(dramatic music)
- The Boeing saga this past year
is an example of how not to handle a crisis.
- A relatively small design issue
that exploded into massive catastrophe.
- They did not build in margin for human error.
- This brand new plane crashed twice
in the span of about five months.
How could this possibly happen?
- How long has this plane going to be grounded?
Boeing says there's a fix.
When is it coming?
- Boeing was once held up to be the gold standard
of engineering excellence.
And today it has lost a lot of credibility.
- The 737 MAX scandal will change aviation history
like no other event in the past five or six decades.
- [Narrator] Until relatively recently,
Boeing's reputation among pilots and passengers
was second to none.
Today, that faith has been significantly shaken
as America's aviation giant continues to reel
from the fall out of two devastating crashes
that killed 346 people.
The MAX crisis has severely crippled
the nation's biggest exporter.
Exposed critical flaws in the relationship
between the FAA and the businesses it regulates.
And raised serious questions, how was this able to happen?
Who is to blame, and what does this mean
for the future of the aviation industry?
(dramatic music)
In late 2018, things were going pretty well for Boeing.
- Before the first crash, Boeing thought of the MAX
as a cash cow that would keep on producing.
- They were just breaking all sorts of records
for revenue and airplane deliveries.
- [Narrator] A global boom in air travel
had helped the company earn record profits,
which drove it's stock price to new heights.
- Problem prior to the crash for Boeing
was that Boeing couldn't make the MAX fast enough.
We wrote about how Boeing
was running out of parking spots for the MAX.
- [Narrator] The MAX is the latest iteration
of Boeing's 737 aircraft,
which first entered commercial service in 1968.
- It's kind of the work horse of Boeing's fleet
if you've kind of done any kind of medium length travel,
domestically, you've almost definitely flown on a 737.
- [Narrator] As times changed so did the 737.
Over the years, Boeing has updated the jet dozens of times.
All the while maintaining the original air frame.
And this system worked well for Boeing.
The 737 is the most successful
commercial airplane ever made.
In 2017, 50 years after the first 737 took off,
Boeing was following a long established play book
when it delivered one of the first 737 MAX eight's
to a budget Indonesian airline called Lion Air.
- [Newsreader] An Indonesia passenger plane
crashing into the sea minutes after take off.
- [Newsreader] 189 people on board.
- [Narrator] On October 29th, 2018,
a Boeing 737 MAX eight jet crashed into the Java sea,
killing everyone on board.
- There are a bunch of questions that immediately come up.
A brand new plane went into commercial service
about a year before it crashed.
That's unusual.
What could have happened?
Could there have been pilot error?
Was there a maintenance issue?
- [Narrator] Some of the most important reporting
to come out after the crash
was the story about an obscure piece of software.
- We were obviously trying to understand things
about this airplane and the systems on the airplane,
and so I went to a aviation safety conference.
One of the people we talked to
was a pretty senior Boeing executive,
and he acknowledged that they never told pilots
about the system.
And essentially what's the big deal.
- [Narrator] Boeing at the time argued
that pilots didn't need to know
about the existence of the automated flight control system,
who's name the public would eventually learn was MCAS.
- Well how can that be?
How can there be something on a plane,
not only that pilots didn't fully understand
and weren't trained on,
but also just didn't know that it existed.
- After the first crash I think we still didn't yet realize
how big the story would become.
(mellow music)
- [Narrator] The origin of the MAX scandal
has it's roots in the rivalry between Airbus and Boeing.
Ever since the 1990's
the two companies have been locked in competition.
By the 2010's the commercial aviation market
was essentially a stable duopoly,
with each company controlling roughly half of the market.
At the heart of this rivalry
has long been each company's
flagship commercial passenger plane.
For Boeing, that aircraft is the 737,
for Airbus, it's the A320.
(dramatic music)
In 2010, Airbus shook up the market
when it announced the A320 Neo,
an updated version of the A320 aircraft line.
Neo planes wouldn't just be updated versions
of a familiar aircraft, they would also be cheaper to run.
- Fuel efficiency's the touchstone of anything
that airlines do.
I mean, if you talk about bean counters and penny pinchers,
airlines are the ultimate in those areas.
- [Narrator] It's time to think max.
- Boeing did not design a completely new plane
from the ground up because it would have taken too long.
- [Narrator] To make the MAX,
Boeing took the existing 737 air frame
and paired it with a new, more powerful engine.
But doing that changed the plane's aerodynamics.
One effect was that in rare flying conditions
the aircraft's nose would pitch up.
This is where the MCAS software came in.
It was designed to automatically push the plane's nose down.
- One former Boeing engineer who didn't work on the MAX,
characterized the software fix as a band aid.
We've been learning for the last year
how the band aid wasn't as strong as Boeing needed it to be.
(slow piano music)
- [Narrator] On March 10th 2019, a second crash.
This time in Ethiopia.
All 157 people on board were killed.
- [Male] I heard about the second crash.
- When on Sunday morning.
- I woke up and kind of rolled over and looked at my phone.
- I got a text from an airline official,
and it simply read, "MAX eight".
I thought, how could this be, another one?
- From the moment that the second crash happened,
we've really thought or written about almost nothing else.
- Plane crashes in general are pretty rare.
Plane crash within five months of each other,
is pretty stunning.
(dramatic music)
- This is unparalleled in modern commercial aviation.
It doesn't happen.
- [Narrator] A day after the crash,
in an unprecedented move, China grounded the MAX.
Other nations quickly followed.
- China grounding the planes
before the FAA had done that was a huge deal,
and it came as a huge surprise to all of us.
- Historically speaking, the FAA has always been the,
the leader that all the other countries followed.
- [Narrator] This was the first time in aviation history
that any nation's regulatory body had overruled the FAA.
- An emergency order of prohibition
to ground all flights of the 737 MAX eight.
- [Narrator] Two days later, the FAA relented
and decided to ground the MAX.
This marked the beginning of the agency's troubles,
as the MAX crisis brought the regulator
under increased scrutiny.
In April, Boeing began to face the financial consequences
of the scandal.
News then emerged that Boeing hadn't informed the FAA
the warning system that helped pilots diagnose
an MCAS malfunction wasn't working as intended.
Boeing's lack of transparency about MCAS
was highlighted yet again
when a recording emerged of a meeting.
- [Michael] If you're gonna give us a system
that we are gonna be affected by,
it's hugely important that we get briefed on what it is.
- [Narrator] The story was based partially on a recording
made about a month after the first crash,
when a group of Boeing executives
met with the American Airlines pilot union.
In the tape, the pilots confront the executives,
saying they were not told enough about the plane.
- [Michael] Most people say,
"If it ain't Boeing, it ain't goin'."
That's where most of us get that from
because we think we've been dealt with honestly
by the company.
We're getting told via the news media
that you know what, the average pilot,
that's a little bit too much information
for him to understand and be able to comprehend.
- [Narrator] Then in July it was revealed
that after the first crash,
the FAA had done it's own internal risk analysis
of a potential second crash.
- Their analysis showed that if the FAA
and Boeing didn't do anything
and just kept the planes operating as they had been,
there would be 15 crashes over some two decades.
That would make the 737 MAX the most dangerous jet airliner
ever developed in the modern world.
- What was going on inside Boeing?
What was going on inside FAA?
Did anyone discuss grounding the plane
after the first crash?
- A lot of questions have been raised
about what the FAA's role was.
Whether the agency was really doing it's job
in overseeing the design and production of the MAX.
You know, the FAA delegates Boeing employees
to do some of that oversight itself,
and I think some people have questioned whether
that has gone too far.
You know, whether it's sort of the fox
guarding the hen house.
(mellow music)
- We set out to pin point the root cause
of how Boeing created a plane that crashes.
We really tried to get to the heart
of how they came to these decisions.
- Why didn't they use two sensors?
They only used one sensor
and that is sort of a violation of basic engineering.
- At the root of it
Boeing made an incredibly flawed assumption.
- But they failed to recognize badly,
that all these other emergency signals would be confusing.
Would make it very very difficult for a crew
to do the right thing in a fast enough way.
- [Narrator] Despite the intense scrutiny
surrounding the MAX,
at that time Boeing wasn't especially forthcoming
with information about the plane.
- I spent much of the summer knocking a lot of doors
in the Seattle area, trying to find Boeing and FAA people
who would help us understand how all this happened.
People would politely say no, close the door,
sometimes it was more of a door being slammed in our face.
- We went to, I think it was something like 200 houses,
you know, drove 500 miles.
It was really difficult to get people
to agree to talk with us.
- [Narrator] That fall, Boeing CEO, Dennis Muilenburg
appeared before congress,
where he was sharply criticized by senators.
- How did you not, in February,
set out a nine alarm fire to say,
we need to figure out exactly what happened.
- We're not quite sure what Mr Faulkner meant
by that exchange.
- I think it was widely thought
that he did not perform well in those hearings.
- He survived two days of really tough questioning,
but he was brutally wounded.
- In conjunction with those hearings
he sat down with family members in a closed door meeting,
and they sat there with large posters
with photos of their loved ones.
In one case, a family member brought photos
just of the coffins of his wife and his mother in law,
and his three children, and he lost
and he told the Boeing officials,
including Dennis Muilenburg,
that he didn't feel they deserved
to see his family members' faces.
In December, the company finally said,
we can't keep making these planes,
we're going to have to shut down our factory.
And that has a huge ripple effect
throughout the supply chain, and I think,
all of the relatively rosy projections
that Dennis Muilenburg had been making throughout the year,
finally it came to a head,
and the board said enough is enough.
- [Narrator] Less than a month later, Muilenburg was fired.
- It wasn't surprising when Muilenburg was pushed out,
it was more surprising that it took the board
as long as it did to push Muilenburg out.
- He wasn't visible.
You know a question that came up a lot was
"Where is Dennis?"
- [Narrator] In the new year,
Boeing has continued to grapple with the fall out
from the MAX scandal.
The end of which doesn't seem to be anywhere in sight.
On January 10th,
Boeing released a batch of internal communications.
- They showed Boeing employees
talking about tricking regulators
and say some really unflattering things
about the regulators that they were dealing with.
- It gives you a real glimpse into culture inside Boeing.
- [Narrator] It was these internal messages
that likely led to Boeing's hand being forced
to reverse their long held stance
that pilots didn't need simulator training.
- That is a stunning development.
- We had been writing about how going back nearly a decade,
Boeing had designed the MAX from the start
to not require additional simulator training for pilots.
- [Narrator] Flight simulators
are highly specialized machines,
built to train pilots on the ground.
One of the MAX's biggest selling points,
touted by Boeing from the beginning,
was that the pilots who knew earlier 737 models,
like the 737 NG,
wouldn't need much more training to pilot the MAX.
For years, Boeing assured pilots, airlines and regulators
that pilots who knew the NG could easily fly the MAX
after just a few hours of training on an iPad.
- Requiring pilots to go through simulator training
before flying the MAX sort of raises questions
about the fundamental, you know,
value proposition of the MAX.
You know, what is the value of the MAX?
- [Narrator] Since March 8th of 2019,
Boeing's market value has dropped close to $112 billion.
- There is an ongoing criminal investigation
by the justice department.
There is a civil investigation
by the Securities and Exchange Commission.
It is also the subject of inquiries
by the congressional law makers.
It is also being looked at
by the Department of Transportation and the FAA.
The plane is still on the ground.
Perhaps most important of all, 346 people died.
- The MAX saga shows that there's something
that needs to be reassessed in that whole system.
It's time to take a breath.
And let's think about the down sides of automation.
How it can confuse pilots,
how it can introduce unexpected consequences
and new hazards.
So we're looking at a new world
where other regulators will be much more assertive
and will take a much greater role in approving aircraft,
even if they're US aircraft.
- [Narrator] In an email to the Wall Street Journal,
Boeing said, "The development to the MCAS portion
"of the software is complete,
"however the entire software package
"is going through the system safety analysis,
"and then will be presented to the FAA for approval."
Boeing said it expects the MAX to be cleared
to back in the air this summer.