crashed into the sea this morning.

Rescuers have located debris,

but they do not expect to find any survivors.

Some of the warning signs, in retrospect

were there all along.

Some of the decisions, or changes,

were so subtle that people might not even have realized

the importance, as they were taking place.

And Ethiopian Airlines flight

has crashed shortly after takeoff

from Addis Ababa, killing all 157 passengers and crew

thought to be on board.

Boeing's best-selling plane

is coming under increased scrutiny

after another deadly accident.

We'll do everything possible to earn and re-earn

that trust and confidence

from our customers and the flying public

in the weeks and months ahead.

Boeing is an American icon,

revered around the world for its engineering innovation.

But with two crashes in under six months,

critics have asked if Boeing is straying

from its original mission.

The SEC is investigating whether Boeing

properly disclosed issues tied to the grounding

of its 737 Max Airliners.

One message described the 737 Max

as a plane designed by clowns, overseen by monkeys.

The safety culture at Boeing was corrupted

under pressure from Wall Street,

and executives, and board members

who were lookin' more at their bonuses

than they were at the integrity of the organization.

Boeing was playing a game, to a certain extent.

It was a game of numbers.

They were meeting Wall Street's expectations,

but unfortunately, that came

at the expense of the end customer, and the flying public.

The failures that happened at Boeing

are really complicated, and involve subtle forces

and cultural changes that have been underway

for decades at the company.

This is a story of how

an American icon lost its way,

and whether or not it can find it again.

2019 was not the best year for Boeing.

Just five months apart, two Boeing 737 Max planes crashed,

and the planes have been grounded since March of 2019.

There's simply no precedent, in aviation,

for a plane this important to be grounded this long.

In the first crash, Lion air flight 610,

something was discovered with the technology on the plane.

Investigators believe the plane's sensors

or its computers, had bad data suggesting a potential stall.

There was this software system,

known as MCAST, that stands for

maneuvering characteristics augmentation system.

This obscure flight control software

was created so the Max handled the same way for pilots

as the previous generation of 737s.

Black box data indicated that

a bad sensor had triggered MCAST,

which automatically pushed the plane down.

Within probably 24 hours of them discovering this,

Boeing and the FAA put out a warning,

indicating that this could occur,

and then also telling them how to counteract it.

There is a fix, simply flipping a switch

should have turned the automatic system off.

The second crash, however, the same failure.

I've covered dozens and dozens of plane crashes,

and one of my mantras has always been

that crashes don't occur for the same cause.

China grounded the plane,

and it just set off a ripple effect.

Any plane currently in the air

will go to its destination, and thereafter be grounded.

Boeing is an incredible company,

and hopefully they'll very quickly come up with the answer.

What had been billed as

a relatively simple software fix proved not to be so simple.

Every time it seemed like Boeing was just around the corner,

then a new issue cropped up.

MCAST wasn't the only issue on this airplane,

you had issues where the computers

were getting overloaded with information,

now there's a new issue that

the computers don't start up properly,

when you want them to.

And then, the first batch of

really embarrassing employee emails leaked.

The FAA is demanding answers from Boeing

after they waited months to disclose to the agency

internal messages between test pilots

who were working in the 737 Max flight simulator.

"It's running rampant in the sim on me."

One pilot, referencing the flight simulator.

"The plane is trimming itself like crazy."

The emails came out two weeks before

Boeing's Chief Executive, Dennis Muilenburg,

was due to testify before Congress,

and it was a bipartisan shellacking.

346 people are dead

because what these chief pilots describe as egregious.

You're the CEO, the buck stops with you,

did you read this document,

and how did your team not put it in front of you,

run in with their hair on fire, sayin'

'We got a real problem here.'

Ultimately, we don't quite know

exactly what caused the MCAST design,

just like we don't know all the causes of the crash,

we don't quite know, but it's very clear

that the one big cultural change at Boeing

had been a disruption in the communication

between engineers and top management.

But this kind of cultural change

for a company as old as Boeing happens slowly,

over the course of not years, but decades.

Boeing's history goes back over a century,

and while its early sea planes weren't iconic,

by World War Two, their military aircraft were.

When news of the successful raid

by the Flying Fortresses comes in,

these are the people who get the biggest thrill,

the thousands of Boeing workers who build them.

Boeing's an American manufacturing icon.

It was churning out bombers

that were critical to the allied defense effort,

and gave us Rosie the Riveter.

Sort of a symbol for American can-do culture.

Employers find that women can do

many jobs as well as men, some jobs better.

They were the great survivors of the post-World War Two

shakedown in aircraft design,

and the most successful new entrant

in the new jetliner market of the late 1950s.

The company gambled everything on a prototype

of what became its first jetliner, the Boeing 707.

Nearing completion

in the Boeing plant at Seattle,

America's first jet transport

is a unit of glistening beauty.

And that was followed by the 727,

and built this revolutionary behemoth, the 747,

you probably know it for the hump behind the nose,

and at the same time, they came up with what became

Boeing's greatest commercial success,

and that was the 737.

The 737 wasn't immediately successful.

It took several design and engineering iterations

to turn it into the plane that we see today.

It became a work horse for airlines like Southwest,

that fly primarily shorter routes,

and really brought travel to every day people.

And even as more and more

travelers flew on these aircraft,

the aviation safety record during this time

made flying one of the statistically safest ways to travel.

We've been the technology leader in aviation in the world.

Boeing was a magnificent company,

who made, in my opinion, the best airplanes in the world,

until some of these recent cultural changes,

which all came from pressure to Wall Street,

and bad management.

You know, over the years,

Boeing was this tremendously important

and innovative company,

but it wasn't necessarily a great stock.

In 1997, Boeing merged with McDonnell Douglas,

another aerospace and defense giant.

Boeing said

'let's do a merger, we'll continue with the innovation,

'and maybe McDonnell Douglas will help us

'in terms of our structure

'and telling our story to Wall Street.'

Almost immediately you began to hear

kind of a bitter joke coming out of Seattle,

that McDonnell Douglas had used

Boeing's money to buy Boeing,

and certainly, in terms of management structure,

it began to look that way.

Harry Stonecipher, a former GE executive

and McDonnell Douglas CEO,

becomes COO of the combined companies.

And more and more of the company's style and culture

began to be more of a McDonnell Douglas sort of picture.

He almost immediately signaled

there was a new sheriff in town,

and he was gonna bring financial disciple to Boeing.

Stonecipher would eventually become CEO,

and continued his emphasis on

controlling costs within the company.

A culture that engineers within the company

would begin to feel.

We had breakfast with the president of the--

This is Stan Sorscher,

he was a physicist at Boeing for over 20 years,

and felt these changes firsthand.

And he said he was so proud of cutting his

capital expenditure budgets by 60%.

Capital expenditures, for us,

were improvements in the factory, in our shop floor,

in processes and materials and things like that.

By 2000, there was a great deal of dissatisfaction

with the way our

problem solving culture was being displaced,

and we thought it was just much more difficult

for us to do our job.

And that's when a lot of people trace

this sort of fundamental shift in thinking

in terms of what you prioritize,

whether that be profits, or whether that be engineering.

Further evidence of

a move away from engineering prowess

and innovation, to profit, was Boeing's decision

to move company headquarters to Chicago,

when Boeing's jet manufacturing

and airplane designers were in Seattle.

Probably the biggest motivation was

to send a message to the Street

that this was a company that was not going to make

investment decisions on the basis of legacy,

or heritage, or anything like that,

but rather, purely make investment decisions

on the basis of returns,

and by moving to a place where there were no

legacy loyalties, no heritage production facilities,

they were sending that message.

And it also started to shape how

Boeing viewed its own internal investments

in things like airplane programs,

tremendously important as the company

started planning for what became the 787 Dreamliner.

Ladies and gentlemen,

your 787 Dreamliner.

For this event, it was held on July 8, 2007, so 787,

Tom Brokaw was there,

I was there just sitting in the audience,

just trying to soak it all in.

I think they raised the factory door,

and there was the plane.

But at the time, it was just, it was an empty shell.

We didn't know it, but it was all for appearances.

For the 787, Boeing attempted

a new system for designing the aircraft.

Instead of doing everything in house,

it would outsource much of the plane's

design and manufacturing to its biggest suppliers.

It was gonna be about outsourcing,

outsourcing to the places where

we could produce things more cheaply,

as opposed to the finest, best,

safest airplanes in the world,

which is what Boeing made for decades.

This works for running shoes, ladies garments,

cell phones, hard drives, integrated circuits,