Case Study: Failure by Design: Boeing and the 737 Max
Answer the following questions at the end of the case study. Responses for each case discussion question should be in paragraph form and be approximately 250 words in length.**
At 6:20 a.m. on the morning of October 29, 2018, Lion Air Flight 610 departed from the airport in Jakarta, Indonesia, for a routine one-hour flight to a provincial capital. The aircraft was a nearly new Boeing 737 MAX, delivered to Lion Air, a low-cost regional carrier and one of Boeing's major customers, just four months earlier. The weather was clear and flying conditions excellent. Just 11 minutes into the flight, shortly after the pilots had reported a flight control problem, the plane slammed into the Java Sea at high speed, killing all 189 people on board. The 737 MAX was Boeing's newest aircraft and the centerpiece of the company's strategy for the short to mid-range commercial market. Just 200 MAX aircraft were in operation, but many airlines, including such critical customers as American, Southwest, and Air Canada, had more than 4,700 of the planes on order. Boeing's CEO, Dennis Muilenburg, and his top management team were suddenly faced with an urgent task: to determine what had gone wrong and why with Boeing's so-far successful new model.
The Boeing Company
In 2018, The Boeing Company was a major multinational corporation that designed, manufactured, and marketed commercial jetliners, military aircraft, and defense, space, and security systems. For years locked in head-to-head competition with the European consortium Airbus, the U.S.-based Boeing was the largest aerospace company in the world. With headquarters in Chicago, it employed 153,000 people in 65 countries, including 137,000 in all 50 U.S. states. Boeing also had a major impact on the U.S. economy through its supply chain. In 2016, Boeing estimated, its transactions had generated $45 billion for more than 13,600 businesses, in turn supporting 1.3 million additional jobs in the United States. In 2018, total revenues for Boeing were on an upswing; sales had increased from $93.4 billion in 2017 to $101 billion in 2018 as the MAX had entered commercial service.
Boeing was comprised of three business units, based on market sector, and a wholly owned financial subsidiary. The Commercial Airplane unit manufactured aircraft for passenger and cargo transportation. The Defense, Space and Security unit manufactured military aircraft as well as spacecraft, satellites, and related systems. The Global Services unit provided aftermarket support for aircraft including maintenance, repairs, and training. A wholly owned subsidiary incorporated in 1968, the Boeing Capital Corporation, provided loans for commercial and military customers to purchase aircraft and supporting technology in installments.
In 2018, the company was governed by a 13-person board of directors. Their backgrounds included high-level positions in government-mainly in defense, trade, and diplomacy-and in the aerospace, insurance, pharmaceutical, medical device, and energy industries. Five board members had ties to private equity funds, including two with leadership roles at The Blackstone Group, the largest such fund in the world. All board members were independent, except for Muilenburg, who served as chair.
Corporate Culture
Boeing was an American success story, a product of ingenuity and innovation. Its founder and namesake, William Boeing, had run a timber company in his hometown of Seattle, Washington, before diversifying into shipbuilding, using wood from his mills. After attending an aviation conference in 1910, he took flying lessons and bought an airplane for his personal use. Seeing an opportunity, he converted his shipyard into a manufacturing facility for airplanes, which at that time were mostly made from wood.
William Boeing had a reputation for being a perfectionist. While visiting the factory in 1916, company legend had it, Boeing observed a set of improperly sawed spruce ribs. He swept the ribs onto the floor and stomped on them until they were broken and no longer useable. During the same visit, Boeing spotted a frayed aileron cable. (Ailerons, hinged surfaces on the top of wings, were used to control lateral balance.) "I, for one, will close shop rather than send out work of this kind," Boeing had exclaimed. By the time Boeing retired in 1934, he had left an indelible mark on the organization. Boeing had established a strong culture focused on a commitment to quality, leading the industry in cutting-edge design of commercial and military aircraft.
Innovation in aircraft design would continue to be the company's hallmark as it expanded under the founder's successors. After World War II, Boeing executives moved further into the commercial aircraft market. Early passenger jetliners produced in Europe had structural problems that resulted in tragic accidents, dampening public enthusiasm for commercial jet travel. Boeing's then-CEO and the board approved an investment of $16 million-almost all the profit earned during the war-in the development of a large-capacity passenger jet. The resulting Boeing 707, marketed as "comfortable, reliable, and safe," could accommodate up to 181 passengers and their luggage. The first successful commercial jetliner, the 707 remained in service for more than three decades.2 The company then rolled much of the profit from the 707 into the development of the Boeing 747, the largest civilian aircraft in the skies when it entered service in 1970. Dubbed "The Incredibles," a team of 50,000 Boeing employees took 747 from design concept to market in just 16 months.3 Other commercial models developed in the postwar period included the 727, 737, 757, 767, and 777 series aircraft-the last of which was introduced in 1994.
A pivotal figure in Boeing's history, Philip Condit became CEO and chairman in 1996. Unlike his predecessors, Condit believed the company had taken undue financial risks in the design and production of new aircraft. By contrast, his strategy was to acquire other firms and assimilate their products into Boeing's portfolio while maintaining a steady revenue stream from updates of existing models. In 1997, Boeing acquired its competitor, McDonnell Douglas, a leader in the defense market. Boeing retained many McDonnell executives, transferring several into key leadership positions. Former McDonnell CEO Harry Stonecipher was installed as Boeing's president, bringing with him the strategic priorities and management style that had characterized McDonnell. (Stonecipher later served as Boeing's CEO.)
Prior to the McDonnell Douglas acquisition, for 80 years, Boeing had operated, as one analyst put it, as an "association of engineers."4 Many Boeing executives had been intimately involved in aircraft design, held patents, and "spoke the language of engineering and safety as a mother tongue."5 Stonecipher and his former McDonnell executives, by contrast, were focused on affordability, cost cutting, and efficiency. Traditionally, Boeing had held investors and stock analysts at arm's length. By contrast, Condit, Stonecipher, and their management teams actively sought their approval, prioritizing revenue and shareholder returns over research and development.
Before the McDonnell Douglas acquisition, Boeing had avoided share repurchases, also called buybacks. (These occurred when a company bought its own shares on the stock market, reducing the number of outstanding shares. This boosted the market value of the remaining shares and annual dividends distributed to shareholders.) Within a year of the McDonnell merger, buybacks had become a key component of Boeing's strategy.6 At the same time, the company reduced R&D spending, which dropped by 20 percent in three years. For the first time in four decades, Boeing had no plans in development for a completely new plane. Rather, its strategy was to continue modifications and revisions of existing models, with an emphasis on cost effectiveness.
Pushing the engineering envelope to make planes fly "higher, faster, farther"-a phrase often used in the aviation industry-gave way to the slogans, "We're in business" and "We're managing for value," used by the management team to communicate Boeing's new priorities to its employees. As one senior manager described the change, "We're not selling airplanes just for the fun of it. That's the big cultural change. We're running it as a business."7
The only new airplane Boeing designed after the mid-1990s was the 787 Dreamliner, a fuel-efficient twinjet widebody the company started work on in 2003. To cut costs, Boeing outsourced the design and production of critical components. Many of these contractors did not pay the same attention to quality that Boeing had in the past, and flaws in components led to repeated delays. The 787 was three years late and $25 billion over budget when it entered commercial service in late 2011. Just months later, U.S. regulators temporarily grounded the 787 in 2013 due to the risk of electrical fires caused by faulty lithium batteries.8
Ethics Policies and Practices
Boeing had a code of conduct that identified the company's "enduring values"-integrity, quality, safety, diversity and inclusion, trust and respect, corporate citizenship, and stakeholder success. Boeing's Ethical Business Conduct Guidelines, 27 pages long, explained employee conduct expectations in greater detail.9 Boeing also circulated several documents explicitly stating expected behavior for various groups of Boeing employees, such as specific codes for members of the board of directors and financial officers.10 Employees were required to sign the code of conduct annually. The signing event was intended to "reaffirm [the employee's] personal responsibility to speak up, seek guidance, and raise concerns about possible violations."11 Boeing held regular training on compliance. Managers were responsible for page 443training their direct reports on their obligations associated with the code and were provided resources, such as case studies, to use for this purpose. The company also routinely surveyed its employees confidentially about their perceptions regarding retaliation for reporting unethical behavior and manager's support of ethical decision-making.
In 2018, Diana Sands, senior vice president for internal governance and administration, was the company's chief compliance officer. In this role, she oversaw Boeing's ethics programs and practices. A trained accountant, she had previously served as corporate controller and vice president of finance.
The company's Ethical Business Conduct Guidelines provided detailed protocols for how employees should report possible violations of the code. Employees were advised to go first to a manager with their concerns. Employees could also consult ethics advisors, described as "full-time, dedicated Boeing employees who are trained in advising employees and stakeholders on matters of ethical concern."12 Employees could contact an ethics advisor using one of Boeing's ethics lines, a phone number where an employee or anyone else with information could report ethically questionable behavior confidentially and anonymously. Boeing supported an ethics reporting process website, an interactive tool that guided the employee through the reporting and investigation process. Finally, an anonymous reporting tool allowed employees to report ethically questionable accounting or auditing practices anonymously and confidentially. Prior to the Lion Air crash on October 29, 2018, Boeing did not disclose the number and types of incidents reported under these procedures.
U.S. Government Regulation of Aircraft Certification
In the United States, the safety of commercial aircraft such as those made by Boeing was regulated by the Federal Aviation Administration (FAA). Created by Congress in 1958, the FAA's mandate was to provide "service with the highest degree possible of safety in the public interest." The agency had oversight of all civil aviation, including the construction and operation of airports, management of air traffic control, and certification of new and modified aircraft. It also oversaw the training and certification of flight crews.
By most measures, the FAA had done an excellent job. Civil aviation in the United States was extremely safe. In the late 2010s, around 1 billion U.S. passengers flew annually, with around 5,000 planes in the sky over the nation's airspace at any one time. Between 1996 and 2019, the air carrier fatality rate declined from 81 per 100 million passengers to 0.6 per 100 million passengers.
In 2005, as part of a broader deregulatory effort, Congress had approved a process called Organization Delegation Authorization, or ODA. This permitted the FAA to delegate authority to an organization or individual to undertake aircraft certification tasks that previously would have been handled solely by government regulators. As a result, companies and their employees could be tasked with certifying their own aircraft. In such delegated roles, they were known as authorized representatives, or ARs (this term was later shortened simply to "unit members"). Teams of FAA engineers and inspectors were created to oversee the work of ARs and assure their work met government standards. The FAA Reauthorization Act of 2018, passed with strong bipartisan support, doubled down on this approach, calling for the agency to make progress toward "full utilization of... delegation."
Supporters of delegation argued that it was necessary to augment limited government resources, leverage private sector expertise, and bring innovative new products to market page 444more quickly. In a 2013 review of the certification process, Ali Bahrami, an engineer and chief of FAA's office in Seattle, wrote in defense of the practice, "Given the complex nature of today's aviation products, it is virtually impossible for regulators to have all necessary expertise in every FAA office throughout the country, especially when global manufacturing models continue to grow."14 But others expressed caution, saying that such delegation set up a situation in which company employees would be pressured to act in their employer's interest, rather than the public's. Michael J. Driekorn, a former FAA official and vice president for quality and compliance at Pratt & Whitney, expressed his ambivalence about delegated authority this way: "Conceptually, yes, it makes sense because FAA can't be everywhere. But the reality is it is flawed, [because] you have the fox watching the henhouse."15
At Boeing, this system of delegation took the form of a complex, two-headed structure. The FAA maintained a Boeing Aviation Safety Oversight Office (BASOO) in Seattle to oversee the company's commercial aircraft programs. BASOO was staffed in 2019 with 45 engineers and other experts, including 6 senior engineers and 18 working-level engineers. In parallel, Boeing operated a dedicated Organization Design Authorization (ODA) department, staffed by about 1,400 ARs-more than 30 for every FAA employee in the Seattle office. These individuals had dual roles, in that they were both Boeing employees and authorized to act on behalf of the FAA.16 Strict procedural rules limited contact between Boeing and FAA staff. For example, if a Boeing engineer had questions, he or she was expected to resolve the matter internally instead of directly involving FAA staff.17
In late 2016, Boeing conducted a survey of its employees in the ODA group. (The results were later provided to Congressional investigators not by Boeing, but by an unnamed whistleblower.) Its purpose was to determine if Boeing AR's experienced any undue pressure, defined as "unwarranted, excessive, or unjustifiable force, coercion, or bullying of Unit Members... while performing or attempting to perform their roles and authorized functions/delegated authority."18 About a third of the ARs responded to the questionnaire.
The survey revealed that almost all respondents understood what undue pressure was, and most felt comfortable reporting it to management. However, 39 percent said they perceived undue pressure, and 29 percent were concerned about the consequences of reporting it. In an analysis of open-ended comments, the company found that the dual role of Boeing subject-matter experts who were also authorized representatives of the FAA could "cause confusion leading to potential undue pressure." For example, some authorized representatives were responsible both for developing Boeing's compliance documents and then recommending their approval.19
When an aircraft manufacturer, such as Boeing, wished to introduce a new aircraft, it had to demonstrate, and the FAA (or its designated representatives) had to certify, that the product complied with all relevant federal regulations. A brand-new model or type of page 445aircraft, such as the 787, required what was known as a "type certificate." A modified version of an existing model, such as the 737 MAX, required what was known as an "amended type certificate." In the latter case, the government required review only of changed aspects and areas they could affect, not the entire aircraft. To obtain a type certificate could take up to a decade; to obtain an amended type certificate, generally between five and eight years.
The Development of the 737 MAX
In 2010, Boeing was considering options for a successor to its hugely successful 737 aircraft. The company had first introduced the 737, a short to medium range twinjet narrow-body airplane, in 1967. Since then, the plane had been updated 11 times, most recently to the 737 Next Generation (NG) series. The 737's main competitor was the A320, produced by the European consortium Airbus. In December 2010, Airbus announced a plan to redesign the A320 with larger, more fuel-efficient engines. The A320neo, as it was called, was scheduled for rollout in 2015.
At the time, Boeing had two options on the table: an updated 737 with a larger engine, and an entirely new, "clean-sheet" airplane. The company was leaning toward the latter option. At a meeting in January 2011, Jim Albaugh, president of the commercial airplane division, told employees that "we think the right answer [is] to probably do a new small airplane that might come out toward the end of this decade...Every customer we talk to has a real hard time understanding why a re-engined [737] airplane makes sense."20
But just a few months later, the company suddenly pivoted. The CEO of American Airlines, one of Boeing's biggest customers, called Boeing's CEO James McNerney to say that the airline was about to place a large order for the Airbus A320neo. If Boeing wanted to retain the airline's business, American's chief told McNerney, "it would need to move aggressively."21 Within 48 hours, McNerney had decided to abandon the clean-sheet design and move forward with an update of the 737-the model that later became the MAX. (American Airlines eventually purchased hundreds of both A320neo and 737 MAX aircraft.) The cost of updating the 737 was estimated at between $1 and $2 billion, much lower than the estimated $10 to $12 billion to design an all-new aircraft.22 The process was likely to be faster-possibly five or six years, compared with as long as a decade to design and certify a new plane. Boeing's board ratified the decision to develop the MAX in August 2011.
When Boeing applied for an amended type certificate for the 737 MAX in January 2012, the FAA created a checklist of 93 items that would need to be certified. This list was divided, with BASOO retaining 58 items and the rest delegated to Boeing.23 Because Boeing sought an amended type certificate, each item on the list was reviewed separately in what a later investigation characterized as a "bottom-up approach," in which compliance was demonstrated at the level of each specific change rather than of an integrated aircraft.24
According to an investigation by The Seattle Times, as the process ground on, the MAX project fell behind schedule, and pressure built to accelerate certification. A former FAA safety engineer later testified that about halfway through the process, "We were asked by management to reevaluate what would be delegated. Management thought we had retained too much at the FAA."25 More items from the checklist were turned over to Boeing. page 446By 2018, the regulator was allowing Boeing to certify 98 percent of its own work, one agency official told The New York Times.26
The Maneuvering Characteristics Augmentation System (MCAS)
As they embarked on a redesign of the 737, one of the first decisions Boeing's engineers made was to use a larger, more fuel-efficient engine, the CFM International LEAP-1B. These engines were similar to those used on the 737's main competitor, the Airbus 320neo series of airplanes. This decision posed a significant engineering challenge. Because Boeing retained the old, relatively low-slung airframe of the 737, the CFM LEAP-1B engines did not fit where the engines had previously been mounted, so the designers had to move them further forward and higher on the wings. This shifted the aircraft's center of gravity, giving the nose a tendency to pitch up under certain conditions, risking a stall. Engineers first identified this possibility in certain high-speed maneuvers at cruising altitude.
To counteract the tendency for the plane to pitch up under certain circumstances, in 2012 Boeing engineers developed a flight control system called the Maneuvering Characteristics Augmentation System, or MCAS (pronounced "em-cass"). The MCAS system was tied into two angle of attack (AOA) sensors mounted on either side of the fuselage to measure the angle of the aircraft relative to the oncoming air. When a sensor detected that the aircraft was pitched too steeply upwards, the system was designed to move the tail rudder, automatically pushing the nose back down. In the original design for the MCAS, the system could only make a pitch correction of 0.65 degree or less. It was designed to work in the background, so that the pilot would not even be aware it had engaged.
Although the aircraft was equipped with two AOA sensors, only one was tied into the MCAS system at a time. This created a design issue known as a single point of failure. Aircraft were traditionally designed around the principle of redundancy, so if one system or part failed, another could take over. Boeing engineers working on the MAX debated this issue internally but had concluded that such a malfunction of the AOA was unlikely.27 Boeing did place an "AOA disagree" indicator in the cockpit, to alert pilots to divergent readings from the two sensors in the event one malfunctioned. However, activating this indicator was optional, available only at extra cost. Only 20 percent of airline customers had purchased this option. Lion Air had not purchased the AOA disagree indicator for its planes' cockpits.
As part of the FAA's aircraft certification process, Boeing was required to assess the risk inherent in various systems. In internal documents summarizing the certification of MCAS, a "loss of one AOA followed by an erroneous AOA" was deemed "catastrophic before flight crew recognition of issue," but the risk was rated "acceptable" based on "crew training, appropriate flight crew action, and the probability of failure being extremely remote."28 The Wall Street Journal later reported that Boeing assumed that if MCAS triggered erroneously, pilots would be able to take corrective action within four seconds 100 percent of the time.29
Boeing went through the usual procedures and obtained FAA approval for the first iteration of MCAS. However, as the design of the aircraft proceeded, new problems emerged. On March 30, 2016, an internal memo reported that test pilots had discovered that the MAX's nose also tended to pitch up during certain low speed conditions-typically, shortly after takeoff, as the plane was ascending to cruising altitude with its flaps up.30 To address page 447this low-speed scenario, Boeing's engineers went back to the drawing boards. They added functionality to MCAS to engage under these conditions, enabling it to make corrections of up to 2.5 degrees and to trigger repeatedly every 10 seconds until the danger of a stall had passed. Some key people at Boeing were apparently not informed of this modification-which made MCAS four times as powerful as it had been earlier.
Boeing was required to brief the FAA on any modifications of elements that had already been approved-such as changes to MCAS. But, somehow, communication between the company and regulators on this point seemed to have broken down. A subsequent review of the certification process of the 737 MAX flight control system by the Joint Authorities Technical Review (JATR), a panel of representatives from the FAA and civil aviation authorities around the world, concluded that the certification documents had not been updated to show the changes to MCAS.31 A series of "coordination sheets," released to Congress, summarized the FAA signoffs on MCAS. Sheets for March 2016 (before MCAS had been given greater potency) and June 2018 (after) showed no changes: both concluded that "MCAS shall not have any objectionable interaction with the piloting of the airplane."
Pilot Training for the 737 MAX
At the outset, Boeing management established a critical program objective: pilots transitioning from earlier models of the 737 to the MAX would need training only on a tablet or laptop, rather than on a flight simulator. This was known as "Level B," or computer-based training. A major motivation was cost. Flight simulators cost between $10 and $20 million, and hourly rental rates could reach as high as $1,000.33 To be trained on a simulator, pilots had to take time off from flying paying customers, travel to training sites, and be housed and fed. One of Boeing's major customers, Southwest Airlines, employed around 10,000 pilots to fly its fleet of 737s-all of whom, presumably, would need training. In recognition of the added cost, Boeing's marketing staff offered Southwest a $1 million rebate per 737 MAX if the FAA later required pilot training on a simulator. The airline had ordered around 280 MAXs.
A key person in Boeing's effort to convince regulators to approve Level B training was Mark Forkner.34 In his role as chief technical pilot on the MAX program, Forkner worked with the FAA to write flight manuals and determine training requirements for pilots transitioning to the new model. The company later released to Congressional investigators many electronic messages exchanged between Forkner and his colleagues at Boeing.
The messages reveal that Forkner felt great pressure from his managers to limit the training pilots would need. On December 18, 2014, he wrote a colleague, "...If we lose Level B [it] will be thrown squarely on my shoulders... Who cost Boeing tens of millions of dollars! Burn him at the stake!" A pilot who worked with him later told The Wall Street Journal that Forkner was afraid of losing his job if the FAA required pilots to undergo simulator training. A former flight deck engineer who had also worked with him told the reporter, "Mark was under an enormous amount of pressure... He was clearly stressed."
Over the following year, Forkner's messages reflect his urgent search for support in convincing the regulators to change their position that pilots transitioning to the MAX should receive at least some simulator training. On November 17, 2015, he wrote a group of colleagues (names redacted):
Subject: RE:!! Important Help Needed!!!... The FAA AEG refuses to negotiate the training level determination for [new features of the MAX] ... We are going to push back very hard on this, and will likely need support at the highest levels when it comes time for the final negotiation... Failure to obtain Level B for [these new features] is a planet-killer for the MAX.
Nine months later, the FAA acceded to Boeing's position.
Even after the FAA approved Level B training for 737 pilots transitioning to the MAX, Boeing still had to convince civil aviation authorities in other regions of the world to follow suit. Forkner noted on August 18 that European regulators had accepted the FAA's findings, but that "we may have to go to other regulators around the world to jedi-mind trick them" into accepting Level B training. (The phrase jedi-mind trick apparently referred to the Star Wars films, in which Jedi masters were able to influence the behavior of others through supernatural mental powers.) Individual airlines also had to agree. By June 2017, regulators in Europe, Canada, China, Malaysia, and Argentina had adopted the FAA's findings. But several civil aviation authorities and airlines had resisted. Among them were Indonesia's Directorate of Civil Aviation and Lion Air, the Indonesian airline that later suffered the first MAX crash. But eventually Lion Air backed off, after Forkner emphasized that simulator training would create "a difficult and unnecessary training burden for your airline."
As this process unfolded, Boeing was also developing and seeking regulatory approval for the training materials and manuals that would be provided to flight crews. On March 30, 2016, Forkner asked the FAA in an e-mail for permission to remove all references to MCAS from these materials. The FAA agreed. When the MAX entered commercial service, pilots transitioning from older 737s to the new model were completely unaware of MCAS, its capabilities, or how to override it in case it triggered erroneously.
Production at the Renton Factory
The 737 MAX was manufactured at Boeing's factory in Renton, Washington. As the MAX entered service in May 2018, production in Renton was severely backed up. "Jobs behind schedule," a key metric, spiked to 10 times normal, and "roll out on time" dropped below 10 percent.37 The production delays postponed flight tests for new planes, pushing back delivery to customers.
That summer, Boeing leadership boosted production targets at the Renton factory to 57 planes per month, up from 47, to be achieved within six months. Pressure on employees was relentless, and planned overtime rates doubled. Because critical parts were backlogged, work was completed out of sequence. Plant managers no longer held the normal daily meetings at which employees on the incoming and outgoing shifts would communicate.38 This page 449impaired production, as the incoming shift would be uncertain about what had been accomplished and what had been left to do by the preceding shift.
On June 9, 2018, Edward Pierson, a highly decorated former Naval commander and a senior manager at the Renton factory, e-mailed Scott Campbell, vice president and general manager of the 737 product division, to express his concerns about operations at the Renton factory.
My first concern is that our workforce is exhausted. Employees are fatigued from having to work at a very high pace for an extended period of time. This obviously causes stress on our employees and their families. Fatigued employees make mistakes... My second concern is schedule pressure (combined with fatigue) is creating a culture where employees are either deliberately or unconsciously circumventing established processes. These process breakdowns come in a variety of forms adversely impacting quality... I am talking about inadvertently imbedding safety hazard(s) into our planes... Frankly right now all of my internal warning bells are going off. And for the first time in my life, I'm sorry to say that I'm hesitant about putting my family on a Boeing airplane.
Pierson made two recommendations. The first was to remind employees that they should prioritize quality and working safely. The second was to shut down the production line to allow the teams to regroup and address production issues so they could complete production of the planes safely.
One month later, on July 18, Pierson met with Campbell in person to emphasize these points. He later testified before Congress that Campbell said he would not shut down the production line. Pierson had pushed back, saying "I've seen operations in the military shut down over less substantial safety issues, and those organizations had national security responsibilities." Campbell's reply: "Well, the military isn't a profit-making organization."40
Pierson voluntarily retired from Boeing a little over one month later. He later testified: "AOA sensors have a long history of reliability. No one has asked why two brand-new AOA sensors on two brand-new planes inspected, installed, and tested by Boeing at the Renton plant during the summer of 2018 failed."41
A Design Flaw with the Plane
As Boeing's top managers continued to gather intelligence over the days immediately following the Lion Air crash, little was known with certainty about its causes. But Indonesian investigators had quickly focused their suspicions on the possibility that an angle of attack sensor had malfunctioned, feeding erroneous data into the plane's computer, and they had raised their concerns with Boeing. A week after the crash, the deputy chief of the Indonesian safety agency said an inaccurate reading from a defective sensor could have caused the aircraft to descend uncontrollably. This was "something for Boeing to reflect upon," he noted, although he then added, "We cannot yet say there was a design flaw with the plane."42
Discussion Questions
Q1) What were the immediate technical causes of the crash of Lion Air Flight 610?
Q2) Describe the culture of the Boeing organization. How did the company's culture affect the development and production of the 737 MAX? Need Assignment Help?
Q3) Describe the ethics policies and practices of Boeing. What ethical safeguards were in place to promote safety? Evaluate the effectiveness of these safeguards during the development and production of the 737 MAX.
Q4) Evaluate the external competitive environment of Boeing. How did external competition contribute to the development of an unsafe aircraft?
Q5) Examine the regulatory environment of Boeing, particularly Boeing's relationship with the Federal Aviation Administration (FAA). In what ways did the relationship between Boeing and its regulators contribute to the development of an unsafe aircraft?
Q6) Recommend actions Boeing managers, regulators, and various stakeholders could take to prevent unsafe aircraft from being designed, manufactured, and sold in the future.