Emirates Airline’s head has warned Boeing that it is in the “last-chance saloon”, as he prepares to send his engineers to oversee Boeing’s production line after witnessing the long decline in the manufacturing performance.
Sir Tim Clark said that he saw a “progressive decrease” in Boeing standards. He attributed this to management and governance mistakes, such as prioritising financial results over engineering excellence.
Clark is one of aviation’s most prominent figures. He has worked in senior positions at Emirates for over 30 years and been the president since 2003. His comments are a further blow to the US plane manufacturer following the mid-flight rupture of a fuselage section on a Boeing Max 9 aircraft.
Emirates, one of Boeing’s largest customers, placed an order in November for 95 wide-body Boeing 787 and 777 jets for long-haul flight, valued at $52bn list price.
They must instill a safety culture that is unmatched. They need to review their manufacturing processes so that there are no shortcuts etc. I know [chief executive] Dave Calhoun, and [commercial director] Stan Deal will be working on this. . . This is the last opportunity saloon,” said he.
Clark announced that for the first-time, the airline will send its own engineers in order to observe the production of the 777 by Boeing and Spirit AeroSystems.
“The fact that we’re having to do that is testament to what has happened. This would not have been sanctioned in the old days. You know, we trusted these people implicitly to get it done,” he said.
Clark has often criticised manufacturers over delays or reliability issues, but this is his most direct criticism of Boeing.
Boeing’s reputation has suffered a serious blow as a result of the 737 Max 9 accident, which is currently being investigated by federal regulators. Its manufacturing and quality assurance procedures have also been scrutinized more closely.
Boeing refused to comment on Clark’s remarks, but pointed out Calhoun’s message earlier in the week to employees in which he stated that “now is not the right time” to discuss financial or operational goals. The company did not provide its usual financial guidance when it reported the results of the fourth quarter, on Wednesday. It has promised to regain the trust of its stakeholders.
Clark said Boeing’s previous management made repeated mistakes, including outsourcing part of its manufacturing and moving portions of its 787 to South Carolina in order to reduce costs after battles with the unions at their primary base north from Seattle, Washington.
Boeing moved its entire 787 production from South Carolina to South Carolina by 2021, but the facility has faced manufacturing challenges. Clark stated that Boeing lost “skills” and “competences” as a result of the move.
Clark said that the company’s manufacturing process needed to be thoroughly reviewed. He added that management should set aside concerns over financial performance.
“It’s time to take a close look at the way it makes aeroplanes, and where they are made. . . This is just good management and good governance, and everyone on the board should make it their priority.
What is the return on your investment, not: “What is it? What is your bottom line? What is free cash flow? What is shareholder value? What is the value of a share? What is my bonus’? No, you will get it if everything goes well in the beginning.
Clark said Calhoun had the chance to “put Boeing’s house in order”, adding that “only time will show” if these two are the best people for the task.
Will Boeing ever regain its former glory?” Yes, it will. Will Boeing continue to design and produce great aeroplanes that are well-built, reliable for customers? They will. They have to get the house in order right now. “This is a significant shift in priorities,” he said.
Clark’s remarks echo those made by other airline customers over the past few weeks. Aengus Kelley, CEO of AerCap, the world’s largest aircraft lessor, told the Financial Times last month Boeing should put financial targets aside and focus on safety and quality.