Boeing cuts Max production as it tries to spin its way out of bad publicity

Boeing yesterday slashed 737-Max production by 19% to try and hold down the growing backlog of undeliverable aircraft.

At the same time a first flight of a 737-Max 7 with modified software also took a test flight.

Yet it’s Indonesia and Ethiopia who are keeping up pressure on Boeing’s reputation, coupled to a surprisingly unforgiving global public reaction. Add to that the pressure from the US Congress and DoT on the FAA and Boeing’s clearly dubious self certification and inspection processes, the company has been highly defensive.

In the background another 787 issue has happened twice now, as a second Japanese aircraft lost both engines as it touched down at Narita. This may be more of an engine issue but it still doesn’t look good. Nor is anyone forgetting how the 787 battery issue was handled, and how it was ever certified is now back in the spotlight.

All of this comes as the US Air Force suspended KC46 Tanker deliveries (767 frames) for a second time in just a few weeks as yet more FOD – foreign object debris – was found in sealed spaces inside the airframe and wings from manufacturing processes. This happened almost immediately after Boeing assured the USAF it wouldn’t happen again.

So yesterday CEO Denis Muillenberg went on another mea culpa exercise, assuring in another of those semi-formal factory set videos, that Boeing was accepting responsibility and understood it was basically responsible for the deaths of nearly 400 people. No doubt it’s setting aside a couple of billion dollars to fight court cases and pay compensation. Cynically, the video was posted one minute after the US Stock Market closed for the week so that it wouldn’t affect the share price!

In Ethiopia and Indonesia this is all being seen as far too little far too late. There’s also a feeling from local coverage that they feel a degree of low level racism from the American side. There’s a lot of understandable undercurrent that Boeing and the US in general, especially under the present administration with its attitudes, feels these countries airlines are not up to standard, especially in terms of training and skills.

That attitude seems to have come across when neither the FAA or Boeing wanted to ground the aircraft – if it had been a US airline the reaction would have been far different and far swifter.

Boeing’s directors are bonus driven and have every reason to feel under pressure to preserve their incomes. Their bonus is paid based not in sales or profits, but on the value of the airlines stock market price. And that’s taken a sizeable hit.

It’s also been paying billions to shareholders by buying back their shares, thus forcing up the stock price over several years, and making them bigger bonuses – and that’s money not being put into engineering, software and research.

Boeing continues to aggressively lobby for its cause to try and get Congress to pull back or lessen the investigations – so while on one hand it’s busy looking like its sorry, it’s just as busy trying to make sure it’s interests are protected.

Boeing will do whatever is necessary to protect itself – it will beg forgiveness at the same time as making sure it has to do as little about it as it can get away with.

That’s the sad fact about mega-corporations. Boeing is doing what they all do. As with everything, it’s the bottom line that matters.