Gus Carlson is a U.S.-based columnist for The Globe and Mail.
It seems a reasonable and rational guideline for running one’s life – and business: If you take care of the small things, the big things will take care of themselves.
If only Emily Dickinson had been on Boeing’s executive leadership team or its board of directors.
As it becomes clearer that a critical element of the beleaguered aircraft manufacturer’s problems is its outsourcing of small things to third-party suppliers to save money at the expense of quality, someone at the Virginia-based giant must be wishing its decision-makers had paid attention to the simple, if quaint, observation by the 19th-century American poet.
Those small things Boeing delegated in the name of profitability have put big things at risk – namely, the safety of millions of travellers who fly in its aircraft and, perhaps, even the long-term health of the company itself.
Any business person who has outsourced tasks, critical and otherwise, knows that no matter how diligent the oversight, monitoring and maintaining consistent quality control downstream is difficult. For many manufacturers, flaws in the value chain are annoying and cost money to fix. But they aren’t life and death.
Not so for Boeing. On a multimillion-dollar aircraft designed to carry hundreds of passengers, the stakes are higher, and virtually every element, including the small things, matters. The quality and care with which parts are made, installed and repaired have very tight tolerances. And the flying public expects that.
But in what is a virtual duopoly in the aircraft-building industry – Airbus is Boeing’s only major commercial competitor – breaking that contract with customers in the name of saving a few bucks is apparently a little too tempting.
Yes, regulators have come down hard on the company with groundings and inspections. Earlier this week, the U.S. Department of Justice launched a criminal probe into the now-infamous mid-air door plug failure on an Alaska Airlines Boeing 737 Max 9 in January. The National Transportation Safety Board concluded the likely cause was the failure to reinstall bolts on the door – small things – after they were removed during repairs last fall.
While investors have cooled on Boeing shares in the past two months and poked Boeing executives for answers, there has been a remarkable lack of outrage from shareholders calling for changes to the way the company does business. Complacency, in this case, is complicity.
The sad truth is that without a truly competitive market, there is no burning platform to demand change even if it means improving the life-and-death equation.
The question now is, how much more bad news will it take before someone other than regulators and the DOJ stands up and says enough is enough?
Since the near-catastrophic Alaska Airlines incident, things have gone from bad to worse for Boeing, both in the air and on the ground.
In the air, dozens of people were injured this week when a LATAM Airlines Boeing 787 Dreamliner flying from Sydney to Auckland suddenly lost altitude. The pilot said the failure of a critical instrument caused him to lose control of the aircraft, sending it into a dive and throwing passengers around the cabin.
The same day, a United Airlines Boeing 777-300 bound for San Francisco from Sydney with 180 passengers aboard turned back two hours into the flight because of what the airline said was a “maintenance issue.” These mishaps followed an incident the previous week when a wheel fell off a Boeing plane leaving San Francisco.
On the ground, several airlines reported this week that their orders for new Boeing aircraft are being delayed by these safety issues. Delta Air Lines said its order for new 737 Max 10s won’t arrive until 2027, two years late. United Airlines faces similar delays and said that without the 277 Max 10 planes it has ordered it will need to rethink its long-term plans.
Adding a mysterious and macabre element to the issue, a Boeing whistle-blower who called out quality-control problems at the company’s 787 Dreamliner factory in South Carolina last year was found dead this week from what police say was a self-inflicted gunshot wound.
To be sure, because of the scrutiny on Boeing, every incident is capturing media attention. It’s important to note that every day thousands of Boeing aircraft around the world complete their journeys without incident.
But under the magnifying glass that now dogs the company, everything is fair game, including those who are actively trying to be part of the solution – and those who are increasingly conspicuous in their absence.
Investors should be bringing more pressure to bear on the company to pay attention to the small things at the root of its big problems, voting not only with their wallets but with their voices. They need to remember that their reputations are also on the line, and if there is a catastrophic event involving the loss of life, the blood will be on their hands, too.