tag:theconversation.com,2011:/au/topics/boeing-9266/articlesBoeing – The Conversation2024-03-17T12:53:32Ztag:theconversation.com,2011:article/2256522024-03-17T12:53:32Z2024-03-17T12:53:32ZWhat the Boeing whistleblower’s death reveals about exposing corporate wrongdoing in North America<figure><img src="https://images.theconversation.com/files/582057/original/file-20240314-30-19fe3a.jpg?ixlib=rb-1.1.0&rect=7%2C22%2C4950%2C3277&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">In 2019, a number of current and former Boeing employees went public with concerns about the company's manufacturing and safety processes.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>A former Boeing employee who raised concerns about the company’s safety and production standards <a href="https://www.counton2.com/news/national-news/boeing-whistleblower-who-raised-production-concerns-found-dead-at-62//">was found dead on March 9 before he could provide his final deposition</a> in an ongoing lawsuit against Boeing. John Barnett died from what appeared to be a self-inflicted gunshot wound, <a href="https://globalnews.ca/news/10353532/boeing-whistleblower-dead-john-barnett-lawsuit/">according to police</a>. </p>
<p>For more than three decades, Barnett worked at Boeing, including as a quality manager at a <a href="https://www.live5news.com/2024/03/12/brave-honest-man-boeing-whistleblowers-attorneys-release-statement-his-death/">North Charleston, S.C. plant</a>, which manufactures the 787 Dreamliner. In 2019, <a href="https://www.nytimes.com/2019/04/20/business/boeing-dreamliner-production-problems.html">Barnett and a dozen other workers blew the whistle on Boeing in a <em>New York Times</em></a> story, claiming its manufacturing processes prioritized speed over public safety. </p>
<p>While <a href="https://www.ctvnews.ca/world/former-boeing-whistleblower-found-dead-from-apparent-self-inflicted-gunshot-wound-1.6805965">Boeing denied the claims of unsafe work practices</a>, recent audits have confirmed that quality control issues exist. The Federal Aviation Administration released the <a href="https://nypost.com/2024/03/12/us-news/faa-audit-of-boeings-737-production-found-mechanics-using-hotel-card-and-dish-soap-as-makeshift-tools-report/">results of a recent investigation showing numerous non-compliance issues</a>. </p>
<p>Boeing’s planes have recently caught media attention for a series of technical problems. These incidents include a <a href="https://theconversation.com/boeing-needs-to-get-real-the-737-max-should-probably-be-scrapped-221023">door blowing off a plane soon after takeoff from Portland on Jan. 5</a>, <a href="https://www.nbcnews.com/news/us-news/passenger-video-shows-flames-shoot-united-airlines-engine-midflight-rcna142217">planes making emergency landings</a> due to mechanical issues, and, on March 11, <a href="https://www.nbcnews.com/news/world/50-people-injured-strong-movement-boeing-flight-new-zealand-rcna142405">50 passengers sustaining injuries</a> on a Boeing plane due to a sudden loss of elevation.</p>
<h2>The costs of whistleblowing</h2>
<p>Barnett’s death sadly appears to <a href="https://foreignpolicy.com/2020/03/20/death-of-a-whistleblower-suicide-pentagon-office-inspector-general/">fit into an established pattern</a>. Whistleblowers face intense public scrutiny, and, frequently, retaliation after going public. According to a recent study, <a href="https://www.sec.gov/news/press-release/2023-89">82 per cent of whistleblowers face some level of retaliation from their employer after leaking information</a>, including harassment or dismissal.</p>
<p>Aside from retaliation, whistleblowers also frequently lose their sense of community after coming forward. </p>
<p>Corporate work culture makes choosing between duty and loyalty emotionally complicated. For many people, <a href="https://doi.org/10.1037/a0024166">work largely informs their identity</a>. Their workplace is their community and their work ethic often merges personal achievement with professional values. They become emotionally invested in the culture, structure and daily dramas of their workplace. </p>
<p>When whistleblowers go public, they make an overt choice to separate from this community. More to the point, they represent that community — or a portion of it — as unethical or criminal. As such, former colleagues whose identity is wrapped up in their work <a href="https://psic-ispc.gc.ca/en/resources/corporate-publications/sound-silence">may feel betrayed by the whistleblower</a>.</p>
<p>Even members of the public may critique whistleblowers as disloyal and attention-seeking. But this is not a fair characterization.</p>
<h2>Duty versus loyalty: A false dichotomy</h2>
<p>Even after coming forward and facing public attention and resentment, research indicates <a href="https://doi.org/10.1177/0170840619880565">many whistleblowers continue to define themselves through their work community</a>, relying on it for their sense of identity and belonging.</p>
<p>Many whistleblowers speak out because they are particularly invested in their work community’s ideals and their profession’s standards. This suggests the choice between public duty and professional loyalty is a false dichotomy. For whistleblowers, their duty to the public and their loyalty to their professional standards are one and the same. </p>
<p>For Barnett, this seems to have been particularly true; his public duty and professional loyalty were not at odds. Seeking to protect the public, Barnett demonstrated a commitment to a better future for his colleagues and the firm he worked at for 32 years.</p>
<p>In the wake of Barnett’s passing, <a href="https://www.nbcnews.com/news/us-news/boeing-whistleblowers-case-go-posthumously-attorney-says-rcna143001">his lawyers said</a>: </p>
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<p>“John was a brave, honest man of the highest integrity. He cared dearly about his family, his friends, the Boeing company, his Boeing co-workers, and the pilots and people who flew on Boeing aircraft. We have rarely met someone with a more sincere and forthright character.”</p>
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<h2>Whistleblowers in the public eye</h2>
<p>As public figures, whistleblowers not only face retaliation from their employers, but also ire from the public. They often find themselves caught in a tangled web of cultural, social and professional values. </p>
<p>Public discussion pits duty against loyalty, presenting whistleblowers as martyrs or snitches. Many <a href="https://www.forbes.com/sites/kellypope/2018/12/26/the-truth-about-whistle-blowers/?sh=422782db6a9b">see whistleblowers as “tattle tales” or “rats”</a> that betray their employers to seek status, financial reward or validation.</p>
<p>A recent whistleblower award in the United States saw an anonymous informant receive <a href="https://www.sec.gov/news/press-release/2023-89">US$279 million dollars</a> — the largest award ever granted by the Securities and Exchange Commission. This fell under the <a href="https://www.sec.gov/files/dodd-frank-sec-922.pdf">Dodd-Frank Act</a>, which guarantees would-be whistleblowers a bounty equalling 10 to 30 per cent of monetary sanctions collected.</p>
<p>The policy provides an incentive for whistleblowers to speak up, as well as confidentiality protection for vulnerable employees. However, monetary reward and secrecy, particularly in the context of enforcement, serves as <a href="https://www.integrityline.com/expertise/blog/ethics-behind-whistleblower-rewards/">fruitful ground for public speculation</a> on whistleblowers’ motives.</p>
<p>At the other end of the spectrum are those who see whistleblowers as heroes that put themselves at risk to call out unethical practices and protect others from harm. In films like <em><a href="https://www.imdb.com/title/tt8236336/">The Report</a></em>, <em><a href="https://www.imdb.com/title/tt6294822">The Post</a></em> and <em><a href="https://www.imdb.com/title/tt9071322">Dark Waters</a></em>, Hollywood depicts whistleblowers as impassioned heroes standing up to clearly villainous conspiracies. In real life, of course, the experience is much murkier. </p>
<p>Consider <a href="https://www.cbc.ca/player/play/2445276799">Kathe Swanson</a>, the town clerk in Dixon, Ill., who blew the whistle on comptroller Rita Crundwell. <a href="https://wgntv.com/news/wgn-investigates/rita-crundwell-stole-54-million-then-returned-to-the-scene-of-the-crime/">Crundwell embezzled US$54 million over more than 20 years</a> to finance her extravagant lifestyle. Accounting professor Kelly Richmond Pope positions Swanson’s actions as heroic, arguing <a href="https://www.ted.com/talks/kelly_richmond_pope_how_whistle_blowers_shape_history?language=en">Swanson went public not for fame or financial reward, but because she felt it was the right thing to do</a>.</p>
<h2>Holding power to account</h2>
<p>Our culture ultimately relies on whistleblowers to hold powerful organizations and individuals accountable. </p>
<p>The Association of Certified Fraud Examiners’ <a href="https://legacy.acfe.com/report-to-the-nations/2022/">2022 Report to the Nation</a> found that a significant number of fraud cases reported in North America — 42 per cent — were detected as a result of whistleblower tips. More than half of those tips were made by an organization’s own employees.</p>
<p>Whistleblowers play a crucial role in upholding accountability and integrity within our society. We do not, however, make it easy for them. </p>
<p>By supporting the efforts of whistleblowers and recognizing the personal and professional risks they take, we may begin to foster a culture that values transparency, ethical conduct and accountability, strengthening our institutions as a whole.</p><img src="https://counter.theconversation.com/content/225652/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Whistleblowers play a crucial role in upholding accountability and integrity within our society. We do not, however, make it easy for them.Thomas Stuart, Lecturer in Communications, Gustavson School of Business, University of VictoriaDouglas A. Stuart, Assistant Teaching Professor, Gustavson School of Business, University of VictoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2256752024-03-14T05:47:43Z2024-03-14T05:47:43ZShould you be concerned about flying on Boeing planes?<p>The American aerospace giant Boeing has been synonymous with safe air travel for decades. Since the 1990s, Boeing and its European competitor Airbus have dominated the market for large passenger jets. </p>
<p>But this year, Boeing has been in the news for all the wrong reasons. In January, an emergency door plug <a href="https://www.seattletimes.com/business/boeing-aerospace/alaska-airlines-let-boeing-max-fly-despite-warning-signals">blew off a Boeing 737 MAX</a> in mid flight, triggering an investigation from United States federal regulators. </p>
<p>More recently, we have seen a Boeing plane lose a tyre while taking off, another flight turned back as the plane was leaking fluid, an apparent engine fire, a landing gear collapse, a stuck rudder pedal, and a plane “dropping” in flight and <a href="https://theconversation.com/latam-flight-800-just-dropped-in-mid-flight-injuring-dozens-an-expert-explores-what-happened-and-how-to-keep-yourself-safe-225554">injuring dozens of passengers</a>. A Boeing engineer who had raised concerns regarding quality control during the manufacturing process on the company’s 787 and 737 MAX planes also <a href="https://www.bbc.com/news/business-68534703">died earlier this week</a>, apparently of a self-inflicted gunshot wound. </p>
<p>As members of the travelling public, should we be concerned? Well, yes and no.</p>
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Read more:
<a href="https://theconversation.com/boeing-door-plug-blowout-highlights-a-possible-crisis-of-competence-an-aircraft-safety-expert-explains-221069">Boeing door plug blowout highlights a possible crisis of competence − an aircraft safety expert explains</a>
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<h2>Many problems, but not all can be blamed on Boeing</h2>
<p>The recent parade of events has certainly been dramatic – but not all of them can be blamed on Boeing. Five incidents occurred on aircraft owned and operated by United Airlines and were related to factors outside the manufacturer’s control, like maintenance issues, potential foreign object debris, and possible human error. </p>
<p>A <a href="https://www.independent.co.uk/travel/news-and-advice/united-airlines-plane-tire-blowout-boeing-b2509241.html">United Airlines 777</a> flying from San Francisco to Japan lost a tyre on takeoff, a maintenance issue not related to Boeing. The aircraft landed safely in Los Angeles. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1767636549288824990"}"></div></p>
<p>A <a href="https://www.mercurynews.com/2024/03/12/united-airlines-reports-fifth-flight-incident-in-a-week-as-jet-turns-back-due-to-maintenance-issue/">United Airlines flight from Sydney</a> to Los Angeles had to return to Sydney due to a “maintenance issue” after a fluid was seen leaking from the aircraft on departure. </p>
<p>A <a href="https://www.nbcnews.com/news/us-news/passenger-video-shows-flames-shoot-united-airlines-engine-midflight-rcna142217">United Airlines 737-900</a> flying from Texas to Florida ended up with some plastic bubble wrap in the engine, causing a suspected <a href="https://skybrary.aero/articles/compressor-stall#:%7E:text=Compressor%20stalls%20cause%20the%20air,dirty%20or%20contaminated%20compressor%20components">compressor stall</a>. This is a disruption of air flow to an operating engine, making it “backfire” and emit flames. </p>
<p>A <a href="https://simpleflying.com/united-boeing-737-max-houston-runway-incident/">United Airlines 737 Max</a> flying from Tennessee to Texas suffered a gear collapse after a normal landing. The pilot continued to the end of the runway before exiting onto a taxiway – possibly at too high a speed – and the aircraft ended up in the grass and the left main landing gear collapsed. </p>
<p>The fifth event occurred on a <a href="https://www.nbcnews.com/news/us-news/another-boeing-max-mishap-ntsb-probes-stuck-rudder-pedals-united-airli-rcna142286">United Airlines 737-8</a> flight from the Bahamas to New Jersey. The pilots reported that the rudder pedals, which control the left and right movement of the aircraft in flight, were stuck in the neutral position during landing.</p>
<h2>Manufacturing quality concerns</h2>
<p>The <a href="https://www.seattletimes.com/business/boeing-aerospace/alaska-airlines-let-boeing-max-fly-despite-warning-signals">exit door plug failure in January</a> occurred on an Alaska Airlines flight. US regulators are currently investigating Boeing’s <a href="https://www.vox.com/money/24052245/boeing-corporate-culture-737-airplane-safety-door-plug">manufacturing quality assurance</a> as a result. </p>
<p>The door plug was installed by a Boeing subcontractor called Spirit AeroSystem. The door plug bolts were not properly secured and the plug door fell off in flight. The same aircraft had a series of pressurisation alarms on two previous flights, and was scheduled for a maintenance inspection at the completion of the flight. </p>
<p>Spirit got its start after Boeing shut down its own manufacturing operations in Kansas and Oklahoma, and Boeing is now in the process of <a href="https://www.cnbc.com/2024/03/01/spirit-aerosystems-boeing.html">buying the company</a> to improve quality oversight. Spirit currently works with Airbus, as well, though that may change.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-did-alaska-airlines-flight-1282-have-a-sealed-off-emergency-exit-in-the-first-place-the-answer-comes-down-to-money-221263">Why did Alaska Airlines Flight 1282 have a sealed-off emergency exit in the first place? The answer comes down to money</a>
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</p>
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<h2>What changed at Boeing</h2>
<p>Critics say the <a href="https://www.washingtonpost.com/business/2024/03/12/boeing-whistleblower-death-plane-issues/">culture at Boeing has changed</a> since Airbus became a major competitor in the early 2000s. The company has been accused of shifting its focus to profit at the expense of quality engineering. </p>
<p>Former staff have raised concerns over tight production schedules, which increased the pressure on employees to finish the aircraft. This caused many engineers to question the process, and the US Federal Aviation Administration (FAA) to fine Boeing for lapses in quality oversight after tools and debris were found on aircraft being inspected. </p>
<p>Several employees have testified before US Congress on the production issues regarding quality control. Based on the congressional findings, the FAA began to inspect Boeing’s processes more closely.</p>
<p>Several Boeing employees noted there was a high staff turnover rate during the COVID pandemic. This is not unique to Boeing, as all manufacturing processes and airline maintenance facilities around the globe were also hit with high turnover. </p>
<p>As a result, there is an acute shortage of qualified maintenance engineers, as well as pilots. These shortages have created several issues with the airline industry successfully returning to the <a href="https://www.aviationbusinessnews.com/mro/critical-shortage-of-engineers-means-looming-crisis-for-aviation-warns-aeroprofessional/">pre-pandemic levels</a> of 2019. Airlines and maintenance training centres around the globe are working hard to train replacements, but this takes time as one cannot become a qualified engineer or airline pilot overnight.</p>
<p>So, is it still safe to fly on Boeing planes? Yes it is. Despite dramatic incidents in the news and social media posts <a href="https://twitter.com/DaveMcNamee3000/status/1767636549288824990">poking fun at the company</a>, air travel is still extremely safe, and that includes Boeing.</p>
<p>We can expect these issues with Boeing planes now will be corrected. The financial impact has been significant – so even a profit-driven company will demand change.</p><img src="https://counter.theconversation.com/content/225675/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Doug Drury does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The American aerospace company Boeing has been synonymous with safe air travel for decades, but recent weeks have seen it plagued by a series of issues.Doug Drury, Professor/Head of Aviation, CQUniversity AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2210692024-01-19T13:41:11Z2024-01-19T13:41:11ZBoeing door plug blowout highlights a possible crisis of competence − an aircraft safety expert explains<figure><img src="https://images.theconversation.com/files/569659/original/file-20240116-21-w7tewc.jpg?ixlib=rb-1.1.0&rect=24%2C24%2C5439%2C3612&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An investigator examines the frame of a Boeing aircraft whose door plug blew out in flight.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/BoeingEmergencyLanding/390bb7248d0f4069b1b987492afbc254/photo">National Transportation Safety Board via AP</a></span></figcaption></figure><p><em>In the wake of the <a href="https://www.cnn.com/2024/01/08/us/what-happened-alaska-airlines-flight-1282/index.html">in-flight blowout of the side of a Boeing 737 Max 9</a>, federal regulators have grounded planes and are stepping up scrutiny of Boeing’s manufacturing process.</em></p>
<p><em>The Jan. 5, 2024, explosive decompression after takeoff was related to a component called a “door plug” being ejected from the fuselage of the aircraft. This was after <a href="https://apnews.com/article/alaska-airlines-portland-oregon-emergency-landing-aab8ee1e594369ab48fa3ce60f3acdc6">three prior flights of that plane</a> had registered warning signals about cabin pressurization. The National Transportation Safety Board is investigating that incident.</em></p>
<p><em>In addition, the Federal Aviation Administration has launched an investigation into Boeing’s manufacturing process. Other incidents have raised concerns about other 737 Max aircraft – not just <a href="https://theconversation.com/heres-how-airplane-crash-investigations-work-according-to-an-aviation-safety-expert-113602">fatal crashes in 2018 and 2019</a>, but more recent examples of <a href="https://www.bbc.com/news/world-us-canada-67919436">bolts or other fittings or fasteners</a> not being up to standards.</em></p>
<p><em>The Conversation U.S. asked <a href="https://scholar.google.com/citations?user=I0IMxAkAAAAJ&hl=en&oi=ao">Daniel Kwasi Adjekum</a>, an aviation safety expert and professor of aviation at the University of North Dakota, to explain the significance of the incident, the government’s response and what it all means for the flying public.</em></p>
<h2>Why is Boeing – not the airline – responsible for the door plug being secure?</h2>
<p>Under U.S. federal requirements, the number of occupants in an aircraft and the seating arrangements determine the <a href="https://www.ecfr.gov/current/title-14/chapter-I/subchapter-C/part-25/subpart-D/subject-group-ECFR88992669bab3b52/section-25.807">number and placements of emergency exit doors</a>. Airplane manufacturers build fuselages with enough openings to accommodate all the doors that might be needed. If airlines choose to use the highest-density seating arrangements, they need to use all of the openings for actual exit doors. But not all airlines pack the seats in that tightly; on those planes, some emergency doors are not needed. Those spaces are filled by door plugs.</p>
<p>In the case of the Boeing 737 Max 9 aircraft, the door plugs are fitted by Spirit AeroSystems in Wichita, Kansas, which is the supplier of the airframe to Boeing. The final assembly of the aircraft is carried out at the Boeing plant in Renton, Washington. Quality control checks are done at Spirit AeroSystems, and then another round of quality checks is done by Boeing. These include a high-pressure test to ensure that the cabin can be pressurized safely and to ensure the integrity of the fuselage and pressure bulkheads.</p>
<p>Normally, the plugs are not removed during those tests at the Boeing facility, though they are checked to ensure they are correctly aligned with the rest of the fuselage. Overall, it is Boeing’s responsibility, as the original equipment manufacturer, to ensure the components conform to the FAA’s design, manufacturing, installation and performance requirements. </p>
<h2>Do the airlines have any reason to inspect the bolts that fasten the plugs in place?</h2>
<p>Under normal circumstances, once they are delivered and initially inspected, door plugs and their components are not adjusted by the airline maintenance team, though their integrity is checked as part of stipulated maintenance checks. Records from Alaska Airlines suggest that on previous flights before this incident, <a href="https://apnews.com/article/alaska-airlines-portland-oregon-emergency-landing-aab8ee1e594369ab48fa3ce60f3acdc6">pilots had received cockpit alerts</a> indicating a failure of the aircraft’s cabin auto-pressurization system.</p>
<p>In a situation like that, where there are suspected cabin pressurization issues, it may be possible for airline maintenance crews to check all cabin doors, windows, seals and potentially door plugs as part of a thorough troubleshooting process, but they would be subject to Boeing’s procedures for inspecting a door plug.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/569658/original/file-20240116-23-6pkv4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Airline seats sit next to an opening in the side of an aircraft." src="https://images.theconversation.com/files/569658/original/file-20240116-23-6pkv4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569658/original/file-20240116-23-6pkv4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569658/original/file-20240116-23-6pkv4l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569658/original/file-20240116-23-6pkv4l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569658/original/file-20240116-23-6pkv4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569658/original/file-20240116-23-6pkv4l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569658/original/file-20240116-23-6pkv4l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">A view of the opening in the side of a Boeing aircraft that lost a door plug in midflight.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/BoeingEmergencyLanding/d6bae2b392f74ac88efa0f8f7ffbb5af/photo">NTSB via AP</a></span>
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<h2>What do FAA investigations involve?</h2>
<p>The design, testing, certification and approval process for any new aeronautical product is supposed to be in compliance with strict <a href="https://www.ecfr.gov/current/title-14/chapter-I/subchapter-C/part-25?toc=1">legal and FAA regulatory standards</a>.</p>
<p>As part of the investigations in this case, the FAA will <a href="https://www.npr.org/2024/01/12/1224444590/boeing-faa-737-max-9-alaska-airlines-door-plug">review the engineering and manufacturing processes</a> for the Boeing 737 Max 9, including the processes for vendors and suppliers, to determine if those standards were met. The <a href="https://www.seattletimes.com/business/boeing-aerospace/faa-reviews-data-from-preliminary-inspections-of-boeing-737-max-9/">FAA will review documentation</a> on quality control and assurance processes and analyze components. </p>
<p>The FAA has said it is <a href="https://www.faa.gov/newsroom/faa-increasing-oversight-boeing-production-and-manufacturing">considering bringing in a third party</a> to conduct an audit of the engineering and manufacturing processes for the Boeing 737 Max 9. The findings and recommendations from the <a href="https://www.npr.org/2024/01/08/1223427243/boeing-flight-door-plug-alaska-airlines">National Transportation Safety Board incident investigation</a> may also provide valuable information.</p>
<h2>How do airlines deal with having so many airplanes that are now out of service pending their various inspections?</h2>
<p>With all these aircraft grounded, you need hangars and parking places for temporary storage. And it costs. In the U.S. alone we’re talking about <a href="https://www.newsweek.com/list-airlines-boeing-max-9-1858436">171 airplanes</a> on the ground. </p>
<p>That is a huge financial loss to airlines, which are otherwise benefiting from a <a href="https://edition.cnn.com/2024/01/12/business/alaska-and-united-flights-canceled-737-max/index.html">surge in air service demand and increased passenger interest</a>.</p>
<p>Airlines’ fleet plans – entailing which aircraft they send on which routes and in what sequence – will be disrupted. Some high-traffic routes normally served by these aircraft will have to be done by other aircraft with limited seat and load capacities. That can reduce expected revenue.</p>
<p>The current scenario will also affect flight crew scheduling. Some crew members may have their work hours reduced or eliminated, at least for a period of time.</p>
<p>Once investigators have determined what went wrong, and how to fix whatever it was, that corrective action will also take a lot of maintenance work, in addition to the normal maintenance work for keeping the rest of the planes fit for flying.</p>
<p>It also appears that the <a href="https://www.faa.gov/newsroom/updates-grounding-boeing-737-max-9-aircraft">FAA may want to inspect each plane</a> after it is fixed before certifying it to return to service. That will require significant amounts of inspection time.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/569660/original/file-20240116-21-b90elk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two planes sit parked on the tarmac at an airport." src="https://images.theconversation.com/files/569660/original/file-20240116-21-b90elk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569660/original/file-20240116-21-b90elk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569660/original/file-20240116-21-b90elk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569660/original/file-20240116-21-b90elk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569660/original/file-20240116-21-b90elk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569660/original/file-20240116-21-b90elk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569660/original/file-20240116-21-b90elk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Two Boeing 737 Max 9 aircraft sit on the ground at an Oregon airport on Jan. 9, 2024, awaiting approval to take to the skies once again.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/alaska-airlines-boeing-737-max-9-aircrafts-n705al-and-news-photo/1913163434">Mathieu Lewis-Rolland/Getty Images</a></span>
</figcaption>
</figure>
<h2>How does an airliner manufacturer regain public confidence? Have other companies dealt with this before?</h2>
<p>In the 1970s, McDonnell Douglas had airworthiness issues with the DC-10 aircraft. Its <a href="https://www.smithsonianmag.com/air-space-magazine/book-excerpt-flight-981-disaster-180967121">cargo door sometimes opened midflight</a>, resulting in injuries and <a href="https://mitpressbookstore.mit.edu/book/9781588345608">fatalities</a>.</p>
<p>The incidents were a big public relations problem for McDonnell Douglas, but using recommendations from the accident investigations, the company managed to redesign the door. </p>
<p>In the 1990s, ATR had its own issues with the <a href="https://www.faa.gov/lessons_learned/transport_airplane/accidents/N401AM">ATR 72’s de-icing system</a>. The company completely redesigned the system and gradually came back into the market.</p>
<p>Airbus has also faced similar challenges: Some <a href="https://simpleflying.com/a320neo-engine-troubles/">Airbus A320neos using Pratt and Whitney 1100G engines</a> had vibration problems that required review with engine manufacturers and regulators.</p>
<p>Most aircraft manufacturers are aware technical issues can surface after deploying a product into the market. That is why it’s important for them to get continuous feedback from operators on reliability and safety. </p>
<p>Boeing’s situation is difficult in part because of previous problems with other 737 Max models, including fatal crashes in 2018 and 2019. In my view, the company will need a lot of transparency and leadership to address these hits to its reputation.</p>
<p>To me, the company’s best chance for surviving this crisis would be to take full responsibility for what has happened and avoid blaming its suppliers. Boeing could involve airline executives, pilots, engineers, cabin crew, media and others in a wide-ranging discussion of quality and safety. If Boeing could win the confidence of these key stakeholders who operate its aircraft, that could help reestablish credibility for its brand with the traveling public.</p>
<p>In early 2023, Boeing was planning to <a href="https://www.reuters.com/business/aerospace-defense/boeing-add-737-max-line-it-boosts-production-2023-01-30/">ramp up production of the 737 Max line</a>. My suggestion would be that the company make product safety and quality an immediate priority and worry later about maximizing production goals and profits, after Boeing’s reputation is restored.</p><img src="https://counter.theconversation.com/content/221069/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Daniel Kwasi Adjekum has previously received funding from the National Academies of Sciences Gulf Research Program. </span></em></p>Boeing is under increased public and government scrutiny in the wake of dangerous events that have people worried about the safety of air travel.Daniel Kwasi Adjekum, Assistant Professor of Aviation, University of North DakotaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2212632024-01-18T13:29:47Z2024-01-18T13:29:47ZWhy did Alaska Airlines Flight 1282 have a sealed-off emergency exit in the first place? The answer comes down to money<figure><img src="https://images.theconversation.com/files/569625/original/file-20240116-29-1acz42.jpg?ixlib=rb-1.1.0&rect=90%2C38%2C8536%2C5703&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The door plug area of an Alaska Airlines Boeing 737 MAX 9 aircraft awaits inspection on Jan. 10, 2024. </span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/BoeingEmergencyLanding/f0eebc33866f4efd9f75429155b4d229/photo">Lindsey Wasson/AP Photo</a></span></figcaption></figure><p>The aviation industry is still in shock from a <a href="https://www.nytimes.com/2024/01/07/us/alaska-airlines-boeing-passengers.html">near disaster</a> on Jan. 5, 2024, in which a 60-pound “door plug” blew out from a nearly new Boeing 737 MAX 9 in flight at 16,000 feet, leaving a gaping hole in the fuselage. </p>
<p>In response, <a href="https://apnews.com/article/alaska-airlines-portland-oregon-emergency-landing-b522e36ff228b5ea9a89ea13ee24f597">the Federal Aviation Administration grounded</a> all 737 MAX 9 planes with such plugs, and aviation authorities in other countries have <a href="https://www.reuters.com/world/asia-pacific/indonesia-temporarily-grounds-three-boeing-737-max-9-planes-transport-ministry-2024-01-08/">followed suit</a>. </p>
<p>The industry is watching closely. </p>
<p>A lot of news coverage has emphasized the <a href="https://www.nytimes.com/2024/01/09/opinion/alaska-airlines-safety.html">impressive safety record</a> of the global airline industry, particularly since an Alaska Airlines crew managed to land the plane with no fatalities. I commend the outstanding performance of airline employees, air traffic controllers and emergency responders who achieved this impressive feat.</p>
<p>However, as a former United Airlines pilot <a href="https://som.yale.edu/faculty-research/faculty-directory/amy-fraher">now lecturing in Yale University’s School of Management</a>, I believe the wrong questions are being asked about what happened on Alaska Airlines Flight 1282. As the <a href="https://www.ntsb.gov/investigations/Pages/DCA24MA063.aspx">National Transportation Safety Board</a> and numerous <a href="https://www.kgw.com/article/news/local/airplane-plug-door-door-plugs-explainer/283-2f5d3371-fec8-409c-86e4-88658d0acd02">news outlets</a> have explained, door plugs are commonly used to seal unused exits on commercial airliners. The question we need to ask is: Why wouldn’t an airline use all of an aircraft’s emergency exits? Wouldn’t that make passengers safer?</p>
<p>It’s all about money.</p>
<h2>Safety isn’t free</h2>
<p>Airlines have lots of expenses. Some, such as <a href="https://www.iata.org/en/publications/economics/fuel-monitor">jet fuel</a>, are easier to calculate. Others, such as emergency exits, are more opaque to travelers. </p>
<p>Believe it or not, every functioning emergency exit comes at a price for an airline. Each requires routine maintenance and frequent inspections – for example, to make sure that emergency evacuation slides work properly – and flight attendants must staff emergency exits during takeoff and landing for safety reasons.</p>
<p>In other words, every working exit comes with associated costs in salaries, health benefits, pension plans, training and related expenses. Sealing off an emergency exit cuts costs.</p>
<p>But is every one of those emergency exits crucial? From the U.S. government’s perspective, not necessarily.</p>
<h2>Why you get more emergency exits in Indonesia</h2>
<p>In the U.S., airlines must comply with federal aviation regulations, which dictate aircraft maintenance procedures and in-flight personnel assignments – and minimum standards for emergency exits.</p>
<p>The issue is that Boeing sells the same airplane to different airlines with different needs.</p>
<p>Boeing notes that its 737 MAX 9 can carry up to 220 passengers, which, under U.S. regulations, requires it be built with a specific number of emergency exits. This <a href="https://www.reuters.com/graphics/ALASKAAIR-BOEING/klvydkrlopg/">dense seating configuration</a> is common among lower-cost global airlines such as Jakarta-based Lion Air.</p>
<p>However, given Americans’ desire for legroom, most U.S. carriers are equipped with considerably fewer than 220 seats – and when there are <a href="https://www.reuters.com/graphics/ALASKAAIR-BOEING/klvydkrlopg/">fewer than 190</a> seats, the rules allow fewer emergency exits to be in service. The Alaska Airlines Max 9 had just <a href="https://www.reuters.com/graphics/ALASKAAIR-BOEING/klvydkrlopg/">178 seats</a>.</p>
<p>Under these conditions, the federal rules allow air carriers to disable these exits and plug the openings. That’s precisely what happened with Alaska Airlines Flight 1282 – and how “door plug” suddenly entered the American vernacular.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/ZqVCDpF-k_0?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">A Portland-area science teacher found the missing door plug in his backyard.</span></figcaption>
</figure>
<p>Although this sort of workaround is authorized, it’s unclear to me that this is in the best interest of air safety. Wouldn’t it be better for the FAA to require that all exits are available for use in an emergency, regardless of aircraft seating capacity, even if it required some additional expense for airlines?</p>
<h2>A worrying safety record</h2>
<p>The 737 MAX is a plane of many firsts – not all of them positive.</p>
<p>The MAX is the latest addition to Boeing’s 737 family of aircraft. The 737 family has far eclipsed all rivals as the <a href="https://www.businessinsider.com/boeing-737-max-timeline-history-full-details-2019-9">most popular commercial airliner ever built</a>, with over 10,000 sold worldwide since its introduction in 1967.</p>
<p>Some carriers, such as Southwest Airlines in the United States and Ryanair in Ireland, fly only 737s; it’s a critical element of their low-cost business strategy. By flying just one type of aircraft, these airlines significantly improve scheduling flexibility while cutting maintenance and training costs.</p>
<p>That’s all to say that demand for the latest 737 was high. In 2017, when the FAA certified the 737 MAX safe for flight, Boeing <a href="https://boeing.mediaroom.com/2017-03-09-Boeing-737-MAX-8-Earns-FAA-Certification">had already received</a> more than 3,600 new orders from 83 customers. </p>
<p>But very shortly afterward, <a href="https://www.theguardian.com/business/2021/nov/11/boeing-full-responsibility-737-max-plane-crash-ethiopia-compensation">two crashes</a> that <a href="https://www.nbcnews.com/news/world/indonesia-report-finds-fatal-lion-air-jet-crash-due-boeing-n1071796">together killed 346 people</a> grounded the 737 MAX for nearly two years – another first as <a href="https://democrats-transportation.house.gov/committee-activity/boeing-737-max-investigation">the longest airline grounding in aviation history</a>. Destined to profit US$12 million on the sale of each $121 million MAX, there was <a href="https://www.businessinsider.in/heres-how-much-boeing-is-estimated-to-make-on-each-737-max-8-plane/articleshow/68399220.cms">significant incentive</a> for Boeing to press on with MAX development even though it had already proved to be a dangerously problematic aircraft design.</p>
<p>In 2020, <a href="https://www.oig.dot.gov/sites/default/files/FAA%20Boeing%20737%20MAX%20Return%20to%20Service%20Final%20Report%5E4.26.2023_revised.pdf">the FAA recertified the MAX as “safe for flight”</a>; by 2023, Boeing had logged more than 7,000 total orders for the MAX, <a href="https://www.boeing.com/commercial/orders-deliveries">far eclipsing</a> the sale of any other type of airliner. This fact alone ought to raise safety concerns. It may soon prove impossible to avoid flying on a 737 MAX, particularly in the U.S. domestic market. United, American, Southwest and Alaska airlines <a href="https://simpleflying.com/boeing-737-max-airlines/">all currently fly the MAX</a>. </p>
<p>When airplane parts and passengers’ cellphones are <a href="https://www.cbsnews.com/news/iphone-sucked-out-alaska-airlines-plane-fell-16000-feet-found-still-works/">raining from the sky</a>, it could be a sign that the industry needs to think harder about unintended costs – and consequences.</p><img src="https://counter.theconversation.com/content/221263/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amy Fraher does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A commercial pilot turned management expert and author of ‘The Next Crash: How Short-Term Profit Seeking Trumps Airline Safety,’ explains the economics behind the near-deadly disaster.Amy Fraher, Lecturer in Management, Yale UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2210232024-01-12T17:38:54Z2024-01-12T17:38:54ZBoeing needs to get real: the 737 Max should probably be scrapped<p>The Boeing 737 Max is in the <a href="https://www.reuters.com/business/aerospace-defense/boeings-ongoing-737-max-crisis-2024-01-06/">news again</a>, this time because the <a href="https://www.youtube.com/watch?v=ek_KjQCoVV4">door plug</a> on a brand-new plane <a href="https://news.sky.com/story/alaska-airlines-grounds-all-boeing-737-9-max-planes-after-mid-flight-window-blowout-13042962">came off</a> soon after take-off. The pilots of the Alaska Airlines flight from Portland, Oregon, managed to return the Max 9 safely to Portland International Airport, but the consequences would have been far more serious had the incident occurred at cruising height a few minutes later. </p>
<p>Alaska Airlines and fellow US carrier United Airlines have also <a href="https://www.bbc.co.uk/news/world-us-canada-67919436">discovered</a> loose hardware and connections on their fleets of 737 Max planes. The US Federal Aviation Administration (FAA) <a href="https://news.sky.com/story/boeing-737-9-max-alaska-airlines-blowout-cannot-happen-again-official-investigation-into-jet-under-way-13046391">has now grounded</a> 171 Boeing aircraft, mostly operated by Alaska Airlines and United Airlines, pending inspections.</p>
<p>The 737 Max is a series of narrow-body commercial aircraft developed as an upgrade to the highly successful <a href="https://en.wikipedia.org/wiki/Boeing_737_Next_Generation">Boeing 737 Next Generation</a> (NG) series. First delivered in 2017, it <a href="https://www.icelandair.com/about/our-fleet/boeing-737-max/">was designed</a> to be even more fuel efficient and with more power supplied by bigger engines. </p>
<p>It has attracted more demand than Boeing can supply, but has faced significant challenges. Most notable were crashes in <a href="https://www.nbcnews.com/news/world/indonesia-report-finds-fatal-lion-air-jet-crash-due-boeing-n1071796#:%7E:text=Plane%20plunged%20into%20the%20Java,%2C%202018%2C%20killing%20189%20people.&text=JAKARTA%2C%20Indonesia%20%E2%80%94%20An%20Indonesian%20investigation,inadequate%20training%20and%20maintenance%20problems.">Indonesia (2018)</a> and <a href="https://www.barrons.com/news/inquiry-into-2019-ethiopian-air-crash-confirms-software-failure-01671821708">Ethiopia (2019)</a>, which were partly caused by technical problems and killed 346 people. </p>
<p>So why have there been <a href="https://www.reuters.com/business/aerospace-defense/boeings-ongoing-737-max-crisis-2024-01-06/">all these problems</a> and what can be done? </p>
<h2>Design and manufacturing</h2>
<p><a href="https://www.aviationtoday.com/2019/10/28/lion-air-737-max-final-accident-report-cites-aoa-sensor-mcas-as-contributing-factors/">An investigation</a> following the Indonesia crash revealed issues with an automated flight control system called the Maneuvering Characteristics Augmentation System (MCAS). This was designed to prevent the 737 Max <a href="https://simpleflying.com/airplane-stalls/">from stalling</a>, which had been made more likely by its larger engines. Yet the system’s complexity and reliance on a single sensor made it vulnerable to failure. </p>
<p>The MCAS was also involved in the Ethiopian crash, albeit the <a href="https://www.seattletimes.com/business/boeing-aerospace/final-report-on-boeing-737-max-crash-disputed-agencies-note-pilot-error-as-a-factor/">US safety agency</a> argued pilot errors were the main cause. Boeing <a href="https://www.boeing.com/commercial/737max/737-max-software-updates.page">subsequently issued</a> a <a href="https://www.seattletimes.com/business/boeing-aerospace/boeings-fix-tames-the-tiger-in-the-737-max-flight-controls/">software fix</a> for the MCAS problem. So far as we are aware, it has now been resolved. </p>
<p>Besides the most recent issues with Alaska and United, quality and safety problems have included <a href="https://www.cnbc.com/2019/06/02/boeing-notifies-faa-of-737-max-parts-that-may-be-susceptible-to-failure.html">unsatisfactory wing components</a> in 2019. In 2023, suppliers were poorly attaching <a href="https://www.reuters.com/business/aerospace-defense/boeing-pauses-deliveries-some-737-maxs-amid-new-supplier-problem-2023-04-13/">aircraft fittings</a> and <a href="https://www.flyingmag.com/extra-holes-drilled-in-737-max-pressure-bulkheads-boeing/">drilling unnecessary holes</a>. </p>
<p>While these defects could be blamed on manufacturing, unwieldy designs make it difficult to manufacture products at scale while meeting quality requirements. So, you have to question whether poor design and unrealistically high volume expectations are ultimately what has happened to the 737 Max. </p>
<p>The fact that door plug problem and loose bolts are cropping up at a time when <a href="https://www.reuters.com/business/aerospace-defense/boeing-boosts-monthly-737-production-38-defense-unit-struggles-2023-07-26/">Boeing is trying</a> to ramp up 737 Max production to about double the pre-pandemic level – and the pressure to achieve the pre-pandemic stock price – makes design all the more suspect. </p>
<p><strong>Boeing share price:</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Boeing share price chart" src="https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=363&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=363&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=363&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=457&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=457&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=457&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="https://www.tradingview.com/">Trading View</a></span>
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<p>Moreover, <a href="https://www.theguardian.com/business/2020/jan/09/boeing-737-max-internal-messages">leaked internal documents</a> from 2015-18 have revealed that employees who worked on the Max planes believed the design was unsound. Hundreds of internal messages showed them referring to the “piss-poor design” and one “designed by clowns” who were “supervised by monkeys”. </p>
<p>A <a href="https://www.bbc.co.uk/news/business-54174223">US Congressional report</a> in 2020 into the 737 Max crashes said: “Boeing failed in its design and development of the 737 Max, and the FAA failed in its oversight of Boeing and its certification of the aircraft.” It also pointed to too close a relationship with the FAA. </p>
<p>Boeing’s approach to manufacturing costs may also be a factor. Former employees <a href="https://www.cbc.ca/news/business/boeing-fifth-estate-costs-safety-1.5426571">previously suggested</a> it had imported a culture that was very focused on cost-cutting when it bought rival US aerospace manufacturer <a href="https://simpleflying.com/mcdonnel-douglas-boeing-merger/">McDonnell Douglas</a> back in 1997. Boeing <a href="https://www.aljazeera.com/economy/2014/9/10/interview-the-former-boeing-union-president">has denied</a> that it has compromised on product safety or quality for any reason whatsoever. </p>
<p>Assembly line workers on the 737 Max have <a href="https://www.ft.com/content/04f6f45e-1c2c-11ea-97df-cc63de1d73f4">reportedly faced</a> intense pressure to meet production deadlines, while a former senior manager claimed in 2019 he had sent urgent emails and letters to <a href="https://www.ft.com/content/04f6f45e-1c2c-11ea-97df-cc63de1d73f4">the company’s leadership</a> to shut down production. Boeing <a href="https://www.ft.com/content/04f6f45e-1c2c-11ea-97df-cc63de1d73f4">has denied</a> that assembly-line pressure had any bearing on the crashes, and pointed out that company’s commitment to safety was reflected in the fact that the whistleblower was able to brief its general counsel over his concerns. </p>
<p>Despite these alleged assembly-line issues, Boeing has not faced anything like the same problems with the other 737 variants or indeed with other planes like the 787 Dreamliner. Again, it indicates that the problem may ultimately be more to do with design of the 737 Max. </p>
<h2>What next</h2>
<p>So what happens now? Going by the previous debacles, the playbook is clear. The FAA will lift the grounding order in the coming weeks as politicians start complaining about orders being lost to Airbus. Boeing will swear all the planes are safe and that the production processes of the parts vendor in question, Kansas-based <a href="https://www.spiritaero.com/">Spirit AeroSystems</a>, have been reviewed (<a href="https://www.boeing.com/737-9-updates/index.page">Spirit has said</a> it is committed to ensuring every Boeing plane meets the highest safety and quality standards). </p>
<p>Then the White House will push developing countries to buy the Boeing 737 Max, as <a href="https://www.reuters.com/business/aerospace-defense/vietnam-air-signs-78-bln-deal-50-boeing-737-max-planes-white-house-says-2023-09-11/">President Biden did</a> in his visit with business leaders to Vietnam last September. All will be well – until it isn’t. </p>
<p>Instead, Boeing should suppress its political muscle and take a different approach. The 737 Max brand is so tarnished that it may be better to let go. More importantly, if the design is also ultimately unworkable at scale, it would be better to scrap it too rather than trying to push production even harder. </p>
<p>The good news for the company is that the 737 has been highly successful commercially going back to 1968, with a solid history of safety, not including the 737 Max. The 737 variants’ <a href="https://www.independent.co.uk/travel/news-and-advice/boeing-737-max-crash-plane-door-future-b2476106.html">safety record</a> until the end of 2019 was the same as the narrow-body offering from Airbus, including the A320, but it has now become much worse with the 737 Max. </p>
<p>Boeing should arguably design a new narrow-body plane again based on the 737 Next Generation with higher efficiency and larger engines. The supply chain won’t need to be changed dramatically. It worked for previous 737s, so there is no reason it can’t work again. If cost-cutting has resulted in suppliers cutting too many corners, that needs to be revisited of course. </p>
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<p>Boeing President and CEO Dave Calhoun <a href="https://www.boeing.com/737-9-updates/index.page">said at</a> an all-employee safety meeting on January 9: “We’re going to have to demonstrate trust by our actions, by our willingness to work directly and transparently with them (customers).”</p>
<p>This is true, but the company’s first priority has to be to <a href="https://www.nytimes.com/2020/01/10/business/boeing-737-employees-messages.html">make sure</a> it has the trust of its workers by listening to their safety concerns and taking them onboard. </p>
<p>Only by addressing its culture can Boeing really end this crisis. There has been such a catalogue of sequential errors that anything short of a complete overhaul is only likely to compound the problem and put more lives at risk.</p><img src="https://counter.theconversation.com/content/221023/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>ManMohan S Sodhi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There have been so many problems with the 737 Max that the nuclear option may be the best way forward.ManMohan S Sodhi, Professor of Operations and Supply Chain Management, City, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2208052024-01-10T16:34:08Z2024-01-10T16:34:08ZPost Office will struggle to rebuild brand trust – as Boeing and Facebook scandals show<figure><img src="https://images.theconversation.com/files/568654/original/file-20240110-16-jk1eme.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4207%2C3246&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/people-line-outside-post-office-cambridge-1865055061">Edward Crawford/Shutterstock</a></span></figcaption></figure><p>The Post Office, once an <a href="https://www.emerald.com/insight/content/doi/10.1108/EJM-11-2014-0691/full/html">iconic British brand</a> has fallen from grace following the <a href="https://theconversation.com/the-post-office-scandal-is-possibly-the-largest-miscarriage-of-justice-in-uk-history-and-its-not-over-yet-211217">Horizon IT Scandal</a>. With over 11,500 branches, it’s the <a href="https://corporate.postoffice.co.uk/#:%7E:text=With%20over%2011%2C500%20branches%2C%20we,retail%20franchise%20network%20in%20Europe.&text=An%20anchor%20of%20UK%20communities,people%20who%20rely%20on%20us.">largest retail franchise</a> network in Europe, offering a variety of products – not just postal, but cash and banking, foreign exchange and government services. Post offices are also often an important social hub for communities, not to mention offering a chance to run a vital local business for people around the UK.</p>
<p>The Horizon system, developed by Fujitsu, was introduced in 1999 to help branches manage transactions, accounts and stocktaking. It has since been revealed as faulty, causing account shortfalls often initially blamed on those people running the branches (known as sub-postmasters and mistresses). As a result of the system’s errors, these workers were accused of fraud and theft, and wrongly prosecuted. A <a href="https://www.itv.com/watch/mr-bates-vs-the-post-office/10a0469/10a0469a0001">new ITV four-part drama</a> has put a spotlight on the scandal, renewing pressure on the government Post Office to <a href="https://www.bbc.co.uk/news/live/uk-politics-67926661">exonerate and compensate</a> hundreds of former workers.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/mr-bates-vs-the-post-office-depicts-one-of-the-uks-worst-miscarriages-of-justice-heres-why-so-many-victims-didnt-speak-out-220513">Mr Bates vs The Post Office depicts one of the UK's worst miscarriages of justice: here’s why so many victims didn’t speak out</a>
</strong>
</em>
</p>
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<p>One of the <a href="https://www.onepostoffice.co.uk/secure/latest-news/our-business/brands-we-trust-where-we-sit-in-the-rankings/">UK’s most trusted brands</a> only a few years ago, the Post Office has since drawn near-universal ire
<a href="https://www.itv.com/news/2021-04-23/post-office-postmasters-horizon-court-of-appeal">for its treatment of its sub-postmasters and mistresses</a>. The ITV show has only reignited the controversy.</p>
<p>Trust is crucial to the relationship brands develop with consumers. These connections help attract new customers, but also create long-term buying habits. It takes time and effort to build this kind of trust, but it can crumble in an instant, as major brands like Facebook, Boeing and Volkswagen – and now the Post Office – have found. Rebuilding this trust after a scandal takes even more time and effort and the results can be mixed.</p>
<p>Brand trust is multifaceted but can be thought of as the <a href="https://www.researchgate.net/publication/257541748_Does_Having_an_Ethical_Brand_Matter_The_Influence_of_Consumer_Perceived_Ethicality_on_Trust_Affect_and_Loyalty">confidence, reliability and credibility</a> that consumers and other stakeholders – such as investors, suppliers, employees and even competitors – associate with a brand. It reflects the belief that a brand is competent, consistent, honest and takes responsibility for delivering on its promises and acting in the best interest of consumers. </p>
<p>People can <a href="https://www.jstor.org/stable/10.1086/209515">develop strong emotional attachments to brands</a> and trust is typically <a href="https://hbr.org/2019/07/the-trust-crisis">at the core</a> of these relationships. Trust underpins people’s commitment and <a href="https://business.columbia.edu/sites/default/files-efs/pubfiles/593/The_Chain_of_Effects.pdf">loyalty</a> to a brand. And when a brand earns people’s trust, it can be rewarded with more sales, positive word of mouth, and long-term custom, <a href="https://www.adobe.com/content/dam/cc/uk/aboutadobe/newsroom/pdfs/051121-future-of-marketing.pdf">according to research</a>. <a href="https://www.researchgate.net/publication/227895249_Examining_the_Antecedents_and_Consequences_of_Corporate_Reputation_A_Customer_Perspective">Academic studies also show</a> the importance of trust to corporate reputation. </p>
<h2>From hero to zero</h2>
<p>So, when this trust is broken, it can be highly damaging for a brand, as big names have found in the past. </p>
<p>In 2018, social media platform Facebook was at the centre of a major data breach. Governments around the world questioned the company’s commitment to data privacy after <a href="https://www.theguardian.com/technology/2018/apr/08/facebook-to-contact-the-87-million-users-affected-by-data-breach">87 million users</a> were confirmed to have had their personal data shared with Cambridge Analytica. The political consultant was using the data to target voters during the 2016 US presidential election. </p>
<p>Facebook founder and CEO Mark Zuckerberg apologised in a Facebook post acknowledging “a breach of trust between Facebook and the people who share their data with us and expect us to protect it”. But his initial response – <a href="https://www.theguardian.com/technology/2018/mar/21/mark-zuckerberg-response-facebook-cambridge-analytica#:%7E:text=The%20Facebook%20CEO%20broke%20his,expect%20us%20to%20protect%20it%E2%80%9D.">deafening silence for five days</a> – probably didn’t help shore up consumer trust in the brand. </p>
<p>The scandal had huge implications for data privacy and governments acted swiftly to pass laws and regulations to protect consumers, including the EU’s <a href="https://digital-strategy.ec.europa.eu/en/policies/digital-services-act-package">Digital Services Act</a>. In the aftermath of scandal, Americans were also <a href="https://theconversation.com/cambridge-analytica-scandal-facebooks-user-engagement-and-trust-decline-93814">less likely to trust</a> Facebook. </p>
<p>More recently, aeroplane maker Boeing’s reputation for quality has been decimated. First, a damning <a href="https://www.imdb.com/title/tt11893274/">Netflix documentary</a> examined the 2018 and 2019 crashes of two 737-MAX jets and the company’s choices about <a href="https://www.theguardian.com/film/2022/feb/22/downfall-the-case-against-boeing-netflix-documentary-737-max">passenger safety</a>. Boeing spent <a href="https://www.thetimes.co.uk/article/we-regain-trust-one-aircraft-at-a-time-says-boeing-boss-dave-calhoun-998fwztnv#:%7E:text=of%20Alba%202023-,We%20regain%20trust%20one%20aircraft%20at%20a,says%20Boeing%20boss%20Dave%20Calhoun&text=Boeing%20has%20spent%20four%20long,its%20bestselling%20737%20Max%20aircraft.">four years rebuilding trust</a> after <a href="https://www.boeing.com/737-max-updates/official-statements/">the two fatal crashes</a>. But the recent <a href="https://www.bbc.co.uk/news/world-us-canada-67915771">mid-air cabin panel blow out</a> of a 737 MAX 9 has seen Boeing hit the headlines again, further damaging the company image and leaving customers, pilots, crew and regulators asking why they should trust the company. </p>
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<p>At an all-staff meeting shortly after the incident, <a href="https://edition.cnn.com/2024/01/09/business/boeing-safety-meeting-737-max-factory/index.html">CEO Dave Calhoun told employees</a> that Boeing must acknowledge “our mistake” and has promised total transparency. A video of <a href="https://www.boeing.com/737-9-updates/index.page#:%7E:text=hosted%20a%20meeting%20with%20all%20employees">his opening statement</a> was also posted on the company website.</p>
<p>Volkswagen experienced similar trust issues after a scandal dubbed “emissionsgate” or <a href="https://www.bbc.co.uk/news/business-34324772">“the diesel dupe”</a>. The car company is still struggling after the US environmental regulator <a href="https://www.epa.gov/vw/learn-about-volkswagen-violations">accused the company</a> of cheating on vehicle emissions tests. Customers <a href="https://www.thedrum.com/news/2015/09/23/has-volkswagen-s-emissions-scandal-smashed-brand-beyond-repair">lost trust</a> in the brand and the company, after admitting fault, also had to pay billions of dollars in fines and compensation claims. </p>
<p>“Our most important task in 2016 is to win back trust,” Volkswagen CEO Matthias Mueller said in a January 2016 speech at an auto industry event.</p>
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<h2>Rebuilding trust in a brand</h2>
<p>In the aftermath of a brand crisis, <a href="https://www.tandfonline.com/doi/abs/10.1080/13527266.2023.2172601">communication</a> in the form of this kind of brand apology is key. But <a href="https://theconversation.com/boeing-is-doing-crisis-management-all-wrong-heres-what-a-company-needs-to-do-to-restore-the-publics-trust-114051">Boeing</a> is still being accused of doing crisis management “all wrong”, and Facebook has also been <a href="https://insigniacrisis.com/2019-facebook-a-lesson-in-crisis-management">criticised</a> for its scandal response. </p>
<p>The speed of the response matters. An effective crisis management approach typically involves company leaders issuing swift public statements – often filmed – acknowledging responsibility and full transparency about the mistakes that lead to the scandal and the remedial steps.</p>
<p>Trust can be rebuilt but it’s a long-term process. Some <a href="https://fabrikbrands.com/brands-and-companies-that-have-repositioned-themselves/">companies</a> such as Starbucks and Gucci have successfully <a href="https://press.farm/brand-repositioning-strategies-rebuild-trust/">repositioned their brands</a> to alter the perceived image held by consumers. This involves changing marketing elements such as prices or promotional methods to attract new customers and refresh the brand image. In some cases, it involves a complete rebrand with a new logo and tagline.</p>
<p>The latest headlines have reignited debate about what the Post Office and the government should do to address the Horizon IT scandal. The Post Office must find the right kind of crisis management strategy if it wants to weather this storm and regain its position as a trusted British brand.</p><img src="https://counter.theconversation.com/content/220805/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sameer Hosany does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Companies like Facebook, Volkswagen, Boeing – and now the Post Office – have seen how easy it is to destroy brand trust. But communication and transparency are key to rebuilding efforts.Sameer Hosany, Professor of Marketing, Royal Holloway University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2180372023-11-28T03:49:33Z2023-11-28T03:49:33ZAlmost half the men surveyed think they could land a passenger plane. Experts disagree<figure><img src="https://images.theconversation.com/files/561998/original/file-20231127-29-h9xkjy.jpg?ixlib=rb-1.1.0&rect=69%2C0%2C5754%2C3877&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Picture this: you’re nestled comfortably in your seat cruising towards your holiday destination when a flight attendant’s voice breaks through the silence: </p>
<blockquote>
<p>Ladies and gentlemen, both pilots are incapacitated. Are there any passengers who could land this plane with assistance from air traffic control?</p>
</blockquote>
<p>If you think you could manage it, you’re not alone. <a href="https://today.yougov.com/topics/politics/survey-results/daily/2023/01/02/fd798/3">Survey results</a> published in January indicate about one-third of adult Americans think they could safely land a passenger aircraft with air traffic control’s guidance. Among male respondents, the confidence level rose to nearly 50%.</p>
<p>Can a person with no prior training simply guide everyone to a smooth touchdown?</p>
<p>We’ve all heard stories of passengers who saved the day when the pilot became unresponsive. For instance, last year <a href="https://www.youtube.com/watch?v=qbMoyWukjbs">Darren Harrison</a> managed to land a twin-engine aircraft in Florida – after the pilot passed out – with the guidance of an air traffic controller who also happened to be a flight instructor. </p>
<p>However, such incidents tend to take place in small, simple aircraft. Flying a much bigger and heavier commercial jet is a completely different game. </p>
<h2>You can’t always rely on autopilot</h2>
<p>A pilot spends about 90% of their time monitoring autopilot systems and making sure everything is working as intended. The other 10% is spent managing problems, taxiing, taking off and landing. </p>
<p>Takeoffs and landings are arguably the most difficult tasks pilots perform, and are always performed manually. Only on very few occasions, and in a handful of aircraft models, can a pilot use autopilot to land the aircraft for them. This is the exception, and not the rule.</p>
<p>For takeoff, the aircraft must build up speed until the wings can generate enough lift to pull it into the air. The pilot must <a href="https://youtu.be/16XTAK-4Xbk?si=66yDo5g5I086Q2y2&t=65">pay close attention</a> to multiple instruments and external cues, while keeping the aircraft centred on the runway until it reaches lift-off speed. </p>
<p>Once airborne, they must coordinate with air traffic control, follow a particular path, retract the landing gear and maintain a precise speed and direction while trying to climb. </p>
<p>Landing is even more complicated, and requires having precise control of the aircraft’s direction and descent rate.</p>
<p><a href="https://youtu.be/u_it9OiTnSM?si=xNZrLB9ZH870LEa3&t=360">To land successfully</a>, a pilot must keep an appropriate speed while simultaneously managing gear and flap configuration, adhering to air traffic regulations, communicating with air traffic control and completing a number of paper and digital checklists.</p>
<p>Once the aircraft comes close to the runway, they must accurately judge its height, reduce power and adjust the rate of descent – ensuring they land on the correct area of the runway.</p>
<p>On the ground, they will use the brakes and reverse thrust to bring the aircraft to a complete stop before the runway ends. This all happens within just a few minutes. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/Nyx4NyMrvOs?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>Both takeoff and landing are far too quick, technical and concentration-intensive for an untrained person to pull off. They also require a range of skills that are only gained through extensive training, such as understanding the information presented on different gauges, and being able to coordinate one’s hands and feet in a certain way.</p>
<h2>Training a pilot</h2>
<p>The journey from student to commercial pilot is a long one. It normally starts with a recreational licence, followed by a private licence, and then a commercial licence (which allows them to fly professionally). </p>
<p>Even before stepping into a cockpit, the student must study aerodynamics, air law and flight rules, meteorology, human factors, navigation, aircraft systems, and performance and flight planning. They also need to spend time learning about the specific aircraft they will be flying. </p>
<p>Once the fundamentals are grasped, an instructor takes them for training. Most of this training is conducted in small, lightweight aircraft – with a simulator introduced briefly towards the end.</p>
<p>During a lesson, each manoeuvre or action is demonstrated by the instructor before the student attempts it. Their attempt may be adjusted, corrected or even terminated early in critical situations.</p>
<p>The first ten to fifteen lessons focus on takeoff, landing, basic in-flight control and emergency management. When the students are ready, they’re allowed to “go solo” – wherein they conduct a complete flight on their own. This is a great milestone.</p>
<p>After years of experience, they are ready to transition to a commercial aircraft. At this point they might be able to take off and land reasonably well, but they will still undergo extensive training specific to the aircraft they are flying, including hours of advanced theory, dozens of simulator sessions and hundreds of hours of real aircraft training (most of which is done with passengers onboard).</p>
<p>So, if you’ve never even learned the basics of flying, your chances of successfully landing a passenger aircraft with air traffic control’s help are close to zero.</p>
<h2>Yet, flying is a skill like any other</h2>
<p>Aviation training has been democratised by the advent of high-end computers, virtual reality and flight simulation games such as Microsoft’s <a href="https://www.flightsimulator.com/">Flight Simulator</a> and <a href="https://www.x-plane.com/">X-Plane</a>.</p>
<p>Anyone can now rig up a desktop flight simulator for a few thousand dollars. Ideally, such a setup should also include the basic physical controls found in a cockpit, such as a control yoke, throttle quadrant and pedals. </p>
<p>Flight simulators provide an immersive environment in which professional pilots, students and aviation enthusiasts can develop their skills. So if you really think you could match-up against a professional, consider trying your hand at one. </p>
<p>You almost certainly won’t be able to land an actual passenger plane by the end of it – but at least you’ll gain an appreciation for the immense skill pilots possess.</p><img src="https://counter.theconversation.com/content/218037/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>We conducted a research project with funds provided by Boeing Research & Technology Australia.</span></em></p>Takeoff and landing are among the most difficult tasks commercial pilots perform.Guido Carim Junior, Senior Lecturer in Aviation, Griffith UniversityChris Campbell, Adjunct Associate Professor, Griffith UniversityElvira Marques, Aviation PhD candidate, Griffith UniversityNnenna Ike, Research Assistant, Griffith Aviation, Griffith UniversityTim Ryley, Professor and Head of Griffith Aviation, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1791402022-03-15T15:05:15Z2022-03-15T15:05:15ZBoeing: why the Ukraine crisis could help it become the world’s number one aircraft maker again<p>Boeing has faced a lot of bad press in recent years, and deservedly so. After <a href="https://www.nbcnews.com/news/us-news/737-max-crashes-killed-346-were-horrific-culmination-failures-boeing-n1240192">two Boeing 737 Max</a> crashes killed 346 people, the American aerospace giant <a href="https://journals.sagepub.com/doi/full/10.1177/2046147X211001350">was criticised</a> for its “slow” and “defensive” handling of the crisis, and <a href="https://www.flightglobal.com/airframers/boeing-737-max-cleared-to-fly-again-after-20-month-grounding/141166.article">nearly 400 planes</a> were grounded for 20 months following a temporary ban by the US authorities. The company has also been <a href="https://www.bizjournals.com/seattle/news/2020/09/15/boeing-consolidation-787-assembly-study-everett.html">plagued with problems</a> at its South Carolina plant, which makes 787 Dreamliners. </p>
<p>However, Boeing has got a lot right too – and this is becoming apparent as events in Ukraine unfold.</p>
<p>New aircraft rely heavily on lightweight materials, including titanium. Titanium has other key properties too, including its high strength and heat resistance, making it ideal for use in the body of the plane (the airframe), the parts that hold the structure together (the fastening elements), and the wheels and undercarriage (the landing gear). Unfortunately, titanium is scarce – and <a href="https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-titanium.pdf">16% of its supply</a> comes from Russia and Ukraine.</p>
<p>Following the 2014 Crimean crisis, <a href="https://www.bizjournals.com/wichita/news/2014/08/08/boeing-united-technologies-stocking-up-on-russian.html">Boeing began</a> stockpiling titanium and <a href="https://www.reuters.com/business/aerospace-defense/boeing-confident-working-through-any-disruption-titanium-supplies-exec-2022-02-14/">started diversifying</a> its arrangements for sourcing metals. In a statement on March 7, the company sought to reassure its stakeholders about its position with regards to raw materials: </p>
<blockquote>
<p>Our inventory and diversity of titanium sources provide sufficient supply for airplane production, and we will continue to take the right steps to ensure long-term continuity.</p>
</blockquote>
<p>Interestingly, Boeing <a href="https://www.businesstoday.in/latest/world/story/ukraine-crisis-boeing-stops-purchase-of-titanium-from-russia-325070-2022-03-07#:%7E:text=US%20planemaker%20Boeing%20Co%20said,continuity%2C%22%20the%20company%20added.">suspended buying titanium</a> from Russia earlier in March, even though the metal is not yet covered by US sanctions. Airbus <a href="https://www.reuters.com/business/aerospace-defense/aerospace-firms-brace-turbulence-russian-titanium-supplies-2022-01-28/">may also</a> have been stockpiling titanium since Crimea, but <a href="https://www.reuters.com/business/aerospace-defense/boeing-suspends-part-its-business-russia-wsj-2022-03-07/">it continues</a> to rely on Russia for its supply, citing its compliance with EU sanctions. </p>
<p>Thanks to its diversification, Boeing <a href="https://mentourpilot.com/boeing-stops-buying-russian-titanium-airbus-continues/">now relies</a> on Russia for about 35% of its supply, whereas different sources put Airbus somewhere between 50% and 65%. Incidentally, smaller manufacturers are even more reliant: Brazilian aircraft maker Embraer relies on Russia for 100% of its supply.</p>
<p>Both Boeing and Airbus have taken a hit in the stock market since Russia’s invasion of Ukraine on February 24, because of the prospect of decreased demand for aircraft in affected markets and potential disruption to financing arrangements. Boeing has performed marginally better at the time of writing, having generally underperformed Airbus in recent years. And should sanctions be placed on Russian titanium, Airbus and other manufacturers would find themselves in a difficult (perhaps impossible) position. For Boeing, the threat is much less significant.</p>
<p><strong>Boeing vs Airbus</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/451947/original/file-20220314-24-1xj3cyw.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Chart showing Boeing and Airbus stock performances compared to the S&P 500" src="https://images.theconversation.com/files/451947/original/file-20220314-24-1xj3cyw.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/451947/original/file-20220314-24-1xj3cyw.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=314&fit=crop&dpr=1 600w, https://images.theconversation.com/files/451947/original/file-20220314-24-1xj3cyw.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=314&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/451947/original/file-20220314-24-1xj3cyw.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=314&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/451947/original/file-20220314-24-1xj3cyw.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=394&fit=crop&dpr=1 754w, https://images.theconversation.com/files/451947/original/file-20220314-24-1xj3cyw.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=394&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/451947/original/file-20220314-24-1xj3cyw.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=394&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Cyan = S&P 500; blue = Boeing; orange = Airbus.</span>
<span class="attribution"><span class="source">Trading View</span></span>
</figcaption>
</figure>
<h2>The 747-8 – a plane that failed well</h2>
<p>The Boeing 747 might be about the most successful plane of all time, but the 747-8, launched in 2005, has been described as <a href="https://airwaysmag.com/airlines/klm-retires-its-last-two-boeing-747/">a “flop”</a> for the company. Boeing’s final punt in the jumbo era sold <a href="https://modernairliners.com/airbus-a380/airbus-a380-orders-and-deliveries/#content">138 planes</a>, compared to 249 by main rival, the Airbus A380. </p>
<p>Yet Airbus’ success over the 747-8 was pyrrhic. The fact that Boeing developed the 747-8 lured Airbus into mobilising huge resources into the A380, having not previously had the infrastructure to build such a vehicle. Boeing, which obviously did not have this problem, was able to spend elsewhere. The 747-8 programme <a href="https://seekingalpha.com/article/3293125-the-boeing-747minus-8-and-airbus-a380-2-very-large-aircraft-2-different-stories">cost US$4 billion</a> (£3 billion) after adjusting for inflation, while the A380 cost <a href="https://simpleflying.com/airbus-a380-cost/">six or seven times</a> more. </p>
<p>The problem for Airbus was that the market pivoted from jumbos towards mid-sized widebody aircraft like the Boeing 787 Dreamliner. The industry has for years been <a href="https://simpleflying.com/hub-and-spoke-vs-point-to-point/">shifting towards</a> “point-to-point” flying between two places, as opposed to via a hub like London Heathrow, and COVID accelerated this trend. This favours the operational agility of mid-size aircraft. Consequently, many airlines including Air France, KLM and Virgin Atlantic have prematurely retired their A380 and 747 fleets. Production of A380s was wrapped up in 2021 after Emirates cancelled its final orders, while Boeing 747 production ceases this year. </p>
<p>Launched in 2004, the Dreamliner boasts unprecedented <a href="https://simpleflying.com/airbus-a330neo-vs-boeing-787-9-which-is-best/">fuel efficiency</a> and <a href="https://simpleflying.com/boeing-787-dimmable-windows-why/">comfort</a>. It soon became the fastest selling widebody aircraft of all time. Airbus put everything into the A380 – a plane for which <a href="https://simpleflying.com/boeing-a380-competitor/">Boeing knew</a> there was little demand. </p>
<p>Even when Airbus did get the A330neo to market to compete with the Dreamliner in 2014, its development was a modified version of a pre-existing airframe, so it cannot match the 787 in terms of fuel efficiency and comfort. In any case, the 787 had already cemented itself as the preferred plane in its market. Boeing <a href="https://modernairliners.com/boeing-787-dreamliner/boeing-787-dreamliner-deliveries/#content">has delivered</a> 1,006 of them to customers and has orders for about 900 more, whereas the A330neo has done 67 deliveries and a total of 348 orders. </p>
<p>Airbus has been more successful with its A350, which is a larger widebody aircraft more suited to long haul that began passenger flights in 2015. Boeing’s competition, the 777X, is due for its first delivery in 2023 (having been delayed by the problems with the 737 Max). <a href="https://modernairliners.com/boeing-787-dreamliner/boeing-787-dreamliner-deliveries/#content">In terms of orders</a>, the A350 is ahead, but the 777X has been on sale for less time and is picking up orders. Boeing is <a href="https://www.aviacionline.com/2022/01/boeing-prepares-new-version-of-787-dreamliner-family/">also launching</a> a larger version of the Dreamliner to compete with the A350, so there is the potential for the A350 to be squeezed from both sides. </p>
<h2>Where next</h2>
<p>The question is whether Boeing can repeat its success with the Dreamliner in other segments of the market. We eagerly await news on its new mid-sized aircraft for medium-haul flights (currently referred to as the 797), which has also been delayed by the 737 Max problems. Designed to replace the narrowbody 757 and compete with the Airbus A321XLR, which is due to enter service in 2023, this aircraft may be critical to Boeing’s success. </p>
<p>In the narrowbody market, which is for shorter flights, the Airbus A320 family <a href="https://modernairliners.com/boeing-787-dreamliner/boeing-787-dreamliner-deliveries/#content">recently inched ahead</a> of Boeing’s 737 in terms of sales, though the 737 retains the lead for aircraft delivered. It is uncertain how potential supply chain issues may disrupt this balance. The ongoing Russian invasion of Ukraine has the potential to be hard, particularly on Airbus.</p>
<p>The future of aircraft manufacturing is uncertain. But by thinking forwards, in terms of sourcing arrangements and travel demand, Boeing has been shrewd. So long as Boeing learns lessons from its recent past, it may finally be back in the ascendant.</p><img src="https://counter.theconversation.com/content/179140/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joseph Mellors does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>For years it has lagged Airbus, but that might be coming to an end.Joseph Mellors, Associate lecturer, Northumbria University, NewcastleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1697252021-12-02T23:55:34Z2021-12-02T23:55:34ZAn AI-flown military aircraft is being designed in Australia. Are our laws equipped to protect us?<p>In September, Boeing <a href="https://www.abc.net.au/news/2021-09-22/qld-boeing-to-build-plane-manufacturing-facility-drone/100482190">announced</a> it would design and build a new military aircraft in Queensland, a first in Australia for <a href="https://news.defence.gov.au/capability/australian-built-aircraft-military-milestone">over 50 years</a>. </p>
<p>The “Loyal Wingman” is an uncrewed craft that flies in teams with other crewed and uncrewed aircraft to provide surveillance and reconnaissance support to a mission. But it could also be fitted with weapons. It <a href="https://boeing.mediaroom.com/news-releases-statements?item=130834">completed its first test flight</a> in March and plans are to have the production facility up and running in just a few years.</p>
<p>Although a lot of defence forces have used uncrewed aircraft (including drones) for a long time, they have primarily been remotely piloted from the ground. The test of the Loyal Wingman involved pre-programmed flying with human oversight. </p>
<p>However, the Loyal Wingman is ultimately being <a href="https://www.boeing.com/defense/airpower-teaming-system/">designed to use artificial intelligence to complete flights</a> without real-time human oversight. </p>
<p>This raises questions of whether our laws are adequate to protect us from a host of concerns involving health, safety and data collection when autonomous aircraft systems are in the skies.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1319169651507630080"}"></div></p>
<h2>What are the advantages of autonomous aircraft?</h2>
<p>Defence forces around the world are investing heavily in these types of artificial intelligence technologies. </p>
<p>Unlike remotely piloted systems that require sizeable teams on the ground, these craft can be deployed in large numbers by small teams. This could exponentially increase the size of a country’s air force – an invaluable thing.</p>
<p>Further, these uncrewed aircraft are a fraction of the cost of one flown by a human crew. So, while they are not designed to be disposable (they still cost a few million dollars each), they are ultimately expendable in return for the right military advantage.</p>
<p>Although current spending on autonomous projects in Australia is small in relation to the overall defence budget, <a href="https://www.aspistrategist.org.au/funding-on-track-but-strategic-circumstances-worsening-the-cost-of-australias-defence/">it is increasing</a>. </p>
<p>Defence leaders are increasingly <a href="https://defence.gov.au/vcdf/forceexploration/adf-concept-future-robotics-autonomous-systems.asp">becoming aware</a> of both the opportunities these systems present to the Australian Defence Force (ADF), as well as the challenges posed by other militaries exploiting them.</p>
<h2>Legal questions about autonomous craft</h2>
<p>The Loyal Wingman test flight took place at the remote South Australian <a href="https://www.airforce.gov.au/about-us/bases/south-australia/woomera-range-complex">Woomera Range Complex</a>. The <a href="https://www.tiq.qld.gov.au/new-drone-testing-facility-for-cloncurry/">new drone test facility at Cloncurry, Queensland</a>, will also likely host test flights in the future. That facility is specifically designed to support the testing of new autonomous military technologies. </p>
<p>But what happens when the crafts need to move beyond these specially equipped facilities in remote areas? What does this mean for everyday Australians? </p>
<p>Occasionally, we see tanks and other military vehicles on our roads. We see warships in our ports and hear fighter jets in our skies. We know that while these military vehicles have a war-fighting role, they also need to exist safely in our communities. This allows the ADF to train with them or move them between military bases, as well as to training or conflict zones. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1305413670596300800"}"></div></p>
<p>There <a href="https://www.defence.gov.au/ADC/Publications/AJDSS/volume3-number1/navigating-to-autonomy.asp">are a number of legal considerations</a> for the design and deployment of any uncrewed autonomous military aircraft in our skies. These include privacy, noise, occupational health and safety, the environment and public liability. </p>
<p>For instance, our <a href="https://defence.gov.au/DASP/DASR-regulations/Default.asp">defence aviation safety regulations</a>, set by the Defence Aviation Safety Authority in the Department of Defence, would need to be amended to allow these types of craft to be flown over Australia (<a href="https://www.defence.gov.au/DASP/Docs/Manuals/DefenceAviationSafetyRegulation/DASRWeb/index.htm#23738.htm">currently only remotely piloted craft can be</a>) and to determine whether they could be weaponised. </p>
<p>Although amending the regulations is a relatively simple process – <a href="https://defence.gov.au/DASP/Docs/Manuals/BetterPracticeGuide/Introduction-to-Defence-Aviation-Safety-Guidebook.pdf">they are updated every six months</a> – such a significant policy shift cannot be undertaken lightly or without consideration of the wider implications of allowing autonomous devices in our skies. </p>
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Read more:
<a href="https://theconversation.com/the-self-driving-trolley-problem-how-will-future-ai-systems-make-the-most-ethical-choices-for-all-of-us-170961">The self-driving trolley problem: how will future AI systems make the most ethical choices for all of us?</a>
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<p>Then there’s the personal data these craft could inadvertently collect through their surveillance and reconnaissance sensors while in the sky. </p>
<p>The <a href="https://www.oaic.gov.au/privacy/australian-privacy-principles">Australian privacy principles</a> outlined in the <a href="https://www.legislation.gov.au/Series/C2004A03712">Privacy Act 1988</a> cover incidentally collected information such as this. Although this is also an issue for crewed aircraft, the sheer volume of data that could potentially be collected from a large number of uncrewed, autonomous aircraft rings alarms bells. </p>
<p>This could require the ADF to report data breaches to those whose information is collected, and even pay compensation. </p>
<p>There are also environmental concerns, such as the possibility of an uncrewed autonomous aircraft unintentionally <a href="https://www.epa.nsw.gov.au/-/media/epa/corporate-site/resources/epa/18p0775-guidelines-epa-use-unmanned-aircraft.pdf">starting a bushfire</a> on the ground. </p>
<p>In Germany, strict aviation rules contributed to the <a href="https://www.dw.com/en/german-government-culls-costly-euro-hawk-drone-project/a-16812690">abandonment</a> of one very expensive, autonomous, military drone project because the craft could not obtain clearance to fly in civil aviation airspace due to safety concerns. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1372129708146524161"}"></div></p>
<p>Australia is only starting to consider these issues. For example, <a href="https://tasdcrc.com.au/new-tas-project-to-develop-a-detect-and-avoid-daa-design-test-and-evaluation-dte-standard-for-low-risk-uncontrolled-airspace-outside-the-airport-environment/">a current project</a> is working on new standards for designing, testing and operating autonomous aircraft safely in the skies. This is primarily focused on commercial drones, but could set best practices for all autonomous craft.</p>
<h2>The ADF and the law</h2>
<p>The military is not always covered by the same rules as the rest of us. There are lots of exclusions for ADF members from the general application of Australian laws. </p>
<p>This means military vehicles and technologies can be excluded from certain government inquiries. For example, the <a href="https://www.infrastructure.gov.au/sites/default/files/migrated/aviation/environmental/aircraft-noise/files/report_on_review_of_air_navigation-aircraft_noise-regulations2018-v2.pdf">recent federal government review</a> into aircraft noise did not cover military drones. </p>
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<strong>
Read more:
<a href="https://theconversation.com/six-ways-robots-are-used-today-that-you-probably-didnt-know-about-82067">Six ways robots are used today that you probably didn't know about</a>
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<p>New civilian technologies in Australian skies have already faced a host of questions. For example, the Google Wing delivery drone designers have had to <a href="https://www.brisbanetimes.com.au/national/queensland/drone-delivery-service-wing-launches-less-noisy-drones-to-more-suburbs-20210525-p57v3p.html">take measures to deal with noise concerns</a> (and <a href="https://www.abc.net.au/news/2021-09-22/territorial-ravens-disrupt-canberra-drone-deliveries/100480470">swooping ravens)</a>) in the Brisbane and Canberra suburbs where they are currently operating. Safety concerns have also had to be carefully considered. </p>
<p>The law is constantly being updated to keep pace with technology. For instance, a court recently <a href="https://www.abc.net.au/news/2021-08-01/historic-decision-allows-ai-to-be-recognised-as-an-inventor/100339264">set an important precedent</a> by ruling that artificial intelligence systems can be legally recognised as an inventor in patent applications. </p>
<p>It’s not unreasonable to imagine circumstances could require a change to some defence safety aviation rules to allow for greater use of artificial intelligence in our skies. </p>
<p>Over the coming years, much thought will need to go into ensuring the ADF can safely and effectively get their autonomous craft to the starting line in a way that is workable under the Australian legal system and for the Australian public.</p><img src="https://counter.theconversation.com/content/169725/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The Law and the Future of War research group at the University of Queensland receives funding from the Australian Government through the Defence Cooperative Research Centre for Trusted Autonomous Systems. The views and opinions expressed in here are those of the author, and do not necessarily reflect the views of the Australian Government or any other institution.
</span></em></p>While military aircraft with innovative technologies are designed to fight wars, they also need to exist safely in our communities.Eve Massingham, Senior Research Fellow, Law and the Future of War, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1506882020-11-27T18:19:38Z2020-11-27T18:19:38ZBoeing 737 Max: why was it grounded, what has been fixed and is it enough?<p>The Boeing 737 Max began flying commercially in May 2017 but has been grounded for over a year and a half following two crashes within five months. On October 29 2018, <a href="https://www.bbc.com/news/world-asia-46014463">Lion Air Flight 610</a> took off from Jakarta. It quickly experienced problems in maintaining altitude, entered into an uncontrollable dive and crashed into the Java Sea about 13 minutes after takeoff. Then on March 10 2019, <a href="https://nymag.com/intelligencer/2019/04/what-passengers-experienced-on-the-ethiopian-airlines-flight.html">Ethiopian Airlines Flight 302</a> from Nairobi suffered similar problems, crashing into the desert around six minutes after leaving the runway.</p>
<p>In total, 346 people lost their lives. After the second crash, US regulator the Federal Aviation Administration (FAA) decided to ground all 737 Max planes, of which around 350 had been delivered at the time, while they investigated the causes of the accidents.</p>
<p>Now, 20 months later, the FAA <a href="http://news.aa.com/news/news-details/2020/Return-of-the-Boeing-737-MAX-to-service-OPS-DIS-11/default.aspx#:%7E:text=Today%2C%20the%20Federal%20Aviation%20Administration,its%20grounding%20in%20March%202019.&text=This%20includes%20investing%20in%20extensive,it%20returns%20to%20commercial%20use">has announced</a> that it is rescinding this order and has set out steps for the return of the aircraft to commercial service. Brazil has responded quickly, <a href="https://simpleflying.com/brazil-boeing-737-max-recertification/amp/">also approving</a> the 737 Max. So, what went wrong – and can we be confident that it has been fixed?</p>
<p>The causes of the two accidents were complex, but link mainly to the 737’s <a href="https://www.seattletimes.com/seattle-news/times-watchdog/the-inside-story-of-mcas-how-boeings-737-max-system-gained-power-and-lost-safeguards/">manoeuvring characteristics augmentation system</a> (MCAS), which was introduced to the 737 Max to manage changes in behaviour created by the plane having much larger engines than its predecessors.</p>
<p>There are some important points about the MCAS which we must consider when reviewing the “fixes”. The MCAS prevented stall (a sudden loss of lift due to the angle of the wing) by “pushing” the nose down. Stall is indicated through an angle of attack (AoA) sensor – the 737 Max is fitted with two, but MCAS only used one. If that AoA sensor failed, then the MCAS could <a href="https://www.york.ac.uk/assuring-autonomy/news/blog/accidental-autonomy/">activate when it shouldn’t</a>, unnecessarily pushing the nose down. The design meant that there was no automatic switch to the other AoA sensor, and MCAS kept working with the erroneous sensor values. This is what happened in both crashes.</p>
<p>The design of the MCAS meant that it was repeatedly activated if it determined that there was a risk of a stall. This meant that the nose was continually pushed down, making it hard for pilots to keep altitude or climb. The system was also hard to override. In both cases, the flight crews were unable to override the MCAS, although other crews had successfully managed to do so in similar situation, and this contributed to the two accidents.</p>
<h2>The fixes</h2>
<p>Have these things been fixed? The FAA has published an <a href="https://www.faa.gov/foia/electronic_reading_room/boeing_reading_room/media/737_RTS_Summary.pdf">extensive summary</a> explaining its decision. The MCAS software has been modified and now uses both AoA sensors, not one. The MCAS also now only activates once, rather than multiple times, when a potential stall is signalled by both the AoA sensors. Pilots are provided with an “AoA disagree warning” which indicates that there might be an erroneous activation of MCAS. This warning was not standard equipment at the time of the two accidents – it had to be purchased by airlines as an option. </p>
<p>Importantly, pilots will now be trained on the operation of the MCAS and management of its problems. Pilots claimed that initially they were <a href="https://www.bbc.co.uk/news/business-48281282">not even told</a> that MCAS existed. This training will have to be approved by the FAA.</p>
<p>So, is all well? Probably. As the 737 Max accidents put Boeing and the FAA under such intense scrutiny, it is likely that the design and safety activities have been carried out and checked to the maximum extent possible. There is no such thing as perfection in such complex engineering processes, but it is clear that this has been an extremely intensive effort and that Boeing found and corrected a few other potential safety problems that were unrelated to the accidents. </p>
<p>Of course, we are not there yet. The more than 300 aircraft already delivered have to be modified, and the 450-or-so built but not delivered also need to be updated and checked by the FAA. Then the pilots need to be trained. And the airlines need passengers – but will they get them? That is an issue of trust.</p>
<h2>Safety culture and trust</h2>
<p>The <a href="https://www.youtube.com/watch?v=ep7oLR1xCW0">US Congressional Enquiry</a> was scathing about the culture at both Boeing and the FAA and the difficulty of the FAA in overseeing Boeing’s work. <a href="https://fisher.osu.edu/blogs/leadreadtoday/blog/a-textbook-case-for-disaster-psychological-safety-and-the-737-max">Some commentators</a> have also referred to an absence of psychological safety: “The assurance that one can speak up, offer ideas, point out problems, or deliver bad news without fear of retribution.” We have evidence that the engineering problems have been fixed, but safety culture is more nebulous and slow to change. </p>
<p>How would we know if trust has been restored? There are several possible indicators. </p>
<p>Due to the effects of COVID-19, airlines are running a reduced flight schedule, so they may not need to use the 737 Max. If they choose not to do so, despite its reduced operating costs compared to earlier 737 models, that will be telling. Certainly, all eyes will be on the first airline to return the aircraft to the skies. </p>
<p>Some US airlines <a href="https://simpleflying.com/how-to-tell-if-youre-flying-on-the-boeing-737-max/">have said</a> they will advise people which model of aircraft they will be flying. If passengers opt to avoid the 737 Max, that will speak volumes about public trust and confidence. </p>
<p>The FAA <a href="https://www.faa.gov/news/updates/?newsId=93206">press release</a> also says there has been an “unprecedented level of collaborative and independent reviews by aviation authorities around the world”. But if the international authorities ask for further checks or delay the reintroduction of the aircraft in their jurisdictions, that will be particularly significant as it reflects the view of the FAA’s professional peers. Brazil’s rapid response is a positive sign for this international engagement.</p>
<p>Hopefully, the first few years will prove uneventful and trust can be rebuilt. But only time will tell.</p><img src="https://counter.theconversation.com/content/150688/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John McDermid receives, or has received, funding from government research agencies, industry including in the aerospace sector and the Lloyd's Register Foundation, relevant to the safety of aircraft and autonomous systems. He has not received any funding directly relevant to the Boeing 737 Max.</span></em></p>Almost two years after crashing twice within five months and being pulled out of service, the Boeing 737 Max’s return to the skies has now been approved.John McDermid, Director, Assuring Autonomy International Programme, University of YorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1317112020-06-17T16:56:30Z2020-06-17T16:56:30ZAirbus: flying high on the wings of corruption<figure><img src="https://images.theconversation.com/files/342466/original/file-20200617-94078-17enfs0.jpg?ixlib=rb-1.1.0&rect=0%2C6%2C1497%2C997&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Cockpit of the Airbus A330-900.</span> <span class="attribution"><a class="source" href="https://www.airbus.com/aircraft/passenger-aircraft/a330-family/a330-900.html">P. Pigeyre/Airbus</a></span></figcaption></figure><p>On January 31, 2020, the European aerospace manufacturer Airbus agreed to pay nearly <a href="https://www.nytimes.com/2020/01/31/business/airbus-corruption-settlement.html">3.7 billion euros in fines to settle bribery charges</a> stemming from a four-year investigation by French, British, and US authorities. The investigations found that for more than a decade the firm bribed officials in 16 countries through intermediaries to buy its aircraft and satellites. France will receive the largest settlement, 2.1 billion euros, while the UK will receive nearly 1 billion, and the United States more than 500 million.</p>
<p>The case shows that European authorities have finally decided to make credible justice decisions against firms that use bribery and other forms of corruption to maintain and develop their business. It is also a learning opportunity for anyone interested in white-collar crime, and a number of theories developed by criminology researchers allow us to better understand how Airbus was able to operate so long with such impunity.</p>
<h2>Globe-spanning corruption</h2>
<p>Headquarters in Netherlands, Airbus has key operations in France, Germany, Spain and the United Kingdom. It’s one of the world’s largest manufacturers of commercial aircraft, helicopters and other high-tech products in the defence and space sectors. According to documents from the US Department of Justice, from 2008 to 2015 Airbus used its Strategy and Marketing Organization (SMO) branch to funnel <a href="https://www.justice.gov/opa/pr/airbus-agrees-pay-over-39-billion-global-penalties-resolve-foreign-bribery-and-itar-case">millions of bribes to decision-makers and influencers to obtain business deals</a>. Countries involved included the United Arab Emirates, China, South Korea, Nepal, India, Taiwan, Russia, Saudi Arabia, Vietnam, Japan, Turkey, Mexico, Thailand, Brazil, Kuwait, Colombia, South Korea, Indonesia, Sri Lanka, Malaysia, Taiwan, Ghana and Mexico.</p>
<p>When categorising white-collar crimes, a key factor is the separation between those involving individuals or a few people, and corporate cases. Given the SMO’s role, the Airbus case was clearly one of an organisational crime. SMO was a significant business unit for Airbus, with around 150 employees and an initial annual budget of 300 million US dollars. The branch was created to compile and appraise applications from potential business partners for the purpose of <a href="https://www.sfo.gov.uk/download/airbus-se-deferred-prosecution-agreement-statement-of-facts/">compliance risk assessment</a>. As a corruption machine SMO operated from 2008 to 2015, and long-term fraud implies internal learning systems in the fraudulent firm, with former employees transmitting fraud techniques to new recruits. </p>
<p>Indeed, Donald Sutherland’s <a href="https://www.thoughtco.com/differential-association-theory-4689191">theory of differential association</a> shows that certain crimes are not innate at all, but learned through contact with experienced criminals. The individuals involved in white-collar crimes are nominally respectable, or at least respected, making the crimes themselves ones that are committed by elites. That was the case with the Airbus case: the documents involve behaviour by senior executives, government and foreign officials, a board of directors, businessmen, an international-compliance officer and a general counsel.</p>
<p>A particularity of economic crime is its technical difficulty. Criminals in organisations are experts in developing systems to conceal their frauds. The techniques used by SMO could be easily included in a manual for how to pay bribes: </p>
<ul>
<li><p>Acquisition of a company belonging to an airlines executive at inflated price.</p></li>
<li><p>Acquisition of luxury estate properties for the use of an influential individual.</p></li>
<li><p>Purchase by a subsidiary based in a foreign country of shares in an entity belonging to the son of a commercial intermediary through money transferred via another country.</p></li>
<li><p>Sponsoring a sport team belonging to an airline executive.</p></li>
<li><p>Recruitment of the spouse of a key executive as a business partner using a straw company (despite the fact that the spouse had no relevant expertise).</p></li>
</ul>
<p>To cite a specific example, Chinese officials were invited to a business trip to Hawaii in 2013 with a 30-minute daily briefing about business information followed by “more important” activities such as <a href="https://www.justice.gov/opa/press-release/file/1241491/download">golf, scuba diving, horseback riding, and surfing lessons</a>.</p>
<h2>SMO: the corruption machine</h2>
<p>In addition, the criminologist <a href="https://www.journals.uchicago.edu/doi/abs/10.1086/221475">Donald Cressey</a> explained the emergence of of organisational crime by the existence of an opportunity. A typical opportunity was further described by <a href="https://www.jstor.org/stable/2094589?seq=1">Cohen and Felton</a> as the insufficient surveillance system. Thus, SMO produced fake documents and invented stories to fit international compliance requirements. SMO executives developed different techniques to look like following the best due-diligence practices without actually doing them. In a Russian case, SMO instructed an external company to conduct due diligence to evaluate the quality of a potential business partner, which in fact was in charge of paying approximately 9 million euros of bribes. To prepare the audit, the SMO International manager <a href="https://www.agence-francaise-anticorruption.gouv.fr/files/files/CJIP%20AIRBUS_English%20version.pdf">wrote to the commercial intermediary in charge of paying bribes</a>:</p>
<blockquote>
<p>“Compliance is buying the story, we now only need to ‘justify’ your past experience”, to which the commercial intermediary replied: “Sir, Yes Sir! […] I am going to try to find something to write for you ;-)”</p>
</blockquote>
<p>The external audit raised red flags about the Russian business partner: no registered office, no financial account, no ability to provide the services offered to SMO. Still, a contract was signed and money transferred.</p>
<p>In his <a href="https://www.simonandschuster.com/books/The-Division-of-Labor-in-Society/Emile-Durkheim/9781439118245">“anomie” theory</a>, French sociologist Emile Durkheim explained the importance of punishment in fixing norms of behaviour for a society. The fines Airbus paid are a “stick” that will teach the aircraft manufacturer that compliance must be respected, and they will follow now the best compliance practices. </p>
<p>In a press release, Guillaume Faury, chief executive officer of Airbus, <a href="https://www.airbus.com/newsroom/press-releases/en/2020/01/airbus-reaches-agreements-with-french-uk-and-us-authorities.html">stated</a>: </p>
<blockquote>
<p>“The agreements approved… with the French, UK, and US authorities represent a very important milestone for us, allowing Airbus to move forward and further grow in a sustainable and responsible way. The lessons learned enable Airbus to position itself as the trusted and reliable partner we want to be.”</p>
</blockquote>
<p>At the same time, Durkheim explained that a penalty is particularly important for all members of a society, who become aware of what is admissible or not. In the case of the competitors of Airbus, they too are aware that engaging in corrupt practices can have extremely painful consequences.</p><img src="https://counter.theconversation.com/content/131711/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bertrand Venard, professor at Audencia (France) and the University of Oxford (UK) is conducting several research projects about frauds such as cybersecurity and corruption. He is doing a major research project about cybersecurity behaviour, funded by the European Union (Project Number : 792137). He received funding from Anti-Corruption Commission of Bhutan. Indeed, he directed two major research projects to fight corruption in the mining industry and human resource management in the civil services of Bhutan. </span></em></p>In January Airbus agreed to pay nearly 4 billions euros to settle bribery charges. Theories developed by criminology researchers explain how the firm was able to operate so long with such impunity.Bertrand Venard, Professor, AudenciaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1387662020-06-11T12:19:10Z2020-06-11T12:19:10ZFirst space tourists will face big risks, as private companies gear up for paid suborbital flights<figure><img src="https://images.theconversation.com/files/340436/original/file-20200608-176575-spj6md.jpg?ixlib=rb-1.1.0&rect=68%2C41%2C4532%2C2110&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ready to take your suborbital selfie?</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/boy-and-girl-taking-selfie-in-a-spaceship-royalty-free-image/1202269427?adppopup=true">EvgeniyShkolenko</a></span></figcaption></figure><p>On May 30, 2020, millions of Americans watched the inaugural <a href="https://www.nasa.gov/press-release/nasa-astronauts-launch-from-america-in-historic-test-flight-of-spacex-crew-dragon">SpaceX Crew Dragon launch NASA astronauts</a> to the International Space Station. This mission marked two significant events: First, the return of launch to orbit capability for human spaceflight from the United States. Secondly, it <a href="https://theconversation.com/spacex-reaches-for-milestone-in-spaceflight-a-private-company-launches-astronauts-into-orbit-138765">successfully demonstrated private sector capability</a> to build and operate a launch vehicle for human spaceflight. </p>
<p>While SpaceX may be the first private space company to accomplish this, it is not alone. <a href="https://www.boeing.com/space/starliner/">Boeing’s Starliner</a> and <a href="https://www.lockheedmartin.com/en-us/products/orion.html?gclid=Cj0KCQjwoPL2BRDxARIsAEMm9y_c1m8agawgO55UbIX1lfYQVTCASj6wSm73ZYU16PCgVs2L0wJeUGwaAvLFEALw_wcB">Lockheed’s Orion</a> capsule are also being developed for NASA’s Commercial Crew Program, and <a href="https://spacenews.com/space-force-rescue-units-prepare-for-new-era-of-commercial-human-spaceflight/">training has begun for safety operations on the spacecraft</a>. </p>
<p>As an aerospace lawyer working and <a href="https://faculty.erau.edu/Sara.Langston">teaching on human spaceflight law and policy</a> for over a decade, I have a professional and personal appreciation for current spaceflight technologies and astronaut developments.</p>
<p>For many, the Crew Dragon launch marked the start to a <a href="https://theconversation.com/spacex-reaches-for-milestone-in-spaceflight-a-private-company-launches-astronauts-into-orbit-138765">new era of commercial access to space and private human spaceflight</a>. However, given logistical and destination requirements for Earth orbit or beyond, the onset of larger-scale private human spaceflight is more likely to emerge within the <a href="https://www.cnbc.com/2019/10/28/high-space-tourism-demand-for-blue-origin-and-virgin-galactic-ceo-says.html">suborbital space market</a>. </p>
<h2>Commercial suborbital flights coming next</h2>
<p>A suborbital flight, in contrast to SpaceX’s recent orbital flight, is a brief spaceflight that fails to complete one full orbit of the Earth. That is, you launch your space vehicle to the edge of space and come right back down. Virgin Galactic has been inching closer to commercial suborbital launch operator status with successful <a href="https://www.virgingalactic.com/articles/three-virgin-galactic-crew-presented-with-commercial-astronaut-wings-at-35th-national-space-symposium/">crewed test flights in February 2019</a>. In fact, <a href="https://www.virgingalactic.com/">Virgin Galactic’s SpaceShipTwo</a>, an air-launched suborbital rocket, and <a href="https://www.blueorigin.com/new-shepard/">Blue Origin’s New Shepard</a>, a rocket-launched space capsule, are projected to <a href="https://spacenews.com/spaceshiptwo-makes-first-flight-from-spaceport-america/">commence suborbital flights catering to both space tourists and scientific research this year</a>. Each suborbital flight presents a unique spaceflight experience, trajectory and set of regulatory requirements.</p>
<p>While industry continues to test and refine tech and operations, the Federal Aviation Administration – which regulates launch, reentry and spaceports for U.S. commercial spaceflight – is also morphing to address the needs of the emerging private space industry. </p>
<h2>What you need to know before you fly to space</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/340646/original/file-20200609-21201-995hwi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/340646/original/file-20200609-21201-995hwi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/340646/original/file-20200609-21201-995hwi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1028&fit=crop&dpr=1 600w, https://images.theconversation.com/files/340646/original/file-20200609-21201-995hwi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1028&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/340646/original/file-20200609-21201-995hwi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1028&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/340646/original/file-20200609-21201-995hwi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1292&fit=crop&dpr=1 754w, https://images.theconversation.com/files/340646/original/file-20200609-21201-995hwi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1292&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/340646/original/file-20200609-21201-995hwi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1292&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">In a suborbital flight, the crew and passengers enjoy a brief parabolic flight that takes them to the cusp of space and then back to Earth.</span>
<span class="attribution"><span class="source">The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Spaceflight is regarded as an inherently dangerous activity. While some hazards of spaceflight and the space environment – like G-forces, radiation, vibration and microgravity – are well documented, many risks remain unknown. The scope of <a href="https://ieeexplore.ieee.org/document/8002956">physiological risks spans pre-flight, in-flight, and post-flight operations and activities</a>. </p>
<p><a href="https://www.ecfr.gov/cgi-bin/text-idx?gp=&SID=1f58495405665a030c05e44bca5a8591&mc=true&tpl=/ecfrbrowse/Title14/14chapterIII.tpl">FAA regulations</a> also focus on the safety and protection of the public on the ground, not the civilian passengers who are called <a href="https://www.ecfr.gov/cgi-bin/text-idx?SID=9160158c60ae33b0b455465c98d0f30a&mc=true&node=se14.4.401_15&rgn=div8">spaceflight participants</a>. This includes anyone who is <a href="https://uscode.house.gov/view.xhtml?path=/prelim@title51/subtitle5/chapter509&edition=prelim">not crew or a government astronaut on a spacecraft</a>. </p>
<p>As a result, regulations stipulate minimum requirements with regard to medical fitness and training for space tourists, as well as informed consent, and waivers of liability to protect the launch operator. </p>
<p>So prospective space participants are taking a big risk. </p>
<h2>Medical criteria</h2>
<p>No standardized medical criteria exists for screening or selecting spaceflight participants. Unlike flight crew which require a Class II airman’s medical certificate, there is no similar requirement for fitness to fly for space tourists. Where the law is silent or lacking, the FAA’s <a href="https://www.faa.gov/about/office_org/headquarters_offices/ast/media/recommended_practices_for_hsf_occupant_safety-version_1-tc14-0037.pdf">Recommended Practices for Human Space Flight Occupant Safety</a> can provide general guidance. </p>
<p>Here the FAA recommends a spaceflight participant receive a medical consultation within 12 months of flight from a physician trained or familiar with aerospace medicine. Since this is a not a legal requirement, ultimately it will be up to the launch operator to determine fitness-to-fly and “no-go” criteria for preexisting conditions. </p>
<p>Virgin Galactic, for example, has few restrictions: <a href="https://www.airspacemag.com/airspacemag/how-to-ber-a-space-tourist-180972609/">no upper age limit, and weight limit only as it relates to practical space vehicle requirements</a>. </p>
<p>When it comes to the risks from radiation, the FAA <a href="https://www.faa.gov/data_research/research/med_humanfacs/oamtechreports/2010s/media/201323.pdf">tries to reduce the exposure for crew members</a>. But it considers the radiation risks of a space tourist taking a single suborbital joy ride as insignificant.</p>
<h2>Training</h2>
<p>Similar to how airlines provide safety information before a flight, the launch operators are required to instruct space tourists <a href="https://www.ecfr.gov/cgi-bin/text-idx?SID=b235bb3ffe622e1522ab90c284300dbc&mc=true&node=sp14.4.460.b&rgn=div6#se14.4.460_151">on how to respond to emergency situations</a> including smoke, fire, loss of cabin pressure and emergency exit. </p>
<p>This is a minimal requirement, and each launch operator determines its training protocol. Virgin Galactic, for instance, offers a <a href="https://www.nationalgeographic.com/science/2019/02/first-woman-in-space-on-commercial-spacecraft-beth-moses-offers-advice/">three-day training</a> with a focus on participant’s gear, communications and function, and spacecraft cabin. </p>
<p><a href="https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=b235bb3ffe622e1522ab90c284300dbc&mc=true&n=pt14.4.460&r=PART&ty=HTML#se14.4.460_15">Flight crew</a>, in contrast, must be trained and qualified to perform their critical functions, and withstand the pressures of spaceflight. Orbital or long-duration spaceflights, however, will likely require more stringent commercial industry training protocols than for suborbital flights. </p>
<h2>Informed consent</h2>
<p>The FAA set the <a href="https://www.federalregister.gov/documents/2006/12/15/E6-21193/human-space-flight-requirements-for-crew-and-space-flight-participants">age requirement for civilian participants at 18 years</a>. </p>
<p>This is necessary to ensure the participant can provide informed consent. In addition, the regulations dictate that the launch operator inform crews and participants that <a href="https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=b235bb3ffe622e1522ab90c284300dbc&mc=true&n=pt14.4.460&r=PART&ty=HTML#se14.4.460_145">the U.S. government does not certify the spaceflight and space vehicle as safe for humans</a>. </p>
<p>The launch operator must also inform the participants in writing of the risks of launch and reentry, the safety record of the vehicle, and that <a href="https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=b235bb3ffe622e1522ab90c284300dbc&mc=true&n=pt14.4.460&r=PART&ty=HTML#se14.4.460_145">both known and unknown space hazards and risks</a> could result in serious injury, either partial or total physical or mental disability. </p>
<h2>Waivers of liability</h2>
<p>The spaceflight participant is also <a href="https://uscode.house.gov/view.xhtml?edition=prelim&path=%2Fprelim%40title51%2Fsubtitle5%2Fchapter509&req=granuleid%3AUSC-prelim-title51-chapter509&num=0&hl=false">required to sign a reciprocal waiver</a> of liability with the commercial launch operator and an indemnification agreement with the Federal Government. </p>
<p>However, participants don’t sign a waiver with other participants. Meaning, if an accident occurs, spaceflight participants can sue each other but generally not the launch operator or the government. </p>
<p>To protect oneself, it would be advisable to take out insurance. A few companies, including AXA XL and Allianz, are beginning to offer third-party liability insurance for civilians to engage in spaceflight. </p>
<p>The space industry expects that many people may want to go to space in the near future, and private spaceflight is being marketed as the next experience in luxury escapism and scientific research. </p>
<p>But the hazardous nature of spaceflight also requires critical understanding of the risks and uncertainties in human spaceflight. The industry is still in its infancy, and the best practices and regulations for human spaceflight are still evolving. </p>
<p>[<em>Insight, in your inbox each day.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=insight">You can get it with The Conversation’s email newsletter</a>.]</p><img src="https://counter.theconversation.com/content/138766/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sara M. Langston does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When it comes to commercial space tourism, suborbital flight are the first frontier. But what are the risks? Are there health requirements? What should you know before taking such a way-out trip?Sara M. Langston, Assistant Professor of Spaceflight Operations, Embry-Riddle Aeronautical UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1363562020-06-08T14:02:29Z2020-06-08T14:02:29ZHow and why companies lay off employees affects future success<figure><img src="https://images.theconversation.com/files/338719/original/file-20200531-78858-1w22p1a.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C6000%2C3853&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Why a company lays off employees and who delivers the message to the public and shareholders is important. </span> <span class="attribution"><span class="source">(Pixabay)</span></span></figcaption></figure><p>Employers have engaged in temporary layoffs in reaction to the economic uncertainty they’ve faced during the COVID-19 pandemic. </p>
<p><a href="https://www.youtube.com/watch?v=7Xn--8SpEWI&t=">A recent poll</a> of 114 human resources and business professionals conducted by the Guelph Chamber of Commerce, in collaboration with the Gordon S. Lang School of Business and Economics at the University of Guelph, reveals that temporary layoffs were the leading worker reduction strategy used by businesses to respond to COVID-19. This aligns with research indicating that layoffs have become <a href="https://doi.org/10.1177/0149206309346735">the most popular management tool to cut costs and restructure the organization</a>.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/7Xn--8SpEWI?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Gordon S. Lang School of Business and Economics.</span></figcaption>
</figure>
<p>However, <a href="https://www.nortonrosefulbright.com/en-ca/knowledge/publications/68e2cba9/temporary-layoffs-what-canadian-employers-need-to-know-during-a-pandemic">employment legislation in each Canadian jurisdiction limits how long an employee can be on a temporary layoff</a>. Past that point, an employer must make a more permanent decision. </p>
<p>Given the prevalence of layoffs and the impact of layoff decisions on business recovery efforts, it’s troubling that <a href="https://doi.org/10.1016/S1053-4822(02)00099-2">most companies don’t have a policy</a> in place to guide how layoff decisions are made. Two recent Canadian studies offer advice to help businesses take an informed approach to layoffs. </p>
<h2>Layoff messaging matters</h2>
<p>Leaders consistently indicate that <a href="https://doi.org/10.1177/0149206312461053">the delivery of bad news, including job cuts, is their most challenging task</a>. <a href="https://www.emerald.com/insight/content/doi/10.1108/JOCM-06-2018-0161/full/html">Research published in the <em>Journal of Organizational Change Management</em> in 2019</a> by myself and a colleague, Agnes Zdaniuk of the department of management at the University of Guelph, shows that the explanation of the layoffs and the messaging in layoff announcements has an impact on shareholder reactions. Explanations can include excuses, justifications, apologies and denials.</p>
<p>Our study explored 388 layoff announcements in Canadian media outlets from 2006 to 2015. The results show that shareholders respond positively when employers use excuses, shifting blame for layoffs to other factors (economic or industry decline, for example). There is a slight decline in share prices when the company uses justifications, whereby layoff explanations focus on a larger strategic goal (the long-term survival of the firm, for example).</p>
<p>Apologies and denials both result in significant drops in share prices. When companies use apologies, they accept blame for the layoffs and shareholders interpret that the cuts are a result of poor management. </p>
<p>Some companies deny the job cuts occur by reframing the layoffs positively, using terms like “right-sizing” or “transitioning.” That approach makes stakeholders feel that the company failed to provide honest and accurate information. They may begin to wonder what other information the company is hiding. </p>
<p>Stakeholders also expect CEOs to be more aware of potential threats and opportunities than other company executives. Given the CEO’s greater level of power and expertise, they’re expected to consider alternatives and take action to prevent job cuts from occurring.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/339666/original/file-20200604-130907-1ke5xl7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/339666/original/file-20200604-130907-1ke5xl7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/339666/original/file-20200604-130907-1ke5xl7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/339666/original/file-20200604-130907-1ke5xl7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/339666/original/file-20200604-130907-1ke5xl7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/339666/original/file-20200604-130907-1ke5xl7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/339666/original/file-20200604-130907-1ke5xl7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Shareholders expect CEOs to take action to prevent job losses and view layoffs more negatively when CEOs make the announcement.</span>
<span class="attribution"><span class="source">(Unsplash)</span></span>
</figcaption>
</figure>
<p>Excuse- and apology-based explanations highlight the fact that a company’s actions, as well as errors in forecasting and responding to changes, contributed to job losses. There’s also a larger drop in share prices in response to excuse- and apology-based layoffs when the CEO delivers the message, compared to any other messenger. </p>
<p>Essentially, shareholders view the layoff more negatively when the announcement comes from the CEO, and the layoff explanation can be attributed to a failure to respond to internal and external changes. That means using a human resources manager, legal counsel or another manager rather than the CEO to make the announcement can minimize the negativity of stakeholder reactions to layoffs.</p>
<h2>The best way to implement layoffs</h2>
<p>In an upcoming article I wrote for the <a href="https://onlinelibrary.wiley.com/journal/19364490"><em>Canadian Journal of Administrative Sciences</em></a>, I explored decisions and outcomes of voluntary versus involuntary layoff techniques. </p>
<p>For involuntary layoffs, management unilaterally makes decisions about which employees are selected for layoffs. In contrast, voluntary layoffs — also known as voluntary buyouts — involve employees volunteering to be laid off.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/339671/original/file-20200604-130940-99mkf6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/339671/original/file-20200604-130940-99mkf6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/339671/original/file-20200604-130940-99mkf6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/339671/original/file-20200604-130940-99mkf6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/339671/original/file-20200604-130940-99mkf6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/339671/original/file-20200604-130940-99mkf6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/339671/original/file-20200604-130940-99mkf6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Manitoba Premier Brian Pallister defends job cuts at Crown-owned Manitoba Hydro at a March 2020 news conference.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/John Woods</span></span>
</figcaption>
</figure>
<p>In May 2020, companies like <a href="https://www.cbc.ca/news/canada/manitoba/boeing-layoffs-winnipeg-covid-19-1.5582503">Boeing</a>, <a href="https://www.bnnbloomberg.ca/postmedia-to-lay-off-about-40-employees-after-unions-reject-salary-cuts-1.1441835">PostMedia</a>, the <a href="https://www.cbc.ca/news/canada/british-columbia/yvr-airport-authority-lays-off-25-per-cent-workforce-1.5564669">Vancouver Airport Authority</a>, <a href="https://simpleflying.com/united-voluntary-separation/">United Airlines</a> and <a href="https://winnipegsun.com/news/news-news/manitoba-hydro-to-lay-off-600-700-workers-to-slash-expenses-for-covid-fight">Manitoba Hydro</a> announced voluntary layoffs. Generally, they’re <a href="https://doi.org/10.1111/j.1467-8551.2005.00457.x">viewed as less psychologically traumatizing to employees</a>, and <a href="https://go.gale.com/ps/anonymous?id=GALE%7CA118951744&sid=googleScholar&v=2.1&it=r&linkaccess=abs&issn=1524833X&p=AONE&sw=w">more legally defensible</a> given the employee’s say over the decision.</p>
<p>Too often, companies are focused on reducing head count <a href="https://doi.org/10.1177/014920630002600510">with very little consideration for the quality and composition of the workforce that remains</a>. Clearly, retaining the best performers can help a business recover and rebuild post-layoff. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/339669/original/file-20200604-130961-15pejys.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/339669/original/file-20200604-130961-15pejys.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/339669/original/file-20200604-130961-15pejys.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/339669/original/file-20200604-130961-15pejys.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/339669/original/file-20200604-130961-15pejys.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/339669/original/file-20200604-130961-15pejys.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/339669/original/file-20200604-130961-15pejys.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">In this January 2020 photo, a Boeing 777X airplane takes off on its first flight with the Olympic Mountains in the background at Paine Field in Everett, Wash. Boeing announced in May it was cutting more than 12,000 jobs through layoffs and buyouts due to COVID-19.</span>
<span class="attribution"><span class="source">(AP Photo/Ted S. Warren)</span></span>
</figcaption>
</figure>
<p>To inform layoff practices, the forthcoming study compared voluntary and involuntary layoff decisions and outcomes at three Canadian companies. In total, 976 employee profiles were examined. </p>
<p>The results suggest that the use of voluntary layoffs significantly alters the composition of the workforce that remains post-layoff. In more than 19 per cent of the cases, an employee that management would have selected for a layoff would not have volunteered for a layoff. In more than 24 per cent of the cases, the employee who would have volunteered for a layoff was not selected by management for an involuntary layoff. </p>
<p>As expected, management decisions are influenced most by employees’ job performance, as poor performers are targeted for involuntary layoffs. </p>
<h2>Severance packages</h2>
<p>However, employee voluntary layoff decisions are driven mostly by the value of the severance package. Essentially, the severance package can incentivize employees to volunteer for a layoff. This results in increased layoff costs to employers, and the exit of employees who would not have been chosen under management-led involuntary layoffs. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/339670/original/file-20200604-130934-1xlqgu5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/339670/original/file-20200604-130934-1xlqgu5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=390&fit=crop&dpr=1 600w, https://images.theconversation.com/files/339670/original/file-20200604-130934-1xlqgu5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=390&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/339670/original/file-20200604-130934-1xlqgu5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=390&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/339670/original/file-20200604-130934-1xlqgu5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=490&fit=crop&dpr=1 754w, https://images.theconversation.com/files/339670/original/file-20200604-130934-1xlqgu5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=490&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/339670/original/file-20200604-130934-1xlqgu5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=490&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Generous severance offers can prompt the best employees to leave companies during voluntary layoff appeals.</span>
<span class="attribution"><span class="source">(Piqsels)</span></span>
</figcaption>
</figure>
<p>The result is that the wrong employees leave during voluntary layoffs, and for the wrong reasons.</p>
<p>This suggests businesses should develop clear policies around eligibility for voluntary layoffs, including offering standard severance packages to employees and developing retention plans. If not, employers should consider abandoning the use of voluntary layoffs to retain control on the composition and quality of the remaining workforce. </p>
<p>Clearly, research shows that layoff explanations, who communicates the layoffs to shareholders and the public and how layoffs are implemented are important strategic decisions. </p>
<p>As organizations prepare for permanent layoffs, the approach to layoffs needs to be strategic and informed to ensure that the right employees remain with the firm. This will help the business recover and rebuild post-pandemic.</p><img src="https://counter.theconversation.com/content/136356/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dr. Nita Chhinzer is an Associate Professor in Human Resource Management and Business Consulting with the University of Guelph (Department of Management). She serves on the Advisory Board for the Canadian HR Reporter and the Governance Professionals of Canada. She is also on the Board of Directors at the Toronto Centre for Learning and Development, as well as Hospice Toronto. Dr. Chhinzer also co-authors Canada's leading post-secondary Human Resource Management textbook with Pearson Education Canada and offers HR Advisory Services to Canadian Businesses.</span></em></p>COVID-19 has prompted many companies to lay off employees, but
most companies don’t have a policy governing layoffs. Here’s why that’s a mistake.Nita Chhinzer, Associate Professor, Human Resource Management and Business Consulting (Dept of Management), University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1387652020-05-22T12:21:23Z2020-05-22T12:21:23ZSpaceX reaches for milestone in spaceflight – a private company launches astronauts into orbit<figure><img src="https://images.theconversation.com/files/336822/original/file-20200521-102637-1cyg1v1.jpg?ixlib=rb-1.1.0&rect=18%2C27%2C1964%2C2016&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A SpaceX Falcon 9 rocket with the company’s Crew Dragon spacecraft onboard is raised into a vertical position on the launch pad at Launch Complex 39A. </span> <span class="attribution"><a class="source" href="https://blogs.nasa.gov/commercialcrew/wp-content/uploads/sites/230/2020/05/NHQ202005210007.jpg"> NASA/Bill Ingalls</a></span></figcaption></figure><p>On May 27, two American astronauts, <a href="https://www.nasa.gov/astronauts/biographies/robert-l-behnken/biography">Robert L. Behnken</a> and <a href="https://www.nasa.gov/astronauts/biographies/douglas-g-hurley">Douglas G. Hurley</a>, are planning to launch from the Kennedy Space Center on a mission to the International Space Station. If successful, this will mark the first time in nine years that American astronauts will launch into space from American soil. What’s even more remarkable is they will not be launched by NASA but by a private company, SpaceX.</p>
<p>Human spaceflight is incredibly difficult and expensive; the rockets must be reliable and the vehicle must be built with expensive life support systems and a certain level of redundancy. To date, only three countries – Russia, the United States and China – have achieved this feat.</p>
<p>As <a href="https://scholar.google.com/citations?hl=en&view_op=list_works&gmla=AJsN-F4V7EkQ7lmG9AIVxq7tkq1SjY1VeEh4bCQxvtOBJhDKGQqSmfCwSFFXtxMhfXOJWUg6pn4pqWcsfGttVtqhBn6b2AaaNA&user=PxIOz7cAAAAJ">a space policy expert</a>, I find it hard to overstate the significance for both SpaceX and spaceflight in general. For SpaceX, it’s another step on their road to Mars, but more generally, it demonstrates that spaceflight need not be reserved for only the most powerful of states.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/336825/original/file-20200521-102671-ptevan.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/336825/original/file-20200521-102671-ptevan.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/336825/original/file-20200521-102671-ptevan.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=493&fit=crop&dpr=1 600w, https://images.theconversation.com/files/336825/original/file-20200521-102671-ptevan.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=493&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/336825/original/file-20200521-102671-ptevan.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=493&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/336825/original/file-20200521-102671-ptevan.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=620&fit=crop&dpr=1 754w, https://images.theconversation.com/files/336825/original/file-20200521-102671-ptevan.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=620&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/336825/original/file-20200521-102671-ptevan.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=620&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Astronauts Douglas Hurley (left) and Robert Behnken before boarding the Gulfstream jet that will carry them to Kennedy Space Center in Florida.</span>
<span class="attribution"><a class="source" href="https://blogs.nasa.gov/commercialcrew/wp-content/uploads/sites/230/2020/05/jsc2020e023069_crop.jpg">NASA/James Blair</a></span>
</figcaption>
</figure>
<h2>A dream and an opening</h2>
<p>In many ways, SpaceX’s achievement is due not only to technological advances, but opportunity brought about by disaster. The breakup of the space shuttle Columbia in 2003 led <a href="https://history.nasa.gov/Bush%20SEP.htm">the Bush administration to decide</a> to end the shuttle program by 2010. They directed NASA to develop a replacement, <a href="https://www.globalsecurity.org/space/systems/vse.htm">Project Constellation</a>, but due to budget cuts and other problems, NASA failed to make significant progress. As a result, in 2010, <a href="https://www.sciencedirect.com/science/article/abs/pii/S0265964610001189?via%3Dihub">the Obama administration directed NASA</a> to refocus its efforts on deep space missions and rely on private companies to provide access to the ISS and low Earth orbit.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/336827/original/file-20200521-102628-1bv3jpo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/336827/original/file-20200521-102628-1bv3jpo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/336827/original/file-20200521-102628-1bv3jpo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=757&fit=crop&dpr=1 600w, https://images.theconversation.com/files/336827/original/file-20200521-102628-1bv3jpo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=757&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/336827/original/file-20200521-102628-1bv3jpo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=757&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/336827/original/file-20200521-102628-1bv3jpo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=951&fit=crop&dpr=1 754w, https://images.theconversation.com/files/336827/original/file-20200521-102628-1bv3jpo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=951&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/336827/original/file-20200521-102628-1bv3jpo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=951&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The SpaceX Crew Dragon spacecraft is designed to carry up to seven passengers.</span>
<span class="attribution"><a class="source" href="https://blogs.nasa.gov/commercialcrew/category/spacex/">NASA/Kim Shiflett</a></span>
</figcaption>
</figure>
<p>Enter SpaceX. Dreaming of colonization of Mars but frustrated with the slow pace at which it was coming, Elon Musk founded SpaceX in 2002. To get to Mars, he decided that spaceflight would first need to be made cheaper. His philosophy was to devise a rocket system that could be used again and again with minimal refurbishment between flights. Over the next decade, SpaceX designed, built and tested its Falcon series of rockets. It signed <a href="https://www.spacex.com/press/2012/12/19/spacex-wins-nasa-cots-contract-demonstrate-cargo-delivery-space-station">contracts with NASA</a> to provide cargo services to the ISS and with other companies and the U.S. military to provide general launch services. Perhaps most importantly, SpaceX has demonstrated that its rockets can be reused, with the core stages flying their way back to Earth to land themselves.</p>
<p>The 2010 shift in American space policy gave SpaceX an opportunity to build on its early successes. By 2014, both <a href="https://spacenews.com/41891nasa-selects-boeing-and-spacex-for-commercial-crew-contracts/">SpaceX and Boeing were given contracts</a> from NASA to provide commercial crew launch services. And it appears, so far, that SpaceX has made good on its promise of reducing the cost of human spaceflight. Compared to an average <a href="https://www.space.com/12166-space-shuttle-program-cost-promises-209-billion.html">space shuttle mission that cost US$1.6 billion</a>, <a href="https://www.space.com/spacex-boeing-commercial-crew-seat-prices.html">NASA is paying only $55 million</a> per seat for SpaceX’s upcoming ISS flights.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/336832/original/file-20200521-102637-hrrxv0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/336832/original/file-20200521-102637-hrrxv0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/336832/original/file-20200521-102637-hrrxv0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/336832/original/file-20200521-102637-hrrxv0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/336832/original/file-20200521-102637-hrrxv0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/336832/original/file-20200521-102637-hrrxv0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/336832/original/file-20200521-102637-hrrxv0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/336832/original/file-20200521-102637-hrrxv0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A picture taken June 13, 2007 in Paris shows the inside part of the mock-up of the future tourism plane-rocket, made by the European Aeronautic Defence and Space Company EADS Astrium branch.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/astrium-prepare-un-avion-fusee-pour-developper-le-tourisme-news-photo/74588306?adppopup=true">OLIVIER LABAN-MATTEI/AFP via Getty Images</a></span>
</figcaption>
</figure>
<h2>Tourists in space?</h2>
<p>This massive reduction in cost made possible through reusable rockets is contributing to several developments in spaceflight. First, it provides NASA a means of access to the ISS without relying on the Russian Soyuz. Since 2011, the <a href="https://www.space.com/spacex-boeing-commercial-crew-seat-prices.html">U.S. has been paying Russia</a> upwards of $86 million per seat for flights to the space station. </p>
<p>Second, with SpaceX and Boeing providing access to the ISS, NASA can concentrate on <a href="https://www.nasa.gov/what-is-artemis">Project Artemis</a>, which intends to return humans to the Moon by 2024. They are also leveraging new commercial capabilities from SpaceX, Blue Origin and others to further reduce costs to get there.</p>
<p>If SpaceX is successful, it could also mean the opening of space to tourism. Blue Origin and Virgin Galactic are planning to offer <a href="https://www.cnbc.com/2019/10/28/high-space-tourism-demand-for-blue-origin-and-virgin-galactic-ceo-says.html">brief suborbital launches</a> that don’t enter Earth orbit. SpaceX, on the other hand, is already <a href="https://www.space.com/spacex-crew-dragon-will-fly-space-tourists.html">signing up passengers</a> for several-day trips to space at $35 million a seat. Even <a href="https://www.forbes.com/sites/joshwilson/2020/05/06/tom-cruise-nasa-and-elon-musks-spacex-prepare-to-shoot-a-movie-in-space/#6a2c8f5b673f">Tom Cruise is looking to fly</a> on SpaceX and film a movie aboard the ISS. While space companies have long predicted opportunities for space tourism, SpaceX’s Dragon brings that possibility closer to reality.</p>
<p>More broadly, adding tourists to the mix in low Earth orbit may even help make space safer. Debris in orbit is a growing problem, along with increasing tensions between the U.S., China and Russia in space. Both of those things make operating in space more difficult, dangerous and costlier. </p>
<p>For the space economy to really take off, countries will need to put in place regulations that ensure safety and reliability in several areas, including vehicle safety and debris mitigation. And, as I suggest <a href="https://www.amazon.com/Privatizing-Peace-Commerce-Reduce-Conflict-dp-0367337835/dp/0367337835/">in my new book</a>, having more humans in space might force countries to think twice before taking potentially dangerous actions in space. While orbital space tourism might still be far off for the average American, SpaceX’s crew launch brings us closer to the day when an extraordinary event is a normal occurrence.</p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p><img src="https://counter.theconversation.com/content/138765/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Wendy Whitman Cobb is affiliated with the US Air Force School of Advanced Air and Space Studies. Her views are her own and do not necessarily reflect the views of the Department of Defense or any of its components.</span></em></p>SpaceX’s launch of astronauts to the International Space Station will make it the first private company to launch humans to space. The effort has ramifications for NASA and spaceflight in general.Wendy Whitman Cobb, Professor of Strategy and Security Studies, Air UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1353712020-04-03T09:14:20Z2020-04-03T09:14:20ZCorporate debt is in serious trouble – here’s what it means if the market collapses<figure><img src="https://images.theconversation.com/files/324969/original/file-20200402-74895-43gchz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Stand well back. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/closeup-hand-man-take-one-block-387122737">Oatawa</a></span></figcaption></figure><p>Markets abhor uncertainty. The coronavirus pandemic is a severe supply shock that will substantially reduce the world’s economic output, and there will potentially be several waves as the contagion returns in the autumn or spring 2021. </p>
<p><a href="https://theconversation.com/coronavirus-comparing-todays-crisis-to-2008-reveals-some-interesting-things-about-china-132147">Many governments</a> are trying to form a bridge over the lockdown period to allow economic activity to be restored. This involves keeping viable businesses in operation with a furloughed workforce that can quickly re-open when appropriate. One major impediment is that the private corporate debt market is likely to completely implode, which risks pushing a substantial number of businesses over the edge. </p>
<p>Corporate debt is traded on the open market in <a href="https://www.economist.com/finance-and-economics/2020/03/12/corporate-bonds-and-loans-are-at-the-centre-of-a-new-financial-scare">several ways</a>: bonds issued directly by companies, and bank loans that are sold on to investors by the bank that agreed them, either individually or in packages of multiple loans. Bonds make up <a href="https://files.stlouisfed.org/files/htdocs/publications/es/13/ES_31_2013-11-15.pdf">the majority</a> of the market. </p>
<p>There are three direct measures of the state of this corporate debt market. One involves credit ratings. The three leading ratings agencies <a href="https://www.zerohedge.com/markets/fallen-angel-avalanche-arrives-sp-downgrading-companies-fastest-pace-record">have been</a> downgrading corporate debt <a href="https://www.ft.com/content/253210d5-4a2d-439f-a4a6-204a7f66d445">at a rapid pace</a>, including big names like Ford and Goodyear. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/325011/original/file-20200402-74854-47sjlm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/325011/original/file-20200402-74854-47sjlm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/325011/original/file-20200402-74854-47sjlm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=377&fit=crop&dpr=1 600w, https://images.theconversation.com/files/325011/original/file-20200402-74854-47sjlm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=377&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/325011/original/file-20200402-74854-47sjlm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=377&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/325011/original/file-20200402-74854-47sjlm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=474&fit=crop&dpr=1 754w, https://images.theconversation.com/files/325011/original/file-20200402-74854-47sjlm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=474&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/325011/original/file-20200402-74854-47sjlm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=474&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Downgraded.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/paris-france-september-30-ford-focus-62427691">Darren Brode</a></span>
</figcaption>
</figure>
<p>Ratings agency Fitch <a href="https://www.fitchratings.com/site/re/10114439">is forecasting</a> a doubling in defaults in 2020 on US <a href="https://www.investopedia.com/terms/l/leveragedloan.asp">leveraged loans</a>, which refers to bank loans to businesses considered more risky. The agency expects a default rate of 5% to 6% this year, compared to 3% last year. The dollar value will exceed the previous high of 2009, and for retail and energy companies, the default rate could approach 20%. </p>
<p>Fitch then expects defaults of between 8% and 9% next year in this market, amounting to a total of US$200 billion (£161 billion) in bad debt over two years. Other sectors at risk include airlines, hotels, restaurants, casinos and cinemas. </p>
<h2>That 2008 feeling</h2>
<p>A second measure of corporate debt is the market price of credit default swaps (CDSs), which are tradeable contracts that investors use to insure against companies defaulting on their debts. Both for <a href="https://www.investopedia.com/articles/02/052202.asp">investment grade and “junk” debt</a>, the price of these swaps is <a href="https://www.ft.com/content/f013c18e-649c-11ea-b3f3-fe4680ea68b5">back at the levels</a> of the financial crisis of 2007-09. It is striking how quickly this has happened. </p>
<p>The final measure is to look at the risk premiums associated with different types of debt. In other words, how much it costs companies to borrow compared to the benchmark ten-year US treasury bond. We have seen spikes in these rates for <a href="https://fred.stlouisfed.org/series/AAA10Y">high-grade</a> corporate debt and <a href="https://www.nasdaq.com/articles/ishares-iboxx-%24-high-yield-corporate-bond-etf-experiences-big-inflow-2020-04-01">junk bonds</a> alike. Both have eased back in recent days, but borrowing costs remain considerably higher than before the crisis. This will be putting pressure on many companies already struggling to cope. </p>
<p>As a general rule, if one company has a negative shock through no fault of its own, even a severe one, it will be able to obtain financing to continue in business. Anyone seeking online deliveries from Ocado will realise, for example, that the company is still suffering logistically from its <a href="https://www.bbc.co.uk/news/uk-england-hampshire-49071456">devastating warehouse fire</a> in England in July 2019, yet it has <a href="https://www.independent.co.uk/news/business/news/ocado-losses-warehouse-fire-robots-andover-hampshire-a9329301.html">continued to</a> have access to finance. </p>
<p>It’s a different story if a majority of firms are all suffering shocks at the same time, and the outcome looks as uncertain as it does at the moment. To make matters worse, companies are entering this period carrying high levels of debt. US corporate debt, for example, <a href="https://wolfstreet.com/2019/03/23/countries-with-most-monstrous-corporate-debt-pileup-u-s-wimps-out-in-25th-place-debt-to-gdp/">is over</a> 70% of GDP, much higher than <a href="https://www.ft.com/content/27cf0690-5c9d-11ea-b0ab-339c2307bcd4">historic levels</a>. </p>
<p><strong>US corporate debt as a % of GDP</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/324987/original/file-20200402-74874-l9dulr.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/324987/original/file-20200402-74874-l9dulr.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/324987/original/file-20200402-74874-l9dulr.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=392&fit=crop&dpr=1 600w, https://images.theconversation.com/files/324987/original/file-20200402-74874-l9dulr.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=392&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/324987/original/file-20200402-74874-l9dulr.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=392&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/324987/original/file-20200402-74874-l9dulr.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=493&fit=crop&dpr=1 754w, https://images.theconversation.com/files/324987/original/file-20200402-74874-l9dulr.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=493&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/324987/original/file-20200402-74874-l9dulr.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=493&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Going up.</span>
<span class="attribution"><a class="source" href="https://wolfstreet.com/2019/03/23/countries-with-most-monstrous-corporate-debt-pileup-u-s-wimps-out-in-25th-place-debt-to-gdp/">Wolf Street</a></span>
</figcaption>
</figure>
<h2>Alternatives</h2>
<p>While the markets for trading corporate debt may well collapse, some companies may still be able to borrow privately. During the financial crisis, Goldman Sachs chose not to participate in government bailouts, which came with restrictive conditions. </p>
<p>Instead, the US investment bank went to Warren Buffett’s Berkshire Hathaway in 2008 and <a href="https://qz.com/67052/heres-how-warren-buffett-made-3-1-billion-on-his-crisis-era-bet-on-goldman-sachs/">effectively borrowed</a> US$5 billion. This created enough investor confidence to allow Goldman to issue new shares on the open market to raise extra capital. </p>
<p>This time around, Berkshire <a href="https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-buy-tesla-starbucks-mcdonalds-coronavirus-selloff-2020-3-1029041432">holds about US$125 billion</a> in “cash”, which could be used to strike similar deals. An alternative option for some promising companies will be <a href="https://www.mckinsey.com/industries/private-equity-and-principal-investors/our-insights/private-equity-and-the-new-reality-of-coronavirus">private equity finance</a>, in which investment firms buy stakes in them. </p>
<p>In some cases, bank lending may also be available: central banks <a href="https://theconversation.com/are-the-banks-strong-enough-to-withstand-the-coronavirus-crash-134258">have given</a> continual assurances that the major commercial banks have passed strenuous stress tests, so they will hopefully be in a position to do their jobs and lend. </p>
<p>Yet despite these possibilities, current uncertainties may cause companies in <a href="https://theconversation.com/coronavirus-your-guide-to-winners-and-losers-in-the-business-world-134205">sectors hit hard</a> by the pandemic to be insolvent if they cannot trade for several months. Here, the <a href="https://www.bbc.co.uk/news/business-51982005">UK programme</a> on paying up to 80% of wages for furloughed workers is well judged. This should help high street retailers, for example, since they have high wage bills. It will also help these firms that business rates <a href="https://www.bbc.co.uk/news/business-51836256">have been suspended</a>. </p>
<p>In contrast, the US government’s <a href="https://www.visualcapitalist.com/the-anatomy-of-the-2-trillion-covid-19-stimulus-bill/">US$2 trillion stimulus package</a> seems extremely ill-judged. It includes US$500 billion of business support that is likely to be <a href="https://www.marketwatch.com/story/the-fed-will-make-up-to-4-trillion-in-loans-to-businesses-to-rescue-economy-mnuchin-says-2020-03-22">multiplied by</a> the Federal Reserve buying corporate bonds and offering extra liquidity to American banks by printing up to US$4 trillion in new money. Even the US scheme for supporting furloughed workers is a lot more indirect than the UK version. </p>
<p>The American programme is much more focused on stoking aggregate demand, which is not the answer at this point. If supply falls by 20% because everything from manufacturing to services is hampered by the pandemic, then demand needs to fall 20% as well. Otherwise <a href="https://www.prospectmagazine.co.uk/economics-and-finance/keynes-in-the-age-of-coronavirus-economy-recession-covid-19">we risk</a> unleashing inflation. From an economic point of view, the priority must be to ensure that a collapsing corporate debt market does not bring down viable firms and make the crisis even worse.</p><img src="https://counter.theconversation.com/content/135371/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jefferson Frank does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The coronavirus pandemic is shaking a system that was pretty wobbly already.Jefferson Frank, Professor of Economics, Royal Holloway University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1322342020-02-26T14:01:41Z2020-02-26T14:01:41ZA company’s good deeds can make consumers think its products are safer<figure><img src="https://images.theconversation.com/files/317191/original/file-20200225-24655-fmc2mq.jpg?ixlib=rb-1.1.0&rect=36%2C41%2C3458%2C2305&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Consumers may think Boeing's planes are safer because the company donated 250,000 masks to China.</span> <span class="attribution"><span class="source">AP Photo/Vincent Yu</span></span></figcaption></figure><p><em>The Research Brief is a short take on interesting academic work.</em></p>
<h2>The big idea</h2>
<p>Companies like to highlight when they do good things for society, such as making <a href="https://money.cnn.com/2018/01/26/news/companies/budweiser-super-bowl-water/index.html">charitable donations</a>, becoming more <a href="https://www.reuters.com/article/us-climate-change-microsoft/microsoft-to-erase-its-carbon-footprint-past-and-future-in-climate-push-idUSKBN1ZF2CG">environmentally friendly</a> or <a href="https://www.usnews.com/news/stem-solutions/articles/2020-01-08/commentary-a-portfolio-managers-approach-to-diversity-and-inclusion">improving the diversity of their workforce</a>. Broadly, these behaviors come under the umbrella of corporate social responsibility. Companies do them to <a href="https://business-ethics.com/2015/05/05/does-corporate-social-responsibility-increase-profits/">increase customer loyalty</a> and, ultimately, earn more revenue. </p>
<p><a href="https://doi.org/10.1086/680089">Past research</a> has suggested that customers like to purchase more from companies that do good deeds because of the “warm glow” that comes with it. In a <a href="https://link.springer.com/article/10.1007/s10551-020-04445-0">new study</a>, however, three colleagues and I discovered that there’s another effect motivating consumer behavior: These activities can make people think the firms’ products or services are safer and of higher quality.</p>
<p>When people see companies spending resources on socially responsible activities, they infer that these firms are invested in building long-term relationships with its customers. That is, they assume companies are not trying to cheat them into buying inferior quality products or services. For example, when <a href="https://www.yahoo.com/news/boeing-donates-250-000-medical-184800269.html">Boeing donated</a> 250,000 medical-grade respiratory masks to address supply shortages in China, it likely not only created goodwill among consumers but also reduced the perception that flying aboard one of its planes is risky.</p>
<h2>Why it matters</h2>
<p>Society needs companies to invest in corporate social responsibility. Businesses can do far more good than any one individual. But managers are always under pressure to demonstrate how such investments – even ones intended to benefit society at large – will affect their bottom line. </p>
<p>Importantly, our analysis suggests that the types of activities that have the biggest impact for companies involve actual changes to their operations, such as by making products safer or more environmentally friendly, rather than unrelated things like charitable giving. An example is <a href="https://www.theverge.com/2018/8/16/17693866/ford-self-driving-car-safety-report-dot">Ford investing in making its self-driving cars safer</a>.</p>
<p>While consumers want to see companies giving back to society, what is more important is that they create safer and higher quality products that benefit customers, the environment and society in the long term. </p>
<h2>How I do my work</h2>
<p>My colleagues and I analyze publicly available archival data on companies and their activities and perform experiments in the lab. For example, we brought participants into the lab and had some of them read a scenario involving a company’s corporate social responsibility efforts, while others did not. We then measured each group’s perceptions of the risk of buying the company’s products. This allowed us to better understand cause and effect.</p>
<h2>What’s next</h2>
<p>While this research offers suggestions to managers about when and how to use corporate social responsibility, future researchers may want to explore whether it may be of value in controversial industries such as tobacco and gambling, where such efforts may be employed as a means to offset past irresponsibility. It would also be interesting to investigate how long it may take companies to recuperate investments in corporate social responsibility.</p>
<p>[<em>Get the best of The Conversation, every weekend.</em> <a href="https://theconversation.com/us/newsletters/weekly-highlights-61?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=weeklybest">Sign up for our weekly newsletter</a>.]</p><img src="https://counter.theconversation.com/content/132234/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Valerie Good does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New research shows that when companies do things like give to charity or reduce their carbon footprint, consumers perceive their products as less risky.Valerie Good, Published Researcher and Marketing Faculty, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1309172020-01-31T17:08:50Z2020-01-31T17:08:50ZHow Boeing’s new boss could rebuild the firm’s damaged reputation<figure><img src="https://images.theconversation.com/files/313053/original/file-20200131-41507-mpji7a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/boeing-737-jet-aeroplane-landing-through-105724190">Shutterstok/travellight</a></span></figcaption></figure><p>Boeing expects the <a href="https://www.theguardian.com/business/2020/jan/29/boeing-puts-cost-of-737-max-crashes-at-19bn-as-it-slumps-to-annual-loss">economic cost</a> of its two fatal plane crashes to be as high as US$19 billion, and has confirmed its first annual loss in 20 years. As well as losing US$636m in 2019, the company also <a href="https://www.nytimes.com/2019/12/23/business/Boeing-ceo-muilenburg.html">said goodbye</a> to its president and CEO, Denis Muilenburg, at the end of the year. </p>
<p>But investors and regulators may well be concerned about the arrival of his successor, <a href="https://www.cnbc.com/2019/12/23/what-to-know-about-new-boeing-ceo-david-calhoun.html">company insider Dave Calhoun</a>. For if there is one lesson that we can take from the 737 Max scandal, it is that as a company, Boeing clearly believed itself to be more competent than it actually was. </p>
<p>Boeing’s responses to the various disclosures of safety shortcomings have been <a href="https://www.theguardian.com/business/2019/oct/29/boeing-dennis-muilenburg-congress-testimony-737-max-mcas">widely seen</a> as arrogant, dismissive and, eventually, begrudging. Appointing someone who has been on the company board for the last ten years as a replacement CEO is hardly a recipe for fresh thinking, or anything resembling an independent appraisal of what needs to change. </p>
<p>Indeed it was only last week that <a href="https://www.seattletimes.com/opinion/editorials/boeing-needs-to-show-commitment-to-deep-overhaul/">Calhoun seemed to express</a> total confidence in Boeing employees when it comes to safety – a remarkable position given recent events.</p>
<p>But it is easy to become institutionally arrogant like this if you are one of only a handful of large players in an industry. The long-haul aircraft market only has two suppliers, Boeing and Airbus. </p>
<p>Commercial airline companies find themselves locked into purchasing schedules with one manufacturer, not least to ease the integration of new aircraft and the necessary training that comes with it.</p>
<p>This environment breeds complacency. When customers are so locked in that changing supplier would require a massive amount of work, company managers become lazy, unresponsive, and – most damaging – deaf to concerns about product quality. </p>
<p>In the case of Boeing, the fact that the product concerns related to safety showed just how far the company’s internal standards had lapsed.</p>
<p>Boeing needs to balance the need for continuity with the need to be seen to be responding seriously to the largest crisis in the company’s history. That job falls directly to the new CEO, who should do three things if he is to succeed in rebuilding the reputation of the organisation.</p>
<h2>Three steps to change</h2>
<p>As an insider, Calhoun could be motivated to try to brush past failings under the carpet. Instead, to begin with, he needs to conduct a complete review and overhaul of Boeing’s operations.</p>
<p>After all, this is an organisation that systematically ignored safety concerns, <a href="https://edition.cnn.com/2019/10/18/politics/boeing-737-max-faa-documents/index.html">withheld critical documentation</a> from regulators, and whose immediate internal response to two catastrophic crashes was to blame others. </p>
<p>Calhoun’s first priority must be to examine every aspect of how Boeing operates – and to be seen to be doing so. If it is to be credible, such a review should have a wide mandate and be overseen by an independent party reporting into the non-executive directors. Ideally, its findings should be made available to regulators, shareholders and the general public.</p>
<p>Second, he needs to restore internal pride. One of Boeing’s greatest assets is its technical engineers, designers and production staff. Despite the failings of the 737 Max, this is a company with a proud history of manufacturing excellence. </p>
<p>But this is a marketplace where the best talent can move quickly, and in Boeing’s case it seems clear that they are now extremely vulnerable to losing talent. Rebuilding pride takes time, but it starts with the basics: showing respect for the work that is being done by the workforce under what must be very intense conditions; communicating clearly that this is a pivot point when it comes to the standards that the company will in future hold itself to; and leading from the front by example. </p>
<p>Managers who talk of change while acting the same way that they have always done fatally undermine other actions designed to improve morale.</p>
<p>Lastly, he needs to restore confidence, principally with regulators and customers but also, beyond that, with shareholders and other external stakeholders including the local communities where Boeing operates. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/SxULJnNnBlU?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>Confidence builds trust, which facilitates all aspects of business. When trust is low, there are more demands on a business, which often leads to greater inefficiency and cost. </p>
<p>Regulators will want to see a commitment to a more proactive oversight regime, one that builds partnership rather than just compliance. Investors will need to believe that Calhoun is sufficiently independent to get to the bottom of why Boeing allowed itself to get into this position on one of its flagship products, and also how it is changing its culture to react differently to challenges – internally or externally.</p>
<p>It is possible for insiders to achieve success after a crisis. Oil giant BP’s <a href="https://www.theguardian.com/business/2019/oct/04/bp-boss-bob-dudley-to-step-down-next-year-after-four-decades">outgoing CEO Bob Dudley</a> is a good example of an insider who balanced the importance of being able to act quickly after a crisis, leveraging internal knowledge and networks while also signalling a clear recognition of the need to learn from mistakes and to be humble. </p>
<p>But success stories like this are rare. Boeing’s board needs to step up its oversight of its insider appointee to ensure that it joins the ranks of those companies who have emerged stronger after a crisis, not weaker.</p><img src="https://counter.theconversation.com/content/130917/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rupert Younger does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With planes grounded, and money lost, the firm is at a pivotal point in its history.Rupert Younger, Director, Oxford University Centre for Corporate Reputation, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1295952020-01-17T13:59:52Z2020-01-17T13:59:52ZAirbus again becomes the world’s leading aircraft manufacturer<figure><img src="https://images.theconversation.com/files/309165/original/file-20200108-107231-y5h1jt.jpg?ixlib=rb-1.1.0&rect=0%2C86%2C3626%2C2420&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Airbus A321 XLR, one of Airbus' centerpieces.</span> <span class="attribution"><a class="source" href="https://www.airbus.com/aircraft/passenger-aircraft/a320-family/a321neo.html">Airbus</a></span></figcaption></figure><p>After eight years of Boeing leadership, Airbus has again become the world’s leading aircraft manufacturer. The European group surpassed <a href="https://www.aerospace-technology.com/comment/airbus-boeing-aircraft-top/">1,000 aircraft orders in 2019</a> and broke its record of aircraft delivered with <a href="https://www.reuters.com/article/us-airbus-deliveries-exclusive/exclusive-airbus-beats-goal-with-863-jet-deliveries-in-2019-ousts-boeing-from-top-spot-idUSKBN1Z01Q8">863 units</a>. By comparison, Boeing delivered a <a href="https://www.telegraph.co.uk/business/2020/01/02/boeinhttps://www.aerospace-technology.com/comment/airbus-boeing-aircraft-top/g-surrenders-crown-worlds-biggest-plane-maker-airbus-737/">mere 345</a>. </p>
<p>The A320, launched in 1988, became the bestselling aircraft of all time, outnumbering the Boeing 737, which is 20 years older. In addition, from January 2020, Boeing suspended production of the 737 Max, once a bestseller but currently banned from flying because of <a href="https://theconversation.com/boeing-737-max-air-safety-market-pressures-and-cockpit-technology-113580">two crashes in October 2018 and March 2019</a>.</p>
<p>According to Airbus commercial director Christian Scherrer, Boeing’s difficulties are <a href="https://aviationweek.com/air-transport/airbus-not-benefiting-boeings-max-crisis-exec-says">not benefiting its European competitor</a> – the firm’s production capacity does not allow it to deliver new customers before four years. However, <a href="https://www.reuters.com/article/us-boeing-deliveries/boeing-orders-sink-as-customers-opt-to-swap-max-idUSKBN1XM24M">Airbus continues to accumulate orders</a>, including from customers once loyal to Boeing. In addition, it is likely that the 10% tax on aircraft imports into the United States is a <a href="https://www.tourmag.com/Christian-Scherrer-Airbus-Passer-de-la-batterie-a-la-production-d-electricite-embarquee-_a101632.html">direct result of Boeing’s troubles</a>.</p>
<p>Suppliers General Electric and Safran have been heavily affected by the 737 Max crisis, an aircraft exclusively equipped with the LEAP engine that they co-developed. The joint subsidiary CFM International has <a href="https://www.wsj.com/articles/ge-agrees-on-deal-to-build-more-airbus-engines-to-help-offset-max-shutdown-11576860015">negotiated with Airbus</a> to increase the percentage of A320neo aircraft that use this engine to compensate for the losses associated with the 737 Max. Hundreds of European suppliers that also work for Airbus are also <a href="https://www.ft.com/content/016189b4-6dac-11e9-80c7-60ee53e6681d">financially affected</a>.</p>
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<figcaption><span class="caption">Presentation of the LEAP (Leading Edge Aviation Propulsion) high-bypass turbofan that power A320neo airplanes.</span></figcaption>
</figure>
<h2>Relative successes for Airbus</h2>
<p>Although 2019 was marked by the end of the A380, considered a <a href="https://theconversation.com/airbus-a380-from-high-tech-marvel-to-commercial-flop-112086">commercial flop</a>, Airbus has exceeded the symbolic mark of the 20,000 planes sold since its creation. The company also won many battles against Boeing last year. The A320, A320neo, A321, A321neo and A350 models are particularly popular with airlines. <a href="https://www.forbes.com/sites/samuelengel1/2019/12/18/uniteds-new-aircraft-order-nudges-boeing-and-airbus-toward-environmental-sustainability/#624f31304199">The A321 XLR is part of a sustainable development strategy</a>: it consumes a third less of kerosene, which gives it a much greater radius of action and reduces costs per passenger.</p>
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<figcaption><span class="caption">The A321 XLR will replace the A380 on the aircraft market.</span></figcaption>
</figure>
<p>United Airlines ordered <a href="https://www.forbes.com/sites/michaelgoldstein/2019/12/04/united-airlines-to-buy-50-ultra-long-range-airbus-a321xlr-aircraft-in-estimated-6-billion-deal/">50 ultra-long-haul Airbus A321 XLRs</a> for about $6 billion. These aircraft are intended to replace Boeing 757s and are expected to enter service in 2024. Thanks to this innovative plane, which as presented by Airbus at the <a href="https://theconversation.com/aeronautique-la-menace-sino-russe-plane-sur-le-duopole-airbus-boeing-118638">2019 Paris Air Show</a>, the company will be able to reduce significantly its carbon footprint and <a href="https://www.aviationtoday.com/2019/12/05/united-airlines-buying-airbus-a321xlrs-replace-boeing-757-fleet/">benefit from the long-range capabilities to add new destinations</a>.</p>
<p>Cebu Pacific Air, the leading airline in the Philippines, confirmed an order for <a href="https://www.channelnewsasia.com/news/business/philippines--cebu-air-orders-15-a320neo-jets--pushing-airbus-toward-sales-milestone-12196784">five A320neo and ten A321 XLR on December 19</a>, after having finalized another of 16 A330neo, which makes a total of 21 aircraft for approximately $6.8 billion in 2019. This is nothing compared to the <a href="https://www.airbus.com/newsroom/press-releases/en/2019/10/indigo-signs-for-300-a320neo-family-aircraft.html">record order from one of the fastest-growing airlines in the world</a>: the low-cost Indian company IndiGo. In October, it ordered 300 A320s, including several A321 XLRs, worth $33 billion. When delivered, IndiGo will reach a total of 730 A320s, making it the <a href="https://www.aerotime.aero/rytis.beresnevicius/24127-indigo-300-airbus-a320-aircraft-order">largest customer for this model</a>.</p>
<p>Airbus has also been <a href="https://www.bbc.com/news/business-50753718">selected by Quantas</a> to operate the longest flight in the world: 20 hours to cover the 10,500 miles (17,000 km) between London and Sydney. In December 2019, after launching a tender to the two manufacturers, Quantas announced that it was choosing the A350-1000 rather than the Boeing 777X.</p>
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<figcaption><span class="caption">New touch-screens cockpit displays in Airbus A350 XWB.</span></figcaption>
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<p>Airbus’s situation seems solid and the future looks bright. The group may hire between 1,500 and <a href="https://www.en24.news/2020/01/toulouse-airbus-expected-to-hire-nearly-2000-people.html">2,000 people in France, and potentially 5,000 worldwide</a>. The group has exceeded US$100 billion in market valuation, Airbus shares rose 59% in 2019](https://www.lefigaro.fr/conjoncture/ces-entreprises-qui-font-flamber-le-cac-40-20191229) and the company begins 2020 at the top of the French stock market index CAC40. </p>
<p>Still, Airbus’s leadership position <a href="https://www.aerospace-technology.com/comment/airbus-boeing-aircraft-top/">remains fragile</a>. If <a href="https://www.aerospace-technology.com/comment/airbus-boeing-aircraft-top/">the symbolic threshold of 1,000 aircraft ordered</a> may seem satisfactory, it is already the sixth time that the group has exceeded it, and this remains well below <a href="https://www.telegraph.co.uk/finance/newsbysector/industry/10580384/How-Britain-lifts-Airbus-to-record-sales-high.html">the record set in 2013 with 1,503 orders</a>. Production is <a href="https://www.wsj.com/articles/airbus-slashes-delivery-target-as-it-struggles-with-production-woes-11572417894">struggling to keep up with sales</a>, as the most popular models are victims of their success. Some current deliveries are late and the increase from 60 to 63 aircraft per month between 2019 and 2021 will not significantly improve things.</p>
<h2>A multidimensional crisis for Boeing</h2>
<p>Boeing is currently going through the <a href="https://www.flightglobal.com/analysis/why-boeing-faces-worst-crisis-in-its-history/135000.article">worst crisis since it was founded</a> in 1916. This crisis is deep, lasting and multidimensional. Above all, it is a reputational crisis, the group having entered a spiral of failures and an era of suspicion. Multiple charges of negligence and willful intention to deceive the authorities could be confirmed by <a href="https://www.usatoday.com/story/news/nation/2019/12/24/boeing-reveals-new-very-disturbing-documents-737-max-jetliner-faa-house/2743402001/">internal documents transmitted to the US Congress</a> in December 2019.</p>
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<figcaption><span class="caption">Boeing to halt 737 Max production after damaged reputation.</span></figcaption>
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<p><a href="https://theconversation.com/boeing-737-max-air-safety-market-pressures-and-cockpit-technology-113580">After two 737 Max crashes</a> that left 346 dead, many passengers have completely lost confidence in the plane: 40% of travelers are <a href="https://www.washingtonpost.com/business/when-will-boeing-737-max-fly-again-and-more-questions/2019/12/16/251d2b02-2039-11ea-b034-de7dc2b5199b_story.html">ready to pay more or take less practical flights</a> to avoid it. New theories question the <a href="https://www.nytimes.com/2020/01/05/business/boeing-737-max.html">safety of other software-independent parts</a> of the aircraft. </p>
<p>The crisis is also technological, Boeing has had <a href="https://www.cnbc.com/2019/10/22/the-year-that-changed-boeing-airplane-maker-struggles-to-regain-footing-since-first-737-max-crash.html">significant difficulties finding reliable solutions</a> to the various <a href="https://theconversation.com/boeing-737-max-air-safety-market-pressures-and-cockpit-technology-113580">dysfunctions</a> of its planes. This in turn led to an industrial crisis: after severely <a href="https://www.businessinsider.com/boeing-studies-737-max-output-slowdown-among-scenarios-source-2019-4">slowing down the production</a> of the 737 Max, <a href="https://www.theverge.com/2019/12/16/21025081/boeing-737-max-production-halt-stop-crash-faa-airplane">Boeing stopped it completely</a> in January 2020. Although 12,000 people work directly in the production of the 737 Max, Boeing <a href="https://www.cnbc.com/2020/01/06/boeing-reassigs-thousands-of-737-max-workers-while-supplier-spirit-mulls-layoffs.html">does not plan to lay off</a> workers for the time being. The consequences may be particularly difficult for the suppliers most dependent on Boeing to bear.</p>
<p>Boeing also faces a legal crisis: <a href="https://www.reuters.com/article/us-boeing-737max-lawsuit-board/lawsuit-against-boeing-seeks-to-hold-board-liable-for-737-max-problems-idUSKBN1XS2I3">lengthy and costly lawsuits</a> from victims and airlines could well further tarnish the company’s image. The financial consequences are already considerable with 10 billion euros of cash provisioned to deal with the direct and indirect consequences of the crashes. If the manufacturer had <a href="https://www.foxbusiness.com/markets/boeing-debt-raise-737-max">US$20 billion in funds a few months ago</a>, it would consider <a href="https://www.wsj.com/articles/boeing-considers-raising-debt-as-max-crisis-takes-toll-11578308401">increasing its debt by at least US$5 billion</a> to meet expected costs in the first half of 2020.</p>
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<figcaption><span class="caption">Turkish Airlines reach 737 Max aircraft compensation deal from Boeing.</span></figcaption>
</figure>
<p>To cope with the managerial dimension of the crisis, a financial expert, <a href="https://www.forbes.com/sites/georgebradt/2019/12/23/why-david-calhouns-onboarding-as-ceo-of-boeing-is-a-work-in-progress/#66ed9d754a32">David Calhoun, was chosen to succeed the engineer Dennis Muilenburg</a> as CEO of Boeing from January 13, 2020. Muilenburg was <a href="https://www.ft.com/content/457dfcf2-25dc-11ea-9a4f-963f0ec7e134">severely criticized for his handling of the crisis</a> and had to resign. Among other things, he was accused of not respecting the independence of air-transport regulatory authorities and not reacting quickly enough.</p>
<h2>Major geopolitical issues</h2>
<p>Naturally, Boeing’s difficulties and Airbus’ success are <a href="https://www.nytimes.com/2019/10/06/business/boeing-airbus-world-trade-organization.html">not to the liking</a> of US president Donald Trump, who saw a <a href="https://edition.cnn.com/2019/12/18/economy/boeing-gdp-impact/index.html">large part of the GDP of the United States evaporate</a>. The competition between the two has fueled the trade war between EU and US, which in October 2019 decided to apply a 10% tax on imports of European aircraft. Airbus management denounces an unfair decision directly linked to the current fragility of the Boeing group.</p>
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<figcaption><span class="caption">WTO sides with US in Airbus subsidy case, allowing US to target $7.5B in EU imports.</span></figcaption>
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<p>Airbus and Boeing must prepare for <a href="https://theconversation.com/aeronautique-la-menace-sino-russe-plane-sur-le-duopole-airbus-boeing-118638">the entry into the market of a strong competitor</a>. In 2017, the Chinese group Comac (Commercial Aircraft Corporation of China) and the Russian consortium UAC (United Aircraft Corporation) created the joint venture CRAIC (China-Russia Commercial Aircraft International Corporation) in order to launch aircraft they claim are as <a href="https://www.youtube.com/watch?v=cZzbgfidzvI">efficient as those of Airbus and Boeing, but less expensive</a>.</p>
<p>For presidents Xi Jinping and Vladimir Putin, this alliance is part of a major strategic move toward <a href="https://www.ainonline.com/aviation-news/air-transport/2019-06-14/sino-russian-cr929-has-room-high-tech-input-west">Sino-Russian collaboration</a>. The friendship between the two presidents has led them to join forces against the United States and the trade policy of the government of Donald Trump. The <a href="https://www.youtube.com/watch?v=cZzbgfidzvI">CR929</a> will be a direct competitor to the <a href="https://www.youtube.com/watch?v=jGIIGQPUecg">A350 and the B787</a>. With a budget of US$20 billion, this aircraft is scheduled to enter service between 2025 and 2028.</p><img src="https://counter.theconversation.com/content/129595/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Oihab Allal-Chérif ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>If Airbus has once again become the world’s leading aircraft manufacturer, it is mainly thanks to a favorable economic context and Boeing’s 737 Max crisis.Oihab Allal-Chérif, Business Professor, Neoma Business SchoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1296892020-01-10T03:45:17Z2020-01-10T03:45:17ZWhat investigators should be looking for in the Iran plane crash: an expert explains<p>While there is much <a href="https://www.bbc.com/news/world-middle-east-51055219">speculation</a> about the cause of the Ukrainian airliner that crashed after take-off from Tehran’s airport this week, killing all 176 people on board, there is presently very little factual information to go on. </p>
<p>Western intelligence <a href="https://www.washingtonpost.com/world/europe/ukraine-flight-was-on-fire-in-air-and-returning-to-tehran-at-time-of-crash-iran-investigators-say/2020/01/09/9b27434c-3244-11ea-971b-43bec3ff9860_story.html">has indicated</a> a surface-to-air missile likely hit the plane in what may have been an “unintentional” act – an assertion Iran quickly dismissed.</p>
<p>As with any other crash, the world aviation community needs to know what caused this one in the interest of ongoing flight safety. </p>
<p>Political tensions between Iran and the US may make the investigation more challenging, but they should not prevent a thorough systematic analysis from occurring and the cause of the crash to ultimately be established. </p>
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Read more:
<a href="https://theconversation.com/iran-and-us-step-back-from-all-out-war-giving-trump-a-win-for-now-129615">Iran and US step back from all-out war, giving Trump a win (for now)</a>
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<h2>Who will have access to the black boxes?</h2>
<p>The flight recorders hold the key to establishing what actually happened and why. And here’s where the political tensions are most problematic – Iran initially said <a href="https://www.bbc.com/news/world-middle-east-51042326">it would not hand over</a> the black boxes to the manufacturer of the aircraft, Boeing, or the US. </p>
<p>But <a href="https://www.nytimes.com/2020/01/09/world/middleeast/iran-plane-crash-ukraine.html">new reports say</a> Iran has now invited the US National Transportation Safety Board and Boeing to take part in the investigation.</p>
<p>Under the <a href="https://www.icao.int/safety/airnavigation/AIG/Pages/Documents.aspx">International Civil Aviation Organisation Annex 13 convention</a>, the US has the right to appoint an adviser to the investigation, as does the aircraft manufacturer. The convention presumes a level of cooperation between all parties involved in crash investigations, which could prove difficult in this case. But that doesn’t necessarily mean a proper investigation won’t or can’t be conducted.</p>
<p>Responsibility for the investigation sits with the Iranians, but under the UN Civil Aviation Conventions, they can request assistance from any other country, if they don’t have the capacity to conduct it themselves. </p>
<p>There are many other countries with the necessary expertise to assist, including recovering flight data from recorders with very significant damage. France, Canada, UK, the Netherlands, Germany and Australia could all help, for example. </p>
<p>Other countries can only step in, however, if invited by Iran or if Iran chooses not to conduct the investigation. </p>
<p>What’s most important is that whoever leads the investigation must have access to all the information – the wreckage itself, flight data, radar data, maintenance records, crew data, flight plans, load sheets, and passenger and cargo manifests. Otherwise, the wrong conclusions can be reached.</p>
<h2>Why is a field investigation important?</h2>
<p>There also needs to be a parallel field investigation analysing the wreckage. </p>
<p>First, investigators should be ensuring they have accounted for all the wreckage. If some parts separated from the aircraft in-flight, they may be found some distance from the main wreckage site and may hold key clues that could lead to a better understanding of the cause of the crash. </p>
<p>As such, the terrain under the flight path needs to be surveyed carefully to locate all items from the aircraft.</p>
<p>Clearly, it will also be important to examine the wreckage of the engines for any evidence of pre-crash damage. </p>
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Read more:
<a href="https://theconversation.com/heres-how-airplane-crash-investigations-work-according-to-an-aviation-safety-expert-113602">Here's how airplane crash investigations work, according to an aviation safety expert</a>
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<p>For example, if a fire had been burning inside the engine cowling, there may be evidence of scorching. Analysis of the internal engine components should also make clear whether the engines were still delivering power when the plane made impact with the ground or if there was a pre-crash structural or component failure.</p>
<p>Investigators should also look at the wing and fuselage surfaces next to the engines for any pre-impact damage. If an engine failure occurred, there may be evidence of impact damage from engine components after they burst out of the armoured casing. </p>
<p>This was the case with the fatal <a href="https://www.bbc.com/news/world-europe-11923556">Air France Concorde crash in 2000</a>, as well as the uncontained engine failure that <a href="https://www.traveller.com.au/inside-qf32-qantas-captain-reveals-all-about-a380s-engine-explosion-22pz6">nearly caused Qantas flight QF32 to crash</a> en route from Singapore to Sydney in 2010. </p>
<h2>Can evidence show if a missile hit the plane?</h2>
<p>Analysing the aircraft engines, wing and fuselage surfaces may also provide evidence if the aircraft was struck by a missile. </p>
<p>This was the case with <a href="https://www.businessinsider.com.au/mh17-anniversary-how-crash-happened-why-nobody-officially-held-responsible-2019-7?r=US&IR=T">Malaysia Airlines flight MH17</a>, which was shot down over Ukraine in 2014, killing all 298 people aboard. There was clear evidence of the aircraft structures being penetrated from outside the plane by high-speed particles.</p>
<p>Similar forensic analysis can be conducted on the remnants of the Boeing 737 in Iran, even if a high degree of fragmentation occurred in the crash. This should reveal the truth if a missile was responsible.</p>
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<span class="caption">One of the engines of the crashed Boeing 737 in Iran.</span>
<span class="attribution"><span class="source">ABEDIN TAHERKENAREH/EPA</span></span>
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<h2>Would Boeing’s exclusion hurt the investigation?</h2>
<p>Of course, it would be usual for the aircraft manufacturer to be involved. After all, it knows more about the technologies involved in building and operating the aircraft than anyone else. </p>
<p>That said, there are many global agencies that also know a lot about the engineering and operation of the B737-800 plane, such as the <a href="https://www.defence.gov.au/DASP/DASR-Regulations/Recognition.asp">airworthiness authorities in other countries</a>, who could be called upon to participate. </p>
<p>No doubt, Ukraine will be heavily involved, as will Canada, due to the number of Canadians who lost their lives in the crash. So, if Boeing was excluded from the investigation, it might be a set-back, but not a show-stopper. </p>
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Read more:
<a href="https://theconversation.com/mh17-charges-who-the-suspects-are-what-theyre-charged-with-and-what-happens-next-119155">MH17 charges: who the suspects are, what they're charged with, and what happens next</a>
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<p>Boeing is, however, responsible for assuring the ongoing safety standards for the global B737 fleet, so whether it is directly involved in the investigation or not, it is imperative the reasons for the crash are shared with global aviation agencies, the manufacturer and all other airlines.</p>
<p>It is worth reflecting in these sad occasions that the purpose of a crash investigation is to prevent future incidents. Unless the actual cause of this crash is understood, any possible problems in the global flight safety system may go unrectified, making the risk of future crashes higher than it otherwise would be. </p>
<p>The impact of the crash on the families of the victims is also immense and immeasurable. This is another reason why a proper, thorough and systematic investigation is so important. It ensures those who have tragically lost their lives, and their families and friends, will not have suffered in vain.</p><img src="https://counter.theconversation.com/content/129689/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geoffrey Dell is Associate Professor/Discipline Lead for Accident Forensics and Investigation at Central Queensland University and is a Member of the International Society of Air Safety Investigators and the Australian Society of Air Safety Investigators.</span></em></p>Key evidence from the wreckage can show if the plane experienced engine trouble or was hit by a missile. But first, Iran must decide how much outside help it will accept in an investigation.Geoffrey Dell, Associate Professor/Discipline Leader Accident Investigation and Forensics, CQUniversity AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1289582020-01-03T09:36:44Z2020-01-03T09:36:44ZSpace milestones: here are the missions to look forward to in 2020<figure><img src="https://images.theconversation.com/files/307415/original/file-20191217-58344-fwxt4t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">SpaceX's Dragon 2 will carry humans for the first time in 2020.</span> <span class="attribution"><span class="source">NASA/SpaceX</span></span></figcaption></figure><p>Last year was an excellent year for space exploration, with the icing on the Christmas cake the first ever image acquired of a black hole by the <a href="https://eventhorizontelescope.org/">Event Horizon Telescope</a>. </p>
<p>This year, 2020, is set to be interesting too. Here’s what to look out for.</p>
<h2>Human spaceflight</h2>
<p>The year 2020 is set to be quite a big one for human spaceflight, especially for private companies. Both SpaceX’s <a href="https://www.spacex.com/dragon">Dragon 2</a> and Boeing’s <a href="https://www.boeing.com/space/starliner/">CST-100 Starliner</a> spacecraft are due to conduct their first crewed missions to the International Space Station (ISS). Both of these projects have been beset with delays, however in recent months both companies have completed a series of successful pre-flight tests.</p>
<p>These include multiple parachute drop tests and the ability of the capsules to rocket themselves free of their launcher in the event of some catastrophic failure. That said, an uncrewed orbital test flight for the Starliner in December <a href="https://www.newscientist.com/article/2228665-boeings-starliner-hiccup-could-delay-us-plans-for-crewed-spaceflight/">failed to reach the ISS as planned, due to a software problem</a>. SpaceX, on the other hand, has already completed an uncrewed orbital test flight of the Dragon 2, and currently expect to launch their first crewed ISS mission in the first quarter of 2020.</p>
<p>Not to be outdone, NASA is scheduled to launch <a href="https://www.nasa.gov/artemis-1">Artemis-1</a> in November. This will be the first attempted flight of its new <a href="https://www.nasa.gov/exploration/systems/sls/index.html">Space Launch System</a>, and the <a href="https://www.nasa.gov/exploration/systems/orion/index.html">Orion spacecraft</a> built jointly by NASA and the European Space Agency (ESA). </p>
<p>This flight, though uncrewed, will take a human-rated spacecraft well beyond the orbit of the moon, before returning to Earth several weeks later. This will be a vital milestone on the road to returning people to the moon. It will also, if successful, be the furthest distance from Earth that a spacecraft which is capable of carrying humans has ever flown. The Orion spacecraft is comprised of the crew capsule, built by Lockheed Martin, with sufficient space to accommodate up to six people, and a service module built in Europe, by Airbus. </p>
<p>China is also planning to launch the first section of a <a href="http://www.xinhuanet.com/english/2018-07/08/c_137310103.htm">new orbital space station</a> in 2020. When complete, China’s new space station is expected to have about the same dimensions as <a href="https://en.wikipedia.org/wiki/Mir">the former Russian <em>Mir</em></a>, including a number of orbital laboratory modules and enough space to comfortably accommodate three crew members for extended periods in orbit. </p>
<h2>Life on asteroids?</h2>
<p>The Japanese Space agency (JAXA) launched the <a href="http://www.hayabusa2.jaxa.jp/en/">Hayabusa 2</a> mission in 2014, which managed to collect a few samples from the asteroid 162173 Ryugu. This should be arriving back at Earth this year. The procedure for achieving this was incredible. As the gravity of the asteroid is tiny, <a href="https://www.wired.com/2013/10/a-closer-look-at-newtons-third-law/">no force</a> can hold a lander to the surface. The first sample of the surface involved firing a small pellet at the asteroid which caused regolith (soil) to be ejected from the surface. At the same time, the satellite approached the surface to collect the dust. </p>
<p>The mission also collected a sample from the inside of the asteroid – a region that hasn’t been exposed to the interstellar medium or the solar wind. This trickier task involved firing a 2.5kg object at high speed into the asteroid from a safe distance and then <a href="https://www.planetary.org/explore/space-topics/space-missions/hayabusa2.html">briefly landing to collect the material</a>.</p>
<p>The samples will allow a detailed look at asteroid composition, giving us some idea of where they might have come from and whether they are capable of carrying life. This is important as it could provide evidence for or against the <a href="https://astrobiology.nasa.gov/news/in-search-of-panspermia/">panspermia theory</a> – the idea that life exists throughout the universe, and is spread by asteroids and meteorites. </p>
<h2>Magnetic Mars</h2>
<p>The China National Space Administration’s (CNSA) plans for 2020 are extensive. One of their most ambitious projects is a <a href="https://spaceflightnow.com/2019/11/19/chinese-mars-rover-completes-landing-trial-ahead-of-2020-launch/">Mars rover</a> – despite having not sent an orbiter to Mars to date. </p>
<p>The rover is aimed for launch in the summer, and should arrive in 2021. It has ground penetrating radar to give a view of the internal structure of Mars. This type of radar is also planned for NASA’s <a href="https://mars.nasa.gov/mars2020/mission/instruments/rimfax/for-scientists/">Mars 2020 rover</a>, due to launch in July. A combination of subsurface information from multiple sites and rovers will boost our knowledge of how Mars was formed. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/307419/original/file-20191217-58311-xyhzxf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/307419/original/file-20191217-58311-xyhzxf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=336&fit=crop&dpr=1 600w, https://images.theconversation.com/files/307419/original/file-20191217-58311-xyhzxf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=336&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/307419/original/file-20191217-58311-xyhzxf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=336&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/307419/original/file-20191217-58311-xyhzxf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=422&fit=crop&dpr=1 754w, https://images.theconversation.com/files/307419/original/file-20191217-58311-xyhzxf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=422&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/307419/original/file-20191217-58311-xyhzxf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=422&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Mars 2020 rover.</span>
<span class="attribution"><span class="source">Rawpixel Ltd/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Mars 2020 is set to be the first in a series of missions which will eventually <a href="https://theconversation.com/life-on-mars-europe-commits-to-groundbreaking-mission-to-bring-back-rocks-to-earth-128328">return samples</a> of Martian soil to Earth. The rover will also be measuring the climate and magnetic conditions of Mars. The planet lacks a global protective magnetic field, which <a href="https://science.nasa.gov/science-news/science-at-nasa/2001/ast31jan_1">leaves its atmosphere vulnerable</a> to the effects of the solar wind.</p>
<p>ESA’s <a href="http://www.esa.int/Science_Exploration/Human_and_Robotic_Exploration/Exploration/ExoMars/All_instruments_onboard_Rosalind_Franklin_rover">Rosalind Franklin Rover</a>, Europe’s first ever attempted landing of a rover on the red planet, is also scheduled to launch in July. The rover will carry a suite of instruments designed to look for <a href="https://theconversation.com/our-rover-could-discover-life-on-mars-heres-what-it-would-take-to-prove-it-89625">signs of past and present life</a> on Mars. It will include a large drill which can burrow down to two metres to extract samples from well beneath the surface. Here, delicate organic structures are much better protected from the harsh radiation environment of the Martian surface. </p>
<h1>A close up look at our star</h1>
<p>In <a href="http://www.esa.int/Science_Exploration/Space_Science/Solar_Orbiter/Solar_Orbiter_launch_campaign_begins">February</a>, ESA will be launching a flagship solar mission: <a href="https://sci.esa.int/web/solar-orbiter">Solar Orbiter</a>. </p>
<p>This spacecraft will join NASA’s <a href="https://www.nasa.gov/content/goddard/parker-solar-probe">Parker Solar Probe</a> as a dedicated close range solar observatory. While not getting as close to the Sun as Parker, the Solar Orbiter will still spend much of its life well inside the orbit of Mercury, enduring temperatures of hundreds of degrees. </p>
<p>It will also, by way of numerous gravity assists from Venus, incline its orbit by up to 30° – enabling its array of instruments to peer at higher latitude regions of our star. It will conduct detailed observations of the sun’s magnetic field, and the outflow of plasma into the surrounding solar system called the solar wind.</p>
<p>These higher latitude observations should help scientists to more fully understand the magnetic <a href="https://www.nasa.gov/content/goddard/the-suns-magnetic-field-is-about-to-flip/">solar activity cycle</a>, which is still not fully understood. It is also hoped that by observing active regions in detail that extreme space weather event <a href="https://spacenews.com/researchers-bemoan-limited-space-weather-prediction-capabilities/">prediction can be improved</a>.</p><img src="https://counter.theconversation.com/content/128958/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>From alien life to human spaceflight, 2020 may deliver some exciting news.Gareth Dorrian, Post Doctoral Research Fellow in Space Science, University of BirminghamIan Whittaker, Lecturer in Physics, Nottingham Trent UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1264062019-11-07T12:16:38Z2019-11-07T12:16:38ZInequality is higher in some states like New York and Louisiana because of corporate welfare<figure><img src="https://images.theconversation.com/files/300474/original/file-20191106-12521-1n5z88i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">New York's offer of incentives to Amazon to open a headquarters in the state faced significant opposition.</span> <span class="attribution"><span class="source">AP Photo/Karen Matthews</span></span></figcaption></figure><p>Income inequality <a href="https://markets.businessinsider.com/news/stocks/income-inequality-reached-highest-level-ever-recorded-in-2018-2019-9-1028559996">made</a> <a href="https://www.washingtonpost.com/business/2019/09/26/income-inequality-america-highest-its-been-since-census-started-tracking-it-data-show/">big</a> <a href="https://www.axios.com/income-inequality-united-states-record-c78b1ff4-4b71-4a88-a890-db20ff8222f3.html">headlines</a> in 2019, after the <a href="https://www.census.gov/programs-surveys/acs/news/data-releases/2018/release.html#par_textimage_copy">U.S. Census Bureau</a> released data showing that the gap between the richest and poorest Americans is at its <a href="https://www.npr.org/2019/09/26/764654623/u-s-income-inequality-worsens-widening-to-a-new-gap">highest level in at least half a century</a>. </p>
<p>Less reported was the <a href="https://data.census.gov/cedsci/table?hidePreview=true&q=B19083%3A%20GINI%20INDEX%20OF%20INCOME%20INEQUALITY&table=B19083&tid=ACSDT1Y2018.B19083&lastDisplayedRow=155&g=0100000US.04000.001&tp=true">significant variation among the states</a>. New York and California had the highest inequality in 2018, while Utah and Alaska had the lowest. In addition, states as diverse as Alabama, Texas and New Hampshire experienced large increases from the prior year.</p>
<p>Why are some states more or less equal than others? </p>
<p>It usually comes down to policies. States with <a href="https://scholars.org/contribution/how-states-can-fight-growing-economic-inequality">more generous welfare programs</a> and <a href="http://csivc.csi.cuny.edu/Thomas.Volscho/files/volscho1.pdf">higher minimum wages</a> often have lower inequality, while those with <a href="https://doi.org/10.1177/1532440018760198">weaker unions</a> and <a href="https://www.nytimes.com/2019/07/20/opinion/sunday/inequality-taxes.html">lower taxes on the rich</a> have higher levels.</p>
<p>My <a href="https://jmjansa.files.wordpress.com/2019/11/chasing-disparity-sppq-final-version-w-cover.pdf">research suggests</a> there’s another, less-noticed reason behind the disparities: corporate welfare. </p>
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<h2>Incentivizing inequality</h2>
<p>States offer economic development incentives to businesses in order to encourage their investment and expansion in the state.</p>
<p>Famously, <a href="https://www.nytimes.com/2018/01/18/technology/amazon-finalists-headquarters.html">hundreds of states and cities offered</a> Amazon property and income tax credits, bonds, grants, reimbursements and infrastructure assistance in their efforts to convince the Internet giant to open a “second” headquarters in one of their cities. One of the finalists even offered to provide Amazon with <a href="https://www.cnbc.com/2018/11/14/atlanta-offered-amazon-the-chance-at-its-own-train-car-for-hq2.html">a private train car</a>. New York and Virginia won the sweepstakes with a combined <a href="https://www.nytimes.com/2018/11/13/business/economy/amazon-hq2-va-long-island-city-incentives.html">US$2 billion in incentives</a> – although Amazon dropped New York after it met political resistance.</p>
<p>But the amount of incentives states offer can vary significantly. For example, New Hampshire spent just $9.9 million on incentives, or 75 cents for every state resident, per year from 1999 to 2014, while Louisiana paid out an average of $1.2 billion a year, or $267 per capita.</p>
<p>I wanted to know if how much a state spends on corporate incentives affects its level of income inequality. So I analyzed incentive spending using <a href="https://www.goodjobsfirst.org">Good Jobs First</a> data and income inequality as measured by the <a href="https://data.census.gov/cedsci/table?hidePreview=true&q=B19083%3A%20GINI%20INDEX%20OF%20INCOME%20INEQUALITY&table=B19083&tid=ACSDT1Y2018.B19083&lastDisplayedRow=155&g=0100000US.04000.001&tp=true">Gini coefficient</a> from 1999 to 2014. </p>
<p>The Gini coefficient measures inequality by assigning a decimal number that can range from 0, which represents perfect equality, to 1, meaning perfect inequality. New York had a Gini of 0.513 in 2018, while Utah’s was 0.426. A change in the Gini coefficient of as little as 0.01 means the top 10% of households earned $1,500 to $2,400 more per year, depending on the state. </p>
<p>I found that when states spend more on incentives, their level of inequality tends to spike within a year or so. This holds true even when controlling for other economic and demographic factors and other public policies.</p>
<p>The data showed that, on average, for every $180 per citizen that a state spends on incentives, the Gini coefficient increases by 0.004. In other words, $600 to $1,000 more winds up in the pockets of people from wealthy households.</p>
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<p>In big-dollar terms, $180 per citizen is the equivalent of a state spending $200 million to $2 billion a year on incentives, depending on its population. To put it in context, states frequently give billion-dollar incentive packages to individual companies, such as <a href="https://www.scientificamerican.com/article/nevada-gives-1-3-billion-tax-break-to-electric-car-maker-tesla/">Tesla</a>, <a href="https://www.cnbc.com/id/100315374">Nike</a>, <a href="https://www.oregonlive.com/silicon-forest/2018/12/intels-oregon-tax-breaks-are-among-the-nations-biggest-new-report-finds.html">Intel</a>, <a href="https://news.bloombergtax.com/daily-tax-report-state/boeings-8-7-billion-washington-state-tax-break-under-scrutiny">Boeing</a> and <a href="https://www.goodjobsfirst.org/study-nissans-mississippi-subsidies-top-13-billion">Nissan</a>.</p>
<p>Incentives serve to redistribute funds to the wealthy and reduce resources for broadly redistributive policies over the long run.</p>
<h2>The whole story</h2>
<p>Incentives, of course, do not explain everything. New Hampshire, for example, has growing inequality but doesn’t spend much on incentives.</p>
<p>Yet, looking at incentives can help explain why states that are <a href="https://scholars.org/contribution/how-us-states-are-tackling-inequality-and-what-more-can-be-done">leaders in mitigating inequality</a> through higher minimum wages or welfare spending on the poor, such as New Mexico and New York, are still seeing growing inequality.</p>
<p>So the next time you hear an elected official cite big <a href="https://madison.com/wsj/news/local/govt-and-politics/ap-fact-check-scott-walker-embellishes-return-on-new-milwaukee/article_f00d4074-d403-5944-a00f-902705e8153f.html">returns on investment</a> as their reason for offering a company billions in incentives to open a factory or office, remember they aren’t telling the whole story. Those big returns come at a cost: higher inequality, which in turn can <a href="http://dx.doi.org/10.2139/ssrn.178708">hamper economic growth</a>.</p><img src="https://counter.theconversation.com/content/126406/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joshua Jansa does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The gap between rich and poor is at record levels in the U.S., yet it varies widely among the states. A political scientist explains why.Joshua Jansa, Assistant Professor of Political Science, Oklahoma State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1262682019-11-05T03:22:36Z2019-11-05T03:22:36ZShould you worry about Boeing 737s? Only if you run an airline<p>The <a href="https://www.abc.net.au/news/2019-11-01/qantas-says-three-boeing-737-found-with-cracks/11661320">cracks found in three Qantas-owned Boeing 737s last week</a> led to calls that it should ground its 33 aircraft with a
similar service record.</p>
<p>Although the three planes have been grounded and will require complex repairs, the cracks – in a component called the <a href="https://www.abc.net.au/news/2019-10-31/pickle-fork-graphic/11660462">pickle fork</a>, which helps strengthen the join between the aircraft’s body and wing – do not threaten the plane’s airworthiness.</p>
<p>This makes it more of a threat to consumers’ confidence in Boeing and the airlines that fly its planes, rather than a direct risk to passenger safety, especially after the tragedies over a <a href="https://theconversation.com/flights-suspended-and-vital-questions-remain-after-second-boeing-737-max-8-crash-within-five-months-113272">poorly thought out automatic control system</a> installed on the Boeing 737 MAX 8. </p>
<hr>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/flights-suspended-and-vital-questions-remain-after-second-boeing-737-max-8-crash-within-five-months-113272">Flights suspended and vital questions remain after second Boeing 737 MAX 8 crash within five months</a>
</strong>
</em>
</p>
<hr>
<p>More broadly, however, the pickle fork defects highlight a problem that aviation engineers have been contending with for decades: component fatigue.</p>
<p>The world’s first commercial jet airliner, the <a href="https://www.bbc.com/future/article/20170404-the-british-airliner-that-changed-the-world">de Havilland Comet</a>, launched in 1952 but suffered two near-identical crashes in 1953 in which the planes broke up shortly after takeoff, killing all on board. A <a href="https://www.bbc.com/future/article/20140414-crashes-that-changed-plane-design">third fatal breakup in 1954</a> triggered an investigation and threatened to end the era of mass air travel almost as soon as it had begun. </p>
<p>The crashes were all ultimately blamed on “fatigue failure”, caused by a concentration of stress in one of the passenger windows which resulted in a rapidly growing crack.</p>
<p>Almost any metal structure can potentially suffer fatigue failure, but the problem is that it is very hard to predict before it happens. </p>
<p>It begins at an “initiation area”, often at a random point in the component, from which a crack gradually grows each time the part is loaded. In the case of aircraft, the initiation area may be random, but from there the crack generally grows at a predictable rate each flight cycle. </p>
<p>One solution instituted after the Comet investigation was to subject all aircraft to regular inspections that can detect cracks early, and monitor their growth. When the damage becomes critical – that is, if a component shows an increased risk of failure before the next inspection – that part is repaired or replaced. </p>
<p>The current damage to the Qantas aircraft is a long way short of critical, as highlighted by the fact that Qantas has pointed out the next routine inspection was not due for <a href="https://www.news.com.au/travel/travel-updates/incidents/qantas-southwest-airlines-checking-boeing-737-planes-for-structural-cracks/news-story/565826954fd9151b51896ae905642421">at least seven months</a> – or about 1,000 flights. This is normal practice under the official <a href="https://www.faa.gov/regulations_policies/airworthiness_directives/search/?q=737">airworthiness directives</a> for Boeing 737s.</p>
<p>Obviously, given the public relations considerations also involved, Qantas has nevertheless taken the three planes out of service immediately.</p>
<h2>Why aren’t the pickle forks a threat?</h2>
<p>It might sound strange to say the cracks in the pickle forks aren’t a threat to the aircraft’s safety. Does that mean aircraft can just fly around with cracks in them?</p>
<p>Well, yes. Virtually all aircraft have cracks, and a monitored crack is much safer than a part that fails without warning. Bear in mind that all aircraft safety is reinforced by multiple layers of protection, and in the case of the pickle fork there are at least two such layers. </p>
<p>First, the pickle fork is secured with multiple bolts, so if one bolt should fail as a result of cracking, depending on the location there will be another five or six bolts still holding it in place.</p>
<p>Second, should the unthinkable occur and a pickle fork totally fail, there is still another “structural load path” that would maintain the strength of connection between the wing and body, so this would not affect the operation of the aircraft. </p>
<p>On this basis, it seems strange that the Australian Licensed Aircraft Engineers Association has <a href="https://www.abc.net.au/news/2019-10-31/cracks-discovered-on-second-qantas-boeing-737/11657146">called for the entire fleet to be grounded</a>, especially given that this union has no official role in the grounding of aircraft. The Civil Aviation Safety Authority is the only agency in Australia with a legal obligation to make such a ruling, and has <a href="https://edition.cnn.com/2019/10/31/business/qantas-australia-union-737-scli-intl/index.html">assured passengers it is unnecessary</a>. </p>
<p>Aircraft maintenance procedures are drawn up by the manufacturer’s design engineering team. Before the aircraft obtains a permit to fly, the designer has to demonstrate to a regulator – in Boeing’s case, the <a href="https://www.faa.gov/">US Federal Aviation Administration</a> – that is has fully accounted for all airworthiness issues. This has to be proved by both engineering calculations and physical models. The result is an extensive maintenance manual for each aircraft model. </p>
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Read more:
<a href="https://theconversation.com/all-boeing-737-max-flights-grounded-and-travellers-could-feel-it-in-the-hip-pocket-113456">All Boeing 737 MAX flights grounded – and travellers could feel it in the hip pocket</a>
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<p>Before each flight the aircraft must be demonstrated to conform to the maintenance manual, which is the role of the maintenance engineers who work directly for airlines. While the maintenance engineers’ union is right to bring any safety concerns or maintenance issues to the attention of the airline and possibly the regulator, only the regulator is in a position to rule on whether a fleet, or part of it, should be grounded.</p>
<p>Boeing and Qantas, and the many other airlines that fly 737s, are right to be concerned by this latest development because of the potential for it to harm them commercially. But while the cracked pickle forks will be giving executives headaches, passengers should rest easy in their seats.</p><img src="https://counter.theconversation.com/content/126268/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Page has previously supervised a part-time PhD student who worked for Qantas. The student graduated and left Qantas three years ago.</span></em></p>Qantas has faced calls to ground its entire fleet of Boeing 737s after cracks were found in three aircraft. But the incident is a threat to airlines’ reputations rather than a real risk to passengers.John Page, Senior Lecturer with the School of Mechanical and Manufacturing Engineering, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1222452019-08-27T11:58:56Z2019-08-27T11:58:56ZCompanies don’t need permission from the Business Roundtable to be better corporate citizens<p>A business group that represents the <a href="https://www.businessroundtable.org/about-us/members">CEOs of America’s most powerful companies</a> recently
issued a statement that <a href="https://www.forbes.com/sites/nelldebevoise/2019/08/23/3-steps-to-activate-the-business-roundtable-statement/#24cb55345462">may sound like a roar</a>. </p>
<p>But it’s actually more of a whimper. </p>
<p>For decades, the Business Roundtable has maintained that the primary purpose of a corporation is to provide returns for its shareholders. The Roundtable – which <a href="https://www.businessroundtable.org/about-us">represents 193 companies with over US$7 trillion in revenue</a> and almost 15 million employees – <a href="https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans">now says</a> that corporations “share a fundamental commitment to all of our stakeholders,” including employees, communities and suppliers. </p>
<p>This is a big symbolic win, but it is unlikely to change how companies – even those that signed, such as Amazon, Boeing and Pfizer – actually behave. Ultimately, only shareholders have an actual seat at the table and can vote on who runs the company. </p>
<p>As an <a href="https://michiganross.umich.edu/faculty-research/faculty/erik-gordon">adviser to corporate managers</a>, I have spent countless hours listening to executives discussing what shareholders want. I haven’t heard more than 20 minutes of talk about what employees, communities or suppliers need or deserve. </p>
<p>A statement from a group of CEOs, no matter how powerful, won’t fundamentally change how they operate. But there’s one thing that will. </p>
<h2>A symbolic change of tune</h2>
<p>The idea of shareholder primacy first emerged in a <a href="http://www.doi.org/10.2307/1331341">1932 Harvard Law Review article</a> by Adolphe Berle, a Columbia University law professor who served on President Franklin Roosevelt’s “Brain Trust.” Berle said “all powers granted to a corporation or to the management of a corporation … [are] at all times exercisable only for the ratable benefit of the shareholders.” </p>
<p>Until now, that was essentially the position of the Business Roundtable, which was founded in 1972. In a 1997 “<a href="https://cdn.theconversation.com/static_files/files/693/Statement_on_Corporate_Governance_Business-Roundtable-1997%281%29.pdf?1566830902">Statement on Corporate Governance</a>,” for example, the Roundtable said “the principal objective of a business enterprise is to generate economic returns to its owners.” </p>
<p>But on Aug. 19, the Roundtable changed its tune. The 182 CEOs who signed the statement said they are committed to not only generating long-term value for shareholders but also:</p>
<ul>
<li>delivering value to their customers</li>
<li>investing in their employees</li>
<li>dealing fairly and ethically with their suppliers and</li>
<li>supporting their communities and embracing sustainable practices.</li>
</ul>
<p>The new commitments represent a symbolic victory for <a href="https://sloanreview.mit.edu/article/the-shareholders-vs-stakeholders-debate/">those who want</a> companies to consider the interests of not just its shareholders but of other groups that are affected by corporate behavior. The statement signals this view is now Corporate America’s as well.</p>
<p>But in practice, the statement doesn’t really amount to much. </p>
<h2>The purpose of a corporation</h2>
<p>First of all, the Roundtable doesn’t actually have the power to define the purposes of corporations or the duties of managers who run them. Those duties are a matter of corporate law. </p>
<p><a href="https://delcode.delaware.gov/title8/c001/sc04/">Corporate law states</a> that the “business and affairs of every corporation … shall be managed by or under the direction of a board of directors.” And these directors in turn <a href="https://www.courtlistener.com/opinion/2308640/cede-co-v-technicolor-inc/">owe fiduciary duties</a> of care and loyalty to the corporation and its <a href="http://www.potteranderson.com/delawarecase-Frederick-Hsu-Living-Trust-v-ODN-Holding-Corp-April-14-2017.html">stockholders</a> – no one else. </p>
<p>CEOs cannot alter these legal duties by signing a statement. The Roundtable is neither a state legislature nor a supreme court, so its statement doesn’t change the law.</p>
<h2>No law forbids doing good</h2>
<p>More to the point, the law doesn’t need changing in order for companies to be able to do “good.” That is, even though the law creates a specific duty to shareholders, it doesn’t prevent companies from considering the interests of other groups. </p>
<p>No law requires companies to maximize shareholder returns by paying employees the minimum necessary to keep them on the job. No law requires managers to treat suppliers unfairly, disrespect the communities in which they work or to shun sustainable practices – if doing so will yield higher returns for shareholders.</p>
<p>The law is even more expansive than the Roundtable statement. No law forbids corporations from taking money that could have gone to shareholders and donating it to hospitals or museums. </p>
<p>In fact, the <a href="https://www.americanbar.org/content/dam/aba/administrative/young_lawyers/publications/101/fiduciary_duties_of_directors_coporate_takeover.authcheckdam.pdf">only time companies have to exclusively focus of maximizing shareholder value</a> is when selling the company. Otherwise, they are free to do many things that benefit people who are not shareholders. </p>
<p>For decades the Roundtable <a href="https://www.businessroundtable.org/archive/resources/sustainability/2017">has touted</a> the efforts of its members in supporting the environment, their workers and their communities. It didn’t take a statement to incite those efforts. It took changes of heart – or, perhaps more often, public pressure.</p>
<p>If you think some or most companies are behaving badly, the Business Roundtable’s statement shouldn’t lift your hopes that their behavior will get any better. Shareholders will remain primary. </p>
<p>But at least these companies recognize that <a href="https://sustainablebrands.com/read/marketing-and-comms/new-report-reveals-86-of-us-consumers-expect-companies-to-act-on-social-environmental-issues">people expect</a> a lot more from them. That’s what <a href="https://theconversation.com/investors-consumers-and-workers-are-changing-capitalism-for-the-better-by-demanding-companies-behave-more-responsibly-119281">is forcing change</a>.</p>
<p>[ <em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=youresmart">You can read us daily by subscribing to our newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/122245/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Erik Gordon has in the past done consulting work for various companies, including those in the Business Roundtable but not for about seven years. More recently he has requested and received data for use in his research from some of the group’s member companies.</span></em></p>A group of America’s most powerful CEOs said companies should no longer merely focus on maximizing shareholder wealth. A business professor explains why it’s not a big deal.Erik Gordon, Professor of Business, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1181622019-06-24T11:59:15Z2019-06-24T11:59:15ZCorporate boards are supposed to oversee companies but often turn a blind eye<p>A lot of giant companies are getting into big trouble these days.</p>
<p>When <a href="https://theconversation.com/boeing-737-max-the-faa-wanted-a-safe-plane-but-didnt-want-to-hurt-americas-biggest-exporter-either-113892">Boeing 737 Max aircraft crashed in Indonesia and Ethiopia</a>, killing a total of 346 people in October 2018 and March 2019, the disasters raised serious questions about the safety of the aviation leader’s anti-stall system.</p>
<p>When some 5,000 <a href="https://theconversation.com/how-wells-fargo-encouraged-employees-to-commit-fraud-66615">Wells Fargo</a> employees fraudulently opened over 1 million bank and credit card accounts, it had to pay <a href="https://www.npr.org/2019/03/12/702501160/ceo-says-wells-fargo-has-transformed-after-scandals-lawmakers-are-skeptical">billions in penalties and fines</a>.</p>
<p>Then there’s <a href="https://theconversation.com/elon-musk-was-right-to-drop-his-bungled-plan-to-take-tesla-private-102225">Tesla founder Elon Musk</a>, who tweeted about having “funding secured” to take the publicly traded electric automaker and solar energy company private in August 2018. The <a href="https://www.sec.gov/news/press-release/2018-226">Securities and Exchange Commission</a> a month later fined Musk and Tesla US$20 million each for making misleading statements that could manipulate the stock market.</p>
<p>In each case, I wondered: Why didn’t anyone on their boards intervene before it was too late?</p>
<p>I’ve researched <a href="https://scholar.google.com/citations?user=loPMxzAAAAAJ&hl=en">corporate boards</a> for more than 15 years. Seeing these problems reminded me that boards of directors often fail to act in time to protect brands, prevent harm to the public and safeguard investors. What’s more, there are <a href="https://doi.org/10.1016/j.jfineco.2013.10.013">few if any consequences</a> for their inaction, especially for independent directors who don’t hold executive positions in the firms.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/280768/original/file-20190621-61729-22imly.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/280768/original/file-20190621-61729-22imly.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/280768/original/file-20190621-61729-22imly.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/280768/original/file-20190621-61729-22imly.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/280768/original/file-20190621-61729-22imly.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/280768/original/file-20190621-61729-22imly.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/280768/original/file-20190621-61729-22imly.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/280768/original/file-20190621-61729-22imly.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Tesla CEO Elon Musk, laughing on his way to an April 2019 court appearance.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Tesla-SEC-Hearing/e1737cbaf698401a90f7844e53d14108/1/0">AP Photo/Richard Drew</a></span>
</figcaption>
</figure>
<h2>What boards do</h2>
<p>Boeing, Wells Fargo and Tesla are all <a href="https://www.wallstreetmojo.com/publicly-traded-companies/">publicly traded</a> corporations – meaning that they have sold shares to the public. That means they are legally bound to follow rules established by the <a href="https://www.nyse.com/regulation">New York Stock Exchange</a> or <a href="http://nasdaq.cchwallstreet.com/NASDAQTools/PlatformViewer.asp?selectednode=chp_1_1_1_1&manual=%2Fnasdaq%2Fmain%2Fnasdaq-equityrules%2F">NASDAQ</a>.</p>
<p>In addition, they must have a board of directors whose members must follow their own bylaws for board structure, operations and ethics as they exercise their <a href="https://doi.org/10.1111/j.1467-8683.2004.00387.x">managerial and strategic responsibilities</a>. </p>
<p>Corporate boards hire and fire chief executive officers and monitor their performance and develop succession plans in case the CEO falters, quits or dies. Boards also work closely with the company’s leaders on decisions that promote the company’s long-term success, such as budgeting and personnel management.</p>
<p>Boards are also supposed to set the appropriate tone and <a href="https://theconversation.com/fixing-a-toxic-culture-like-ubers-requires-more-than-just-a-new-ceo-79102">cultivate a corporate culture</a>.</p>
<p>The average U.S. corporate board has <a href="https://search.proquest.com/docview/894768961?pq-origsite=gscholar">nine members</a>, but board sizes range from three to more than 30. Directors are, <a href="https://doi.org/10.1093/acprof:oso/9780199202607.001.0001">at least technically</a>, elected by shareholders and have what’s known as a <a href="https://www.investopedia.com/ask/answers/042915/what-are-some-examples-fiduciary-duty.asp">fiduciary duty</a> to act on behalf of anyone who owns the company’s stock.</p>
<p>They are supposed to ensure that operations run smoothly, profitably and without any wrongdoing. Directors are supposed to be selected because they can help the business, but it’s often a question of <a href="https://doi.org/10.1177%2F0149206311428671">who they know</a>. In practice, directors were traditionally very <a href="https://doi.org/10.1086/688650">closely connected to one another</a>, often serving on one another’s boards.</p>
<p>Most board members are paid. At public companies, their annual compensation <a href="https://corpgov.law.harvard.edu/2017/03/14/board-of-directors-compensation-past-present-and-future/">typically amounts to around $260,000</a> for a part-time job. <a href="https://s2.q4cdn.com/661678649/files/doc_financials/annual/2019/Boeing-2019-Notice-of-Annual-Meeting-and-Proxy_Statement.pdf">Boeing’s directors</a> earned between $315,000 and $371,000 in 2018.</p>
<p>Because their obligations can occupy only a few hours at a stretch, the time commitment is hard to measure. Some common estimates range from <a href="https://www.freep.com/story/money/markets/2016/07/19/job-pays-263500-few-days-work/87262478/">eight</a> to <a href="https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/toward-a-value-creating-board">33 days of service a year</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/280772/original/file-20190621-61737-cc7w7c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/280772/original/file-20190621-61737-cc7w7c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/280772/original/file-20190621-61737-cc7w7c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=475&fit=crop&dpr=1 600w, https://images.theconversation.com/files/280772/original/file-20190621-61737-cc7w7c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=475&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/280772/original/file-20190621-61737-cc7w7c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=475&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/280772/original/file-20190621-61737-cc7w7c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=597&fit=crop&dpr=1 754w, https://images.theconversation.com/files/280772/original/file-20190621-61737-cc7w7c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=597&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/280772/original/file-20190621-61737-cc7w7c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=597&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Clearing away the wreckage after a Boeing 737 Max aircraft crashed near Addis Ababa.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/APTOPIX-Ethiopia-Plane-Crash/308ee546e19a4aaba92bbd52674bb328/3/0">AP Photo/Mulugeta Ayene</a></span>
</figcaption>
</figure>
<h2>‘No tools’</h2>
<p>Many of <a href="https://www.boeing.com/company/general-info/corporate-governance.page">Boeing’s board members</a> had extensive experience in aviation, related industries and government. Former Boeing board members who asked for anonymity have told <a href="https://www.washingtonpost.com/business/2019/05/06/safety-was-just-given-inside-boeings-boardroom-amid-max-crisis/?utm_term=.00b7355ad9d2">The Washington Post</a> that the board considered “safety was just a given” and that “the board doesn’t have any tools to oversee” safety.</p>
<p>But in contrast to other corporations supplying products and services that depend on safety, Boeing’s corporate governance guidelines do not even mention that word. As Boeing’s success truly depends on its safety record, I believe its board should have been held more accountable for safety and actively appointed safety experts to the board.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/280771/original/file-20190621-61767-13txwzq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/280771/original/file-20190621-61767-13txwzq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/280771/original/file-20190621-61767-13txwzq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/280771/original/file-20190621-61767-13txwzq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/280771/original/file-20190621-61767-13txwzq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/280771/original/file-20190621-61767-13txwzq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/280771/original/file-20190621-61767-13txwzq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/280771/original/file-20190621-61767-13txwzq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Friends of one of the passengers killed when a Boeing 737 MAX crashed in Africa, holding up a montage of all the victims on Capitol Hill.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Congress-Boeing-Plane/7b4e5196c93746ac8df4342a53658038/5/0">AP Photo/Andrew Harnik</a></span>
</figcaption>
</figure>
<h2>Consequences</h2>
<p>The <a href="https://www.americanbanker.com/news/fed-drops-hammer-on-wells-fargo-as-four-board-members-fired">Federal Reserve</a> cracked down on Wells Fargo to punish it for a lack of oversight following the fake accounts scandal. The Fed demanded that the bank replace four board members, three of whom had been on board for more than 10 years. </p>
<p><a href="https://www.vox.com/business-and-finance/2018/9/22/17890400/elon-musk-podcast-tesla-investigation-board">Tesla’s board expressed confidence</a> in Musk after his tweet and other bizarre behavior, such as indicating he was drinking <a href="https://www.vox.com/business-and-finance/2018/9/8/17834910/elon-musk-joe-rogan-podcast-tesla-stock">whiskey and getting high</a> during a podcast and telling investors and analysts that their “boring, bonehead questions are not cool” during an <a href="https://www.vanityfair.com/news/2018/05/elon-musk-bizarre-tesla-earnings-call-just-cost-him-millions">conference call</a>.</p>
<p>When the SEC fined Musk and Tesla, it also ordered him to stop chairing the board for at least three years. <a href="https://www.cnbc.com/2018/11/09/how-the-new-tesla-chairman-robyn-denholm-thinks-about-leadership.html">Robyn Ault</a>, an independent member of the board of directors with significant experience in the auto and technology industries, replaced Musk as chair. But Tesla also added two new directors who are <a href="https://www.wsj.com/articles/tesla-to-larry-ellison-and-kathleen-wilson-thompson-as-board-directors-11546003507">Musk’s close friends</a>.</p>
<p>That hardly offers assurance that the board is going to become independent enough to sniff out problems and demand action at a time when the company faces a rising number of <a href="https://www.cnbc.com/2019/05/22/consumer-reports-says-teslas-autopilot-raises-serious-safety-concerns.html">safety concerns</a> for drivers and <a href="https://www.revealnews.org/blog/a-users-guide-to-teslas-worker-safety-problems/">workers alike</a>.</p>
<p>The <a href="https://www.upi.com/Top_News/US/2019/03/27/FAA-plans-more-oversight-after-Boeing-crashes/1961553685790/">Federal Aviation Administration</a> plans to step up its oversight of Boeing, starting in July 2019. It remains unclear what steps other government agencies besides the FAA will take to discipline the aircraft manufacturer.</p>
<h2>Shirking responsibilities</h2>
<p>Perhaps the clearest case of the disasters that await when board members shirk their responsibilities is <a href="https://www.investopedia.com/updates/enron-scandal-summary/">Enron, the energy company</a> that collapsed in 2001. Enron’s board voted twice to waive the corporation’s ethical code to allow then-Chief Financial Officer <a href="https://www.wsj.com/articles/SB1011221339276275320">Andrew S. Fastow</a> to conduct complex transactions that contributed to the <a href="https://www.insurancejournal.com/news/national/2017/02/15/441619.htm">company’s demise</a>.</p>
<p>Even though Enron’s directors failed at their missions most suffered no serious consequences. The only Enron board member who served time behind bars was also one of its executives: CEO <a href="https://www.cnbc.com/2019/03/23/former-enron-ceo-jeffrey-skilling-wants-back-into-the-energy-business.html">Jeffrey Skilling</a>, who completed his prison sentence in 2019. Another, Enron founder <a href="http://www.nbcnews.com/id/13715925/ns/business-corporate_scandals/t/enron-founder-ken-lay-dies-heart-disease/#.XQvb-IhKhPY">Ken Lay</a>, died of a heart attack in 2006 while awaiting what might have been a life sentence.</p>
<p>The only punishment for the rest of Enron’s board was being largely <a href="https://www.nytimes.com/2006/01/29/business/businessspecial3/10-enron-players-where-they-landed-after-the-fall.html">banished from corporate America</a>. As of 2019, based on what I found by searching board data, only one of Enron’s 16 directors still sits on a corporate board. <a href="https://www.bloomberg.com/research/stocks/private/person.asp?personId=510590&privcapId=19487">Herbert S. Winokur Jr.</a> is on the board of Nano Terra, a government and corporate contractor that engineers nanomaterials.</p>
<p>I know of only one case where corporate board members have served time and it involved an <a href="https://grapevine.is/news/2018/02/07/36-bankers-96-years-in-jail/">Icelandic bank</a> in the wake of that country’s banking crisis. To me, it seems clear that greater accountability is warranted in the United States and everywhere else.</p><img src="https://counter.theconversation.com/content/118162/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Siri Terjesen does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The consequences for board members of corporations found to violate the law and ethical norms are rare and usually minor.Siri Terjesen, Dean's Faculty Fellow in Entrepreneurship, American University Kogod School of BusinessLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1183052019-06-06T12:45:13Z2019-06-06T12:45:13ZNo, Americans shouldn’t fear traveling abroad<figure><img src="https://images.theconversation.com/files/278209/original/file-20190605-40731-1v2e2x4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Just another American abroad.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Japan-Daily-Life/0444f044b6ab4ba6943d5673b59df7a2/12/0">AP Photo/Eugene Hoshiko</a></span></figcaption></figure><p>As summer travel season begins, friends and relatives have asked me if it’s safe to travel outside the U.S.</p>
<p>I understand their fears. The news is filled with scary stories, like a tourist bus being <a href="https://www.bbc.com/news/world-middle-east-48328793">bombed</a> near Egypt’s pyramids, people being knifed at a <a href="https://www.nbcnews.com/news/world/least-2-dead-stabbing-attack-japan-n1010606">bus stop in Japan</a> and continuing coverage of the two <a href="https://www.nytimes.com/interactive/2019/business/boeing-737-crashes.html">Boeing 737</a> Max air crashes, both of which happened overseas.</p>
<p>As a <a href="http://businessmacroeconomics.com/about-the-author/">macroeconomist</a> I travel frequently to understand global trends. I crunched the numbers on U.S. fatalities abroad, and what I found might surprise you.</p>
<h2>Americans abroad</h2>
<p>In 2018, over <a href="https://travel.trade.gov/research/monthly/departures/index.html">56 million U.S. citizens got on board</a> a plane for a trip to an international destination.</p>
<p>The average person leaving the U.S. by air spends <a href="https://travel.trade.gov/outreachpages/download_data_table/2016-Outbound-Profile.pdf">slightly more than 17 nights</a> outside the U.S., based on 2016 data. Multiplying trips by time means almost 3 million citizens are taking a trip abroad on any given day.</p>
<p><iframe id="kSFLp" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/kSFLp/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Yet these figures underestimate how many Americans actually travel abroad, since some people leave the U.S. on boat trips or even drive to Canada or Mexico. It also doesn’t include the <a href="https://www.migrationpolicy.org/article/counting-uncountable-overseas-americans">number of U.S. citizens who permanently live</a> <a href="https://www.irs.gov/pub/irs-soi/14insprbulforearnincome.pdf">abroad</a>.</p>
<p>All this tourism is a vital part of many countries’ economies. U.S. travelers spent <a href="https://www.ustravel.org/system/files/media_root/document/Research_Fact-Sheet_US-Travel-Answer-Sheet.pdf">US$256 billion</a> in 2018. If Americans or other international travelers stop hopping on a plane because they believe traveling to a specific country or region has become unsafe, this could have <a href="https://www.aljazeera.com/indepth/features/2017/04/lonely-pyramids-giza-egyptian-tourism-falling-170418050241421.html">devastating effects on economies</a> that depend on foreign tourism, such as <a href="http://www.egypttoday.com/Article/3/67255/Travel-tourism-contribute-to-Egypt%E2%80%99s-GDP-by-11-9">Egypt</a> and <a href="https://www.cnn.com/2019/04/22/business/sri-lanka-economy-tourism/index.html">Sri Lanka</a>.</p>
<h2>Safety first</h2>
<p>So is there reason to worry?</p>
<p>In October 2002, the State Department started tracking the number of <a href="https://travel.state.gov/content/travel/en/international-travel/while-abroad/death-abroad1/death-statistics.html">U.S. citizens who die</a> in a foreign country from non-natural causes, which excludes deaths from illness and things like heart attacks. The data include the date of death, where the death occurred and the cause.</p>
<p>I found the numbers shockingly low. </p>
<p>In 2018, just 724 Americans died from unnatural causes while abroad, the fewest since 2006 and down from a peak of 1,065 in 2010. I was expecting much larger numbers, more like the over 15,000 <a href="https://ucr.fbi.gov/crime-in-the-u.s/2017/crime-in-the-u.s.-2017/topic-pages/tables/expanded-homicide-data-table-1.xls">murders that happen in the U.S.</a> every year.</p>
<p>And this doesn’t actually show the full extent of the decline because the number of U.S. overseas travelers has surged in the same period. From <a href="https://travel.trade.gov/view/m-2010-O-001/index.html">2010</a> to 2018, the <a href="https://travel.trade.gov/view/m-2018-O-001/index.html">number of citizens flying</a> to international destinations increased by 50%. </p>
<p>More travelers combined with fewer deaths mean it is actually getting safer to travel abroad.</p>
<p><iframe id="AA6fi" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/AA6fi/5/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>How Americans die overseas</h2>
<p>The next question is what are the leading causes of death.</p>
<p>It’s certainly not terrorism. In 2018, just six Americans were killed in a terrorist incident, the lowest number in over a decade. And just 381 died this way from October 2002 through last year.</p>
<p>And while dying in an airplane accident has been a <a href="https://www.npr.org/2019/04/17/711820160/after-boeing-crashes-more-people-want-help-taming-fear-of-flying">growing fear</a> since the Boeing 737 Max crashes in Ethiopia and Indonesia, there were only 10 such deaths in 2018, or 383 since 2002. </p>
<p>The top cause of death is actually <a href="http://time.com/4250811/travel-safety/">motor vehicle accidents</a>, which <a href="https://www.weforum.org/agenda/2015/10/the-10-best-and-worst-countries-for-drivers/">claimed the lives</a> of 167 American travelers last year, or almost 4,000 since 2002. That’s almost one-third of all deaths in the period. </p>
<p>One reason for the relatively high number of deaths from car accidents may be that some countries don’t have the same safety standards that are common in the U.S., and so <a href="https://www.weforum.org/agenda/2015/10/the-10-best-and-worst-countries-for-drivers/">driving abroad can be</a> a very different experience, with confusing rules or more aggressive drivers.</p>
<p>Once, my wife and I went on a low-budget African safari in Botswana. Though lions prowled restlessly outside our tent at night, the real danger turned out to be the high-speed drives in an open jeep while our guide dodged giant potholes and meandering animals, all while talking on his phone.</p>
<p>After traffic accidents, the second-most-common cause of death was homicides. But to put the 132 Americans who died this way in 2018 into perspective, <a href="https://www.nbcchicago.com/news/local/2018-chicago-violence-shooting-police-503764291.html">Chicago alone had 561 homicides</a> that year.</p>
<p>Other leading causes of death are drownings, suicides and non-vehicular accidents. </p>
<h2>Like getting hit by lightning</h2>
<p>In other words, dying abroad from unnatural causes, especially terrorism, is unlikely. Last year, three times as many people were <a href="https://www.weather.gov/safety/lightning-fatalities18">killed by lightning</a> in the U.S. as died overseas in a terrorist attack.</p>
<p>The media extensively cover relatively rare terrorist attacks and <a href="https://www.doi.org/10.1177/1088767900004004004">high-profile murders</a>. It often gives little coverage to <a href="https://www.doi.org/10.2105/AJPH.88.10.1510">routinely occurring deaths</a>. <a href="https://www.forbes.com/sites/johnnyjet/2018/01/10/9-tips-to-help-fight-travel-anxiety/#5bfabe996ef9">While many people are worried</a> about traveling and especially about being killed abroad, it doesn’t happen often.</p>
<p>That doesn’t mean traveling is problem-free. I have been pickpocketed, threatened and had a gun pointed at me in my travels. The State Department’s <a href="https://travel.state.gov/content/travel/en/traveladvisories/traveladvisories.html/">travel advisories</a> show what to watch out for and any precautions to take for every country in the world.</p>
<p>So although the world is a fascinating place to visit, just remember to read the travel advisory – and buckle your seatbelt.</p>
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<p class="fine-print"><em><span>Jay L. Zagorsky does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If headlines about bombings and airplane crashes are making you rethink your international travel plans this summer, a look at how many Americans actually die abroad should set your mind at ease.Jay L. Zagorsky, Senior lecturer, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.