What should Boeing do to fix its long-standing problems?

What should Boeing do to fix its long-standing problems?

When it comes to signs of trouble at a company, a hole blowing 16,000 feet through the wall of one of its planes is not subtle.

So it was no surprise that Boeing CEO Dave Calhoun devoted much of the company’s fourth-quarter earnings call Wednesday to safety issues. Regarding the incident that happened on January 5, he said, “We created the problem and we understand it.”

Mr. Calhoun said the company instituted additional quality control and halted production for a day to focus on safety and quality. But Boeing’s problems span decades, and some aviation and management experts have long suggested they go deeper than processes, pointing instead to a shift in company culture that prioritized finance over engineering. Correcting this may require more serious measures.

“What Calhoun and his team had to do required both a leap of faith from the way they did business and a kind of reliable, trustworthy courage,” said Nancy Kohn, a historian who focuses on crisis leadership at Harvard Business School.

DealBook asked experts in company culture, aviation and management what measures Boeing could take to try and fix its long-standing problems.

Design a completely new airplane. The 737 Max, the workhorse of Boeing’s fleet, was introduced in 1968. “They’re putting in new components, but I think they need a whole new aircraft design based on all the lessons learned in aeronautics over the last 60 years. “said Bill George, former CEO of Medtronic and executive fellow at Harvard Business School, who wrote two case studies on Boeing. Mr. Calhoun said Boeing won’t deliver its next all-new plane until the mid-2030s.

Move headquarters to Seattle, is the heart of the company’s engineering operations. Boeing moved its base to Chicago in 2001, and then to Washington, D.C., in 2022. Mr. George said that was a mistake. “Management needs to reconnect with engineers who understand flight safety,” he said. “Most of Boeing’s senior management does not have an aeronautical engineering degree.”

Open the factory. One historical example that could be instructive for Boeing, Ms. Koehn said, is what food manufacturing plants have done to deal with grotesque sanitation and working conditions in the meatpacking industry: They’ve organized tours and lobbied for regulation to control quality. “Boeing could say come to the factories and talk to our people. Do it now. Do it for four weeks. Do it in six weeks,’” Ms. Cohen said. On Wednesday’s earnings call, Mr. Calhoun said Boeing invited customers to visit the factory. Doing the same for regulators, journalists and consumer groups could go a long way toward restoring trust, Ms. Koehn said.

Host product launch events in tech style. Ashley Fulmer, an associate professor at Georgia State University’s Robinson College of Business who studies the dynamics of trust in organizations, said Boeing needs to communicate more with all stakeholders, including the general public. He pointed to the kinds of big product launch events hosted by tech companies like Apple and Meta as one way to do this. “I think at this point it’s not enough to shoot for any incident,” he said. “What they need is a regular demonstration of skills where they have a new design to improve safety and reliability, for example.”

Ask, should Boeing be nationalized? Matt Stoller, director of research at the American Economic Freedom Project, a progressive think tank, and author of the pro-monopoly BIG newsletter, recently noted that the US government is helping and sharing much of its surplus revenue. sells its planes abroad.

But Richard Aboulafia, managing director of aerospace consultancy AeroDynamic Advisory, said nationalization would be difficult. He said the government could impose conditions on defense contracts for Boeing’s management, although there is little precedent for such a move.

“Risk is not bankruptcy; it is a mismanagement,” Mr. Abulafia said.

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