How to Fix Boeing: A Repair Manual

A fuselage panel that blew off in midair. Mishaps on the factory floor. Stranded astronauts. A crippling strike. Five straight annual losses.

Boeing's travails keep piling up, and that list doesn't include a pair of fatal accidents in 2018 and 2019 that killed 346 people. The 108-year-old jet maker this summer agreed to plead guilty in a federal criminal case related to those crashes. The string of crises has left the company bleeding cash, mired in manufacturing problems, regulators and its own employees. On Dec. 29, 179 people were killed in a South Korean crash whose cause is now under investigation.

"We're at a low here, folks," Boeing's new CEO, Kelly Ortberg, told the company's employees in a November all-hands meeting.

There's a lot riding on Boeing's ability to pull out of its nose dive. Boeing is the biggest U.S. exporter and one of the world's two major manufacturers of large commercial jetliners, along with Europe's Airbus. Boeing makes jets, bombs and helicopters for the U.S. military. It makes rockets and spacecraft for NASA. It employs some 170,000 people around the world and is the central cog in a global supply chain of thousands of companies from small parts shops to multinational giants like GE Aerospace.

"Everybody wants us to succeed," Ortberg told workers. "They're all also expecting us to kind of clean up our act and, you know, deliver good products and not have these snafus." Ortberg, who took the helm of Boeing in August, has signaled his intention to shrink the company and slash layers of bureaucracy. We asked dozens of people-current and former Boeing leaders, airline executives, employees, suppliers, safety regulators and others in recent months what Boeing should do to turn itself around. Here's what they said.

Think big.

Boeing for decades was an aerospace pioneer-but it's been 20 years since Boeing introduced a new airplane. Since then, the jet maker has instead made updates to its existing models. Phil Condit, who was CEO of Boeing from 1996 to 2003, said Boeing needs to get to work on a brand new design as soon as possible.

"You've got to get people excited about what they're doing," Condit says. "You don't come to work just for a paycheck, you come to work because you care about what you're doing."

Others echo the call for ambition. "Successful companies make big bets," said U.S. Rep. Adam Smith (D., Wash.), whose district includes Boeing's factory in Renton. "There's an upfront cost but they do it."

"The current generation of students is very interested in social impact," said Gail Cornelius, a career center director at the University of Washington and a former Boeing program manager. "Blue Origin wants to put people on Mars. Tesla, it's to get rid of gas. The social impact is tangible. Boeing doesn't have that."

Fix the culture.

Boeing's culture morphed over time from one that valued ingenuity and quality to one that prioritized shareholder returns. That culture is now at the root of Boeing's problems, many people say--and fixing it starts with safety.

"Until it soaks through every layer of the company, all the way down to the person who sweeps the factory floor, until everybody has that in their DNA - that the most important thing to Boeing is excellence and safety of flight - there will never be a full, 100% trusting of that company, because their mind is not on the ball. Their mind is on the cash register," said Morrie Goodman, a former communications leader at Boeing, NASA, FEMA and the Commerce Department.

Encouraging employees to report safety concerns would reduce the need for whistleblowers, "and that's really what we're watching and trying to make sure that they get to," said Federal Aviation Administration chief Mike Whitaker, who has imposed production limits on Boeing's 737 factory.

"There were Boeing engineers...that would say, 'Wait a minute guys, I don't know that we should do this. This may not be safe.' Their concerns were essentially dismissed. Boeing has good people. But they need a reward system in place that actually compensates folks for doing the right thing," said Douglas Pasternak, lead investigator for the House Transportation Committee's probe into the 737 MAX crashes.

Executives also need to set an example by publicly talking about what they have learned from their own mistakes, said Rich Plunkett, who heads strategic development for Boeing's engineers' union. "It's not so we can all dogpile on a manager who made a mistake, but what can we learn from a manager who made a mistake?"

"We really, really have a blaming culture," Ortberg told employees during the recent all-hands. "Don't sit at the water cooler and bitch about people. Let's focus on the task at hand."

Alan Mulally ran Boeing's commercial airplanes business from 1998 to 2006 and persuaded leaders to sign off on the 787 despite their jitters over the program's sky-high price tag. "The most important thing is that they have a reliable process and a very clear expected behavior of all the participants," said Mulally, who went on to run Ford. "People have to respect each other, listen to each other, and have emotional resilience."

That includes listening to employees. "Go out on the floor and ask them," said Adam Dickson, former Boeing fuel systems engineer and manager. "Go talk to the employees and say, no managers allowed: Tell me what's the No. 1 problem you have on the floor. Listen to them."

Forget production deadlines - for now.

Boeing executives for years have tried and failed to break a dangerous habit: traveled work, a term for tasks that are completed out of their ordinary sequence on the production line. Pushing unfinished planes down the line to meet quotas has led to errors, including a failure to replace four critical bolts on a door plug that ended up blowing off an Alaska Airlines flight last January.

"The joke is: 'Safety first, as long as your production schedule is met," said Andrew Cropp, a machinist overseeing rework at Boeing's factory in Renton. "We used to have monthly meetings with your crew, manager and [the manager's boss] and if there were any issues, they'd have a team look into it. That stuff went away because the time off floor was not time building an airplane."

Airline bosses say that as frustrated as they are about delivery delayson the hundreds of jets they have ordered from Boeing, right now they just want problem-free planes.

"Start with getting one aircraft off the line in a really quality configuration and then just build from there," says Robert Isom, CEO of American Airlines. "Let's just get quality aircraft off the line first."

Ortberg, the former CEO of a big Boeing supplier, has been surprised by what he has found inside Boeing. There are entire production lines inside the 737 and 787 factories repairing recently-assembled jets instead of building new ones. "It's amazing to me how much waste is consuming our daily work," said Ortberg.

Revamp the design process.

A growing reliance on outsourcing and offshoring has sapped Boeing's intellectual property and given it less agency over the design and manufacturing process. "They outsourced too much" intellectual property, said Jason Adams, a portfolio manager at Boeing investor T. Rowe Price. "They almost didn't give themselves enough credit for how good they were in their design and manufacturing systems."

Bring design and manufacturing in-house as much as possible, said Tewolde Gebremariam, who was CEO of Ethiopian Airlines in 2019 when an Ethiopian Airlines 737 MAX crashed, killing 157 passengers and crew. The accident led to the global grounding of the planes for more than a year.

"For a manufacturer of that size, and a manufacturer of such sensitive products as airplanes, Boeing has to control the design process and manufacturing process," he said. "Of course, there will be outsourcing, there will be suppliers, but Boeing will be in a better position to control that process."

Manufacturing experts, test pilots and suppliers should all be involved, too, others say. Many of Boeing's problems stem from the fact that planes aren't designed with the manufacturing process in mind, said Bill Osborne, former head of quality for Boeing's defense and space business. "It's not just designing the part for performance, it's designing it so that it can be manufactured. Manufacturing has not had a seat at the table," he said.

Boeing relies heavily on middlemen to coordinate between the engineers designing parts and the suppliers tasked with building them. That often slows things down when problems arise, said Rosemary Brester, owner of a small Seattle-area supplier that makes parts for the 767 and 777. "You may never get an answer back and, if you do, it might be weeks or months before you hear back from someone."

Restore trust.

The 737 MAX crashes shook the public's trust, and the events of the past year eroded it further. In July, Boeing agreed to plead guilty to a criminal charge that it misled air-safety regulators before the deadly MAX crashes. (A judge later rejected the deal, and Boeing and prosecutors said they are working on a new one.) And Boeing's Starliner spacecraft faces an uncertain future after technical issues left two astronauts stuck on the International Space Station.

"When things happen, and they will, you've got to be very transparent about having a corrective action plan in place, and think about going above and beyond what the regulations require," said former FAA chief Steve Dickson.

Boeing overcharged the Air Force nearly $1 million for spare parts on C-17 cargo planes, including an 8,000% markup on soap dispensers, according to the Pentagon's inspector general. That's a symptom of a bigger problem, said retired Army Lt. Gen. David Bassett, former head of a Pentagon agency that policed Boeing's contracts with the military. "We ultimately want companies that are doing the right thing when the oversight isn't looking, and Boeing has to become that kind of a company," he said.

Boeing has work to do inside the company as well. "They have a workforce that doesn't trust Boeing, that is afraid of retaliation. As long as that continues...they're going to have problems," said Jennifer Homendy, chair of the National Transportation Safety Board.

Whatever choices he makes, Ortberg doesn't have much time to fix Boeing. It had been burning through its reserves before he agreed in November to a 38% wage increase to end the machinist strike. He has already made a few emergency moves: slashing thousands of jobs, ousting a few top executives and raising $24 billion to buy some time. Boeing slowed its production rate after the door-plug blowout and plans to ramp back up slowly.

Ortberg said Boeing needs to put its house in order before making a big move like designing a new plane. And, he said, Boeing can't afford another mistake. He has been spending time on the factory floors and meeting with employees and others as he develops his fix-it plans. He said he recently met with Sen. Ted Cruz (R., Texas), who told him Boeing would be "in deep, deep trouble" if it had one more safety problem.

"And I think he's right," Ortberg said.