This evening, while recovering from a flu, I happened to watch a business documentary, “Downfall – A Case Against Boeing”, on Netflix. It was on recommendation of a professional associate, Seshu, who suggested that I watch this documentary. We were discussing the documentary in the context of how Galaxy Surfactants, the company that Seshu has devoted his professional career to, and Unique Mixers, our company which has been my Karma Bhoomi (place of action) for the last 21 years, have grown keeping the organisational DNA – principles and practices intact for over 4 decades. And how, on the contrary, when organizations choose to deviate from their founding fundamentals, disaster strikes. The unforgettable business lesson that I learnt from watching the Netflix documentary is, “Good work brings goodwill and growth, greed results in disgrace and downfall.”
We have all known Boeing to be a world class company – the Gold Standard in aviation, and a company known for its engineering and manufacturing excellence. Yet, when a company choses to comprise on quality (which in the case of Boeing airplanes has a direct bearing on the safety), for the sake of business and profitability, slowly but eventually it results in descent, and undoing of all the good work done over many years, hurting the business reputation beyond repair. The following is a short narrative of the Boeing 737 Max case study, based on the Netflix documentary and some reading.
Boeing, once synonymous with engineering excellence and innovation, has seen a drastic decline in its reputation and safety standards over the years. The company’s downfall can be traced back to a significant merger with McDonnell Douglas in 1997, leading to a shift in priorities and the organisational culture from that of quality and safety, to cost-cutting and shareholder value.
When Boeing began to lose it’s market share to Airbus, they decided to go all out with the hurried launch of the 737 Max, to beat their French competitor’s Airbus A320 Neo aircraft. To win over, Boeing ditched the idea of developing a new passenger plane, which would take a decade. Instead, it decided to update its workhorse 737. The pace of the work on the 737 Max was frenetic. One former designer on the team working on flight controls for the Max said the group had at times produced 16 technical drawings a week, double the normal rate. A technician who assembles wiring on the Max said that in the first months of development, rushed designers were delivering sloppy blueprints to him. He was told that the instructions for the wiring would be cleaned up later in the process. An engineer who designed the 737 Max Cockpit said, “The company was trying to avoid costs and trying to contain the level of change. They wanted the minimum change to simplify the (pilot) training differences, minimum change to reduce costs, and to get it done quickly.”
After its announcement in 2011, the Boeing 737 Max took its maiden flight in January 2016. The most serious problem for Boeing was a design flaw in the 737 Max that led to two fatal crashes, one in October 2018 and one in March 2019, that killed a total of 346 people, and led to a 20-month grounding of the aircraft only after the second crash. Investigations revealed that both planes fell to the ground under similar circumstances; an incorrect sensor reading erroneously activated the aircrafts’ new flight control system called MCAS, forcing the planes into an uncontrollable nosedive. Further analysis concluded that the design and certification process of the 737 MAX 8 was rushed; pilots and aircraft maintenance engineers were inadequately trained in the operation of the new aircraft, and several incident reports leading up to the crashes were not thoroughly investigated.
However, immediately after the crashes, the Boeing management, which was in full knowledge of the compromises that they had made, concealed the facts from the authorities. Instead, Boeing issued a brief statement after each crash, saying it was “deeply saddened” by the loss of life and offered its “heartfelt sympathies to the families and loved ones” of the passengers and crews, while simultaneously defending the aircraft against any faults and suggesting the pilots had insufficient training, until rebutted by evidence.
One year after the crashes, lawmakers demanded answers from then Boeing CEO Dennis Muilenburg in a hearing on Capitol Hill. They questioned him about the discovered mistakes leading to the crashes and also about Boeing’s subsequent cover-up efforts. One important line of enquiry was how Boeing “tricked” regulators into approving sub-standard pilot training materials, especially the deletion of mentioning the critical flight stabilization system MCAS. A Texas court eventually ruled in October 2022 that the passengers killed in two 737 MAX crashes are legally considered “crime victims”, which has consequences concerning possible remedies. U.S. District Judge Reed O’Connor wrote, “Boeing’s crime may properly be considered the deadliest corporate crime in U.S. history.” The Justice Department settlement included a fine of $243.6 million, compensation to airlines of $1.77 billion and a $500 million fund for crash victims.
If that wasn’t enough, as late as January 2024, the door plug of a commercial Boeing 737 Max 9 came off as the plane was climbing, opening a large hole on the side of the plane, alarming passengers onboard, and raising new questions about the aircraft.
Boeing’s downfall is a cautionary tale of how a once-proud company can lose its way when prioritizing profits over safety and abandoning its core principles. It will only be befitting to conclude on the same note as we started, “Good work brings goodwill and growth, greed results in disgrace and downfall.”
PS : I had the fortune of touring with my family, the Boeing factory in Seattle, USA, in May 2018 and I had then penned a note then about this fascinating experience (the link to this note is at the bottom of this article). I never imagined that 6 years later, I would be writing this note which takes away all the good memories that I once associated with Boeing.
Additional Links
Downfall – The Case Against Boeing
Visit to the Boeing Factory