Boeing driving ‘transformational change’ that may take years

Boeing Co. is intent on driving “transformational change” into its factories and culture based on feedback from customers, regulators and to a large part employees, the head of the planemaker’s commercial aircraft business said.

The overhaul will take years to take root, and will require support from customers who’ve been burned by Boeing’s delays and quality lapses, Stephanie Pope acknowledged in her first public appearance since taking the job as part of a management shakeup earlier this year.

The company is seeing an improvement in the factory flow for its 737 that will help a “meaningful” increase in production rates of its most important airliner after months of slowed output, Pope told reporters on the eve of the Farnborough International Air Show.

The planemaker is trying to dig itself out of a crisis since a near-catastrophic accident in January on an airborne 737 Max. Pope said she spent her first four months on a listening tour. She’s been bringing customers into Boeing’s Renton factory, showing them the equivalent of a war room, where key production indicators of work being done out of schedule, late-arriving parts and the like are visible in real time. 

“They’ve been very engaged, very involved and very candid with our feedback,” she said of the response. “It still doesn’t take away from the reality that we’ve disappointed them and we’ve impacted their business.”

Regulators and airlines will be skeptical that the work underway is more than just window dressing until Boeing has stabilized its factories and supply chain and customers are getting their aircraft as scheduled, said Nick Cunningham, analyst with Agency Partners.

“The problem for Boeing is that they’re not going to be given the benefit of the doubt for obvious good reason,” Cunningham said.

The first step in the process would be convincing US regulators to sign off on increasing the 737 production rate above the current curb of 38-jets per month — and then Boeing actually achieving that rate, Cunningham said.

‘The Moment’

Pope was previously seen as a possible successor to Chief Executive Officer Dave Calhoun when she took on a more prominent role late last year. The blow-out of a fuselage panel on an airborne 737 in January and the subsequent crisis shifted her into her new role, while Calhoun said he’ll leave by the end of the year at the latest. Boeing is still searching for his replacement, and Pope said she won’t be drawn into what the next company leader needs to do. 

The board is undergoing a “robust” search for the next company leader, she said.

“Leadership is all about meeting the moment,” Pope said, adding that entails engaging with people, providing accountability and creating a plan for US regulators that drives transformational change.

The Federal Aviation Administration remains very engaged at Boeing, with the regulator’s inspectors still in its factories, and Pope described their interaction as “firm and fair.”

A 90-day safety and quality plan that Boeing submitted to its regulator in response to the Max grounding “is not a three-month plan,” Pope said. 

Speaking alongside Pope at a briefing ahead of the Farnborough Air Show, Boeing Defense head Ted Colbert said the division continues to face difficulties after posting a profit in the first quarter. The results would be more akin to the third quarter of 2023, Colbert said, when the unit posted a nearly $1 billion loss.

Boeing reports earnings at the end of the month.