Boeing HQ
Today’s news items focus on the safety culture, or lack thereof, at Boeing, with multiple articles citing shortfalls, many of which were revealed again at Senate hearings looking at FAA oversight of Boeing.
Some of the interesting revelations include workers feeling schedule pressures even after the mid-air blowout and Boeing’s promise to focus on safety rather than speed. The Senate hearings revealed ‘troubling and recurring’ safety failings, with the FAA not providing appropriate oversight of Boeing.
We reported yesterday that the FAA expects the Boeing safety process to take more than three years to change, something as a consumer and taxpayer I find unacceptable. If there is a right way and a wrong way of doing something, shouldn’t the regulatory mandate the right way, and if there is a problem, simply bring production to a halt? The FAA has not yet restored Boeing’s full production certificate, retaining some processes to itself. The question we ask is why these problems are continuing, and why changes have not been mandated with shorter time frames.
Even after the recent “blowout” and a promise from the company that their safety system has been strengthened, we find that production pressures still exists to rush the completion and delivery of aircraft, even though appropriate safeguards have not been taken.
What has come out of the Senate hearings is a promise from the FAA to quickly notify the Department of Justice if Boeing engages in any criminal activity. Given the time it takes to prosecute a case and come to a resolution, aircraft defects could be in service for years, endangering the lives of passengers like those on Alaska Airlines flight 1282. Helpful? Perhaps but also too little too late. FAA regulatory authority needs teeth, and the ability to shut production lines until changes are made. But Boeing may be considered to be too big to fail.
One article questions whether the machinists can save Boeing from its own management. The article cites that the machinists have been against rampant outsourcing, undermining quality inspections, moving work to non-union shops, and hollowing out what one were family sustaining jobs. Union employees want to build safe airplanes by the book, but Boeing management has used output pressure while reducing safety inspections to more quickly move aircraft through the plant. Could this strike be the backbreaker for Boeing’s toxic culture?
In strike news, a new estimate indicates that Boeing is losing between $100 million and $150 million each day that the strike continues. At the rate the company was burning cash prior to the strike, a strike of more that a month may require Boeing to raise equity, as raising debt would result in a loss of their investment grade credit rating. The company will soon be scraping the bottom of the barrel for cash. Could a chapter 11 be in Boeing’s future? It is not beyond the realm of possibilities anymore.
Finally, joining other airlines, Etihad is now refurbishing its older 777 models as the 777-9 is running more than 5 years behind schedule. But with refurbishing its older aircraft, will this push the new aircraft acquisition back by one major maintenance cycle so the airline can achieve a return on its investment? Etihad, with its delivery timetable and fleet plan decimated by Boeing delays, will need to deal with the financial impacts of a refurbishment program caused by Boeing’s internal problems, and seek compensation for those delays.
Links to today’s key stories follow:
- Boeing workers felt schedule pressure even after midair blowout – BNN Bloomberg
- Senate probe reveals Boeing’s ‘troubling and recurring’ safety failings – ABC News
- FAA will notify DOJ if Boeing engages in any criminal activities – Reuters
- Can the machinists save Boeing from its management? – Real News Network
- Boeing losing ‘$100 million to $150 million a day’ as union strike rolls on – Yahoo
- Etihad resorts to retrofitting old Boeing jets amid plane delays – BNN Bloomberg
