Saving the boeing soldier
The question is beginning to be seriously asked: is the giant Boeing in danger and is its survival assured? Won’t the avalanche of bad news lead to the fall of the emblematic manufacturer? The new boss: Kelly Ortberg, who replaced Dave Calhoun during the summer, is facing a huge work stoppage of 33,000 employees, which is bringing down production of the 737 MAX, 777 and 767. We don’t see where the descent will stop.
It really started with the American manufacturer’s denial about the malfunctions of the latest born, the B 737 MAX, which was supposed to compete with Airbus’ A320 NEO. Several hundred Lion Air and Ethiopian Airlines passengers lost their lives and even worse was the reaction of Boeing executives who implied a little heavily that these disasters were due to errors in the operations of “exotic” carriers. This contempt was the consequence of the arrogance of the manufacturer which tried to mask a strategy intended to preserve the company’s results even at the expense of safety, in order to serve copious dividends to shareholders.
The downturn began in the spring of 2020 and since then it has only worsened. The US Department of Transportation (DOT) fined $2.5 billion in early 2021, presumably partly to hide complicity between federal controllers and the automaker. We thought that the difficulties would end there, but this was not the case. First, whistleblowers came forward inside Boeing and its main subcontractor, Spirit Aerosystems. Two of them were also stricken with sudden death before being able to testify. And then we noticed manufacturing defects in some B 787s. As if that wasn’t enough, the door of a B737 came loose in mid-flight from Alaska Airlines, fortunately without casualties, which led to a new investigation by the U.S. Congress and finally the change of CEO Dave Calhoun in July.
The financial consequences have come to sanction the operational difficulties. Currently, Boeing is dragging a loss of $58 billion and announces disastrous figures in the third quarter of 2024: a new loss of $6 billion, all after having to reintegrate its main subcontractor Spirit Aerosystems into the parent company for $4.7 billion and the resumption of losses. And finally, Kelly Ortberg has to face the biggest strike in Boieng since 2008 with the work stoppage of the production lines of the main devices after announcing the elimination of 17,000 jobs.
Any company would have disappeared in the face of this avalanche of bad news, even the Defense sector is impacted, and we wonder if the list is over or if we won’t discover new problems. Is Boeing too big to disappear? We have not said the past of air transport giants such as Pan Am or Swissair, and yet many major companies have now disappeared, despite the widely affirmed support of states. However, there are finally enough carriers to handle a constantly growing demand, but there are currently only two major manufacturers, Airbus and Boeing, while waiting for the arrival of Comac in China and perhaps the return, one day or another, of the Russians.
It should be remembered that Boeing has an order book of more than 6,000 aircraft and that Airbus’ is close to 9,000. However, air operators make their service plans several years in advance according to the delivery dates of the aircraft ordered. A long delay can have catastrophic consequences, and that’s why Sir Tim Clark, the iconic boss of Emirates, is so. He is still waiting for the delivery dates of the aircraft he ordered in … 2013.
Boeing’s bankruptcy would be a huge disaster not only for the United States, but for global air transport. To survive, this sector of activity needs manufacturers capable of delivering around 200 aircraft per month, while currently the figure remains close to 100. And producing an aircraft is such a complex operation that a manufacturer cannot be replaced overnight as it can happen for airlines.
The airline world has no other solution than to support the manufacturer in difficulty and to bend its back while waiting for the machine to get back on track. The coming months will be difficult for all operators. It will probably be necessary to return to service many aircraft grounded during the Covid crisis. In any case and by all means, the Boeing soldier must be saved.
