the wiring department responsible for hand assembling the hundreds of wiring harnesses that go into each plane).  Gone are the skills developed and honed to a state that produced a quality and reliable plane.  The best example of the negative impacts of outsourcing can be seen in the sourcing of parts for their two largest and newest planes, only to find that 700+ suppliers sent in parts that didn’t fit – yes, didn’t fit. This resulted in multi-year delays of launching the new planes, with losses of profit, cancellation of orders in hand and providing a competitive opportunity to the only other competitor that represents the EU.

If it is proven that Boeing knew about their current 737 Max problems one year ago and didn’t notify their Customers, you can rest assured that SWA and United will need to have extensive guarantees in order for both airlines to take off the current grounding orders.  Based on both of these airlines keeping their 737 Max’s grounded until they feel safe, so will all the rest of the Airlines across the globe as they monitor the progress.  Boeing is going to have to compensate all airlines who are currently experiencing revenue losses – the question is how much?

One wonders on the answer to the question – how did the Max gain approval and to what degree were Boeing officials involved in the process?  It seems that Boeing engineers seemed to think that the sensor problem didn’t adversely impact airplane safety or operation. While several notifications seem to have been released. Senior Boeing leaders didn’t learn about the issue until after the October 29th, 2018 Lion Air crash.  Why the delays in admitting that they had a software problem in designing the –angle-of-attack disagree alerts?  Why did it take a four month delay between notifying key Customers SWA and UNITED of the possible software glitch?

IT DOESN’T LOOK GOOD FOR BOEING!

If Boeing knew of the problem a year ago, why did it take 500 plus fatalities in both 737 Max crashes to start making the adjustments?  There are very few companies in the world making commercial jets, but this action will assure a timely response from these competitors – as Boeing moves from the leadership position to last place in the world. Profit squeezes and non-reliable sourcing plus questionable Distribution and assembly operations throughout the world are now the backbone of Boeing.  Thousands of qualified and loyal employees lost their jobs due to the Suits developing strategies without upside and downside contingency plans reflecting strengths and opportunities.

One wonders whether the savings were achieved, as a result of moving operations out of the Seattle area.  My guess is that someday the payoff will be realized, but in the meantime Boeing will have a major challenge in getting the Max 737’s owned by SWA and UNITED flying again.

“ IT STARTS and ENDS WITH MANAGEMENT” – LESSON:

  1. Produce quality products that are totally supported with training etc.
  2. Provide TRANSPARENCY 100% of the time to as much info that is available to all Customers.
  3. If something goes wrong, have a contingency strategy in place (ONE PAGE PLAN) that kicks-in without delay and covers all the bases regarding the contingency.

 Boeing will suffer dearly, if in fact the Company knew of a potential safety problem with the 737 Max for a year prior to disclosure. Meanwhile the 400 Max’s stay grounded. Also, concerns have been raised about the pilot having enough physical strength to manually crank a flight-control wheel in extreme emergencies – the same emergency procedure applies to the 6300-previous generation 737’s that fly on a global basis. They have not been grounded yet –all 400 Max’s have been.

Isn’t it strange that thousand of flights have taken place all over the world that included the 737 & the 737 Max and we have a limited number of issues that are causing a complete economic disaster in the airline industry? However, Captain Chesley “Sully” Sullenberger just got through testifying to Congress last week and said the following: he told the committee that he recently experienced a recreation of the fatal Max flights in a simulator, and that he came away understanding how crews could have been overwhelmed by alerts and warnings without enough time to fix the problem. He also expressed concern about how the original Max was designed and accepted by FAA regulators, that it was fatally flawed, and should have never been approved-it is clear from his written testimony that he thought Boeing and the FAA had a problem.  This comes from a Pilot who has no skin in the game, and who I consider to be one of the most trust-worthy people in the world.                                                                                                                                                                                                                                                                                                                                                                                                Neither Boeing nor FAA regulators anticipate design – or equipment changes to result from this review, but instead provide multilingual training tools and receive guarantees from buyers that all future purchases will be totally supported.