The Unraveling of Boeing | The Crash | 1

0:05Tower, Ethiopian 302, ready for departure. 302, this is Tower. Please stand by. March 10th, 2019, Ethiopia. It's 8.37 a.m., and at Addis Ababa Bol International Airport, Ethiopian Airlines Flight 302 is waiting for takeoff, and in the cockpit, Captain Yarad Gedichu is looking forward to an uneventful flight. Outside, it's warm, and there's not a cloud in the sky. 302, clear for takeoff. Gedichu glances at his co-pilot, First Officer Ahmed Mohamed. Ready? Ready. Getachew starts the takeoff. Same routine as always. Stable. N1 toga. Check. Takeoff thrust set. Cross checked. Speed increasing. Their Boeing 737 MAX 8 aircraft begins to move down the runway, gathering speed.

0:58Soon, the plane and the 157 people on board will be heading to Nairobi. They are airborne. The ground below falls away as they climb into the bright blue sky. But as they do, there's a malfunction. A sensor that checks the angle of the plane's nose relative to the horizon fails. It starts incorrectly telling the onboard computers that the nose is pointed so high that the plane might stall. But since the plane is in takeoff mode, the computer ignores the warning. In the cockpit, Mohammed raises the flaps that help the plane take off. When the flaps slide back under the wings, the onboard computers register that the plane is no longer in takeoff mode.

1:39And now, it's paying attention to the warning from the failed sensor. Inside the computer, a system called MCAS activates. Boeing created it to stop its 737 MAX planes from stalling. Flight 302 isn't about to stall, but a failed sensor indicates that it is. And that's enough to prompt MCAS to intervene. Suddenly, the plane's nose lurches downwards, tipping the aircraft into a dive. Warning alerts sound. Both pilots yank back their control yokes to raise the nose. MCAS intervenes again and shoves the nose down even further. Getachew now knows he's fighting for control with MCAS. Five months ago, 737 MAX pilots didn't even know the system existed.

2:23But then, in October 2018, MCAS forced an Indonesian passenger plane into the sea, killing everyone on board. Gatachu realizes this is a life-or-death fight. Gatachu strains to pull up the nose, but every time MCAS forces it to back down, the plane is rising and falling through the skies like a roller coaster and gaining speed. Mohammed flips the switch that should shut off MCAS. It works. But now the plane's flight controls are so out of whack that Gatachu must keep holding the yoke, the plane's steering wheel, halfway back just to stop the nose dropping. Mohamed tries turning the manual trim wheel to adjust tabs on the wings and stabilize the aircraft, but he's overlooked that the engines are still in their high-powered takeoff mode.

3:11The plane is now blasting through the skies and above its maximum operating speed. It's no good. The trim wheel is useless. At this speed, it lacks the mechanical strength to overcome the air rushing over the plane. Only the electrical system has the power to overcome these kinds of aerodynamic forces. But to use it, they must risk re-engaging MCAS. Gata Chu flips the switch and tries to engage autopilot to stop MCAS taking control. But the autopilot won't engage when the yoke is pulled halfway back. Desperate, Gata Chu releases the yoke. It snaps forward. The plane dips violently, pointing at the farmland below.

3:49Pitch up! Pitch up! Then, MCAS activates again. The plane lurches into a steep dive. It's shooting towards the ground at more than 500 miles per hour.

4:10One hour later, in the air around Flight 302's last known location, an Ethiopian Air Force helicopter hunts for the crashed aircraft, but they can't see one. Then, one of the team realizes what they're looking at. Oh, God. There's no plane to find. The speed of impact has shattered Flight 302 into thousands of pieces. There are no survivors. This is the second fatal 737 MAX flight in the past five months, and once again, MCAS is the prime suspect. And this time, the world's aviation watchdogs will not trust Boeing to fix it.

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7:04From Wondery, I'm David Brown, and this is Business Wars.

7:33In this season, we follow the turbulent path of aircraft manufacturer Boeing over the past 30 years. Boeing once led the$400 billion aircraft manufacturing industry. Now, it's embattled, a company struggling to salvage a tainted reputation. In the past decade, Boeing's been hit by a series of scandals, airplane crashes, and unexpected setbacks that have dented its once sterling reputation for quality engineering and safety. Many of those problems were self-inflicted, and they've cost Boeing dearly. The company has lost billions of dollars over the past five years. Its credit rating has tanked.

8:13There's even speculation that this American manufacturing icon could be forced to seek Chapter 11 bankruptcy protection. And at the center of Boeing's woes is the product that once seemed set to restore it to market leader status in civil aviation, the 737 MAX. How did Boeing allow this to turn deadly? And what, if anything, can be done to save the company? This is Episode 1, The Crash.

8:48It's Monday, March 11, 2019, the morning after Ethiopian Airlines Flight 302 crashed, As the families of the 157 people who died mourn, Boeing and its 737 MAX line now have to face their day of judgment. Just five months ago, another 737 MAX loaded with passengers crashed shortly after takeoff from Indonesia. That flight's pilots also faced a desperate and ultimately unsuccessful battle for control with the plane's MCAS software system. When that first plane crashed, Boeing persuaded the world's regulators that it could fix the problem. It could update the software and in the meantime just tell pilots how to get MCAS under control.

9:31So the MAX kept flying while waiting for the promised software update. But now, in the wake of Flight 302's crash, the moods changed. And the first to act is China's aviation regulator. Hello, China has grounded its entire Boeing 737 MAX fleet, a day after an Ethiopian Airlines plane crashed, killing all... Soon after, Indonesia's regulator follows China's lead. The decisions leave a third of all 737 MAXs unable to fly. Boeing's stock dives, wiping billions of dollars from the company's market valuation. In Renton, Washington, the thousands of Boeing employees who build the 737 MAXs arrive for work in a glum mood, shocked and sad.

10:18But they're also filled with uncertainty about their future. The groundings of the MAX are a threat to their livelihoods. Many of them have retirement plans that are loaded up with Boeing stock, and that stock is devaluing fast. But Boeing's hope that the decisions in China and Indonesia will be isolated cases. doesn't pan out. The next day, more regulators ban the MAX from their skies. Australia is the latest country, Stuart, to ban flying of the 737 MAX. This comes after similar moves from authorities in countries including China, Singapore, and South Korea. We have an avalanche now of countries around the world grounding this plane, and this one is a very big announcement.

11:01The British Aviation Authority grounding the 737 MAX. France, Germany, Malaysia, Turkey, and the United Arab Emirates also ground the MAX. By the end of the day, 27 regulators have barred the Boeing plane from flying. But in the U.S., the Federal Aviation Administration has yet to declare its position. Instead, its acting chief, Daniel Elwell, and senior officials are gathered in a conference room in Washington, D.C., debating how to respond. It's an unfamiliar position for the FAA to find itself in. the FAA has long been the regulator that other countries look to for guidance. If the FAA took action, the regulators of the rest of the world did the same.

11:45But now, much of the world has acted without waiting for the FAA. Elwell and his team debate what to do for hours. Canada is also considering grounding the MAX. And if it does, that would pile further pressure on the FAA. But if the FAA grounds the MAX, it won't just stop commercial flights in the U.S. It will also leave Boeing unable to deliver the jet to its customers. There's also concern that the world's regulators are overreacting due to political pressure. In the end, the FAA decides to wait. It issues a statement explaining that until it has more data about the crash in Ethiopia, there is no legal or regulatory justification for grounding the MAX.

12:30The FAA's line is, it will only act when the evidence shows the MAX is at fault, not before. The next morning, the FAA gets that evidence. Data that shows the final moments of Flight 302 in Ethiopia mirror those of the Lion Air crash in Indonesia five months before. It's evidence that points to the 737 MAX itself as the cause of the crash. Armed with the new evidence, Elwell briefs President Donald Trump at lunchtime By then, Canada has also grounded the MAX, putting more pressure on the FAA to do the same. After being talked through the evidence, the president tells the FAA to ground the MAX and then phones Boeing CEO and Chairman Dennis Mullenberg to warn him of what's about to happen.

13:15Then, Trump tells the American public in a press briefing. We're going to be issuing an emergency order of prohibition to ground all flights of the 737 MAX. Boeing is an incredible company. They are working very, very hard right now. And hopefully they'll very quickly come up with the answer. But until they do, the planes are grounded. The president's swift announcement catches the FAA off guard. The American public is told before the FAA even alerts its own offices across the country. By March 18th, a week after the crash, 84 regulators have grounded the MAX. Now, all of the 387 MAXs in service are unable to fly.

14:04Thousands of weekly flights are gone, and airlines are dealing with the fallout from canceled flights and shredded schedules. Boeing is now in a deep crisis. Its best-selling aircraft model is out of action. Its customers, the airlines, are furious. Its stock price has plunged, wiping$30 billion off its market valuation. On Capitol Hill, politicians are organizing committees and investigations to get to the bottom of what's gone wrong. At the company's facility in Renton, new 737 MAXs are still being made, but instead of being delivered, they are piling up outside of the factory. And with 346 people now dead, Boeing's hard-won reputation for quality and safety is in tatters.

14:53Boeing hopes it can fix the MAX and convince regulators to let it fly again, fast. And analysts are confident Boeing will deliver that. Bank of America estimates that Boeing will have resolved this setback within six months and recommends buying Boeing stock while it's depressed in anticipation of a quick recovery. The aviation industry feels confident, too. Despite the pain, airlines also think the MAX will soon return to service. But this confidence is misplaced. Because for the Boeing 737 MAX, the path back to the skies is going to be long and slow.

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17:56It's April 29th, 2019, and in Chicago, Illinois, protesters wearing hooded raincoats have gathered at the foot of the Grand Steps leading up to the Field Museum on Lakeshore Drive. In their hands, some hold enlarged photographs, pictures of those who lost their lives in the 737 MAX crashes. Others hold placards that bear slogans capturing the rage and pain felt by these friends and relatives of the dead. Boeing is making a killing from killing. Boeing's arrogance kills. Prosecute Boeing and executives for manslaughter. Among those holding photographs of lost loved ones are the family members of Samya Stumo, a 24-year-old American and the grandniece of Ralph Nader, who died in the Ethiopia Airlines crash.

18:42Her grieving family has no body to bury. The speed at which the 737 Max slammed into the ground left no bodies intact. It will take months of DNA testing of the remains found at the crash site until what is left of her can be buried. So now, her family stands here in the rain to make sure those coming to the museum for Boeing's annual shareholders meeting see the faces of those who have died. And as they stand out in the cold, inside the museum, sheltered from the rain and protests, Boeing CEO and Chairman Dennis Mullenberg is preparing to make his first major public address since the 737 MAX was grounded.

19:26Today should have been a day of celebration for Boeing. 2018 was a banner year for the company. For the first time in its history, revenues exceeded$100 billion. But in the wake of the 737 MAX deaths and groundings, this is no time for celebration. Muhlenberg's prime objective today is to convince investors that Boeing is still a good place for them to park their money. The headlines are bad. The company's best-selling product, the 737 MAX, is grounded worldwide, and Boeing's cut back on its production. Investors have watched their stakes in Boeing wither in value. Airlines are weighing whether it's time to cancel their MAX orders and buy Airbus A320 NEOs instead.

20:12Mercifully for Boeing, that's not a realistic option for many of its customers. There's a five-year waiting list to get an A320neo, and Airbus has no quick way to expand its manufacturing capacity. Most airlines have little choice but to pray that Boeing gets the MAX back in the air. Fast. Mullenberg heads to the podium at the front of the room. He's wearing a somber suit and a glum expression on his thin face. Behind him, instead of corporate logos or flashy displays, there's a heavy blue curtain that adds to the solemn air of today's meeting. Mullenberg looks out at the audience. It's not just employees, shareholders, and analysts.

20:53The world's media are also here in force. And he knows they will pick over every word he utters. So he and his communications team have carefully honed this address. Today is not a day for improvisation. Mullenberg opens with the only topic he could. The 737 Max. An apology for the losses and a moment of silence. Then, he addresses the question that every investor wants to know. How close is Boeing to getting the 737 MAX back in the air? We hold ourselves to the highest standards of safety, quality, and integrity in our work, because the stakes could not be higher. He shares how Boeing teams are hard at work on creating a software update to MCAS.

21:39They've been working on it since the Lion Air crash in Indonesia six months earlier. He pledges that this update will stop erroneous angle-of-attack sensor readings triggering MCAS and ensure that similar accidents will never happen again. And he assures shareholders that they won't have to wait long for this update to arrive. We're making steady progress on the path to certification, having completed the official engineering test flight of the software and the final technical flight test prior to the certification flight. With a certified software update implemented, the 737 MAX will be one of the safest airplanes ever to fly.

22:18Mullenberg then reminds the audience that these crashes are isolated incidents. Every day, 5.3 million people fly on Boeing jets. At any given time, nearly half a million people are flying on an airplane from the 737 family. From there, Mullenberg segues into positive company updates, including refinements to the production of F-15 fighter jets and flight tests for its new spacecraft, the CST-100 Starliner. Then, he sets to work reminding investors that aerospace manufacturing is a growth business. The industry could be worth more than$8 trillion over the next decade. Boeing predicts that more than 40 ,000 new commercial jets will be sold over the next 20 years.

23:03The message to Wall Street is clear. The regrettable setback of the 737 MAX will soon be history. But with the pre-prepared speeches out of the way, the shareholders get their chance to question the company's leadership. One shareholder takes Muhlenberg to task for the design flaws in the 737 MAX. He demands to know why MCAS was built, so that if just one of the two angle-of-attack sensors failed, it would activate. We don't have to have 300-plus people die every time to find out that something is unreliable. That never should have happened. Another shareholder questions Boeing's close ties with the FAA.

23:41Then, a retired Air Force officer asks if Max pilots will now get flight simulator training. Muhlenberg insists pilots will only need computer-based training, but despite the critical voices and the protesters outside calling for heads to roll, shareholders still trust Boeing's leadership. In a vote, they reject a motion calling for Mullenberg to be stripped of his role as chairman.

24:09That same day, it's revealed that a cockpit warning light on the MAX doesn't work as it should, known as the AOA disagree alert. It was supposed to warn pilots if either of the plane's angle of attack sensors malfunctions. The warning light comes as standard on every 737 MAX. But Boeing engineers later discovered that the warning only works when an optional display costing$80 ,000 is also installed, and only around 20 % of MAXs in service have that display. Boeing kept quiet about its discovery. It decided the lack of a functioning warning light wouldn't compromise safety. Only after the Lion Air crash in Indonesia did Boeing fess up about the problem to the FAA.

24:54The revelation that Boeing swept the problem under the carpet unnerves pilots, despite Boeing stressing that this warning light doesn't activate when a plane is on the ground, so it could not have prevented the Lion Air crash. But the problems keep raining down. That summer, Boeing's finance team estimates that the grounding of the MAX will cost the company just shy of$5 billion. The timeline for the MCAS update keeps slipping. Initially, Boeing hoped to have the MAX flying by the fall, Now, end of the year seems the best it can hope for. And on Capitol Hill, investigations and inquiries galore are being launched to find out what's really going on with the MAX, Boeing, and the FAA.

25:37Armed with reports from whistleblowers, the Senate Commerce Committee probes whether the training of FAA inspectors is good enough. In May 2019, the House Aviation Subcommittee starts its own investigation into the factors behind the MAX crashes. In his opening address to the investigation, Missouri Congressman Sam Graves declares that pilots trained in the USA would have been able to overcome the problems that downed the planes. Drawing on a report funded by several major investors in Boeing, he argues that the real problem is pilot training standards in foreign countries. Later on in the hearing, acting FAA Chief Daniel Elwell backs him up.

26:19He tells the subcommittee that the Ethiopian Airlines pilots didn't adhere to the emergency directive the FAA issued following the Lion Air crash. They should have controlled the aircraft's speed. Ethiopian Airlines fires back. It accuses Elwell of attempting to deflect public attention from the flaws in the 737 MAX. The airline also notes that it is one of the only airlines that bought a flight simulator to train its pilots to fly the MAX. It also notes that Boeing's simulator didn't simulate the operation of MCAS. But back on Capitol Hill, FAA Chief Elwell is not getting a comfortable ride. The MAX crisis hasn't just engulfed Boeing.

27:01It's also exposed flaws in how the FAA works. Lawmakers are now raising doubts about the regulator's effectiveness and questioning its decision to let Boeing and other manufacturers self-regulate. And as the scrutiny intensifies, more questionable activities are unearthed. In October 2019, the Seattle Times reveals that Boeing convinced the FAA to play loose with the regulations so it could avoid a full upgrade of the 737's aging flight-controlled system. That same month, a government report on the 737 MAX slams the FAA for granting Boeing the authority over some parts of the certification process.

27:44It concludes this allowed MCAS to be certified without enough oversight and calls for significant reform of the FAA. Then, just 13 days later, the investigation into the 2018 Lion Air crash publishes its final report. The conclusions are stark. The flawed design and certification of MCAS is the key factor in the fatal flight that killed 189 people. The investigators criticized Boeing for the AOA disagree alert that didn't work and its failure to inform pilots about MCAS's existence. The report also finds the pilots, particularly the first officer, failed to follow a checklist procedure that would have turned MCAS off.