CHICAGO (BLOOMBERG) - Boeing Chief Executive Officer Dennis Muilenburg unveiled a structural overhaul intended to sharpen the planemaker's focus on safety after two accidents of its 737 Max killed 346 people within a five-month span.
Acting on a recommendation from the board, Muilenburg is creating a new product and services safety organisation to centralise responsibilities across the planemaker's business and operating units.
The new group will be run by Beth Pasztor, a 34-year Boeing veteran who will report to a new board aerospace committee as well as the company's chief engineer.
Pasztor will have responsibility for all aspects of product safety, including investigating concerns raised anonymously by employees, Boeing said in a statement Monday (Sept 30).
The company's accident-investigation team, safety-review boards and engineering and technical experts who represent the Federal Aviation Administration in aircraft certification will all report to Pasztor, who previously oversaw product safety at Boeing's jetliner division.
"Beth is a proven leader, she's a collaborator," Muilenburg said in an interview in the company's Chicago office tower. He also considered external candidates before deciding that Pasztor's deep knowledge of Boeing would give her a running start.
"She, from a technical qualification standpoint, is the best."
The CEO is under pressure to show airlines, travelers and global regulators that safety is woven into the century-old manufacturer's designs and culture.
Both have been called into question given the lapses that have prompted regulators to ground two brand-new Boeing jetliners this decade.
The company had already rung up US$8.3 billion in Max-related expenses through July, and the costs of maintaining production and compensating customers are certain to grow the longer the grounding lasts.
The Max hasn't flown commercially since just after the March crash of an Ethiopian Airlines jet. A Lion Air plane went down off the coast of Indonesia in October.
In both disasters, a once-obscure flight-control system went haywire, nudging the planes' noses down until pilots were overwhelmed. In 2013, the 787 Dreamliner was banned for three months after fires on two planes from lithium-ion batteries.
Directors last week signaled that they would closely monitor the company's progress under Muilenburg. A new board committee is devoted to overseeing the safe design, development and production of the company's aerospace product line-up.
"Safety-related experience" will be a criteria to be considered in choosing future directors.
"This is an engineering company, it needs an engineering culture and engineering management," aerospace analyst Richard Aboulafia said last week. "It deviated pretty far from this at the time when the Max was being developed."
The US National Transportation Safety Board last week called for a renewed focus on how a cacophony of flight-deck alerts can distract and overwhelm pilots. The agency's report on the Max tragedies also provided clues to one of the mysteries of the disasters: how Boeing safety assessments for a software-system linked to the crashes could still comply with FAA design principles.
Boeing's simulator tests of the so-called MCAS system focused on pilots' response to indications that a motor on the horizontal stabilizer was moving the plane's nose down without their input.
But the hazard tests never examined specific failure modes that could cause MCAS to kick on - including failure of a key sensor that tripped multiple cockpit warnings and bewildered pilots on the Lion Air and Ethiopian Airlines flights.
Boeing, following recommendations from the the board last week, will have the company's tens of thousands of engineers report to the company's chief engineer, Greg Hyslop.
That will promote a more consistent approach to meeting operational priorities, while enabling senior managers to spot and elevate talented engineers, Boeing said.
The move mirrors an earlier restructuring of finance professionals, who now report directly to Boeing Chief Financial Officer Greg Smith.
Muilenburg said he doesn't expect the structural shift to substantially change the day-to-day work of those carrying out design and testing. But connecting the technical experts to other engineers across the company will create a new, informal network for them when problems crop up, he said.
He is also expanding Boeing's safety-management system and safety-review boards, which have been expanded and are now led by senior executives, including Hyslop and business division chiefs.
Boeing has also invested in enhanced flight simulation and computing capabilities. Software engineers in recent weeks have run 390,000 flight hours - the equivalent of flying 45 years - on the 737 Max.
In addition, the company is already pouring money into researching the design of future flight decks to account for human factors.