Not since the sensational scandal at Enron led to its collapse more than two decades ago has a major American corporation been as publicly and persistently plagued by problems as Boeing.
Boeing is the world’s largest aerospace company – in the U.S. alone it employs more than 150,000 people. Moreover, for well over a half century the excellence of Boeing’s performance made it a jewel in America’s corporate crown. But in recent years it has suffered humiliating and debilitating setbacks including two tragic aircraft accidents. To be clear: its jetliners continue to fly all over the world and the company is still servicing both the miliary and civilian sectors. But in recent years Boeing has repeatedly been brought to its knees.
I wrote briefly about Boeing in my latest book, Leadership from Bad to Worse.
Here is a glaring, indeed horrific example of ineffective – and yes, arguably also unethical – leadership enabled by ineffective followership. Dennis Muilenburg, former CEO of Boeing, and others at [the company] who, when things threatened to go wrong, and then did, should have intervened. In October 2018, a Boeing 737 Max jet crashed off the coast of Indonesia, killing 189 passengers and crew. [Further]a few months later… a second Boeing 737 Max crashed, this one also killing all on board, 157 passengers and crew.
I concluded that under Muilenberg Boeing developed a company culture so intent on remaining competitive that safety standards were compromised. What was not, however, clear when I wrote the book was that under Muilenberg’s successor, David Calhoun, safety concerns would continue to bedevil the company, further tarnishing its reputation and costing it planeloads of money.
The most infamous of recent incidents – which not only was dramatic but near-catastrophic – was the midair blowout last January of a door-sized fuselage panel on an Alaska Airlines 737 MAX 9. Just this week the Seattle Times published a detailed account of what happened, compiled from the transcripts of interviews conducted by federal investigators. The findings were not heartening. Under Calhoun quality control issues at Boeing persisted. While the origins of the sloppiness that explains the blowout remain in dispute, what is inarguable is that problems at Boeing are ongoing.
As if to underscore the point, just a few days ago NASA decided that instead of relying on Boeing’s Starliner capsule to bring back to earth the two stranded astronauts – the original plan was to have them stay aboard the International Space Station for 8 days; instead, technical issues have obliged them to remain in space for what now looks like eight months – they are turning to Space X to accomplish the task. Clearly it was decided that the company founded and led by Elon Musk has a more reliable vehicle than does the once venerated Boeing. So, in yet another stunning blow to Boeing’s reputation, the Starliner – which has cost the company more than $1.4 billion in losses – will return to earth without the two person crew. Instead, they are now slated to be brought back in February on Space X’s Dragon craft.
Calhoun was Boeing’s chief executive officer for four years. He exited this month, turning the reins over to his successor, Robert “Kelly” Ortberg, whose mandate is clear. First, rectifying a company culture that remains troubled, and second, reducing Boeing’s debt.
Usually, we look to leaders, especially new leaders, as saviors. But when it was announced that Ortberg would be Calhoun’s successor the mood was grim. The headline in the New York Times noted that to catch up with its major competitor, Airbus, Boeing faced a “steep climb.” And in the Wall Street Journal one headline cautioned that “Boeing’s New Pilot Faces Rough Skies”; another reminded readers that “Boeing Factories Remain Source of Concern.”
If Ortberg can pull Boeing out of its years-long decline, he will be hailed as a hero-leader. But if he cannot not, if he fails as did his two predecessors, will he be blamed? Despite the two terrible tragedies that happened on his watch, when Muilenberg left the company, he received $58 million in compensation and pension benefits. And, despite the problems that persisted on his watch, Calhoun also made out exceedingly well. For his performance in 2023, for example, he pulled in a cool $33 million.
Which raises this question. Why are most of us made to pay for our mistakes but a few of us are not? Why are leaders like these exempt from being held to account?