News reports today indicate that text messages between Boeing employees show that the company apparently lied to the FAA regarding the safety of the MAX and that Boeing knew about these messages for some time before turning them over to the regulators. The news about the MAX continues to get worse, as misleading a regulatory agency that resulted in 346 deaths will likely be viewed as criminal in nature. The history of the MAX has been troubling, and these allegations are likely to generate formal charges from the Department of Justice investigation that is on-going.
This couldn’t get much worse for Boeing. Let’s look at some of the possible effects this may have. We started our list and stopped when we reached 37. The implications of today’s news will be far-reaching and could change the landscape of the industry.
- Will the MAX re-certification be further delayed?
- If Boeing lied to the FAA about one system, why wouldn’t they have lied about more than one?
- Without a complete double-check of the entire certification of the aircraft, how can the FAA and international regulators assure the public that the MAX is now safe?
- International regulators were highly critical of the FAA certification processes, as reported in the Joint Authorities Technical Review briefing last week. Will international regulators demand additional independent testing apart from the FAA?
- Will they demand their own recertification?
- How long will additional regulatory oversight impact the return to service of the MAX?
- Will full recertification required, reviewing everything?
- Could that take another year or two to complete, keeping the MAX grounded?
- Knowing that Boeing lied to the FAA, how can the agency now defend its certification process, and what will it take to convince the flying public that the 737 MAX is safe?
- In an era of social media, will Boeing’s delay in turning over messages be considered a cover-up?
- With a tacit admission of a criminal act in the text messages, will Boeing take appropriate action against those employees, and further change its culture to restore safety, rather than profits, as the number one objective?
- Will Dennis Muilenburg survive as CEO, with the Board now knowing of an apparent cover-up in delaying sharing of these messages, and a schedule to face Congress on the 29th?
- Will he be fired before he is scheduled to testify?
- Will airlines, concerned about customer acceptance of the aircraft, switch orders to competing for aircraft from Airbus?
- What impact will these allegations have on market share, and the corresponding impacts on employment in Renton?
- How rapidly could Airbus and its supply chain ramp-up production to meet additional demand?
- Will the A220 and A320 families both benefit from the MAX debacle?
- Will the 737MAX7 and MAX10 models be canceled?
- If full recertification is required, how long can Boeing afford to keep the plant open and building aircraft to be delivered at a later date?
- With the credibility of Boeing now in question, will the certification process for the 777-X extend the already late entry into service schedule further, and how much more will it cost?
- Will this impact the planned merger with Embraer?
- Would Boeing be able to deliver Embraer E195-E2 models to customers as an interim aircraft?
- Will the merger be canceled?
- Does this further delay the NMA program at Boeing?
- Will this force a move-up in the schedule for the Future Small Aircraft?
- What will this do for earnings, particularly since lawyers now have new ammunition that Boeing lied to the FAA?
- Will out of court settlements be much higher than anticipated?
- Will the 737MAX supply chain survive an extended grounding, and will Boeing need to “bailout” smaller suppliers by continuing to take on inventory for future production?
- How low will the Boeing share price drop, knowing that the company now faces tens of billions in potential costs from the MAX program failures and apparent cover-up?
- Will there be criminal indictments of Boeing executives who may have known about the potential problems with the aircraft and hid MCAS problems from the FAA, airline customers, pilots, and Boeing’s airline customers?
- How will customers react to the realization that Boeing apparently lied to the FAA?
- Will the old saying “If it isn’t Boeing, I’m not going” be reversed in the near future?
- Will there be customer boycotts of the 737 MAX on social media?
- Could those boycotts extend to other Boeing aircraft?
- If boycotts cripple profitability for Boeing aircraft, could this reduce orders for non-MAX Boeing aircraft as well?
- Is Boeing “too big to fail” and could a government bailout result?
- Can Boeing’s board survive this crisis?
We will be looking at all of these questions in the next week for our subscribers.
