Question

In: Accounting

When a McDonnell Douglas DC-10 crashed over Iowa, a subsequent investigation suggested that the plane’s hydraulic...

When a McDonnell Douglas DC-10 crashed over Iowa, a subsequent investigation suggested that the plane’s hydraulic systems did not provide enough protection. The DC10 had three separate hydraulic systems, all of which failed when an engine exploded. The engine threw off shreds of metal that severed two of the lines, and the third line required power from the demolished engine that was no longer available. The DC-10, unlike other commercial jets, had no shutoff valves that might have stemmed the flow of hydraulic fluid. Lockheed’s similar L-1011 tri-jet had four hydraulic systems. A McDonnell Douglas VP said at the time. “You can always be extreme and not have a practical airplane. You can be perfectly safe and never get off the ground.”

a) Discuss the pros and cons of McDonnell’s position as expressed by the VP.

b) What strategy would you have recommended McDonnell Douglas follow to address the failure? Why?

Solutions

Expert Solution

A) The pros and cons of Mc Donnell's position as expressed by the VP are as follows:

Pros:

- As expressed by the VP, we can say that Mc Donnell builds commercially viable planes. To be a profitable company managing costs is extremely important which the company does.

-One might argue that the crashing of DC-10 was a one off incident and could happen to any airline company.

Cons:

-In the pursuit of being profitable and practical, Mc Donnell compromised on safety by not having enough hydraulic lines on DC 10 and no shut off valves.

- A loss of reputation once a jet crashes due to poor quality parts is hard to recover from.

- Being safe is of utmost importance, and the VP's statement that it will not be possible to get off the ground if you are too focused on being safe does not hold a ground, as Lockheed has a similar tri-jet with 4 hydraulic lines and any airline company will build a cost efficient jet.If it is possible for Lockheed, it must be possible for Mc Donnell.

B) Mc Donnell should introspect on all the reasons which led to the crash and find out cost efficient measures to weed out the flaws. They could look at collaborating with the suppliers of Lockheed or other competitors to build a safe yet viable aircraft. Further, the approach towards safety needs to undergo a major change.


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