Boeing 2020: Descent into Corporate and Culture Crisis

Lawrence Kellner, recently named Board Chair for the Boeing Company, is faced with assessing Boeing's strategic and financial condition in January 2020 as recent events potentially threatened the aerospace firm's survival. The most visible issue was the global grounding of the Boeing 737 MAX airliner fleet. Boeing also faced safety issues, production delays, and cost overruns that affected the remainder of its commercial airliner business, resulting in negative 2019 earnings, total debt almost doubling in one year to more than $27 billion, and negative 2019 stockholder equity. Boeing also was suffering competitively as its main commercial airliner competitor, Airbus, sold more commercial airliners than Boeing in 2019. The case seeks causes for the current crises by examining Boeing's history since it 1916 founding, its engineering leadership up to its 1997 merger with rival McDonnell Douglas, and the board's decisions since the merger. The board's decisions are examined regarding repeatedly forgoing expensive new product development while increasing dividends and stock buybacks to appeal to investors, and the effects of these decisions on Boeing's product line, culture, and ability to compete with Airbus. Data is provided to support assessing the financial, cultural, and competitive dimensions of the current situation, determining the board's role in Boeing's current competitive challenges with Airbus, and assessing how the board decisions contributed to Boeing's cultural changes and current strategic position. Information is also included to support an assessment of Boeing's current financial position and a determination of the board's role in creating the current situation. Critical decisions for discussion and response include what potential actions Kellner may recommend the board take to address Boeing's short-term and long-term issues as the company and he prepare for the upcoming 2020 Boeing Annual Stockholder Meeting.

• Corporate governance
• Strategy