The U.S. House of Representatives Committee on Transportation and Infrastructure released an investigative report this week that concludes that aircraft manufacturer Boeing prioritized profits over safety and that the Federal Aviation Administration (FAA) provided grossly insufficient oversight to ensure safety of the flying public.

Boeing 737 MAX

This explosive 238-page report provides conclusions  that after over 18 months of investigation and testimony after looking into the history of the Boeing 737 MAX and the two tragic accidents involving this aircraft.

Committee chairperson Representative Peter DeFazio addressing the two fatal accidents attributed to the Boeing 737 MAX aircraft indicated:

This is a tragedy that never should have happened. It could have been prevented, and we’re going to take steps on our legislation to see that it never happens again.

A portion of the committee’s report indicates:

They (accidents) were the horrific culmination of a series of faulty technical assumptions by Boeing’s engineers, a lack of transparency on the part of Boeing’s management, and grossly insufficient oversight by the FAA — the pernicious result of regulatory capture on the part of the FAA with respect to its responsibilities to perform robust oversight of Boeing and to ensure the safety of the flying public.”

Five categories of findings are reportedly included in this report relating to aircraft design and pressures to compete with Airbus, achieving production goals and cost cutting as taking a higher priority, flawed assumptions relative to the aircraft’s MCAS system design, withholding critical information from the FAA and other specific findings as-well.

Commenting on this report, Boeing indicated in a written statement:

We have learned many hard lessons as a company from the accidents of Lion Air Flight 610 and Ethiopian Flight 302, and from the mistakes we have made. As this report recognizes, we have made fundamental changes to our company as a result and continue to look for ways to improve. Change is always hard and requires daily commitment, but we as a company are dedicated to doing the work.

The FAA indicates in a statement that the agency will continue to work with the committee to carry out any recommended changes and was already making such changes.

The essence of the report as indicated by chairperson DeFazio was that the 737 MAX history of developments revealed a safety oversight process that was flawed and compliant, as well as inadequate.

 

Supply Chain Matters Perspectives

It’s no secret that the U.S. political environment has become highly charged and partisan, and some reports related to these findings may be spun as to interpretations and viewpoints. That should not take away from the evidence and the tragic deaths that occurred as a result of the two crashes involving this aircraft.

It further does not take away from the unfortunate circumstance of the COVID-19 coronavirus global pandemic, and it’s devastating impact on global airlines. The 737 MAX grounding crisis and now global airline market demand disruption is leading to dislocation of a large number of Boeing, and its supplier network partners, not to mention thousands of airline employees.

Readers are welcomed to download this investigative Congressional report at this U.S. House of Representatives web link.

Readers are further welcomed to search our Supply Chain Matters content utilizing the search term “Boeing 737 MAX” to explore the litany of developments that have occurred from an aircraft design, production quality, supply chain and corporate cultural perspective over these multiple months from aircraft market introduction to now.

From our lens, this report should not fault all of Boeing or FAA employees and efforts. Rather it serves as an indictment of Wall Street greed, placing companies such as Boeing as stock buyback and dividend generators with every passing quarter.

This was an industry the envy of many, with multiple years of customer order backlog driven by more innovative aircraft technology, especially in fuel economy.

Manufacturer’s such as Boeing should be viewed as engineering-driven technology leaders, but also subject to third-party regulatory checks and balances. The report’s Executive Summary indicates in-part:

The story of the Boeing 737 MAX was never expected to be associated with catastrophe. It was supposed to be a story of American ingenuity and technological success—a modern, more fuel efficient airplane that had already become the manufacturing giant’s best-selling jet in its storied history prior to the first MAX crash of Lion Air flight 610 in Indonesia on October 28, 2018. Ethiopian Airlines flight 302 crashed on March 10, 2019, just two years and two days after the Federal Aviation Administration (FAA) had certified the new 737 derivative aircraft as safe to fly.

Instead, and from our lens, the future of Boeing has evolved not in longer-term product development and technology pipeline strategies, but in near-term cash return optimization.

 

Other Themes

Since we are a blog in supply chain management, there are other themes that have resonated with our coverage, and with broader media reports. They have included themes of:

Senior management in product design, manufacturing and services claiming no knowledge of what was occurring while on the ground design managers and production workers indicating that their appeals were being ignored by superiors. Just this week, two very senior Boeing design engineering executives claimed no knowledge of what was occurring in their design teams. Similarly, certain FAA senior officials had previously denied knowledge of regulatory shortcomings or issues with the aircraft’s safety. Recall that is was the FAA and the U.S. Secretary  of Transportation that initially resisted an aircraft grounding order after the tragic accidents, while other various global regulators subsequently grounded the aircraft.

A corporate culture of finger-pointing manifesting itself not only with the 737 MAX, but the original launch of the 787 Dreamliner, the design and production of a new U,S. Air Force tanker that was described as loaded with flaws and quality lapses, and now, the latest revelation this week of manufacturing and quality control lapses of the 787 aircraft, several years after market introduction.

Listening to the customer has always been the driving principle of supply chain management business processes. Yet it would appear that Boeing had a dull ear to airline customers and especially to pilots tasked with overall safety of this aircraft. This includes the cited ill-fated design assumptions of the MAX’s MCAS flight control system, assuming that a pilot would be able to respond to a fault alarm within mere seconds.

A CEO succession that hired from within rather than recruiting a non-biased leader that would take a candid and objective view of required changes needing to be made, and the relationships needing to be mended.

 

Path Forward

Boeing continues to ensure investors, airlines, pilots and flying public that after undergoing 18 months of scrupulous review and design changes, that this aircraft will now be the safest aircraft ever to fly.

We wonder aloud, after all of these developments, and now this regulatory oversight report, whether Boeing will ever be believed.

Already, there are efforts underway to re-brand the aircraft, especially in online schedules of flights when the aircraft returns to service. That reflects a marketing strategy. More pertinent is repairing a reputation, the loss of many skilled and talented workers directly and indirectly associated with the company.

For the sake of its employees and supply partners, we hope for the best.

 

Bob Ferrari

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