Boeing management clearout betrays the seriousness of the company’s crisis

Published

10 months ago

March 25, 2024

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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.

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.

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.

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.

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They are hurting but managing to find hope in ‘tomorrow’ – the residents who have lost everything in the LA fires

Published

3 hours ago

January 11, 2025

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They are hurting but managing to find hope in 'tomorrow' - the residents who have lost everything in the LA fires

They are the displaced and there are tens of thousands of them, 600 in an evacuation centre we visited.

From elderly people who fled without their medication, to pregnant mothers desperate to escape the smoke, they had nowhere else to go.

Jim Mayfield, who has lived in the northern suburb of Altadena for 50 years, wept as he told me his dogs, Monkey and Coca, were all he had left.

He said: “The fire was coming down, a ball of fire, it hadn’t made it to my house, but then I woke up and I seen it so I had to start evacuating.

“I had to grab my dogs, I didn’t have enough water and my house is burned down to the ground.”

Sheila Kraetzel, another elderly resident, relived the sense of terror as homes were engulfed by the flames.

She said: “I smelt smoke, I was sleeping, and my dog alerted me that there was trouble.

“When I looked outside, there were embers floating across my yard.

“My whole neighbourhood is gone.”

“It was a beautiful, unique place,” she added, smiling.

Asked how she could smile, she fought back tears and replied: “Well, there’s tomorrow you know.”

How anyone could find hope amid the destruction we have witnessed here is beyond me.

There are people handing out food and water, medical staff doing what they can. Volunteers have rallied from far and near.

One of them, Stephanie Porter, told me it felt “heavy” inside the centre.

“You walk through and see the despair on people’s faces, not knowing what their next step is, not knowing if their house is still standing,” she said.

“I had to take a few moments… and kind of cry, and then you go back to serve.

“It just breaks your heart.”

Three miles up the road, Altadena resembles a war zone, but residents have not been allowed to return.

When they finally do, they’ll discover there’s nothing left of the material lives they left behind.

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Sam Moore, who sang Soul Man in the duo Sam & Dave, dies

Published

3 hours ago

January 11, 2025

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Sam Moore, who sang Soul Man in the duo Sam & Dave, dies

Sam Moore, who sang Soul Man and other 1960s hits in the legendary Sam & Dave duo, has died aged 89.

Moore, who influenced musicians including Michael Jackson, Al Green and Bruce Springsteen, died on Friday in Coral Gables, Florida, due to complications while recovering from surgery, his publicist Jeremy Westby said.

No additional details were immediately available.

Moore was inducted with Dave Prater, who had died in a 1988 car crash, into the Rock and Roll Hall of Fame in 1992.

The duo, at the Memphis, Tennessee-based Stax Records, transformed the “call and response” of gospel music into a frenzied stage show and recorded some of soul music’s most enduring hits, including Hold On, I’m Comin’.

Many of their records were written and produced by the team of Isaac Hayes and David Porter and featured the record label’s house band Booker T & the MGs.

Sam & Dave faded after their 1960s heyday but Soul Man hit the charts again in the late 1970s when the Blues Brothers, John Belushi and Dan Aykroyd, recorded it with many of the same musicians.

Moore had mixed feelings about the hit becoming associated with the Saturday Night Live stars, remembering how young people believed it originated with the Blues Brothers.

Sam & Dave broke up in 1970 and neither had another major hit.

Moore later said his drug habit played a part in the band’s troubles and made record executives wary of giving him a fresh start.

He married his wife Joyce in 1982, and she helped him get treatment for his addiction that he credited with saving his life.

Moore spent years suing Prater after his former partner hired a substitute and toured as the New Sam & Dave.

He also lost a lawsuit claiming the pair of aging, estranged singers in the 2008 movie Soul Men was too close to the duo.

In another legal case, he and other artists sued multiple record companies and the American Federation of Television and Radio Artists in 1993, claiming he had been cheated out of retirement benefits.

Despite his million-selling records, he said in 1994 his pension amounted to just 2,285 US dollars (£1,872), which he could take as a lump sum or in monthly payments of 73 US dollars (£60).

“Two thousand dollars for my lifetime?” Moore said at the time. “If you’re making a profit off of me, give me some too. Don’t give me cornbread and tell me it’s biscuits.”

Moore wrote Dole Man, based on Soul Man, for Republican Bob Dole’s 1996 presidential campaign and was one of the few entertainers who performed at President Donald Trump’s inaugural festivities in 2017.

Eight years earlier, he objected to Democratic presidential candidate Barack Obama’s use of the song Hold On, I’m Comin’ during his campaign.

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LA fires: Data and videos reveal scale of ‘most destructive’ blazes in modern US history

Published

6 hours ago

January 11, 2025

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LA fires: Data and videos reveal scale of 'most destructive' blazes in modern US history

The fires that have been raging in Los Angeles County this week may be the “most destructive” in modern US history.

In just three days, the blazes have covered tens of thousands of acres of land and could potentially have an economic impact of up to $150bn (£123bn), according to private forecaster Accuweather.

Sky News has used a combination of open-source techniques, data analysis, satellite imagery and social media footage to analyse how and why the fires started, and work out the estimated economic and environmental cost.

More than 1,000 structures have been damaged so far, local officials have estimated. The real figure is likely to be much higher.

“In fact, it’s likely that perhaps 15,000 or even more structures have been destroyed,” said Jonathan Porter, chief meteorologist at Accuweather.

These include some of the country’s most expensive real estate, as well as critical infrastructure.

Accuweather has estimated the fires could have a total damage and economic loss of between $135bn and $150bn.

“It’s clear this is going to be the most destructive wildfire in California history, and likely the most destructive wildfire in modern US history,” said Mr Porter.

“That is our estimate based upon what has occurred thus far, plus some considerations for the near-term impacts of the fires,” he added.

The calculations were made using a wide variety of data inputs, from property damage and evacuation efforts, to the longer-term negative impacts from job and wage losses as well as a decline in tourism to the area.

The Palisades fire, which has burned at least 20,000 acres of land, has been the biggest so far.

Satellite imagery and social media videos indicate the fire was first visible in the area around Skull Rock, part of a 4.5 mile hiking trail, northeast of the upscale Pacific Palisades neighbourhood.

These videos were taken by hikers on the route at around 10.30am on Tuesday 7 January, when the fire began spreading.

At about the same time, this footage of a plane landing at Los Angeles International Airport was captured. A growing cloud of smoke is visible in the hills in the background – the same area where the hikers filmed their videos.

The area’s high winds and dry weather accelerated the speed that the fire has spread. By Tuesday night, Eaton fire sparked in a forested area north of downtown LA, and Hurst fire broke out in Sylmar, a suburban neighbourhood north of San Fernando, after a brush fire.

These images from NASA’s Black Marble tool that detects light sources on the ground show how much the Palisades and Eaton fires grew in less than 24 hours.

On Tuesday, the Palisades fire had covered 772 acres. At the time of publication of Friday, the fire had grown to cover nearly 20,500 acres, some 26.5 times its initial size.

The Palisades fire was the first to spark, but others erupted over the following days.

At around 1pm on Wednesday afternoon, the Lidia fire was first reported in Acton, next to the Angeles National Forest north of LA. Smaller than the others, firefighters managed to contain the blaze by 75% on Friday.

On Thursday, the Kenneth fire was reported at 2.40pm local time, according to Ventura County Fire Department, near a place called Victory Trailhead at the border of Ventura and Los Angeles counties.

This footage from a fire-monitoring camera in Simi Valley shows plumes of smoke billowing from the Kenneth fire.

Sky News analysed infrared satellite imagery to show how these fires grew all across LA.

The largest fires are still far from being contained, and have prompted thousands of residents to flee their homes as officials continued to keep large areas under evacuation orders. It’s unclear when they’ll be able to return.

“This is a tremendous loss that is going to result in many people and businesses needing a lot of help, as they begin the very slow process of putting their lives back together and rebuilding,” said Mr Porter.

“This is going to be an event that is going to likely take some people and businesses, perhaps a decade to recover from this fully.”

The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.