Boeing at X-Roads?
I expect that functionally he is relieved of all responsibilities except handoff and he is welcome/encouraged to goof off until the end of the year.
From today’s New York Times
Another step that would impress aircraft purchasers and passengers would be clawing back some of Calhoun’s bonus pay, or at least not paying out awards that haven’t vested yet. I asked Boeing about that and was told that details on that issue are coming in a few weeks.
When Calhoun took over as chief executive in 2020, he vowed to produce jets at a pace the factory can handle, instill discipline, hunt for bad news and act on it, according to a profile in The Times. “If I don’t accomplish all that,” he said, “then you can throw me out.”
They just did.
When Calhoun took over as chief executive in 2020, he vowed to produce jets at a pace the factory can handle, instill discipline, hunt for bad news and act on it, according to a profile in The Times. “If I don’t accomplish all that,” he said, “then you can throw me out.”
They just did.
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Earlier today I watched the interview Dave Calhoun gave to CNBC Squawk Box autos and aviation reporter. Some interesting points.
But first, about so-called golden parachutes. Any severance or similar types of payments certainly are determined by the executive employment agreements these high-level positions always entail, and even more certainly in a company of Boeing's size. The terms of bonus payments, deferred compensation, stock options, ad well as payments upon termination of employment under various (legally, more or less standardized) categories of situations will have been spelled out, in plenty of detail, from the start of the position. Perhaps high-level executive talent could be recruited for such positions with such heavy responsibilities (and public presence) without severance arrangements under standard categories of termination, but I seriously doubt it. (Whether any so-called "clawbacks" of various types of executive comp could result from, for example, shareholder derivative litigation, I'm not guessing.)
Also relating to the next CEO, Calhoun in the CNBC interview this morning emphasized that the aircraft business is one that runs on very long term development cycles; that he will participate in the executive search and will be looking for significant aviation experience in the context of very long development cycles, and noted specifically that the next aircraft program will require an investment of 50 billion dollars and the next CEO must have a track record on that order of magnitude or scale if you prefer. I'm not posting this because anyone wouldn't already know these parameters or wouldn't expect them to apply - instead this SLF/attorney found those remarks a further step in the right direction. Time will tell.
As for the continuing elevation of Stephanie Pope, it would seem extraordinary for Ms. Pope or anyone in the same roles she has held until now to be pushed forward to the top executive job in so rapid a rise as January 2025. And without piling on, please not an accountant no matter how fantastic. Get an engineer.
But first, about so-called golden parachutes. Any severance or similar types of payments certainly are determined by the executive employment agreements these high-level positions always entail, and even more certainly in a company of Boeing's size. The terms of bonus payments, deferred compensation, stock options, ad well as payments upon termination of employment under various (legally, more or less standardized) categories of situations will have been spelled out, in plenty of detail, from the start of the position. Perhaps high-level executive talent could be recruited for such positions with such heavy responsibilities (and public presence) without severance arrangements under standard categories of termination, but I seriously doubt it. (Whether any so-called "clawbacks" of various types of executive comp could result from, for example, shareholder derivative litigation, I'm not guessing.)
Also relating to the next CEO, Calhoun in the CNBC interview this morning emphasized that the aircraft business is one that runs on very long term development cycles; that he will participate in the executive search and will be looking for significant aviation experience in the context of very long development cycles, and noted specifically that the next aircraft program will require an investment of 50 billion dollars and the next CEO must have a track record on that order of magnitude or scale if you prefer. I'm not posting this because anyone wouldn't already know these parameters or wouldn't expect them to apply - instead this SLF/attorney found those remarks a further step in the right direction. Time will tell.
As for the continuing elevation of Stephanie Pope, it would seem extraordinary for Ms. Pope or anyone in the same roles she has held until now to be pushed forward to the top executive job in so rapid a rise as January 2025. And without piling on, please not an accountant no matter how fantastic. Get an engineer.
Bold mine
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Claybird
Another illustration of the truth of the old saw,, "words matter."
I had heard Calhoun's remarks about the long-term development cycle generally, and the need to invest 50 billion dollars specifically, as meant to include experience in aviation (which I believe he did specifically articulate) as well as manufacturing excellence in particular.
But I see (by your post) this might assume too much. After all, did not the outgoing Boeing leaders - and several tiers of leaders before them - assume that executing a tens-of-billions-of-dollars aircraft development and production program was a matter of returning maximal value to shareholders . . . and to themselves? rather than high-fidelity to principles of quality standards for aerospace and to preeminence in engineering? So it's ultimately got to be about not just having led a business on the scale referenced by Dave Calhoun, rather about having done so in fact and done it with the emphasis on adherence to the highest applicable quality and engineering standards. To that extent, I stand corrected.
I'd further argue that if attainable, the selection of the next CEO ought to be someone who will (or at least will be able to, since no one is guaranteed tomorrow) reverse the errors of the past yet additionally advance those very standards of manufacuring excellence and engineering preeminence. Make up for the ground, .....err, the air, that has been lost.
Another illustration of the truth of the old saw,, "words matter."
I had heard Calhoun's remarks about the long-term development cycle generally, and the need to invest 50 billion dollars specifically, as meant to include experience in aviation (which I believe he did specifically articulate) as well as manufacturing excellence in particular.
But I see (by your post) this might assume too much. After all, did not the outgoing Boeing leaders - and several tiers of leaders before them - assume that executing a tens-of-billions-of-dollars aircraft development and production program was a matter of returning maximal value to shareholders . . . and to themselves? rather than high-fidelity to principles of quality standards for aerospace and to preeminence in engineering? So it's ultimately got to be about not just having led a business on the scale referenced by Dave Calhoun, rather about having done so in fact and done it with the emphasis on adherence to the highest applicable quality and engineering standards. To that extent, I stand corrected.
I'd further argue that if attainable, the selection of the next CEO ought to be someone who will (or at least will be able to, since no one is guaranteed tomorrow) reverse the errors of the past yet additionally advance those very standards of manufacuring excellence and engineering preeminence. Make up for the ground, .....err, the air, that has been lost.
Shall the new leader walk across Puget Sound and still the waters with a wave of their hand?
Where shall such a savior come from?
Simple question for those customers - who do they know will fit that requirement? I bet they could poach the entire management from Airbus and install it in Renton.
Is that the plan?
Where shall such a savior come from?
Simple question for those customers - who do they know will fit that requirement? I bet they could poach the entire management from Airbus and install it in Renton.
Is that the plan?
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Shall the new leader walk across Puget Sound and still the waters with a wave of their hand?
Where shall such a savior come from?
Simple question for those customers - who do they know will fit that requirement? I bet they could poach the entire management from Airbus and install it in Renton.
Is that the plan?
Where shall such a savior come from?
Simple question for those customers - who do they know will fit that requirement? I bet they could poach the entire management from Airbus and install it in Renton.
Is that the plan?
- Bachelor of Science (B.S.) degree in mechanical engineering.
- Master of Science (M.S.) degree in mechanical engineering from Massachusetts Institute of Technology
- Master of Business Administration (MBA) from the MIT Sloan School of Management).
An engineer and an MBA
Edit: At 61 though I don't knows ... a bit on the wrong edge of what Boeing (should be) looking for
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Claybird:
"At 61 though I don't knows ... a bit on the wrong edge of what Boeing (should be) looking for."
One point is that the person's actual age within the presumed sought-after range of chronological ages is relevant if and when better or even just equally qualified candidates emerge who have longer career tracks to run. Even this, though, takes conventional notions about declining effectiveness around the standard ages for retirement as necessarily valid.
There is also the perspective that as situated at the start of his seventh decade, an experienced senior executive and leader brings an additional factor that less senior people do not possess and rarely if ever claim to have. If he were to return to the Company now, surely his legacy would be a subject of much reflection or contemplation. A chance to right the big Boeing enterprise after the occurrence of all the problems, what a legacy that could be. Up until the time "retirement age" is really in the near future, concern over legacy - as opposed to the beach house or villa in the South of France, or (my favorite) the big sailboat - isn't as perceptible in one's motivations. At 61, I'd guess for someone described as a Boeing lifer, it likely could be a strong factor.
"At 61 though I don't knows ... a bit on the wrong edge of what Boeing (should be) looking for."
One point is that the person's actual age within the presumed sought-after range of chronological ages is relevant if and when better or even just equally qualified candidates emerge who have longer career tracks to run. Even this, though, takes conventional notions about declining effectiveness around the standard ages for retirement as necessarily valid.
There is also the perspective that as situated at the start of his seventh decade, an experienced senior executive and leader brings an additional factor that less senior people do not possess and rarely if ever claim to have. If he were to return to the Company now, surely his legacy would be a subject of much reflection or contemplation. A chance to right the big Boeing enterprise after the occurrence of all the problems, what a legacy that could be. Up until the time "retirement age" is really in the near future, concern over legacy - as opposed to the beach house or villa in the South of France, or (my favorite) the big sailboat - isn't as perceptible in one's motivations. At 61, I'd guess for someone described as a Boeing lifer, it likely could be a strong factor.
Last edited by WillowRun 6-3; 27th Mar 2024 at 12:12.
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Claybird:
"At 61 though I don't knows ... a bit on the wrong edge of what Boeing (should be) looking for."
One point is that the person's actual age within the presumed sought-after range of chronological ages is relevant if and when better or even just equally qualified candidates emerge who have longer career tracks to run. Even this, though, takes conventional notions about declining effectiveness around the standard ages for retirement as necessarily valid.
There is also the perspective that as situated at the start of his seventh decade, an experienced senior executive and leader brings an additional factor that less senior people do not possess and rarely if ever claim to have. If he were to return to the Company now, surely his legacy would be a subject of much reflection or contemplation. A chance to right the big Boeing enterprise after the occurrence of all the problems, what a legacy that could be. Up until the time "retirement age" is really in the near future, concern over legacy - as opposed to the beach house or villa in the South of France, or (my favorite) the big sailboat) - isn't as perceptible in one's motivations. At 61, I'd guess for someone described as a Boeing lifer, it likely could be a strong factor.
"At 61 though I don't knows ... a bit on the wrong edge of what Boeing (should be) looking for."
One point is that the person's actual age within the presumed sought-after range of chronological ages is relevant if and when better or even just equally qualified candidates emerge who have longer career tracks to run. Even this, though, takes conventional notions about declining effectiveness around the standard ages for retirement as necessarily valid.
There is also the perspective that as situated at the start of his seventh decade, an experienced senior executive and leader brings an additional factor that less senior people do not possess and rarely if ever claim to have. If he were to return to the Company now, surely his legacy would be a subject of much reflection or contemplation. A chance to right the big Boeing enterprise after the occurrence of all the problems, what a legacy that could be. Up until the time "retirement age" is really in the near future, concern over legacy - as opposed to the beach house or villa in the South of France, or (my favorite) the big sailboat) - isn't as perceptible in one's motivations. At 61, I'd guess for someone described as a Boeing lifer, it likely could be a strong factor.
I seriously warn a good handful people in my corporation of Boeing as a bad example. Being a company with tradition, heritage, engineering. BULLCRAP.
And I also see the top mgmt (edit: in my corp) changing the course, but seemingly still kind of reasonable. Of course they are disconnected from shopfloor and customers. Make the company more profitable and fit for survival.
The real catastrophy is management below. Their desperate attempt to fulfill the new job and hide issues from top is a disaster. Shareholders must be pleased at all costs. The middle management quits in disgustion, the remaining ones are totally spinning doctors, dreamers, gamblers and utter egoists. DENIAL of reality, not only disconnection. A sad desperate clownhouse with not even foul compromises, but total baseless actions. (edit: end of peekin' into my surroundings)
Calhoun didn't really have a chance. Of course it's right to fire him. But a lot more mgmt. must be replaced and brainwashed.
And I also see the top mgmt (edit: in my corp) changing the course, but seemingly still kind of reasonable. Of course they are disconnected from shopfloor and customers. Make the company more profitable and fit for survival.
The real catastrophy is management below. Their desperate attempt to fulfill the new job and hide issues from top is a disaster. Shareholders must be pleased at all costs. The middle management quits in disgustion, the remaining ones are totally spinning doctors, dreamers, gamblers and utter egoists. DENIAL of reality, not only disconnection. A sad desperate clownhouse with not even foul compromises, but total baseless actions. (edit: end of peekin' into my surroundings)
Calhoun didn't really have a chance. Of course it's right to fire him. But a lot more mgmt. must be replaced and brainwashed.
Last edited by waito; 26th Mar 2024 at 21:08. Reason: clarification of what Im talking about
The problem is going to be that the people who have the ability, knowledge, experience, and stamina to actually to fix the Shyte show that is Boeing are probably not interested.
The people who are interested are probably the people you don’t want.
The people who are interested are probably the people you don’t want.
I seriously warn a good handful people in my corporation of Boeing as a bad example. Being a company with tradition, heritage, engineering. BULLCRAP.
And I also see the top mgmt changing the course, but seemingly still kind of reasonable. Of course they are disconnected from shopfloor and customers. Make the company more profitable and fit for survival.
The real catastrophy is management below. Their desperate attempt to fulfill the new job and hide issues from top is a disaster. Shareholders must be pleased at all costs. The middle management quits in disgustion, the remaining ones are totally spinning doctors, dreamers, gamblers and utter egoists. DENIAL of reality, not only disconnection. A sad desperate clownhouse with not even foul compromises, but total baseless actions.
Calhoun didn't really have a chance. Of course it's right to fire him. But a lot more mgmt. must be replaced and brainwashed.
And I also see the top mgmt changing the course, but seemingly still kind of reasonable. Of course they are disconnected from shopfloor and customers. Make the company more profitable and fit for survival.
The real catastrophy is management below. Their desperate attempt to fulfill the new job and hide issues from top is a disaster. Shareholders must be pleased at all costs. The middle management quits in disgustion, the remaining ones are totally spinning doctors, dreamers, gamblers and utter egoists. DENIAL of reality, not only disconnection. A sad desperate clownhouse with not even foul compromises, but total baseless actions.
Calhoun didn't really have a chance. Of course it's right to fire him. But a lot more mgmt. must be replaced and brainwashed.
Reminds me of the old management maxim. First rate executives hire first rate assistants, second rate executives hire third rate assistants.
Boeing is paying the price for 20 years of second rate leaders.
Another management maxim is KGB kill good brains
A worse problem is people already in the company at all levels who are completely disinterested in safety and quality, or who have been trained and required to be disinterested.
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I wouldn't have mentioned his age of Calhoun hadn't said that the next CEO will oversee not just the production of the new aircraft but also the process of figuring out what that aircraft will be, which is in synch with a mid 2030s timeline. Even if the next CEO is not the CEO when it hits the factory floor, surely the development phase will be a 5-7 year endeavor. I don't know.
But on the other hand, Boeing's crisis - its perilous arrival at the X-Roads - is so serious, perhaps it should not be taken as a given that the next CEO will oversee both design and production (of the new airplane). Not taken as a given that the mission Mr Calhoun was elevated to accomplish in the immediate aftermath of the two 737 MAX accidents, can be rolled together with the next new airplane design and related efforts for prototyping, certification and production planning (if those are at least close to the required lines of effort).
Almost forgotten here is the fact that parameters for succession planning perhaps ought not be too closely tied to what Mr Calhoun has to say about the matter.
Not least, the WSJ reporting states that labor organizations of Boeing employees want a seat on the Board. It will be intriguing, perhaps even suspenseful, to see - if Labor indeed gets a Board seat - what combination of pertinent qualifications Labor seeks: demonstrated understanding of labor organizations and the processss of the shop floor and in the CBA; knowledge of aerospace manufacturing and contracting; and either a legal or executive career portfolio.
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That's an interesting point. On one hand, will there be suitable candidates with the right experience and qualifications (which includes an absence of the bean-counting mindset which took over after the merger) who also have career open road in front of them covering at least seven years? Not being in the aerospace headhunter business, I surely don't know.
But on the other hand, Boeing's crisis - its perilous arrival at the X-Roads - is so serious, perhaps it should not be taken as a given that the next CEO will oversee both design and production (of the new airplane). Not taken as a given that the mission Mr Calhoun was elevated to accomplish in the immediate aftermath of the two 737 MAX accidents, can be rolled together with the next new airplane design and related efforts for prototyping, certification and production planning (if those are at least close to the required lines of effort).
Almost forgotten here is the fact that parameters for succession planning perhaps ought not be too closely tied to what Mr Calhoun has to say about the matter.
Not least, the WSJ reporting states that labor organizations of Boeing employees want a seat on the Board. It will be intriguing, perhaps even suspenseful, to see - if Labor indeed gets a Board seat - what combination of pertinent qualifications Labor seeks: demonstrated understanding of labor organizations and the processss of the shop floor and in the CBA; knowledge of aerospace manufacturing and contracting; and either a legal or executive career portfolio.
But on the other hand, Boeing's crisis - its perilous arrival at the X-Roads - is so serious, perhaps it should not be taken as a given that the next CEO will oversee both design and production (of the new airplane). Not taken as a given that the mission Mr Calhoun was elevated to accomplish in the immediate aftermath of the two 737 MAX accidents, can be rolled together with the next new airplane design and related efforts for prototyping, certification and production planning (if those are at least close to the required lines of effort).
Almost forgotten here is the fact that parameters for succession planning perhaps ought not be too closely tied to what Mr Calhoun has to say about the matter.
Not least, the WSJ reporting states that labor organizations of Boeing employees want a seat on the Board. It will be intriguing, perhaps even suspenseful, to see - if Labor indeed gets a Board seat - what combination of pertinent qualifications Labor seeks: demonstrated understanding of labor organizations and the processss of the shop floor and in the CBA; knowledge of aerospace manufacturing and contracting; and either a legal or executive career portfolio.
I see a) labor participation and b) an engineer-trained CEO as non-negotiable myself and c) firing all the middle to high(er) managers who are not willing or have not been able to follow this new mindset - and believe me, they know who they are. You can't hide your middle-managment style under a cloak.
EDIT: It's absolutely clear that the customers "pushed" Calhoun out, no matter what he says, it's also important to say that it's the right thing to do not to step down right away, because that would've negated the "process" of finding the right person and lastly, if the customers - and let's face it, it's their doing - mandated these changes I have a high degree of confidence they will push for an Engineer at the helm with a super-savvy CFO by their side.
And let's be realistic here, this is Boeing not MD, not Vickers, not BAC, not Embraer or some mom and pop business. Anyone thinking Boeing is finished is delusional. The company is not going anywhere, a lot of companies at this level have had bad management hold them back (for anyone interested, look at how recent studies have shown that GE under Jack Welch might not be a success story after all - Jack Welch with his Six-Sigma management mantra being a God until circa 2010, even after his retirement).
Boeing has almost a quarter of a trillion dollars in undelivered PASSENGER planes (not to mention active participation in Defense and Services programs etc) so this downturn is and will be reversible. It's about RESTORING TRUST, first and foremost to the client base and if they listen to them, as they seem to, SO FAR, it will be OK.
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Just for convenience of reference
SPEEA statement on Boeing executives’ departures amid safety crisis
SPEEA responds to news of Boeing CEO and other executives leaving the company in the midst of the company’s safety crisis, including the door plug blowout on Alaska Flight 1282.
“The problems in Boeing’s executive suite are systemic. Nothing is going to change for the better without company leadership acknowledging their failures and thoroughly committing to fixing them,” SPEEA said in a statement.
SPEEA Executive Director Ray Goforth added: “The next CEO should be an aerospace engineer. This company thrived under engineering leadership for decades but has lurched from crisis to crisis with MBAs running the company.”
[From SPEEA website March 25 2024 (copied without alteration)]
SPEEA statement on Boeing executives’ departures amid safety crisis
SPEEA responds to news of Boeing CEO and other executives leaving the company in the midst of the company’s safety crisis, including the door plug blowout on Alaska Flight 1282.
“The problems in Boeing’s executive suite are systemic. Nothing is going to change for the better without company leadership acknowledging their failures and thoroughly committing to fixing them,” SPEEA said in a statement.
SPEEA Executive Director Ray Goforth added: “The next CEO should be an aerospace engineer. This company thrived under engineering leadership for decades but has lurched from crisis to crisis with MBAs running the company.”
[From SPEEA website March 25 2024 (copied without alteration)]
Claybird, when you say super savvy CFO do you mean one who is smart enough to know that Boeing will only fully recover if accounting and financial management issues are focussed on supporting the product and the development and manufacture of it and who will not indulge in the manipulation of the vast amounts of cash that pass through Boeings hands to generate profit and financial benefit from playing games with that money, ie share buy-backs and the like. . Because if they are not like that then they need a steady Eddie/Edith controller type CFO who makes sure Boeing is solvent and has the funds to back development. The last thing Boeing needs right now is a super smart CFO who can sell ideas to the board about how to make money without making airplanes.
One of the names is interim Spirit CEO and Former Boeing lifer Patrick Shanahan
- Bachelor of Science (B.S.) degree in mechanical engineering.
- Master of Science (M.S.) degree in mechanical engineering from Massachusetts Institute of Technology
- Master of Business Administration (MBA) from the MIT Sloan School of Management).
An engineer and an MBA
Edit: At 61 though I don't knows ... a bit on the wrong edge of what Boeing (should be) looking for
- Bachelor of Science (B.S.) degree in mechanical engineering.
- Master of Science (M.S.) degree in mechanical engineering from Massachusetts Institute of Technology
- Master of Business Administration (MBA) from the MIT Sloan School of Management).
An engineer and an MBA
Edit: At 61 though I don't knows ... a bit on the wrong edge of what Boeing (should be) looking for
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Claybird, when you say super savvy CFO do you mean one who is smart enough to know that Boeing will only fully recover if accounting and financial management issues are focussed on supporting the product and the development and manufacture of it and who will not indulge in the manipulation of the vast amounts of cash that pass through Boeings hands to generate profit and financial benefit from playing games with that money, ie share buy-backs and the like. . Because if they are not like that then they need a steady Eddie/Edith controller type CFO who makes sure Boeing is solvent and has the funds to back development. The last thing Boeing needs right now is a super smart CFO who can sell ideas to the board about how to make money without making airplanes.