Boeing Corporation - Are Real Challenges Just Beginning?

The misadventures of one of the world's two leading aircraft manufacturing giants, whose "black streak" began in the spring of 2019 after two accidents of its 737 MAX airliners, which killed 346 people, seemed to have subsided. Boeing increasingly began to report not about new financial losses, production stoppages, layoffs and canceled deals, but about the conclusion of successful contracts, the supply of its aircraft to various airlines and other positive things.

However, not so long ago there was information that the crisis in the company managed to reach a completely different, systemic and comprehensive level. According to media reports, this time it is not about pressure exerted on the corporation from the outside (from the government, competitors or victims of memorable disasters), but about internal problems that pose a much greater threat than colossal fines and lawsuits. Let's try to figure out what exactly we are talking about.

"Black Karma" Doesn't End?

Proponents of the theory that negative emotions of great force, simultaneously thrown out by a large number of people on a particular object, really have a specific destructive potential, may well use the history of Boeing's failures and defeats that have followed Boeing over the past couple of years as a fairly convincing proof of their own innocence. One gets the impression that the corporation was attacked with all its negative power by the pain and anger of many relatives and friends of passengers, as well as crew members of the 737 MAX airliners crashed in Ethiopia and Indonesia, which increased many times after it became known about the guilt of its leadership in the incident. We must pay tribute to the top management of the company - they really did their best to avoid really big troubles. After all, Boeing, among other things, had a very real risk of becoming involved in a large-scale trial, during which he would have to bear responsibility for fraud committed by the corporation in the process of certification of its own aircraft.

Salvation for the aviation giant was a deal concluded by its leadership with the United States Department of Justice. However, it cost Boeing much dearly. In accordance with this "gentlemen's agreement", the entry into force of which became known at the end of June this year, the company will be forced to fork out $ 2.5 billion. However, this is much better than a "high-profile" lawsuit, which would certainly have attracted the maximum attention of the media and the public, as a result of which the corporation's already pretty shaken business reputation would most likely be buried completely and irrevocably.

Tellingly, out of the above-mentioned amount, only $ 500 million will go to the creation of a special fund to support the relatives of the victims of the fatal 737 МАХ plane crashes. Yes, in the end each of the affected families will receive a whopping $ 1.45 million. However, this impressive gesture of mercy is not the main expense of the corporation. $ 1.77 billion will go as a "payoff" to airlines that had the imprudence to purchase the "killer" model liners and as a result suffered colossal losses when their flights were banned for a long 20 months. Also, over $ 240 million will go to cover legal costs in criminal trials that took place in Indonesia and Ethiopia over the same disasters. But what about the unscrupulous actions of the corporation, the deliberate forgery and deception, thanks to which they managed to "smuggle" planes with a "killer program" and other flaws in the aircraft industry through the American licensing authorities ?! Nothing like that? It was just ...

The US Federal Aviation Administration (FAA) recently acknowledged that in 2015-2019 Boeing was trying to certify at least 178 737 MAX aircraft with “improper components”. In the end, they were still installed on these aircraft, as well as on another 618 Boeing 737 NG. Thus, about 760 cars were equipped with sensors that were never approved by the FAA (at least not officially). This "cute prank" will cost the corporation a mere $ 17 million fine. However, regulators threaten to add another ten million to this amount - in the event that Boeing "does not correct the situation in a timely manner." The corporation swears that they will do everything in their power.

Shots solve everything?

At first glance, despite the curses and unkind wishes that were plentifully pouring on him, Boeing still manages to "get out of the water" relatively "dry". Yes, according to available information, the financial losses of the corporation due to the 737 MAX disasters amounted to at least $ 5.6 billion. Yes, this model will henceforth and forever be under the closest scrutiny of all conceivable and inconceivable regulatory authorities - in March of this year, MAX again began to be massively removed from flights due to power problems that had arisen in them. Despite the fact that in reality it was literally about a few aircraft and Boeing immediately handed over to air carriers the side numbers of those aircraft in which it could theoretically also appear, the ill-fated 737 MAX began to be "joked" in dozens.

For example, Southwest Airlines immediately canceled 30 flights of this model, which, by the way, makes up almost half of its fleet. The problem was somehow sorted out, but this indicates that the "trail" of negative will last for 737 MAX exactly as long as they will surf the air ocean. However, as we remember, in November last year, the FAA changed its anger to mercy, and the next month these airliners returned to the skies over the United States. Somewhat later, the possibility of resuming their operation was also discussed in Europe. The main thing is that Boeing managed to bypass the most difficult days for itself, which, according to experts, began in January 2020, when the corporation (for the first time since 1962) did not receive a single order for its aircraft. This year, among all the other problems that befell the airline giant, also brought the coronavirus pandemic - not surprisingly, the company ended it with a loss of $ 12 billion.

It took Boeing more than a year to achieve any positive financial results. In February 2021, the company delivered 22 aircraft to its customers. Then things went even better - by the end of the 1st quarter, this figure had already reached 77 aircraft. The total volume of orders for this period amounted to 282 aircraft. According to reports, the American airline United Airlines, rightly considered one of the leading in the world, intends to order 200 Boeing 737 MAX aircraft, which will be the most significant addition to its flight fleet in its entire history. Not so long ago, Ryanair, Europe's largest low-cost airline, proudly announced the arrival at its main base in Dublin, directly from Seattle, of the newest Boeing 737-8200 airliner belonging to the MAX family. This giant, designed and built by the Americans specifically for Ryanair, has a dozen more seats than its counterparts and, accordingly, less fuel consumption in terms of each of them. No wonder the new car has already been dubbed Gamechanger, hinting that it will change the rules of the game, at least in the low-cost aviation market.

As far as is known, Ryanair “taking into account the needs of its subsidiaries Malta Air and Buzz) has already ordered such aircraft from Boeing 210. It would seem that the clouds over the corporation have dispelled, the horizon is clear, and its leaders can safely chart a course for new victories and achievements. However, in reality, things are far from being so optimistic. Not so long ago, Blooomberg journalists told about the true state of affairs in the company, who managed to get to the bottom of the internal "kitchen" of Boeing, which there, for obvious reasons, does not seek to put on public display.

It turns out that the aviation corporation is experiencing not just a powerful outflow of qualified specialists, but a process that would be more correctly called a "brain drain." Apparently, the shareholders and top managers of the company, caught in the grip of the most severe crisis, decided to save money, first of all, on its employees, which affected Boeing in the most disastrous way. The well-known expression of Comrade Stalin about the key importance of personnel potential or, as his would-be heirs used to say, “the human factor”, no one can refute because it corresponds to reality exactly 100%. This is especially true when it comes to those spheres of activity where the most advanced Technology, which can be applied and developed exclusively by highly qualified and properly motivated personnel. Here they are, as it turned out, and scatter from Boeing in all directions. Only from the well-known Aircraft Production Center of the company in Seattle over the past year and a half, at least 3.2 thousand have left not just ordinary employees, but engineering and technical workers. The number of “specialists” who quit from there is slowly but surely approaching a fifth of all those who were registered with the local trade union.

These "fugitives" find employment, of course, not at all in cafeterias and at car washes. As expected, former Boeing employees are welcomed with open arms in the largest US companies, and, first of all, in those that, in fact, are direct competitors for their former employers. So, according to available information, at least two hundred "ex-Boeing" have already been employed at SpaceX. Part went to Lockheed Martin and Northrop Grumman. However, people who come from there are also favored by such giants as Microsoft and, especially, Amazon. As far as we know, the last of the named companies today fruitfully employs more than a thousand specialists who previously adorned the ranks of Boeing with their presence.

Most surprisingly, the corporation does not seem to see much of a problem in what is happening. On the contrary, its management not so long ago announced its intentions to lay off "due to low financial performance of the company" in the near future from 20 to 23 thousand employees, and of all ranks - from members of the executive committee to those employed in assembly shops. According to industry experts, such a dismissive attitude of the Boeing management to the "gold fund" of any technology giant, its "think tank", can be very expensive later on. Competition in the aviation market is already tough enough, and in the future it is predicted to become even more aggravated. Winning the race for the liking of potential customers and their wallets without advanced technological solutions will be very problematic for Boeing.