People once thought the banking industry was too big to fail, some seriously big financial institutions ultimately proved that wrong during the Global Financial Crisis of 2008/2009 which saw many seemingly unsinkable companies go out of businesses.
Early 2019, after two deadly crashes of the allegedly bigger and better 737 MAX, the plane was grounded by countries around the world as people scrambled to find answers for what happened. After numerous investigations, the culprit turned out to be MCAS also known by its non-abbreviated mouthful of a name Maneuvering Characteristics Augmentation System.
The issue with the 737 MAX was engineers were tasked with fitting larger and heavier engines under the wing of the plane. The engines had to be moved slightly higher and moved forward, which ultimately caused a dynamically unstable airframe. The solution was MCAS which used a single sensor to determine if the nose of the plane should be pushed down (as a safety measure).
While the 737 MAX continues to collect dust in parking lots and warehouses, Boeing is bleeding money. Just recently, they announced they’re halting production of the MAX (which will only slow, not stop the money bleeding). The solution Boeing has come up with involves comparing data from two AOA (Angle of Attack) sensors and comparing the difference if both sensors cannot agree, the MCAS does not override the plane as detailed here.
The company was hoping to have the 737 MAX recertified by the end of 2019, but this has been pushed back to 2020. Understandably, this entire situation does not just reflect badly on Boeing, but also the FAA who allowed this to happen in the first place.
Too Big, Too Influential
For any other company, two tragedies and a grounding going on for almost a year would be enough to plunge them into bankruptcy and put them out of business. For Boeing, their stock has been affected a bit, but they’re still okay.
Boeing is a company that has been around for over one-hundred years. When it comes to the aerospace industry, you don’t get any bigger than Boeing. Since the ’90s, the presidential fleet of planes consists of two Boeing VC-25’s which are military versions of the workhorse Boeing 747.
In terms of employment size, Boeing is one of the largest American employers. They employ over 150,000 people, many of those work in the US. If Boeing were to go out of business, the US economy would be affected. Not to mention the supply chain Boeing has created rivals even that of a company like Amazon and its supply chain.
Fly on any major airline in most parts of the world and chances are you are flying on a Boeing built plane, most likely a variant of the Boeing 747.
To get an understanding of just how influential Boeing is and its importance to the US, look no further than the fact the CEO of Boeing (Dennis Muilenburg) still has his job (CEO’s have been fired or forced to step down over less) and has not been summoned to Washington to be grilled before the senate over the tragedies and mismanagement of the 737 MAX.
You don’t get any more influential than not being held accountable or even being questioned on why two tragedies in such a short space of time even took place (the 737 MAX tragedies were unprecedented). When the banking industry collapsed, bankers were dragged before congress to be held accountable.
Still Waters Run Deep, Boeing Runs Deeper
When you and I think of Boeing, we think of a company that makes passenger planes. However, Boeing has its fingers in many pies, it’s producing the pies, it’s eating them, it owns the pie factory, it owns the supply chain that is shipping the pies to stores and restaurants.
Not many people realise Boeing also props up other companies and industries. Their subcontracts with General Electric (GE) and United Technologies and Spirit Aerosystems are some of the biggest. You best believe Boeing is adding a few zeroes to the books of those contractors.
Boeing is entrenched in both civilian and military sectors. They sell planes, rockets, satellites, telecommunications equipment and even missiles. They are the largest exporter by dollar value in the US. As far as size is concerned, Boeing is a juggernaut, a core pillar of the aerospace industry.
They are already saying that the halting of the 737 MAX could affect the US’s GDP in 2020. Not many companies can lay claim to being so big they contribute to the overall GDP of a country.
Even if Boeing were to get into serious financial trouble, the US government would not even hesitate to bail them out. It would probably be considered a national security risk if Boeing were to go under given their influence and reach in the defence sector alone. Quite simply, Boeing could sustain many more missteps and accidents before it really affected them and forced the government to step in.
