As New CEO Takes Charge, Boeing's Challenges Remain
Updated at 11 a.m. ET
As he moves into the chief executive's suite in Boeing's 36-story world headquarters building in downtown Chicago today, David Calhoun will find he has monumental tasks ahead of him.
The aerospace giant is still reeling from the fallout of two 737 Max jetliner crashes — in Indonesia in October 2018 and in Ethiopia last March — that killed a total of 346 people.
Documents released by Boeing late last week reveal that during the years the 737 Max was under development, key company employees appear to have hidden safety problems and deceived regulators and customers, while also sometimes mocking them, along with some of Boeing's suppliers and even fellow employees.
"I'm just shaking my head and rolling my eyes," says Scott Hamilton, an aviation industry consultant for the , who has been closely watching Boeing since the 1970s. He says he can understand expressing frustrations in the workplace, "but in this case, this goes beyond frustrations. This is disdain, this is contempt for the regulators, for some of their customers and even for some of their co-workers."
"This is another black eye for Boeing," Hamilton adds. Even though it may not hurt the company's efforts to get the troubled 737 Max recertified by regulators around the world, he says, "It's going to affect the ability to restore confidence in the traveling public."
The more than 100 pages of emails and internal instant messages show a pattern of deceit as Boeing employees downplay safety problems with the 737 Max. In one of the most shocking messages, one worker tells another, "This plane was designed by clowns who are in turn supervised by monkeys."
Another unnamed employee, while complaining about safety flaws, mentions that the company once admired for high safety standards has changed and "created a culture of 'good enough' and that is an incredibly low bar."
In another exchange, one employee asks a colleague, "Would you put your family on a Max simulator trained aircraft? I wouldn't." The colleague responds, "No."
The documents also detail schemes to hide information about a new automated flight control system on the Max that has been pinpointed as a primary cause of the two deadly crashes, as well as efforts to mislead regulators so they didn't require costly pilot training in a simulator, something that some experts say might have been able to prevent the plane crashes in Indonesia and Ethiopia.
"It's horrifying," says Nadia Milleron, the mother of Samya Stumo, who was 24 when she was killed in the crash of Ethiopian Airlines flight 310 on March 10. "I feel like I'm living a nightmare; I keep wanting to wake up."
"These revelations sicken me," adds Michael Stumo, Samya's father.
"The culture of Boeing has eroded horribly," he added. "My daughter is dead as a result."
The documents released by Boeing dropped late Thursday on the FAA and congressional committees investigating the 737 Max crisis. They paint a picture of a corporate culture fixated on cutting costs, as well as boosting profits and shareholder value, at the expense of engineering excellence and safety.
"It's terrible. The company has to change completely in order to actually produce safe aircraft," Milleron says.
Milleron and some others say they don't have much faith in the new CEO Calhoun, a private equity executive and onetime head of GE's aircraft engine unit, who has served on Boeing's board of directors for more than a decade.
"I would point out that David Calhoun has been on the board since 2009 and has set and endorsed the policies of shareholder value and cost," Hamilton says. "And so I would say he's actually part of the problem."
Milleron puts it more bluntly to those expecting Calhoun to bring an outsider's perspective and shake things up: "He's not new to the company. He is partially responsible for my daughter's death."
Boeing has made one significant change, reversing its long-held position that pilots don't need training on a simulator to fly a 737 Max even after its flaws are fixed. The company is now recommending simulator training for all 737 Max pilots before the plane is certified to return to passenger service.
Pilots and travelers' advocates applaud the reversal in Boeing's position, but some say they are disturbed to discover in the emails and other messages released last week the great lengths Boeing went to in order to fight against such recommendations.
One of the airlines that the documents show had been pushing for Boeing to provide their pilots with more costly and time-consuming simulator training was Indonesia's Lion Air. On Oct. 29, 2018, Lion Air Flight 610 was the first Boeing 737 Max to crash, killing all 189 people on board.
"Boeing worked very hard to dissuade them, pressure them, some might say, bully them by using examples of other airlines around the world and regulators around the world that said the simulator time wasn't necessary," says Sean Broderick, senior air transport and safety editor at Aviation Week, adding that "Boeing, in that case, didn't take its customers' best interest into consideration. It took its own best interests into consideration."
Rebuilding relationships with airlines, with pilots and with aviation regulators is among the top challenges Calhoun faces, as is restoring the trust of airline passengers, many of whom say they won't fly on a Max even if regulators clear the troubled plane to fly again.
"He's got his work cut out for him," Hamilton says.
For doing that job, Calhoun will earn a salary of $1.4 million, plus a $7 million bonus if and when the Max is recertified and other benchmarks are met. In all, he could earn nearly $30 million with all the stock options, incentives and bonuses Boeing is offering.
In an email to Boeing employees on Monday, Calhoun said returning the 737 Max to service safely is among his top priorities for the company in 2020.
"This company has a tremendous legacy of aerospace achievement, thanks to your efforts and the contributions of generations before you," he said. "I honor that legacy, and I appreciate your tireless commitment. I also recognize the learnings — many of them painful — from the experiences of the last 18 months that you are bringing to the way we do business."
Meanwhile, the company has announced that Calhoun's predecessor, Dennis Muilenburg, is walking out with more than $62 million in compensation. In a statement, Boeing says that is what Muilenburg is contractually entitled to receive. Boeing said he is not receiving severance pay or a bonus, and he has returned nearly $15 million worth of stock options.
Still, that's a hefty payout for someone who one of the families of those killed in the plane crash says failed to do his job, which is to keep airline passengers safe.
"He shouldn't get any reward for killing people," Nadia Milleron says. "He should actually go to jail rather that get a reward."
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