Boeing’s Reputation On The Line

Since Dennis Muilenburg took the Boeing Co. helm four years ago, it has been more or less clear skies for the firm. Air traffic has been increasing six percent annually, orders were booming, and last year’s revenue topped US$100 billion for the first time in the company’s 102-year history.

At the same time, competitor Airbus SE was sidelined with the embarrassing commercial flop of its A380 flagship and a bribery scandal that precipitated a massive management turnover. During Muilenburg’s tenure, Boeing’s stock price has tripled, with its market value soaring above US$200 billion to make it the largest industrial company in the US. Boeing is using its newfound success to pursue acquisitions and dream projects, such as the ever-elusive flying car.

Until this month, the only black mark on the company’s record sheet was the crash in October of a 737 Max 8 operated by Indonesia’s Lion Air Inc. The tragic, but seemingly isolated incident, has re-emerged with new meaning in the wake of a second tragic accident of the same model in Ethiopia.

It’s a PR scenario every chief executive officer hopes to avoid: public panic over product safety tarnishing an otherwise carefully cultivated corporate reputation- perhaps permanently. For Boeing, the pressure is severe: the 737 accounts for a third of the firm’s profit.

Regulators throughout China, India, Australia, Singapore, Canada and the EU have quickly grounded the plane, and dozens of airlines have halted their 737 flights. British tabloids the Sun and the Daily Mail have, in their characteristic subtly, dubbed the Max 8 the “death jet”.

Fleeing investors have also cut more than US$20 billion from Boeing’s market value, with Muilenburg forced to call President Trump to reassure him of the plane’s safety after he sent a tweet criticizing modern airliners as “too complications. Even so, Trump and the US Federal Aviation Administration have ultimately made the call to ground the jets.

There are still many unknowns surrounding the two accidents, but the speed with which other countries grounded the plane as Boeing and the FAA dragged their feet signalled a new era of airline safety not dependent on American guidance.

“What we’re looking at here is almost a rebellion against the FAA,” says Sandy Morris, aerospace analyst at Jefferies International Ltd. in London, “it’s the first time I’ve ever seen this happen.”

In the meantime, Muilenburg has followed a protocol of limiting communications about investigations until more information is painstakingly gathered, and the accident’s cause clearly determined. What brief statements he has released, however, read much like the product of a team of engineers and lawyers- not PR professionals.

If nervous passengers are truly to be reassured, and what remains of Boeing’s reputation salvaged, it’s high time Boeing called in the experts.

Ronn Torossian is the CEO and Founder of 5W Public Relations. 5WPR is a NYC based PR Agency.

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