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Boeing’s 787 Problems Never Would Have Happened if Alan Mulally Was CEO: Clive Irving

Daily Ticker

Boeing (BA) suffered another huge setback this week when the Federal Aviation Administration (FAA) decided to ground the company's 787 “Dreamliner” jets by all U.S. airline carriers.

Japan’s major airlines, All Nippon Airways and Japan Airlines, announced Wednesday that they were voluntarily suspending use of their Boeing 787 aircraft. One All Nippon Airways 787 was forced to make an emergency landing midflight Wednesday when the plane’s battery system started to overheat; a burning smell was reported in both the cockpit and cabin. According to ANA, the plane's lithium-ion battery looked "as though it had been burnt" and was leaking fluid. On Jan. 7 one of the batteries in a parked JAL-operated 787 caught fire at Boston Logan International Airport.

ANA and JAL operate 24 of the 50 Dreamliners currently in service and ANA was the first airline to fly a 787.

The FAA told Boeing executives that a "corrective action plan" was required before U.S. flights could resume.

The 787 battery troubles are the latest headache for Boeing after reports of fuel leaks, braking problems and a cracked cockpit window. These incidents call into question the safety and reliability of the 787s.

The 787s, Boeing’s new fuel-efficient and technologically innovative jets, were supposed to change air travel and restore Boeing’s reputation as the vanguard in the airline industry. Building the planes with lighter composite materials instead of aluminum and employing a state-of-the-art battery system would allow the 787s to travel long distances more efficiently by burning 20% less fuel than older jets – a huge money-saving feature for airlines. But the technological advancements that took three years for Boeing to bring to market (after costly and repeated delays) are now the source of the Chicago-based company’s distress.

Clive Irving, senior consulting editor at Conde Nast Traveler who has been reporting about the airline industry for 30 years, says none of these technological problems would have occurred if Alan Mulally, a 37-year veteran of Boeing and now CEO of Ford Motor Company (F), were running the company. Irving describes Mulally, the former head of Boeing Commercial Airplanes, as a “genius” who spearheaded the highly-successful Boeing 777; he decided to leave Boeing for Ford in September 2006 after being passed over twice for the Boeing CEO position.

Irving also blames the FAA for the 787s safety failures. He says the FAA was “probably overwhelmed by the technical demands” of the certification process for the 787 because the planes incorporated technologies that were “a generation ahead” of current systems. Boeing’s concept for the 787s was “bold and brilliant” and something no airliner had ever attempted before, Irving notes.

Shares of Boeing were up half a percent to $74.81 in recent trading.

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