What in the world is wrong out at Boeing Co.--a corporation that for decades symbolized the very best in American manufacturing but in the past few years has seemed to be embracing the worst?
Let's put aside, for now, the latest Boeing disaster--the crash early Sunday morning of an EgyptAir 767. It will probably be weeks or months before anyone can say why that plane crashed into the Atlantic off Nantucket Island, and whether Boeing has any responsibility.
No, the scariest fact about Boeing was last week's news that the company for 19 years failed to disclose an internal report about fuel-tank problems like the one that apparently destroyed TWA Flight 800 in July 1996. That report followed other recent stories about massive production problems and management confusion at Boeing--a corporate unraveling which, as Fortune magazine wrote early this year, has been "a truly ugly story."
For lawyers representing the families of the 230 people who died on TWA 800, the new fuel-tank story is likely to mean a big payday. You could almost hear the plaintiffs' lawyers mouthing the magic words--"willful misconduct"--that could allow them to recover huge damages from Boeing.
But for ordinary people who care about business--and who fly in Boeing airplanes--there's a different question. Why do good companies do stupid things? How could a firm that has prospered over the years because of its reputation for safety have overlooked a report that pointed to a potentially deadly flaw?
That design problem, if you missed the stories, involves the placement of the 747's center fuel tank near the air-conditioning unit--which runs so hot that it could create flammable fuel vapors in the nearby tank. A 1980 Boeing report examined this problem in the military version of the 747, but the report sat on a shelf. It remained there, gathering dust, after a 1990 fuel-tank explosion on a Boeing jet in Manila, and after the 1996 crash of TWA 800, and even after the National Transportation Safety Board (NTSB) began to focus on the fuel tank as the most likely cause of the TWA disaster. It wasn't delivered to the NTSB until June--which caused "dismay" and "displeasure" at the safety board.
How could conscientious people have overlooked that report? Boeing insists it didn't deliberately suppress the information, which makes the puzzle even more mysterious. Evil is always easier to explain than stupidity.
The answer to the Boeing mystery begins with the culture of bureaucracy. As Charles Peters, editor of the Washington Monthly, has been reminding readers for several decades, the crucial question for any organization is whether it has a culture that allows the boss to hear bad news.
Will employees be supported if they pass along bad news about, say, a potential problem in a fuel tank? Are they encouraged to push investigation to the next level, even if it may upset customers? Are they rewarded for making a nuisance of themselves in their pursuit of excellence and safety, or are they subtly penalized? The air transport industry prides itself on having a safety-first culture, but why did it fail here?
Those are the questions that should be causing anguish at Boeing headquarters today--not how they can outsmart the plaintiffs' lawyers and escape damages, or how they can craft a PR blitz to protect their reputation. They need to be asking: What went wrong, and why?
If we're honest, we know that most disasters have early warning signals that responsible people fail to detect. After a cargo door blew off a Turkish Airlines DC-10 in the early 1970s causing a fatal crash, it turned out that there had been a similar problem with a cargo door over Windsor, Ontario, a few years before--but the pilot had landed the plane safely and nobody bothered to correct the defect.
After the spectacular 1986 explosion of the Challenger space shuttle, it turned out that NASA engineers had recognized that if the rocket's "O-rings" failed, there was no backup system to prevent the tragedy that happened. But the engineers couldn't get the attention of NASA's top management.
Boeing's problems partly reflect the fact that "this industry has been through tremendous turmoil . . . [and] distraction, because of huge layoffs" totaling 1.5 million people over the past dozen years, says Norm Augustine, former chief executive of Lockheed Martin. "After the fact, it's always obvious what went wrong. But before the fact, the problems are so hard to find--the technology is so complicated and unforgiving."
The key, says Augustine, is a culture where employees know "they won't lose their heads" if they tell the boss bad news. His rule: "We'll tolerate problems, but we won't tolerate not reporting them."
That's where Boeing will have to start its rebuilding. The worst feeling in the world--one that Boeing managers must have in their gut today--is realizing later that you could have taken steps to prevent disaster, if only you had known the facts.