Boeing CEO Blasted by Senators For ‘Broken’ Safety Record

Boeing Co. Chief Executive Officer Dave Calhoun faced searing criticism in a Senate hearing that accused him of failing to overcome the company’s manufacturing shortcomings by putting profit ahead of safety.

Bloomberg
Published19 Jun 2024, 02:01 AM IST
Boeing CEO Blasted by Senators For ‘Broken’ Safety Record
Boeing CEO Blasted by Senators For ‘Broken’ Safety Record

(Bloomberg) -- Boeing Co. Chief Executive Officer Dave Calhoun faced searing criticism in a Senate hearing that accused him of failing to overcome the company’s manufacturing shortcomings by putting profit ahead of safety. 

“You and your board of directors have a duty to your shareholders, but they will be deeply ill served if you fail to correct course and confront the root cause of this broken safety culture,” Senator Richard Blumenthal, a Democrat from Connecticut, said in his opening comments. “For Boeing, it is a moment of reckoning.”

Calhoun began his comments by standing and apologizing to family members of people who had died in two crashes involving Boeing aircraft in 2018 and 2019. As he began responding to questions from Blumenthal, the CEO said he accepts that Boeing and faulty software were responsible for the crashes that killed a combined 346 people.

Blumenthal confronted Calhoun with what he called a broken safety culture, asking the CEO to explain how Boeing allegedly retaliated against whistleblowers while at the same time encouraging workers to come forward with complaints. When asked if anyone had been fired for retaliating against whistleblowers, Calhoun said the company had done so but could not specify how many.

Calhoun said he’d not spoken to any whistleblowers directly, while acknowledging that doing so would be a “good idea.” 

While Calhoun has met privately with lawmakers, his testimony before the subcommittee that Blumenthal chairs marks his first public appearance before Congress since taking over the top job at Boeing in early 2020.

“I’m here in the spirit of transparency and I’m here to take responsibility,” Calhoun told reporters ahead of the hearing. 

Calhoun has said he’ll step down by the end of the year at the latest, while Boeing looks for a successor. Blumenthal likened to management change to “musical chairs” because he says they don’t get to the heart of Boeing’s issues and that it appears people are just moving around the company.

As CEO, Calhoun has presided over one of the most turbulent stretches in Boeing’s century-long history. The planemaker has wracked up nearly $26 billion in annual losses during his watch as it dealt with a global grounding of the 737 Max, pandemic, worker exodus and supply chain chaos. In January, a Boeing aircraft suffered a near-catastrophic accident while in flight.

While Calhoun publicly stressed transparency and embraced lean manufacturing, the pressure to speed up manufacturing and deliveries often took precedence on the factory floor, whistleblowers like Sam Mohawk have said. 

In a June 11 claim filed with a US agency that oversees workplace safety, Mohawk said the company lost track of hundreds of potentially damaged or unusable parts, some of which may have ended up on 737 aircraft. He also accuses Boeing managers of instructing workers to delete or not maintain records for those components, in violation of Boeing policy and FAA rules, according to the complaint.  

The quality lapses at Boeing and supplier Spirit AeroSystem Holdings Inc., which makes the 737 Max’s hull, came to the forefront after the jet’s suffered an airborne blowout of a fuselage panel in January While no one on board was killed, investigators determined that the nearly new jet was delivered without four bolts needed to secure the door plug.

Some of the harshest criticism was leveled at Calhoun’s compensation package for 2023 totaling almost $33 million, with Missouri Senator Josh Hawley saying it was a “travesty” that the CEO was still in his job. 

Hawley said Boeing had been “hollowed out” over the last two decades as it outsourced more manufacturing to subcontractors, with Calhoun saying the company is addressing the issue by seeking to buy back Spirit.

(Updates with comment from senator on compensation)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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First Published:19 Jun 2024, 02:01 AM IST
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