But inevitably this is also a savage blow to the airline industry as a whole, to the company operating the aircraft, Air India, and most of all to the beleaguered manufacturer, Boeing.
It is about ethics, about how the pursuit of short-term profits can not only undermine engineering competence built up over many years, but also lead to human tragedy – and ultimately to financial disaster too.
In short order, a group of managers trained by the legendary Jack Welch at GE brought his aggressive style of management to Boeing. They put pressure on managers to cut costs, moved the headquarters away from Seattle where the planes were assembled, outsourced parts of manufacturing to suppliers which were then further squeezed down – and according to a Federal Aviation Administration audit failed to meet quality control standards in their production of the 737 Max. That was the aircraft involved in two fatal crashes, in 2018 and 2019.
Well, anyone who has reported on how polished chief executives present themselves to the press will have a certain scepticism about this sort of statement. But to be fair, Ortberg was head of Rockwell Collins, one of the suppliers to Boeing, so he knows what it was like to be squeezed by his client to cut costs. He has come out of retirement to do the job and, as he said, moved to Seattle to do so. And so far his actions have been generally welcomed as a clear break from the culture of recent years.
Until 2019 Boeing was the world’s largest aerospace company by revenue. Now it is number two. And, in 2023, the number of Airbus aircraft in service passed Boeing for the first time. The order book for Airbus planes is longer than that for Boeings, and it will at best take a decade for the American company to claw back the advantage it lost to its European rival.
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The narrow point is that Donald Trump wants to revive US manufacturing. Well that is not going to happen if the country’s largest manufacturer, Boeing, continues to lose ground to Airbus.
So if Ortberg can succeed in turning Boeing round, then it would show that focus on excellence matters more than trying (and actually failing) to make the fast buck. There is nothing helpful to add at this stage about the impact on Boeing of this latest catastrophe.
What is worth saying is this: ethics matter in business. Investment in technology and people is more important than the next quarter’s profit figures. And while Boeing has been a dreadful story of what happens to a once-great company if badly run, there is hope that lessons have been learnt and it will rebuild its reputation.
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