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

Published

8 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.

US

Donald Trump can seek dismissal of hush money case as sentencing postponed

Published

1 day ago

November 22, 2024

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Donald Trump can seek dismissal of hush money case as sentencing postponed

A judge has postponed sentencing in Donald Trump’s hush money case and granted permission for his lawyers to seek a dismissal.

It comes after the Manhattan district attorney said he wouldn’t oppose a motion to delay the sentencing.

In May, a New York jury found Trump guilty of 34 counts of falsifying business records to commit election fraud.

It was the first time a US president had been convicted of or charged with a criminal offence.

Trump had tried to cover up “hush money” payments to a porn star in the days before the 2016 election.

When Stormy Daniels‘ claims of a sexual liaison threatened to upend his presidential campaign, Trump directed his lawyer to pay $130,000 (£102,000) to keep her quiet.

The payment buried the story and he later won the presidency.

Trump denied the charges and said the case was politically motivated. He also denied the sexual encounter took place.

New York State Supreme Court Justice Juan Merchan today delayed the sentencing, which had been due to take place on Tuesday.

The office of district attorney Alvin Bragg had asked the judge to postpone all proceedings until Trump finishes his four-year presidency, which starts on 20 January.

Trump’s lawyers say the case should be dismissed because it will create “unconstitutional impediments” to his ability to govern.

Responding to Friday’s decision, a Trump campaign spokesman said: “The American People have issued a mandate to return him to office and dispose of all remnants of the Witch Hunt cases.”

The judge set a 2 December deadline for Trump’s lawyers to file their motion, while prosecutors have until 9 December to respond.

He did not set a new date for sentencing or indicate when he would rule on any motion to throw out the case.

Even before Trump’s win in this month’s election, experts said a jail term was unlikely and a fine or probation more probable.

But his resounding victory over Kamala Harris made the prospect of time behind bars or probation even less likely.

Trump, 78, was also charged last year in three other cases.

One involved him keeping classified documents after he left office and the other two centre on alleged efforts to overturn his 2020 election loss.

A Florida judge dismissed the documents case in July, the Georgia election case is in limbo, and the Justice Department is expected to wind down the federal election case as it has a policy of not prosecuting a sitting president.

Trump last week nominated his lawyers in the hush money case, Todd Blanche and Emil Bove, for senior roles in the Justice department.

When he re-enters the White House, Trump will also have the power to shut down the Georgia and New York cases.

US

Pam Bondi: Key proponent of Trump’s false 2020 election claims set to head justice department after Gaetz withdrawal

Published

1 day ago

November 22, 2024

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Pam Bondi: Key proponent of Trump's false 2020 election claims set to head justice department after Gaetz withdrawal

Donald Trump has pledged for years to surround himself with ultra-loyalists who can mould his government to his vision without barriers.

That’s precisely why he picked Matt Gaetz. Now he’s out, Pam Bondi is in and she’s equally loyal.

Gaetz was uniquely unpopular on Capitol Hill but ultra-MAGA and ultra-loyal to the president-elect.

He was chosen by the president-elect to do his bidding inside the Justice Department as attorney general.

Critics called his pick “a red alert moment for democracy” and the man a “gonzo agent of chaos” – language that would surely only affirm Trump’s decision in his own proudly disruptive mind.

If it wasn’t for the fact that the president-elect is himself a convicted felon, and a man found liable in a civil court of his own sexual offences, the prospect of Gaetz, with all his baggage, making it through the nomination process would have seemed remote.

But Donald Trump’s return to the White House suggested anything is possible.

And so, beyond his loyalty, Gaetz was Trump’s test for his foot soldiers on Capitol Hill. How loyal were they? Would they wave through anyone he appointed?

It turns out that Gaetz, and the storm around his private life, was too much for a proportion of them.

At least five Senate Republicans were flatly against Matt Gaetz’s confirmation. We understand that they communicated to other senators and those close to Trump that they were unlikely to be swayed.

They included the Republican old guard like Senator Mitch McConnell.

Beyond the hard “no” senators, there were between 20 and 30 other Republicans who were very uncomfortable about having to vote for Gaetz on the Senate floor.

The key question is whether Gaetz was Trump’s intentional wild card crazy choice that he knew, deep down, would probably never fly.

Was Gaetz the candidate he had accepted would be vetoed by senators – who would then feel compelled to wave the rest of his nominees through?

Will Pete Hegseth’s alleged sexual impropriety concern them as they consider the suitability of the former Fox News host and army major to run the Department of Defence?

What about Tulsi Gabbard, the candidate Russian state TV calls ‘our girl’, and the appropriateness of her running America’s intelligence agencies?

These are all appointments that the politicians on Capitol Hill must consider and confirm in the weeks ahead.

We don’t yet know who Trump will choose to direct the FBI.

There are some names being floated which will make the establishment of Washington shudder but then that’s precisely why Trump was elected. He is the disrupter. He said so at every rally, on repeat.

He was quick to pivot to another name to replace Gaetz.

Bondi is the former attorney general of Florida. Professionally she is in a different league to Gaetz. She’s been a tough prosecutor, with a no-nonsense reputation.

She is also among the most loyal of loyalists. Her attachment to Trump stretches way back.

I first came across her in Philadelphia in November 2020 when she was among Trump surrogates claiming the election back then had been stolen from them by Joe Biden and the Democrats.

She was a key proponent of the false claims the election had been rigged and Trump was the rightful winner.

The court cases concluding that was all nonsense didn’t seem to convince her.

Now she is poised to head up the Department of Justice as the country’s top law enforcement official.

US

Donald Trump on day one: Pace of change ‘like nothing you’ve seen in history’, warns campaign official

Published

2 days ago

November 21, 2024

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Within hours of taking office, president-elect Donald Trump plans to begin rolling out policies including large-scale deportations, according to his transition team.

Sky News partner network NBC News has spoken with more than half a dozen people familiar with the executive orders that his team plans to enact.

One campaign official said changes are expected at a pace that is “like nothing you’ve seen in history”, to signal a dramatic break from President Joe Biden’s administration.

Mr Trump is preparing on day one to overturn specific policies put in place by Mr Biden. Among the measures, reported by sources close to the transition team, are:

• The speedy and large-scale deportations of illegal immigrants

• Ending travel reimbursement for military members seeking abortion care

• Restricting transgender service members’ access to gender-affirming care

But much of the first day is likely to focus on stopping illegal immigration – the centrepiece of Trump’s candidacy. He is expected to sign up to five executive orders aimed at dealing with that issue alone after he is sworn in on 20 January.

“There will without question be a lot of movement quickly, likely day one, on the immigration front,” a top Trump ally said.

“There will be a push to make a huge early show and assert himself to show his campaign promises were not hollow.”

But Mr Trump’s campaign pledges also could be difficult to implement.

Deporting people on the scale he wants will be a logistical challenge that could take years. Questions also remain about promised tax cuts.

Meanwhile, his pledge to end the war between Russia and Ukraine in just 24 hours would be near impossible.

Even so, advisers based at Mr Trump’s Mar-a-Lago resort or at nearby offices in West Palm Beach, Florida, are reportedly strategising about ending the wars in Ukraine and the Middle East.

Following his decisive victory on 5 November, the president-elect has moved swiftly to build a cabinet and senior White House team.

As of Thursday, he had selected more than 30 people for senior positions in his administration, compared with just three at a similar point in his 2016 transition.

Stephen Moore, a senior economic adviser in Mr Trump’s campaign, told NBC News: “The thing to realise is Trump is no dummy.

“He knows he’s got two to three years at most to get anything done. And then he becomes a lame duck and we start talking about [the presidential election in] 2028.”