Boeing to Halt 737 MAX Production in January


After months of speculation, Boeing has temporarily shut down production of its 737 MAX. The announcement is expected to have ripple effects across the US economy, even though the company is painting the shutdown as a temporary measure. Boeing announced the move after regulators announced the 737 MAX would not be cleared to return to service this year.

Boeing does not intend to furlough or lay off any workers at any plants; the workers currently assigned to 737 MAX production will be temporarily reassigned. Boeing slashed the number of planes it built per month to 42 in April of 2019, once airlines stopped taking deliveries of the plane, but had continued finishing that number of aircraft up until now. US airlines have removed the 737 MAX from their schedules through at least March and American said last week that it did not expect to see the 737 MAX fly again until April. Boeing has stored the 400+ jets it has completed in the intervening months and claims halting production will actually make it easier to deliver the aircraft to customers once shipments are allowed to resume.

Ongoing investigations have raised questions about the degree of regulatory capture at the FAA (“regulatory capture” refers to a situation in which a regulatory agency that is intended to be a watchdog instead becomes an effective arm of the industry it is intended to oversee.). Another argument — one well-articulated by The Atlantic a few weeks back — is that Boeing’s decision to move its headquarters to Chicago back in 2001 had a long-term and significantly negative impact on the company. Splitting the company’s HQ into thirds and moving them away from its engineering centers was the beginning of a fundamental change in managerial approach that ultimately culminated in the Lion Air and Ethiopian Airlines disasters. According to author Jerry Useem, Boeing replaced engineering executives who understood the company’s business with marketing and business executives who didn’t. He writes:

“If in fact there’s a reverse takeover, with the McDonnell ethos permeating Boeing, then Boeing is doomed to mediocrity,” the business scholar Jim Collins told me back in 2000. “There’s one thing that made Boeing really great all the way along. They always understood that they were an engineering-driven company, not a financially driven company . If they’re no longer honoring that as their central mission, then over time they’ll just become another company.”

The Joint Authorities Technical Review (JATR) of the FAA’s certification process on the 737 MAX presented its findings in October 2019. After reviewing the FAA’s overall process for evaluating the 737 MAX the group stated:

[T]he process did not adequately address cumulative effects, system integration, and human factors issues. The Changed Product Rule process allows the applicant6 to only address in a limited way changed aspects (and areas affected by the change) and does not require analysis of all interactions at the aircraft level.

The current Changed Product Rule process lacks an adequate assessment of how proposed design changes integrate with existing systems and the associated impact of this interaction at the aircraft level.

If you wanted to summarize the loophole the MCAS failure slipped through, you could do worse. Boeing failed to understand how pilots would respond to systemic changes to the 737 MAX. It may have failed to do so because the entire 737 MAX development effort was literally focused on making certain that there were no systemic changes in the first place. If your entire business plan revolves around not finding reasons to declare a new aircraft a major revision to a previous design, it’s harder to claim you seriously considered the problem in the first place. Boeing’s entire economic argument for the 737 MAX hinged on the idea that pilots wouldn’t need to requalify or retrain on the new model. It had good reason to push back against any conclusion to the contrary.

Right now it looks as if the FAA expects to complete its review by February 2020. If the software fix is ready to deploy by then we might see 737 MAX’s flying again by March or April.

Now Read:

Leave a Reply

Your email address will not be published. Required fields are marked *