Boeing: the fatal price of competition

Boeing Boing

Capitalism’s supporters are always telling us that competition brings out the best in human beings. It is supposed to encourage efficiency and creativity and promote innovation. We are also informed that capitalism’s drive for profit creates high quality goods that most people desire at a competitive price. However, as we have shown time and time again, the reality is rather different, and as in the two recent air crashes, the consequences can be fatal.

On 10 March, an Ethiopians Airline flight bound for Nairobi from Addis Abba crashed shortly after take-off, killing all 157 on board. This was eerily similar to the Lion Air crash that took place five months earlier in Indonesia where 189 passengers lost their lives. In both cases the pilots were unable to prevent their planes from taking a steep nosedive and both planes were of the new Boeing 737 Max 8 design. Preliminary investigations in the Ethiopian Airlines crash absolved the pilots of any blame.

Competitive pressures

Around ten years ago, Airbus developed a new range of aircraft with enhanced fuel efficiency and lower operating costs. They were able to pick up a lot of orders from airlines keen to lower their running costs. Boeing feared that they might lose out on market share to their European rival and were spurred to action when American Airlines, a longstanding customer of Boeing, purchased a large consignment of the new Airbus model. Boeing set to work to design an aircraft to compete with Airbus.

For a plane to fly successfully without stalling, that is avoiding a situation in which the angle of the plane points so far upwards it stops flying and is at risk of falling and crashing, the weight and power of the engines needs to be in balance with the wings, the cargo areas and other component parts of the plane. Therefore, if you are going to build a plane with heavier, more fuel-efficient engines you normally need to design an entirely new aircraft. Indeed, Boeing did investigate this option, but they ruled this out as it was deemed to be too expensive and just as importantly the development timescale of up to ten years was considered to be too long, as Boeing needed to deliver the new planes more quickly in order to maintain its share price. So they made the fateful decision to fit the new heavier engines onto the existing 737 design. The 737 Max 8 aircraft was introduced in 2017. The aerodynamics of the new plane were altered with the heavier engines, in certain flying conditions, potentially forcing the plane to thrust upwards raising the likelihood of stalling. To counteract this, Boeing installed anti-stalling software, known as the ‘Manoeuvring Characteristics Augmentation System’ (MCAS). When the angle of the plane is too high, sensors on the nose would transmit signals to MCAS, which would then force the nose down. An advantage from the point of view of the manufacturer and the airlines was that this automated software obviated the need to retrain the pilots, thus saving Boeing and the airlines money.

This set up depends on the software working correctly at all times. However, It is now generally believed that in both fights incorrect signals were being transmitted from the sensors to MCAS indicating that the angle of the plane was too high when in fact it was flying normally, thus forcing it to point downwards. The only thing that the pilots knew about MCAS is that they could deactivate it and use manual controls. Unfortunately, as the sensors continued to supply incorrect signals, MCAS was reactivated after a few minutes, forcing the planes to nosedive until they crashed. Two safety measures, a so-called ‘angle of attack indicator’ and a ‘disagree light’ indicator which warn that the sensors are malfunctioning, were not installed on the planes as Boeing sold them as optional extras. Evidently, Neither Lion Air nor Ethiopian Airlines had decided to purchase them.

Largely due to budget cuts over the last ten years, the Federal Aviation Authority (FAA) has found itself short of the qualified staff that is required to oversee the airworthiness of new aircraft and have effectively delegated regulation to airlines and manufacturers. One thousand Boeing employees had been seconded to the FAA.

In the wake of the crashes, the US flight attendants’ trade unions called for the 737 Max 8 planes to be grounded and pledged that they would support any member who refused to fly in them. Airlines around the world grounded their 737 Max 8 planes. The FAA in the United States reluctantly agreed to ground the planes a few days after the crash in Ethiopia. Boeing shares plummeted and their image has been tarnished. They are facing expensive lawsuits from victims’ families. They are desperate to restore their reputation and get their 737 Max 8 planes flying again, and are working on a fix for their MCAS software and have pledged an improved safety manual and training for pilots.

Some do see that the market has played a role in these tragedies, but do not arrive at the conclusion that capitalism should be abolished. They argue that corporate power should be reined in with tougher regulations. Will Hutton, in an article published in the Observer (7 April), says ‘The Boeing scandal is an indictment of Trump’s corporate America’, citing ‘America First nationalism, indulgent free market economics, Republican libertarianism and a political system in hock to corporate lobbying’ as the villains. It is true that Trump’s government pursues a free market capitalist agenda which is hostile to regulation, and Trump is in favour of privatising the FAA. He has representatives from the major banks and corporations in his government. Indeed, former Boeing executive Patrick Shanahan is Trump’s acting secretary of defence and it is alleged that he has tried to enhance Boeing’s contracts with the government. Boeing has spent billions on lobbyists to obtain lucrative defence contracts and has given donations to both Republican and Democrat lawmakers

When a government is said to embrace free market ideology, what this really means is that it is committed to pursuing the interests of its capitalist class ruthlessly without the impediments of workers’ rights, human safety and human welfare. This is not just the case with Trump, but also with Republican and Democrat presidents before him. Indeed it is the function of governments within capitalist society to defend and promote the profits of their capitalist class. Over recent years, governments have come under global competitive pressures to cut their costs and therefore implement more ‘free market’ policies of deregulation.

Cheating the regulations

Then there are manufacturers who try to cheat the regulations. In September 2015, the US Environment Protection Agency discovered that Volkswagen installed software in the engines of their diesel cars that was able to detect when they were being tested and give out false emission readings to enable them to pass emission tests. These cars would be pumping out more pollution into the atmosphere compromising people’s health. As with Boeing, Volkswagen shares fell and its reputation was badly damaged.

In the era before Trump and ‘indulgent free market economics’, some companies would dangerously cut corners to maintain their market share. One notable case in the 1970s was the Ford Pinto car, in which the fuel tank was placed dangerously in the rear. This meant that if another car hit it from behind, the tank was in danger of exploding. In fact this happened in one instance and the driver was killed. An investigation by the victim’s lawyers found that Ford cynically calculated that it would be more cost effective to pay out damages than remedy the design flaw. Ford was forced to pay out substantial damages.

The ex-Militant Tendency Trotskyists claim, in an article, ‘Corporate capitalism jeopardises air safety’ (Socialist, 3 April) that ‘public ownership of the aviation industry under democratic workers’ control and management’ is the solution. However, companies under public or state ownership also have to compete in markets and keep their costs down. In 1966, disaster befell a small Welsh mining village called Aberfan when a colliery spoil tip collapsed and engulfed the village, including schools, killing 116 children and 28 adults. A period of heavy rain led to a build-up of water within the tip which caused it to slide downhill as a slurry, The National Coal Board, a state-owned company, decided it was cheaper to dump the colliery waste on the mountain slope above the town. In 1987, a fire ravaged Kings Cross station killing 31 people. A shortage of staff and lack of maintenance due to budget cutbacks resulted in more people losing their lives. More recently there has been the tragedy of the Grenfell fire where the local council had the block of flats covered with cheaper but highly flammable cladding.

Not only does capitalism exploit us, it is gambling with our lives. State ownership, tighter regulations and software fixes cannot change this. We need to stop being chips on capitalism’s roulette table and organise to get rid of this pernicious economic system once and for all.