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

Published

2 months ago

March 25, 2024

admin

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.

Money latest: Get ready for 3% interest rates, respected economists predict

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

Michael Cohen tells trial he lied and bullied for ex-president and was ‘knee deep’ in Trump ‘cult’

Published

4 hours ago

May 15, 2024

admin

Michael Cohen tells trial he lied and bullied for ex-president and was 'knee deep' in Trump 'cult'

Michael Cohen said he had been “knee deep into the cult of Donald Trump” as he testified for a second day in the ex-president’s trial.

As Trump‘s defence tried to paint the former lawyer and ‘fixer’ as a bitter and fame-hungry former acolyte, he denied being obsessed by his former boss but said he had once “admired him tremendously”.

He is testifying in the case about hush money payments to ex-porn star Stormy Daniels in an attempt to cover up an alleged sexual encounter in 2006.

Trump trial – Day 17 as it happened

Such payouts aren’t illegal, but Trump is accused of falsifying business records to hide it – a claim he denies.

He told the court on Tuesday that loyalty was the reason he kept lying about the payment when it came out in the media.

In 2016 he described Trump as kind, humble, honest and genuine.

The defence asked whether he had believed what he was saying.

“At the time, I was knee-deep into the cult of Donald Trump,” he responded, adding: “I was not lying, no, that’s how I felt.”

Mr Cohen admitted he “missed Trump” at times after he became president.

They have also pointed to hundreds of media appearances, podcasts and interviews in which the disgraced lawyer has mentioned him.

His credibility was under attack as Mr Cohen has previously admitted lying under oath.

The 57-year-old was jailed after pleading guilty in 2018 to charges relating to the hush money payment and other unrelated offences.

He said that after a FBI raid on his home the same year, Trump had messaged him: “I am the president of the United States, everything is going to be okay, stay tough”.

Donald Trump denies the liaison with Stormy Daniels and says Mr Cohen acted on his own initiative when he made the payment.

The former lawyer denied that claim in earlier evidence, saying “everything required Trump’s sign-off”.

‘I violated my moral compass’

Mr Cohen – who once said he would take a bullet for his boss – admitted at the end of questioning on Tuesday that he “violated my moral compass” while working for Donald Trump.

“I regret doing things for him that I should not have,” he told the New York court. “Lying, bullying people in order to effectuate the goal.

“I don’t regret working for the Trump Organisation – as I expressed before, [those were] some very interesting, great times,” he added.

“But to keep the loyalty and to do things that he had asked me to do, I violated my moral compass, and I suffered the penalty, as did my family. That is my failure.”

On Monday, the court heard him testify about setting up a shell company to make the $130,000 hush money out of his own money.

Prosecutors say Trump later paid the money back and covered it up by recording it as a legal retainer fee.

He faces 34 counts of falsifying business records over the claims.

Trump – who will take on Joe Biden in his bid to become president again in November – is unlikely to face a custodial sentence if found guilty.

His other cases are potentially more damaging but mired in delays.

They concern allegations of keeping stacks of secret documents after leaving office and trying to overturn his 2020 election defeat. He denies the claims.

US

Eight dead and 40 taken to hospital after bus carrying farm workers involved in Florida collision

Published

12 hours ago

May 14, 2024

admin

Eight dead and 40 taken to hospital after bus carrying farm workers involved in Florida collision

Eight people have died and another eight were critically injured after a bus carrying farm workers crashed and overturned in Florida.

The bus was transporting 53 workers when it collided with a pickup truck in Marion County, north of Orlando, the Florida Highway Patrol (FHP) said.

The bus then swerved off State Road 40 – a hilly two-lane road that goes through farms – and crashed through a fence, before overturning, authorities said.

The incident took place at 6.35am local time on Tuesday and it is unclear why the two vehicles crashed.

A total of 40 people needed hospital treatment – eight of whom are in a critical condition, the Marion County Fire Rescue confirmed to NBC News.

The driver of the truck was also taken to hospital and more than 30 ambulances attended the scene, NBC News added.

Lieutenant Pat Riordan, from the FHP, told reporters some of those injured are “in very serious condition” and there’s a “high probability” the number of dead could rise.

“At this point, we are conducting a massive traffic homicide investigation,” he said.

More US news:
Trump trial latest as his ex-lawyer takes to the stand
‘Inappropriate behaviour’ shuts Dublin-NYC livestream

Torrential rain and thunderstorms have hit some US regions in recent days – including Marion County – and authorities will be investigating if the weather contributed to the collision.

Photographs from the scene show the bus on its side, with both its rear emergency door and top hatch open.

The farm workers were being transported to Cannon Farms in Dunnellon, where watermelon harvesting has been taking place.

Following the crash, a post on the farm’s social media account said it will “be closed today out of respect to the losses and injuries endured early this morning”.

“Please pray with us for the families and the loved ones involved in this tragic accident,” the post continued. “We appreciate your understanding at this difficult time.”

Cannon Farms is a family-owned business that has been operational for more than 100 years, according to its website.

They now focus on peanuts and watermelons, which they supply to grocery stores across the US and Canada.

The vehicle transporting the workers was a 2010 International Bus and the pickup truck was a 2001 Ford Ranger, authorities said.

US

Donald Trump ‘not thinking about Melania’ when he paid off Stormy Daniels, says ex-lawyer Michael Cohen

Published

1 day ago

May 14, 2024

admin

Donald Trump 'not thinking about Melania' when he paid off Stormy Daniels, says ex-lawyer Michael Cohen

Donald Trump “wasn’t thinking about (his wife) Melania” when he paid off a former porn star, his former lawyer has testified.

Michael Cohen told a court Mr Trump personally approved $130,000 in hush money to Stormy Daniels over an alleged 2006 sexual encounter.

The payout isn’t illegal, but Mr Trump is accused of falsifying records to hide it – a claim he denies.

On Monday, his trial in New York heard from Mr Cohen, once a lawyer and self-described “fixer” for the ex-president.

Mr Trump’s lawyers have painted the hush money as an attempt to protect his wife from rumours and upset.

However, Mr Cohen said his boss was purely concerned with keeping the claims quiet as he ran for the presidency.

“He wasn’t thinking about Melania. This was all about the campaign,” he said, prompting Mr Trump to shake his head in response.

Mr Cohen told the court he’d heard Stormy Daniels was considering selling her story and he told his boss swift action was required.

Mr Trump denies the affair and his lawyers say Mr Cohen acted on his own – a claim he denied in court.

He told jurors in Manhattan that “everything required Mr Trump’s sign-off” and he was ordered to “just do it”.

Mr Cohen said he stumped up the $130,000 himself after Mr Trump told him he would pay him back.

He said he set up a shell company – listed as a “real estate consulting company” – to make the payment.

Prosecutors say Mr Trump later paid the money back and covered it up by recording it as a legal retainer fee.

He faces 34 counts of falsifying business records over the claims.

The court also heard a recording of a conversation between Mr Trump and Mr Cohen over hush money said to have been paid to another woman, former Playboy model Karen McDougal, who he also allegedly had an affair with.

Mr Cohen suggests in the recording setting up another company to repay David Pecker – who said he provided the $150,000 to cover up the story.

The former National Enquirer boss previously testified he bought the story to keep it hidden and eventually decided against seeking reimbursement.

Later in the recording, Mr Trump can be heard suggesting the $150,000 might be better off being paid in cash.

Mr Cohen told the court this was to “avoid any type of paper transaction”.

The 57-year-old – who once said he would take a bullet for Mr Trump – worked for him for nearly a decade.

He pleaded guilty to violating campaign finance law in 2018 over the Stormy Daniels payment and was jailed, but at the time prosecutors did not bring charges against Mr Trump.

Mr Cohen’s credibility is in the sights of defence lawyers as he has previously admitted lying under oath.

Mr Trump – who will take on Joe Biden in his bid to become president again in November – is unlikely to face a custodial sentence if found guilty.

His other cases are potentially more damaging but mired in delays.

They concern allegations of keeping stacks of secret documents after leaving office and trying to overturn his 2020 election defeat. He denies the claims.