By Erik Dolson
Boeing Chief Executive Officer Dave Calhoun has now stepped in another large pile of his own deposit. Think of it as interest on the Boeing’s inheritance from General Electric (G.E.). Just more of the same from the plane maker.
Calhoun was trained by G.E. Chairman Jack Welch, who died last week. Welch was known as “Neutron Jack,” nicknamed after neutron bombs that killed people but left buildings intact. The Welch style of management was ruthless, including termination of 10% of all employees every year.
This had consequences for morale. Several recent Boeing CEOs were from G.E. or heavily influenced by that company. Morale at Boeing suffered, as well.
Boeing’s Calhoun was quoted in an interview that appeared in the New York Times last week as laying the blame for Boeing failures on previous CEO Dennis Muilenberg. “If anybody ran over the rainbow for the pot of gold on stock, it would have been him,” Calhoun said. The problems at Boeing, he said, “speaks to the weakness of our (former) leadership.”
What Calhoun failed to say, possibly because he is incapable of it, was that as an important outside board member, his leadership was part of that weakness as yet another alumnus of General Electric, touted during the 80s and 90s as the zenith of corporate capitalism. In fact, the Welch legacy may be turning out to be a failure when not implemented by Welch.
Growth at all costs, huge payouts based on stock price, and ruthless cutting of costs (talent and expertise) in the effort to increase profits (and bonuses for management) may have resulted in destruction at Boeing and other companies where Welch protoges landed after drinking the G.E. Kool-aid.
That beverage also involves public relations at the expense of honesty. Last month, Calhoun said that emails and texts between Boeing test pilots lamenting the build quality and training of pilots on the 737 Max represented a problem with emails and texts, not the airplanes themselves or culture at the company.
It should be noted that Calhoun stands to receive a rather large fortune if he can quickly get the 737 Max approved by the FAA and flying again.
Denying that the communications between pilots accurately represented a crumbling corporate culture, where engineering decisions were overruled by managers under the gun to cut costs, frightened they might lose thier jobs if they failed to do so, Calhoun said the emails and texts would stop.
Now, Calhoun has turned on the top managers of Boeing that he supported while he was a crucial board member and they were putting profit ahead of safety.
And he has implied it was the fault of pilots who were overpowered by software that flew two of his jetliners into the ground, software that did not exist on aircraft they were trained on. These pilots apparntly did not read the fine print in manuals that accompanied the new planes. Shame on them.
The loss of 348 lives had nothing to do with greed and failure to provide adequate instrumentation and training.
His hand in the till while he is cracking the whip, Calhoun has defended his salary and is in full CYA mode, rather than being accountable. This is the G.E. way when followed by men other than the admittedly brilliant Jack Welch, who was dealing with a fat corporation in another era.
The leadership at Boeing is still in denial, which means the company has not yet hit bottom. This is not over. Even NASA recently suggested that agency no longer trusts the company.
Small wonder. Boeing will not recover until the company redevelops the honesty required to admit and then publicly correct rot caused by 40 years of misdirected leadership. Boeing builds airplanes. Airplanes need to be safe, not just profitable.
There was another capitalist icon of the 1980’s era who seems to have been forgotten in recent decades: W. Edwards Deming, who was essential to the rise of Toyota and other Japanese automakers. Like Welch, Deming was a believer in statistics and process control, and the elimination of defects in manufacturing.
But Deming also advocated team building (rather than cutthroat competition among fellow employees), distribution of responsibility and accountability (as opposed to top management collecting absurdly valuable stock options via intimidation), and listening to those actually doing the work (as opposed to firing or smothering dissenting voices).
Calhoun has to go. He is not the man for this job. No graduate from G.E.’s school of abusive management is. Perhaps Boeing could lure Dan Davis, former director of Motorsports for Ford Motor Company, out of retirement for a couple of years. Davis has a resumé and a style that Boeing needs about now.