Boeing’s Other Big Problem: Fixing Its Space Program

Boeing Co.’s engineering failures didn’t begin or end with the 737 MAX. Its once-dominant space program, which helped put Americans on the moon five decades ago, has also struggled.

The company’s biggest space initiatives have been dogged by faulty designs, software errors and chronic cost overruns. It has lost out on recent contracts with the National Aeronautics and Space Administration to return science experiments and astronauts to the moon, amid low rankings on price and technical merit. Boeing needs revenues from its defense and space arm, which makes everything from military jets to satellites, as a safety net as it navigates through the MAX crisis and slowed demand for new commercial jets in the pandemic.

Its space ambitions will soon face a major test with another attempt to launch a capsule called the Starliner. In the first launch, just over a year ago without astronauts on board, a software error sent the Starliner into the wrong orbit, and then another threatened a catastrophic end to the mission. A successful launch, which could come as soon as March, would help restore the company’s reputation for reliability and engineering prowess.

The problems pose a serious challenge for Chief Executive David Calhoun one year into his tenure as he charts a new course in the face of uncertainties wrought by the pandemic.

After making record profit of $10.5 billion in 2018, Boeing has since lost nearly half that amount as of Sept. 30, largely due to a sharp drop in commercial aircraft deliveries and MAX-related charges. Defense and space revenue of $19.5 billion in the first nine months of last year eclipsed its commercial unit’s $11.4 billion in sales. Jefferies analysts estimate Boeing brought in more than $6 billion in space revenue for all of last year.

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