Boeing CEO Calhoun Stepping Down After Security Crisis

Dave Calhoun, the Boeing CEO, announcinghis attempt to step down for all. Brooke Sutherland from Bloomberg Opinionjoins us now. Brooke, you pointed to this almostimmediately after the Alaska incident. You said there might be cultural issuesthat need to be addressed. And you alluded to the fact that maybethere needs to be a change at the very top of the company.Brooke, you surprised this morning. I'm not because I think, you know,change does start from the top. And I and I think that it's just beenstriking the degree to which Boeing has been reluctant to talk about this as adeep rooted cultural problem.

And I think you need somebody to come into really look at everything with fresh eyes.Because remember, you know, Dave Calhoun has been on the board since 2009.So he's been there for a very long time. And I think this is a company that isdesperately in need of some fresh perspective.But now the question is, who do they get to bring in that fresh perspective?And I think, you know, there's going to be a lot of eyes directed toward LarryCoke's way, just given the turnaround that he's been able to orchestrate atGE. I don't know if he would be interestedin this because he's got a pretty great.

Job at GE right now.He's about to leave an independent GE Aerospace, a future that looks a lotbrighter than the one that Boeing has right now.But that's the type of person that you need to really get in there and focus onthe manufacturing that is at the heart of what Boeing does.They got a little off course as far as that's concerned.And you really need somebody who's going to drill down those basics and produceairplanes that don't have any defects. How do you meet that, Brooke, with theneed for industry knowledge? So I'm looking at the change as well tothe commercial airlines, commercial.

Airplanes.CEO So Stephanie Pope's been named been at the company for nearly 30 years.Stan Dale is kind of retired. What do you make of that transition?I mean, I think that's another one where it just was not tenable to keep themanagement in place running the commercial airplanes division, becausethat's where a lot of the problems were emanating from.And so I think what you're seeing is Boeing trying to take accountability forthe fact that there does need to be sweeping changes.And it's not just the CEO, it goes down into further into the ranks ofmanagement.

And so I think that's what the signal ishere. But to your point, I mean, I think youneed somebody with a lot of aerospace expertise.This is not a job where you bring in somebody from the auto industry orsomebody from the health care industry who is a good operating CEO.You need somebody who knows aerospace, who understands airplane manufacturingand how to get this job done. Why did this take so long, Brooke?Sorry. Why did this take so long to have theCEO step down at a time when this company was coming under spiralingallegations and a lot of questions.

Around the culture?I mean, I think there was a reluctance to throw more chaos into the situation,which I can understand that there's a lot of scrutiny on Boeing right now anda lot that it needs to figure out. And a management change does, you know,add more variability to the process. So there was a little bit of that.But then I think it also goes back to what I was talking about of I don'tthink that this company until quite recently grappled how serious of asituation that it's in. And even on the earnings call in theirmost recent one, they were sort of talking about this as a temporary pauseand production ramps for the 737.

And I don't think that's the rightattitude. The CFO was on the Jefferies EarningsConference call the other day and talking still about that $10 billioncash flow target that Boeing has that out there and they're not putting outannual targets, but they're still not backing off that $10 billion long termtarget. And I don't think that's the rightmentality now. And so I think, you know, we're finallyseeing a moment where they're coming to terms with the seriousness of thesituation that they're in. Will this ease any concerns the FAA has?I mean, I would think that the FAA had.

To have been apprised of what'shappening here. And, you know, certainly they're goingto be looking for somebody who will pay attention to all the manufacturingdetail. I would think that, you know, Boeingwould be in close talks with their regulator in terms of what the goforward plan looks like. And you want to bring somebody and whohas that aerospace factory expertise. So I don't think the FAA is going to behappy with, you know, a surprise outsider with no expertise in thisindustry. Brooke, the investigations are ongoing.And I just wonder and this is a.

Difficult question to give a directanswer to, so forgive me for asking it, but I'm just thinking out loudremuneration for Dave Calhoun. How is this going to be managed as heheads to the exec, given these investigations will be ongoing and we'vegot no idea where they land. I yes.I mean, I don't know the exact answer to that.It'll be interesting to see, you know, once we get the proxy filings and theterms of his retirement package to see what that looks like.Um, but I will say, I mean, I, you know, they didn'tand Dennis Muilenburg also stepped down.

And and there's certainly a history herefor for how this gets managed without going executives.

Sharing is caring!