Abstract

The case discusses the challenges faced by American aircraft manufacturer The Boeing Company (Boeing). The aerospace giant came under intense scrutiny from regulators after fatal air crashes in 2018 and 2019 involving its 737 Max aircraft. The accidents, which killed 346 people, brought to the fore questions about the production quality at Boeing and the safety of its passengers. To add to its troubles, in January 2024, the door panel of a Boeing 737 Max jet, operated by US-based airline Alaska Airlines, blew out mid-air. The accident left several passengers injured. Consequently, the Federal Aviation Administration (FAA) ordered Boeing to ground nine 737 Max jets globally and to put a cap on the production of its jets. This was followed by a probe conducted by the Federal Bureau of Investigation. Even as Boeing was grappling with quality control issues and safety challenges, a machinist strike halted production of its aircraft, which led to the company recording losses of US$3.8 billion for the quarter ended December 2024. To turn the company around, Kelly Ortberg (Ortberg) was brought in as the CEO of Boeing in 2024. Ortberg had the Herculean task of tackling among other things the safety culture issues at Boeing and production delays. He was also seeking the FAA’s permission to increase the number of jets the company could produce every month. Going forward, how can the aerospace giant sustain and increase the production of its jets? What steps should Ortberg and his team take to avoid any further crises at Boeing in future?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Discuss the role played by organizational culture in shaping a company’s success.
• Understand the importance of long-term vision over short-term profits in an organization.
• Understand why it is important for organizations to value customer trust.
• Discuss how organizations can manage regulatory and compliance risks.
• Formulate strategies for a company to maintain its momentum in a hugely competitive market segment.

Keywords

Air crashes; Excellence in engineering; Continuous improvement; Turnaround Plan; Production delays; Supply chain disruptions; Operational inefficiencies; Labor disputes; Spirit AeroSystems; Maneuvering Characteristics Augmentation System; the Federal Aviation Administration; the Federal Bureau of Investigation; Airbus SE; Whistleblowers; the National Transportation Safety Board,Philip Condit; Pacific Aero Products Co.; McDonnell Douglas; Harry Stonecipher; Jim McNerney; John Barnett; the US Senate Commerce Committees; the House Committee on Transportation and Infrastructure; the US Department of Justice; the Securities and Exchange Commission