Calhoun steps into Boeing hotseat

Newly installed CEO – viewed by many as “part of the problem” at plane maker – says first priority is getting 737 MAX in the air while “rebuilding trust” comes second. Can he appease the hungry ghosts of 346 dead passengers?

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In Asia, there is the concept of the “hungry ghost” in which restless souls of the dead come back to haunt their living relatives who are not properly venerating their ancestors. These hungry ghosts are different from their run-of-the-mill supernatural cousins in that they are created as a result of “evil deeds” like being killed.

Boeing President and CEO David Calhoun. (PHOTO: Boeing)

Boeing’s new CEO, David Calhoun, who took over from ousted CEO Dennis Muilenburg on Monday (13 January), is facing those hungry ghosts in the form of 346 dead passengers, killed when two 737 MAX jets crashed. He is also facing a gargantuan task, or several really, of convincing global regulators, US politicians, airline customers, and the flying public that Boeing can be trusted in the future with the lives of people who fly on the company’s planes.

That task – of rebuilding trust – became a lot harder recently when hundreds of pages of damaging emails were released that showed Boeing employees mocked US regulators at the Federal Aviation Administration, derided Boeing’s airline customers and said the 737 MAX was “designed by clowns who are in turn supervised by monkeys”.

Calhoun has been credited in press reports as pushing for the release of those emails, damaging as they were, as part of his push to increase transparency at Boeing. If true, that’s a positive development for one of America’s most strategically important companies. But Calhoun’s elevation to the CEO’s post is not without detractors, who say because he has been on Boeing’s board of directors for 10 years he is “part of the problem” in which Boeing has become a company dominated by financial engineering, cost-cutting and one that puts profits over safety.

Despite those public misgivings by analysts and the relatives of the dead passengers, Boeing’s new chairman of the board, Lawrence Kellner, said Calhoun is the “right leader to navigate Boeing through this challenging time…We’re confident Dave will take Boeing forward with intense focus on our values, including safety, quality and integrity.”

To download Boeing’s CEO compensation report to the US SEC, click on the photo above.

Calhoun, 62, does have experience in the aviation industry where he was in charge of GE Aircraft Engines in addition to other posts. For his new duties, Calhoun will earn a salary of US$1.4 million plus a US$7 million bonus if and when the Max is recertified and other benchmarks are met. In all, he could earn nearly US$30 million with all the stock options, incentives and bonuses Boeing is offering.

Boeing also said recently that Muilenburg, who was “fired” or “resigned”, depending upon who is talking, will receive more than US$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 US$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, according to media reports. “He shouldn’t get any reward for killing people,” Nadia Milleron, a relative of one victim, said, according to National Public Radio in the US. “He should actually go to jail rather that get a reward.”

Friends and relatives of the dead passengers on Lion Air’s Boeing 737 MAX want Boeing executives prosecuted. (PHOTO: Shutterstock)

Calhoun, in a statement released on Monday, said: “I’m honoured to lead the talented people of Boeing as we face our challenges. Working together, we will strengthen our safety culture, improve transparency and rebuild trust with our customers, regulators, suppliers and the flying public. With the strength of our team, I’m confident in the future of Boeing, including the 737 MAX.”

In an email sent to Boeing employees, Calhoun said he recognised some of the “learnings” of the past 18 months were “painful” and said Boeing faces a “crucial time as it works to uphold our values and to build on our strengths. I see greatness in this company, but I also see opportunities to be better. Much better. That includes engaging one another and our stakeholders with greater transparency, holding ourselves accountable to the highest standards of safety and quality, and incorporating outside-in perspective on what we do and how we do it”.

Calhoun said returning the 737 MAX to service is the company’s “primary focus”. Boeing’s second priority is to “rebuild trust” in the company. “Many of our stakeholders are rightly disappointed in us, and it’s our job to repair these vital relationships. We’ll do so through a recommitment to transparency and by meeting and exceeding their expectations. We will listen, seek feedback, and respond — appropriately, urgently and respectfully”, the CEO said.

That respect will be key to re-earning the trust of regulators, airlines, and Boeing’s own employees and to appeasing the hungry ghosts of those 346 passengers killed on Boeing’s planes.

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