Boeing’s New CEO: Honest, Unlikable, Or Both?

Filed Under: Media

Yesterday The New York Times published an interview with David Calhoun, Boeing’s new CEO. Obviously he has a huge task ahead of him, though I can’t help but feel like the quotes attributed to him paint him in a rather negative light.

I’m undecided as to whether he’s just being honest and this is a reflection of the state of things at Boeing, or whether it’s him. I wanted to share a few highlights.

Indirectly blaming pilots for 737 MAX crashes

Boeing has certainly in some ways tried to shift blame for the 737 MAX crashes, both officially, and through leaked company messages.

In the interview Calhoun is asked if he thinks American pilots would have been able to handle a malfunction of the software. He asked to speak off the record, but The New York Times refused to do so. He then said:

“Forget it. You can guess the answer.”

Clearly he thinks that ultimately the crashes wouldn’t have happened with US pilots.

Why he wouldn’t give up his salary

Calhoun has a rather controversial bonus structure, as he’s being given a $7 million bonus based in part on whether he can get the 737 MAX back into the sky. He dismissed concerns of that, saying:

“The objective is to get the Max up safely. Period.”

He was also asked why he didn’t elect to forgo his salary altogether, and said:

“Cause I’m not sure I would have done it.”

Throwing previous CEO under the bus

Calhoun has been on Boeing’s board for over a decade, and as recently as last November said his predecessor, Dennis Muilenburg “has done everything right” and shouldn’t resign.

Now he has a different explanation and take:

“Boards are invested in their C.E.O.s until they’re not. We had a backup plan. I am the backup plan.”

He now acknowledges that Muilenburg turbocharged production rates before the supply chain was ready, which sent Boeing shares to an all time high. He went on to explain:

“I’ll never be able to judge what motivated Dennis, whether it was a stock price that was going to continue to go up and up, or whether it was just beating the other guy to the next rate increase. If anybody ran over the rainbow for the pot of gold on stock, it would have been him.”

Boeing doesn’t have a culture problem

All kinds of internal Boeing emails and messages have emerged, which sure paint a pretty damning picture of the culture at Boeing. Calhoun doesn’t think the company has a systematic culture problem, though.

He acknowledged the messages were unacceptable, but also tried to downplay the issue:

“I see a couple of people who wrote horrible emails.”

Bottom line

There’s no doubt that Calhoun has his work cut out for him, and he has only been in his current role for several weeks. However, I can’t on balance help but feel like he comes across as rather unlikable.

I’m not sure if that’s just a reflection of Boeing as a company being viewed less favorable, or if it’s specific to Calhoun.

What do you make of the interview with Boeing’s new CEO?

Comments
  1. I’m not sure at this stage – statements dont necessarily paint a picture of the guys abilities – let’s wait and see ,however I do agree that if American pilots or Australian pilots were flying those Max aircraft I personally believe they would have been able to control them

  2. I don’t like blame shifting and he does take a fair amount of responsibility for the safe return of the MAX, but there is, without question, safety concerns at some airlines, especially in southeast Asia. There is no way I’d fly Air Asia, and that was before their more recent safety concerns came to light.

    The NYT Magazine had a great story about the MAX disaster and some foreign carrier, especially Air Asia: https://www.nytimes.com/2019/09/18/magazine/boeing-737-max-crashes.html

  3. Seems like exactly the sort of ******* you’d expect to be in that sort of position, in that sort of company. Snakes for blood.

    Nothing will change.

  4. Some day Boeing will be a business school case study. The day they moved their executive headquarters to Chicago was the day they became a financial engineering company instead of a plane engineering one. This guy doesn’t seem like he gets it.

  5. we have become very cynical in the last few years here in the US. Case in point your post regarding the new Boeing CEO as well as Richard G’s post. Calhoun has a very hard road ahead for him as well as BA, no doubt, but not to give the gentleman an opportunity to work this thing out is wrong,

    Sometimes hard answers not politically correct answers are needed. If one looks back at CEO’s hired to turn things around many of them were subjected to negative “press” in the beginning, I know because I was one. It’s not pleasant to be second guess when I hadn’t even gotten a pay check !

    As a former AF driver my feelings mirror many of your commenters and Boeing needs to be cleaned out and a culture of quality and flight safety restored. It has become a huge embarrassment for all of us Americans. Having said that there is a culture of “race to the bottom line” here in the US and indeed worldwide.

    Travel safe Ben

  6. To those saying the new Boeing CEO should be given a chance….. if a cancer patient was offered treatment for a cold should the doctor be given a chance?

    The fact is lobbying and cash flow culture is now deeply embedded Away from the conservative engineering and safety culture at Boeing. Given the new CEO does not recognize that he may wreck the company along with the majority of the u qualified BOD

  7. This does not bode well. Boeing has a cultural problem, especially at leadership level. They really needed a fresh perspective, not another of the ol’boys.

  8. That insulation about pilot skills is reprehensible. Even if true, Boing has an obligation to deliver a product that is safe for all operators and passengers.

    I don’t see them limiting the airlines to which they’ll sell planes based on an assessment of the carriers’ pilots’ skills.

  9. Because so many do it falsely, I hate to call out racism, but this nonsense about American pilots being inherently superior to others is ridiculous.

    The fact was that it was a badly flawed design, as shown by Boeing’s internal documents, and its existence, and thus the knowledge of how to counteract it, was kept secret from pilots. Given that the crashes occurred during very busy parts of the flight, when there was little recovery time, it’s simply not good enough to blame the pilot.

    And then, even if they get software which actually does what it’s meant to, they have the issues of debris left in the fuel tanks – are they going to blame the pilots for that also?

  10. @Daniel & StevenE, “Sully” Sullenberger, the “Miracle on the Hudson” pilot called the 737 Max a death trap in his response to the NYT magazine article. So much for “white guys”as better pilots.

    The basic design of the 737 Max was flawed and no amount of lipstick or software on that pig can fix it. Every single one of those planes should be SCRAPPED.

    Boeing spent $43B on share buy backs during the 737 Max development period. The executives and board should be criminally prosecuted for murder.

  11. Well, the CEO is right. Weren’t there similar incidents in the US, but the pilots were able to handle them even if they were caught by surprise?

    Not all pilots are created equal.

    An acquaintance of mine worked for ATC in the UAE in the 1980s. His words: “To certain airlines, we couldn’t give any complex instructions as they struggled to keep those birds flying in the first place.” That’s just how thw world is.

  12. Well, he is correct. American Pilots would not have let the aircraft crash if they had been at the controls. (Hence why there were no crashes involving US operated 737 Max aircraft). He should not forgo his salary. He was hired after the issues happened, not before it. I.E. He allowed it to become his problem. He didn’t make the problem.

  13. @ Richard G:

    you are 100% correct. just another self-centered, narcissist CEO who is blind to internal issues.
    Nothing will change with him at the helm.

  14. Upstarter, I agree. The 737 was not a good design to begin with, and Boeing tried to keep ‘polishing a turd’ with the MAX revision instead of introducing a new plane. They brought all of this on themselves.

  15. Reminds me of the pmUA tulip fan boys these ‘engineering culture’ people

    That ended about 1974 around when the company nearly went under because the 747 was an early dud

    They made some innovative planes in the 60s – so did Douglas – ever since it’s been low risk corporate vanilla nothing new there

    He’s right – production ramped too quickly

  16. He gets a bonus if the 737 Max ever flies again? Company itself must have some doubts about that, then.

  17. @markj: I remember that the CEO of Boeing at the time, Phil Condit, said he made the decision to move the HQ because of increased necessity for him as CEO to appear in DC. Basically, the more Boeing got invested in defense work (especially after acquiring McDonnell-Douglas), the more congressional oversight there was, and SEA-IAD-SEA-IAD-SEA, etc., was eating up a lot of time.

    It’s difficult for me to really fault him on that.

  18. When a company finds itself in trouble as a consequence of the ill-considered actions of bean counters and marketers ( riding roughshod as they have over the views of engineers), what to they do? Appoint as CEO someone with a background in accounting, finance and marketing ….and one without much sophistication in the media game, at least judging by this interview.
    It appears that Boeing has learned very little from the disasters of the past 2 years. It does not bode well.

  19. I find his answer direct and honest. I’m not going to judge him based on an interview. Journalists these days bait too much just to sell news, fake or not.

    Culture is clearly a problem and I do think Calhoun can change it. He is from a different culture and background than other Boeing life long employees.

    I personally think Boeing missed out big big time on Alan Mulally a decade ago. He was behind the 777 success and guided BCA through 9/11. Once he left the 787 literally caught fire. Then look at his tenure at Ford vs GM+Chrysler.

  20. Based purely on what you’ve presented, there isn’t nearly enough information to make a judgment one way or the other on Calhoun. Print is notoriously problematic because it contains no body language or tonality to give any of us clues on whether Calhoun is arrogant, is exhibiting hubris, or is denying everything. Certainly, based on your first quote, to draw a conclusion that he feels US Pilots are better is irresponsible, though I truly understand this is your blog and can present your opinion in the way you see fit. I reiterate, however, that I also don’t know the answer.

    The point is, give the guy a chance. I have no idea if he’ll be any better – or worse – than the last. Jumping into questioning contempt based on text snippets of an interview that don’t present a clear picture is a slippery slope, regardless of bias toward the company.

  21. @NB

    Pointing out that other countries have a poor safety culture isn’t racism and you would be doing yourself a favor if you educated yourself on the difference.

    I’ve worked with Lion Air and while they are wonderful people I wouldn’t fly the airline because a perceived lack of safety at the airline which is reflective of Indonesian culture overall.

  22. @Daniel from Finland
    Shortly after the crashes I delved into the NASA reporting system looking at incidents about the MAX reported by American pilots. All of the ones I came across (which admittedly is probably by no means all) were faults occurring at altitude where the pilots had both time and space to give it a second, think, and then act. Both the Ethiopian and Lion Air crashes had the trim trying to go into extreme nose-down position shortly after take-off, at much lower altitude. That’s a very dangerous and difficult situation for any pilot to be in, no matter how well they’re trained, because there is much less time to troubleshoot the problem and take action.

  23. His speaking style. Little filter, pointed. Part of why he was appointed in contrast to Muilenburg’s calculated style. It was the congressional hearing and stating it was up to the board per operating procedure if he [Muilenburg] should not have a salary that is generally considered the point of no return for him as CEO. Basics of public corporate scandal recovery; be frank, be contrite, commit to do whatever is needed.

    It’s not a different take. “Boards are invested in their C.E.O.s until they’re not. We had a backup plan. I am the backup plan.” is exactly how it works. Company publicly support the CEO even if they internally question and why they can be ‘100% confident’ one week and then fire them the next.

  24. “I see a couple of people who wrote horrible emails.”

    The emails were not horrible. It was engineers wanting it on record that they thought the 7373max was unsafe and should not be certified.

    You cannot blame the pilots. Lion Air had suggested that it’s pilot have simulator training and Boeing had actually stopped them from doing this, as this set a precident that other airlines might follow and then they would not be delivering on the Boeing promise that no training was needed to fly this plane (there was a $1m fine per plane for Boeing if Boeing said training was needed). On top of this the simulator did not even have mcas in it and it was not mentioned in the training material. The real issue is that the 737 Max planes sold in America had an extra sensor so this issue would be less likely to happen as 2 sensors would have to fail simultaneously. Boeing offered this as an optional extra to Asian carriers who obviously didn’t bother buying it as it provided no extra features, just redundancy. If any of these carriers knew about mcas they would not have bought the plane without this option, and the plane would not have been allowed to be sold without the extra sensor had it been certified correctly.

  25. It’s like one of those Samsung phones that exploded. Would you blame customers for not being smart enough to see it coming and throw it away? No. Would you compliment whoever is stupid enough to make that suggestion to be “honest”? Yeah sure, it’s honestly stupid.

  26. For those of you supporting Calhoun’s statement about foreign pilots, I offer this:

    Aviation Week reported earlier that sim flight test were conducted after the two crashes, in the US. Now remember 1) These pilots were not going to die in the sim 2) They did not have some 200 lives in their hands 3) They KNEW the MCAS system was going to kick in and force the nose of the aircraft down.

    They flew the scenario and were shocked to find out they couldn’t save the aircraft. It was later said that pilots had to recognise the problem in 4 seconds and react within 10 seconds. Experienced, US pilots.

    $43 billion spent on stock buybacks sine 2013 to drive up the share price. That’s where the money went.

  27. A bit rich for Americans to call other airlines unsafe, when Alaska and Hawaiian are the only American airlines that made the top 20 safety rankings for airlines in 2020.

  28. Agree with the point made by @NB and to the person who kept writing Air Asia, you’re having a shot at an airline not even mentioned… Its Lion Air. Two entirely different carriers. Get it right mate.

  29. Calhoun seems to be a man of few words. He’s my kind of guy; plainly doesn’t suffer fools gladly.
    Whether he’s likable or not is beside the point. He will be judged on results. On balance I’m finding him refreshing, and likable enough.

  30. Chevrolet manufactures the Corvette.

    Theoretically every driver with a basic license can drive a Corvette.

    The statistics show that the fatality rate for inexperienced drivers of the Corvette is significantly higher than that of experienced drivers.

    So should we ground the Corvette until the design is made so FOOL PROOF that any driver of any skill level would be protected by the car from making stupid errors? Or should every driver be required to demonstrate they have the skills necessary to drive the car?

    For some reason bloggers on this site now demand that Boeing must ensure that anyone can fly the Max 8 with not much more than a private pilot’s license under all circumstances.

    This is irrational!

  31. I work at Boeing. This article is idiotic. Muilenberg did promote a happy talk culture. Foreign pilots lack the training of US commercial pilots and work in poorly managed systems. Who would work for free? If you read other Calhoun comments you will hear him say that, yes, Boeing’s culture has issues. I’ll take frank and honest over the standard corporate eyewash anyday. How about an article about the challenges of fixing a battered Aerospace manufacturing company and improving international pilot training standards instead of a takedown. Journalists, get your shit together and do you job.

  32. Ben you are young and not with enough experience to see through this. Perhaps I wouldn’t have as well at 30 years of age.

  33. Steven E – so “however I do agree that if American pilots or Australian pilots were flying those Max aircraft I personally believe they would have been able to control them” – So British trained and qualified ATPL pilots would have crashed, would pilots trained by CAE, L3 or maybe the RAF be dangerous? SOME STATEMENT! Anywhere other than USA or Australian trained crews are no good eh? Or is it that QF72 An Airbus Aircraft had a similar problem and the pilot kept control? Did ADIRU do basically the same/similar thing as MCAS?

  34. He was honest alright. My initial reaction when reading the interview: ‘what a deplorable sleaze bag!’ No expression of sorrow for the victims, probably on advice of Boeing’s lawyers – but not needed anyway as Boeing would have nothing to do with the dumb pilots who rode those fine machines into the ground. Been on the board for a decade but ‘hey, we support our CEO no matter what until he is gone, then we blame him for everything and move on.’

    Well, those poor passengers did not have the luxury of golden parachutes. I expect it takes the pending criminal investigations to establish that there was criminal negligence or even worse to cut Boeing and its arrogant irresponsible executives down to size.

    P.S.: I didn’t think twice about taking a couple of Air Asia flights lately. You won’t see me on a 737 Max flight on any US airline should they ever be covered again.

  35. reading this blog post and thinking if this guy is too honest or just a plain dick, i’d go with the latter.

    first, under no circumstance would i ever believe a board member had no idea of its CEO’s intentions due simply to the fact that a CEO’s job is to ensure the corporation succeeds, is profitable and has to do so by seeking board approval on how to get there. that this new CEO was part of that approval process as “the backup plan” would be extremely naive to suggest he was unaware. so, he may be a dick though anything but honest, imo.

    “ “I’ll never be able to judge what motivated Dennis, whether it was a stock price that was going to continue to go up and up, or whether it was just beating the other guy to the next rate increase. If anybody ran over the rainbow for the pot of gold on stock, it would have been him.”

  36. BS. How could American pilots have done anything differently than the Ethiopian and Indonesian Pilots did when American Pilots weren’t even aware that the system was on the aircraft?

    And why did that happen? Because Boeing was greedy, lazy and grossly incompetent

  37. @Daniel from Finland
    @Joe

    Can you name even one incident where an American or European pilot encounter the same difficulties controlling the aircraft that the pilots in Ethiopia and Indonesia did?

    There is no such incident that is documented because bowling did not even tell any airline much less American and European airlines that the MCAS system was on board the Max and what it was capable of doing.

    As I understand it the post crash initial report shows that the Ethiopian pilot did exactly what Boeing had very broadly told Pilots to do which obviously it was not enough or correct.

    People who don’t know the actual facts should refrain from commenting. Just because you have an opinion doesn’t mean it’s factual.

  38. Airlines wanting the best quality aircraft at the lowest price possible, passengers wanting cheap flights an engineering company run by bean counters = a disaster. No disrespect to Captain Sully his skill at landing on a river doesn’t make him a hero or aviation expert.

  39. @JJ

    The same fix as “runaway trim” which was a standard procedure for trained pilots, according to many of the expert testimony. Same two switches same procedure.

    Why are so many rabid Boeing haters blogging?

    A321neo has a real problem that should be preventing them from flying (center of gravity issues). Can’t fly full because aircraft becomes unstable. Don’t hear about this do we? Reported on many professional sites.

  40. Over the past few months I have been analyzing both Boeing and Wells Fargo in my business course’s. A connection I have made between the two is that a CEO who was brought in from inside the company can not lead the change needed, as they will always have a bias (in this case it is due to David Calhoun being on the board for Boeing during the crashes and for all decisions leading up to it). My group has recommended removing Mr. Calhoun and finding a CEO from the external environment – as Wells Fargo did after the fake accounts scandal.

    The CEO during the scandal, John Stumpf, was removed and replaced by Tim Sloan, who was the COO or CFO. As Elizabeth Warren very publically stated, he should be fired for his involvement and cannot truly lead change from a toxic culture that he played a large role in. Wells Fargo has not brought in an external CEO, Charles Scharf from VISA, who has no bias towards the company, and is seen as a true change agent who can make the necessary culture changes (three years after the scandal came to light!) This is the basis of our recommendation – David Calhoun can not be the change leader that Boeing needs. Boeing needs to recognize the toxic culture that has been building since the mid-90s, and they won’t if Mr. Calhoun is the CEO.

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