Boeing's Future Dominance In Question After 737 Max Crashes, New CEO
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To the challenging start now for Boeing's new CEO, David Calhoun. The company recently released more damaging emails and internal messages related to the 737 Max. The aviation giant fell further behind rival Airbus, and with the troubled planes still grounded, airlines are now canceling Max flights into June. From Chicago, NPR's David Schaper reports on Boeing's uncertain future.
DAVID SCHAPER, BYLINE: The messages released last week revealed a lot more than just efforts by Boeing employees to deceive both customers and regulators. And they go much deeper than the ridiculing of the 737 Max as a turd and an airplane designed by clowns.
MARISA GARCIA: The message that comes through with all of that collected text is that there is a certain level of arrogance and entitlement.
SCHAPER: Marisa Garcia is an aviation analyst and writer who worked on airplane certification issues.
GARCIA: And that said, problematic because at the end of the day, you have to approach safety with a healthy dose of humility.
SCHAPER: Company statements say the content and sentiments of those messages do not reflect Boeing's values, but Garcia and others say the messages actually suggest the opposite, and Boeing needs to own up to that.
GARCIA: Because I think people at this point have lost a considerable amount of confidence. More importantly, they need to get back to the basics of engineering values that made the company very strong.
SCHAPER: Garcia says this is a pivotal moment for Boeing.
GARCIA: It is what type of Boeing continues to exist that is in question. It's also a question that goes beyond Boeing to the global aerospace industry.
SCHAPER: With defense, space and other businesses in addition to commercial airplanes, Boeing may well be in the category of too big to fail, with tens of thousands of its own employees and a huge supply chain that stretches around the world. So shutting down production of the 737 Max has a huge economic impact, as Treasury Secretary Steve Mnuchin acknowledged on "Fox News Sunday."
(SOUNDBITE OF TV SHOW, "FOX NEWS SUNDAY")
STEVEN MNUCHIN: The Boeing situation is going to slow down the GDP numbers. Boeing is one of the largest exporters. And with the 737 Max, I think that could impact GDP as much as 50 basis points this year.
RICHARD ABOULAFIA: If I were Boeing, this is just the wrong time for inaction.
SCHAPER: That's Richard Aboulafia, aviation industry analyst with the Teal Group, who lists what should be the first priorities for new Boeing CEO, Dave Calhoun.
ABOULAFIA: They really need somebody to reset relations with so many different groups of people - regulators, customers, suppliers, the traveling public and so on. It's absolutely crucial. And he does that very well.
SCHAPER: But Aboulafia doubts Calhoun can lead a more radical transformation inside of Boeing to change a culture that many say emphasizes cost-cutting and shareholder value over engineering and safety because as a member of Boeing's board over the last decade, Calhoun helped set those priorities. Aboulafia says now should be the time for Boeing to reverse that course.
ABOULAFIA: Nevertheless, the emphasis on shareholder returns seems to be continuing. So it's not really clear that they've got their priorities set here.
SCHAPER: A spokesman says Boeing has reorganized engineers into one unit, reporting to the company's chief engineer. Test pilots and technical pilots are being combined in a similar way to improve communications and oversight. So if the company can fix what's broken, both with the 737 Max and its internal culture, Steve Kaplan at the University of Chicago's Booth School of Business says there is opportunity ahead for Boeing.
STEVEN KAPLAN: I think the good news for Boeing is that there aren't a lot of other options.
SCHAPER: The only major competitor for making commercial airliners is Europe's Airbus.
KAPLAN: And the world probably doesn't want to have just one aircraft manufacturer.
SCHAPER: But the risk is that if Boeing doesn't get the fixes right at a time of increasing global demand for airplanes, the company could lose a significant share of the emerging market.
David Schaper, NPR News, Chicago.
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