Boeing management clearout betrays the seriousness of the company’s crisis
The scale of the management changes announced by Boeing are a recognition from the company of the grave situation in which it finds itself.
It is pretty rare for the chairman and chief executive of an organisation to step down at roughly the same time as Larry Kellner and Dave Calhoun are doing.
For the departure of another senior executive, running one of that company’s most important businesses, to be announced at the same time is almost without precedent.
Stan Deal, who steps down immediately as head of Boeing‘s commercial airlines operation, is clearly carrying the can for the crisis to have engulfed the 737 MAX 9 jet which has been subject to mass groundings since the incident, in January, in which one of the jets, operated by Alaska Airlines, suffered the blowing-out of a door plug in mid-air.
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Since then, Boeing has had to launch a root-and-branch investigation of its fuselage production to ensure that nothing like that happens again.
It has also had to tell some of its customers, most notably Ryanair in Europe and Southwestern Airlines in the United States, that deliveries of the aircraft will be subject to delays. That has led customers to rethink their flying schedules during the key summer months and Ryanair, for one, is demanding compensation.
What is especially damning about the departure of Mr Calhoun, in particular, is that he is now the second consecutive Boeing chief executive to be forced to step down due to questions over its poor quality of production and supply chains.
The man he replaced, Dennis Muilenberg, was sacked at the end of 2019 following two crashes involving an earlier version of the 737 MAX – a Lion Air flight in Indonesia in October 2018 and an Ethiopian Airlines flight in March that year – that claimed the lives of hundreds of people. On that occasion, Boeing was heavily criticised for not acting more quickly, with Mr Muilenberg’s continued occupation of the CEO’s office distracting from the company’s attempts to rebuild its relationships with its customers and regulators.
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What’s going on at Boeing?
Mr Calhoun’s decision to depart at the end of the year suggests Boeing has learned from that experience but also reflects the fact that he failed in his most crucial role – to improve production quality – and clearly that has rattled the confidence of investors.
Their mood will not have been improved by a report in the Wall Street Journal last week that the chief executives of some of Boeing’s biggest airline customers in the US had requested a meeting with Boeing’s board to express concern over the Alaska Airlines accident and the subsequent production problems with the 737 MAX 9.
The outgoing CEO did his best today to suggest that this was part and parcel of the normal process of succession – telling CNBC’s Phil LeBeau that he would be 68 at the time of his departure, having been in the role for five years, making it an obvious time to step down.
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January: Ryanair has ‘confidence’ in Boeing
But this is not a normal CEO succession, not when Mr Kellner and Mr Deal – who has spent nearly 40 years at the company – are also stepping down. It is emblematic of a company in crisis.
That Boeing – America’s biggest and most important manufacturing business – has been able to immediately announce a new chairman of the quality of Steve Mollenkopf, the former Qualcomm chief executive, will at least provide some reassurance.
His first task will be identifying a new chief executive. Stephanie Pope, who had only just been made chief operating officer before her second ‘battlefield promotion’ this year to replace Mr Deal, will obviously been seen as a contender.
However, it feels likely that Boeing investors will press him to appoint someone from outside the company, someone not tainted with the production disasters of the last few years.
In one way, though, Mr Calhoun does deserve some sympathy.
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Boeing used to be run by engineers who took immense pride in what the company did. It was a key contractor in Apollo 11, the NASA mission that first put man on the moon, as well as the Space Shuttle – the world’s first reusable spacecraft.
More recently, the focus has been on financial engineering, with share buybacks given a greater priority than research and development. The 737 MAX family was emblematic of that – it was merely a re-engineering of the old 737 family of jets rather than a complete rethinking of what customers might want.
Airbus, which took a more conservative approach to its balance sheet, was by contrast more able to rethink its aircraft designs and invest in R&D. The European company’s reward is that it has now comprehensively overtaken Boeing in terms of production and aircraft sales.
In an ideal world, this boardroom reset would be aiming to recapture Boeing’s past glories.
For now, though, the task for the new management will be to rebuild the confidence of regulators, customers, investors and employees. It is that serious a situation.
One person has died in a bomb explosion near a reproductive health clinic in California, authorities have said.
The incident took place in Palm Springs, a city two hours east of Los Angeles, and is being investigated as a possible car explosion.
The city’s mayor Ron DeHarte said one person died in the blast, adding that the bomb was “either in or near” a vehicle. The deceased’s identity is not known, Palm Springs police said.
Dr Maher Abdallah, who runs the American Reproductive Centers clinic, told the Associated Press his facility was damaged but all staff were safe and accounted for.
The explosion damaged the office space where the practice conducts patient consultations, but the IVF lab and stored embryos were unharmed, he added.
“I really have no clue what happened,” he said. “Thank God today happened to be a day that we have no patients.”
Debris covers the ground after the explosion. Pic: ABC7 Los Angeles/AP
In a statement posted on Facebook the clinic said it was “heartbroken” to learn someone died in the explosion and added: “Our deepest condolences go out to the individuals and families affected.”
It continued: “Our mission has always been to help build families, and in times like these, we are reminded of just how fragile and precious life is.
“In the face of this tragedy, we remain committed to creating hope – because we believe that healing begins with community, compassion, and care.
The clinic will be fully operational on Monday, it added.
“This moment has shaken us – but it has not stopped us. We will continue to serve with strength, love, and the hope that brings new life into the world,” the statement concluded.
Pic: ABC7 Los Angeles/AP
The Palm Springs city government said in a post on Facebook that the explosion happened on North Indian Canyon Drive, near East Tachevah Drive, before 11am local time (6pm GMT).
A burned-out car can be seen in a parking lot behind the building in aerial footage.
The blast caved in the clinic’s roof and blew debris across four lanes of the road.
Another person said he was inside a cannabis dispensary nearby when he felt a massive explosion.
Nima Tabrizi said: “The building just shook, and we go outside and there’s massive cloud smoke.”
Investigators from the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives are travelling to the scene to help assess what happened.
California governor Gavin Newsom has been briefed on the explosion, his press office said.
A former FBI director has been interviewed by the US Secret Service over a social media post that Republicans say was a call for violence against President Donald Trump.
James Comey, who led the FBI from 2013 until he was fired in 2017 by Mr Trump during his first term in office, shared a photo of seashells appearing to form the numbers “86 47”.
James Comey later removed the Instagram post. File pic: AP
He captioned the Instagram post: “Cool shell formation on my beach walk.”
Some have interpreted the post as a threat, alleging that 86 47 means to violently remove Mr Trump from office, including by assassination.
Mr Comey later removed the post, saying he thought the numbers “were a political message” and that he was not aware that the numeric arrangement could be associated with violence.
“I didn’t realise some folks associate those numbers with violence. It never occurred to me, but I oppose violence of any kind, so I took the post down,” Mr Comey said.
Mr Trump rejected the former FBI director’s explanation, telling Fox News: “He knew exactly what that meant. A child knows what that meant… that meant assassination.”
Donald Trump Jr accused Mr Comey of “casually calling for my dad to be murdered”.
US Homeland Security Secretary Kristi Noem confirmed in a post on X that Mr Comey had been interviewed as part of “an ongoing investigation” but gave no indication of whether he might face further action.
The Secret Service is part of the Department of Homeland Security.
White House deputy chief of staff Taylor Budowich said Mr Comey had put out “what can clearly be interpreted as a hit on the sitting president of the United States”.
“This is deeply concerning to all of us and is being taken seriously,” Mr Budowich wrote on X.
Another White House official James Blair said the post was a “Clarion Call (…) to terrorists & hostile regimes to kill the President of the United States as he travels in the Middle East”.
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Mr Trump fired Mr Comey in May 2017 for botching an investigation into 2016 democratic presidential nominee Hillary Clinton, the White House said at the time.
While Mr Comey was the director of the FBI, the agency opened an investigation into possible collusion between the Trump 2016 presidential campaign and Russia to help get Mr Trump elected.
The Trump administration is considering a TV show whereby immigrants compete for the prize of US citizenship, the Department for Homeland Security has confirmed.
It would see contestants compete in tasks across different states and include trivia and “civic” challenges, according to the producer who pitched the idea.
Participants could battle it out to build a rocket at NASA headquarters, Rob Worsoff suggested.
Confirming the administration was considering the idea, Department for Homeland Security spokeswoman Tricia McLaughlin said: “We need to revive patriotism and civic duty in this country, and we’re happy to review out-of-the-box pitches. This pitch has not received approval or rejection by staff.”
It comes amid hardline immigration measures implemented by President Donald Trump on his return to office in January.
Since being back in the White House he has ordered “mass deportations” and used the Alien Enemies Act to deport alleged gang members to countries in Central and South America.
Rob Worsoff in 2013. Pic: AP
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Mr Worsoff, who is a Canadian-American citizen, said his pitch was inspired by his own naturalisation process.
He cautioned that those who “lost” the gameshow would not be punished or deported but said the details of how it would work would be down to TV networks and federal officials.
The producer said the US was in need of “a national conversation about what it means to be American”.
He said the show, if accepted by a network, would “get to know” contestants and “their stories and their journeys”, while “celebrating them as humans”.
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Meanwhile, the Department for Homeland Security has asked for 20,000 National Guard troops from various states to assist with its efforts rounding up illegal immigrants.
Currently, the federal Enforcement and Removals Operations agency only has around 7,700 staff – but the boost would help fulfil Mr Trump’s inauguration promises.
The Trump administration has already recruited 10,000 troops under state and federal orders to bolster the US-Mexico border.
Some have now been given the power to detain migrants within a newly militarised strip of land just adjacent to it.
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