Boeing, You’re Grounded.

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Boeing, You’re Grounded. The Aircraft Manufacturer’s Fight or Flight Response Kelsey Bross and Annika Gustafsson

Transcript of Boeing, You’re Grounded.

Boeing, You’re Grounded.

The Aircraft Manufacturer’s Fight or Flight

Response

Kelsey Bross and Annika Gustafsson

Table of Contents

Abstract 3

A Little Background: Boeing 4

Where Did it All Go Wrong? 4

Some Unexpected Turbulence 5

Lion Air Flight 610 5

Ethiopian Airlines Flight 302 6

Timeline 7

Crisis Communication Strategy 8

Initial Reaction 8

Picking Up the Pace 8

Boeing Tries to Save Face 9

The Stakeholders Weigh In 10

Airlines and Countries 10

The Consumers 10

The FAA 10

Boeing Employees and Engineers 10

Heading Back to the Skies? 11

How Boeing Could Have Boarded the Right Flight 12

References 14

Appendix A 17

Appendix B 18

Abstract

On October 29, 2018, the Boeing Company experienced a major shock when one of its 737 MAX planes

plunged to the ground, killing all passengers inside. After another five months went by, the company

experienced some deja-vu when yet another MAX aircraft came crashing down, again killing all on

board. With both crashes having similar system failures prior to disaster, investigations opened up to

determine what the origin of disaster was. It was discovered that the security system approved to be inside

of the aircrafts malfunctioned, sending the planes into chaos. With their safety procedures and

management tactics in question, Boeing had to face a distraught and wary public and defend their image.

Boeing’s initial response made the company appear standoffish and closed off to the public. Ambiguity

and confusing messages left stakeholders wondering exactly what Boeing believed: do they take

responsibility for the crashes, or do they deem their planes are safe for travel? However, as time went on,

the company chose to work harder on developing stronger and more effective safety programs and

training procedures. Boeing is still currently working on redesigning the 737 MAX to be completely safe

for takeoff, but until then, the public is sitting and waiting to see if the company is ready for fight or

flight.

This case study will delve further into the workings of this crisis, touching upon the company’s history

and decision to create the 737 MAX, the crisis itself, and all of the aftermath with company and

stakeholder responses. It will also focus on what crisis communication strategies Boeing seemed to

implement throughout the crisis timeline, as well as what we believe Boeing could or should have done

instead to keep their reputation trusted and respected.

A Little Background: Boeing

The Boeing Company has been manufacturing airplanes since 1916. Founded by William E. Boeing, the

company defines its vision as: “people working together as a global enterprise for aerospace industry

leadership” (Boeing, 2019). The company had its beginnings as a mail-carrying service from Seattle to

Canada, and worked closely with the United States military during the 1920s to create aircrafts like

fighter planes and transports. By developing itself as a strong brand, Boeing has been able to sell planes

to several airlines, most notably Southwest, American, and United Airlines. The company aspires to

“unite for service strength around the globe” and has developed several products throughout its history,

including aircrafts, defense products, space products, and other systems for use in aircrafts and travel

(Boeing, 2019).

Boeing is most well-known for its various aircraft models. Over the years, the company has released the

747-8 for high-volume routes, the 767 for deliveries, the 777 for fuel-efficient passenger travel, and the

787 Dreamliner. However, the biggest model that stands out to the public is the 737, Boeing’s fastest-

selling airplane. Boeing has sold more than five thousand 737s, and due to the aircraft’s success, the

company wanted to revamp the aircraft. However, this would prove to work out poorly for Boeing, as

their new creation, the 737 MAX, experienced some massive turmoil before the plane could even leave

the runway (Boeing, 2019).

Where Did it All Go Wrong?

The entire crisis truly begins with the creation of the 737 MAX aircraft. Natalie Kitroeff from the New

York Times describes that around nine years ago, Boeing experienced a major wake-up call. The

manufacturer’s main competitor, Airbus, released a new fuel-efficient jet onto the market, and Boeing

immediately felt the pressure to create something that would make them stand out against the global

competition. With this in mind and a small time-frame laid out in front of them, Boeing executives and

engineers decided to scrap their idea for an

entirely new aircraft and started working on

the airline’s newest project: updating the 737

and creating the 737 MAX.

During the early stages of creation, Boeing

designed the MAX to be a single-aisle plane

with seats for around 200 passengers. It was

also designed to fly more efficiently and

across greater distances. However, this

required a bit of a change in power. To meet

these standards, Boeing increased the size of

the engines on the MAX, which changed the

overall aerodynamics of the aircraft and

raised the potential for stalling mid-flight.

In order to get the planes out faster, Boeing

decided to make some cuts in spending. While designing the plane, the implementation of a synthetic

The Air Current | 2019

airspeed system was discussed. This system would be able to detect when the plane’s angle-of-attack

sensors were not working correctly and would allow the plane to disregard this information while in

flight. However, Boeing’s managerial staff chose to forego the request due to extra costs, the impact on

training requirements that pilots would need, and the short timeline the company had to produce the new

jet.

The development process reached its biggest issue when it was decided that the 737 MAX planes would

include the Maneuvering Characteristics Augmentation System (MCAS). This system would help

prevent the aircraft from stalling due to the increased engines. To avoid this issue, the MCAS system

would push the plane’s nose down to stabilize the jet in certain situations. According to the New York

Times, the FAA turned to the manufacturer to approve the use of MCAS, which meant that Boeing did

not need to disclose the system’s details with agency engineers. Boeing also decided to expand MCAS

use later into production, which lead to the plane relying on a single sensor during an in-flight situation.

Once the systems were in place and the aircrafts were finished, Boeing was not required by FAA

regulations to submit a formal review of the MCAS system. The jet was deemed to be safe, pilots

received minimal training, and it was sent out to airlines to become a part of their daily travel aircrafts

(Kitroeff, 2019).

Some Unexpected Turbulence

In the last quarter of 2018 and beginning of 2019, Boeing Co. experienced two horrific and deadly

crashes of their Boeing 737 Max aircraft, which left 346 people dead. Both of these incidents stemmed

from pilots losing control of the planes after having trouble with the Maneuvering Characteristics

Augmentation System (MCAS). In the days following the second crash, the Federal Aviation

Administration temporarily suspended all operations of Boeing’s 737 MAX airplanes.

Lion Air Flight 610

On the morning of October 29th, 2018, Lion Air Flight 610 took off from Jakarta, Indonesia and began its

trip to Pangkal Pinang, Indonesia. Prior to the flight, the aircraft was having both speed and altitude

issues, but it was cleared for takeoff regardless. In the minutes right before leaving the runway, the pilot

also claimed that there were flight control problems, but again, they were going to proceed with the flight.

When the plane took off, the pilots were warned that the plane may stall. The nose of the plane was being

forced downward as they tried to fix the issue. With little time, their efforts to steady the aircraft were

unsuccessful. At the 12-minute mark of the flight, air traffic control lost contact and the plane plummeted

into the ocean, killing all 189 people on board. The

question of what exactly caused the malfunction

was still unknown. Following the crash, the

Indonesian government conducted a search of the

crash site, where they recovered the victims along

with pieces of the wreckage to help uncover

underlying issues. It wasn’t until November of

2018 that it was found that during the flight, the

MCAS (Maneuvering Characteristics

Augmentation System) had malfunctioned and was

causing the downward nose tilt. The MCAS is A member of the rescue team in Indonesia sifts through

the rubble of the crash

Gulliver | 2018

supposed to automatically adjust the horizontal trim of the aircraft when it is believed to be in danger of

stalling. In March of 2019, it was discovered that on the night of October 28th, 2018 (the night before the

crash), a similar issue had occurred in-flight, but the crew on board, which was different than those

members aboard the fatal flight the next day, was able to save the plane from crashing by following

instructions on how to stabilize the trim motors. This issue was not communicated to the crew that was on

Flight 610 (Giordano, 2019).

Ethiopian Airlines Flight 302

On March 10th, 2019, Ethiopian Airlines Flight 302 took off from Addis Ababa, Ethiopia and was

scheduled to land in Nairobi, Kenya. Upon takeoff, the pilot reported flight control issues. Similar to the

issues that led to the crash of Lion Air Flight 610, the nose of the plane was being forced down by the

MCAS. Pilots turned off the MCAS in order to attempt to regain control of the aircraft, but they needed to

power it up again in order to correctly turn the plane around to return to the airport. Despite efforts, the

737 MAX crashed into the ground at over 700 mph and killed all 157 passengers and crew members on

board. Three days after the crash, on March 13th, 2019, the FAA temporarily grounded all Boeing 737

MAX planes. On April 4th, 2019,

Ethiopian Airlines released the data that

was gathered from the black box after the

crash. The preliminary reports showed

that pilots correctly carried out

emergency procedures suggested by

Boeing. The set of instructions given to

override the MCAS had failed Flight

302. This evidence points to the fault of

the malfunctioning safety system

installed in the Boeing 737 MAX

(Stewart, 2019). With this being the

second crash for this aircraft, attention

was immediately drawn to Boeing, who

had been silent since the initial crash in

October of 2018.

The remains of Flight 302 are collected

by volunteers and rescue teams in

Ethiopia

Time | 2019

Timeline

Various sources | 2018/2019

Crisis Communication Strategy

Initial Reaction

Immediately following the October 29th crash of Lion Air Flight 610, Boeing initially put blame on the

pilots of the aircraft, saying that they did not completely follow the safety regulations given. In the

statement following the Lion Air crash, Boeing defended the safety of their planes. Not included in the

statement, the company claimed that in the manuals onboard the planes, they had instructions on how to

override the MCAS (Boeing, 2019).

The first statement from Boeing CEO following the Lion Air crash BOEING | 2018

Picking Up the Pace

It was after the second deadly crash in Ethiopia that Boeing began to really communicate with the public.

On March 12th, 2019, two days after the second crash, Boeing promised to make changes in their safety

system. This comes a day before the FAA temporarily grounds all 737 MAX planes. In response, on

March 19th, 2019, Boeing CEO Dennis Muilenburg released a statement officially announcing the

updates that Boeing will be making to its safety software, as well as offering additional training for pilots.

Muilenburg states, ‘“We know lives depend on the work we do, and our teams embrace that responsibility

with a deep sense of commitment every day,’ the letter says. ‘Our purpose at Boeing is to bring family,

friends and loved ones together with our commercial airplanes — safely”’ (Chicago Tribune, 2019).

In the following months, Boeing has continuously worked on repairing their safety software and

improving the Boeing 737 MAX. During this process, they have used their website as a platform to

promote the effort they are putting into making the 737 MAX one of the safest aircrafts in the sky. In May

of 2019, Boeing began testing their updated software, but received feedback from the FAA to continue

working. All of these announcements can be found under the tab, “737 MAX Updates.” Along with their

own official timeline of the crisis, the tab also features a section that is entitled “Employee Voices”. This

is a collection of videos that depicts the impact that this crisis has had among employees. Subjects of

these videos range from pilots to engineers to security personnel. Craig, the head pilot for Boeing

commented on the aircraft manufacturer's role, “I feel a very large commitment to the public to ensure

that we prevent accidents like this from ever happening again. And we’re going to figure out how to make

not only our products but the industry safer going forward” (See Appendix A) (Boeing, 2019).

In September of 2019, Muilenburg released a set of “initial fundamental changes” that Boeing has put

into effect. This PDF shown below was released on their website and on their social media.

BOEING | 2019

Currently, Boeing is still focusing on getting the 737 MAX planes back in the sky and consistently

updating their website with any information regarding the process of the project.

Boeing Tries to Save Face

Much of the communication strategy exhibited by Boeing and its leaders runs parallel with the image

restoration theory. This theory emphasizes maintaining a positive image and reputation. In this aftermath,

Boeing has attempted to shift the public’s negative view of their aircraft. Instead, they are promoting a

seemingly new vision of the Boeing 737 MAX, a much safer one.

Of the five main strategies associated with the image restoration theory, Boeing first mainly focused on

denial and evasion of responsibility. As shown in the initial statements, they emphasized the safety of

their planes. Putting the responsibility of the accidents in the hands of the pilots, Boeing claimed that they

had written in step-by-step solutions to override the MCAS. It was not until the black box data from the

Ethiopian flight was released that they acknowledged their need to delve deeper into the emergency safety

systems on each aircraft.

A large part of their strategy post-March 10th has been corrective action. As they attempt to pick up the

pieces of this crisis, they have made a lot of strides in trying to prove to the public that they are improving

their safety systems. Part of the problem leading up to both accidents was that Boeing was criticized for

rushing the process of creating this aircraft. This time around, they are documenting the process of

creating the new system. Boeing is highlighting their work relationship with the FAA, who allowed the

faulty MCAS to be approved in the first place. Another corrective action that Boeing has taken is offering

more extensive training to pilots. Many pilots came forward after the accidents claiming that they did not

feel as though they received enough training, which could have been a factor in the crashes. Perhaps their

most extensive strategy comes as a form of reducing offensiveness. In July, Boeing announced that they

would be compensating the families of the victims with 100 million dollars set aside from the company.

Although this does not undo what has already been done, it is Boeing’s way of apologizing to those who

were affected by this crisis.

The Stakeholders Weigh In

Airlines and Countries

Once the crashes occurred, several of Boeing’s stakeholders felt the need to take their own safety

measures. After the first of the two crashes, countries and airlines themselves recognized a major issue in

Boeing’s 737 MAX planes and began to ground them. United Airlines and Southwest Airlines have

given passengers who booked flights on 737 MAX aircraft the chance to rebook their flights with no fees.

This move was respected by passengers, as many felt uneasy traveling on 737 MAX planes after the

crashes they witnessed. Southwest Airlines even went as far as to sue Boeing for 100 million dollars the

airline lost in income due to the numerous groundings. Southwest lost 3.7 billion dollars due to the

Boeing crisis (Goodwyn, 2019).

The Consumers

Boeing stating that the plane’s design was safe immediately after taking ownership and responsibility for

the crashes, which caused many members of the public to become anxious. The ambiguity of the

response messages left people wondering what the truth behind the situation really was. CEO Dennis

Muilenburg addressed the public for the first time 26 days after the second crash, and he addressed them

through a pre-recorded video released onto social media platforms only, which was not received well by

the public (See Appendix B). They thought the response felt insincere, especially considering the pre-

recorded format. Business Insider describes how the public also recoiled at Muilenburg suggesting the

pilots were to blame. All of the mixed messages and defensive stances put the public on edge, and many

are still unsure as to whether or not they trust the 737 MAX’s overhaul (Baker, 2019).

The FAA

The Federal Aviation Administration (FAA) also took a hit from the Boeing crisis. Many people stepped

in and blamed the FAA for not keeping regulations tighter during the development of the 737 MAX. The

FAA was the last organization to step in and ground the planes, which left the public confused as to why

individual airlines were left to make that choice after such a serious pair of incidents. The FAA is also

being pressed by the public to take a closer look at how pilots work with interface systems in the aircrafts.

The lack of presence by the FAA during the first renovations of the 737 MAX left Boeing to make

decisions for themselves, and now the public wants to make sure that the FAA is preparing pilots in how

to properly handle the new software.

Boeing Employees and Engineers

Much of the information learned after the crashes came from Boeing employees and workers, who were

also impacted by the crises. One worker described to the New York Times how he witnessed the company

rejecting the more expensive safety features and filed complaints about the issue (Gelles, 2019). Another

Times article mentions that several other employees discussed problems with the design process, noticing

managers putting money over proper equipment (Kitroeff, 2019). These employees and engineers are

now scrambling to put together a better plane for the company while staying out of the scrutiny following

the incident.

Heading Back to the Skies?

Boeing has been struggling to rebound from these disasters. To this day, Boeing 737 Max planes are still

out of the sky due to safety concerns and numerous testing procedures. The planes were placed on a six-

month safety ban following the second crash. According to NBC, there are also numerous investigations

still ongoing about how the technology was allowed to pass through the FAA in the first place

(Newburger, 2019). However, through the bad outlook, Boeing has made some changes to try and regain

trust with its stakeholders. The company has already run over 700 test flights with the new software

system in place, and it has invited more than 200 pilots to sit in on informational sessions. Forbes also

mentions that Boeing has created new safety committees and is going to propose that engineers must

report to the chief engineer of the company, not managers of individual programs. Boeing has also

proposed that a product and safety services unit respond to the chief engineer as well (Bogaisky, 2019).

Apart from the social implications of the crashes,

Boeing has also received a sharp blow in financial

areas. The company is down around 7.3 billion

dollars since the crashes due to all of the

groundings and delays, not to mention that it set

aside 100 million dollars to compensate the

families of the victims. Over the last two quarters,

Boeing has reported losses for the company.

Since the crisis began, Boeing has released a

statement mentioning that CEO Dennis

Muilenburg has been stripped of his chairman

title. In the release, the company mentions that

Muilenburg will continue to work as Boeing’s

CEO, and he will focus on keeping the company

running while the 737 MAX keeps being tested for approval. The company

believes that this decision will “ensure full support to Boeing’s customers around the world” and it has

full confidence in Muilenburg remaining as CEO and running the business as a whole. Muilenburg

himself supported and respected the decision made, stating that Boeing wants to honor its commitments

to its consumers (Boeing, 2019).

After the updates to the website, Boeing has now given stakeholders the chance to read into how they can

protect themselves from crises. This tactic, called self-efficacy, gives Boeing the chance to step back into

the public’s good graces by providing them with more information about safety and regulations than

originally provided before the two crashes. The company’s website now features a whole section devoted

solely to the 737 MAX, and on the first page, several safety initiatives are listed so Boeing’s consumers

can see what the company has done and is continuing to do (Boeing, 2019).

MARKET REALIST | 2019

The biggest issue for Boeing lies with trust going forward. Even though the planes have been grounded

and pulled, many setbacks in the reconstruction process leave consumers wondering if the 737 MAX will

ever be fit enough for travel. Boeing is set to deal with a tough challenge in regaining customers’ trust.

So far, according to NBC, Boeing is looking into hiring a larger PR firm to help reintroduce the jets to the

runways, and Boeing wants to put more emphasis on the pilots (Newburger, 2019). Boeing CEO Dennis

Muilenburg addressed this factor in this quote:

MUILENBURG | 2019

Boeing has planned to continue holding meetings with the FAA and other aviation authorities to discuss

the 737 MAX’s return and approval. If the company can prove to its publics that the aircraft is reliable, it

may begin to see customer trust rebuild and allow for future success.

In addition, Boeing may have to forego future aircraft plans to make up for the loss of credibility and lives

following this crisis. CNN states that Boeing was planning on releasing a mid-size airplane, speculated to

be called the 797. The company mentions that they are going to try and work on the 797 while also

redesigning the 737 MAX, but that release could still be months away. Meanwhile, CNN also reports that

Boeing’s rival, Airbus, has gotten to announce their own mid-size jet in the wake of the crisis, leading

many to believe that Boeing will see fewer sales due to a later release (Isidore, 2019).

How Boeing Could Have Boarded the Right Flight

This crisis has yet to fizzle out, with all Boeing 737 MAX planes still grounded as they continue to make

updates to their emergency safety system. There is also a plethora of lawsuits that will be plaguing the

company for years to come. After diving deeply into the workings of this crisis, there were many mistakes

made that led Boeing to this mess.

One of the main issues with this crisis lies in the fact that Boeing is a manufacturing company. They

rarely deal with interactions with consumers, and when they came face-to-face with these incidents, they

were not at all prepared. In a New York Times article entitled, “As Boeing Confronted a Swelling Crisis,

They Had Little to Say”, written by David Gelles, he interviewed Richard Levick, who is the owner of a

crisis communications firm in Washington. Levick weighed in by saying “Boeing responded as a

business-to-business company, but this has become a business-to-consumer issue. Consumers now care

about what plane they are on” (Gelles, 2019). By keeping mainly silent and out of the public from

November to March, Boeing caught the attention of the public in the worst way. They were criticized for

not being more vocal or taking more action to keep the public safe. By defending themselves and their

products, they lost the trust of the consumer. Directly after the Lion Air flight, Boeing should have

grounded all planes, instead of having countries decide for themselves. By pushing the responsibility onto

the proxy communicators to protect their publics, Boeing looked extremely passive.

In recent articles, many let the blame fall equally on the FAA and Boeing. During the creation of the

Boeing 737 MAX, some things were swept under the rug by both parties. In order to follow their

projected timeline and budget, Boeing did not reveal all details regarding the 737 MAX. On the other end,

the FAA did not have the knowledge to be able to fully comprehend the complexity of the MCAS.

Between the faulty communication and ignorance of the FAA, the Boeing 737 MAX was already in a

dangerous position (Koenig, 2019). This crisis could have been avoided if Boeing and the FAA had taken

the time to thoroughly examine all aspects of the plane before approving it. Boeing should take into

consideration all of the missteps that led them here and learn from them.

Boeing has some learning to do before it can be fully trusted again by its publics. With these suggestions,

Boeing could have been more successful in communicating with its stakeholders, or even have avoided

the crisis to begin with. Simple mistakes can lead to a company’s downfall, and hopefully after carefully

revamping the 737 MAX, Boeing can step back into the public’s good graces and get people to their

destinations in an efficient and safe aircraft.

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altitude-and-told-air-traffic-controllers-that-they-were-experiencing-a-flight-control-problem-

the-nose-of-the-plane-seemed-like-it-was-being-forced-downward-38.

Stewart, E. (2019, April 4). Preliminary report on Ethiopia crash finds pilots followed Boeing's

procedures properly. Retrieved from https://www.vox.com/policy-and-

politics/2019/4/4/18295528/boeing-737-max-ethiopia-faa-dagmawit-moges.

Ulmer, R. R., Sellnow, T. L., & Seeger, M. W. (2019). Effective Crisis Communication: Moving

From Crisis to Opportunity. Thousand Oaks: SAGE Publications.

Appendix A

BOEING | 2019

Boeing "Employee Voices" Videos. (n.d.). Retrieved October 16, 2019, from

https://www.boeing.com/commercial/737max/737-max-update.page#/employees/craig.

Appendix B

YOUTUBE | 2019

CEO Dennis Muilenburg Response Video. (n.d.). Retrieved October 16, 2019, from

https://youtu.be/iUeo4248wpI.