Boeing's quality control process and company culture are being heavily scrutinized after the 737 Max Flight 1282 blowout

• United and Alaska airlines found loose bolts on Boeing 737 Max 9 jets after they were grounded.
• After past issues with the 737 Max, it suggests there may be problems with quality control.
• Boeing's culture shifted to prioritize finances over engineering following a 1997 merger.

An Alaska Airlines Boeing 737 Max 9 had 177 people on board on January 5 when part of the fuselage was blown off. Oxygen masks were deployed, one passenger lost his T-shirt, and others had their cellphones sucked out of the gaping hole.

It's a miracle of sorts that nobody was seriously injured as the plane returned to Portland International Airport 20 minutes after taking off.

No one was sitting in the seats right next to the door plug, which covered an unused emergency exit. If it had been lost at a higher altitude or farther away from an airport, fatalities could have resulted.

After the Federal Aviation Administration grounded all 737 Max 9 planes with a door plug, United Airlines and Alaska Airlines discovered loose hardware on several.

The FAA then announced that all 737 Max 9 planes with door plugs would stay grounded until all were inspected as Boeing revised its inspection instructions to airlines.

"The safety of the flying public, not speed, will determine the timeline for returning the Boeing 737-9 Max to service," it added.

After the door plug was found, the National Transportation Safety Board announced four bolts holding it in place were unaccounted for. Investigators don't know whether they were lost — or never installed.

On Friday, the FAA announced "significant actions" to increase its oversight of Boeing, including an audit of the 737 Max 9 production line. It's also exploring using an independent third party to oversee Boeing's inspections.

That came a day after the regulator announced a formal investigation to determine whether Boeing failed to ensure Max 9 planes were safe and conformed to the design approved by the regulator.

It remains unclear whether the problem affecting the new Alaska Airlines plane — delivered just 66 days earlier — was a manufacturing problem rather than a design flaw. Either way, the incident again raises serious questions for Boeing and left it open to criticism from airline bosses.

"I think that both Airbus and Boeing, certainly Boeing, need to significantly improve quality control," Michael O'Leary, the CEO of Europe's Ryanair, told the Financial Times this week.

And Tim Clark, the president of Emirates, told Bloomberg that Boeing had had "quality control problems for a long time now, and this is just another manifestation of that."

But he acknowledged the power of the Airbus-Boeing duopoly, adding that the "wannabes" had a long way to go to be on equal footing.

Why the 737 Max was grounded in 2019

Competition between Airbus and Boeing played a role in the twin 737 Max crashes that killed almost 350 people in 2018 and 2019. The US company was desperate to catch up with the Airbus A320neo.

The timeline for getting the latest version of the 737 in the air was "extremely compressed," a Boeing engineer told The New York Times. "It was go, go, go."

New, more fuel-efficient engines needed to compete with the Airbus jet didn't fit on the 737 and changed its aerodynamics, making it more likely to pitch upward in some scenarios.

To solve this problem, Boeing added software, the Maneuvering Characteristics Augmentation System, that automatically pushed the nose down if the "angle of attack" was too steep.

However, it relied on only one sensor, which malfunctioned in the Lion Air and Ethiopian Airlines planes that crashed.

Bob Clifford, the lead counsel for the families of the Ethiopian Airlines crash victims in a case against Boeing, told Business Insider: "There are people at Boeing that I believe should have been prosecuted. They did everything they could to get ahead of the curve, and see if they could solve the problem without interrupting the operations of the fleet globally. They gambled with people's lives — and people lost."

Almost unbelievably, pilots were not properly informed about the MCAS software in training for the Max — which could've been to speed up the approval process for the jet.

"In the beginning, they tried blaming the pilots," Clifford said. "We learned that the pilots didn't know" about MCAS, he added.

The Justice Department charged Boeing with conspiracy to defraud the FAA. As part of a deferred-prosecution agreement in 2021, Boeing agreed to pay a $2.5 billion penalty.

David P. Burns, the department's acting assistant attorney general, said: "Boeing's employees chose the path of profit over candor by concealing material information from the FAA."

The Alaska Airlines blowout will almost certainly renew scrutiny of Boeing's deal with the department, which demanded new compliance procedures.

"It's not just a matter of loose screws," Clifford told BI. "There's going to be a focus on the design of this plug and whether or not Boeing and Spirit AeroSystems told the FAA everything they were supposed to, and they got it properly certified."

Spirit AeroSystems is the Kansas company that makes the fuselages and other parts of Boeing planes.

Boeing has prioritized finances since merging with McDonnell Douglas

Difficulties persist with the 737 Max. Last month, Boeing told operators to inspect the rudder-control system of Max planes to see whether there was a loose bolt.

Also in December, Boeing applied to the FAA for a safety exemption on the Max 7, related to a flaw in the engine's deicing system that could cause debris to break off and damage the fuselage, The Seattle Times reported.

Boeing said such a breakup was "extremely improbable" — but the exemption was needed for the Max 7 to receive full certification. Its absence has delayed deliveries and could affect orders.

Many point to Boeing's 1997 merger with McDonnell Douglas as the beginning of a culture change that seemed to prioritize finances over engineering.

"When that happened, the business analysts will tell you that Boeing changed from an engineers' company to a company run by MBAs who were more focused on balance sheets and return and quarterly performance and stock profitability," Clifford said.

A former McDonnell Douglas CEO, Harry Stonecipher, later took the same role at Boeing. According to The Atlantic, he called engineers "arrogant" when they criticized him.

"When people say I changed the culture of Boeing, that was the intent, so that it's run like a business rather than a great engineering firm," Stonecipher once said.

He made decisions including outsourcing the design of the 787 Dreamliner, which faced production delays due to quality-control problems.

"Can you change the culture of a company without changing the willingness to cut corners? That's the fork in the road," Clifford told BI.

He added: "Are they going to go down the path of safety, and quality, and engineering excellence — or are they going to go down the other path of satisfying the money people who watch stock performance?"

On Tuesday, Boeing CEO Dave Calhoun became emotional in a company meeting as he acknowledged the Alaska Airlines incident was "our mistake."

"You don't culture the answers — you engineer them. And then the culture goes with it," he told CNBC the following day. "We will engineer answers and be certain it can never happen again."

Clifford, who's spent 40 years working on commercial-aviation cases, said safety issues became a lot more important to people once they affected them directly: "The minute it's happening to you or your family, you have a different attitude."

Boeing didn't immediately respond to a request for comment.