Boeing has been under the microscope from analysts and former executives, who argue the company is putting profit over quality after numerous safety incidents over the years.
Recent Aviation Turmoil
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Boeing has had a tumultuous few years after numerous safety incidents, including two fatal crashes.
Boeing’s Long List of Failures
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Incidents included fuselage damage, quality lapses, and two fatal crashes resulting in 346 deaths.
Alaska Airlines 737 Max Incident
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A recent incident involving Alaska Airlines’ 737 Max 9 has only added to Boeing’s troubles, with some models being grounded and investigated by the National Safety Transportation Board (NSTB).
Impact on Boeing’s Reputation
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The recent string of safety incidents also included a critical failure on a Boeing 737 intended for high-profile passenger Secretary of State Antony Blinken.
Delta Plane Wheel Detachment
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Another incident involved a Delta plane’s nose wheel detachment, which also severely blew Boeing’s once-sterling reputation.
A Deeper Look into Boeing’s Problems
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Systemic issues include a flawed anti-icing system and “misdrilled holes,” resulting in “loose bolts.”
Silence on the Matter
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Despite the gravity of these revelations, Boeing has chosen to remain silent on the matter, offering no comments on the unfolding crisis.
A Downward Spiral
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Industry expert Richard Aboulafia’s characterization of this situation as a “downward spiral” from Boeing’s old reputation. So, what’s changed?
Shift in Corporate Image
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The reason behind Boeing’s transformation from a safety-centric company to one entangled in a reputational crisis has been revealed by a former executive in the company.
Former Exec Speaks Out
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Ed Pierson, a former Boeing exec, claimed that the company’s “leadership is more concerned with getting the planes out the door than quality,” in a brutal assessment of his time at the company.
Cultural Change and Profit Motivation
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Some critics say that the decline in Boeing’s quality is synonymous with a change in company culture that began in 1997 when the company merged with McDonnell Douglas.
Leadership Shifts Impact
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The change in leadership after the merger allegedly saw the company favor profits over quality in its new culture.
Management Team to Blame
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Aboulafia revealed, “You’ve got a management team that doesn’t seem terribly concerned with their core business in building aircraft.”
A Different Set of Motivations
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According to analyst Rob Epstein, “everything had to be cost-justified,” after that merger, with engineering executives in the company being replaced with more finance-motivated members.
Unions Make Feelings Heard Post-merger
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The merger soon saw “an open labor war between the unions and the management,” according to analyst Scott Hamilton.
2008 Strike Action Taken
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The war resulted in over 22,000 Boeing engineers walking out of the job until a better pay deal was agreed in 2008.
Union Struggles and South Carolina Plant
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The decision to open a non-union plant in South Carolina intensified union conflicts and raised questions about prioritizing cost-cutting over expertise.
CEO Changes and Financial Woes
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Fast-forward to now, and CEO changes, including the appointment of Dave Calhoun, was Boeing’s attempt to better their financial woes, with Boeing reporting losses exceeding $26 billion over five years.
Finance Focused
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“The big criticism,” according to Aboulafia, “is that they’re solely focused on finance, but they’re not even good at that.”
The Future of Boeing
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Despite severe financial setbacks and backlash, the fact that Boeing is one of the main manufacturers of aircraft in an industry that doesn’t have many contenders means they’ll likely survive.
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The post Boeing’s Troubled Reputation: Profit Trumps Quality, Say Analysts first appeared on From Frugal to Free.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.