Boeing: How the Mighty Have Fallen
In addition to writing about national and world affairs here on Substack I also write about various companies for Seeking Alpha. Given the number of veterans who subscribe to my thoughts “On Point,” here are some of my concerns and remarks about Boeing…
Boeing is a Department of Defense (DoD) contractor as well as a purveyor of commercial aircraft. The bullish case that is often made to buy shares of Boeing too often neglects problems with the defense side of the business. Too many analysts only concentrate on the fact that Boeing and Airbus SE) own a duopoly on commercial aviation. They become stary-eyed when seeing the massive backlog of orders for both BA and Airbus.
But Boeing today is not the company it once was. Too much financial engineering has left the company bereft of aircraft engineering. Boeing’s early successes in WWII were military aircraft that were built with pride. Boeing then cleverly piggybacked on the military aircraft that DoD (read: taxpayers) were paying for as a way to also build their commercial aircraft. The order for 250 KC-135 tankers from the US Air Force in 1955 paid for the research, the tooling, the wind testing, the flight testing, etc. This laid the foundation upon which Boeing then built its first commercial jet aircraft - the 707.
The KC-135:
(U.S. Air Force photo by Ty Greenlees)
The 707, the “commercial” version of the USAF KC-135:
Source:Boeing Images
Boeing and the US Defense Community
When I wrote my first analysis about Boeing in 2020, I was able to say…
“BA is the 2nd-largest military contractor, with ongoing contracts for Apache and Apache Longbow rotary wing aircraft, F/A-18 Super Hornet fighter jets, Air Force One and its twin…a drone tanker for the Navy designed to launch from a ship at sea and refuel jets such as the F/A-18 Super Hornet; the latest jet trainer aircraft for Air Force pilots; new helicopters, and more.”
Not any longer. Recently, Boeing has fallen hard. Here are the final numbers for 2023, courtesy of my most recent copy of “Defense News.”
Source: Defense News
Today’s Boeing: Commercial Aircraft Woes
On February 27th this year, NBC News reported the following:
Boeing’s safety culture is 'inadequate' and 'confusing,' new FAA report finds
The report…described the safety culture as “inadequate” and "confusing.”
There was also "employee confusion" among different work sites and groups due to "complex" and constantly changing procedures and training.
(Boeing’s safety culture is 'inadequate' and 'confusing,' new FAA report finds (nbcnews.com))
The problems continued. Here is a transcript from National Public Radio of a discussion about Boeing from aviation experts:
Experts: Boeing's safety culture is broken, and defective airplanes are being put out
April 18, 2024 5:12 AM ET
A MARTÍNEZ, HOST:
Aviation safety experts and whistleblowers say that more than five years after two 737 MAX plane crashes that killed 346 people, little has changed at Boeing. [Emphasis mine.] The safety culture is still broken, and the company is putting out defective airplanes.
DAVID SCHAPER, BYLINE: Investigations into Boeing's airplane design flaws, production problems, and safety lapses have been numerous …The latest crisis of an airplane door plug panel flying off an Alaska Airlines 737 MAX mid-flight, resulted in a Boeing management shakeup, but concerns remain.
A panel of independent aviation experts assembled by the FAA spent a year looking into Boeing's safety management systems and culture. At a Senate hearing yesterday, three of those experts testified that they found that there's a huge disconnect between what Boeing executives say about their commitment to safety and the reality Boeing employees experience on the company's airplane factory floors.
JAVIER DE LUIS: They hear, safety is our No. 1 priority, but what they see is that that's only true as long as your production milestones are met, and at that point, it's pushed out the door as fast you can.
SCHAPER: That's Javier de Luis, an aerospace engineer and a lecturer at MIT.
DE LUIS: We found this disconnect to be present at almost all levels and at all worksites that we visited…. And there was a very real fear of retribution and payback if you held your ground.
SCHAPER: A Boeing whistleblower emphasized that point during a second Senate hearing. Longtime company engineer Sam Salehpour accuses Boeing of taking shortcuts to speed up production, putting the structural integrity of some airplanes at risk.
The company's chief financial officer also recently acknowledged that Boeing has made mistakes, saying, "For years, we prioritized the movement of the airplane through the factory over getting it done right, and that's got to change."
(Experts: Boeing's safety culture is broken and defective airplanes are being put out : NPR)
Most Recent Update on the Boeing 737-9 MAX From the FAA
The above issues are not of concern only to airline executives and aviation experts. Released August 7th, here is the FAA’s plan of “aggressive oversight” to ensure dramatic changes at Boeing:
Boeing Oversight Actions
The FAA is holding Boeing accountable following the Jan. 5 door plug incident. We will continue our aggressive oversight of the company and ensure it fixes its systemic production-quality issues.
Jan. 6, 2024: The FAA Immediately grounded 171 Boeing 737-9 MAX aircraft operated by U.S. airlines or in U.S. territory.
January 2024: Halted production expansion of the Boeing 737 MAX.
February 2024: FAA Administrator Mike Whitaker…increased onsite safety inspector presence at Boeing’s facility in Renton, Washington, and Spirit AeroSystems’ facility in Wichita, Kansas.
February 2024: Administrator Whitaker visited to Boeing’s factory floor in Renton, Washington to see the 737 production line and hear directly from Boeing engineers, mechanics, and others about quality control processes. He has actively encouraged all whistleblower complaints, and the FAA investigates every single one.March 2024: Concluded an audit of Boeing’s production line… The FAA identified non-compliance issues in Boeing’s manufacturing process control, parts handling and storage, and product control.
Ongoing: To ensure long-term success, the FAA is actively monitoring Boeing’s progress in a variety of ways, including:
A team of FAA subject matter experts continually review Boeing’s progress.
Senior FAA leaders meet with Boeing weekly to review their progress.
(Updates on Boeing 737-9 MAX Aircraft | Federal Aviation Administration (faa.gov))
The 787 Dreamliner
I am sorry to say the problems go beyond the 737-MAX issues:
May 7, 2024 (Reuters) – “The Federal Aviation Administration said on Monday it has opened an investigation into the Boeing 787 Dreamliner to see whether some employees committed "misconduct" by claiming certain tests that were not performed had been completed.”
NBC then reported: The FAA has issued a mandatory inspection order for Boeing 787 Dreamliners after 50 people were injured in a nosedive incident earlier this year. (A 787 abruptly dropped in midair. 50 of the 263 passengers and crew on board were injured, with several people flying out of their seats and hitting the roof of the plane.)
The FAA said the dive was caused by a seat in the cockpit jolting forward and disconnecting from the autopilot system. The FAA has received four additional reports of similar issues since.
At the time, the pilot reported losing control of the plane after the gauges “went blank.”
Now, plane operators are required to complete inspections of all 787s within 30 days. This will impact 158 planes in the US and another 737 worldwide.
And from the New York Times:
The Federal Aviation Administration is investigating claims made by a Boeing engineer who says that sections of the fuselage of the 787 Dreamliner are improperly fastened together and could break apart mid-flight after thousands of trips…
The new 777X as of August 2024
The 777 is Boeing’s latest widebody aircraft, designed to fly as many as 400 passengers on long over-water international flights.
Last week, the Seattle Times reported:
Boeing grounds 777X test planes for defective part linking engine to airframe
After one of the 777X test airplanes landed Friday in Hawaii, maintenance mechanics found damage in a structural part that links the engine and the airframe. Inspections of the two other active 777X test planes found cracks in the same structure,
The affected part is called a “thrust link,” a heavy titanium component. The thrust link is not part of the GE-9X engine that powers the airplane, but a Boeing-designed connector to the engine. [emphasis mine.] …
… The news is another setback for the 777X program. The jet was launched in 2013 and first flew in 2020, but certification of the jet by the Federal Aviation Administration has been repeatedly delayed.
Boeing grounds 777X test planes for defective part linking engine to airframe | The Seattle Times
More on the KC-46 as of 2024
In May 2024, according to Aviation Week, “The U.S. Air Force has not taken delivery of KC-46 tankers from Boeing in more than two months as a new issue on the aircraft’s boom was discovered during inspections.”
In June 2024, Air & Space Forces Magazine reported: A U.S. Air Force F-16 fighter and a KC-46 Pegasus tanker were involved in an aerial refueling incident off the coast of the Netherlands on June 27 … An Airman aboard [the KC-46] says their aircraft was “damaged and unable to refuel.”
The Air Force and Boeing are currently working to resolve multiple Category I deficiencies including a “stiff” boom and the Remote Vision System. The system washes out or blacks out in certain conditions, such as in direct sunlight. The RVS system can also cause issues with the boom operator’s depth perception, which creates the risk of the boom operator accidentally hitting the aircraft the KC-46 is refueling.
F-16 in Aerial Refueling Incident with KC-46 over Europe (airandspaceforces.com)
Having personally sat in the boom operator’s seat (from a KC-10 tanker, not a KC-46) for a nighttime refueling I will tell you it is already a difficult art to refuel a thirsty F-16 or any other jet aircraft visually. To rely instead on some “Remote Vision System” as if this were a video game makes no sense to me whatsoever.
And to move at a snail’s pace so that it has taken years to fix the above “multiple Category 1 deficiencies” defies all reason. (A Cat 1 Deficiency is one which, among other issues, “may cause death, severe injury, or severe occupational illness.”
(KC-46 Update: Where Things Stand With Every Deficiency (airandspaceforces.com))
Why I have not owned Boeing in many years
· A report was written after the Lion Air and Ethiopia Airways crashes caused by poor MCAS training. It was written by two commercial pilots who said pilot error as “the most consequential factor” in both crashes. Their report was commissioned and paid for by institutional investors with large holdings in Boeing stock. Smarmy.
· Boeing today spends billions of dollars for its cost overruns and having to “do it over properly” repairs. The Pegasus tanker’s remaining Category 1 defects are but one example. The seriously over-budget Starliner space vehicle is yet another. NASA had so little confidence in the Starliner that they selected SpaceX for the return of two astronauts.
· It is likely to take a great deal of time to solve the problems with the 737, the 787, the 777, the Pegasus KC-46, and Starliner. That is a bucketful of problems.
What I Would Like to See at Boeing
· A senior management team that is driven by the desire to build great airplanes and to restore Boeing’s reputation as the premier place for the very best aerospace engineers, mechanics, and manufacturing people to work.
· Almost every flight on every single airline has hundreds of lives at stake. Every turn of a wrench to precise specifications counts. The approach must be: “This does not leave my workbench until I would put my parents or kids on this airplane.”
· Hands-on management from the CEO on down. Boeing has typically hired new CEOs from the financial industry — or from its own Board of Directors. This time it selected Kelly Ortberg, the former head of Rockwell Collins.
Kelly Ortberg knows Boeing and Boeing’s biggest competitor in commercial aviation, Airbus, having been a major supplier to both. His first decision upon accepting the CEO position was to move his family from West Palm Beach to Seattle.
Current senior management is in Arlington VA outside DC so they can be closer to legislators and DoD buyers. I think his move to Seattle is more than mere optics. Seattle is where the rubber meets the road. First, build great airplanes. Lobbying and schmoozing with legislators and procurement officials should be, and may now become, of only secondary importance.
It can’t happen too soon for this once-great American company.
Joe, as usual…superb. forwarding to several Boeing “diehards.”