Max was born of a race to outdo a Boe­ing ri­val

Turn to Air­bus threat­ened sales

The Buffalo News - - FRONT PAGE - By David Gelles, Natalie Kitroeff, Jack Nicas and Re­becca R. Ruiz

Boe­ing faced an un­think­able de­fec­tion in the spring of 2011. Amer­i­can Air­lines, an exclusive Boe­ing cus­tomer for more than a decade, was ready to place an or­der for hun­dreds of new, fuel-ef­fi­cient jets from the world’s other ma­jor air­craft man­u­fac­turer, Air­bus.

The chief ex­ec­u­tive of Amer­i­can called Boe­ing’s leader, W. James McNer­ney, to say a deal was close. If Boe­ing wanted the busi­ness, it would need to move ag­gres­sively, the air­line ex­ec­u­tive, Gerard Ar­pey, told McNer­ney.

To win over Amer­i­can, Boe­ing ditched the idea of de­vel­op­ing a new pas­sen­ger plane, which would take a decade. In­stead, it de­cided to up­date its work­horse 737, promis­ing

the plane would be done in six years.

The 737 Max was born roughly three months later.

The com­pet­i­tive pres­sure to build the jet – which per­me­ated the en­tire de­sign and de­vel­op­ment – now threat­ens the rep­u­ta­tion and prof­its of Boe­ing, af­ter two deadly crashes of the 737 Max in less than five months. Pros­e­cu­tors and reg­u­la­tors are in­ves­ti­gat­ing whether the ef­fort to de­sign, pro­duce and cer­tify the Max was rushed, lead­ing Boe­ing to miss cru­cial safety risks and to un­der­play the need for pi­lot train­ing.

While in­ves­ti­ga­tors are still try­ing to de­ter­mine the cause of the crash in Ethiopia this month and one in Indonesia in Oc­to­ber, they are fo­cused on a newly in­stalled piece of soft­ware de­signed to avoid stalls. The soft­ware was meant to com­pen­sate for big­ger, more fuel-ef­fi­cient en­gines and en­sure the plane flew the same way as an ear­lier ver­sion.

Months be­hind Air­bus, Boe­ing had to play catch-up. The pace of the work on the 737 Max was fre­netic, ac­cord­ing to cur­rent and for­mer em­ploy­ees who spoke with the New York Times. Some spoke on the con­di­tion of anonymity be­cause of the sen­si­tiv­ity of the mat­ter.

En­gi­neers were pushed to sub­mit tech­ni­cal draw­ings and de­signs at roughly dou­ble the nor­mal pace, for­mer em­ploy­ees said. Fac­ing tight dead­lines and strict bud­gets, man­agers quickly pulled work­ers from other de­part­ments when some­one left the Max pro­ject. Although the pro­ject had been hec­tic, cur­rent and for­mer em­ploy­ees said they had fin­ished it feel­ing con­fi­dent in the safety of the plane.

The specter of Boe­ing’s chief ri­val was con­stant. Air­bus had been de­liv­er­ing more jets than Boe­ing for sev­eral years. And los­ing the Amer­i­can ac­count would have been gut­ting, cost­ing the man­u­fac­turer bil­lions in lost sales and po­ten­tially thou­sands of jobs.

“They weren’t go­ing to stand by and let Air­bus steal mar­ket share,” said Mike Ren­zel­mann, an en­gi­neer who re­tired in 2016 from Boe­ing’s flight con­trol team on the 737 Max.

Dis­miss­ing a ri­val

Boe­ing didn’t seem both­ered at first by the A320­neo, the fuel-ef­fi­cient plane that Air­bus an­nounced in 2010.

At a meet­ing in Jan­uary 2011, James F. Al­baugh, the chief ex­ec­u­tive of Boe­ing’s com­mer­cial air­planes di­vi­sion, told em­ploy­ees that Air­bus would prob­a­bly go over budget cre­at­ing a plane that car­ri­ers didn’t re­ally want, ac­cord­ing to a record­ing of the meet­ing re­viewed by the Times.

For decades, Air­bus was barely on Boe­ing’s radar. A con­sor­tium started in 1970 by sev­eral Euro­pean coun­tries, it was slow to com­pete glob­ally. Boe­ing, founded in 1916, dom­i­nated the pas­sen­ger-jet mar­ket with its 737 mid­size jet and the 747 jumbo jet.

Then came John Leahy, an Amer­i­can who rose through the ranks to be­come the chief Air­bus sales­man in 1994. Leahy was re­lent­less. Once, the chief ex­ec­u­tive of an air­line got sick just as a deal was about to close. Leahy trav­eled to the man’s house, and the ex­ec­u­tive signed the pa­pers while wear­ing his bathrobe.

“Boe­ing thought we were a flash in the pan,” Leahy said. “But I thought there was no rea­son we couldn’t have 50 per­cent of the mar­ket.”

Leahy scored a ma­jor coup in 1999 when JetBlue de­cided to launch with a fleet com­posed en­tirely of Air­bus A320s. In the years that fol­lowed, more low-cost car­ri­ers around the world, like easyJet, placed big or­ders, too.

Air­bus had pulled ahead of Boe­ing by 2005. “Boe­ing has strug­gled with the de­vel­op­ment work needed to take the com­pany into the 21st cen­tury,” Tim Clark, pres­i­dent of Emi­rates, the Dubai air­line, said that year. Air­bus, he said, “has been braver, more brazen.”

In 2008, Air­bus de­liv­ered 483 air­planes, while Boe­ing de­liv­ered just 375. Three years later at the Paris Air Show, Air­bus took or­ders for 730 air­craft, worth some $72.2 bil­lion, with its new fuel-ef­fi­cient ver­sion dom­i­nat­ing.

“Boe­ing was just com­pletely ar­ro­gant in dis­miss­ing the vi­a­bil­ity of the A320,” said Scott Hamil­ton, man­ag­ing direc­tor of the Lee­ham Co., an avi­a­tion con­sult­ing firm.

As Amer­i­can con­sid­ered plac­ing its largest-ever air­craft or­der ex­clu­sively with Air­bus in the spring of 2011, ex­ec­u­tives at the car­rier ini­tially didn’t be­lieve Boe­ing thought that the threat was real, ac­cord­ing to a per­son in­volved with the dis­cus­sions, who spoke on the con­di­tion of anonymity.

Even­tu­ally, Amer­i­can de­cided to make deals with both Boe­ing and Air­bus, buy­ing hun­dreds of jets from each. Ar­pey called McNer­ney again, this time read­ing from a script to care­fully cal­i­brate his words. First, he con­grat­u­lated the Boe­ing chief on the deal, ac­cord­ing to the per­son with knowl­edge of the dis­cus­sions. Then he broke the news that Amer­i­can would also place an or­der with Air­bus.

‘Pres­sure cooker’

In­side Boe­ing, the race was on. Roughly six months af­ter the pro­ject’s launch, en­gi­neers were al­ready doc­u­ment­ing the dif­fer­ences be­tween the Max and its pre­de­ces­sor, mean­ing they al­ready had pre­lim­i­nary de­signs for the Max – a fast turnaround, ac­cord­ing to an en­gi­neer who worked on the pro­ject.

“The time­line was ex­tremely com­pressed,” the en­gi­neer said. “It was go, go, go.”

One for­mer de­signer on the team work­ing on flight con­trols for the Max said the group had at times pro­duced 16 tech­ni­cal draw­ings a week, dou­ble the nor­mal rate. “They ba­si­cally said, ‘We need some­thing now,’ ” the de­signer said.

De­spite the in­tense at­mos­phere, cur­rent and for­mer em­ploy­ees said, they felt dur­ing the pro­ject that Boe­ing’s in­ter­nal qual­ity checks en­sured the air­craft was safe.

In a state­ment, Boe­ing said: “The Max pro­gram launched in 2011. It was of­fered to cus­tomers in Septem­ber 2012. Firm con­fig­u­ra­tion of the air­plane was achieved in July 2013. The first com­pleted 737 Max 8 rolled out of the Renton fac­tory in Novem­ber 2015.”

The com­pany added, “A mul­ti­year process could hardly be con­sid­ered rushed.”

At the heart of Boe­ing’s push was a fo­cus on cre­at­ing a plane that was es­sen­tially the same as ear­lier 737 mod­els, im­por­tant for get­ting the jet cer­ti­fied quickly. It would also help limit the train­ing that pilots would need, cut­ting down costs for air­lines.

Rick Ludtke, an en­gi­neer who helped de­sign the 737 Max cock­pit and spent 19 years at Boe­ing, said the com­pany had set a ground rule for en­gi­neers: Limit changes to hope­fully avert a re­quire­ment that pilots spend time train­ing in a flight sim­u­la­tor be­fore fly­ing the Max.

“Any de­signs we cre­ated could not drive any new train­ing that re­quired a sim­u­la­tor,” Ludtke said. “That was a first.”

A cas­cade of changes

Months be­fore Boe­ing’s an­nounce­ment of the Max, the com­mer­cial air­planes ex­ec­u­tive, Al­baugh, cri­tiqued the de­ci­sion by Air­bus to re­fit the A320 with big­ger en­gines, which could al­ter the aero­dy­nam­ics and re­quire big changes to the plane.

“It’s go­ing to be a de­sign change that will rip­ple through the air­plane,” Al­baugh said in the meet­ing with em­ploy­ees.

“I think they’ll find it more chal­leng­ing than they think it will be,” he told them. “When they get done, they’ll have an air­plane that might be as good as the Next Gen­er­a­tion 737,” a plane that Boe­ing had launched in 1997.

But a main sell­ing point of the new A320 was its fuel-ef­fi­cient en­gines. To match Air­bus, Boe­ing needed to mount the Max with its own larger and pow­er­ful new en­gines.

Just as Al­baugh had pre­dicted for Air­bus, the de­ci­sion cre­ated a cas­cade of changes. The big­ger en­gines al­tered the aero­dy­nam­ics of the plane, mak­ing it more likely to pitch up in some cir­cum­stances.

To off­set that pos­si­bil­ity, Boe­ing added the new soft­ware in the Max, known as MCAS, which would au­to­mat­i­cally push the nose down if it sensed the plane point­ing up at a dan­ger­ous an­gle. The goal was to avoid a stall. Be­cause the sys­tem was sup­posed to work in the back­ground, Boe­ing be­lieved it didn’t need to brief pilots on it, and reg­u­la­tors agreed. Pilots weren’t re­quired to train in sim­u­la­tors.

The push for au­to­ma­tion was a philo­soph­i­cal shift for Boe­ing, which for decades wanted to keep pilots in con­trol of the planes as much as pos­si­ble.

Air­bus, by com­par­i­son, tended to em­brace tech­nol­ogy, putting com­put­ers in con­trol. Pilots who pre­ferred the Amer­i­can man­u­fac­turer even had a say­ing: “If it’s not Boe­ing, I’m not go­ing.”

The new soft­ware sys­tem is now a fo­cus of in­ves­ti­ga­tors who are try­ing to de­ter­mine what went wrong in the Ethiopian Air­lines crash and the Lion Air tragedy in Indonesia. A lead­ing the­ory in the Lion Air crash is that the sys­tem was re­ceiv­ing bad data from a faulty sen­sor, trig­ger­ing an un­re­cov­er­able nose dive. All 737 Max jets around the world are grounded, and Boe­ing has given no es­ti­mate of when they might re­turn to flight.

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