The Unraveling of Boeing | The Crash | 1

Summary

Business Wars: The Unraveling of Boeing | The Crash — Episode 1 Summary

Release Date: January 8, 2025 | Host: David Brown | Produced by Wondery

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I. Introduction to Boeing’s Turbulent Journey

In the inaugural episode of Business Wars: The Unraveling of Boeing, host David Brown delves deep into the dramatic downfall of Boeing, a titan that once dominated the $400 billion aircraft manufacturing industry. Over the past three decades, Boeing's reputation for quality, engineering excellence, and safety began to crumble under a series of scandals, catastrophic airplane crashes, and strategic missteps. This episode meticulously traces Boeing's descent, focusing particularly on the ill-fated Boeing 737 Max series and the catastrophic failures that led to its downfall.

II. The Tragic Crashes: Flight 302 and Its Aftermath

The episode opens with a harrowing recount of Ethiopian Airlines Flight 302 on March 10, 2019. At precisely 8:37 AM, the Boeing 737 Max 8 prepares for departure from Addis Ababa's Bole International Airport. Everything seems routine until a malfunction in the plane's sensor system triggers the MCAS (Maneuvering Characteristics Augmentation System), a software designed to prevent the aircraft from stalling.

David Brown (00:18):
"Inside the computer, a system called MCAS activates. Boeing created it to stop its 737 Max planes from stalling."

Despite the pilots' desperate attempts to regain control, including shutting off the MCAS system and trying to stabilize the aircraft manually, Flight 302 tragically crashes, killing all 157 on board. This marks the second fatal crash involving the 737 Max within five months, with the first being Indonesia's Lion Air Flight 610.

III. Global Groundings and Financial Fallout

Following the Ethiopian disaster, global aviation regulators swiftly respond. China becomes the first to ground the entire Boeing 737 Max fleet, a decision swiftly mirrored by Indonesia, Australia, and numerous other countries. This collective action incapacitates nearly a third of all 737 Max planes, sending Boeing's stock plummeting and causing billions in losses.

David Brown (10:20):
"We have an avalanche now of countries around the world grounding this plane."

At Boeing’s Renton, Washington facility, the mood is bleak. Thousands of employees face uncertainty as production halts and aircraft accumulate, idle and undelivered. The financial strain intensifies as Boeing reports nearly $5 billion in losses due to the grounding, and the company's credit rating plummets, sparking fears of Chapter 11 bankruptcy.

IV. Shareholder Meetings and Leadership Challenges

In a pivotal shareholder meeting on March 11, 2019, Boeing CEO Dennis Muilenburg addresses the crisis. Standing before investors, employees, and the media, Muilenburg acknowledges the severity of the situation and outlines Boeing’s efforts to rectify the MCAS software flaws.

Dennis Muilenburg (20:46):
"We hold ourselves to the highest standards of safety, quality, and integrity in our work because the stakes could not be higher."

Despite these assurances, shareholder frustration mounts. Investors question the transparency of Boeing's safety measures and the integrity of its regulatory relationships. During the meeting, Muilenburg faces tough inquiries about the design flaws in the 737 Max and Boeing's prior communications with the FAA.

V. Intensifying Investigations and Regulatory Scrutiny

As the crisis deepens, both the Senate Commerce Committee and the House Transportation and Infrastructure Committee launch intensive investigations into Boeing's practices and the FAA’s regulatory oversight. Testimonies reveal alarming insights:

• Whistleblower Revelations: Internal Boeing communications expose attempts to "Jedi mind trick" regulators and downplay the importance of the MCAS system in pilot manuals.

• FAA's Compromised Oversight: Reports highlight how Boeing influenced the FAA to permit self-regulation in certain certification processes, leading to insufficient oversight of critical systems like MCAS.

David Brown (34:01):
"You're continuing to work and make $30 million a year after these horrific accidents."

These revelations erode trust not only in Boeing but also in the FAA’s ability to regulate effectively, prompting calls for significant reforms within the aviation regulatory framework.

VI. CEO Under Siege and Leadership Overhaul

Dennis Muilenburg's leadership is severely tested as he faces relentless questioning from outraged senators and bereaved families during congressional hearings. Accusations of withholding critical safety information and prioritizing profits over passenger safety dominate the discussions.

Senator Richard Blumenthal (32:02):
"When did you become aware that MCAS was not going to be included in the flying manual?"

Despite Muilenburg’s attempts to express accountability and outline corrective measures, public and political pressure mounts. The tension culminates in the Boeing board's decision to strip Muilenburg of his role as chairman, signaling a desperate bid to salvage the company's tarnished reputation.

VII. Shifting Leadership and Ongoing Challenges

With Dave Calhoun stepping in as the new CEO, Boeing faces the monumental task of restoring trust, overhauling safety protocols, and navigating a skeptical regulatory environment. The 737 Max remains grounded, and competitors like Airbus capitalize on Boeing's vulnerability by securing significant orders, such as United Airlines' purchase of 50 Airbus A321XLRs.

David Brown (35:34):
"It's now clear that the MAX will not fly again this year and that the problems that grounded it are serious."

Calhoun's leadership will be pivotal in steering Boeing through financial recovery, rebuilding stakeholder confidence, and redefining the company's commitment to safety and innovation.

VIII. Conclusion and Teasing the Next Episode

As the episode concludes, the gravity of Boeing's situation is palpable. The company stands at a crossroads, grappling with internal failures, regulatory backlash, and a tarnished legacy. The stage is set for a transformative journey as Boeing endeavors to reclaim its position in the aviation industry.

David Brown (38:28):
"In most cases, we can't know exactly what was said. Those scenes are dramatizations, but they are based on historical research."

The next episode promises to explore how Boeing's strategic missteps and leadership changes have reshaped its corporate identity, veering away from its engineering-driven roots towards a focus on financial resilience.

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Notable Quotes with Timestamps

• David Brown (00:18):
  "Inside the computer, a system called MCAS activates. Boeing created it to stop its 737 Max planes from stalling."

• David Brown (10:20):
  "We have an avalanche now of countries around the world grounding this plane."

• Dennis Muilenburg (20:46):
  "We hold ourselves to the highest standards of safety, quality, and integrity in our work because the stakes could not be higher."

• Senator Richard Blumenthal (32:02):
  "When did you become aware that MCAS was not going to be included in the flying manual?"

• David Brown (34:01):
  "You're continuing to work and make $30 million a year after these horrific accidents."

• David Brown (35:34):
  "It's now clear that the MAX will not fly again this year and that the problems that grounded it are serious."

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Final Thoughts

Business Wars: The Unraveling of Boeing | The Crash offers a comprehensive and gripping account of how Boeing, once a paragon of aerospace excellence, found itself ensnared in a web of technical failures, regulatory complacency, and leadership challenges. Through meticulous storytelling and insightful analysis, David Brown paints a vivid picture of corporate downfall and the profound impacts on stakeholders worldwide. For those interested in corporate rivalries and the intricate dynamics of business crises, this episode serves as a compelling case study.

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For more insights into Boeing's saga, the next episode will reveal how Boeing's leadership transformations and strategic decisions will shape its future in the aviation industry.

Transcript

[Narrator]

Wondery plus subscribers can binge all four episodes of Business War's the Unraveling of Boeing early and ad free right now. Join Wondery plus in the Wondery app or on Apple Podcasts.

[David Brown]

Tower Ethiopian 302 ready for departure 302, this is Tower. Please stand by. March 10, 2019, Ethiopia. It's 8:37am and at Addis Ababa Bol International Airport, Ethiopian Airlines Flight 302 is waiting for takeoff. And in the cockpit, Captain Jared Getachew is looking forward to an uneventful flight. Outside, it's warm. There's not a cloud in the sky. 302 clear for takeoff. Getachu glances at his co pilot, First Officer Ahmed Mohammed. Ready? Ready. Gaetachu starts the takeoff. Same routine as always. Stable. N1 toga check. Takeoff thrust set. Cross checked speed increasing. Their Boeing 737 Max 8 aircraft begins to move down the Runway, gathering speed. Soon the plane and the 157 people on board will be heading to Nairobi. They are airborne. The ground below falls away as they climb into the bright blue sky. But as they do, there's a malfunction. A sensor that checks the angle of the plane's nose relative to the horizon fails. It starts incorrectly telling the onboard computers that the nose is pointed so high that the plane might stall. But since the plane is in takeoff mode, the computer ignores the warning. In the cockpit, Mohammed raises the flaps that help the plane take off. When the flaps slide back under the wings, the onboard computers register that the plane is no longer in takeoff mode. And now it's paying attention to the warning from the failed sensor. Inside the computer, a system called MCAS activates. Boeing created it to stop its 737 Max planes from stalling. Flight 302 isn't about to stall, but a failed sensor indicates that it is. And that's enough to prompt MCAST to intervene. Suddenly, the plane's nose lurches downwards, tipping the aircraft into a dive. Warning ALERT sound. Both pilots yank back their control yokes to raise the nose. MCAS intervenes again and shoves the nose down even further. Getachu now knows he's fighting for control with MCAS. Five months ago, 737 Max pilots didn't know the system existed. But then, in October 2018, MCAS forced an Indonesian passenger plane into the sea, killing everyone on board. Getachu realizes this is a life or death fight. Gehrachu strains to pull up the nose, but every time MCAS forces it to back down, the plane is rising and falling through the skies like a roller coaster and gaining speed. Muhammad flips the switch that should shut off mcas. It works. But now the plane's flight controls are so out of quack, the gated must keep holding the yoke. The plane steering wheel halfway back just to stop the nose dropping. Muhammad tries turning the manual trim wheel to adjust tabs on the wings and stabilize the aircraft. But he's overlooked that the engines are still in their high powered takeoff mode. Plane is now blasting through the skies at above its maximum operating speed. It's no good. The trim wheel is useless at this speed. It lacks the mechanical strength to overcome the air rushing over the plane. Only the electrical system has the power to overcome these kinds of aerodynamic forces. But to use it, they must risk re engaging mcast. Gitachu flips the switch and tries to engage Autopilot to stop MCAs taking control. But the autopilot won't engage when the yoke is pulled halfway back. Desperate Gatoru releases the yoke. It snaps forward. The plane dips violently, pointing at the farmland below. Pitch up, pitch up. Then MCAS activates again. The plane lurches into a steep dive. It's shooting towards the ground at more than 500 miles per hour. One hour later, in the air, around Flight 302's last known location, an Ethiopian Air Force helicopter hunts for the crashed aircraft. But they can't see one. Then one of the team realizes what they're looking at. Oh, God. There's no plane to find. The speed of impact has shattered Flight 302 into thousands of pieces. There are no survivors. This is the second fatal 737 Max flight in the past five months. And once again, MCAS is the prime suspect. And this time, the world's aviation watchdogs will not trust Boeing to fix it.

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[David Brown]

From wondering I'm David Brown and this is Business Wars. In this season, we follow the turbulent path of aircraft manufacturer Boeing over the past 30 years. Boeing once led the $400 billion aircraft manufacturing industry. Now it's embattled, a company struggling to salvage a tainted reputation. In the past decade, Boeing's been hit by a series of scandals, airplane crashes, and unexpected setbacks that have dented its once sterling reputation for quality, engineering and safety. Many of those problems were self inflicted, and they've cost Boeing dearly. The company has lost billions of dollars over the past five years. Its credit rating has tanked. There's even speculation that this American manufacturing icon could be forced to seek Chapter 11 bankruptcy protection. And at the center of Boeing's woes is the product that once seemed set to restore it to market leader status in Civil Aviation, the 737 Max. How did Boeing allow this to turn deadly? And what, if anything, can be done to save the company? This is episode one, the Crash Foreign March 11, 2019 the morning after Ethiopian Airlines Flight 302 crashed. As the families of the 157 people who died mourn, Boeing and its 737 Max line now have to face their day of judgment. Just five months ago, another 737 Max loaded with passengers crashed shortly after takeoff from Indonesia. That flight's pilots also faced a desperate and ultimately unsuccessful battle for control with the plane's MCAS software system. When that first plane crashed, Boeing persuaded the world's regulators that it could fix the problem, it could update the software, and in the meantime, just tell pilots how to get MCAS under control. So the MAX kept flying while waiting for the promised software update. But now, in the wake of Flight 302's crash, the mood's changed and the first to act is China's aviation regulator.

[FAA Official]

Hello.

[David Brown]

China has grounded its entire Boeing 737 Max fleet a day after an Ethiopian.

[State Farm Representative]

Airlines plane crashed, killing all.

[David Brown]

Soon after, Indonesia's regulator follows China's lead. The decisions leave a third of all 737maxs unable to fly. Boeing stock dives, wiping billions of dollars from the company's market valuation. In Renton, Washington, the thousands of Boeing employees who build the 737 Maxs arrive for work in a glum mood, shocked and sad. But they're also filled with uncertainty about their future. The groundings of the MAX are a threat to their livelihoods. Many of them have retirement plans that are loaded up with Boeing stock, and that stock is devaluing fast. But Boeing's hope that the decisions in China and Indonesia will be isolated cases doesn't pan out. The next day, more regulators ban the MAX from their skies.

[FAA Official]

Australia is the latest country to ban flying of the 737 Max. This comes after similar moves from authorities in countries including China, Singapore and South Korea.

[David Brown]

We have an avalanche now of countries around the world grounding this plane. And this one is a very big announcement. The British Aviation Authority grounding the 737 Max. France, Germany, Malaysia, Turkey, and the United Arab Emirates also ground the max. By the end of the day, 27 regulators have barred the Boeing plane from flying. But in the US The Federal Aviation Administration has yet to declare its position. Instead, its acting chief, Daniel Elwell, and senior officials are gathered in a conference room in Washington, D.C. debating how to respond. It's an unfamiliar position for the FAA to find itself in. The FAA has long been the regulator that other countries look to for guidance. If the FAA took action, the regulators of the rest of the world did the same. But now much of the world has acted without waiting for the faa. Elwell and his team debate what to do for hours. Canada is also considering grounding the Max. And if it does, that would pile further pressure on the FAA. But if the FAA grounds the Max, it won't just stop commercial flights in the U.S. it will also leave Boeing unable to deliver the jet to its customers. There's also concern that the world's regulators are overreacting due to political pressure. In the end, the FAA decides to wait. It issues a statement explaining that until it has more data about the crash in Ethiopia, there is no legal or regulatory justification for grounding the max. The FAA's line is it will only act when the evidence shows the MAX is at fault, not before the next morning. The FAA gets that evidence data that shows the final Moments of Flight 302 in Ethiopia Mirror those of the Lion Air crash in Indonesia five months before. It's evidence that points to the 737 Max itself as the cause of the crash. Armed with the new evidence, Elwell briefs President Donald Trump at lunchtime. By then, Canada has also grounded the Max, putting more pressure on the FAA to do the same. After being talked through the evidence, the President tells the FAA to ground the Max and then phones Boeing CEO and Chairman Dennis Muilenburg to warn him of what's about to happen. Then Trump tells the American public in a press briefing, we're going to be.

[Donald Trump]

Issuing an emergency order of prohibition to ground all flights of the 737 Max. Boeing is an incredible company. They are working very, very hard right now, and hopefully they'll very quickly come up with the answer. But until they do, the planes are grounded.

[David Brown]

The President's swift announcement catches the FAA off guard, the American public is told before the FAA even alerts its own offices across the country. By March 18, a week after the crash, 84 regulators have grounded the Max. Now all of the 387 Maxs in service are unable to fly. Thousands of weekly flights are gone. And airlines are dealing with the fallout from canceled flights and shredded schedules. Boeing is now in a deep crisis. Its best selling aircraft model is out of action. Its customers, the airlines, are furious. Its stock price has plunged, wiping $30 billion off its market valuation. On Capitol Hill, politicians are organizing committees and investigations to get to the bottom of what's gone wrong. At the company's facility In Renton, new 737 Maxs are still being made. But instead of being delivered, they are piling up outside of the Factory. And with 346 people now dead, Boeing's hard won reputation for quality and safety is in tatters. Boeing hopes it can fix the MAX and convince regulators to let it fly again fast. And analysts are confident Boeing will deliver that. Bank of America estimates that Boeing will have resolved this setback within six months and recommends buying Boeing stock while it's depressed in anticipation of a quick recovery. The aviation industry feels confident, too. Despite the pain, airlines also think the MAX will soon return to service. But this confidence is misplaced, because for the Boeing 737 Max, the path back to the skies is going to be long and slow.

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It's April 29, 2019, and in Chicago, Illinois, protesters wearing hooded raincoats have gathered at the foot of the grand steps leading up to the Field Museum on Lakeshore Drive. In their hands, some hold enlarged photographs, pictures of those who lost their lives in the 737 Max crashes. Others hold placards that bear slogans capturing the rage and pain felt by these friends and relatives of the dead. Boeing is making a killing from killing. Boeing's arrogance kills. Prosecute Boeing and executives for manslaughter. Among those holding photographs of lost loved ones are the family members of Samya Stumo, a 24 year old American and the grand niece of Ralph Nader, who died in the Ethiopia Airlines crash. Her grieving family has no body to bury. The speed at which the 737 Max slammed into the ground left no bodies intact. It will take months of DNA testing of the remains found at the crash site until what is left of her can be buried. So now her family stands here in the rain to make sure those coming to the museum for Boeing's annual shareholders meeting see the faces of those who have died. And as they stand out in the cold inside the museum, sheltered from the Rain and protests. Boeing CEO and chairman Dennis Muilenburg is preparing to make his first major public address since the 737 Max was grounded. Today should have been a day of celebration for Boeing. 2018 was a banner year for the company. For the first time in its history, revenues exceeded $100 billion. But in the wake of the 737 Max deaths and groundings, this is no time for celebration. Muilenberg's prime objective today is to convince investors that Boeing is still a good place for them to park their money. The headlines are bad. The company's best selling product, the 737 Max, is grounded worldwide and Boeing's cut back on its production. Investors have watched their stakes in Boeing wither in value. Airlines are weighing whether it's time to cancel their Max orders and buy Airbus A320neos instead. Mercifully for Boeing, that's not a realistic option for many of its customers. There's a five year waiting list to get an A320neo and Airbus has no quick way to expand its manufacturing capacity. Most airlines have little choice but to pray that Boeing gets the Max back in the air fast. Muilenburg heads to the podium at the front of the room. He's wearing a somber suit and a glum expression on his thin face. Behind him, instead of corporate logos or flashy displays, there's a heavy blue curtain that adds to the solemn air of today's meeting. Muilenberg looks out at the audience. It's not just employees, shareholders and analysts. The world's media are also here in force, and he knows they will pick over every word he utters. So he and his communications team have carefully honed this address. Today is not a day for improvisation. Muilenburg opens with the only topic he could the 737 Max. An apology for the losses and a moment of silence. Then he addresses the question that every investor wants to know. How close is Boeing to getting the 737 Max back in the air?

[Dennis Muilenburg]

We hold ourselves to the highest standards of safety, quality and integrity in our work because the stakes could not be higher.

[David Brown]

He shares how Boeing teams are hard at work on creating a software update to mcas. They've been working on it since the lion air crash in Indonesia six months earlier. He pledges that this update will stop erroneous angle of attack sensor readings triggering MCAS and ensure that similar accidents will never happen again. And he assures shareholders that they won't have to wait long for this update to arrive.

[Dennis Muilenburg]

We're making Steady progress on the path to certification. Having completed the official engineering test flight of the software and the final technical flight test prior to the certification flight. With the certified software Update implemented, the 737 Max will be one of the safest airplanes ever to fly.

[David Brown]

Muilenburg then reminds the audience that these crashes are isolated incidents. Every day, 5.3 million people fly on Boeing jets. At any given time, nearly half a million people are flying on an airplane from the 737 family. From there, Muilenberg segues into positive company updates, including refinements to the production of F15 fighter jets and flight tests for its new spacecraft, the CST100 Starliner. Then he sets to work reminding investors that aerospace manufacturing is a growth business. The industry could be worth more than $8 trillion over the next decade. Boeing predicts that more than 40,000 new commercial jets will be sold over the next 20 years. The message to Wall street is the regrettable setback of the 737 Max will soon be history. But with the pre prepared speeches out of the way, the shareholders get their chance to question the company's leadership. One shareholder takes Muilenberg to task for the design flaws in the 737 Max. He demands to know why MCAS was built so that if just one of the two angle of attack sensors failed, it would activate. We don't have to have 300 plus people die every time to find out that something is unreliable that never should have happened. Another shareholder questions Boeing's close ties with the faa. Then a retired Air Force officer asks if MAX pilots will now get flight simulator training. Muilenburg insists pilots will only need computer based training. But despite the critical voices and the protesters outside calling for heads to roll, shareholders still trust Boeing's leadership. In a vote, they reject a motion calling for Muilenburg to be stripped of his role as chairman. That same day, it's revealed that a cockpit warning light on the MAX doesn't work as it should. Known as the AOA Disagree Alert, it was supposed to warn pilots if either of the plane's angle of attack sensors malfunctions. The warning light comes as standard on every 737 max. But Boeing engineers later discovered that the warning only works when an optional display costing $80,000 is also installed. And only around 20% of maxs in service have that display. Boeing kept quiet about its discovery. It decided the lack of a functioning warning light wouldn't compromise safety. Only after the Lion Air crash in Indonesia did Boeing fess up about the problem to the faa. The revelation that Boeing swept the problem under the carpet unnerves pilots, despite Boeing stressing that this warning light doesn't activate when a plane is on the ground, so it could not have prevented the Lion Air crash. But the problems keep raining down. That summer, Boeing's finance team estimates that the grounding of the MAX will cost the company just shy of $5 billion. The timeline for the MCAS update keeps slipping. Initially, Boeing hoped to have the MAX flying by the fall. Now, end of the year seems the best it can hope for. And on Capitol Hill, investigations and inquiries galore are being launched to find out what's really going on with the max, Boeing and the faa. Armed with reports from whistleblowers, the Senate Commerce Committee probes whether the training of FAA inspectors is good enough. In May 2019, the House Aviation subcommittee starts its own investigation into the factors behind the MAX crashes. In his opening address to the investigation, Missouri Congressman Sam Graves declares that pilots trained in the USA would have been able to overcome the problems that downed the planes. Drawing on a report funded by several major investors in Boeing, he argues that the real problem is pilot training standards in foreign countries. Later on in the hearing, acting FAA chief Daniel Elwell backs him up. He tells the subcommittee that the Ethiopian Airlines pilots didn't adhere to the emergency directive the FAA issued following the Lion Air crash. They should have controlled the aircraft's speed. Ethiopian Airlines fires back. It accuses Elwell of attempting to deflect public attention from the flaws in the 737 Max. The airline also notes that it is one of the only airlines that bought a flight simulator to train its pilots to fly the max. It also notes that Boeing's simulator didn't simulate the operation of mcas. But back on Capitol Hill, FAA chief Elwell is not getting a comfortable ride. The MAX crisis hasn't just engulfed Boeing. It's also exposed flaws in how the FAA works. Lawmakers are now raising doubts about the regulator's effectiveness and questioning its decision to let Boeing and other manufacturers self regulate. And as the scrutiny intensifies, more questionable activities are unearthed. In October 2019, the Seattle Times reveals that Boeing convinced the FAA to play loose with the regulations so it could avoid a full upgrade of the 737's aging flight control system. That same month, a government report on the 737 max slams the FAA for granting Boeing the authority over some parts of the certification process. It concludes this allowed MCAS to be certified without enough oversight and calls for significant reform of the FAA. Then, just 13 days later, the investigation into the 2018 Lion Air crash publishes its final report. The conclusions are stark. The flawed design and certification of MCAS is the key factor in the fatal flight that killed 189 people. The investigators criticized Boeing for the AOA disagree alert that didn't work and its failure to inform pilots about MCAS's existence. The report also finds the pilots, particularly the first officer, failed to follow a checklist procedure that would have turned MCAS off. Lion Air's maintenance crew is also criticized for not grounding the plane due to a sensor fault. But the bulk of the criticism is aimed at Boeing and its aircraft. And that verdict is badly timed for the aircraft manufacturer because in less than a week's time, CEO Dennis Muilenburg is heading to Washington, D.C. to face lawmakers in Congress. And with Boeing's 737 Max crises deepening rather than easing, he knows this high profile public showdown could finish him.

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[David Brown]

29, 2019, and in Washington, D.C. boeing CEO Dennis Muilenburg is under interrogation for an hour. Senators have been questioning, challenging and attacking him and his company's record, and they've got no shortage of ammunition. Every day now seems to deliver a new Boeing scandal. The official investigation in the Lion Air crash, pinning the tragedy on the MCAS's flawed design. The release of hundreds of internal Boeing emails and instant messages where 737 Max team members talk of Jedi mind tricking regulators and scrubbing MCAS from the pilot manual. Or the revelation that just a few weeks before the Lion Air tragedy, Boeing lobbyists got lawmakers to undercut FAA oversight of new aircraft designs. Now many of those same senators who voted to approve less FAA oversight are interrogating Muilenburg about Boeing's failings. The Boeing CEO stiffens in his seat as Connecticut Senator Richard Blumenthal takes over the questioning. He starts by thanking the relatives of those who died in the crashes for coming to the hearing.

[Senator Richard Blumenthal]

Relatives who have lost loved ones. If you could please stand so we could thank you. Thank you for being here. If you could just stand.

[David Brown]

Muilenburg turns in his seat to look at the row of audience members rising from their chairs. People who have lost loved ones in the two 737 Max crashes and are here to watch Muilenburg squirm. The chairman of the committee invites them to hold up photographs of those who died. Pictures of smiling relatives now gone. Young kids who will never grow up after they sit back down. Blumenthal begins his questioning.

[Senator Richard Blumenthal]

When did you become aware of the fact that MCAS was not going to be included in the flying manual?

[Dennis Muilenburg]

Senator first, if I could express my.

[Senator Richard Blumenthal]

Deep sympathies for the You've done that and my time is limited. I apologize for interrupting you, but I want to know specifically when you became aware of this effort.

[Dennis Muilenburg]

Senator, I can't reference that email for.

[David Brown]

The next two hours. The questioning continues. Senators describe the 737 Max as a flying coffin and declare it's time to strengthen the FAA so it can hold Boeing accountable. Muilenburg is accused of telling half truths and setting pilots up for failure. The Boeing CEO concedes mistakes were made, but it's not enough to stop the criticism raining down the next day. He goes through it again as he testifies before the House Transportation and Infrastructure Committee. There, he fares no better. His attempts to appear more human by referencing how his values were forged in his childhood on an Iowa farm fail to impress. Instead, the senators roll their eyes and the audience in the room groans. Muilenburg is on the ropes, just like Boeing. A few days before he came to Washington, Boeing's board of directors stripped him of his role as chairman Publicly, it was presented as part of a change designed to improve oversight at the company. In reality, it's a sign that power is slipping away from him. Tennessee Representative Steve Cohen seizes on Muilenburg's assertions that he is accountable for the mistakes Boeing has made. Cohen asks why in that case is he still making more than $20 million a year? Let me ask you this, Mr. Muellerburg.

[FAA Official]

You said you're accountable. What does accountability mean? Are you taking a cut and pay? Are you working for free from now on until you can cure this problem? These people's relatives are not coming back. They're gone. Your salary's still on. Is anybody at Boeing taking a cut or working for free to try to rectify this problem like the Japanese would do?

[Dennis Muilenburg]

Congressman, it's not about the money for me. That's not why I came. Are you giving up any money, Congressman? My board will conduct a comprehensive review. That's.

[FAA Official]

So you're saying you're not giving up any compensation at all. You're continuing to work and make $30 million a year after this horrific two accidents that caused all these people's relatives to go to disappear to die. You're not taking a cut in pay at all.

[David Brown]

Eventually, the questioning ends as Muilenburg prepares to leave and return to Chicago. Nadia Milleron, Ralph Nader's niece and the mother of a 24 year old who died in the Ethiopian Airlines Flight 3 plane crash, approaches. Muilenburg's security guard moves to block her approach, but Muhlenberg stops to listen to her.

[Nadia Milleron]

Will MCAS really be safe once you finish all the changes?

[David Brown]

Mullenberg assures her it will be. Milleran looks at him for a moment and then delivers her judgment.

[Nadia Milleron]

You talked about Iowa just one too many times. The whole group of us said what you should do is just go back to the farm, go back to Iowa, do that.

[David Brown]

In the wake of the hearings, Muhlenberg's position decays fast. As December begins, one of Boeing's most loyal customers, United Airlines, makes a shocking announcement. It's agreed to buy 50 of Airbus next generation aircraft, the A321XLR. It's built to be a single aisle plane that can fly long haul. The planes won't arrive until 2024, but Airbus latest creation promises to shake up international travel. And Boeing's got nothing to match it. Eager to have something positive to report, Muilenburg attempts to nudge the FAA into allowing Boeing to deliver its completed 737 Maxis to customers. But the FAA is no longer dancing to Boeing's tune. Instead of a yes, Muhlenberg is given a reminder that the FAA is the one in charge here and Boeing needs to focus on supplying the information it needs to decide if the Max can fly again. Faced with an intransigent faa, Muilenburg bows to the inevitable and halts the Production of the 737 Max in Renton, Washington. Unable to deliver the planes to airlines, there's no point in building more. It's now clear that the MAX will not fly again this year and that the problems that grounded it are serious. For Boeing's board, it's the final straw. On Sunday, Dec. 22, 2019, the independent members of Boeing's board hold a teleconference to discuss Muhlenberg's future. They decide he is damaged goods. Boeing is in trouble and a fresh face at the top might buy the company the time it needs to get its house in order. So they fire Muilenburg and replace him with longtime board member Dave Calhoun. It's a new start, but with the 737 Max crisis now tainting the entire Boeing brand, Calhoun is up against serious headwinds in his mission to save Boeing. On the next episode, we find out how a major takeover move separated Boeing from its engineering led roots and turned it into a company with its eyes firmly fixed on its share price.

[Narrator]

If you like Business wars, you can binge all episodes early and ad free right now by joining Wondery plus in the Wondery app or on Apple podcasts. Prime members can listen ad free on Amazon Music.

[David Brown]

Before you go, tell us about yourself.

[Narrator]

By filling out a short [e-mail] survey.

[David Brown]

From Wondery this is episode one of the Unraveling of Boeing for Business Wars. If you're interested in hearing more about Boeing, we recommend Flying Blind by Peter Robison A quick note about recreations you've been hearing. In most cases, we can't know exactly what was said. Those scenes are dramatizations, but they are based on historical research. I'm your host David Brown written by Tristan Donovan of Yellowhead research by Marina Watson. Sound design by Joe Richardson Fact checking by Gabrielle Drollet. Voice acting by Ace Anderson and Chloe Elmore. Our managing producer is Desi Blalock. Our senior managing producer is Callum Plews. Our producers are Tristan Donovan and Grant Rutter. Our senior producers are Emily Frost and Dave Schilling. Our executive producers are Jenny Lauer Beckman and Marshall Louie for wondering.

[State Farm Representative]

And now a next level moment from AT&T business say you've sent out a gigantic shipment of pillows, and they need to be there in time for International Sleep Day. You've got at and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, AT&T5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T5G requires a compatible plan and device coverage not available everywhere. Learn [e-mail] 5G Network.