Boeing – 737 MAX Defects Plane Crashes
Boeing Aerospace Company is one of the world’s planes manufacturer of commercial planes, security systems, and defense as well as space planes. Boeing provides after-sales support for all clients from around the world. Boeing has massive influence in the US airline sector and governments in more than 150 countries. 29th October 2018 and 10th March 2019 were crucial moments due fatal crashes of two Boeing 737 MAX planes in different parts of the world (Shvindina, 2019). Lion Air flight 610 in Jakarta, Indonesia crashed 12 minutes after takeoff into the java sea ending the lives of 189 passengers and crew. In another incident, Ethiopian airlines flight 302 headed to Nairobi, Kenya crashed just six minutes after takeoff, killing the 157 passengers and crew on board. The two events led to an uproar in the global aviation circles, with calls to ground all Boeing 737 MAX in operation in different airspaces around the globe.
Following the accidents, airline companies from around the world grounded Boeing 737 MAX, triggering investigations by the US Department of Justice and Federal Transportation Authorities (FAA). The two incidents posed both legal and ethical issues of different proportions. A legal problem concerns the compensation of victims involved in the two crashes. Airline operators from around the world are also likely to demand payment from lost revenue as they wait to install improved simulator software. On the other hand, an ethical problem emerges from details by the management team that it was aware of flaws in Boeing 737 MAX simulator software. The issue is compounded by the fact that the management did not reveal the information until the recent incidents. This essay provides that Boeing’s two events in Ethiopia and Indonesia have legal and ethical implications to the company, victims, airline operators and shareholders.
Identification and application of general legal topics
Compensation laws provide that victims of accidents should be adequately compensated for deaths and other losses. Airlines and insurance companies have tangible partnerships to ensure loss of lives and property due to plane accidents are adequately compensated. Plane crash information is effectively applied to determine if airplane parts/gadgets are defective (Johnston & Harris, 2019). Hence the investigators engage in the evaluation of incidents to assign liability on percentage grounds. Manufactures can be at fault if it is determined that some of the devices in the planes are faulty (nypost.com/2019). Such a failure cannot be more than 70% if the management is not aware of defective equipment before a crash (Shvindina, 2019). Victims of plane crash victims receive compensation depending on the liability of operators or manufacturers. Connecting the legal issue with crashes of two Boeing 737 MAX planes within the last one year is critical. Settlement of the victims has been compounded by the fact that Boeing Aerospace company management admitted that it was aware of the safety concern of the 737 MAX indicating a probable malfunction. However, the company did not reveal the information until after the two crashes.
Management at Boeing means that faulty Boeing 737 MAX simulator software prevents pilots from about the pitch in the plane. According to the management, the fault in the 737 MAX was discovered several months after launching the flight. Although it is not explicit if the defect informed the crashes in Ethiopia and Indonesia that accused deaths of more than 346 people, all observations indicate acts of omission and commission by the manufacturer. File lawsuits suggest that Boeing Aerospace Company has been charged for misconduct and greed, with claims that the company failed to inform pilots about the simulator software on 737 MAX (nypost.com/2019). Families in Indonesia, Kenya, France, and Ethiopia, the US, among other countries, have filed lawsuits against the company. As a demonstration of the amounts of money expected in compensations, a French window is suing Boeing for $276 million daily lost revenue accrued by the company in 2018.
US Federal Aviation Authority (FAA) has specific regulations and inspection procedures to ensure all planes manufactured in the country meet the stringent standards for operations. An issue of regulation is prominent in the Boeing 737MAX crash issue (Johnston & Harris, 2019). As a demonstration of the determination to regulate the aviation sector, Federal investigators and Congressional committees are seeking answers on how the FAA certified the plane. Efforts by the federal agencies will alter how the US aviation sector is controlled. Shareholders and victims’ families have mobilized their legal teams to sue the company, claiming that the multinational put revenue/profits over safety and security.
Manufacturing defective devices can be legal aspects of the problem facing Boeing. An act of knowingly manufacturing a defective device offers a constitutional dimension to the problem. Developing Boeing 737MAX simulator software failed to adhere to laid down regulations for manufacturing devices of such sensitive nature. Boeing Aerospace Company applied a shortcut to achieve the much-desired selling point for the 737 MAX planes. The new development would require a pilot to accumulate just 2.5hourd iPad training before they can fly the latest model. Questions have been raised about the competency of certifying and regulating agents. Nature of practice to the pilots has been doubted, implying the possibility of lawsuits against the involved agencies. Issues of certifications have emerged, indicating that Federal Aviation Authority could be liable.
Breach of business contract is a legal issue in the problem. Purchasing an aircraft is accompanied by a guarantee that the devices have been manufactured to highest level of safety standards. Boeing Aerospace Company failed to recall the faulty planes several months after launching the products into the market. Operators of the grounded planes can initiate legal proceedings due to massive losses. Boeing Aerospace Company has clients in more than 150 countries in the world (Learmount, 2019). Frustrated airlines have to cancel thousands of flights following the grounding of company’s planes with uncertainties on when the company will return to operations, further compounding the issue.
The company argues that they are ready to sue the company for huge losses. For example, European and US airlines have argued that grounding the planes constitute losses running into millions of dollars and thus are ready to sue Boeing Aerospace Company to recover the damages. Southwest Airlines, that has the biggest fleet of Boeing 737 MAX planes, has indicated that it lost more than $200 million in the first quarter due to grounding of aircraft and canceled flights (Arumugham, 2019). American airlines Inc. has estimated the losses from the grounding of the Boeing 737 MAX to about $350 million resulting from the canceled 15,000 flights.
Boeing Aerospace Company may not be compelled to compensate for the losses but repairing the lost image would be herculean. Reports from Boeing Aerospace Company management show that simulator lacks the necessary features and capacity to reproduce conditions during flights. Ethiopian and Indonesian airline crashes may have been informed by the incapability of the device. It can be argued that Boeing Aerospace Company knowingly sold the planes fitted with the defective simulator software. Therefore the company could have violated warranty agreements and thus has liability over losses due to grounding of planes. MCAs are the software attributed to the crashes in Jakarta and Addis Ababa.
The reluctance of US Federal Aviation Administration and Boeing Aerospace Company to adequately inform the pilots caused the accident (Shvindina, 2019). Therefore, the two agencies contributed to breach of warranty and could lead to critical legal implications. Implementation of such legal action could see the manufacturer lose several billions of dollars in compensation claims. Reports indicate that Boeing Aerospace Company recommends just 30-minute self-instruction course for pilots. Professionals in the field suggest that acquisition of the skills require additional classroom instructions or useful simulator software.
How Milton Friedman’s shareholder or free-market ethics influenced the leadership of the company
Milton Friedman’s shareholder philosophy observes that corporate managers have a duty to perform business to fulfill the desires of shareholders. The economist implied that making as much profits as possible increase shareholder value in all dimensions. However, Friedman’s philosophy insists on importance to conform to basic rules of the society, legal requirements as well as ethical responsibilities. Boeing Aerospace company management insisted on launching 737 MAX planes to compete with Airbus in the lucrative markets. In doing so, the management was keen to increase shareholders’ value. The management was eager to maintain the clientele base and focus on revenue generation. Corporate managers at the company have a duty to ensure that they overcome competition in the market by employing all possible approaches.
Boeing Aerospace Company’s launching of 737 MAX planes was in response to A320neo launch by Airbus (Zhang, 2019). The latter has fuel efficiency features which lower the cost of operations. Such action is critical in promoting the interests of shareholders. Having fuel-efficient planes in the portfolio is essential to increasing sales and ensures that Boeing Aerospace Company does not lose bulk of clients to Airbus. Launching 737 MAX was strategic in overcoming the daily competition between the two multinationals. Records indicate that Boeing Aerospace Company and Airbus have been engaged in equal duopoly in a market valued at $3.5 trillion in the last 20 years (Learmount, 2019). Therefore, Boeing Aerospace Company leadership has been embroiled in efforts to protect the market share through monitoring approaches that Airbus makes. The reverse has also been true with airbus leadership keen to defend its share of the market.
Milton Friedman’s free-market ethics focus on promoting business freedom as critical political freedom. Succinctly, it is impossible to separate business and political interests. The theory provides that economic freedom is essential for protection of minorities and ensuring mitigation against all forms of discrimination. Boeing Aerospace Company leadership acknowledges its responsibilities in protecting the rights of the shareholders, including those with minimal portfolio (Johnston & Harris, 2019). Thus, in spite of the quagmire that the company faces following the two crashes, the leadership remains upbeat that it will soon recover.
Questions have been emerging on whether Boeing Aerospace Company has lacked the necessary leadership to handle the issue. The problem has been intensified by the fact that governments from around the world have the same feeling. Countries have grounded their 737 MAX planes with clear indications they have lost confidence in the leadership of the company. Issues emerging indicate that in spite of the need to protect the interests of the shareholders. Boeing Aerospace Company leadership should have observed a sense of market ethics in making critical decisions such as launching the 737 MAX planes.
The ethical framework that the company leadership could have utilized in this situation
Boeing Aerospace Company leadership could have used the consequentialist theory. An application of the approach would have offered a moral framework and ethical course depending on the final results. Before launching 737MAX, Boeing Aerospace Company leadership should have pragmatically considered the outcomes (Shvindina, 2019). In spite of the need to protect the market share, Boeing Aerospace Company leadership should have put safety ahead of profits. The framework implies that Boeing leadership failed to consider how their actions would affect the results.
The management should have chosen an action plan that contributes to the overall good. Boeing Aerospace Company would have avoided the difficult situation facing the company if the leaders had engaged in a better framing of the case (Knights & O’Leary, 2006). By application of consequentialist theory, Boeing Aerospace Company leaders would have shaped and contained an adverse escalation of the problem. Implementation of the consequentialist approach would have revealed the issues and the opportunities for the company. Use of the method would have enhanced transparency at Boeing Aerospace Company so that leadership emphasized performing all necessary tests before the launch of 737 MAX planes. Thus, the results on the performance of the planes would be different.
Use of the approach would have morally beneficial so that Boeing Aerospace Company management applied procedures that aligned with ethically reflective objective. Boeing Aerospace Company management could have applied a consequentialist framework to prioritize human safety (Knights & O’Leary, 2006). Increased levels of uncertainty and risks that Boeing Aerospace Company has been experiencing could be attributed to failure by the management to adhere to the consequentialist framework. Following the first crash of Lion Air in October Boeing leadership could have employed all the necessary actions to avoid further escalations. An application of the consequentialist framework could have led to a clear path of action. Boeing Aerospace Company could have engaged the regulators to tighten Boeing 737 MAX features to increase passenger safety.
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Learmount, D. (2019). What’s the difference?: two fatal Boeing 737 Max crashes have raised concerns that the system for extending pilot’s qualifications to new variants of an aircraft type may have been stretched too far. Flight International.
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