Why Making Things Is Hard to Make Pay

On Friday 5 January 2024 Alaska Airlines Flight 1282, a Boeing 737 MAX 9 that had been in service for about ten weeks, had just taken off when a panel in the side of its fuselage blew out. The panel was a door plug, which fills a mid-cabin emergency-exit opening that the airline did not use. No one died. The investigation produced a simple and alarming account of how the panel came to leave the aircraft. The fuselage had been built in Wichita, Kansas, by Spirit AeroSystems and delivered to Boeing's final-assembly plant in Renton, Washington. There the plug had been opened so that workers could rework damaged rivets nearby, and it was put back without the four bolts that hold it in place. No record of the removal was made (reported; National Transportation Safety Board).

Nothing in the design of the aircraft had failed. A step in a factory had been done and not documented, and the system around that step did not catch it. The Federal Aviation Administration grounded the MAX 9s fitted with plugs for inspection, began an audit of production at Boeing and Spirit, and capped output of the 737 at 38 a month until Boeing could show that its quality system worked. It did not allow 42 a month until October 2025. The NTSB, adopting its probable cause in June 2025, placed the failure in Boeing's inadequate training, guidance and oversight for removing and reinstalling parts, and in ineffective oversight by the FAA. The FAA proposed a civil penalty of $3.1 million.

The penalty was the smallest cost. Boeing's chief executive, Dave Calhoun, announced in March 2024 that he would leave; Kelly Ortberg succeeded him later that year. About 33,000 machinists represented by the International Association of Machinists struck on 13 September 2024 and stayed out for 53 days, stopping the 737, 767 and 777 lines, before ratifying a contract with 59% of the vote on 4 November that raised wages by 38% over four years (reported). Boeing lost $11.8 billion in 2024 and burned $14.3 billion of free cash flow. In October 2024 it sold $24.25 billion of new shares and mandatory convertible preferred stock, the largest follow-on equity offering on record (reported), and kept its investment-grade credit rating. And it decided to buy back the supplier it had sold twenty years earlier. Boeing had sold its Wichita operations to the investment firm Onex in June 2005 for about $1.2 billion (reported), and the business, renamed Spirit AeroSystems, had become the sole source of the 737 fuselage. By late 2024 Spirit had warned that it might not survive as a going concern, with cash of $218 million at the end of the third quarter. Boeing agreed to buy it on 1 July 2024 and completed the deal on 8 December 2025, for a value of about $8.3 billion including Spirit's debt (reported); about 15,000 Spirit employees at five sites joined Boeing, and the work Spirit did for Airbus