Boeing: Last Week Tonight with John Oliver (HBO)

LastWeekTonight
7 Mar 202432:36

Summary

TLDRThe script is a scathing commentary on Boeing's decline from being a reputable aircraft manufacturer to prioritizing profits over safety. It dissects the company's cultural shift after its merger with McDonnell Douglas, leading to cost-cutting measures, outsourcing, and a stock-price-driven approach that compromised quality control and transparency. The disastrous consequences of these decisions are highlighted through the 737 Max crashes, which exposed Boeing's negligence in informing pilots about a flawed safety system. The script calls for accountability, questioning the effectiveness of regulatory oversight while urging Boeing to rectify its tarnished reputation through genuine leadership and a renewed commitment to safety.

Takeaways

  • 😬 Boeing's reputation for quality and safety has deteriorated due to prioritizing profits and stock prices over engineering excellence.
  • 💸 Cost-cutting measures like outsourcing production and reducing R&D budgets compromised the safety of planes like the 787 Dreamliner and 737 MAX.
  • 💥 The 737 MAX crashes in 2018 and 2019 were caused by a flawed MCAS system that Boeing failed to properly inform pilots about.
  • 🐪 Boeing's acquisition of McDonnell Douglas in the 1990s brought a more profit-driven and cutthroat culture that clashed with Boeing's engineer-centered approach.
  • 😡 Internal messages revealed Boeing employees mocking regulators, the company, and safety issues with the 737 MAX.
  • 🙈 The FAA heavily relied on Boeing's self-certification of its planes, leading to lax oversight and missed safety issues.
  • 💰 Boeing prioritized stock buybacks and dividends over safety investments, diverting 92% of operating cash flow to investors from 2014 to 2018.
  • 👨‍✈️ Production line workers raised concerns about rushed production and safety compromises but were often ignored by management.
  • 🔄 Despite recent crashes and issues, Boeing's leadership has remained largely unchanged, casting doubt on their ability to enact meaningful cultural reforms.
  • 💭 Public trust in Boeing has eroded, with passengers actively avoiding flying on certain Boeing models due to safety concerns.

Q & A

  • What was the main issue with the Boeing 737 MAX planes that led to two fatal crashes?

    -The main issue was with the Maneuvering Characteristics Augmentation System (MCAS), which could push the plane's nose down on its own based on data from a single sensor. This system was not properly explained to pilots, and it could be activated erroneously, leading to the crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302.

  • What cultural shift occurred at Boeing after its merger with McDonnell Douglas?

    -After the merger, the McDonnell Douglas culture, which was more cutthroat and profit-driven, became dominant at Boeing. The company started prioritizing stock buybacks and dividends for investors over investing in research and development or safety.

  • What issues were found during the production of the Boeing 787 Dreamliner?

    -Boeing outsourced much of the Dreamliner's production to suppliers to cut costs, leading to issues with misaligned parts, incorrectly secured fasteners, and gaps between units. The plane's unveiling in 2007 was also revealed to be a sham, with the displayed model being just an empty shell.

  • How did Boeing's relationship with the FAA contribute to the 737 MAX issues?

    -Boeing was allowed to use its own employees as FAA-designated inspectors to certify the planes' airworthiness, creating a conflict of interest. The FAA also heavily relied on Boeing's analysis of the MAX's safety, lacking the ability to effectively analyze much of the company's data.

  • What were some of the damning internal messages revealed about Boeing's awareness of the MCAS issues?

    -Internal messages showed that Boeing knew about the dangers of MCAS throughout the MAX's development. One test pilot failed to recover from an MCAS activation in a simulator, calling it 'catastrophic.' Another employee described the plane as 'designed by clowns, who in turn are supervised by monkeys.'

  • What recent issue with the 737 MAX has raised further safety concerns?

    -In August 2022, the FAA warned that using the engine anti-icing system on the MAX for more than 5 minutes could cause the engine housing to shatter, potentially leading to decompression and loss of control. Pilots are now using Post-it notes and timers as reminders to turn off the system.

  • What changes have been made to address Boeing's safety issues?

    -Congress passed legislation rolling back some of Boeing's ability to oversee its own planes, and the FAA has demanded Boeing come up with a plan to address safety concerns within 90 days. However, concerns remain about the company's commitment to change under its current leadership.

  • How did Boeing's focus on stock prices and cost-cutting impact safety?

    -Boeing diverted 92% of its operating cash flow from 2014 to 2018 towards stock buybacks and dividends, far exceeding its spending on R&D for new planes. This focus on cost-cutting and pleasing investors led to rushed production and compromised safety measures.

  • What was the issue with the Maneuvering Characteristics Augmentation System (MCAS) on the 737 MAX?

    -MCAS could push the plane's nose down based on data from a single sensor, which could be faulty or activated erroneously. Pilots were not properly informed about MCAS or trained to handle such situations, contributing to the crashes.

  • How did Boeing's reputation for safety and quality change over time?

    -Boeing was once renowned for its commitment to safety, quality, and craftsmanship, with a culture of openness and attention to detail. However, after the McDonnell Douglas merger and increased focus on profits, the company's reputation suffered as safety concerns mounted.

Outlines

00:00

✈️ Passengers Recount Terrifying Flight Incident

The main story is about a recent incident on an Alaskan Airlines flight where a door plug became dislodged, causing a gush of air and panic among passengers. The plane, which was relatively new, landed safely but experts say it was mostly luck as a passenger could have been sucked out at takeoff or catastrophic injuries could have occurred at cruising altitude. Boeing CEO Dave Calhoun took responsibility but gave an unclear explanation about a 'quality escape' that allowed an unsafe plane to fly.

05:01

🔄 Boeing's Cultural Shift After McDonnell Douglas Merger

The paragraph discusses how Boeing's culture shifted after merging with McDonnell Douglas in 1997. The McDonnell Douglas management team's profit-driven and cutthroat culture became dominant, with a focus on increasing stock prices rather than quality and safety. Boeing relocated its headquarters away from the commercial plane operations, prioritized stock buybacks over R&D, and introduced slogans like 'less family, more team,' signaling a shift away from its engineer-centered open culture.

10:01

💸 Cost-Cutting and Outsourcing for the 787 Dreamliner

The paragraph explores Boeing's cost-cutting measures and outsourcing strategy for the 787 Dreamliner project. To reduce costs, Boeing slashed R&D budgets, outsourced production to numerous suppliers, and aimed to develop the plane for less than half the cost of previous models. This led to quality issues, communication challenges, and a plywood mock-up being passed off as the real Dreamliner at the unveiling ceremony. The plane was delivered years late and billions over budget.

15:02

⚠️ The Flawed 737 MAX and the MCAS System

The paragraph details the development of Boeing's 737 MAX jet and the flawed MCAS (Maneuvering Characteristics Augmentation System) that contributed to two deadly crashes. To compete with Airbus, Boeing rushed the MAX's design and production, cutting corners and failing to adequately inform pilots about MCAS, which could force the plane's nose down based on a single faulty sensor reading. Pilots were given minimal training on iPads, and Boeing initially dismissed concerns about MCAS after the first crash.

20:02

🕵️ Lack of Regulatory Oversight and Boeing's Self-Regulation

The paragraph discusses the lack of effective oversight from the Federal Aviation Administration (FAA) and Boeing's self-regulation practices. The FAA heavily relied on Boeing employees to certify the MAX's safety, and for decades, Boeing used its own 'FAA-designated inspectors' to approve planes, leading to conflicts of interest. Boeing successfully lobbied to reduce government oversight of airplane designs, allowing it to regulate itself even more, while some Boeing inspectors faced pressure to limit safety analysis.

25:03

🚨 Boeing's Continued Safety Issues and Need for Change

The paragraph highlights Boeing's ongoing safety issues and the need for fundamental change within the company. Despite the MAX crashes and investigations revealing concerning practices, Boeing continues to face new issues, such as a recent FAA directive about a potential engine housing shattering hazard on the MAX. Boeing's new CEO, Dave Calhoun, claims to prioritize accountability and transparency, but his past leadership role during problematic decisions raises doubts. Whistleblowers argue that new leadership is needed for meaningful change.

30:05

🕳️ A Satirical Look at Boeing's Corporate Culture

This paragraph offers a satirical and exaggerated portrayal of Boeing's corporate culture and priorities. Through a series of humorous statements, it mocks Boeing's focus on stock prices over safety, its cost-cutting measures, lack of accountability, and the disconnect between its leadership and the realities of plane manufacturing. The satire aims to criticize Boeing's perceived misplaced values and questionable practices that have compromised its reputation.

Mindmap

Keywords

💡Boeing

Boeing is a major American aerospace company and one of the largest aircraft manufacturers in the world. The video primarily discusses Boeing's safety culture, corporate practices, and the controversies surrounding the 737 Max aircraft. It highlights Boeing's shift from an engineering-focused mindset to prioritizing profits and shareholder value, which allegedly compromised safety standards.

💡737 Max

The 737 Max is a series of commercial aircraft models manufactured by Boeing. The video focuses on the safety issues and fatal crashes involving the 737 Max, which were linked to a flawed software system (MCAS) and Boeing's rushed production process. The 737 Max became a symbol of Boeing's alleged negligence towards safety in pursuit of cost-cutting and competition with Airbus.

💡MCAS

MCAS (Maneuvering Characteristics Augmentation System) is a flight control software system introduced on the 737 Max. It was designed to automatically push the plane's nose down in certain situations to prevent stalls. However, the video alleges that MCAS could be triggered by a single faulty sensor and that Boeing failed to adequately inform pilots about the system, contributing to the 737 Max crashes.

💡Stock buybacks

Stock buybacks refer to a company repurchasing its own shares from the stock market, often to inflate the stock price and increase shareholder value. The video criticizes Boeing's practice of diverting significant funds towards stock buybacks instead of investing in research, development, and safety measures for its aircraft.

💡Corporate culture

Corporate culture refers to the values, beliefs, and practices that define an organization's work environment and decision-making processes. The video highlights the shift in Boeing's corporate culture from a focus on engineering excellence and safety to prioritizing profits and shareholder returns, allegedly at the expense of safety standards.

💡Self-regulation

Self-regulation refers to the practice of industries or companies regulating themselves without external oversight or government intervention. The video criticizes Boeing's ability to self-regulate through the use of FAA-designated inspectors employed by Boeing, which allegedly created a conflict of interest and compromised safety oversight.

💡Whistleblowers

Whistleblowers are employees or former employees who reveal wrongdoing or unethical practices within an organization. The video mentions Boeing whistleblowers who raised concerns about the company's safety practices and prioritization of profits over safety, suggesting that their concerns were not adequately addressed by the leadership.

💡Accountability

Accountability refers to being responsible and answerable for one's actions or decisions. The video questions Boeing's accountability for the safety lapses and fatal accidents involving the 737 Max, suggesting that the company has not taken full responsibility or implemented meaningful changes to address the underlying issues.

💡Reputation

Reputation refers to the public perception or esteem held towards an entity, such as a company. The video contrasts Boeing's historical reputation for excellence and safety with its alleged prioritization of profits and shareholder value, which has eroded its reputation and public trust in recent years.

💡Transparency

Transparency refers to operating in an open and honest manner, without secrecy or deception. The video criticizes Boeing's lack of transparency in communicating safety issues and design flaws to regulators and pilots, suggesting that greater transparency is needed to rebuild trust and improve safety practices.

Highlights

Passengers are sharing their terrifying experience on board an Alaskan Airlines plane that lost a door plug during flights.

Boeing CEO Dave Calhoun had an odd response when asked about the safety issue: 'How did an unsafe airplane fly in the first place? Because a quality Escape occurred.'

Boeing used to be synonymous with quality and craftsmanship, but its reputation has been tarnished by a series of alarming incidents and prioritizing stock prices over safety.

The merger with McDonald Douglas in 1997 marked a shift towards a more cutthroat and profit-driven culture at Boeing.

Boeing rushed the production of the 787 Dreamliner, outsourcing work to save costs, leading to significant problems and delays.

The 737 Max was developed hastily to compete with Airbus, without proper safety considerations, leading to two fatal crashes.

Boeing concealed key information about the MCAS system from pilots and regulators, contributing to the crashes.

Boeing employees mocked the FAA, the company, and the plane's problems in internal messages, describing it as 'designed by clowns.'

The FAA relied heavily on Boeing employees to vouch for the Max's safety, lacking the ability to effectively analyze Boeing's data.

Boeing successfully lobbied to reduce government oversight of airplane designs, allowing it to regulate itself even more.

Boeing whistleblowers say the company won't change until it has new leadership at the top.

On booking sites, users can now exclude specific Boeing models from their flight searches, indicating a loss of public trust.

The narrator suggests Boeing should advertise the kind of company it has become, prioritizing stock prices over safety and quality.

The narrator satirically rewrites Boeing's marketing slogans to reflect its current practices and priorities.

The transcript highlights the need for fundamental changes at Boeing, including new leadership and a renewed focus on safety and quality over profits.

Transcripts

00:04

our main story tonight concerns

00:06

airplanes the place you go to say I'll

00:08

get some reading done before watching

00:10

Nine episodes of The Office you've

00:11

already seen and landing in Tucson

00:13

planes make many of us nervous even

00:15

though commercial air travel is the

00:17

safest form of mass transportation but

00:19

accidents do happen and there was one

00:21

recently that got a lot of attention

00:24

passengers are sharing their terrifying

00:26

experience on board an Alaskan Airlines

00:28

plane that lost a door plug during

00:30

flights what was supposed to be a short

00:33

trip from Portland to Ontario California

00:35

for Garrett Cunningham turned out to be

00:37

one of the most frightening experiences

00:39

of his life a gush of of air I look to

00:42

my left and part of the plane is gone my

00:45

brain couldn't compute what I was

00:46

looking at yeah of course it couldn't

00:49

our minds filter out things that

00:51

shouldn't make sense mine for instance

00:52

refuses to acknowledge that tomatoes are

00:54

fruits or that the shoe Bill isn't

00:57

extinct does that really look like

00:59

something that should exist at the same

01:01

time as the iPad I think not now

01:04

thankfully that flight landed safely

01:06

with only a few injuries but experts say

01:08

that that was mostly luck for one thing

01:10

if someone had been sitting in the

01:11

window seat with their seat belt off

01:13

they could have been sucked out of the

01:15

plane and second this happened just

01:17

after takeoff but if they'd been at

01:18

cruising altitude injuries might have

01:20

been catastrophic and that plane was

01:23

almost new it had been delivered by the

01:25

manufacturer Boeing around 2 months

01:27

earlier and that's too soon for a

01:29

sneaker to fall apart let alone a

01:32

multi-million dollar aircraft now Boeing

01:34

CEO Dave Calhoun was quick to take

01:36

responsibility saying Boeing is

01:38

accountable but when pressed on exactly

01:40

what had taken place had an odd response

01:44

how did an unsafe airplane fly in the

01:46

first

01:48

place because a quality Escape

01:52

occurred can you qu Escape occur what is

01:55

a quality

01:57

Escape I think that's the description of

01:59

what people are finding in their

02:01

inspections um uh anything that could

02:05

potentially contribute to an accident

02:09

what quality didn't escape a part of the

02:12

plane did that's a terrible answer when

02:15

you asked how an unsafe plane flew in

02:18

the first place we need more information

02:20

than essentially the plane was unsafe

02:22

yeah everybody knows that there's a

02:24

hole in the side of it and the

02:27

exact nature of the Escape is pretty

02:29

alarming given that according to the

02:30

preliminary investigation four bolts

02:32

that were supposed to keep the door plug

02:34

in place were missing and when Alaska

02:36

checked their other max9 planes they

02:38

found loose bolts on many of them the

02:41

next day the FAA announced that every

02:43

Boeing 7379 Max with a plug door would

02:46

be grounded until they were inspected

02:49

which is a bit of a relief and honestly

02:51

kind of a fun image i' like to imagine

02:53

Stern FAA inspectors going up to each

02:55

plane and saying you are grounded Missy

02:58

no inflight TV for a month and yes

03:01

planes are girls cuz think about it they

03:03

always have snacks and constantly say

03:05

leaving right now and then don't move

03:06

for another 15

03:07

minutes case closed it's beginning to

03:11

feel like this might be a much broader

03:13

issue within Boeing because it comes on

03:14

the heels of a years long string of

03:17

alarming incidents from fires on board

03:19

to a pair of massive crashes that were

03:22

blamed on flawed Boeing planes and just

03:24

this week the FAA issued a stunning

03:27

order to the company the Federal

03:29

Aviation Administration gave Boeing 90

03:31

days now to come up with a plan to

03:33

address safety issues this comes after a

03:36

report released on Monday found

03:38

employees did not understand their role

03:40

in safety and they feared retaliation

03:43

for raising safety related concerns uh

03:46

those are big problems when you've got a

03:48

factory that is making Jets yeah of

03:51

course although to be fair workers being

03:54

unable to raise safety concerns is a big

03:56

problem in a factory that makes anything

03:57

no one wants grocery stores selling

03:59

Captain Crunch oops all rat poison and

04:02

all of this is striking for a company

04:04

that genuinely used to be seen as one of

04:06

the greatest in America and that's still

04:08

one of the country's largest exporters

04:11

so if a company this big and this

04:12

important seems to be this troubled

04:14

tonight let's talk about Boeing and

04:17

let's start with the fact the Boeing

04:18

used to be synonymous with quality and

04:21

craftsmanship it was founded by William

04:23

Boeing in 1916 and over the years it

04:25

built nearly 100,000 planes for the

04:27

Allied Forces the first stage of the

04:29

Satin five rocket and Air Force One but

04:32

they're best known for revolutionizing

04:34

commercial aviation in 1967 Boeing

04:38

introduced the 737 have made over 10,000

04:41

of them since and the company's success

04:44

rests heavily on its well-earned

04:45

reputation for excellence like in this

04:48

video from an annual shareholder meeting

04:50

the first step in making a difference is

04:52

believing you can we make the impossible

04:55

happen on a regular basis so it can be

04:59

done you you just have to think of a new

05:00

way to do it let's just do it right

05:02

whatever it is quality safety

05:04

environment do it right and make it

05:06

something that you can be proud of I

05:07

wanted to develop products that had a

05:09

global reach and a global

05:11

impact and I'm doing it

05:14

[Music]

05:17

now I mean that sounds pretty good we do

05:20

the impossible great love the impossible

05:23

let's just do it right yes let's Wrong

05:25

Feels Like a bad way to do it I want to

05:28

develop a globally impactful product and

05:30

I did good for you you're a little too

05:31

close to the camera but in general I am

05:33

on board in fact Boe had such a great

05:37

reputation for safety among Pilots there

05:39

was even a common saying if it ain't Boe

05:41

I ain't going which the company put on

05:43

T-shirts lanyards and mugs that you can

05:46

still buy on their website all perfect

05:48

gifts for someone who loves branded

05:50

merch and does not love following the

05:53

news and that Stellar reputation has

05:55

been credited to the company's engineer

05:57

centered open culture William Boeing

05:59

himself once said after noticing some

06:01

shoddy workmanship on his production

06:03

line that he would close up shop rather

06:05

than send out work of this kind and one

06:08

project leader in the 80s and early 90s

06:09

is remembered for saying no secrets and

06:12

the only thing that will make me rip off

06:13

your head and down your neck is

06:15

withholding information and I'm sorry

06:18

but that should be the mug you want a

06:20

shift merch that's how you do it but

06:23

it's pretty clear that we're a long way

06:25

from that culture today and most

06:27

observers will trace the shift back to

06:29

this pivotal event a major announcement

06:32

today in the world of Aviation Boeing

06:35

and McDonald Douglas today announced

06:37

they would joined together to form the

06:38

world's largest aircraft manufacturer

06:41

this is I believe a an historic

06:44

moment in aviation and

06:47

Aerospace yeah the sky boys got business

06:50

married Boeing merged with McDonald

06:52

Douglas who were primarily known for

06:54

military planes and had a lousy

06:56

reputation for commercial airliners most

06:59

notably the dc10 which had multiple

07:01

accidents resulting in over 1100

07:04

passenger fatalities and look was

07:06

merging with the McDonald Douglas

07:07

Aerospace Manufacturing Corporation SL

07:09

murder Emporium that Boeing CEO's worst

07:13

decision probably not because he also

07:14

and this is true married his first

07:17

cousin so the last decision I'd ask this

07:20

guy to make is who it's a good idea to

07:22

couple up

07:24

with and while Boeing was the acquirer

07:27

in the partnership it soon became clear

07:28

that the McDonald Douglas culture which

07:30

was much more Cutthroat and profit

07:32

driven was going to become dominant

07:35

early on the McDonald Douglas management

07:37

team even gave their Boeing counterparts

07:39

a plaque featuring an Economist magazine

07:41

cover about the challenges of corporate

07:43

merges which sounds benign until you see

07:46

that the actual cover was this picture

07:48

of two camels and McDonald

07:50

Douglas exec added the line who's on top

07:54

and setting aside the weirdness of

07:56

gifting your co-workers camel porn it

07:58

begs the the question what was going on

08:00

at the economist back

08:02

then spare a thought for the employee

08:05

who dreamt of doing business journalism

08:07

only to find themselves digging through

08:08

photos of horned up camel banging

08:11

in the

08:12

dirt a year after the merger was

08:14

finalized boing announced a new stock

08:16

buyback program taking company money

08:19

that could have gone to making planes

08:21

and using it to inflate stock prices

08:23

instead and even mechanics at the

08:25

company noticed the culture shift there

08:28

is a m major campaign launched called

08:31

Share value and the idea was that they

08:35

wanted everybody to be aware of the

08:36

stock price and they wanted everybody

08:39

working together to increase the stock

08:43

value even the technical meetings

08:45

everything revolved around boing stock

08:47

prices yeah that's not reassuring

08:50

because that's not where you want their

08:52

priorities focused no wants to get on a

08:54

plane and he good afternoon this is your

08:56

captain speaking we had a few technical

08:58

problems but our maintenance crew is has

08:59

assured us that the stock price is still

09:01

holding strong so let's get this big

09:03

metal tube full of you and your loved

09:04

ones up into the sky shall we and the

09:07

culture change was solidified by the

09:08

decision to relocate the corporate

09:10

headquarters from Seattle where their

09:12

commercial planes were actually designed

09:13

and built 2,000 miles away to Chicago

09:17

because as their CEO put it when the

09:19

headquarters is located in proximity to

09:22

a principal business the Corporate

09:24

Center is inevitably drawn into

09:26

day-to-day business operations and yeah

09:29

it should be you're essentially saying

09:31

hey we're going to be making big

09:33

business decisions over here so we don't

09:35

need to be bothered with you nerds and

09:37

you're keeping planes in the air

09:39

now CEO Phil conit soon left

09:42

the company amid a Contracting Scandal

09:44

and was replaced by Harry Stoner the

09:46

former CEO of McDonald Douglas he was an

09:49

aggressive Cost Cutter who pushed

09:51

boing's management to play tougher with

09:53

its Workforce and to introduce the

09:54

slogan less family more team which

09:57

frankly would have been great advice for

09:59

Phil Condit when he was choosing a

10:01

romantic partner less Family Phil you

10:04

want to be a team but like not one

10:06

that's related by

10:08

blood but the problems with the whole

10:10

stock price first approach soon became

10:12

apparent during the production of the

10:14

787 Dreamliner it was a new lighter

10:17

plane the Boeing announced in 2004 but

10:20

Stone Cipher drastically cut the R&D

10:23

budget you know the money for creating

10:25

the plane even as the company authorized

10:27

large stock BuyBacks and dividends for

10:29

investors under his plans the Dreamliner

10:32

would be de developed for less than half

10:34

of what their previous new plane had

10:36

cost Bo also sought savings by

10:38

Outsourcing production to about 50

10:41

suppliers each of whom was responsible

10:43

for managing its own subcontractor so

10:45

basically the plan was for boing to

10:47

create the plane the same way someone

10:49

creates a gingerbread house from a kit

10:52

essentially assembling a bunch of pieces

10:54

other people made leading to a finished

10:56

product that structurally speaking was

10:57

always going to be a mess and

11:01

years later Boeing itself produced a

11:04

promotional video that admitted that

11:05

plan was a

11:07

Fasco executing a project of such

11:10

complexity proved to be more than some

11:12

suppliers could

11:14

handle wrinkles were found in the

11:17

composite skins from one supplier

11:20

Fasteners were incorrectly secured on

11:22

sections of the tail there were gaps

11:25

between units that were supposed to fit

11:27

tightly together we had our partners and

11:29

then they had Partners who had partners

11:32

and the different cultures and the

11:34

communication uh was very challenging

11:37

and added a lot of complexity you know

11:39

it's never a great sign when you're

11:41

talking about the manufacturing process

11:42

for a plane the same way a doomed open

11:45

thropple talks about their private life

11:47

we had our partners and then they had

11:49

Partners who had partners and

11:50

communication was very challenging and

11:52

added a lot of complexity and long story

11:54

short now we all have

11:57

chlamidia and on top of that Stone

11:59

Cipher was forced to resign in the wake

12:01

of an affair with a Boeing VP and was

12:03

replaced by the company's third CEO in

12:05

as many years Jim McNerney who if

12:07

anything accelerated the cost cutting

12:09

but despite all the setbacks from

12:12

Outsourcing Boeing managed to roll out

12:14

the dream liner on time in an elaborate

12:16

ceremony in 2007 except there was one

12:20

small catch we were all inside the

12:22

factory with artificial lighting big

12:24

stage Tom brocca huge

12:27

screens

12:30

then they open the doors of this giant

12:33

assembly Bay and en rolls this beautiful

12:36

beautiful aircraft we learned that the

12:39

whole thing was a

12:42

sham beautiful isn't it absolutely

12:46

beautiful I realized the doors were made

12:48

of plywood this plan that we were

12:51

admiring was completely a shell inside

12:54

what I realized walking around it is

12:56

that you could you know look up in the

12:58

wheel well and you could see daylight

13:00

wow what a historic moment so exciting

13:03

to see the unveiling of the first

13:05

airplane made entirely out of plywood

13:07

and lies the plane was supposed to take

13:10

its first test flight within two months

13:12

of that launch but unsurprisingly that

13:14

didn't happen in fact the Dreamliner

13:16

didn't carry commercial passengers for

13:18

years finally delivering planes three

13:20

years late and $25 billion over budget

13:24

and almost immediately there were

13:26

problems multiple planes had fires on

13:28

board including two in Boston and Japan

13:31

within 9 days of each other which

13:32

investigations link to a defective

13:34

battery made by a subcontractor that

13:37

Boeing had never audited so the FAA

13:39

grounded the Dreamliner the first time

13:42

it had grounded an airplane model since

13:44

the mcdonal Douglas dc10 in 1979 again

13:48

making it pretty clear that the wrong

13:49

attitude had prevailed after the merger

13:52

basically the wrong camel came out on

13:55

top and investigations revealed that

13:58

even people people building the

13:59

Dreamliner were worried about its safety

14:01

in 2014 aler released hidden camera

14:04

footage of a worker at a Dreamliner

14:06

plant asking fellow employees a pretty

14:09

pointed question did you fly one um no

14:14

you won't fly on

14:15

one did you fly on one of these

14:20

planes did you fly on one of

14:23

these probably not I would one of these

14:26

ples you wouldn't why wouldn't you huh

14:29

why wouldn't you because I see the

14:31

quality vide going down around here did

14:35

you fly one of these yeah it's sketchy

14:37

sketchy I probably would but I mean I a

14:40

death

14:42

too it's

14:44

true out of 15 workers he asked 10 said

14:48

they wouldn't fly on that plane and

14:50

honestly that last guy is almost worse

14:53

because if I had to pick between a plane

14:54

that two-thirds of workers refuse to get

14:56

on and one that would only be ridden by

14:58

death wish Dave I'd pick the former

15:02

every time but while the Dreamliner had

15:04

its problems at least it never had a

15:06

fatal accident but that cannot be said

15:09

for Boeing's next plane the 737 Max in

15:12

2011 as Boeing was rolling out the

15:15

Dreamliner its main competitor Airbus

15:17

was unveiling the A320 Neo a fuel

15:20

efficient update of their already

15:22

popular A320 planes and it was a wild

15:25

success Boeing caught completely off

15:27

guard quickly announced a new fuel

15:29

efficient plane it hadn't even

15:31

engineered yet the 737 Max they wanted

15:34

to get it out of the door as quickly and

15:35

as cheaply as possible McNerney even had

15:38

a catchphrase More For Less which became

15:41

the company's driving theme as it

15:43

embarked on the Max and all the while

15:45

under McNerney and his successor as CEO

15:48

Dennis mullenberg boing continued to

15:50

sign off on massive stock BuyBacks from

15:52

2014 to 2018 Boeing diverted 92% of its

15:57

operating cash flow to dividends and

15:59

share BuyBacks to benefit investors far

16:03

exceeding the money that it spent on R&D

16:05

for new planes workers on the production

16:08

line for the max described a process

16:10

that valued speed over safety and one a

16:13

military veteran worried that Corners

16:15

were being cut what words would you use

16:18

to describe that Factory at that point

16:21

dangerous um unnecessary Tak an

16:24

unnecessary risk he says he urged the

16:26

Boeing manager to shut down the factory

16:28

for a few weeks to straighten things out

16:30

and what was his reaction to that and he

16:32

said um you know we can't shut down and

16:35

and then I kind of got mad and said you

16:36

know I've seen military operations shut

16:39

down for a lot less what was his reply

16:41

to that something I'll never forget he

16:43

said um he said well the military is not

16:46

a profit Mak

16:47

organization wow what a response because

16:50

in a way you're right the military isn't

16:53

a profit-driven culture but they do have

16:55

pretty famously a very high appetite for

16:57

death and dest ruction so if someone who

17:00

worked there is going who slow down a

17:02

bit that seems like something that

17:03

should give you pause so the max was

17:06

rushed through design and production and

17:08

with tragic consequences on October 29th

17:11

2018 a Lion Air flight Bound for

17:13

Indonesia carrying 189 people including

17:15

three children disappeared from radar

17:17

just minutes after takeoff and was found

17:19

to have crashed into the water no one on

17:22

board survived investigations later

17:24

revealed that the plane's safety had

17:25

been compromised by a series of

17:27

shortsighted decisions Boeing had made

17:30

starting with the fact that to save

17:32

money Boeing decided it wasn't going to

17:34

build a new plane it was just going to

17:35

rapidly modify its existing 737 model

17:39

giving it new much bigger engines but

17:42

that brought some significant

17:44

complications because these engines are

17:46

bigger they had to be positioned further

17:49

forward and higher up on the wings and

17:52

so Boeing was worried about the plane

17:55

getting into uh too much of a nose up

17:59

and then the plane could

18:02

stall so if it starts to pitch up mcast

18:06

was designed to help the pilot level the

18:08

plane out yeah they added a system

18:11

called mcass or maneuvering

18:13

characteristics augmentation system very

18:15

basically when the plane came close to a

18:18

situation in which it might stall mcass

18:20

would in technical terms swivel the

18:22

horizontal tail fin to lift the tail up

18:25

and push the nose down or in

18:27

non-technical terms make the go face

18:29

down ass up but there was a fatal flaw

18:32

mcass which again could push a plane's

18:36

nose down on its own could be activated

18:39

by a single sensor the angle of AAG

18:42

sensors protruded out of either side the

18:44

fuselage near the

18:47

cockpit if a happy birthday myar balloon

18:50

gets stuck on that vein it becomes

18:55

unreliable but believe it or not we hit

18:57

balloons we hit H Birds uh and all of

19:00

these things uh are not

19:04

uncommon it's true the whole system

19:07

could be compromised by a balloon a

19:10

testament to how problematic it is to

19:11

use a single sensor and yet another

19:14

reason to hate balloons think about it

19:16

they're exhausting to inflate they scare

19:18

the out of you when they pop and

19:19

uninflated they just look like a pile of

19:21

clown condoms balloons are terrible but

19:25

it gets worse cuz Boeing didn't tell

19:28

Pilots about mcass cuz remember they

19:31

decided to market the plane 2 Airlines

19:33

as a money saver and a massive selling

19:35

point was that the max wouldn't require

19:37

Pilots to be retrained in a flight

19:40

simulator that that's a pretty big

19:41

expense for an airline as it takes

19:44

Pilots out of the air for multiple days

19:46

Boeing was worried that if they

19:47

emphasized mcass as something new it

19:50

might require more training so it told

19:52

Airlines and Regulators that the max was

19:54

so similar to the old 737 simulator

19:57

training wouldn't be necessary and that

20:00

is something even the mother of one of

20:02

the Lion Air Pilots whose flight crashed

20:04

thought was a bit weird at the time I

20:07

said you haven't had a simulator

20:08

training how can you go for Max and it

20:11

is a more powerful engine so without a

20:14

simulator how will you manage he said

20:16

mom I've been given round training they

20:19

have given me a training on iPad I said

20:22

what an iPad that is wild it is bad

20:26

enough that iPads are replacing half the

20:28

staff at Panera

20:30

breit it is worse when they're replacing

20:32

practical training for dangerous jobs

20:35

Boeing gave Pilots a 2hour iPad training

20:38

course that never once mentioned mcass

20:40

what's more it wasn't in the manual at

20:42

all unless you count the glossery which

20:44

defined the term but didn't explain what

20:46

it did and it turned out that a faulty

20:49

mcast activation was what had doomed

20:51

that Lion Air flight and when American

20:53

Airlines Pilots met with Boeing

20:55

Executives after the crash and angrily

20:57

pointed out no no one had been told

20:58

about mcast the answer they got was

21:01

ridiculous these guys didn't even know

21:03

the damn system was on the airplane nor

21:05

did anybody else we try not to overload

21:07

the crews with information it's

21:09

unnecessary I would think that there

21:11

would be a priority on putting things

21:13

explanations of things that could kill

21:15

you

21:17

exactly how is information about a

21:19

system that could crash the plane

21:21

unnecessary it's not all Froot Loops are

21:23

the same flavor or identical twins don't

21:26

have the same fingerprints or if you

21:27

give a mirror to a dolphin they'll

21:29

admire their own genitals all of that is

21:32

good information but unnecessary for a

21:34

pilot to know but we put some software

21:37

on the plane that might try and murder

21:39

you feels important in the aftermath of

21:42

the crash Boeing told us airline pilot

21:44

that they'd have a software fix for

21:46

mcass ready within about 6 weeks and the

21:49

max was allowed to keep flying but they

21:52

didn't the only thing they accomplished

21:54

in those six weeks were and you're never

21:56

going to believe this authoriz ing a

21:58

record $20 billion of stock BuyBacks so

22:02

clearly they were concerned about safety

22:04

specifically the safety of their

22:06

stock price and so a little over four

22:09

months after the crash while Boeing was

22:11

still working on its six week software

22:13

fix Ethiopian Airlines flight 302 a 737

22:17

maxjet crashed after mcass activated

22:19

erroneously again killing everyone on

22:22

board and by that point those Pilots

22:25

knew what mcass was but they still

22:27

weren't able to correct its erroneous

22:29

activation in time 3 days later the FAA

22:32

finally grounded the max but only after

22:35

all these countries had first it was

22:37

grounded for almost two years until

22:39

Boeing developed ways to make mcass less

22:41

error prone and easier to override and a

22:44

damning congressional investigation

22:46

later revealed internal messages showing

22:47

that Boeing knew how dangerous mcass was

22:50

throughout the plane's development in

22:52

2012 one of Boeing's own test pilots had

22:55

failed to recover from mcass activating

22:57

in a flight s simulator a situation that

22:58

he described as catastrophic and some of

23:01

the messages between Boeing Employees

23:03

were damning hundreds of emails and

23:06

instant messages show employees mocking

23:09

the FAA the company and problems with

23:11

the airplane one writing this airplane

23:13

is designed by clowns who in turn are

23:16

supervised by

23:18

monkeys that's pretty bad although part

23:21

of me wish is that he kept going there

23:23

they're designed by clowns who are

23:24

supervised by monkeys who report to

23:26

caffeinated toddlers who overseen by a

23:28

bunch of floppy puppies were monitored

23:30

by a wasted bachelorette party whose

23:32

boss is just a large inflatable

23:34

tubean so at this point you might

23:37

reasonbly be asking where the are

23:38

The Regulators should the FAA have

23:41

caught this before people died and given

23:43

that the answer to that is definitely

23:45

yes what happened well the agency relied

23:48

heavily on Boeing Employees to vouch for

23:51

the Maxi safety because they lacked the

23:53

ability to effectively analyze much of

23:56

what Boeing shared about their new plane

23:58

one employee even said he thought a

24:00

presentation for Regulators was like

24:02

dogs watching TV because they didn't

24:04

understand what they were seeing and I

24:06

really hope that's not true I hope dogs

24:09

do understand what they're watching on

24:11

TV otherwise I did those deep Dives on

24:13

squirrels breathing out of a up

24:15

little nose and poodle anuses for no

24:18

reason at all and incredibly much of the

24:22

oversight was being done by Boeing

24:24

itself for five decades uh manufacturers

24:27

like Boeing were allowed to use what

24:29

they call FAA designated inspectors

24:31

first to certify that the planes were

24:33

airworthy in the beginning and then on

24:34

the assembly line to inspect each plane

24:36

as it went down went down the line

24:37

here's the problem those FAA inspectors

24:40

were employed by Boeing there's a

24:43

conflict of interest there of course

24:45

there is Boeing was paying Boeing

24:48

Employees to regulate Boeing it's the

24:50

most incestuous relationship we've seen

24:52

in this story so far which is saying

24:54

something cuz remember this guy was

24:56

his first cousin

24:59

and while this system of self-regulation

25:01

has been in place for decades it was

25:03

supercharged from 2005 onwards after

25:05

Boeing successfully lobbied to reduce

25:07

government oversight of airplane designs

25:09

basically allowing it to regulate itself

25:11

even more and unsurprisingly several of

25:14

these Boeing employed representatives of

25:16

the FAA have said they faced heavy

25:19

pressure from managers to limit safety

25:21

analysis and testing so the company

25:23

could meet its schedule and keep down

25:25

costs at every point along the way the

25:28

FAA either delegated responsibility to

25:30

Boeing or gave them the benefit of the

25:32

doubt which hopefully they will never do

25:35

again because Boeing like so many

25:37

American companies seems to be coasting

25:39

on a reputation it built up over decades

25:42

even as it squanders it quarter by

25:44

quarter and if you're thinking hey John

25:45

don't you work for a Prestige company

25:47

that got taken over and had the name Max

25:49

slapped on its signature product hey I

25:51

don't know what you're talking about the

25:52

situation is completely

25:55

different new business daddy is so mad

25:57

at us all the time so what now well the

26:02

truth is Boeing's not going out of

26:04

business anytime soon it's one of just

26:06

two major commercial airplane

26:08

manufacturers in the world so we don't

26:10

need them to disappear we need them to

26:12

get better the key question is can they

26:15

fundamentally change well thanks in part

26:17

to pressure from the families who lost

26:19

loved ones in those crashes Congress did

26:21

passed by partisan legislation rolling

26:23

back some of Boeing's ability to oversee

26:26

its own planes and it's encouraging that

26:27

the FAA is now insisting Boeing come up

26:29

with a plan to address safety in 90 days

26:32

though we'll see what that brings and

26:34

Boeing will say it knows that it's made

26:37

mistakes in the past but that under the

26:38

leadership of their CEO Dave Calhoun You

26:41

Know M quality Escape they are

26:44

approaching the challenges they

26:46

currently face with a new spirit of

26:48

accountability and complete transparency

26:50

but it's really hard to trust that given

26:52

that Calhoun served on Boeing's board

26:54

since 2009 through many of the worst

26:57

decisions you've seen tonight and

26:59

there's also the fact that 737 Max 8 and

27:02

9 planes are still flying despite an FAA

27:05

directive last August highlighting a

27:07

serious new issue warning that if pilots

27:10

on the max used an engine anti-icing

27:12

system what One Pilot described to us as

27:14

the equivalent of a car's back

27:16

windshield defogger in dry air for more

27:19

than 5 minutes it could shatter the

27:21

engine's housing causing a hazard to

27:24

window passengers decompression and

27:26

potential loss of control of the

27:27

airplane and while Calhoun claims he's

27:30

very confident they'll have a fix which

27:32

is such great news in the meantime

27:35

Boeing is asking Pilots once more to be

27:38

the last line of defense one that we

27:40

spoke to even sent us a photo of this

27:42

Post-It note he uses in his cockpit to

27:45

remind him to turn off the anti-icing

27:47

system along with an iPhone timer and

27:50

that is too much pressure for a

27:52

Post-It note they shouldn't be the last

27:55

line of defense against plane crashes

27:57

they should be the the last line of

27:58

defense against Sheila from marketing

28:00

eating your chabani out of the work

28:02

fridge Boeing whistleblowers who want

28:05

this company to get better have

28:07

repeatedly said it won't change until it

28:09

has new leadership and Boeing may not be

28:12

able to Coast on its reputation much

28:14

longer as demonstrated by the fact that

28:15

on booking sites like kayak you can use

28:18

this menu to select specific Boeing

28:20

models and exclude them from your flight

28:23

search they've actually moved that

28:25

filter up the page following a spike in

28:28

usage and you know things are bad when

28:31

the general public is getting this

28:32

knowledgeable about specific play models

28:36

look it is pretty clear something has to

28:38

change at Boeing and it has to be at the

28:41

top of that company because if you are

28:43

truly too big to fail that should mean

28:46

that you are big enough to spend the

28:48

time and resources required to fix the

28:50

culture that you have destroyed and in

28:53

the meantime the very least you can do

28:54

is advertise the kind of company you are

28:57

in a much more accurate

29:00

way at Boeing we make the impossible

29:03

happen on a regular basis at Boeing we

29:06

take pride in our work at Boeing

29:09

we sorry can can you back the uh camera

29:12

up a little bit really

29:16

close at Boeing we I'm sorry it's ve it

29:19

feels very

29:21

tight at Boeing we believe the first

29:23

step in making a difference is believing

29:25

you can and I'm not talking about any

29:27

difference I'm talking about a positive

29:29

difference in share price the share

29:32

price needs to go up and stay up like

29:35

our planes do almost all of the time

29:37

since it's founding Boeing's been built

29:39

on quality safety and trust and then we

29:43

thought let's try something new I joined

29:47

Boeing because I wanted to invent things

29:49

no one ever dreamed of and they told me

29:51

if I wanted to do that what I needed was

29:53

to invent a time machine to

29:56

1992 I did tell him that and I think the

29:59

joke landed like our planes do almost

30:02

all of the time whatever it is we do at

30:04

Boeing let's do it right or let's do it

30:08

close enough to right that no one can

30:09

tell the difference from the outside and

30:11

then everyone will just keep their mouth

30:13

shut the engineers don't always agree

30:16

with our business decisions and we

30:18

encourage them to speak up and when they

30:20

do I usually say what I can't hear you

30:23

our offices are so far from

30:26

Seattle airplane design is about

30:29

Precision Care attention to detail and

30:32

then someone telling you to work so

30:33

quickly you make the whole thing

30:34

vulnerable to a balloon we like

30:37

to cultivate a profit-driven philosophy

30:39

here at Boeing and we've got the camel

30:41

porn to prove it who's on top we are

30:45

look man I'm doing what I can I try to

30:47

report everything I see to the FAA see

30:49

that there's a boat missing here so I'm

30:51

going to report

30:53

it at Boeing we oh hold on on get a

30:59

text yeah yeah wait you work for the FAA

31:03

yeah I do the faa's job but I actually

31:06

work for Boeing it's super allowed it's

31:09

super allowed oh apparently there's a

31:13

bolt missing it's fine do you even know

31:16

how many bolts there are on an airplane

31:19

too many you lose one or two that's

31:21

surrounding error the boys on the

31:23

factory floor call me Usain cuz I'm all

31:26

about the ball

31:27

also because I work really fast like

31:30

scary fast like people should be scared

31:31

about how fast I work is it okay if I

31:33

take these home quality is at the

31:36

Forefront of everything we do at Boeing

31:38

and sometimes it's so far in front that

31:40

it escapes whoops quality come back get

31:44

back here

31:46

you I'm not sure I'd want to get on one

31:48

of these planes oh I definitely wouldn't

31:50

get own

31:52

one I I would yeah but that's different

31:56

because you have the a Death Wish thing

31:58

yeah the the Death Wish thing mhm we're

32:01

Bo and we're focused on the important

32:04

things raising stock prices increasing

32:07

stock prices making stock prices bigger

32:09

or elevating stock prices delivering

32:12

value to shareholders at any and all

32:15

human

32:16

cost boing we went to business school

32:20

get on our

32:22

[Applause]

32:26

plane