According to the President of Dubai based Airline Emirates, Tim Clark, US plane maker Boeing is currently in a critical situation due to the ongoing decline in the company’s manufacturing performance.
Clark, who is one of the most prominent executives in global airline industry, said in a recent interview, that Boeing’s standards have been progressively declining. He attributed this decline to ongoing missteps in management and governance, where financial performance has taken precedence over engineering excellence. Clark added that Emirates is mulling the idea of to deploying its own engineers to monitor the production lines of the US aerospace giant.
According to Emirates boss, Boeing needs to establish an unparalleled safety culture. The plane maker must assess its manufacturing processes to ensure no shortcuts are taken.
“I’m sure Dave Calhoun and Stan Deal (Boeing’s the CEO and commercial head respectively) are on that . . . this is the last chance saloon,” Clark added.
Emirates’ President asserted that Boeing’s past leadership committed several errors. These included the decision to outsource certain manufacturing processes and relocate parts of the 787 production to South Carolina as a cost-cutting measure after facing labor disputes at its main facility in Seattle, Washington. According to Clark, this move resulted in the loss of valuable skills and competencies for Boeing.
He also reiterated the need for a comprehensive assessment of the manufacturing procedures employed by the US company, while urging the management to set aside any apprehensions regarding their financial performance.
Clark is convinced that it is crucial for Boeing to thoroughly examine the entire process of aircraft production and its locations. This approach is essential for effective management and governance, and it should be the top priority for all board members. Instead of solely focusing on financial aspects such as return on investment, bottom line, free cash flow, shareholder value, share value, and personal bonuses, the emphasis should be on establishing a solid foundation from the start. By doing things correctly from the beginning, the desired financial outcomes will naturally follow.
The head of Emirates has made these remarks amidst recent groundings and safety inspections faced by Boeing after a 737 Max 9 aircraft experienced a mid-flight blowout, causing damage to a section of its fuselage. In response to these incidents, the US Federal Aviation Administration (FAA) has implemented a set of restrictions on the 737 MAX planes, temporarily preventing the company from increasing their production due to concerns regarding passenger safety.
Emirates, one of Boeing’s biggest clients, confirmed its most recent order for 95 wide-body Boeing 777 and 787 aircraft in November, 2023.