Boeing has disappointed its customers but the embattled plane maker says it is making transformational and systemic changes based on feedback from its employees, airlines and regulators, the chief of its commercial aircraft unit said.
The company has recorded "significant improvements" in the production flow of its 737 Max jets factory, with production rates increasing meaningfully month over month, Stephanie Pope, who is also Boeing's chief operating officer, said in a briefing on Sunday in London, before the Farnborough International Airshow.
The company expects to increase the rate to about 38 jets a month by the end of 2024 after months of slowed output.
However, Boeing's turnaround is tied to action needed to continuously improve its performance and this overhaul will persist for years to come, Ms Pope said.
Boeing's airline customers "have been very engaged, very involved and very candid in their feedback", she said.
"It still doesn't take away the reality that we disappointed them and we've impacted their business and we haven't met their commitments and lived up to being the partner they expect and need us to be."
They were her first remarks to the media since taking the role as part of a wider management shake-up this year.
"What makes this industry so safe is we make mistakes and we learn ... we're making systemic change," she said, noting that the changes are not tied to a specific leader nor limited to a few actions.
The comments come as Boeing is dealing with a safety and quality crisis after a door panel on a 737 Max 9 jet blew off mid-air in January, leading to a slowdown in production of its best-selling plane and increased regulatory and legal scrutiny.
Ms Pope said she spent the first four months of her role listening to employees, regulators and customers.
That feedback resulted in developing and executing a safety and quality plan to stabilise Boeing's factory production and deliver safer aircraft on predictable schedules.
The plan includes increased investment in training, employee skill enhancement, simplifying business processes, reducing defects across Boeing's supply chain and factories, and improving accountability, she said.
Ms Pope has also led customers through Boeing's Renton factory in Seattle to understand the details of the plan and the action being taken to address quality and safety issues, and opened the factory floor for their inspection.
While customers are disappointed by delivery delays and quality issues, they have also been "very supportive" of Boeing's plan and investments to increase its production rate to meet market demand, according to Ms Pope.
"All of these changes in our factory are transformational and they're positioning us to be healthier and to meet the demand going forward," she said.
"While [customers] are disappointed, they are also supportive that we make the right changes now so that we transform this business and we don't make incremental change and then find ourselves having issues in the future."
Boeing has slowed down its factories to execute these changes to return to a predictable schedule of jet deliveries.
“I’m very clear with my team, this isn’t about safety and quality versus schedule ... we have to do safety, we have to do quality, we have to meet our commitments with a predictable schedule at cost. These are not competing priorities," Ms Pope said.
Search for new Boeing boss
Boeing's chief executive Dave Calhoun is set to leave by the end of the year after a major management re-shuffle and the company's search for a new leader is under way.
Boeing's board is undertaking a "deliberate and robust" for the company's next chief executive, Ms Pope said in response to a question from The National.
"Leadership is about being in the moment," she said, noting that this entails engaging with employees, creating a culture of accountability and providing a plan for the US Federal Aviation Administration that drives transformational change.
Ms Pope is widely seen as a possible contender for the role of Boeing chief executive, even though some airlines have urged the company to choose a leader with a solid background in engineering, which she does not have.
When asked if she's interested in the role, she said: "24/7, I'm focused on BCA's [Boeing Commercial Airplanes unit's] recovery. That is my priority."
Ms Pope is also working closely with Boeing's suppliers, holding weekly meetings at the chief executive level.
"We're very transparent about rate and risk and they're transparent with us," she said.
"There's a lot of activity going on, it's a volatile recovery, it's not linear, but it's one that we will work together on transparency and partnership."
The FAA is also very engaged with Boeing in its factories every day.
They are "very firm and fair" and are working to make sure that the company executes its safety and quality plane, Ms Pope said.
Despite Boeing's continuing troubles and industry-wide concerns about its future, she insists that the company is performing well, with a strong backlog sold out through to the end of the decade and a "phenomenal" portfolio of aircraft.
"We are a stable company," she said.
'Actions louder than words'
Ms Pope concluded the briefing with an optimistic outlook on Boeing's direction.
"Action speaks louder than words ... I believe in this plan because it was underwritten by employees ... and nobody knows how to do this job better than they do," she said.
"Getting this culture right, getting this plan deployed, we will start recovering and our factories will get back up the rates that we've committed to and we will start delivering predictably again."
"I'm excited about future, I'm excited about the progress we're making and I encourage you to watch out for those progress points month on month."
'Gold'
Director:Anthony Hayes
Stars:Zaf Efron, Anthony Hayes
Rating:3/5
Company%20profile
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Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
COMPANY%20PROFILE
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Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Need to know
The flights: Flydubai flies from Dubai to Kilimanjaro airport via Dar es Salaam from Dh1,619 return including taxes. The trip takes 8 hours.
The trek: Make sure that whatever tour company you select to climb Kilimanjaro, that it is a reputable one. The way to climb successfully would be with experienced guides and porters, from a company committed to quality, safety and an ethical approach to the mountain and its staff. Sonia Nazareth booked a VIP package through Safari Africa. The tour works out to $4,775 (Dh17,538) per person, based on a 4-person booking scheme, for 9 nights on the mountain (including one night before and after the trek at Arusha). The price includes all meals, a head guide, an assistant guide for every 2 trekkers, porters to carry the luggage, a cook and kitchen staff, a dining and mess tent, a sleeping tent set up for 2 persons, a chemical toilet and park entrance fees. The tiny ration of heated water provided for our bath in our makeshift private bathroom stall was the greatest luxury. A standard package, also based on a 4-person booking, works out to $3,050 (Dh11,202) per person.
When to go: You can climb Kili at any time of year, but the best months to ascend are January-February and September-October. Also good are July and August, if you’re tolerant of the colder weather that winter brings.
Do not underestimate the importance of kit. Even if you’re travelling at a relatively pleasant time, be geared up for the cold and the rain.
The%20Roundup
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COMPANY%20PROFILE%20
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COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
The Al Barzakh Festival takes place on Wednesday and Thursday at 7.30pm in the Red Theatre, NYUAD, Saadiyat Island. Tickets cost Dh105 for adults from platinumlist.net
MATCH INFO
Leeds United 0
Brighton 1 (Maupay 17')
Man of the match: Ben White (Brighton)
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
LA LIGA FIXTURES
Friday
Granada v Real Betis (9.30pm)
Valencia v Levante (midnight)
Saturday
Espanyol v Alaves (4pm)
Celta Vigo v Villarreal (7pm)
Leganes v Real Valladolid (9.30pm)
Mallorca v Barcelona (midnight)
Sunday
Atletic Bilbao v Atletico Madrid (4pm)
Real Madrid v Eibar (9.30pm)
Real Sociedad v Osasuna (midnight)
The five new places of worship
Church of South Indian Parish
St Andrew's Church Mussaffah branch
St Andrew's Church Al Ain branch
St John's Baptist Church, Ruwais
Church of the Virgin Mary and St Paul the Apostle, Ruwais
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
- The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
- US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
Lampedusa: Gateway to Europe
Pietro Bartolo and Lidia Tilotta
Quercus
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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The specs: 2017 Maserati Quattroporte
Price, base / as tested Dh389,000 / Dh559,000
Engine 3.0L twin-turbo V8
Transmission Eight-speed automatic
Power 530hp @ 6,800rpm
Torque 650Nm @ 2,000 rpm
Fuel economy, combined 10.7L / 100km
CABINET%20OF%20CURIOSITIES%20EPISODE%201%3A%20LOT%2036
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Abramovich London
A Kensington Palace Gardens house with 15 bedrooms is valued at more than £150 million.
A three-storey penthouse at Chelsea Waterfront bought for £22 million.
Steel company Evraz drops more than 10 per cent in trading after UK officials said it was potentially supplying the Russian military.
Sale of Chelsea Football Club is now impossible.
