These are the mistakes that cost Boeing CEO Dennis Muilenburg his job
“It reached the point that putting in a new person was the only choice,” said Cai von Rumohr, aerospace analyst with Cowen.
Mistake No. 1: Misjudging the 737 Max’s problem
Muilenburg’s poor reactions to the crisis started early.
After a Lion Air 737 Max flight crashed in October 2018, signs quickly emerged that the safety system meant to stop the airplane from going into a stall was probably a major factor in the accident. The safety feature on the plane that crashed had problems the day before. Although the pilots were able to land the plane on the earlier flight, their problem gave investigators an early idea as to the cause of the accident.
But Muilenburg and Boeing officials assumed better training and some minor software updates could fix the problem, and they did not recommend the plane be grounded.
After another 737 Max plane piloted by Ethiopian Airlines crashed in March, aviation authorities around the world started ordering the planes to be grounded. But Boeing pushed the Federal Aviation Administration to allow it to continue to fly, Muilenburg testified to Congress in October, saying that the company believed the plane was safe with additional pilot training, and that it thought it was premature to ground the plane until more facts about the crash were available. He admitted that had been a mistake.
Mistake No. 2: Missing deadline after deadline
After the second of the two crashes, Boeing promised that it would have a solution “in the coming weeks.” But that proved to be wildly optimistic, and the company missed one set of self-imposed deadlines after another in its attempt to win approval from the FAA to get the plane back in service.
The patience of its airline customers wore thin.
“The airlines look as this time as money. The longer it takes to get back in the air, the more they think they’re entitled to as compensation,” said von Rumohr.
Southwest has never flown anything but the 737. It owns more of the completed 737 Max jets than any other airline. The efficiencies that come from flying a single type of aircraft is central to its business model.
“I’ve been very clear, we’re not happy about our situation,” said Kelly.
Mistake No. 3: Halting production indefinitely
Boeing’s eroded relationship with the FAA, Congress and its airline customers ultimately doomed Muilenburg, said Richard Aboulafia, aerospace analyst with the Teal Group. All of them have publicly criticized Boeing’s handling of its crisis.
That decision underscored a problem that will continue to haunt Boeing: Its overly optimistic timeline caused a failure to manage its production of the plane. The company continued to make 737 Max planes during the grounding, albeit at a somewhat slower pace. But it did not deliver any of those planes because the FAA had not cleared them to fly.
Because Boeing was wildly ambitious about the timeline to return the 737 Max to service, the Max planes sat in inventory, giving suppliers false hope that production would continue uninterrupted.
“If there was a final straw, it was the way the shutdown happened with not a lot of explanation or plans as to what would happen,” said Aboulafia.