Boeing’s problems are now as big as its 747 jumbo-jet. Years of dubious decisions have eroded much of the plane-maker’s goodwill with regulators, customers, passengers, and shareholders. The best way to regain it would be to uproot the corporate culture and go back to the drawing board on a new aircraft.
A Gen eral Electric logo is seen on the engine of a Boeing 777-9 aircraft on display during the 54th International Paris Airshow at Le Bourget Airport near Paris, France, June 18, 2023. REUTERS/Benoit Tessierproblems are now as big as its 747 jumbo-jet. Years of dubious decisions have eroded much of the plane-maker’s goodwill with regulators, customers, passengers, and shareholders.
Stonecipher set out to change Boeing’s culture “so that it is run like a business, rather than a great engineering firm.” He opted not to develop a new narrowbody jet, cut experienced staff and farmed out much of the work on the 787, which led to disastrous delays and cost overruns. Successor Jim McNerney, also from GE, stayed the course, tweaking the 737 rather than starting from scratch.
An outsider with a fresh management approach would have some wiggle room, too. Boeing only has one sizeable competitor, Airbus, and both companies are sold out for years. This market dynamic should enable a CEO to focus more on investing in quality while also making more pressing fixes to the 737 MAX.
Even that amount might be a stretch for Boeing. It anticipates generating $10 billion of free cash flow a year, which would be enough. But it hinges on putting the 737 MAX problems behind it, a date that keeps being extended, jeopardizing potential funding for a new model. Another option would be to offload the defense, space and security division. It lost money last year, but recorded $25 billion of revenue.
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