SUMMARY: The best products and marketing in the world cannot make up for a company devoid of authentic leadership to do the right thing. Jack Welsh, who made himself rich by terminating the livelihood of thousands of employees, continues to wreak havoc in companies that follow his demented guidelines.
I, personally, will go out of my way to avoid flying on a Boeing aircraft. A new book, summarized in this morning’s Daily Beast is eye-opening and scary. It portrays a money-hungry leadership that was more interested in shareholder returns than passenger and crew safety. Here is a summary:
Boeing’s Board is a reflection of how far in America personal greed has superseded the old standards of corporate governance and eradicated any sense of personal accountability for a catastrophic management record.
Every attempt to divine how Boeing’s culture went from exemplary to execrable tends to lead to a man who never laid his hands on Boeing, Jack Welch, the infamously bottom-line hatchet man, known as “Neutron Jack” for his ability to vaporize thousands of jobs at General Electric while its CEO from 1981 to 2001 before leaving with a $417 million exit payment.
Stonecipher acquired a large chunk of Boeing stock in the merger with Mc Donnell Douglas and as the chief operating officer gave the green light to set about injecting the Welch bacillus into Boeing, which he did with a relentless drive to cut costs.
In 2003, Condit resigned, taking responsibility for a scandal involving Pentagon contracts, although he was not personally involved, and Stonecipher became CEO, only to be fired in 2005 when it turned out that he had been having an affair with an executive in the company’s Washington lobbying team. … Stonecipher was replaced by another Welch protégé, Jim McNerney, who received, on signing, a pay package worth $52 million and who, every bit as ruthlessly as Stonecipher, thought it a priority to build Boeing into a money-making machine loved by Wall Street rather than perpetuate a culture that had always balanced profits with sustaining Boeing’s hard-earned status as a world leader in the quality of its engineering.
In the authors reporting for the Daily Beast, he pushed back on the fact that several senior executives that the pilots could have regained control had they followed “a memory item” in the flight manual— in other words, they should have remembered a procedure used on earlier models to deal with rogue movements of the stabilizer. It was preposterous since the flight manual made no mention that the MAX had a new autonomous control system that was, in fact, responsible for both this and the second crash, of Ethiopian Airlines Flight 302 on March 10, 2019, killing 157 people.
In his evidence to the lawmakers, one of the most respected pilots in the world, Captain “Sully” Sullenberger, said the chain of errors “began with decisions that had been made years before to update a half-century-old design…we owe it to everyone who flies to do much better than to design aircraft with inherent flaws that we intend pilots to have to compensate for and overcome.”
The new Boeing 737MAX aircraft made its first flight in January 2020, but eleven months later a serious problem showed up in a test flight—and, incredibly, it involved the same alarming event that was fatal to the 737MAX: an “un-commanded pitch”—meaning that the jet’s nose pitched upward without any action by the pilots.
In 2019, the first unmanned test flight of their Starliner capsule, a project competing with Elon Musk’s SpaceX Dragon capsules for delivering astronauts and cargo to the International Space Station, was aborted because of a serious glitch in the software that investigators said would have endangered the crew during re-entry to the Earth’s atmosphere. This was added to the Air Force’s prolonged travails with a replacement for its aging fleet of inflight refueling tankers, the Boeing KC-46, which should have been a straightforward conversion of a commercial jet, the 767, but has become a textbook case of a seriously mishandled Pentagon contract, making a mockery of the promised budget and deadlines: due to be in full production by 2017, it will not now reach that point until 2024, costing Boeing at least $551 million of its own money to fix.
Investigators for the House committee discovered that when other engineers told Forkner that airline pilots would need new training on simulators to adapt to the changes in the control system (the system that led to the crashes), he responded: “Boeing will not allow that to happen.
…Given all the evidence that Muilenburg had applied relentless pressure on the program’s managers to present an airplane to airlines that were little different than the previous model when, in fact, it introduced a critical and, as it turned out, fatally flawed system, Forkner appears to have been more a loyal messenger than a felon. Calhoun has claimed that Forkner was part of a “micro-culture” that did not represent Boeing, but if the case goes to trial, it’s likely that Muilenburg and Calhoun will be deposed, exposing them to discomforting questions about how such a “micro-culture” could have agency on their watch and about their own roles.
What about the guys on the assembly line who have to do what management orders? They’re just numbers and can be let go or replaced to cut costs. Personally, I would like to see some members of Boeing go to jail for their action that resulted in two crashes and over 300 deaths but that won’t happen.
Jack Welsch’s legacy continues to ruin good companies while failed CEOs get rich.
