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Boeing’s New CEO to Focus on FAA Cooperation

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Boeing’s New CEO to Focus on FAA Cooperation

by usiscc
December 25, 2019
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Boeing’s New CEO to Focus on FAA Cooperation
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When

Dave Calhoun

called the head of the Federal Aviation Administration on Monday, the incoming

Boeing Co.


BA -1.35%

chief executive officer purposely left other executives off the line.

That self-confident but personal management style, honed over nearly three decades in various industries, will be one strategy Mr. Calhoun uses to try to mend the plane maker’s tattered relations with regulators, according to people who know him.

The most immediate challenge confronting Mr. Calhoun, who is 62 years old and takes over Jan. 13, is persuading FAA policy makers that Boeing will be more reliable and cooperative in providing data to verify flight-control fixes for the grounded 737 MAX fleet. That would mean abandoning his predecessor

Dennis Muilenburg’s

prodding of the agency over many months to accelerate vetting of the proposed software fix.

Mr. Muilenburg was ousted Monday, not long after

Steve Dickson,

the FAA administrator, publicly repudiated that approach and warned Boeing it had to produce more timely and complete information. In calls Monday to airlines, suppliers, pilot union leaders, lawmakers and the FAA, Mr. Calhoun and his team said their aim is to be more open and less confrontational, according to industry and government officials.

The underlying challenges confronting Boeing, more than a year after the first of two fatal MAX crashes that took a total of 346 lives, haven’t changed. Mr. Calhoun and his management team may find it tough to depict themselves as reformers, since many of the same executives held high-ranking positions at the company during the development and marketing of the MAX. Even if Boeing makes more personnel changes, lawmakers and other critics say they will remain skeptical that Boeing has sufficiently revamped its culture or set a new precedent for its engineers or production workers.

Mr. Calhoun, a Boeing board member since 2009, also shares responsibility for the MAX’s design and oversight of the company’s response to the first accident in late 2018. The trio of leaders now atop Boeing—including new Chairman

Larry Kellner

and Chief Financial Officer

Greg Smith,

who will be acting CEO until mid-January—all share that history.

Boeing’s board selected Mr. Calhoun to lead the company in part because he is familiar with the crisis and wouldn’t need months to get up to speed on its complexities, said a person close to the board.

Analysts said they expect Mr. Kellner to concentrate on smoothing customer relations while Mr. Smith focuses the financial community and customer compensation amid estimates that Boeing’s ultimate price tag from the MAX crisis could top $20 billion.

Boeing declined to make Mr. Calhoun available for an interview on Tuesday. The company said its board appointed him CEO to restore confidence in the company and promised “a renewed commitment to full transparency.”

Many FAA officials, frustrated by a pattern of delayed technical submissions, are skeptical of Boeing’s latest promises. Foreign regulators have said they would independently vet changes to MCAS, an automated stall-prevention system that misfired and resulted in the accidents.

Two fatal 737 MAX crashes took a total of 346 lives.


Photo:

David Ryder/Getty Images

Mr. Calhoun also needs to change the company’s engineering approach, former employees said. “You don’t get your reputation back saying you’re going to do things differently. You need to do things differently,” said

Jim Albaugh,

who retired as chief executive of Boeing’s commercial airplane division in 2012. “And the engineering part of it is key.”

Boeing’s problems with the FAA extend beyond technical issues. Regulators have faulted the company for failing to swiftly provide internal documents from years ago that appear to raise questions about the design and extent of pilot training for the MAX, according to people familiar with the matter.

The company’s conduct in this regard could come under even more scrutiny, which Mr. Calhoun will likely have to deal with immediately in his new role. The FAA is currently examining how long ago Boeing officials discovered certain documents that it sent to the agency and lawmakers on Monday, and whether it should have alerted the agency sooner, a person briefed on the matter said.

Those documents, the contents of which haven’t been disclosed publicly, include additional material involving Mark Forkner, the former chief technical pilot for the MAX, the people familiar with the matter said. They add to a previous set of instant messages from 2016 in the FAA’s possession, which suggested that Mr. Forkner had concerns about the safety of the aircraft’s flight-control system after encountering some problems in a simulator. Mr. Forkner’s attorney has said his client was referring to problems with the simulator, not the flight-control system itself.

A Boeing spokesman said the company “proactively” turned over the documents as part of its commitment to transparency with regulators and lawmakers.

Mr. Calhoun will also have to work to repair Boeing’s relationship with fliers. Boeing told airlines last week that its own polling showed around 40% of travelers world-wide are unwilling to fly on the MAX, according to materials reviewed by The Wall Street Journal.

Boeing has held calls with airlines this year to lay out plans for restoring confidence in the MAX and providing support to carriers when the plane returns to service. The plans described last week include testimonials from pilots, materials such as printed cards that airlines can share with pilots and flight attendants about the changes made to MCAS, and suggestions to help crew members reassure anxious travelers.

The materials in the presentations to airlines were earlier reported by the New York Times. A Boeing spokesman said the company is working to restore confidence in the company and the MAX.

U.S. airlines are planning their own demonstration flights during the period between when the MAX is recertified and when it returns to scheduled flying. Some airline executives have said they are hopeful Mr. Calhoun will improve relations with the FAA, helping smooth the process of returning the MAX to service.

Mr. Calhoun faces a major test on Jan. 29, when the company is slated to report full-year financial results. Outsiders will likely seek answers to how he intends to restore Boeing’s reputation and reset a product strategy that has left it trailing arch rival

Airbus

SE.

—Andrew Tangel contributed to this article.

Write to Andy Pasztor at [email protected], Doug Cameron at [email protected] and Alison Sider at [email protected]

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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