The federal government holds the most sway over Boeing as both its largest customer and its regulator.
Second is Boeing’s airline customers. And, as Jon Ostrower reports, that’s who forced out Boeing’s Chairman, CEO, and head of commercial airplanes.
- The CEOs of United, Southwest, American and Alaska all sought a meeting with Boeing’s board without its CEO.
- This plan was hatched at March 7th meeting of their lobby shop Airlines for America.
- And it was leaked to the Wall Street Journal.
United Airlines Boeing 737 MAX 9, credit: United
They wanted to talk to Boeing’s board without the filter of Boeing’s CEO. That was a no confidence vote of the CEO. United’s Scott Kirby had already spoken publicly about wanting to see leadership changes at Boeing. I reported exclusively on American CEO Robert Isom’s desire for change at Boeing.
American Airlines Boeing 787-8
The frustrations run far deeper than Alaska Airlines flight 1282 and the failure to install door plugs on that Boeing 737 MAX 9. It follows the grounding of the 737 MAX due to engineering defects, like the single failure point of an angle of attack sensor being able to bring down the aircraft; myriad delays and teething problems with the Boeing 787; and continued slow development, missed deadlines, and delivery failures of aircraft.
The federal government has pushed Boeing to reacquire Spirit Aerosystems, which builds airframes as well as other components for Boeing and was originally spun off from them two decades ago – symbolic of former CEO Harry Stonecipher (who had been CEO of McDonnell Douglas) who declared,
When people say I changed the culture of Boeing, that was the intent, so that it’s run like a business rather than a great engineering firm.
Boeing Factory, Renton, Washington
It’s the airlines that are demanding Boeing is run again like an engineering firm. Whether we get there – how many more changes are made, especially as the new head of Boeing’s commercial aircraft division came up through its current ranks – remains an open question.
Diversity dictator suspected CEO was a “white male” .
Diversity dictators do not allow accused to defend themselves .
So , “bye-bye” .
I’m confused by your comment Alert. Who’s the diversity dictator here? The CEOs of the 4 airlines? You’re just trying to inject your politics here and you’re not making any sense.
Of course airline CEOs want to get to the root of the problem. Boeing hasn’t delivered products on-time and without the need for repeated recalls for 2 decades.
The very existence of some airlines are on the line because they can’t get Boeing aircraft delivered – and in some cases even certified.
It is notable that Delta’s CEO is not on the list of names. You can argue whether it was just luck or a realization of the condition that Boeing has been in that Delta has spent the last decade buying Airbus jets other than the 737-900ER fleet which was converted from the cancelled NW 787 order.
American has straddled the fence between Airbus and Boeing for decades and could win the award for diversifying its fleet while Southwest and United are the most exposed.
Southwest has come to accept that it cannot replace the lost capacity from the uncertified MAX 7 but United, now the subject of an in-depth FAA investigation, might not be in a position to add a bunch of Airbus aircraft in the next couple years, even if Airbus was able to find them.
interesting also that Scott Kirby was quoted in the WSJ as saying that the turnaround of Boeing is going to take two decades. Has an airline that is as dependent on Boeing as United is genuinely accepted that its future is going to look a lot different than the one Kirby was touting less than a year ago?
@ABC … whenever a refreshing laugh is possible , try satire …
… remember Scott Adams and Dilbert ?
Hey ABC,
Come on man, even a blind squirrel can find a nut sometimes!
@Tim Dunn, or perhaps Delta was excluded because your cousin Ed Bastian is as insufferable as you.
Needless to say, the issues with Boeing have been ongoing for years – and continue to this day. It is apparent that Boeing favors profits over producing safe aircraft. This is the well patterned result that has been shown by other businesses over the years. Greed rules, until it doesn’t.
I mean, loose bolts aren’t an engineering defect. It’s a business failure. Every business in the world has to ensure quality control.
neal,
the most obvious answer is that Delta has the lowest percentage of its fleet and order book exposed to current Boeing issues so does not need to get in the midst of a conflict.
Remember that Delta asked Boeing repeatedly to build a new generation replacement for the 767 and Boeing said they could not – which is part of what led to the large Airbus orders esp. for the A330-900.
Realistically, how much more would the 5th airline CEO add that the first 4 didn’t also say?
Again, whether Delta recognized the supply chain and production issues at Boeing or the decision was solely about product, Delta dodged a bullet over the past 10 years that won’t be resolved in the next 5.
Delta’s biggest exposure to industry issues is for the Geared Turbofan and they are partially mitigating that doing their own engine overhauls in-house. They may have to wait for parts just like everyone else but they can rebuild their own engines on their own timeline. And they make money from other airlines in the process.
sometimes there is a lot of wisdom in zigging when everyone else is zagging
@Tim Dunn … Let’s face it … Delta hasn’t been the same since the L-1011 and the mini-skirts .
Of course the airlines want Boeing to be a great engineering firm that delivers quality airplanes in a timely manner. They don’t care whether it is performing well for stockholders as long as it is staying in business.
Management, unfortunately, in the US is incentivized by short term financial goals and are rarely penalized for long term failures. No one goes and says wow the company is doing badly so we have to go back 5-10 years and get all of the bonuses/stock options back since management did poorly long term.
Clearly there needs to be a balance but people are seldom level headed and like politics, go to extremes. You can run a quality company while treating employees and customers well, just look at Costco.
Boeing is a loser company with loser leadership. They need a total slowdown and housecleaning. I see parallels with the USA.
Why should Calhoun or any of his predecessors care, they all get their big pay-offs.
Basically a case of “See ya later, suckers!”
We should recognize the government as the culprit in a lot of this as its policies have pushed up the cost of oil to the point airlines then pushed Boeing to manufacture new designs when there was nothing wrong with the old ones and at an advanced pace to the point Boeing and its engine suppliers couldn’t do a thorough job in conceiving the planes and engines. The 767 could have been fine tuned, the 737 NG could have had minor changes, and the 747-8 could be a sensible option to reduce airway congestion and ATC issues but govt. pushed the cost of oil up too much to make those viable.
Boeing, suppliers, and other companies have been under pressure to push DEI, aka as anti white and anti Christian initiatives, and no wonder we have this wrong focus at big companies.
Then we have the government always penalizing shareholders for the misconduct of management or penalizing shareholders for things that aren’t misconduct in the first place. Management and unions never pay for their bad actions but shareholders do. The government could easily enforce the fiduciary duty standard on management but never does. They can also say big institutional holders who run index funds can’t vote for the board and policies but must allow every shareholder of index funds to have proportional representation.
rich,
while your sentiment might be popular, I’m not sure it is accurate.
There is a cost to poor execution of their strategies and Boeing of all companies should know it.
Boeing has built great planes in the past.
The only reason while Airbus exists is because they have waited for Boeing (or McDonnell Douglas or Lockheed) to offer a product and then have bested it.
The A300 was a twin engine improvement over the DC10 which led Boeing to build the 767 which led to the A330. Airbus came after the 747 with the A380. Boeing’s follow-on to the 767 was the 787 which led to the A350. In every case, each successive product was better than the one the other previously offered.
The 787 is, from an engineering perspective a great plane but it was executed and manufactured poorly. The MAX was a cheap alternative to an old design and became one of the first Boeing products that was less capable than the competing Airbus model. The 777X is so far down the certification timeline that there could be hundreds of A350-1000s in service before the first 777X is delivered- note that the airline CEOs were US airline CEOs and they don’t have the 777X on order and could care less about it but they care alot about the MAX and 787.
Boeing’s problems aren’t new – they go back about 20 years – but they have only gotten worse.
Why neither Boeing realized the need for change or why airlines kept buying products from them when the problems have persisted for so long, I simply do not understand.
Why are they letting him stay till the end of the year though? Why is he not leaving immediately or even in 1 month?
He is there NINE more months!
Well said. Boeing urgently needs to go back to their roots as a great engineering company and eschew the short-term-profit mentality that came with the McDonnell Douglas merger. Who here thinks it’s a coincidence that since the Boeing leadership got the boot in the merger, the company has produced zero new airplane designs that didn’t have massive problems?
Delta was not invited. because no one wanted to hear any of their DEI nonsense.
To “engineer” a system of flight control input (MCAS) that overrides the pilots efforts to control the aircraft without having system redundancy (one stall vane info source rather than two) is an ABjECT FAILURE of basic aviation engineering. To deliberately fail to publish the information on the operation of the MCAS in the flight manual and stipulate that training was needed for the new system is CRIMINAL. The poor performance in aircraft delivery to customers manifests gross negligence and willful misconduct in production performance. Boeing is solely responsible for these failures of engineering, safety, and product production. They did this to themselves all by themselves. The entire BOD and C suite should be replaced immediately. Investigation by the FBI is fully warranted to include brining criminal charges.
Boeing CEO got to go immediately. He go for the money but not for quality’s. and he causing so many life’s under his despicable leadership.
Boeing’s corporate cockpit was hijacked in the late ‘90s by a bunch of McDonald-Douglas thugs out to make a fast buck. That quote from former CEO, Harry Stonecipher, “When people say I changed the culture of Boeing, that was the intent, so that it’s run like a business rather than a great engineering firm.” demonstrated his ineptness about what the company built: airplanes with multiple sophisticated technologies to keep them safely in the sky NOT washing machines. It’s always easier to destroy a company’s product than make it better and/or safer – which unfortunately is what the MD culture did to heritage Boeing. And, each of these “leaders” of course always seem to know when to jump out (with their golden parachutes) before they auger the company into the ground. The LOVE of $$$ is truly the root of all evil.
Delta wasn’t invited because they’re NOT a member of A4A. They withdrew from that group about 9 years ago.
Isn’t it good business to produce and sell an excellent product that customers trust and want to buy? It doesn’t have to be either/or. It can be both/and.
Let’s face it: Delta has likely saved billions by reducing its exposure to Boeing and going exclusively Airbus for both long haul and single aisle types.
Had Boeing actually spent the $10B-$15B twenty years ago for a clean sheet NextGen replacement for the 757 (production ended in 2004) then Delta wouldn’t have turned exclusively to the A321s for its obvious replacement, which now will be sold at a tremendous discount due to Boeing having zero pricing power in the single aisle market for tbe next decade or so.
What a debacle.
Yeah I’m waiting to embark a Delta Airbus, now. Delta claims to be a “premium” airline. I just want an aircraft QC’d and QA’d by actual engineers and not DEI placeholders. I had to get through TSA security shouted at by young staff hired from a DEI neighborhood and shouting at me as if they are prison intake officers, and then after arriving at the gate waiting area, to have the gate agent read the riot act over the PA as to what is civilized passenger behavior on a fully full flight.
If this is the Golden Age of Travel 2.0, then it’s a really weird age.
If Boeing was being run at an efficient business they would have already had a replacement for the 757 and F-15 being made or at least in the works.
capt freedom and Dan gets it even while others childishly mock Delta.
Delta is not the first customer that recognized their supplier is no longer worthy of their loyalty. Let’s not forget that Delta had most favored nation pricing with Boeing prior to the McD-D merger when the US government said such pacts were illegal.
Delta asked Boeing to build new generation aircraft. Boeing screwed up the rollout of the 787 and then doubled down on stupid with the MAX which had no advantages over the A321NEO.
Delta went first with the A321CEO and then the -NEO even while Scott Kirby spouted that UA could not order the A321 or AA would benefit – and yet DL ordered the A321 before UA did.
DL came to the conclusion that, if Boeing can’t build an all-new generation aircraft, DL might as well buy a re-engined jet – the A330NEO – and spend a lot less in the process than if they bought the 787 which is less capable and smaller than the A350-900. It will take at least the 777-8 to challenge what the A350-1000 can do; the 777X program remains uncertified and the first jet in that series will have 1000 miles less range than the A350-1000.
Delta didn’t go to the Boeing roundtable because it has much less risk to Boeing because it decided to go to Europe for airplanes.
As Boeing takes the 2 decades to rebuild as Scott Kirby says will be necessary, DL will have a fleet of Airbus aircraft that will serve them for the generation or DL’s rebilding.
Sometimes your customers can tell you what you need to hear – if you are willing to listen.
Boeing refused to listen not just to some of its former best customers but ultimately the market and its regulators until the wheels literally started falling off and they are all in full disaster recovery mode.
BigTee should check that the Airbus planes he flies are not built in Alabama if he wants to avoid imaginary DEI issues.
What’s with all these DEI comments? Boeing’s woes are 100 percent caused by white male executives. The problem isn’t who the engineers are, it’s that they aren’t allowed to do their jobs, or the necessary jobs don’t even exist anymor after being cut/outsourced by white male management.
Now I’m not saying management is horrid because it’s white and male, as pre-MDD merger management was the same, but if you’re looking to passing blame for planes falling apart, DEI has nothing to do with it.
Boy Dave Arnett. You comment was a dumb as poop. Every evidence in dictates that the problem is that engineering culture was boot for the bean counting corporate raider culture. An they canned the engineering side as getting in the way of profit marger. NO ONE as suggested the this was a DEI. But guess to a dim-witted MAGA type like you self every problem looks like a nail.
thank you Christopher.
The issue is managerial incompetence and that characteristic knows no racial or gender bounds.
And it is noteworthy to this conversation that Japan is saying that it will lead development of a new generation airliner perhaps powered by hydrogen.
Airbus is also working on a hydrogen powered aircraft.
Technical issues have to be addressed but the airline wants a quantum leap in efficiency and technology. Japan has the money to do it and Airbus like does as well.
Japan and Europe are not our adversaries. Japan has been a major Boeing partner for years.
If it really takes Boeing 20 years to get itself back on track, it might miss being a leader in the next generation of aviation technology – and that should be beyond sobering for Americans.
It is bizarre to think that DEI is an issue with ::checks notes:: predominantly white Renton, Washington unionized 737 production workers is an issue. Or the 20 out of 21 white faces on the Boeing executive team website? https://www.boeing.com/company/bios
Delta has the knack of picking up used airframes (mergers, bankruptcies, transitions in fleets, etc). Therefore, it’s not in as big a jam as those baying for blood of the Boeing CEO. Yet, I still understand their wolf pack attack of the Boeing CEO!!
@Alert
I too miss the L1011. Plenty of room, plenty of quiet, rarely crammed to the brim with PAX. It was the time when flying was enjoyable and club rooms were sanctuaries!!
Welcome to the 21st century.
One forgets that Delta has about 100 737MAXs on order. The simulator is being installed now. The sim manufacturer has also added a random blowout panel in the simulator to replicate the rapid decompression due to the plug blowouts.
win,
I haven’t forgotten that Delta has 100 MAX 10s on order.
I did say, accurately, that Delta has the least exposure of the Boeing operators to the Boeing production issues. Their fleet over the past 10 years has been predominantly built by Airbus and the MAX 10, based on current orders and options will be +/-10% of their total fleet in 5 years.
AA and DL both said they want the MAX 10 and want Boeing to succeed but the MAX 10 will be relatively small parts of their fleet. I believe they are genuinely accurate. AA and DL are in a different position than UA and WN which are much more heavily exposed to previous commitments for uncertified Boeing products.
Kellner the chairman was ‘one of them’ – CEO of Continental
Guessing he made the call to leave once it was clear they had to find a new CEO
@Win Whitmire
If you truly want to simulate the blown hatch, the simulator needs a feature where the cockpit door blows open and jams again the front head!!
Having watched Boeing from the inside ( 2+ decades) and all the comments about the Jack Welch disciples running Boeing since 2000, I’m astonished none of you picked up on the fact that the new Pope is an ACCOUNTANT!
So much for an engineering company to emerge.
@Frank: Delta did quit A4A about 9 years ago, but they have since rejoined. They are listed on A4A’s website as a member airline. (There are 10 members: Alaska, American, Atlas Air, Delta, FedEx, Hawaiian, JetBlue, Southwest, United, and UPS.)
Read “Iacocca”. Lee made a very strong case about what happens to companies that let the bean counters push out the product professionals. It’s amazing how many strong companies take over failing ones and then let the failing ones run the businesses.
See the parallel to the destruction of GE and the adoration of Neutron Jack -David Gelles
‘ book The Man Who broke capitalism.
it is amazing. One could be constipated and someone would suggest that DEI was responsible nowadays. Since the “reverse takeover” style merger with McDonnell Douglas, and the complete change of focus from engineering excellence to quarterly results, Boeing has gone comprehensively off course in all areas. The Starliner struggles to dock with the ISS and then spends ages being “fixed”, meanwhile Crew Dragon bops up and down to space with as far as I can see, zero issues. The T7 is reported to be behind schedule with supply chain issues. With the continuing 737 issues, all we see is a re-arrangement of deck chairs on the Titanic. I cannot prescribe a course of action. The sad thing is Boeing, whose planes I have flown on since 1960, no longer produce planes that many of us feel safe on. When Internet memes abound about the safety of the products of one of the most significant members of the Defense Industrial Base, even the most thick skinned board has to take stronger action than just ditching the CEO.
I’ve been turning around companies my entire career in addition to running companies, but everything I turn around is much smaller. For a very long time, decades, Boeing has been driven by what seems like political decisions. The entire company has been run by political animals with a very fragmented supply structure, of which each supplier has also become more political. I’ve advised companies that were suppliers to Boeing and I’d never want to be one.
I don’t know the entire root cause, but suspect it’s lots of culture-related issues that would take at least ten years to turn around. Most of the more qualified turnaround CEOs are probably not airplane people so this is a tough problem to solve. There are far too many special interests pulling in too many directions, including the unions. I like reading the comments here because you see two things, one is a pattern, but also a lot of ideas that may be contributing factors, but too simplified. Just the fact that key customers could go to a board in private says a lot about the dysfunction and complexity. It would be a fun problem to solve, but there is no way to do it without a lot of yelling from special interests.
This “coup” did not go far enough! Calhoun should be gone immediately! Stephanie Pope knows nothing about airplanes or engineering. She is purely a finance person. Significantly more changes are necessary.
The idea that fasteners…bolts …. could not be required by paperwork to be installed or reinstalled …. usually requiring a signed-off procedure of some sort by the installer ….And then that task not been inspected and found incomplete by an inspector ….and then completed…. is simply unimaginable.
Boeing needs a complete review of it procedures. THIS is not “slipping through a crack” …. This is a gaping hole. Were the procedures incomplete or just ignored … and apparently by several responsible people.
MAKING ALL THIS RIGHT REQUIRES A COMPLETE REVIEW…. The , SYSTEMS, properly followed have to prevent this.
A long time ago, w Boeing was designing the 737NG, they (engineering) asked pilots flying the 737 Classics for input on cockpit improvements. One could also fill in their contact information if desiring information on the input. Results: Still waiting. The letter must have gotten lost in the accounting office when it needed a 13 cent stamp that wasn’t budgeted.
I’ve enjoyed reading the insightful comments about the Chicago Boeing and Boeing vs Airbus in this post.
And Alert has two great points . . . the allure of the TriStar, and miniskirts, should never be underestimated.
If you look at Boeing’s C Suite they were rewarded massively with the decisions that they made with Boeing shares riding from the low 20’s in the early 90’s to $418 dollars by 2018..Likewise for a time Boeing truly was a Wall Street darling.
The current financial situation is almost the inverse of what happened in the past with share prices dropping below $200.
If you look at the situation the finance people were quite a d quite wrong. Yes they were able to significantly improve Boeing’s price since the 90’s but destroyed the company in the process. To paraphrase the American Division the Vietnam war: We had to destroy the company to save it
At this point I think we would need another company to and over Boeing because fixing Boeing is clearly behind the capability of a single CEO or even a single team.
It will take another institution to remold Boeing into it’s image. The only in the world that even has a chance of fixing Boeing would be Toyota. They are one of the few institutions with a quality first culture.
The other option would be to completely suspend production and reorganize the corporation. This option would require alot of money and patience from Boeing’s creditors. Of course reorganizing the company would probably piss off Wall Street,Boeing’s creditors it’s customers and the government.. If this were to occur Wall Street would have to extend Boring tons of credit while simultaneously being able to forgoe debt payments that are necessary for Boring yo service it’s debt,which would also anger bond holders.
Unless Boeing is able to secure massive funding for rebuilding and reorganizing while simultaneously being able to suspend debt payments they are screwed.
Money makes the world go around and it’s hard to see investors bring willing to part with far more of it based on a prayer and a hope.
If Boeing is to saved we as a society need to cough up a lot of money. I can’t see who is willing to do that.
The “merger” with McDonnell Douglas was a takeover. When the dust settled, McD people were on top of all the Boeing org charts.
McD as near as I could see always believed paying for in-house engineering was a waste of money and all they had to do was plug together deliveries from their suppliers. Fast forward to today….and see what we have.
I was one of many electrical engineers in a meeting with Harry. At different times he would stop the meeting and have all engineers running around to clarify very tiny points. I recall him as not terribly good for productive discussions that involved him listening to anyone.
“Boeing” won’t recover under the management philosophy that presently controls them and has for about 20 years.
Less the problems that get all the ink, what are the other major screw ups? Is outsourcing problematic? How could inspectors not notice missing/ badly installed bolts? Granted, workers are not the same. The profit angle is trickle down to clicking out on time.