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When it comes to signs of corporate trouble, a hole in the wall of one of your planes at 16,000 feet is not obvious.
So it was no surprise that Boeing CEO Dave Calhoun focused much of the company’s fourth-quarter earnings call on Wednesday on safety. “We are the ones who caused the problem, and we understand that,” he said of the Jan. 5 incident.
Calhoun said the company has instituted additional quality controls and halted production for a day to focus on safety and quality. But Boeing’s problems span decades, and some aviation and business experts have long suggested the problem is more serious than the process, pointing instead to a shift in the company’s culture that prioritizes finance over engineering. I’ve been doing it. Fixing this may require more drastic measures.
“What Calhoun and his team need to do requires both a leap of faith from the way we’ve always done business and a kind of actionable, authentic courage,” he said, focusing on crisis leadership. Nancy Cohn, a historian at Harvard Business School, said:
DealBook asked corporate culture, aviation and management experts about actions Boeing could take to fix long-standing problems.
Design a completely new airplane. Boeing’s flagship aircraft, the 737 Max, was introduced in 1968. “They’ve introduced new components, but I think we need a completely new aircraft design that’s based on all the lessons we’ve learned about aeronautics over the last 60 years.” said Bill George, an executive fellow at the School of Business and author of two case studies on Boeing. Calhoun said Boeing will not deliver its next all-new aircraft until the mid-2030s.
Move headquarters back to Seattle, is the center of the company’s engineering operations. Boeing moved its operations to Chicago in 2001 and near Washington, D.C., in 2022, but George said that was a mistake. “Management needs to reconnect with engineers who understand flight safety,” he said. “Most of Boeing’s executives don’t have degrees in aeronautical engineering.”
Open the factory. Cohn said one historical example that could benefit Boeing is the actions taken by food manufacturing companies to address revelations of grotesque sanitary and working conditions in the meat packaging industry. said. Companies hosted tours and lobbied for regulations to control quality. “Boeing can say, ‘Come to our factory and come talk to our employees.’ Do it now. Do it in four weeks. Do it in six weeks,” Kane said. said. Mr. Calhoun said on Wednesday’s earnings call that he invited Boeing customers to visit the plant. Doing the same with regulators, journalists and consumer groups could go further in rebuilding trust, Cohn said.
Host a technology-style product launch event. Ashley Fulmer, an assistant professor at Georgia State University’s Robinson College of Business who studies trust within organizations, said Boeing should communicate more with all stakeholders, including the general public. She pointed to the types of large-scale product launch events hosted by technology companies like Apple and Meta as one of her ways to make that happen. “At this point, I don’t think it’s enough to just attack to prevent incidents from happening,” she said. “What they need to do is regularly demonstrate their capabilities, including innovating designs to improve safety and reliability.”
Should Boeing be nationalized? Matt Stoller, director of research at the progressive think tank American Economic Liberties Project and author of the monopoly-focused newsletter BIG, recently argued that the U.S. government already owns much of its revenue. He pointed out that the country occupies a large part of the country and provides financial support, and argued that this should be the case. Sell your planes overseas.
But Richard Aboulafia, managing director of aerospace consulting firm Aerodynamic Advisory, said nationalization was unlikely. Instead, he said, the government could attach conditions to Boeing executives on defense contracts, although there is little precedent for such a move.
“The risk is not bankruptcy. It’s management malfeasance,” Aboulafia said.
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