Nov. 4, 2019, © Leeham News: Last week’s Congressional hearings about the Boeing 737 MAX crisis was just as I expected: theatre, lots of grandstanding, little substance and testimony that elicited little in the way of new information.
The US Senate hearing was a perfect example of playing to the television by many Senators.
The House hearing certainly had its share, but in more lucid moments, some House members produced new documents that were especially damning to Boeing.
Boeing CEO Dennis Muilenburg and John Hamilton, VP and chief engineer, did no harm to Boeing, which was probably the prime objective. (Hamilton is no relation to me.)
Muilenburg did harm to himself, however, and some Members of Congress landed some damning blows.
The Senate hearing produced nothing new. The Senators didn’t offer documents or information that could contribute to finding out anything or which could lead to fixing the myriad of contributing factors to the certification of the MAX, development of MCAS and the two accidents.
Montana Sen. John Tester was spot on when he observed Muilenburg “pivoted” on direct questions, noting that as a politician, he, Testor, “knows a pivot when I see it.”
Texas Sen. Ted Cruz, former courtroom litigator that he is, drilled Muilenburg on the now-infamous Forkner text messages.
But otherwise, the Senators’ performance seemed geared more for their five minutes on TV than in any real interest in safety matters. Wide shots later showed several empty Senator seats—those having left after their five minutes of TV time.
The House members did their share of grandstanding, too, but they took their job and this hearing far more seriously than the Senate (a low bar, to be sure).
The questions to Muilenburg and Hamilton were far more pointed, far more substantive and confrontational. Some House members produced documents that had not been previously revealed, some of which were especially damning to Boeing’s approach to developing and certifying MCAS.
There were repeated calls for Muilenburg to resign and one that he give up his compensation ($23m last year). It’s tough to tell how much of this was theatre and how much of this was genuine (although, clearly, one suggestion from a former CEO/mid-size business owner was obviously sincere).
Muilenburg’s responses, however, were cringe-worthy.
The Board of Directors sets his compensation, he repeatedly said. The Board of Directors removed his chairman’s title.
This coming from the same man who repeatedly said he’s accountable and the buck stops with him.
Muilenburg may be technically correct in both responses, but there is nothing preventing him from donating his compensation to a victim’s fund or scholarships or something. He’s rich enough already that he can afford to do so.
He can also submit his resignation, something he says he hasn’t done.
Regardless of the merits of either suggestion, his passing the buck to the Board had terrible optics.
But, like the infomercial, that’s not all.
When asked about Boeing’s legal strategy, reported in newspapers, that it wants to move all lawsuits out of the US to Indonesia or Ethiopia, where liability awards are a fraction of those in the US, Muilenburg professed complete ignorance. He acknowledged awareness of the newspaper reports.
Off camera, the incredulity of a couple of the House members was clear.
I couldn’t agree more.
How Muilenburg, the president, CEO and at the time also the chairman, could not be aware of Boeing’s legal strategy is beyond belief.
Let’s go back to May 1, when Boeing announced Michael Luttig would handle all MAX legal matters. The press release said:
Boeing names Luttig senior counselor and senior advisor
Boeing today named J. Michael Luttig to the newly-created position of counselor and senior advisor to Boeing Chairman, President and CEO Dennis Muilenburg and the Boeing board of directors. Brett Gerry succeeds Luttig as general counsel. Both changes are effective immediately.
Luttig, 64, who has served as general counsel since joining the company in 2006, will manage all legal matters associated with the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents. He also will serve as counselor and senior advisor to Muilenburg and the Boeing board of directors on these and other special matters. Luttig continues to hold the title of executive vice president and remains on the company’s Executive Council.
“During his 13 years of service at Boeing, Judge Luttig has built the finest legal team in the world and delivered an unparalleled record of success for the company,” Muilenburg said. “Judge Luttig is not only a brilliant legal mind, but also a critical voice on all the important issues and opportunities facing our company.”
“He continues to be a trusted partner and advisor as he steps into this new role.”
Luttig is counselor and senior advisor to Muilenburg. He will manage all legal matters relating to the Lion Air and Ethiopian crashes. He remains part of the executive council.
And Muilenburg claims he knows nothing about legal strategy?
Boeing HQ did not respond to a request for comment.
There were, however, some missing links in the hearings: the FAA and Congress itself.
Recognizing that these hearings were about listening to Boeing, nevertheless the few questions about the FAA’s role in the certification and review of MCAS and the MAX was not adequately pursued. Unfortunately, Muilenburg stuck to the messaging that Boeing complied with regulations and ADOs (the designated FAA representatives that are Boeing employees) did their jobs.
This was an opportunity for Muilenburg to say things could be done to improve the system and offer concrete examples.
It was also a chance for Muilenburg to hit home the fact that if Congress wants the FAA to do more, Congress needs to fund the FAA adequately.
Of course, this would have been politically incorrect and I understand why he wouldn’t want to go down this rabbit hole.
But Congress is every bit as culpable. When the FAA can’t even get its own reauthorization act approved by Congress, which would not only fund safety but improvements to Air Traffic Control, Congress deserves to be tagged.
Of course, Congress won’t do this sort of navel-gazing.