New Boeing CEO in­her­its cri­sis af­ter 2 Max crashes

Cal­houn faces fam­i­lies’ law­suits, firm’s tat­tered rep­u­ta­tion

Baltimore Sun - - BUSINESS - By David Koenig

Chang­ing CEOs was the easy part. Now it’s up to Boeing’s new leader to deal with a cri­sis caused by two crashes and the ground­ing of the com­pany’s best­selling plane.

David Cal­houn took over Mon­day as Boeing’s third CEO in the last five years, fol­low­ing the fir­ing last month of Dennis Muilen­burg.

Cal­houn will over­see Boeing’s le­gal strat­egy as it deals with dozens of law­suits by fam­i­lies of the 346 peo­ple who died in crashes of the 737 Max jet­liner. Cal­houn’s to-do list also in­cludes re­pair­ing Boeing’s strained re­la­tion­ship with its chief reg­u­la­tor, and over­see­ing com­pen­sa­tion to air­line cus­tomers who can­celed thou­sands of flights be­cause their Boeing jets were grounded.

Maybe most sig­nif­i­cantly, he must try to re­store the com­pany’s bat­tered rep­u­ta­tion and the im­pres­sion that it put profit over safety.

In an email to em­ploy­ees, which Boeing made avail­able to the pub­lic, Cal­houn spelled out sev­eral pri­or­i­ties for 2020. First, he wrote, is safely re­turn­ing the Max to ser­vice, fol­lowed by restor­ing trust in the com­pany.

“This is a cru­cial time for Boeing,” Cal­houn said. “I see great­ness in this com­pany, but I also see op­por­tu­ni­ties to be bet­ter. Much bet­ter.”

Cal­houn said he will spend his first weeks as CEO lis­ten­ing to em­ploy­ees, cus­tomers and reg­u­la­tors and as­sur­ing them Boeing is on the way to meet­ing their ex­pec­ta­tions. Boeing de­clined to make him avail­able for in­ter­views.

Cal­houn once ran Gen­eral Elec­tric’s jet-en­gine busi­ness and served as chair­man of the Boeing board for 10 years. His fel­low di­rec­tors de­scribed him Mon­day as the right fit for CEO.

“With deep in­dus­try ex­pe­ri­ence and a proven track record of per­for­mance, Dave is the right leader to nav­i­gate Boeing through this chal­leng­ing time in our 104-year legacy,” said Lawrence Kell­ner, a for­mer United Air­lines CEO who is re­plac­ing Cal­houn as Boeing chair­man.

“We’re con­fi­dent Dave will take Boeing for­ward with in­tense fo­cus on our val­ues, in­clud­ing safety, qual­ity and in­tegrity.”

Boeing is halt­ing Max pro­duc­tion un­til it knows when the Fed­eral Aviation Ad­min­is­tra­tion will ap­prove fixes that com­pany en­gi­neers are making to the plane’s soft­ware and other sys­tems. While Boeing says it will find other work for idled em­ploy­ees, em­ploy­ees at ma­jor sup­pli­ers are not so lucky. Spirit AeroSys­tems, which makes fuse­lages for the Max, said Fri­day it will lay off 2,800 peo­ple.

Boeing is so big that the loss of ex­ports from the Max ground­ing is weigh­ing on the en­tire U.S. econ­omy.

“There is no ques­tion that the Boeing sit­u­a­tion, it is go­ing to slow down the GDP num­bers,” Trea­sury Sec­re­tary Steven Mnuchin said Sun­day, re­fer­ring to the mea­sure of eco­nomic growth.

Boeing an­nounced Dec. 23 that it would re­place Muilen­burg. Cal­houn, 62, will get a base salary of $1.4 mil­lion but po­ten­tially sev­eral mil­lion more in bonuses and stock awards, in­clud­ing $7 mil­lion if he gets the Max back in ser­vice.

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