How Boeing's Managerial Revolution Created the 737 MAX Disaster.
Nearly two decades before Boeing’s MCAS system crashed two of the plane-maker’s brand-new 737 MAX jets, Stan Sorscher knew his company’s increasingly toxic mode of operating would create a disaster of some kind. A long and proud “safety culture” was rapidly being replaced, he argued, with “a culture of financial bullshit, a culture of groupthink.”
Sorscher, a physicist who’d worked at Boeing more than two decades and had led negotiations there for the engineers’ union, had become obsessed with management culture. He said he didn’t previously imagine Boeing’s brave new managerial caste creating a problem as dumb and glaringly obvious as MCAS (or the Maneuvering Characteristics Augmentation System, as a handful of software wizards had dubbed it). Mostly he worried about shriveling market share driving sales and head count into the ground, the things that keep post-industrial American labor leaders up at night. On some level, though, he saw it all coming; he even demonstrated how the costs of a grounded plane would dwarf the short-term savings achieved from the latest outsourcing binge in one of his reports that no one read back in 2002.*
Sorscher had spent the early aughts campaigning to preserve the company’s estimable engineering legacy. He had mountains of evidence to support his position, mostly acquired via Boeing’s 1997 acquisition of McDonnell Douglas, a dysfunctional firm with a dilapidated aircraft plant in Long Beach and a CEO who liked to use what he called the “Hollywood model” for dealing with engineers: Hire them for a few months when project deadlines are nigh, fire them when you need to make numbers. In 2000, Boeing’s engineers staged a 40-day strike over the McDonnell deal’s fallout; while they won major material concessions from management, they lost the culture war. They also inherited a notoriously dysfunctional product line from the corner-cutting market gurus at McDonnell.
And while Boeing’s engineers toiled to get McDonnell’s lemon planes into the sky, their own hopes of designing a new plane to compete with Airbus, Boeing’s only global market rival, were shriveling. Under the sway of all the naysayers who had called out the folly of the McDonnell deal, the board had adopted a hard-line “never again” posture toward ambitious new planes. Boeing’s leaders began crying “crocodile tears,” Sorscher claimed, about the development costs of 1995’s 777, even though some industry insiders estimate that it became the most profitable plane of all time. The premise behind this complaining was silly, Sorscher contended in PowerPoint presentations and a Harvard Business School-style case study on the topic. A return to the “problem-solving” culture and managerial structure of yore, he explained over and over again to anyone who would listen, was the only sensible way to generate shareholder value. But when he brought that message on the road, he rarely elicited much more than an eye roll. “I’m not buying it,” was a common response. Occasionally, though, someone in the audience was outright mean, like the Wall Street analyst who cut him off mid-sentence:
“Look, I get it. What you’re telling me is that your business is different. That you’re special. Well, listen: Everybody thinks his business is different, because everybody is the same. Nobody. Is. Different.”
And indeed, that would appear to be the real moral of this story: Airplane manufacturing is no different from mortgage lending or insulin distribution or make-believe blood analyzing software—another cash cow for the one percent, bound inexorably for the slaughterhouse. In the now infamous debacle of the Boeing 737 MAX, the company produced a plane outfitted with a half-assed bit of software programmed to override all pilot input and nosedive when a little vane on the side of the fuselage told it the nose was pitching up. The vane was also not terribly reliable, possibly due to assembly line lapses reported by a whistle-blower, and when the plane processed the bad data it received, it promptly dove into the sea.
It is understood, now more than ever, that capitalism does half-assed things like that, especially in concert with computer software and oblivious regulators: AIG famously told investors it was hard for management to contemplate “a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions” that would, a few months later, lose the firm well over $100 billion—but hey, the risk management algorithms had been wrong. A couple of years later, a single JP Morgan trader lost $6 billion because someone had programmed one of the cells in the bank’s risk management spreadsheet to divide two numbers by their sum instead of their average. Boeing was not, of course, a hedge fund: It was way better, a stock that had more than doubled since the Trump inauguration, outperforming the Dow in the 22 months before Lion Air 610 plunged into the Java Sea.
And so there was something unsettlingly familiar when the world first learned of MCAS in November, about two weeks after the system’s unthinkable stupidity drove the two-month-old plane and all 189 people on it to a horrific death. It smacked of the sort of screwup a 23-year-old intern might have made—and indeed, much of the software on the MAX had been engineered by recent grads of Indian software-coding academies making as little as $9 an hour, part of Boeing management’s endless war on the unions that once represented more than half its employees. Down in South Carolina, a nonunion Boeing assembly line that opened in 2011 had for years churned out scores of whistle-blower complaints and wrongful termination lawsuits packed with scenes wherein quality-control documents were regularly forged, employees who enforced standards were sabotaged, and planes were routinely delivered to airlines with loose screws, scratched windows, and random debris everywhere. The MCAS crash was just the latest installment in a broader pattern so thoroughly ingrained in the business news cycle that the muckraking finance blog Naked Capitalism titled its first post about MCAS “Boeing, Crapification and the Lion Air Crash.”
But not everyone viewed the crash with such a jaundiced eye—it was, after all, the world’s first self-hijacking plane. Pilots were particularly stunned, because MCAS had been a big secret, largely kept from Boeing’s own test pilots, mentioned only once in the glossary of the plane’s 1,600-page manual, left entirely out of the 56-minute iPad refresher course that some 737-certified pilots took for MAX certification, and—in a last-minute edit—removed from the November 7 emergency airworthiness directive the Federal Aviation Administration had issued two weeks after the Lion Air crash, ostensibly to “remind” pilots of the protocol for responding to a “runaway stabilizer.” Most pilots first heard about MCAS from their unions, which had in turn gotten wind of the software from a supplementary bulletin Boeing sent airlines to accompany the airworthiness directive. Outraged, they took to message boards, and a few called veteran aerospace reporters like The Seattle Times’ Dominic Gates, The Wall Street Journal’s Andy Pasztor, and Sean Broderick at Aviation Week—who in turn interviewed engineers who seemed equally shocked. Other pilots, like Ethiopian Airlines instructor Bernd Kai von Hoesslin, vented to their own corporate management, pleading for more resources to train people on the scary new planes—just weeks before von Hoesslin’s carrier would suffer its own MAX-engineered mass tragedy. (...)
Simulator training for Southwest’s 9,000 pilots would have been a pain, but hardly ruinous; aviation industry analyst Kit Darby said it would cost about $2,000 a head. It was also unlikely: The FAA had three levels of “differences” training that wouldn’t have necessarily required simulators. But the No Sim Edict would haunt the program; it basically required any change significant enough for designers to worry about to be concealed, suppressed, or relegated to a footnote that would then be redacted from the final version of the MAX. And that was a predicament, because for every other airline buying the MAX, the selling point was a major difference from the last generation of 737: unprecedented fuel efficiency in line with the new Airbus A320neo.
The MAX and the Neo derived their fuel efficiency from the same source: massive “LEAP” engines manufactured by CFM, a 50-50 joint venture of GE and the French conglomerate Safran. The engines’ fans were 20 inches—or just over 40 percent larger in diameter than the original 737 Pratt & Whitneys, and the engines themselves weighed in at approximately 6,120 pounds, about twice the weight of the original engines. The planes were also considerably longer, heavier, and wider of wingspan. What they couldn’t be, without redesigning the landing gear and really jeopardizing the grandfathered FAA certification, was taller, and that was a problem. The engines were too big to tuck into their original spot underneath the wings, so engineers mounted them slightly forward, just in front of the wings.
This alteration created a shift in the plane’s center of gravity pronounced enough that it raised a red flag when the MAX was still just a model plane about the size of an eagle, running tests in a wind tunnel. The model kept botching certain extreme maneuvers, because the plane’s new aerodynamic profile was dragging its tail down and causing its nose to pitch up. So the engineers devised a software fix called MCAS, which pushed the nose down in response to an obscure set of circumstances in conjunction with the “speed trim system,” which Boeing had devised in the 1980s to smooth takeoffs. Once the 737 MAX materialized as a real-life plane about four years later, however, test pilots discovered new realms in which the plane was more stall-prone than its predecessors. So Boeing modified MCAS to turn down the nose of the plane whenever an angle-of-attack (AOA) sensor detected a stall, regardless of the speed. That involved giving the system more power and removing a safeguard, but not, in any formal or genuine way, running its modifications by the FAA, which might have had reservations with two critical traits of the revamped system: Firstly, that there are two AOA sensors on a 737, but only one, fatefully, was programmed to trigger MCAS. The former Boeing engineer Ludtke and an anonymous whistle-blower interviewed by 60 Minutes Australia both have a simple explanation for this: Any program coded to take data from both sensors would have had to account for the possibility the sensors might disagree with each other and devise a contingency for reconciling the mixed signals. Whatever that contingency, it would have involved some kind of cockpit alert, which would in turn have required additional training—probably not level-D training, but no one wanted to risk that. So the system was programmed to turn the nose down at the feedback of a single (and somewhat flimsy) sensor. And, for still unknown and truly mysterious reasons, it was programmed to nosedive again five seconds later, and again five seconds after that, over and over ad literal nauseam.
And then, just for good measure, a Boeing technical pilot emailed the FAA and casually asked that the reference to the software be deleted from the pilot manual.
So no more than a handful of people in the world knew MCAS even existed before it became infamous. Here, a generation after Boeing’s initial lurch into financialization, was the entirely predictable outcome of the byzantine process by which investment capital becomes completely abstracted from basic protocols of production and oversight: a flight-correction system that was essentially jerry-built to crash a plane. “If you’re looking for an example of late stage capitalism or whatever you want to call it,” said longtime aerospace consultant Richard Aboulafia, “it’s a pretty good one.”
Nearly two decades before Boeing’s MCAS system crashed two of the plane-maker’s brand-new 737 MAX jets, Stan Sorscher knew his company’s increasingly toxic mode of operating would create a disaster of some kind. A long and proud “safety culture” was rapidly being replaced, he argued, with “a culture of financial bullshit, a culture of groupthink.”
Sorscher, a physicist who’d worked at Boeing more than two decades and had led negotiations there for the engineers’ union, had become obsessed with management culture. He said he didn’t previously imagine Boeing’s brave new managerial caste creating a problem as dumb and glaringly obvious as MCAS (or the Maneuvering Characteristics Augmentation System, as a handful of software wizards had dubbed it). Mostly he worried about shriveling market share driving sales and head count into the ground, the things that keep post-industrial American labor leaders up at night. On some level, though, he saw it all coming; he even demonstrated how the costs of a grounded plane would dwarf the short-term savings achieved from the latest outsourcing binge in one of his reports that no one read back in 2002.*
Sorscher had spent the early aughts campaigning to preserve the company’s estimable engineering legacy. He had mountains of evidence to support his position, mostly acquired via Boeing’s 1997 acquisition of McDonnell Douglas, a dysfunctional firm with a dilapidated aircraft plant in Long Beach and a CEO who liked to use what he called the “Hollywood model” for dealing with engineers: Hire them for a few months when project deadlines are nigh, fire them when you need to make numbers. In 2000, Boeing’s engineers staged a 40-day strike over the McDonnell deal’s fallout; while they won major material concessions from management, they lost the culture war. They also inherited a notoriously dysfunctional product line from the corner-cutting market gurus at McDonnell.
And while Boeing’s engineers toiled to get McDonnell’s lemon planes into the sky, their own hopes of designing a new plane to compete with Airbus, Boeing’s only global market rival, were shriveling. Under the sway of all the naysayers who had called out the folly of the McDonnell deal, the board had adopted a hard-line “never again” posture toward ambitious new planes. Boeing’s leaders began crying “crocodile tears,” Sorscher claimed, about the development costs of 1995’s 777, even though some industry insiders estimate that it became the most profitable plane of all time. The premise behind this complaining was silly, Sorscher contended in PowerPoint presentations and a Harvard Business School-style case study on the topic. A return to the “problem-solving” culture and managerial structure of yore, he explained over and over again to anyone who would listen, was the only sensible way to generate shareholder value. But when he brought that message on the road, he rarely elicited much more than an eye roll. “I’m not buying it,” was a common response. Occasionally, though, someone in the audience was outright mean, like the Wall Street analyst who cut him off mid-sentence:
“Look, I get it. What you’re telling me is that your business is different. That you’re special. Well, listen: Everybody thinks his business is different, because everybody is the same. Nobody. Is. Different.”
And indeed, that would appear to be the real moral of this story: Airplane manufacturing is no different from mortgage lending or insulin distribution or make-believe blood analyzing software—another cash cow for the one percent, bound inexorably for the slaughterhouse. In the now infamous debacle of the Boeing 737 MAX, the company produced a plane outfitted with a half-assed bit of software programmed to override all pilot input and nosedive when a little vane on the side of the fuselage told it the nose was pitching up. The vane was also not terribly reliable, possibly due to assembly line lapses reported by a whistle-blower, and when the plane processed the bad data it received, it promptly dove into the sea.
It is understood, now more than ever, that capitalism does half-assed things like that, especially in concert with computer software and oblivious regulators: AIG famously told investors it was hard for management to contemplate “a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions” that would, a few months later, lose the firm well over $100 billion—but hey, the risk management algorithms had been wrong. A couple of years later, a single JP Morgan trader lost $6 billion because someone had programmed one of the cells in the bank’s risk management spreadsheet to divide two numbers by their sum instead of their average. Boeing was not, of course, a hedge fund: It was way better, a stock that had more than doubled since the Trump inauguration, outperforming the Dow in the 22 months before Lion Air 610 plunged into the Java Sea.
And so there was something unsettlingly familiar when the world first learned of MCAS in November, about two weeks after the system’s unthinkable stupidity drove the two-month-old plane and all 189 people on it to a horrific death. It smacked of the sort of screwup a 23-year-old intern might have made—and indeed, much of the software on the MAX had been engineered by recent grads of Indian software-coding academies making as little as $9 an hour, part of Boeing management’s endless war on the unions that once represented more than half its employees. Down in South Carolina, a nonunion Boeing assembly line that opened in 2011 had for years churned out scores of whistle-blower complaints and wrongful termination lawsuits packed with scenes wherein quality-control documents were regularly forged, employees who enforced standards were sabotaged, and planes were routinely delivered to airlines with loose screws, scratched windows, and random debris everywhere. The MCAS crash was just the latest installment in a broader pattern so thoroughly ingrained in the business news cycle that the muckraking finance blog Naked Capitalism titled its first post about MCAS “Boeing, Crapification and the Lion Air Crash.”
But not everyone viewed the crash with such a jaundiced eye—it was, after all, the world’s first self-hijacking plane. Pilots were particularly stunned, because MCAS had been a big secret, largely kept from Boeing’s own test pilots, mentioned only once in the glossary of the plane’s 1,600-page manual, left entirely out of the 56-minute iPad refresher course that some 737-certified pilots took for MAX certification, and—in a last-minute edit—removed from the November 7 emergency airworthiness directive the Federal Aviation Administration had issued two weeks after the Lion Air crash, ostensibly to “remind” pilots of the protocol for responding to a “runaway stabilizer.” Most pilots first heard about MCAS from their unions, which had in turn gotten wind of the software from a supplementary bulletin Boeing sent airlines to accompany the airworthiness directive. Outraged, they took to message boards, and a few called veteran aerospace reporters like The Seattle Times’ Dominic Gates, The Wall Street Journal’s Andy Pasztor, and Sean Broderick at Aviation Week—who in turn interviewed engineers who seemed equally shocked. Other pilots, like Ethiopian Airlines instructor Bernd Kai von Hoesslin, vented to their own corporate management, pleading for more resources to train people on the scary new planes—just weeks before von Hoesslin’s carrier would suffer its own MAX-engineered mass tragedy. (...)
Simulator training for Southwest’s 9,000 pilots would have been a pain, but hardly ruinous; aviation industry analyst Kit Darby said it would cost about $2,000 a head. It was also unlikely: The FAA had three levels of “differences” training that wouldn’t have necessarily required simulators. But the No Sim Edict would haunt the program; it basically required any change significant enough for designers to worry about to be concealed, suppressed, or relegated to a footnote that would then be redacted from the final version of the MAX. And that was a predicament, because for every other airline buying the MAX, the selling point was a major difference from the last generation of 737: unprecedented fuel efficiency in line with the new Airbus A320neo.
The MAX and the Neo derived their fuel efficiency from the same source: massive “LEAP” engines manufactured by CFM, a 50-50 joint venture of GE and the French conglomerate Safran. The engines’ fans were 20 inches—or just over 40 percent larger in diameter than the original 737 Pratt & Whitneys, and the engines themselves weighed in at approximately 6,120 pounds, about twice the weight of the original engines. The planes were also considerably longer, heavier, and wider of wingspan. What they couldn’t be, without redesigning the landing gear and really jeopardizing the grandfathered FAA certification, was taller, and that was a problem. The engines were too big to tuck into their original spot underneath the wings, so engineers mounted them slightly forward, just in front of the wings.
This alteration created a shift in the plane’s center of gravity pronounced enough that it raised a red flag when the MAX was still just a model plane about the size of an eagle, running tests in a wind tunnel. The model kept botching certain extreme maneuvers, because the plane’s new aerodynamic profile was dragging its tail down and causing its nose to pitch up. So the engineers devised a software fix called MCAS, which pushed the nose down in response to an obscure set of circumstances in conjunction with the “speed trim system,” which Boeing had devised in the 1980s to smooth takeoffs. Once the 737 MAX materialized as a real-life plane about four years later, however, test pilots discovered new realms in which the plane was more stall-prone than its predecessors. So Boeing modified MCAS to turn down the nose of the plane whenever an angle-of-attack (AOA) sensor detected a stall, regardless of the speed. That involved giving the system more power and removing a safeguard, but not, in any formal or genuine way, running its modifications by the FAA, which might have had reservations with two critical traits of the revamped system: Firstly, that there are two AOA sensors on a 737, but only one, fatefully, was programmed to trigger MCAS. The former Boeing engineer Ludtke and an anonymous whistle-blower interviewed by 60 Minutes Australia both have a simple explanation for this: Any program coded to take data from both sensors would have had to account for the possibility the sensors might disagree with each other and devise a contingency for reconciling the mixed signals. Whatever that contingency, it would have involved some kind of cockpit alert, which would in turn have required additional training—probably not level-D training, but no one wanted to risk that. So the system was programmed to turn the nose down at the feedback of a single (and somewhat flimsy) sensor. And, for still unknown and truly mysterious reasons, it was programmed to nosedive again five seconds later, and again five seconds after that, over and over ad literal nauseam.
And then, just for good measure, a Boeing technical pilot emailed the FAA and casually asked that the reference to the software be deleted from the pilot manual.
So no more than a handful of people in the world knew MCAS even existed before it became infamous. Here, a generation after Boeing’s initial lurch into financialization, was the entirely predictable outcome of the byzantine process by which investment capital becomes completely abstracted from basic protocols of production and oversight: a flight-correction system that was essentially jerry-built to crash a plane. “If you’re looking for an example of late stage capitalism or whatever you want to call it,” said longtime aerospace consultant Richard Aboulafia, “it’s a pretty good one.”
by Maureen Tkacik, The New Republic | Read more:
Image: Getty
