Boeing is facing two new challenges to their image, reputation and credibility.
Federal Grand Jury Indictment
Yesterday CNN reported that, “A federal grand jury has indicted a former key executive of Boeing for fraud, alleging he deceived the Federal Aviation Administration while it was first certifying the 737 Max jet that would go on to have two fatal crashes caused by design flaws.”
“The charges were not against a top executive. Instead, they were against Mark Forkner, 49, who was the chief technical pilot for Boeing during the certification process for the jet and is accused of deceiving the FAA during that process in 2016 and 2017.”
“Forkner's attorney did not respond to a request for comment, and Boeing declined to comment,” CNN said.
Improperly Made Dreamliner Parts
According to Reuters, Boeing said that “some titanium 787 Dreamliner parts were improperly manufactured over the past three years, the latest in a series of problems to plague the wide-body aircraft.
“The quality issue does not affect the immediate safety of flights, the company said, adding it had notified the Federal Aviation Administration (FAA). Boeing is working to determine how many planes contain the defective part,” according to the news organization.
Boeing did not immediately respond to a request to comment for this article, and there was no mention of the fraud charges or Dreamliner parts issue on the company’s website.
Expect Increased Scrutiny
Dennis E. Sawan is personal injury and insurance lawyer at Sawan & Sawan. He observed that, “Given the callousness allegedly exhibited by Boeing with respect to the MAX 737, we can expect that the company will face increasing scrutiny from regulators, who will no doubt bring out the fine-tooth combs when reviewing Boeing’s safety representations in the future.
“Moreover, companies that place profit over consumer safety have repeatedly faced multi-million dollar punitive damage verdicts—and Boeing is unlikely to escape this fate if the allegations in the Fraud case prove to be true,” he said.
“While Boeing remains a dominant force in commercial flight, airlines may be increasingly wary of conducting business in the future - especially if it leads them to incur additional and unexpected liability for the operation of certain types of aircraft,” Swann concluded.
Power To Damage
Jonathan Hemus is managing director of crisis management consultancy Insignia. He said, “There are so many crisis management [lessons] from this tragic [737 Max] case, not least the enormous power of crises to damage lives, livelihoods, reputations and businesses.
Importance Of Culture
“These latest developments highlight the critical importance of leaders instilling a culture that facilitates crisis prevention or swift resolution. Three years on from the first 737 Max crash, this latest attention on Boeing shows how much easier it is to enter the spotlight due to a mishandled crisis than to exit it. Mishandled crises are not 'here today, gone tomorrow' events; their impact on an organization like Boeing can linger for years, sometime decades,” he observed.
Other Recent Boeing Crisis Situations
Boeing has had a lot of experience dealing with crisis situations over the past several years.
In November, the FAA lifted its ban against the 737 Max. Caroline Sapriel, managing partner of crisis management firm CS&A International, told me at the time that, “It will take time and this black mark on their history may never be completely erased.”
Last February, three months after the company returned the 737 Max to service, an engine on a United 777 exploded over Denver, raining debris on a neighborhood below. Airlines in the U.S., Japan, and South Korea grounded dozens of the 777s, and the Federal Aviation Administration ordered United to increase their inspections of the aircraft.
In April, Boeing faced another crisis involving its 737 Max. As reported by Forbes, the airline manufacturer recommended that a potential electrical issue in a specific group of 737 Max airplanes be addressed before they fly again.
Advice For Business Leaders
Recognizing Vulnerabilities
Hemus said, “Ultimately Boeing's travails underline once more that even the biggest, best, most admired organizations are vulnerable to a catastrophic crisis. Recognition of this, combined with commitment and action to prevent, prepare for and address crises, is the only way to avoid the devastation that a mis-handled crisis wreaks.”
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October 15, 2021 at 08:18PM
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Boeing Faces New Challenges To Image, Reputation And Credibility - Forbes
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