The Leadership of Dave Calhoun at Boeing: Navigating Crisis and Challenges

Boeing has been making headlines for all the wrong reasons in 2024, facing serious issues both in the air and on the ground. Despite this, CEO Dave Calhoun is still in his position. Aviation analyst Richard Aboulafia expressed his concern, noting the board's absence, investors' complacency, and the government's lack of action in addressing the situation.

Boeing's stock has dropped by over 25% since the beginning of the year, with the most recent incident occurring in January when one of its planes had a mid-flight blowout. This incident has led to several federal investigations that indicate Boeing employees may have missed crucial bolts during repairs. Investigators have criticized Boeing for being slow to provide important evidence in response to their requests.

Boeing has stated that it is cooperating with regulators' investigations and is implementing safety improvements at its production facilities.

Boeing stated that they will keep providing support for the investigation in the same open and proactive manner they have supported previous regulatory inquiries into the accident.

The issues surrounding Boeing's 737 Max would already be serious on their own.

But there's more.

On Monday, during a flight from Australia to New Zealand, a Boeing 787 Dreamliner suddenly dropped in altitude, causing injuries to 50 passengers. Fortunately, the plane landed safely. The following day, reports surfaced about the death of a Boeing whistleblower named John Barnett. It was reported that he died by suicide on the day he was supposed to testify about safety issues he had raised regarding the company's safety procedures.

It is uncertain if Boeing holds any responsibility in both situations. The company mentioned that they are currently collecting information on what went wrong with the 787. Regarding the passing of their former employee, they expressed their condolences, stating, "We are saddened by Mr. Barnett's passing, and our thoughts are with his family and friends."

If Boeing were any other company, the CEO would likely have been replaced. However, as of now, Dave Calhoun, who has been Boeing's chief executive since 2020, continues to hold his position, along with the entire C-suite.

Aboulafia, the managing director of AeroDynamic Advisory, mentioned that many have doubted Calhoun's ability to lead for three years now. Despite this, he continues to stay in his position, leaving Aboulafia puzzled.

In 2022, Boeing increased Calhoun's total compensation to $22.5 million, even with challenges in the 777 program and quality control issues with the 787. These problems led regulators to stop the company's deliveries. We will have to wait until April for Boeing to announce Calhoun's 2023 compensation.

To be fair to Calhoun, he inherited a company in serious trouble after two fatal 737 Max crashes led to a lengthy grounding and a prolonged crisis. The issues at Boeing date back to the 1997 merger with McDonnell Douglas, which many consider to be a turning point for the company. Following the merger, the focus shifted to maximizing profits at the expense of quality, with bean-counter executives taking over and displacing engineers from key roles. While this strategy initially boosted margins, it ultimately caused Boeing to lose its way.

In the mid-2000s, Boeing executives saw an industry with significant cash flow, high barriers to entry, and only two major players – themselves and European rival Airbus. This environment, according to Aboulafia, created a situation where companies could engage in unethical practices without facing consequences.

Critics blamed the 737 Max crashes in 2018 and 2019 on more than just design flaws. They also pointed to serious management issues that damaged Boeing's corporate culture.

Boeing brought in Calhoun to help fix the situation. However, under his leadership, Boeing has continued to struggle with major issues. The growing concerns this year show that Calhoun's efforts have not led to significant improvements in quality and safety. CNN contacted Boeing for a response.

According to Gad Allon, a professor at the University of Pennsylvania's Wharton School of Business, the first step for Boeing to regain trust is to let go of the entire C suite. He believes that every executive with a C in their title is accountable for the current situation, although he acknowledges that this is unlikely to happen.

Allon is not optimistic about Boeing's board of directors taking action in this regard.

“If there is a functioning board, that’s what should happen.”

Editor's P/S:

The article highlights the severe challenges faced by Boeing, including safety issues and management failures. It raises concerns about the lack of accountability, particularly the continued presence of CEO Dave Calhoun despite the company's ongoing struggles. Aviation analyst Richard Aboulafia points out the complacency of investors and the government's inaction in addressing the situation. It is alarming that Boeing's stock price has dropped significantly, and that the company has faced multiple federal investigations for safety concerns. The death of a Boeing whistleblower adds another layer of complexity to the issue. The article suggests that Boeing's problems stem from a shift in focus towards profit maximization and a decline in quality control, which has eroded the company's reputation and culture. Despite Calhoun's efforts to address these issues, the article argues that his leadership has not resulted in substantial improvements. It remains to be seen whether Boeing can regain trust and overcome its current challenges. the public.