Boeing 2024: how a door plug blew off mid-flight, ended Dave Calhoun's tenure, and brought Kelly Ortberg from retirement to take over a company in continuous crisis since 2018

The January 5 2024 Alaska 1282 incident and what it revealed

Alaska Airlines Flight 1282 departed Portland International Airport at 4:52 PM on January 5, 2024 with 171 passengers and six crew. The aircraft was a Boeing 737 MAX 9 that had been delivered new to Alaska Airlines on October 31, 2023 — just over two months in service. At approximately 16,000 feet altitude (six minutes into the flight), the left mid-cabin door plug (a panel covering an optional emergency-exit door location that's not used in this aircraft configuration) blew off the fuselage. The resulting hole was approximately 26 inches by 48 inches. Cabin depressurization was rapid. The aircraft returned to Portland and landed safely without fatalities; some passengers had injuries.

Subsequent NTSB investigation found that the four bolts that should have held the door plug in place were missing. The plug had been removed during manufacturing at Boeing's Renton, Washington facility to allow rework of damaged rivets on the fuselage. The plug had been reinstalled but, according to investigation findings, without the required bolts being replaced. The aircraft had then been delivered to Alaska Airlines without the bolts being installed.

The investigation's broader findings exposed quality-control failures at Boeing and supplier Spirit AeroSystems (which manufactures 737 MAX fuselages including the door plugs):

• Documentation gaps: Boeing could not produce documentation showing the plug had been reinstalled with bolts.
• Quality-control process bypass: the rework had occurred outside the standard documented quality-control process.
• Cultural concerns: NTSB chair Jennifer Homendy publicly criticized Boeing's safety culture in subsequent congressional testimony.
• Spirit AeroSystems quality issues: separate investigations identified manufacturing-quality issues at Spirit that had been producing fuselages with various defects requiring Boeing rework.
• FAA audit findings: subsequent FAA audit of Boeing 737 MAX production identified multiple quality-control failures and suspended Boeing's production-rate increase plans.

The continued 737 MAX crisis arc (2018-2024)

The January 2024 door plug incident is part of a continuous Boeing crisis arc:

• October 29, 2018: Lion Air Flight JT610 crashed in the Java Sea, killing 189 people. Initial cause investigation focused on the MCAS (Maneuvering Characteristics Augmentation System) software.
• March 10, 2019: Ethiopian Airlines Flight ET302 crashed near Bishoftu, killing 157 people. Similar MCAS-related cause. Global 737 MAX 8 grounding followed within days.
• March 2019 - November 2020: 20-month US grounding while Boeing rewrote MCAS and FAA recertified the type.
• January 2021: DOJ deferred-prosecution agreement, $2.5B Boeing penalty for fraud against the FAA.
• 2021-2023: 737 MAX returned to service globally; Boeing produced and delivered the aircraft. Various smaller quality and delivery issues continued.
• January 5, 2024: Alaska 1282 door plug incident, FAA emergency grounding, production-rate restrictions, executive change pressures.
• March 25, 2024: Dave Calhoun announced he would step down by end of 2024; chair Larry Kellner also stepped down; Stan Deal (Commercial Airplanes head) departed.
• July 1, 2024: Boeing announced reacquisition of Spirit AeroSystems for $4.7B (Spirit had been spun off from Boeing in 2005) to bring quality control in-house.
• July 2024: Boeing agreed to plead guilty to fraud charges related to the 2018-2019 crashes (subsequently rejected by judge December 5, 2024 over diversity-of-monitor requirements).
• August 8, 2024: Kelly Ortberg took over as CEO.
• September 13 - November 4, 2024: 53-day machinist union strike halted 737 MAX production.
• October-December 2024: continued financial losses, regulatory pressure, and operational challenges.

The Calhoun departure and the Ortberg appointment

Dave Calhoun (CEO January 2020 - August 2024) had taken over from Dennis Muilenburg in the immediate aftermath of the 2019 grounding. His tenure had been defined by managing the existing 737 MAX crisis rather than producing growth. The January 2024 door plug incident essentially ended his strategic credibility:

• March 25, 2024 announcement: Calhoun would step down by end of 2024, allowing successor search. Chair Larry Kellner stepped down immediately. Stan Deal (Commercial Airplanes head) departed.
• CEO search: external candidates were sought given internal-leadership crisis. Several aerospace and defense executives reportedly considered.
• Kelly Ortberg selection: announced July 2024 (effective August 8). Ortberg had been CEO of Rockwell Collins (avionics) 2013-2018, then briefly President of Collins Aerospace after the Rockwell-United Technologies merger. He had been retired since 2021.
• Ortberg background fit: 35+ years in aerospace engineering and operations. Known as an engineer-leader rather than financial-executive type. The cultural-fit framing positioned him as Boeing's return to engineering-led leadership after years of finance-led leadership.
• Ortberg location: relocated to Seattle from Tampa, Florida, signaling that Commercial Airplanes (headquartered in Seattle) would be operational focus. Boeing's corporate headquarters had been in Arlington, Virginia (and previously Chicago) under prior CEOs; the Ortberg-to-Seattle signal was deliberate.

The Spirit AeroSystems reacquisition and the integration thesis

On July 1, 2024 (just before Ortberg's CEO announcement), Boeing announced it would reacquire Spirit AeroSystems for $4.7 billion:

• Spirit history: Spirit had been spun off from Boeing in 2005 when Boeing divested its Wichita, Kansas facility (which produces 737 fuselages). Spirit's investment-bank-led 2005 spinoff was part of the outsourcing-and-financial-engineering era that ended with the post-2018 crisis.
• Strategic logic: Spirit's quality issues had been identified as a major contributor to Boeing's manufacturing problems. Bringing Spirit back in-house would eliminate the supplier-Boeing communication and quality-control gaps.
• Airbus deal: as part of the Spirit acquisition, Airbus agreed to acquire Spirit's Airbus-related operations (Spirit produces some Airbus parts). The carve-out simplified the deal's antitrust path.
• Integration timeline: closing expected mid-2025 pending regulatory and shareholder approvals.
• Cultural implications: the deal effectively reversed the 2005 spinoff philosophy of outsourcing-and-financial-engineering. It signaled that Boeing was returning to vertical-integration-and-engineering-priority strategy under Ortberg.
• Cost: the $4.7B acquisition combined with the various penalties, recall costs, and continued operational losses meant Boeing entered 2025 with substantially worse balance-sheet position than pre-crisis.

The September-November 2024 machinist union strike

Boeing's IAM District 751 union (Seattle-area machinists, ~33,000 workers) struck on September 13, 2024 after rejecting Boeing's initial contract offer. The strike was the first at Boeing since 2008:

• Strike duration: 53 days (September 13 - November 4, 2024).
• Production halt: 737 MAX production stopped completely. Other Boeing programs in Seattle area also halted.
• Wage demands: initial union demands of 40% raise over four years; Boeing initial offer 25%; multiple intermediate proposals rejected.
• Final settlement: 38% wage increase over four years plus enhanced 401(k) contributions and ratification bonus. Approximately 59% union approval (after two earlier proposals had been rejected).
• Financial cost to Boeing: estimated $5B+ in lost revenue and continued production-restart costs.
• Strategic implications: the strike accelerated Boeing's October 11, 2024 announcement of approximately 17,000 layoffs (~10% of workforce). Ortberg's first major operational decision was workforce reduction alongside the strike resolution.
• Long-term labor relations: the strike outcome restored some union-management trust but the underlying culture-and-trust issues remain.

How RGM thinks about continuous-crisis company recovery

Boeing's 2018-2024 trajectory is the worked example of how continuous-crisis companies recover (or don't). The structural elements making Boeing's recovery difficult: safety-critical-product industry (aviation) requires regulatory trust that takes years to rebuild; technical-debt accumulated from prior outsourcing decisions (Spirit AeroSystems) creates integration costs; workforce-trust damage from prior cost-cutting eras requires sustained investment to repair; financial losses constrain investment flexibility just as investment is most needed.

Our framework for clients in continuous-crisis recovery situations: the operational sequence must be (1) acknowledge the crisis honestly rather than minimize it, (2) leadership change that signals genuine cultural reset (Ortberg's engineer-led background, Seattle relocation), (3) structural changes to address root causes (Spirit reacquisition, FAA production-rate restrictions accepted), (4) workforce-relations investment that rebuilds trust (settling strike with substantial wage gains rather than fighting), (5) financial discipline that funds the recovery without compromising the recovery itself. Boeing's 2024 actions begin this sequence but the recovery is multi-year work. We tell clients in similar situations that continuous-crisis recovery cannot be rushed and that attempted shortcuts (cost reductions during recovery investment, leadership half-measures, financial engineering to mask losses) extend the crisis rather than ending it.

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