A soaring economy in Washington — and, indeed, the entire United States — partly depends on Boeing to fly right.
The world’s largest aerospace company has about 80,000 workers in Washington, making it the state’s largest employer, and about 150,000 throughout the country. It has annual sales of more than $100 billion and for generations has marked the United States as the global leader in aviation innovation and safety.
But for Boeing to maintain that status some changes are necessary. Two crashes of the company’s new 737 Max — in October in Indonesia and in March in Ethiopia — resulted in 346 deaths and led to scrutiny of the company’s safety protocols and relationship with the Federal Aviation Administration. The plane has been grounded worldwide.
On Monday, Boeing CEO Dennis Muilenburg addressed a meeting of shareholders and then briefly took questions from reporters. After answering six questions in his first media appearance since the Ethiopian crash, Muilenburg walked off stage after 16 minutes.
While that might not have been the best place to address difficult questions about the company’s safety issues, Muilenburg will need to demonstrate more transparency in order to reassure the public that Boeing remains the leader in its field. Public relations in a globally competitive market are essential to convincing customers to purchase your planes.
Instead, Muilenburg insisted that a “chain of events” led to the crashes and that “in some cases” pilots did not follow “procedures.”
Meanwhile, Boeing shareholders elected all 13 company-backed candidates to the board of directors and rejected a proposal to name an independent board chairman rather than having Muilenburg serve as chairman and CEO. Last year, the board approved a $23.4 million compensation package for Muilenburg in salary and stock.
Matt Brubaker of business strategy consultant FMG Leading told the Associated Press that a chairman-CEO “is not always a bad thing, but at times of crisis it’s hardly ever a good idea.”
Inadequate attention to the crisis is a threat to the Washington economy. Company officials reported last week that delivery of new planes dropped 19 percent during the first quarter of 2019 when compared with the previous year, and failure by Boeing leadership and the federal government to tackle lingering issues would only exacerbate those troubles.
Among the issues is the 737’s Maneuvering Characteristics Augmentation System, which is believed to have contributed to both crashes. Muilenburg said the company is developing a software fix and a training plan for pilots. But pilot unions are demanding more rigorous training, and Dennis Tajer of the union for American Airlines pilots said, “Not every pilot that goes out there and flies is a Boeing test pilot.”
There also are questions about the FAA’s decision to allow Boeing to self-regulate some of its safety oversight in developing the 737 Max. Not all the answers have been determined, but the situation demonstrates the dangers of lax regulation and a too-cozy relationship between government overseers and corporations. The FAA’s top safety officer previously was part of an industry association that advocated for manufacturers to certify their own work.
In attempting to re-establish their company as the global leader in aviation, Boeing officials must effectively address these issues rather than hope they go away. Failing to successfully navigate the crisis could help ground the economy throughout Washington.
