Boeing | No Nerds, No Birds | 2
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It's April twenty eighth, two thousand and nine chicago, illinois, an airspace reporters sitting in the back of an uber, gazing out the window as they approached the field museum of natural history. Up ahead, he can see a small group of protesters standing outside the museums entrance.

Some of them are holding signs that say things like boeing, arrogance kills others hold post size photos of their are loved ones, people the reporter recognizes as victims of the most recent boeing 737 max eight crash。 The reporter has been covering commercial air travel for years, and he's been closely following the situation of boeing since the first max a crashed six months ago. Right from the star, he had questions about how a brand neu plane could simply fall out of the sky. And since a second maxi crash just last month, those questions have only grown .

more urgent.

but so far, boeing has not been forthcoming with any answers. The company admits that they installed a new software component called m cast on the planes without telling pilots. They also admit that in both crashes, that system now function, but the company insists that they followed all proper safety protocols when installing m.

cas. And that pilot error was what LED to the accidents reporter thinks. There's more to the story though, and that's why he's here.

Boeing has rented out the museum for its annual shareholders meeting, and in a few minutes, the company, CEO dan's mollen berg, is scheduled to hold his first press conference since the two crashes. So when the reporters, uber, pulls up to the curve outside the museum, he head straight for the entrance. Inside, he identifies himself to security.

They search his bag and make him walk through an x ray machine before finally drain him to a press room just off the lamy. The room is already filled with other reporters seated and rose of folding chairs. That face electron at the front. The reporter suffers over to a seat in the back. Then he pulls out his no book and reviews his prepared questions, making sure he will be ready when called on.

Then, after a moment, mEllen berg strides up to the lecture, his grain hair is trimmed, ed into a crew cut, and he keeps his blue eyes turned down, away from the gaze of his a woman hover is not far behind him, looking ready to jump in if mulberry gets himself in a trouble. The reporter recognizes her as a member of bowing P. R.

team. Molly berg then pulls a piece of paper from his inside pocket and setts on the electron. Then he leaned into the microphone with a calm but stern expression on his face. I appreciate you all join us here this morning. Before I take your questions, i'd like to share a few brief open in comments all of us are calling are deeply sorry for the loss of life and the eth OpenAIrlines f light t hree o t wo l ine a irflow s ix t en a ccident n othing m ore i mportant t o u s t han t he s afety o f t he p eople w ho f ly o ur a irplanes e very d ay. Five point three million people fly safely on boeing plants.

Millburg continues in this vain, talking up, blowing safety record and insisting that the company has been working with regulators to fix the m cas software by in addition to the software upgrade we're working on, we're also committed to going above and beyond on train while we focus on the safe return, the service of the max. The fundamentals of our market and our business remains strong. With that, will be happy to take your questions all at once.

The journalists raise their hands and millburg points to one near the front. There are a lot of passengers who are afraid of the max. Why should they trust boeing that he would be safe with this uprising? We do regret the impact this, the tana passengers, and we know we have to work to return that trust.

How exactly do you think the software upgrade is enough? We know in both accidents there was a chain of events. One of the links in that chain was the activation of the m cas system because of ironies angle that happened. We know that is a link that we own, is our responsibility to eliminate them risk, and the software update does exactly that. And confident with this change, the max will be one of the safest airplanes ever to fly.

Millburg then points to another reporter, in light of the crisis facing your company, have you considered resigning? I've had the privilege of working for boeing for thirty four years, my intendente st, to continue to lead on the front of safety and quality and integrity. That's who we are, the company.

That's what i'm focused on. Next, you you said that m. Cas Operated as designed, you couldn't possibly have designed a system that would activate twenty one times, pushing the nose of the playing down to the poo and fun recover will die.

In in the case of the m past failures scenario is something called a runaway stable as your procedure， if that kind of scenario occurs, you go to root checklist. And in some cases, that procedure was not completely follow. But the iope an piles followed that, and we're still unable to recover.

Even from the back of the room, the reporter can see mulan bergs john muscles tensor as he feels one tough question after another. I think it's really important that we all focus on letting the investigation, but to course, our job is to focus on safety, not speculation. We're going to continue to support the investigation process, and I would suggest that the right way to handle millburg brusk answers a few more questions and not, and leaves the lector at the back of the room.

The reporter is frustrated. He never got to ask his questions, shout out from the back three hundred, says people have died. Can you answer a few questions about that? But Molly berg doesn't look back, the reporter checks is watch the press conference lasted fifteen minutes.

This would be shameful behavior from any company, but from the country's preeminent airplane manufacturer. We had two of its own planes crash within six months. It's unconscious, so the reporter feels more determined than ever.

He's not gone to stop investigating until he gets some real answers. And looking around, he can tell he's in a room full of journalists who feel exactly the same way. American scandal is sponsored by audio.

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From wondering island's y gram and this is american scandal.

After two boeing planes crashed within five months of each other in nearly identical ways, journalists and government leaders became determined to find out exactly what went wrong. What they learned was that, similar to a plain craft, there was a chain of events at boeing.

This chain stretched back decades, a series of decisions and mistakes that all LED to two brand new boeing seven thirty seven max planes nose diving out of the sky to trace those events back to their starting point. Investigators began in the one thousand nine eighties when a boeing plane was involved in another fatal axa. At that time, the response from the company's than CEO could not have been more different than denis mullen.

Berks, this is episode too. No nerd's, no birds. At september thousand nine hundred eighty five, thirty three years before the line aircraft h bowing CEO thirteen, Wilson is marching through the company's headquarters in sean's washington.

As he walks past rows of his employee's desks, he can see that they're trying to avoid eye contact, and he can understand why it's a time of crisis for the company. A few weeks ago, a boeing seven forty seven Operated by japan airlines crashed into a mountain. Five hundred and twenty people died, making IT.

The deadly single plane crashed in aviation history. Investigators believe that pressurized air blasted through an opening in the bulky, causing the tail to explode. But why that happened is still unknown.

Inspectors around the world are examining seven forty seven to see if the accident was caused by a design problem. And if they find one bowyer's entire fleet of seven forty seventh could be grounded, that would be devastating for boeing. They've never had one of their planes grounded before.

And rival manufacturers like airbus and a Donald Douglas will be short of pounds on bowlings failure when Wilson reaches his corner office. Boeing president Frank thrones has already inside waiting. Thrones has a manila folder in his hand in a worried expression on his face.

Jhones tells Wilson that the investigators have sent over to an initial report on the japan airlines crashed. They believe the accident was caused by a faulty repair made by a boeing employee. Wilson sits downside in his chair.

This is not what he was hoping to hear, but he tells shorts to give him the details. Trones explains that seven years ago, this particular seven forty seven made a hard landing that damaged the il. Because the damage was significant, bowing sent a team to japan to conduct repairs, but IT appears that the crew repair the tale incorrectly.

Now investigators believe that this error is what caused the tale to explode the plane to crash. Chron suggests some possible responses. He points out that they could say this is just the investigators theory that they don't know for a fact that this pacific r actually caused the accident, or they could say they need more information before commenting.

Wilson nods. He knows what trances pitching is the expected response. It's what most companies would likely do in this situation. But to Wilson, IT doesn't feel like the boeing response.

Boeing presently controls fifty two percent of the commercial plane market, far ahead of the second place, mcDonald Douglas, with just nineteen percent. And Wilson believes they've earned that dominance in part by being the kind of company that will do the right thing no matter the cost. So he looked france in the eye and says, boeing will not deflect.

They have to acknowledge that an incorrect repair was made by their own maintenance crew, that all the evidence points to this being the cause of the crash. Chronis benches and asks if Wilson is shore. This is a big admission. There could be fines or lawsuits, but Wilson is certain that this is the right move. And it's not purely about integrity.

If boeing admits to one isolated mistake on a single repair and it's less likely that the regulators will feel the need to ground the entire seven forty seven fleet, trance nods and says he'll start working with communications department to put together a statement as leaves the office wills and leans back in his chair and feels good about this decision. They're going to respond honestly and face whatever consequences because that's the boring way. Thirteen willson's decision to own up the maintenance teams air catches japanese regulators by surprise, but IT shouldn't have.

Boeing had been Operating with that level of integrity for decades. When boeing first started designing commercial airplanes in the nineteen fifties, the aviation industry was Young and regular. People were nervous about taking to the skies.

The leaders at bowling knew they had to change that, and in order to grow their business, make people feel safe. So when designing their first commercial planes, the company instituted rigorous testing protocols. And when hard choices came up between costs and safety, rowing always chose safety.

In october one thousand nine hundred and fifty nine, the company decided to delay the release of its new seven o seven commercial jet to completely overhaul the design of its rudder following a test flight accident. The change was expensive, but he was the safest thing to do. So boy, did IT their commitment to safety pay off.

Over the next three decades, boeing became one of the most successful and trusted brands in the world. Pilots eventually came up with the saying, if it's not boeing, we aren't going. The company also earned a reputation for valuing its engineers.

Executives came out of the engineer's ranks, and every employee from top, the bottom, was encouraged to speak up if they saw something that could be improved by the late thousand nine hundred and sixty, boeing was the most dominant aircraft manufacturer in the world, and their latest plane, the seven, thirty seven, became the workforce for many airlines. But in the early one hundred and ninety, things started to shift. In thousand nine hundred and ninety two, one of bowings most reliable customers, united airlines, stuns s.

The company went at halts orter of the thirty and instead buys planes from boeing ing european and competitor airbus. Airbus was founded in one nine hundred and seventy and had long lagged behind, bowing and market share. But they started to turn things around when they announced a revolutionary new plane called the a three twenty.

In addition to room your seats, the a three twenty had a resigned n flight control system that allow the plane to fly almost entirely on autopilot. IT was a genuine breakthrough, and soon airbuses sales started cutting into boeing's market chair, culminating in the surprise deal with united airlines in one thousand nine hundred ninety two. And in the years after airbus continues to cut into bowings market share.

So in one thousand nine hundred and ninety six, when boeing CEO feel content, gets word that rival company mcDonald Douglas is interested in a merger. He's all years on paper. The merger makes perfect sense.

A Donald Douglas is known for its military plans, but its commercial aircraft division is weak. Bowing is the opposite. So together that should be formidable across the board.

Going into merger talks, boeing has the upper hand. McDonald Douglas has faced a series of setbacks in his own shaky financial ground. They need this merger to survive.

But medal .

Douglas CEO Harry stone safer is a shark online bowings fill conduct. He rose through the engineering ranks. Stoney fer studied under jack welsh, the natta ously cut rote leader of general electric, obsessed with cost cutting and profits. And like his mentor stone cyber, dominates the negotiations. Later, industry observers would know that during the merger, the mcDonald's glas team acted like hunter killer assassin, going up against a group of boys counts.

So when the deal closes in one thousand nine hundred and ninety seven, a huge wan from mcDonald Douglas, the joint company, retains the boeing name, but stone cypher and another mcDonald's glas executive become two of the largest individual stockholder and also take high ranking executive roles behind close doors. People say that can IT, who is technically still C E, O now, just does stones cypher's bidding. IT is seen as too conflict averse to stand up to jack welches protege.

And soon long time boeing employees begin to notice changes and how the company is run. In may one thousand nine hundred ninety nine, boiling engineer stand sorter is reviewing some design at his desk. He's lost track of how many times he's gone over them, but he's not onna stop until he's sure he hasn't missed anything.

This is the way sourcing has worked for boeing for almost twenty years, and he has a reputation for being a perfectionist st, and he's proud of that in the business of eron odal engineering mistakes can be deadly, so sourcing is deep. And thought when an assistant comes by and dropped mavor's desk sourced picks IT up and begins to read, but before he's even two sentences in, he's already rolling his eyes. Earlier in the week, a representative from the hedge fund that is now boeing's largest shareholder stopped by to meet with the finance team.

Doing CFO like what he had to say so much that she's had the whole thing transcribed and distributed throughout the company. And as source continues reading IT, he becomes more and more outraged. The hedged fund rap says that wild boeing thinks that special, because that makes plains IT still has to compete with companies that practice values based management, that is, companies that keep production costs low and stock Prices high.

The memo even threatened that if bowling doesn't improve its stock Price, IT might become the target of a hospital. When scher is done reading, he's fuming. He gets up and walk over to a coworker in a cubicle.

A few rose down and over the three quarter height wall he can see his colleague reading the same memo with a scale on his face. Source are wrap on the fabric covered wall of the cubicle. Reading something interesting.

You see this bs, yeah, like our new overlord. S don't understand. You can't just want a plane company the same way you run a you ever think you'll click with them that the product we make has the potential to what kill hundreds of people in one go.

If that does, I don't think they'll even care. They're all being counters. It's all about the bottom line of them.

Now speaking of being counters, you see that interview that Deborah hawkins gave a bloomberg. I don't even remember who that is, our new CFO. That's where this metal came from, SHE said.

It's important that boy not be overly focused on the plane itself. Oh god, what does that even mean? That means forget about the plane.

It's about profit. H sourced colleague and leaned forward, speaking lower all of stand unit, gently, worried about what's gona happen. All these changes are making the planes worse.

And I thought, what's keeping me up at night? I'm worried too. What do we do? We're still engineers.

And engineers have always have been the heart and soul in this company. So we'll keep doing what we do, ensuring that we make the best, safest planes out there. We can't just keep our mouse shop and we see corners cut.

Sourcing colleague nods, but he doesn't look fully convinced. Sourced turns back to his work station, determined to go over the design he was reviewing one more time because he feels an even greater sense of responsibility to ensure that they're perfect. Later, in one thousand nine hundred ninety nine, stand source's faith in his employer is shaken further when the union representing the engineers begins negotiations for a new contract.

Boeing comes out with an aggressively low ball offer. They refused to write any kind of bonus structure into the new contract and even suggest rolling back some of the health and dental benefits included in the old one. The engineers are live in talks, reach an impasse, and a strike is thread, but bowing president Harry stoney's r to act as human resources team, not to restart negotiations.

In december one thousand eight, ninety nine members of the engineers union formally reject boone's contract over and authorize a strike. But even with that threat, boeing executives refused to budge. So the union announced a walk off set for federal nine two thousand.

But on the morning of the plan, event engineers stand, scher finds himself alone in the cold, standing outside the seven thirty seven factory in red in washington, sourced, checked. This watch is five minutes after nine in a wave of trepidation washes over him. The plan was for everyone to walk off the job at nine am sharp, then make their way over to a local football field.

Were engineers from all the factories in the area would congregate for a rilling. But sourcing has a sneaking feeling that the others have gotten cold feet for decades. Boeing has treated its engineers so well that the union was more symbolic than a true bargaining organization.

We've rarely had this kind of impasse over contract negotiations before. So a source worries that even though the engineers are angry, I don't think striking is for them. Some who voice concerns as striking is for auto workers and coal miners, not engineers with phds, but to source this strike is not about money and benefits.

It's about forcing executives to acknowledge that boeing is nothing without its engineers. The strike is about preserving the soul of the company. So sore shirt checks is watch again now, eight past the hour, and still no sign of any other striking engineers.

He's about to give off. When he hears what sounds like a stampede behind him, he turns to see a massive engineers pouring out of the factory. And as they get closer, he can hear them chanting, no nerds, no birds with their glasses, chunk y sneakers and calculator watches.

There are a far cry from the popular image of union workers, but they're acting like a union source of breaks into a wine friend. He rushes over to join the group and asks one of the engineers near the front what took them so long. He's told that they decided to march around the factory floor before coming outside.

And IT was great. All of the machinist cheered them on, and he wish his sourcing could have seen a look on some of the managers faces, sort ture, then takes a look back the stream of engineers behind him, things about the thousands more they're about to meet at the football field. And he feels a sliver of hope, if growing executives care so much about profits, don't want to end this strike as soon as possible.

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On the morning of february nine, two thousand, twenty three thousand of boeing engineers walk off the job is the largest y collar workers strike in U. S. history. But boeing president Harry stones side for an other top executives still refused to come back to the bargaining table table.

They convinced the engineers will break, so they let the strike drag on for weeks, but the engineers don't back down, and they decide to take their case directly to the company shareholders. Near the end of the month, several members of the union, including stand soca, show up at a bowling shareholder retreat. Their source approaches the hedge fund representative lectured boeing's finance team on value based management source, lets him know that the total cost of the bonuses and benefits that the union is asking for amounts to just seventy five million dollars.

The hedge fund rap can't believe how small that number is to him, seventy five million dollars as rounding air. Meanwhile, the Younger strike might cost boeing ten times there. So a few days later, the union gets work that boeing is ready to come back to the table.

IT takes another several weeks to reach a deal, but ultimately buying gives them to almost all of the engineer's demands. But this win does not earn the engineers the respect they were hoping for. Their relationship with management remains in tagish.

And eighteen months after the strike, boeing announced that its topic executives will no longer work in the same city where its planes are designed and built. The company is moving its corporate headquarters from seattle to chicago. This news comes as a shocked to engineers and industry insiders.

Bowing has been based just outside of since IT was founded in one nine hundred and sixteen, and the integration between the corporate officers and the factories had been considered a key to boying success. Veteran engineers, there's ized that the move is intended to create literal distance between them and the executives and ultimately to give the engineers less say. But as these internal ban els drag on, boeing faces another fight with rival airbus as they continue to gain on boeing's market chair, rapidly expanding airlines like jet blue and easy jet up to fly airbus a three twenties instead of boeing seven thirty seventh.

And in two thousand and three, airbus surpasses boeing in sales for the first time. The news comes at a tomato ous time for boy fill content has just resigned a CEO Harry stone cyber has been named as his replacement, but shortly into stone cyphers ten year, it's revealed that he's been having an affair with another executive and the board asks for his resignation. Eventually, board member je mic nerney is named the new CEO to fight back against air buses.

A cent mygale pins all his hopes on the new plane that bowings in the process of designing the seven eighty seven, also known as the dream liner, is to be the most cost efficient plane the company has ever built. The goal is to have the dream line or cost sixty percent less than what IT costs to build bowlings previous plane, the seven seventy seven design e over a decade earlier. But the only way to hit that goal is to outsource as much of the design and manufacturing as possible. This is a major reversal of company policy.

For years.

boeing's own engineers designed every component of their planes. They then either manufactured them in house or send extremely detailed specs to third parties. But for the dreamliner, following plans to oversea companies around the world who have one contracts to design and build many of the new planes components, it's a lot of moving pieces to keep track of and cracks in the system quickly start to show.

In two thousand and eight, the president of the engineers union, santa cole, visits the bowling production facility and avert washington, thirty miles north of piano. And as he walks the factory floor, a quality assurance engineer approaches her with a worried look. He asks coal.

He can speak with her privately. Call leeds seen engineer off the noisy factory floor and into a vacant office. I sit down and battered swift chairs on either side of a metal bask.

The engineering is forward, keeping voice low as if he's afraid of being overheard. The listen, we have a major problem here. What's going on? The parts we're getting from these new suppliers, they're not up to par.

There are nowhere near the standards we had when we made them in house. And he spoke to your supervision, you won't listen. He just says we have to keep our part in the process on sWandale.

We can't let a backlog fixes slowdown production. That's really what he said. Yes, he says if he talks about the problem here into trouble, no one wants to hear this. Don't take this the wrong way.

And i'm trying to get the fact here, but what's your relationship like with your supervisor? I mean, do you get a lot used to be fine, but ever since we started on the dream liner, he's a different guy. So there's no personal reason any other reason you can think of that your supervisor wouldn't want to hear from you specifically? Not that I can think of because it's not just me.

I know several other people have raised concerns. They've got ten the same response and that these aren't minor problems. I A friend who told me that with one new vender, they had to tell them eighteen times that the plane smoke detectors had to connect to the electrical system eighteen times.

That's not good. No, it's not. And I could go on sometimes when we look at the manual these company send with their parts, half the pages are blind with the word proprietary stamp across them.

So we don't even know how some of these parts were. no. And if there is a problem with a manufacturing, we wouldn't even know that gotta do something.

After this troubling report, coal heads back into the factory and watches as workers, well together sections of a dream liner's massive uses lodge what this engineer just told her is alarming and suggest that boeing's culture clash between engineering and executives is reaching a breaking point. Over the next several months, cinthio hears from more and more bowing engineers some center emails. Others come up to her when she's visiting facilities.

He even gets recognized by concern employees when she's in the grocery store or eating at restaurants. They all share similar stories. They're seeing major problems with parts coming in from new third party vendors, but when they try to discuss the issues with their supervisors, they are told that this schedule is the utmost importance and nothing can get in its way.

In response, coal arrange a series of town hall meetings where engineers can speak directly to senior managers about the problems are seeing over and over the engineers team man, that the outsourcing isn't working. Finally, in two thousand and nine, even boeing senior executives are forced to admit that their outsourcing experiment is a failure. Buying is forced to spend fifty billion dollars to bring all the work on the dream line are back in house.

And as a result of this failed outsourcing endeavor, the new plane is now behind schedule and over budget, but soon the company has another problem on its hands. While boeing has been dealing with the crisis of the dreamliner, rival airbus has been working on a new plane of its own. In december two thousand and ten, airbus announced that is building a new version of its a 32， the chief competitor red bowings best selling plane in the 3。 They're going to call IT the a 3 neo and suggest that its engines will be fifteen percent more few efficient after a complete redesign。 Fuel is one of the biggest overhead costs for airline, so it's no surprise when airbus quickly racked up orders for its new plane.

The a 32 neo is potentially a major threat to boeing。 So in january two thousand and eleven, bowings president of commercial planes, jim alba, calls a meeting of his division to discuss how to respond. On the day of the meeting, ombo walks into a comfort room with a new company headquarters in chicago.

Other top level executives from the commercial place plane division are already gathered around the table, and their faces are grown. All motels are seed at the head of the table and kicks off the meeting by announcing that he isn't worried at all about the new air bus play when he knows that others at the table are and he wants to hear their concerns. One executive and wire rim glasses in a quarter's zip sweater speaks up.

He says that he thinks the appeal of a more few efficient playing from airbus will heavily eaten to seven thirty seven sales. But all that shakes his head. He thinks that air bus is over promising with the neo, which will likely face production delays and go over budget justice, bowing his dream, iner did.

And he, skeptical that the neo will act, should be able to deliver as much few efficiency as arabs as promising. With that in mind, all about things, bowing is Better off designing a competitor for the neo after they've completed work on the dream ler. That model is finally set to be delivered to its first customer in july, six months from now and two years later than originally promised.

The executive shakes his head down and says he doesn't mean disrespect, but this sounds like a decision made out of fear of having another debacle o like a dream ler and fear isn't the basis for good decision making all ball rejects that premise and says the opposite is true. Rushing into designing a new plane just because airbus made a few sales would be a decision made out of fear. Going shouldn't rush into any new projects until IT sees how the neo performs.

The other executive isn't convinced, but he doesn't push the point further, and the group basically agrees to table the conversation. All bb brings a meeting to a close when, as he walks out of the conference room, he hopes he's making the right decision. Another black eye after the dream line would be a major setback, the bone, and that can't happen on his watch.

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At an air show in paris in june, two thousand and eleven airbus cells, over a thousand of its new planes on spec, indicating that the a three twenty year will be more of a threat than bowings head of commercial planes, jim auber had anticipated.

But all our sticks to his guns, insisting that boeing can weight on designing a new plane to counter the neo, until about a few weeks later, when he receives a call from american airlines that day, all but is answering emails in his office when his assistant and tells him that american airline, CEO jara arbi, is on the line. American is one of bowler's most important customers. They've bought boeing planes exclusively since the nineteen nineties. So all about tells to put R, P.

through.

All will take a deeper breath and picks up the phone. Just always a pleasure. How are you? I'm well, thanks. Good, good.

It's been too long since i've had some good barcoe i'm going to need to get down to for working well. You're welcome anytime and great. I'll get something on the book to what do I use this call? Well, it's it's a courtesy call, actually courtesy call.

yeah. I wanted to let you know that we are strongly considering putting in order for a hundred days, three, twenty nine years, alba suppresses the urge to throw the phone across the room. Well, appreciate the heads up to your art, but i'm surprised why switch horses now, after all this time, with boring?

Well, the fuel savings they are offering, we can't turn that down, but that's all speculative at this point. Our engineers have assessed the design in the backs. We're pretty confident theyll get close to what they're promising.

okay. But remember, airbus uses an entirely different copy IT control system than we do. Your pilots are going to have to do a lot of retraining that will probably wipe out any savings you have from fuel costs.

Yeah and and that's why we haven't pull the trigger yet. And if boeing could come back to us with a competitive offer, we will be happy to reconsider. Well, we absolutely will just give me a little time to put something together.

Now that's great to hear, jim, because I wasn't sure boeing was working on a plane that can match neos efficiently. Don't worry about that. We'll be in touch as soon as we can. Just don't place that order until you hear from us.

All right?

All but hangs up the phone in a wave of fury overtakes him. Boeing has a full time sale staff and dallas to make sure that boeing keeps americaines business. He can't believe they could have missed something like this.

Alba knows if american airlines is considering a deal with airbus other long time boeing customers, probably r two. So to avert disaster, boeing needs to figure out a way to make a plane that's competitive with the airbus a 32 neo。 They need to do IT fast.

After jim all bows call with american airlines, boeing holds a series of emergency meetings to figure out how best to compete against airbus. They need to make an offer that will keep american buying boeing. And the easiest option is to upgrade the 737 with bigger engines and a few other tweak， the plane can be more few efficient.

But there's some push back within the company about redesigning the seven thirty seven yet. Again, it's already on its nine iteration and there are several elements about its design that still date back to the one thousand nine hundred sixties but can be changed. Some executives argue that boeing should take this opportunity to design a new plane from scratch. They point out that more Young pilots around the world are learning to fly on air buses, automated system, and then that might be a good idea for boeing to update its coppet control system to make IT easier and safer to fly like air buses.

But other executives .

countered that the seven thirty seven is a worker SE IT alone accounts for over a third bowings plane sales. So why fix what isn't broken? Ultimately, though, IT comes down to time. Airbus has a significant headstart on designing the neo. So if boying hopes to make american airlines a counteroffer, they need to be able to tell them that they can deliver the new plane no more than a year after air bus. And if they can do that, they're designing .

one from the ground up.

So week after his phone call with american airline CEO, jd r. Jim ob calls him back and pitches him on a redesign, more few efficient version of the seven thirty seven. And on july twenty thousand, two thousand and eleven, american airlines agrees to split their new airplane order between boeing and airbus.

It's not the total win that all ball was hoping for, but it's not a complete embarrassment either. At the same time, another keyboard ing customer, southwest airlines, also agreed to buy several hundred of the redesign, seven thirty seventh. What southwest commitment comes with a catch.

They don't want their pilots to undergo any new training on. The new aircraft pilot in is another major expanse for airlines. Every hour a pilot spends in a simulator is time they're not allowed to fly a plane full of paying customers.

Southwest is bowing biggest customer. They exclusively fly seven, thirty seven. So boeing takes their demand seriously. And a short southwest that pilots will be able to step straight out of old seven, thirty seven and into the new without any simulator training.

And to show that they mean IT bowing promises, IT will pay southwest one million dollars per plane if any simulator training is require. To accomplish this, all boeing will have to make sure there are as few changes as possible to how the new plane flies. If there is too bigger change to any of the onboard systems or controls, the federal aviation administration will require pilots to take additional training, and boeing will own southwest airlines hundreds of millions of dollars.

So in december two thousand and eleven, executive im all bw writer memo to everyone on the seven thirty seven redesign team, telling them that he wants this to be the simplest redesign in bowling history. He only wants engineers to touch the part of the airplane, directly impacted by the new, more few efficient engines and maybe a few other small tweak, nothing more. One veteran boeing engineer sitting at his desk when this memo comes in, and it's not a surprise, all ball and the other executives have been stressing this point for months.

This will be a quick and dirty update, so the engineer doesn't give the memo a much more thought and moves on to the next email in his box. He's halfway through revient when he's interrupted by the sound of hammering coming from down the hall. He tries to ignore IT, but he just doesn't stop, so he picked up his coffee and follows the sound to the conference room that's been assigned for all meetings about the plane.

They're now calling 737 max eight。 Inside the noisy conference room, he finds a manager installing a large digital clock on the far wall. Engineer asks what's going on, and the manager says it's a countdown clock.

IT shows the time left to reach the max ates next milestone. So every time people sit in the meeting about the max, they will be reminded that they're racing against the clock. The engineer not he's well aware that boeing is promised american, southwest and other customers that they'll start delivering the max by two thousand and seventeen about five years from now.

And that may sound like plenty of time, but that makes the engineer feel uneasy. The process for designing and building an airplane is an arduous one, even when making changes to an existing plan. Each new component requires several rounds of test flights and a lengthy certification process with the ava, and all of that needs to be completed before the plane can be manufactured and delivered to customers.

On top of all that, the engineering team has only a general idea about how they're going to make the max more few efficient. There are still a lot of details to out. So the engineer knows issues will come up because they always do.

And in the past, design teams are bowing, felt comfortable speaking up when they saw a potential problem, even if IT meant delaying a planes delivery. But as the design and production process of the dreamliner made clear, those days are over. And by installing this clock, bowings management is sending the message that they want this plane delivered on time no matter what. So the engineering just hopes that no one has put in the position of choosing speed over safety because for the first time in his career with bony, he's not sure which one management will pay. From wandering, this is episode to a boy for american skin in our next episode's ping of the seven thirty seven max eight doesn't go according to plan, and bowering is forced to make some questionable decisions to hit its goals.

If you're enjoying american scandal, you can unlock exclusive seasons on one free plus binge new seasons first and listen completely and free when you join wander plus in the wander APP apple podcast or 4。 And before you go, tell us about yourself by filling out a survey and wonder dot com slash survey, if you'd like to learn more about this story, we recommend the book flying blind by Peter Robinson and the documentary downfall, the case against boeing, directed by rory. This episode contains reenactments and dramatized details.

While in most cases we can know exactly what we said, all our dramatizations are based on historical research. American scandal is hosted, edited and execute to produce by knee linsey grand for air ship audio editing by Christian farago sound designed by Gabriel cool music violent I grain. This episode is writing by Austin rankness, edited by easterton, backtracking by elisa junk purry, produced by john reed, managing producer Olivia font, senior producer andy herman, development by stephane genes and execute to producers are genuine our batmen, martial lui and annoying aries for wonder.

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