Can Boeing be fixed? Aerospace leaders offer a repair manual

Boeing’s travails keep piling up, and that list doesn’t include a pair of fatal accidents in 2018 and 2019 that killed 346 people. The 108-year-old jet maker this summer agreed to plead guilty in a federal criminal case related to those crashes. The string of crises has left the company bleeding cash, mired in manufacturing problems and at odds with airlines, regulators and its own employees. On Dec. 29, 179 people were killed in a South Korean crash whose cause is now under investigation.

“We’re at a low here, folks," Boeing’s new CEO, Kelly Ortberg, told the company’s employees in a November all-hands meeting.

There’s a lot riding on Boeing’s ability to pull out of its nose dive. Boeing is the biggest U.S. exporter and one of the world’s two major manufacturers of large commercial jetliners, along with Europe’s Airbus. Boeing makes jets, bombs and helicopters for the U.S. military. It makes rockets and spacecraft for NASA. It employs some 170,000 people around the world and is the central cog in a global supply chain of thousands of companies from small parts shops to multinational giants like GE Aerospace.

“Everybody wants us to succeed," Ortberg told workers. “They’re all also expecting us to kind of clean up our act and, you know, deliver good products and not have these snafus."Ortberg, who took the helm of Boeing in August, has signaled his intention to shrink the company and slash layers of bureaucracy. We asked dozens of people—current and former Boeing leaders, airline executives, employees, suppliers, safety regulators and others—in recent months what Boeing should do to turn itself around. Here’s what they said.

1. Think big.

Boeing for decades was an aerospace pioneer—but it’s been 20 years since Boeing introduced a new airplane. Since then, the jet maker has instead made updates to its existing models. Phil Condit, who was CEO of Boeing from 1996 to 2003, said Boeing needs to get to work on a brand new design as soon as possible.

Others echo the call for ambition. “Successful companies make big bets," said U.S. Rep. Adam Smith (D., Wash.), whose district includes Boeing’s factory in Renton. “There’s an upfront cost but they do it."

“The current generation of students is very interested in social impact," said Gail Cornelius, a career center director at the University of Washington and a former Boeing program manager. “Blue Origin wants to put people on Mars. Tesla, it’s to get rid of gas. The social impact is tangible. Boeing doesn’t have that."

2. Fix the culture.

Boeing’s culture morphed over time from one that valued ingenuity and quality to one that prioritized shareholder returns. That culture is now at the root of Boeing’s problems, many people say.

Put safety first.

“Until it soaks through every layer of the company, all the way down to the person who sweeps the factory floor, until everybody has that in their DNA—that the most important thing to Boeing is excellence and safety of flight—there will never be a full, 100% trusting of that company, because their mind is not on the ball. Their mind is on the cash register," said Morrie Goodman, a former communications leader at Boeing, NASA, FEMA and the Commerce Department.

Encouraging employees to report safety concerns would reduce the need for whistleblowers, “and that’s really what we’re watching and trying to make sure that they get to," said Federal Aviation Administration chief Mike Whitaker, who has imposed production limits on Boeing’s 737 factory.

“There were Boeing engineers…that would say, ‘Wait a minute guys, I don’t know that we should do this. This may not be safe.’ Their concerns were essentially dismissed. Boeing has good people. But they need a reward system in place that actually compensates folks for doing the right thing," said Douglas Pasternak, lead investigator for the House Transportation Committee’s probe into the 737 MAX crashes.

Acknowledge mistakes.

Executives need to set an example by publicly talking about what they have learned from their own mistakes, said Rich Plunkett, who heads strategic development for Boeing’s engineers’ union. “It’s not so we can all dogpile on a manager who made a mistake, but what can we learn from a manager who made a mistake?"

“We really, really have a blaming culture," Ortberg told employees during the recent all-hands. “Don’t sit at the water cooler and bitch about people. Let’s focus on the task at hand."

Rediscover teamwork.

Alan Mulally ran Boeing’s commercial airplanes business from 1998 to 2006 and persuaded leaders to sign off on the 787 despite their jitters over the program’s sky-high price tag.

“The most important thing is that they have a reliable process and a very clear expected behavior of all the participants," said Mulally, who went on to run Ford. “People have to respect each other, listen to each other, and have emotional resilience."

That includes listening to employees. “Go out on the floor and ask them," said Adam Dickson, former Boeing fuel systems engineer and manager. “Go talk to the employees and say, no managers allowed: Tell me what’s the number one problem you have on the floor. Listen to them."

3. Forget stock price and production deadlines—for now.

Boeing executives for years have tried and failed to break a dangerous habit: traveled work, a term for tasks that are completed out of their ordinary sequence on the production line. Pushing unfinished planes down the line to meet quotas has led to errors, including a failure to replace four critical bolts on a door plug that ended up blowing off an Alaska Airlines flight last January.

Slow down.

“The joke is: ‘Safety first, as long as your production schedule is met,’" said Andrew Cropp, a machinist overseeing rework at Boeing’s factory in Renton. “We used to have monthly meetings with your crew, manager and [the manager’s boss] and if there were any issues, they’d have a team look into it. That stuff went away because time off the floor was not time building an airplane."

Get it right.

Airline bosses say that as frustrated as they are about delivery delays on the hundreds of jets they have ordered from Boeing, right now they just want problem-free planes.

Ortberg, the former CEO of a big Boeing supplier, has been surprised by what he has found inside Boeing. There are entire production lines inside the 737 and 787 factories repairing recently-assembled jets instead of building new ones.

“It’s amazing to me how much waste is consuming our daily work. It seems like 30% of everybody’s job is fixing something—either the bad quality or late product or something that shouldn’t have happened," said Ortberg.

Invest in workforce training.

Boeing lost thousands of veteran workers during the pandemic and has been scrambling to hire and train new staff to work in its factories. “We care about the production system and the integrity of the production system; we’re like the canary in the coal mine," said Jon Holden, president of Boeing’s machinists union chapter. “We need a partner on the other side."

Communicate.

Still, Boeing can’t ignore production deadlines forever. Its dangerous habit of pushing unfinished planes down the production line stems from suppliers being unable to deliver the right parts at the right time, said Bill Osborne, former head of quality for Boeing’s defense and space business. And that’s in large part because the suppliers can’t count on Boeing to tell them accurately how many parts to build, he added.

“You have got to be honest with suppliers," Osborne said. “Giving suppliers enough lead time, giving suppliers the long-term requirements, sticking to your production schedule—all those things extremely important for a disciplined supply chain."

4. Revamp the design process.

A growing reliance on outsourcing and offshoring has sapped Boeing’s intellectual property and given it less agency over the design and manufacturing process.

Many of the recent quality issues can be traced back to Spirit AeroSystems, a fuselage maker that Boeing spun off in 2005. Boeing has agreed to reacquire Spirit and give the unprofitable business a financial lifeline until it does.

Stop outsourcing.

“They outsourced too much" intellectual property, said Jason Adams, a portfolio manager at Boeing investor T. Rowe Price. “They almost didn’t give themselves enough credit for how good they were in their design and manufacturing systems."

Bring design and manufacturing in-house as much as possible, said Tewolde Gebremariam, who was CEO of Ethiopian Airlines in 2019 when an Ethiopian Airlines 737 MAX crashed, killing 157 passengers and crew. The accident led to the global grounding of the planes for more than a year.

“For a manufacturer of that size, and a manufacturer of such sensitive products as airplanes, Boeing has to control the design process and manufacturing process," he said. “Of course, there will be outsourcing, there will be suppliers, but Boeing will be in a better position to control that process."

Involve more people, including manufacturing experts, pilots and suppliers.

Many of Boeing’s problems stem from the fact that planes aren’t designed with the manufacturing process in mind, said Osborne, the former head of quality for Boeing’s defense business. “It’s not just designing the part for performance, it’s designing it so that it can be manufactured. Manufacturing has not had a seat at the table."

“Honestly, the test pilots need to have more say," said Matt Menza, a former Boeing test pilot. “It was different from when I was in the Navy. I told my engineers, ‘I don’t like the way this airplane behaved, [it] acted weird,’ they would stop everything and say, ‘What in God’s name is he talking about? Let’s go look at that.’"

Boeing relies heavily on middlemen to coordinate between the engineers designing parts and the suppliers tasked with building them. That often slows things down when problems arise, said Rosemary Brester, owner of a small Seattle-area supplier that makes parts for the 767 and 777. “You may never get an answer back and, if you do, it might be weeks or months before you hear back from someone."

5. Use engineers better.

Boeing built the wide-body 787 to compete with the more-efficient Airbus A330, which had become popular with airlines. The 787 was a fantastic airplane but overengineered, said Aengus Kelly, CEO of lessor AerCap, the world’s biggest owner of Boeing jets. “The engineers were allowed to go wild," he said. “The program was $26 billion over cost because of the efforts made to try and create this airplane that could fly to the moon. The airplane was grounded 19 months later."

Instead of reining them in, Mike Dostert, a retired FAA aerospace engineer and union representative for the agency’s Seattle office, suggests empowering them. Engineers “find problems and they fix problems," he said. “Well, that’s not the current Boeing company strategy. It’s ‘do the minimum.’ And half the time, they won’t even admit they’ve got a problem. They try to tell everybody there isn’t a problem when clearly there is."

6. Restore trust.

The 737 MAX crashes shook the public’s trust. Regulators, under pressure from lawmakers, began scrutinizing the company more closely, slowing deliveries and approval of new airplane models.

The events of the past year have eroded the public’s trust even further. In July, Boeing agreed to plead guilty to a criminal charge that it misled air-safety regulators before the deadly MAX crashes. (A judge later rejected the deal, and Boeing and prosecutors said they are working on a new one.) And Boeing’s Starliner spacecraft now faces an uncertain future after technical issues left two astronauts stuck on the International Space Station.

That includes with the FAA and the Pentagon…

“When things happen, and they will, you’ve got to be very transparent about having a corrective action plan in place, and think about going above and beyond what the regulations require," said former FAA chief Steve Dickson. “The regulators have got to know that’s your absolute highest priority."

Boeing overcharged the Air Force nearly $1 million for spare parts on C-17 cargo planes, including an 8,000% markup on soap dispensers, according to the Pentagon’s inspector general. That’s a symptom of a bigger problem, said retired Army Lt. Gen. David Bassett, former head of a Pentagon agency that policed Boeing’s contracts with the military.

…as well as employees.

“They have a workforce that doesn’t trust Boeing, that is afraid of retaliation. As long as that continues…they’re going to have problems," said Jennifer Homendy, chair of the National Transportation Safety Board.

Whatever choices he makes, Ortberg doesn’t have much time to fix Boeing. It had been burning through its reserves before he agreed in November to a 38% wage increase to end the machinist strike. He has already made a few emergency moves: slashing thousands of jobs, ousting a few top executives and raising $24 billion to buy some time. Boeing slowed its production rate after the door-plug blowout and plans to ramp back up slowly.

Ortberg said Boeing needs to put its house in order before making a big move like designing a new plane. And, Ortberg said, Boeing can’t afford another mistake. He has been spending time on the factory floors and meeting with employees and others as he develops his fix-it plans. He said he recently met with Sen. Ted Cruz (R., Texas), who told him Boeing would be “in deep, deep trouble" if it had one more safety problem.

“And I think he’s right," Ortberg said.

Alison Sider and Benjamin Katz contributed to this article.

Write to Sharon Terlep at sharon.terlep@wsj.com and Andrew Tangel at andrew.tangel@wsj.com