December 13, 2019

Boeing Will Have To Stop Its 737 MAX Production Line. What will Trump Do To Avoid It?

The grounding of the Boeing 737 MAX will be further extended. Major airlines have already moved the date for the return of the MAX into passenger service to April 2020. They will have to move it again.

After the first 737 MAX crashed in October 2018 the Federal Aviation Administration calculated that it was likely that about 15 more fatal crashes would happen during the 45-year life of the 737 MAX fleet worldwide. Despite knowing that another crash was likely the FAA did not order the planes to be grounded. Only after a second MAX came down in March of this year did the FAA react properly. It was the last regulator to do so.

Global trust to the FAA and Boeing was lost and other international safety regulators are now taking their own detailed look at the planes problems. That process is far from over.

Since the 737 MAX plane type was grounded Boeing has announced again and again that the re-certification of the planes and their return-to-service was just two months away. The always unrealistic announced return date helped to hold up Boeing's stock price and put the FAA under pressure to agree to Boeing's changes. The new FAA administrator Stephen Dickson has finally had enough of it and personally told Boeing's CEO Dennis Muilenburg to shut up:

“The Administrator is concerned that Boeing continues to pursue a return-to-service schedule that is not realistic due to delays that have accumulated for a variety of reasons,” the email states. “More concerning, the Administrator wants to directly address the perception that some of Boeing’s public statements have been designed to force FAA into taking quicker action.” “The Administrator wants to make clear that both FAA and Boeing must take the time to get this process right. Safety is our top priority and the Administrator believes public statements must reflect this priority,” the email states. “The purpose of the meeting is to ensure Boeing is clear on FAA’s expectations.”

There are still several open issues which Boeing has to fix before the plane can go back into service.

The old Maneuvering Characteristics Augmentation System (MCAS) system which caused the crashes used only one Angle of Attack sensor. The logic of its activation was running on only one of the two Flight Control Computers (FCC). Boeing had classified an MCAS failure as a 'MAJOR' incident. MCAS would therefore not require redundancy. But the two accidents have proven that an MCAS failure is a 'CATASTROPHIC' event and that the system requires a much higher degree of safety and redundancy.

The new MCAS version will use at least two AoA sensors and additional logic to compare their values. It will run on both Flight Control Computers which will compare their results and only act if those are equal. Previously a Boeing 737 could in principal fly without a functioning Flight Control Computer. It was not safety critical to have both of them. But now both are required for safety reasons. That again requires that the software running on them can not be allowed to crash the computer. It must be error free.

In November the European Union Aviation Safety Agency (EASA) demanded that Boeing provide documentation of a full formal audit of the software. Boeing played down the issue and the media quoted a person who said who said it would take 'weeks' to do that. As I have done audits of industrial software systems I had a good laugh at that. Even a large team will need several months to do a full formal audit of an FCC.

Another major new issue came up only recently after regular line pilots got confused during simulated MCAS incidents:

Pilots managed to cope with the various emergency flight scenarios they were confronted with, including, for example, a bird strike wiping out an angle of attack sensor at an altitude of 4,000 feet. However, regulators observing the tests were concerned that some of the pilots didn’t follow the expected procedures. “They were using the wrong checklists,” said one person with knowledge of the tests, adding that the European Union Aviation Safety Agency (EASA) in particular may now require changes to the procedures and checklists.

A failure of one of the AoA sensor that drive MCAS leads to number of cockpit alarms. There will be speed warnings, stick shaker stall warnings, altitude warnings and some sirens that might go off. Each alarm requires the pilot to respond in certain ways. But with multiple alarms going off it is difficult for a pilot to analyze the root cause of the problem. During the simulator sessions more than half of the airline pilots reacted with the wrong procedure. It seems evident that the pilots need extensive additional training to fly a revamped 737 MAX. To save costs the airlines and Boeing had tried to avoid that.

There may still be additional issues with the MAX that must be fixed. While the FAA and EASA have taken the lead in the re-certification process of MAX, the biggest customer country for the plane is China. Yesterday the Civil Aviation Administration of China (CAAC) let it be publicly know that it has additional questions:

China has raised “important concerns” with Boeing Co (BA.N) regarding design changes proposed to end the grounding of the Boeing 737 MAX airliner, Beijing’s aviation regulator said on Thursday, declining to say when it might fly in China again. The remarks broke months of public silence from China, the first country to ground the 737 MAX in March following the second deadly crash involving the model in less than five months.

Neither the FAA, nor EASA, nor the CAAC are happy with the several layers of band aid Boeing put onto the 737 MAX. Boeing should take some radical steps to change the root cause that required an MCAS system in the first place. It could change the aerodynamics of the plane to defeat the nose up attitude of the aircraft. That would cost additional money and possibly more time. But it is probably the only solution that everyone can accept.

With no end in sight to the grounding of the MAX Boeing will soon have to stop producing more of the planes:

The issue is finding parking for and managing the inventory of more than 400 airplanes that will have been produced by the end of December. January will add another 42 MAXes at the current production rate, and so on.

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All this means Boeing executives have to decide very soon—perhaps as early as this month, more likely in January—whether to reduce production or suspend it entirely.

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Boeing’s 2019 financial results will be announced Jan. 29. A suspension of stock dividends is already expected, a major move by Boeing that the Board has resisted since the grounding. (Stock buybacks were suspended right away.) If a decision is made to cut or suspend production, an announcement may come before the earnings call on the 29th.

There are thousands of companies, big and small, involved in building an airplane. If Boeing has to shut down the production line many of the hundred thousand people involved will have to move on to do something else. The people and their know-how will try to find someone else to work for. Some of the companies involved may go bankrupt. That will make the later restart of the production line difficult and costly.

But Boeing's current stock of 400 planes will already take more than a year to clear. Boeing simply can not afford to make hundreds of new planes that are not allowed to fly.

Boeing's lobbyists emphasize that Boeing is one of the largest U.S. exporters and that several hundred thousand people are involved in building its planes. If Boeing has to shut down its 737 production line many of them will lose their jobs.

That will not look good for the sitting president during a re-election year. But what could Donald Trump do to avoid it?

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Previous Moon of Alabama posts on Boeing 737 MAX issues:

Posted by b on December 13, 2019 at 19:26 UTC | Permalink

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