Whither, Boeing? No good short-term answers for aviation titan reeling from bad news

It may be that one last snowflake that finally triggers the avalanche, but the snow and ice doesn’t start sliding down the mountain without an accumulation of material built over many weeks or months.

Or, in the case of Boeing, years.

In the wake of a cascade of bad news about Boeing, the latest being a planned shutdown of the 737 Max production line at the Renton plant, armchair pilots and corporate executives have been picking apart the causes and attempting to figure out how to stop it.

Among the scarier aspects of Boeing’s current crisis — and make no mistake, this is much more than a temporary patch of unfavorable developments — is that the bad news isn’t done yet. For now, Boeing says it won’t lay off employees, although they may be reassigned to other facilities such as Everett or even Moses Lake, where the company has dozens of planes parked awaiting regulatory clearance to enter commercial service. It’s also working with suppliers to minimize disruption.

But how long is that sustainable? Having been scolded by the Federal Aviation Administration to stop pushing scenarios of early return to service for the Max (the piece of bad news just before the latest), Boeing isn’t saying how long the suspension of production will last.

One analyst has estimated a minimum shutdown of three to six months. Overly pessimistic? Maybe not, considering that whatever fixes Boeing comes up with to address the issues raised by two crashes that killed 346 people will have to be approved by the FAA and then by international regulators. Would Boeing have suspended production if it thought a resolution was imminent? Remember that Boeing had been telling the world the Max would clear regulatory hurdles and be back in service by the end of this year, forecasts that even a few months back were viewed as overly optimistic.

Even once that happens, there are questions about whether airlines will stick with their orders for the Max, and what those that do will expect in compensation for missed deliveries. And there are questions about how the flying public will regard a plane with two crashes on its young record that’s supposedly been fixed. Not to mention questions about the status of Boeing’s other commercial plane programs.

So what is Boeing to do? What are we to do about Boeing? Let’s look at some of the more popular, or at least more frequently discussed, remedies for the company’s predicament:

▪ Clean house, starting with chief executive Dennis Muilenburg and the board and continuing through the management ranks to cull anyone involved in decision-making with the 737 Max. Some sort of retribution toward executives would provide temporary gratification for those looking for lots of someones to blame, and indeed Muilenburg’s long-term tenure at Boeing does not look like a good bet.

But jettisoning executives now won’t provide much of a short-term fix. Finding someone to take the job and get up to speed on the issues takes time, which Boeing doesn’t have a lot of at the moment. Even if Alan Mulally — a popular nominee to rescue the company —walks back through the door, he’ll need an orientation period.

▪ Junk the 737 Max and move on to the next airplane model. Much of the post-crash analysis has focused on the design changes to the plane that necessitated changes to flight-stabilization software that led to the two instances in which the system malfunctioned which led to loss of control of the aircraft, a tumbling-domino series of events. Better to give up on a fundamentally flawed design and move on to the next plane.

Problem is, new plane models take a lot of money and time to develop, even if you have some idea of what kind of plane you want. Before the current mess involving the 737 Max, Boeing was considering its next plane model, sounding out airlines on what they might want and buy. It was leaning toward a “middle of the market” plane, positioned between the 737 single-aisle plane and the 777 and 787 widebodies, a successor of sorts to the 757.

Does it continue on that path, effectively ceding the 737’s segment to Airbus and to emerging competitors from China and Japan? Or does it come up with a brand new plane to replace the 737 (a decision the Max was supposed to postpone)? Those used to be long-term decisions that now aren’t so distant, and at the moment Boeing has more than enough short-term calamities to deal with.

▪ Move corporate headquarters back to Seattle and undo the effects of the McDonnell Douglas acquisition. Many Boeing loyalists trace the origins of the company’s current woes to the 1997 combination with McDonnell Douglas and the 2001 headquarters move to Chicago. The effects of those moves, they contend, were to shift the company’s focus from engineering to shareholder return and to isolate top management from its operations.

Whatever the merits of those arguments — and there are some — and however popular the proposed reversals would be, they wouldn’t do much to address Boeing’s current woes. They likely wouldn’t even resolve the debate about the merger and the HQ move; if people are relitigating the causes of the Civil War 154 years after Appomattox, then the cause of Boeing’s problems will be good for arguments for decades to come even if Boeing isn’t around for decades to come.

At the moment Boeing is stuck with a least-worst option of working out fixes for the Max that regulators will approve and getting planes delivered to airlines, done with the management it’s got at the moment. It will be expensive to everyone involved, and there’s no guarantee it’ll work. The problems Boeing faces now are short-term, but their causes are long-term.

And just like an avalanche, they won’t melt away just because everyone’s yelling at them to stop.

This story was originally published December 21, 2019 at 7:00 AM.