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Tags: boeing | branding | dennis muilenburg

Boeing's CEO Is Stalling His Company's Brand

Boeing's CEO Is Stalling His Company's Brand
Boeing's Chairman, President and CEO Dennis Muilenburg speaks during a news conference after Boeing's Annual Meeting of Shareholders at the Field Museum on April 29, 2019 in Chicago, Illinois. Boeing announced earnings fell 21 percent in the first quarter after multiple crashes of the company's bestselling plane the 737 Max. (Joshua Lott-Pool/Getty Images)

By    |   Friday, 28 June 2019 11:10 AM

Responding to the ongoing safety crisis over the grounded Boeing 737 Max 8 and Max 9 planes, at the Aspen Ideas Festival this past week, CEO Dennis Muilenburg inartfully said, “I don’t see a need to change the name of the airplane. To me, this is not a marketing or branding exercise. I know that’s important — certainly it impacts the public view — but the most important thing is safety.”

With those unfortunate words, Muilenburg proved that too many CEOs know or care little about branding.

The distrust of Boeing, a $101-billion behemoth, began when two of its 737 Max airplanes crashed and killed their passengers, in Indonesia (October 2018) and Ethiopia (March 2019), respectively. Panic spread so quickly after the second crash that President Trump, echoing other countries, ordered the complete grounding of these jets.

This Boeing debacle has so damaged the finances of worldwide airlines, which had ordered or were already flying the 737 Max planes, that Kevin McAllister, head of Boeing’s commercial-aircraft division, apologized at the recent Paris Air Show for the crashes and his company’s failures.

The culprit of the two crashes was a malfunctioning MCAS (Maneuvering Characteristics Augmentation System), Boeing’s anti-stall system. Designers moved the big engines on the new 737 Max farther forward and higher on the wings. This makes the plane more likely to stall. Hence, the need for MCAS.

Amazingly, many 737 Max pilots either didn’t know their planes were equipped with MCAS or had received inadequate or no training on it from Boeing.

Moreover, Boeing’s engineers, one year before the two crashes caused 346 deaths, were aware of and concealed the flaws of MCAS. Safety, apparently, has not been “the most important thing” throughout Boeing’s ranks.

Worse, because of its cozy relationship with Boeing, the FAA (Federal Aviation Administration) certified the 737 Max planes with perfunctory scrutiny.

It’s reasonable to conclude that, had President Trump not joined other countries in grounding the 737 Max, hundreds more people could have died. As it is, Boeing agreed to settle lawsuits from families of the crash victims.

Back to Muilenburg’s dismissive comment about branding and renaming the 737 Max. A name — product or company — is not a brand. A brand is intangible. It’s the emotional connection customers have with a given supplier. Example: When Apple’s customers, in years past, camped out overnight to get its newest product the next day. That is strong emotional connection to a supplier.

NOTE: One exception to the brand definition above: When a name becomes so unredeemably toxic, so hated and reviled, it turns into a permanent liability. Neither Boeing nor 737 Max has plummeted to that nadir at this point. But, if this saga lingers too long, that could change.

By opining that safety, not marketing or branding, is most important to him, Muilenburg unwittingly put Boeing’s brand into position for a perilous stall — because safety and branding are interdependent.

Before boarding it, passengers implicitly trust that their airplane is safe. This trust is based on presumed and demonstrated safety. Trust is, therefore, a huge part of every supplier’s brand.

Accordingly, for Boeing’s CEO to cavalierly demote branding while jeopardizing his company’s brand is pure hubris.

Source of hubris? Record 2018 profits ($10 billion in net earnings), a backlog of 5,900 planes (end of 2018), and only one competitor: Airbus, headquartered in Holland.

Hubris begets complacency, which begets engineering blunders, shortcuts, product defects, and cover-ups.

Despite the aforementioned, airlines are hungering for the 737 Max. At the Paris Air Show last week, International Consolidated Airlines, parent of British Airways, provisionally ordered 200 of these planes from Boeing — contingent on the FAA’s certification, which is now in doubt.

To compensate for its previous hands-off approach to Boeing, the FAA is putting the 737 Max though the wringer. It reported Wednesday that it had found another MCAS problem. Consequently, nervous shareholders sent Boeing’s stock downward almost three percent on Thursday.

Customers will have to wait indefinitely to fly the 737 Max. How much patience they have before giving up is anyone’s guess. Airbus awaits them.

If the 737 Max is unfixable, Boeing’s brand will become untrustworthy. A stalled reputation is infectious and difficult to right. How many other MCAS-like situations exist at this aerospace company?

Had branding been Dennis Muilenburg’s top priority all along — safety, comfort, economy, speed — and ingrained corporatewide, engineers wouldn’t and couldn’t have hidden MCAS’s flaws. And, today, trained pilots would be flying the 737 Max, not reading about its possible demise.

Marc Rudov is a branding advisor to CEOs, speaker, media commentator, and author of "Brand Is Destiny: The Ultimate Bottom Line" and "Be Unique or Be Ignored: The CEO’s Guide to Branding." Find him at MarcRudov.com. For more of his reports, Go Here Now.

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If the 737 Max is unfixable, Boeing’s brand will become untrustworthy.
boeing, branding, dennis muilenburg
Friday, 28 June 2019 11:10 AM
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