By Alan Murray and David Meyer
March 13, 2019

Good morning.

A few CEO Daily readers may be old enough to remember September 1982, when cyanide-laced Tylenol took the lives of seven people in the Chicago area. Johnson & Johnson had every reason to believe its drug was safe, and that the problem was caused by a local miscreant, but the company nevertheless took the unprecedented step of recalling the popular product from all drugstore shelves, at a cost of millions of dollars. The case since has become a business school case study in effective corporate crisis management.

So did no one at Boeing take the course? While most regulators around the world have grounded the Boeing 737 Max 8 after the Ethiopian Airlines crash—the second of a 737 Max 8 in a few months under similar circumstances—the U.S. FAA is keeping the planes in the air, with Boeing’s backing. “Safety is Boeing’s number one priority,” the company tweeted yesterday, “and we have full confidence in the safety of the 737 MAX.”

Really? Worth pointing out that Boeing is already working on a software fix after the earlier crash, which is due out in April. If there is no problem, why do they need a fix?

Don’t count me among the luddites who believe automation has made flying more dangerous. The evidence suggests otherwise. Moreover, I get that Boeing’s quandary is tougher than J&J’s—analysts estimate suspending the plane could cost the company over $1 billion in revenue.

But I can’t help but feel as though Boeing CEO Dennis Muilenburg is casting himself as Amity Mayor Larry Vaughn in Steven Spielberg’s Jaws, who told tourists that the water was safe. If Muilenburg really believes what he is saying, at a minimum he should make his case personally and publicly…not just on the phone to President Trump. The traveling public deserves to hear from him directly.

More news below.

Alan Murray


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