Pontifications: David Joyce fills key void on Boeing’s Board

Sept. 6, 2021, © Leeham News: Last week’s election of David Joyce to the Boeing Board of Directors fills a glaring hole of talent and expertise that’s been missing from the Board for years.

By Scott Hamilton

Joyce, an outside director, brings commercial aviation and engineering experience to a Board that has been dominated by political, defense and financial expertise.

Following the two 737 MAX crashes in October 2018 and March 2019, the Board came under criticism—including from LNA—about the lack of technical, commercial, engineering and pilot representation. The 2018 Board had one commercial airline expert, from the executive suite: Lawrence Kellner, the former CEO of Continental Airlines. David Calhoun worked for GE for 26 years for the transportation, aircraft engines, reinsurance, lighting and other GE units. He left GE in 2006. From that point forward, Calhoun focused on finance industries. Dennis Muilenburg, an engineer, came from Boeing’s defense side.

But, as the table below illustrates, the 13-member Board was top-heavy with other disciplines.

Board of Directors

The absence of commercial aviation expertise was glaring in the wake of the MAX accidents. Commercial aviation safety didn’t capture the Board’s attention. There were no commercial aviation engineers or pilots on the Board. Yet commercial aviation represented the majority of the products and profits.

Changing of the guard

The Board was slow to make changes. Despite pressure to separate the chairman position from the president and CEO, the Board, and shareholders, rejected the proposal at the 2019 Annual Shareholders meeting in April 2019. But the Board did so the following October. Despite calls to fire CEO Muilenburg, the Board stuck by him for months before finally doing so in December 2019. Calhoun, who became chairman in October, was named president and CEO. Kellner was named chairman.

Since Calhoun’s ascension, there has been major Board turnover. Seven of the 13-member Board are gone. Age-related retirement probably accounted for some. Nikki Haley, the former governor of South Carolina and former Ambassador to the United Nations—a political choice for Board membership—resigned over policy differences. Boeing initially intended to participate in the COVID-related CARES federal financial bailout. Haley opposed this move and quit. Ironically, Boeing swore off the CARES bailout and instead sold billions of dollars in bonds (of which, according to some, the federal government was a buyer). Caroline Kennedy, a former Ambassador to Japan and clearly another political choice for the Board, quit in January 2021. She’s since been identified as the potential Ambassador to Australia.

At last

New members to the Board, however, still didn’t have commercial aviation experience. New members had defense, finance and non-aviation industry experience. Although in the 2021 Proxy, Boeing took great pains to point to the engineering experience of various Board members, none was in aviation.

At last, though, Boeing named an airline pilot to the Board: Stayce Harris, who flew for United Airlines for 30 years on all the Boeing 7-Series aircraft operated by UAL, except the 737. She also was a former Inspector General of the US Air Force, where she achieved the rank of Lieutenant General—three stars. One cynic immediately pointed out that the USAF connections might have been more important to Boeing than her airline pilot credentials, considering the future aerial refueling tanker competition and other air force defense work. Regardless, Boeing finally has a commercial airline pilot on the Board.

And now, it also has representation from the commercial aviation sector and a commercial aviation engineer. David Joyce is highly respected in the industry on both counts. He also benefits from knowing Boeing intimately—no learning curve, or very little, will be necessary. Joyce also knows the challenges and dynamics involved for the Next Boeing Airplane (NBA), whatever it turns out to be.

Possible downside

The possible downside: Calhoun, a GE alumni, picked a former GE exec to succeed former EVP and CFO Greg Smith. The GE influence at Boeing that began with the 1997 acquisition of McDonnell Douglas Corp., where another GE alumni, Harry Stonecipher, was CEO, is viewed by many as a long-term contributor to Boeing’s slide from an engineering company to one overly focused on financial performance and shareholder value.

The GEntrification of Boeing has long been a concern, especially as the financial world saw the decline of GE itself as a global leader that has been in a long financial decline of its own.

Boeing has a long, long road to return to its former glory. It’s taken decades to hit bottom. It will probably take decades to climb out of the valley it’s been in. But at long last, there are some people on the Board who actually understand commercial aviation.

97 Comments on “Pontifications: David Joyce fills key void on Boeing’s Board

  1. Good that there’s now a little more commercial aviation competence on the board.
    However, there’s not much point in having good officers on a ship if there isn’t enough crew — and the brain drain at Boeing is an ongoing substantial problem.

  2. Scott,
    This may seem a little fishy but you wrote sole instead of sold when writing about the CARES bailout 🙂

    • @Lars: Fixed. Grammarly checked it before publishing, but didn’t catch it. Thanks.

      • Good article. I write engineering documents for a living and review those of others. Robot grammar checkers only pick up just over half the issues though introduce issues of their own. There is no substitute for having your own document proofed by someone else. Putting it down a day and then picking it up again helps.

        GECAS executives are turning up at Airbus as well Wouter Van Wersch is head of Sales Airbus Europe. Small industry really. I suspect that Airbus’s multinational structure tends to sleep things diverse a little plus the fact that the CEO’s position is up for re-election thereby making the COO (John Leahy now Christian Scherer) nominally second in command but disproportionately influential but balanced.

        Any board or management dominated by one mindset can be bad.

        Faury is an engineer test pilot from the helicopter side (EC225/Super Puma) and was project manager. The aircraft was grounded for 15 months. due to the CHC Helikopter Service Flight 241 crash.

        • @William

          ‘to sleep things diverse’ is a very imaginative and indeed insightful mode of expression

          If this may be applied to airbus, what like minded phrase will illustrate Boeing?

          – without falling into a drama trap, as per sky falling circus etc etc

          It’s possible BA is a void that prohibits invention

          • Perhaps ” The Sky is Falling™ ” is actually the most apt phrase for Boeing.
            After all, everything that can go wrong is going wrong.

          • I’m glad you picked up it wasn’t a typo but wryly ironic. 😀. The decades of ‘workshare’ arguments the Europeans had seems to have resolved into a stable system where everyone accepts the other guys right to have an aviation industry but still fights a little over work share and who gets to have their guy as a CEO.. The Airbus structure is complex, one would expect it would be unworkable, but work it does. Maybe Boeing will incorporate into that societas Europaea SE structure along with DaimlerChrysler and Aerospatiale Matra and Construcciones Aeronáuticas SA (CASA)

          • @Bryce

            And fitting that such an old fear should sum up BA, they’ve achieved a previously impossible level of failure

          • @William

            If Airbus was spared a monoculture mindset by the facts of formation across EU countries, with politics an essential ingredient, and accept this is a requisite element of success in very large scale systems-

            -This may throw into sharper relief the poverty of BA commercial/financial structure and culture as trivial and irredeemable

            If China/Russia can perform anything like a similar system under related circumstances…..

          • @William

            Also – It might cast a shadow on BA’s pretence adherence to an ersazt ‘diversity’ (see BA website for the usual doublespeak)

            And so reveal a half hearted attempt at distraction, although (in their defence) this is transparently mocked up and is slightly less hypocritical than DoD’s

          • @Gerard. You expressed lucidly what I had hoped to say. It’s worth looking at an old Leeham a interview with John Leahy.
            https://leehamnews.com/2017/11/28/leahy-reflects-33-years-airbus/

            The last section refers to the 20 year exclusivity deals
            Boeing hade with the major US airlines.

            “Exclusive deals:

            The reason Delta would buy another Airbus aircraft was a controversial set of deals Boeing struck, first with American, then with Continental, Delta and United.

            These were, for the time, unprecedented exclusive supplier contracts to eliminate competition and bind the four airlines to buying airplanes in their categories only from Boeing…..”

            The deal, while very successfully, seems to have lulled Boeing into a kind of stupor in the B737 segment.

            Leahy apparently plotted the neo to coincide with the end of that deal though other anecdotes relate it to the lack of competitiveness of the A320ceo against the Bombardier C series when competing with Frontier Airlines. Probably both stories are true.

            ***
            Interestingly in what was called the “Airbus Affair” when Boeing went head to head with Airbus in Canada the Boeing company purchased De Haviland to strengthen its position with the Canadian Government. When Airbus ‘won’ that deal. Boeing dumped Bombardier endangering its existence.

            Part of Boeings problem to me seems to be a history of slightly bitter adversarial relations between Canadian Aviation and US aviation,

            It’s interesting they don’t seem to work together.

            Of course they didn’t have a mover like like Franz Josef Strauss a Chairman who was always ready to make thins happen in European Aviation integration by skirting with what has uncharitably called corruption.

          • @William

            Thanks for the link

            Boeing’s monopoly stupor with the US majors followed the well trod pattern, mimicked the Clinton mass murder of MIC suppliers, airlines

            Results are clear negative across the board – inefficient non performing and overexpensive products : a company structured to pay off Wall Street, or anyone, rather than invest in better production, except off shore

            With Boeing’s guarantee from the Administration to self certify flimflam as genuine, the Ponzi seemed set

            Crippled by the Twin Max murders BA is reduced to dumpster sale prices dictated by those same few airlines of those same few airplanes it has to sell ; although the stock is still in play,WS does not seem inclined to otherwise invest or support the company

            Witness the poor monopolist unable to collaborate, partner or ally

          • @Bryce

            I know, isn’t finance a great business to be in – you get paid off once, then again, then again

            As per your link – the cover ups may now grind to a halt, and BA will not only have to pay a WS aggrieved that they too were misled and should have been paid more and lied to less

            But finally the crash victims may get a decent pay out

            Perhaps DoD, even, will haul itself into the real world and recognise that throwing BA (and the rest of the pack) so much bad money after so much bad money does them down badly

          • @ Gerrard
            Yes, Boeing is in for a nasty, extended, embarrassing time in courtrooms:
            – We already had the lawsuits from the crash families.
            – A federal judge in Texas last week gave a green light for consumer class action suits, alleging collusion between Boeing and SWA to present the MAX as being safer than it was.
            – And now there’s this investor action against the board.

            No shortage of bad press ahead!

        • Good advice on proof reading.

          Need to have someone not familiar with the subject read the draft, for sense – some posters in this forum write badly.

          Need to have someone familiar with the guts of the subject read it too, Coulson Aviation for example has errors on its websites that would be obvious to someone even half familiar with the products.

  3. GE seems to be climbing out of its financial hole after some loss making investments. As LEAP deliveries progresses and cost comes down they will be able to sell them at a profit as well the services profits will climb even faster. But it is todays GE board that pays down debts.
    Boeing hopefully will follow and design a new reliable and advanced aircraft that will be built by robots and be prepared for the future fuels airlines can buy. Those robotic FAL’s can pretty easy be built close to were the biggest markets are.

  4. I think the board and major stake holders (US government, supply chain, unions, banks) should make sure that short term free cash flow / bonusses are no longer the main strategic drivers for thecboard members.

    Long term portfolio relevance, added value for US society and business transparency should set salary levels.

    Bonusses / short term free cash flow shouldn’t determine 80% of the paycheck, but 20%.

    Pushing out investment, mistifying debts, overly rosy outlooks and spotlighting free cash flow took the (rather docile) stock owners for a ride. The board is fully accountable for it.

  5. Someone on the board seems to have realized that sales without healthy margins do nothing to shore up the balance sheet:

    “DUBLIN (Reuters) – Ryanair has ended talks with Boeing on a major new order for Boeing 737 jets due to a disagreement over pricing, the Irish airline said on Monday.”

    “On Monday he (O’Leary) said talks had collapsed without any agreement on pricing.

    “We are disappointed we couldn’t reach agreement with Boeing on a MAX10 order,” O’Leary said in a statement.

    “However, Boeing have a more optimistic outlook on aircraft pricing than we do, and we have a disciplined track record of not paying high prices for aircraft,” he said.

    https://finance.yahoo.com/news/ryanair-ends-talks-boeing-737-091101287.html

    It gets even more interesting: in this article from a Dutch aviation site, O’Leary makes a sneering remark at Boeing:

    “We don’t share Boeing’s optimistic pricing outlook, although this may explain why other large Boeing customers such as Delta and Jet2 have, in recent weeks, placed new orders with Airbus instead of with Boeing.”

    https://luchtvaartnieuws.nl/nieuws/categorie/2/airlines/ryanair-beeindigt-onderhandelingen-over-737-max-10-en-sneert-naar-boeing

  6. There’s still the basic issue of the Boeing FAA inspectors and how independent they are and who they can report to. Boeing years ago, put safety first, and their board and upper management supported that primary objective, for to do otherwise, they understood to be bad for the public and the companies reputation and stock value. Today, there seems to be more emphasis on stock value and only valuing any accidents as a cost of doing business. CEO’s Muilenburg’s phone call to President Trump after the second crash glaringly pointed this out. I could never imagine a former CEO like Bill Allen making a call like that. Has the culture changed at all. Has Boeing’s management learned anything form the 737-MAX disasters? Do they fix problems correctly the first time, or still have the “can’t we just” attitude?
    ===================
    https://thehill.com/policy/transportation/570922-new-boeing-787-dreamliners-may-not-be-delivered-until-late-october

    • “Do they fix problems correctly the first time, or still have the “can’t we just” attitude?”

      Just look at the ongoing deadlock with the FAA with regard to “random sampling” of the 787 production line for for QC purposes — including “tricks” such as using only carefully selected airframes for inspection. Does that give you the impression that things have changed?

  7. The jack welch ‘ shareholder value uber alles’ virus has morphed into so many variants in Boeing that it might as well be called a GEdemic. As GE went from the top to the dumpster, so goes/went Boeing. But cheer up, the U S – having given away bucu defense items like planes and helicopters to make a new well armed military in Europe, Boeing should do well while restocking the cupboard.

    And commercial will continue to limp along- program accounting was a wunnerful invention.

    • Think the picture of Jack Welsh needs refinement, he did some needed structuring of GE and some major investments. Today Culp is doing similar work by reducing debt, focus on industrial products and reducing the size of the capital business. It was mainly under Jeffrey Immelt that GE started buying into fringe businesses. “Neutron Jack” was not perfect as shown by his greedy retirement benefits but not a simple Financial Whiz kid either.

      • Thankyou claes for setting the record straight on Jack Welch at GE.

        Welch eliminated layers of management, the ‘Neutron Jack’ label came from the expectation that neutron bombs kill people but do not damage structure heavily – there were empty floors in some buildings after he did delayered management.

        Otherwise, he sold business units that he did not think could make sufficient profit as part of GE.

        Imelt fell for eco-predictions, investing far too heavily in those fields. Jack Welch picked the wrong person to succeed him.

        Jim McNerney was passed over for the job, he moved on to 3M then to Boeing. https://usatoday30.usatoday.com/money/companies/management/2007-02-25-exec-profile-boeing_x.htm

        He stated clearly to managers in Boeing Commercial Airplanes that their treatment of employees was key in evaluation of them.

  8. Meanwhile, the list of failed programs at Boeing keeps growing: 737 Max (346 lives & $20 billion), 777X (2-3 years late), Starliner (stuck valves,, failed launches), tanker program (boom camera, $5 billion over budget), and recently the 787 (serious production flaws, delivery of 100 planes halted, production slowed.
    Question: is there a single program somewhere these people have not ruined one way or another?
    Question 2: Was that recent infamous quote “designed by clowns supervised by monkeys”, or “designed by monkeys supervised by clowns”? I can’t seem to recall which.

    • Few realize that the first jet powered hydroplane with pickle fork design was designed by Ted Jones and built for Boeing to be used as a high speed test bed for hydrofoil designs in the late 50’s -early 1960’s. And Boeing built a few military hydrofoils for the government.
      And until the late 90’s, Mac dac buyout, most programs made money, were of good quality- 707,727,737,747,767,777,

      Thus in later years a local meme for Boeing wags during Seafair ( hydroplane races ) and when hydroplanes usually were known as miss thriftway, miss burien, miss centurary 21, etc- was that Miss- Management was to be the Boeing entry.

      • Uh, ‘Bubba2’, you ought to learn history of Boeing programs.

        A flight test 737 landed with major chunks of trailing edge flaps missing.

        727 and 737 had significant reliability shortcomings in initial service, with help from and pushing by airliners they matured.

        The first 747s were lucky to land at BFI flight test center from PAE factory with all four turning and burning – a serious goof of engine not stiff enough to resist flight loads. (Perhaps P&W goofup, I do not know.)

        The 747 was a very costly program.

        Yes, the 767 was a well led program.

        As for 777, was it delivered on time or late?

        (Hydrofoils are an obscure diversion, Boeing was trying to diversify but there was little market especially in Boeing’s region where logs in the water damaged the foils.)

        • Keith, A really good book on the development of the 747 (and a lot of good information on Boeing Jets that preceded the 747) is Clive Irving’s “Wide Body – The making of the Boeing 747” … It tells of the 707’s Dutch roll accidents, and the installation of the first yaw damper in the B-47, and of the need to stiffen the engine pylons on the 747, in development etc. For aviation geeks, it makes for fascinating reading. It also has a large focus on the personalities involved, including Managers, Engineers and Test Pilots.

    • John B. I guess a lot of people are comparing Boeing to “clowns supervised by monkeys”
      =============
      https://www.ccn.com/clowns-supervised-by-monkeys-boeing-puts-space-industry-in-danger/
      =========
      and you are correct, it’s a pervasive attitude and culture that Boeing needs to change. Good enough should not be the goal. They build very complex machines, with critical processes that need to be checked and crosschecked. Depending on one AOA sensor, never failing, should never have gotten approved. Making last minute changes, without tracing out their full implications, should never have happened. And to add insult to injury, covering up the changes, to the FAA and then even more, when the fault was laid bare, trying to allow the planes to keep flying is beyond pale.

  9. Even if the most recent appointees to the Board are well intentioned experts in commercial aviation, the last 24 years under the GE-McDonnell-Beancounter-Short-termism have created deep systemic problems in the organization and management of the company. These problems will not be fixed overnight by a couple of new faces at the very top of the management pyramid. It will require a radical change of philosophy and changes deep into the organization and its relationship with the FAA.
    It took 20+ years to ruin the company and it will take a long term commitment to fix it. I don’t yet see evidence of a deep commitment to fundamental change.

    • There are certainly a great any criticisms of the Boeing culture, some of them justified, such as yours. Yet I tend to think the malaise isn’t within Boeing but coming in from the US economy, culture and politics. GM, Ford clearly have similar issues. The last ejection seemed to be about gender pronouns. The revolt of the underclass is combining with the revolt of the elites (both book titles) to destroy the middle class? Finance is important because everyone and every entity seems to be operating under complex debt levels all of the time.

      I recall one Swiss engineer who had moved into sales of earth moving equipment and he observed that when interest rates in Switzerland were 0.4% it was easy to do complex projects and deals. As interest rates crept up the focuse went of the engineering so much.

      The designed by monkey supervised by clowns is also disturbing, showing a breakdown in trust and respect.

      • @William

        ‘the last ejection’ is a great invention, very apt as an epitaph for the newspeakers

        You are indulgent – a lot more than Boeing or the middle class is being destroyed

        Not only respect and trust gone, but any sort of capability or what the AirBusmen would call savoir faire

  10. Having someone with an engineering background and commercial aviation experience join the Boeing board: one step forward.

    Having that someone be yet another GE retread: three steps back.

    The slow, sad tailspin of that once great organization, which I watched from the inside as it began in 1997, continues unabated. Wish I’d taken the lump sum pension….

  11. Consider the two most prominent commercial programs presided over by the post-merger GE-finance-Uber-Alles regime: the 787 and the 737 Max (which replaced the older 767 and 737NG).
    How much is Boeing expected to earn overall on the 787 program: zero!
    How much is Boeing projected to earn overall on the Max program: zero!
    Seems that post-merger Boeing has pioneered a revolutionary new business model: one in which profitable programs from the pre-merger era are slowly replaced with new models which earn ansolutely nothing for the company due to failure to execute….a somewhat curious business model for a regime which claims expertise in finance above all else.

  12. Now that there’s someone with commercial aviation experience on the board, will he be able to make it clear to the other board members that the 777X is heading down the same path as the 747-8i (and the A380)?

    Too big, too heavy, too expensive. People assume that the 747-8i program was a flop because the plane had 4 engines — but its VLA size almost certainly also played a significant role.

    The 777X is program is costing a lot of money, and causing a lot of embarrassment — without much prospect of decent uptake; the intro of the LNA article below this one is an interesting synopsis. Boeing could better spend that money, time and effort on a program with more commercial relevance/urgency and with better chances of success.

    • Leahy put the A380 failure down to both sides of the Atlantic (GE and Rolls Royce) blind siding the engineers at airbus with engines for the B787 that had a specific fuel consumption 12% better than the A380. He actually used the term “blind siding” and more or less accused both companies of being in Cahoots with Boeing to keep this technology from Airbus. Other issues came from adding weight required for the A380F. Improving the A380-800 wing was possible but prohibitive, going to the A380-900 couldn’t be justifie4d. Main problem was the engines.

      In order to stay competitive with B777-9 Rolls Royce will need to keep the Trent-XWB competitive with GEnX on B777-9.

      In a post COVID world I do believe you are right the B777 may be too large.

      • William:

        So Leehy sounds like a conspiracy theorist as well?

        Or is he just making silly excuses for Airbus’ failure to estimate the market for much larger airliners?

        If there is much future in air travel despite Green Goons Airbus may have done what Boeing almost did in the 1970s – cease production of a model during times of very slow sales.

        I read that some airlines re operating the A380 despite low air travel demand.

        Side note: I read that Etihad is making very helpful money flying cargo in bellies of 787s, in times of premium rates for freight. Not sustainable long term but if it keeps a company aloft…..

        (Side note:

        • “So Leehy sounds like a conspiracy theorist as well?”
          More like a believer in the existence of NDA “Non Disclosure Agreements” or a believer in the kind of strategies businesses engage in. I’m somewhat surprised you don’t fathom that people strategize, organise and keep secrets.

          The core of the 15% per seat fuel disadvantage of the A380-800 over the latter B787-9 was a 12% inferiority in SFC of the engines. Fixing that would have gone a long way to assuring the A380-800’s success.

          I doubt that the engineers at Airbus wouldn’t have been able to anticipate an engine of the quality of the GEnx or Trent 1000 on the B787 as engines of this type were proposed for the A380-900. Perhaps they discounted it for too long or that GE and RR were rolling them out.

          The core of the A380’s failure is a 3 year delay in EIS during which the aircraft might have missed out on 100 sales and accumulated debts and a new generation of signicantly better engines developed. Those engines needed to be fitted to the A380.

          Traffic growth continues and its possible that in 15 years the A380 will be just right.

  13. Perhaps failing to launch the NMA (757 replacement and competitor to A321XLR) back in 2018 was a prescient move. After all, what are the odds that the monkey-supervising clowns could create a PROFITABLE clean sheet airplane program? Not good. The single post-merger attempt was the 787, a great airplane but a complete financial failure. Even before the recent production meltdown analysts were debating whether or not that entire program will ever earn the company a single dollar! How about the 737Max? Same story, likely never earns single net dollar! After all, each of these programs had to overcome a $20 billion hole created by the Boeing philosophy of doing everything in the cheapest, fastest way possible.
    So what are the chances this gang of accountants, GE beancounters, and ex-Generals can create a profitable clean sheet airplane program? Not good. They never have before, hard to get things right when the required tribal knowledge left about 10 years ago, and when you are hamstrung by a management philosophy willfully ignores the realities of commercial aviation.

  14. Ryan Air has stopped talking to Boeing about a order for the 737/10 as Boeing won’t come down on the price that Mike O’Leary wants so he can offer cheap cheap flights for the Fascinating Aida trio trip to Ireland what a great true song the trio sang.

    • Ryanair’s largest competitors (Easyjet, WizzAir) are flying A321s, which carry 20% more passengers than a MAX 8 — and with the collapse of MAX10 talks, O’Leary is now left without a similar sized airframe. This is an issue at slot-restricted airports.
      He’s going to have to have a chat with Airbus one of these days: maybe they can cut him some sort of deal à la Jet2, and thus deal another blow to Boeing.

      • If the MAX-10 is too expensive, the A321 will be too expensive too. Who cares about Ryan, they are a poor customer.
        The market needs new planes, it doesn’t matter which airline. So better to choose good customers.

  15. One way to understand the sickness of the post-merger business culture, is the unwillingness or inability to realistically account for technical and program risks, and the associated financial risks.
    For example, the 787 was the first Boeing to incorporate 3 revolutionary features:
    1. Composite fuselage
    2. Composite wings
    3. Global supply chain with roughly twice as much outsourcing as previous programs
    Each of these is a huge change which brings to the program potential savings but also increased risk of development issues and delays. Aviation people understand the enormity of the task of integrating thousands of parts from hundreds of suppliers. If one supplier is late, the delays cascade downstream and the costs grow exponentially. So it is easy to estimate the potential savings from introducing new technology, but one must estimate the associated risk and the cost of this risk. Had they made a reasonable attempt at this they would have seen the potential savings of their “global supply chain” evaporate in a hurry.
    The old aviation adage was, “commercial airplane development is evolutionary not revolutionary.” The post-merger regime refused to accept this. Witness the result: the 787 is a revolutionary plane and a financial failure.

    • The 787 in a way is a cargo cult product. a caricature.

      Lots of features that copy or “one up” the competitor. .. Superficially.
      Boeing never understood the “meat under the skin” of Airbus distributed design and manufacturing setup.

    • I do wonder why Boeing comes down with GE virus maiming its products
      but the GE tech side seems to be mostly unaffected from that virus.

      Or do we see effects of promotion beyond capabilities when leaving GE ( for Boeing, .. )

      • Uhhh- GE used to be THE prime company in the U.S. Then under Welch, it started on a downward trend- In mid 2000 stock was about $ 480/share- now the price is around $90. Even welch late4r admitted he screwed up. In 2018 it was dropped from Dow.

        Hardly a poster child for competent management

        • But they do not have the product issues that beset Boeing.
          At least not visibly. This could be the protective press shroud active for GE. ( GE has issues and a bashfest starts vs. RR )

          • I wonder if it might be better if Boeing made the engines and GE the airplane. That way if Boeing screws up the engines. The problem is localized.

            Unless GE goofs and allows them trim authority in reverse.

  16. Is the 777x not doing better than the next competitor A350-1000. Nobody is ordering wide body aircraft at the moment.Not even the 787 is getting new order.

    • A335k is an “of the shelf product” today
      while the 777X is in kind of a limbo situation.

    • The B777-9 does seem to have a slight fuel burn advantage, no one knows, Bjorn put it down t0 about 3/4% per seat in a Leeham article done years ago but the A350-1000 has nearly 1000nmi more range than the B777-9 and since then Airbus have made several changes such as an altered wing twist so its little to nothing now. The Airbus has the disadvantage of a 3/3/3 cabin with slightly wider seats. versus 3/4/3 on B777-9. Boeing would need the B777-8 to compete on ULH. Boeings sales may have more to do with the major feature the B777-9 has: its the largest aircraft available. This automatically side-lines the A350 towards the smaller A350-900 while the B777-9 handles the high capacity end. The A350-1000 makes sense for those that don’t want to add another type or that have ULH requirements (eg Project Sunrise). I imagine that Airbus and Rolls Royce are both improving the A350 aircraft and engines.

  17. Hopefully the reigning GE duo, the one in the board and the one at the wheel, together do not end up producing the same shipwreck as has been done before by GE acolytes who screwed up big time by focusing on the short term & shareholders while neglecting the long-term product strategy view & the company’s future.

    Would highly recommend the link follow for those looking for a real deeper dig into how the GE model effectively led to Boeing’s cultural deterioration over a span of almost 2 decades starting in the late 1990s and culminating ultimately into the 737 MAX disaster.

    https://www.amazon.com/Airbus-vs-Boeing-Strategy-Perspective/dp/B08NJM93N5

  18. What Joyce will bring to the board remains to be seen.
    Reminds me of when David Carbon, former VP 787 operations at Boeing South Carolina, left Boeing and a litany of quality issues at BSC. He joined Amazon Prime and the headline welcome read “David has over 20 years of experience bringing ground-breaking aerospace innovations to scale safely and reliably and we look forward to his contributions as we scale up our manufacturing and customer delivery operations.”
    Pfffft!

  19. So why has Airbus been more willing than Boeing to pull the trigger on launching new programs? I suspect the answer lies in different methods of estimating potential profits of a new plane.
    Airbus Accounting:
    Estimated development cost = $12 bil
    Cost to manufacture planes = $8 billion
    Required return on investment = $5 bil
    Required total gross sales = $25 bil
    Required production run = 500 planes
    Anticipated sales = 1000 planes
    Conclusion = Launch new program

    Boeing Program Accounting:
    Est development cost = $5 bil (Due to revolutionary method X of production)
    Cost to manufacture planes = $5 bil (Due to revolutionary new methods)
    Cost to clean up inevitable total failure of revolutionary new method = $30 bil
    Required return on investment = $20 bil
    Required gross sales = $$60 bil
    Required production run = 1200 planes
    Anticipated sales = 1000 planes
    Conclusion = No go!

    • Boeing could have fully paid for two new aircraft designs for all the cash they burned through purchasing their own shares. To raise the share value and since the executives are primarily compensated this way. It’s unusual for anyone to really come out against what amounts to a pay raise for themselves.

      The entire board could just decide to never work again. They’ll so rich many times over thanks in part to Boeing.

      Even the disgraced former CEO of Boeing is doing great. Last I hear he’s involved in some startup. Investing his millions there.

      I’m sure he’s very sorry about the two crashes. But the hard work is somebody else’s mess to fix. He’s moving on in life just fine. At least financially speaking.

      The people raising holy hell at Boeing and getting rooted out because complaining about safety was disruptive to cohesion or whatever, never quite recovered financially after Boeing tossed them overboard.

  20. Don’t necessarily need commercial aviation experience, but it should help recognition of the need for high quality in development, testing, and production.

    Not all engineers and pilots and inspectors do well in management, some change their stripes and work against quality – hello Robin Mackie and Charlie Stewart of Pacific Western? And the same happened within Boeing – engineers in management did not see the mess building in 787 development despite the military division alerting them to the risk of fooling oneself.

    • Perhaps engineers saw the mess building on the 787 and were powerless to do anything about it. Corporate said, we are going to develop this plane using this plan, period. Now your job is to execute the plan. If you return and say, “the plan cannot be executed”, that’s fine we, we will find a replacement for you who says it can.
      Corporate refused to accept that the development plan it forced down the throat of engineering was an unexecutable disaster.

      • But JB, the claim of others in this thread is that engineers on the board would prevent such problems.

        Yeah, much pontificating about, including speculating.

        • Muilenberg for one began as an engineer, but long ago moved into the executive ranks and quickly learned that the path to advancement was to focus on budget and schedule, not engineering and quality. The business culture of complete focus on short term profits is deeply entrenched.

  21. And now there’s a new challenge for the board:

    “Boeing board to face investor lawsuit over 737 MAX oversight ‘lies’ before crashes”

    “A judge in Delaware says he will allow a case to proceed on the grounds the board “ignored a red flag” after the first plane crashed off Indonesia in 2018 and gave false statements on its monitoring of the aircraft.”

    “Vice Chancellor Morgan Zurn, sitting in the Court of Chancery, ruled the directors could face claims related to the oversight of the plane’s development, saying the board “publicly lied about if and how it monitored the 737 MAX’s safety”.”

    “The Delaware judge also said in a summary of the investors’ case that chief executive Dave Calhoun – lead Boeing director at the time – had given “false” statements in the aftermath of the tragedies.”

    https://news.sky.com/story/boeing-board-to-face-investor-lawsuit-over-737-max-oversight-lies-before-crashes-12401933

    • @Bryce

      Thanks for link – this decision seems to break the chain of cover ups

        • @Richard Davenport

          If I may I’ll quote from the article linked, and from another article on the same site concerning the DoJ deferred prosecution agreement – what in any other country would be brandished as a proof of corruption plus pretext for invasion is absolutely (in the proper sense) ‘legal’ in the US

          Who says that industry gets no state/exec admin support in the US – which occurs only in ‘red commie countries’

          The article linked


          One thing is clear from the litigation fallout of the two Boeing 737 Max crashes that took the lives of 346 passengers and crew – Boeing and its lawyers are taking every possible measure to make sure that incriminating evidence of its criminal wrongdoing does not see the light of day.

          First there was the sweetheart deferred prosecution that Boeing engineered earlier this year that let Boeing off the criminal hook with no guilty plea, no charge against Boeing executives, no monitor appointed and no public release of incriminating evidence.

          Then last month, the Fifth Circuit Court of Appeals helped out Boeing’s cover-up campaign with a little-noticed decision that overruled a Texas federal district court ruling ordering Boeing to turn over certain documents “in fully unredacted form.”

          The case, Damonie Earl et. al. v. The Boeing Company, is a class action lawsuit against Boeing and Southwest Airlines brought by Southwest passengers alleging that Boeing and Southwest Airlines conspired to defraud the flying public by concealing various alleged design defects with the Boeing 737 MAX 8 aircraft and encouraging the public to fly aboard these aircraft.

          During discovery, Boeing turned over several logs of what it claimed were attorney-client privileged communications and, after Boeing entered into a deferred prosecution agreement, plaintiffs moved to compel over two hundred of the privileged documents under the crime-fraud exception.

          The district court determined that lawyers representing the Southwest passengers established a prima facie case and that the crime-fraud exception to attorney-client privilege applied to the requested documents and ordered Boeing to produce them for in camera review. »

          Same website on the DoJ deal – remarked on at the time, but worth re citing in light of the new investor lawsuit

          « The case was brought by the then U.S. Attorney in the northern district of Texas — Erin Nealy Cox.

          And the case was settled with a deferred prosecution agreement — an agreement that Columbia Law Professor John Coffee at the time called — “one of the worst deferred prosecution agreements I have seen.”

          Boeing did not have to plead guilty to any of the allegations.

          No Boeing executive was charged.

          And the Boeing deferred prosecution agreement included an unusual provision finding that a compliance monitor was not necessary because “the misconduct was neither pervasive across the organization, nor undertaken by a large number of employees, nor facilitated by senior mismanagement.”

          How did Cox and the federal prosecutors know that?

          Did they question senior management?

          “That is without precedent,” Coffee told Corporate Crime Reporter earlier this year. “I have not seen that anywhere else and I’ve looked at a number of deferred prosecution agreements. Prosecutors themselves are not conducting the investigation.”

          Boeing’s lead corporate criminal defense law firm is Kirkland & Ellis.

          Cox, the lead prosecutor in the Boeing case, left the Justice Department earlier this year.

          And last month she joined Kirkland & Ellis as a partner in its Dallas office.

          Kirkland & Ellis partner Mark Filip, who led the Boeing criminal defense team and signed the Boeing deferred prosecution agreement on behalf of the company, welcomed Cox last month to Kirkland and Ellis. «

          This is the same website that has drawn attention to the delicious relationship between Obama and BA ..

          Witness – Obama’s actions as sales rep, the very generous speaker fees, the 10$M for the Pres Library, and – doubtlessly – many more kickbacks in this program accounting twist

          • @Gerrard / @Richard
            This cover-up is bad enough of itself, but what makes it even worse is that it is at variance with the “transparency” alluded to in the memo that Calhoun wrote shortly after his appointment as CEO. A quote from the link below:

            “I see greatness in this company but I also see opportunities to be better. Much better,” Calhoun said.
            “That includes engaging one another and our stakeholders with greater transparency, holding ourselves accountable to the highest standards of safety and quality and incorporating outside-in perspective on what we do and how we do it.”

            https://www.ndtv.com/world-news/david-calhoun-boeing-ceo-tells-staff-to-be-more-transparent-2163504

          • @Bryce

            Calhoun posts some sterile banalities on his web site about ‘diversity’ and ‘transparency’ but the language is lackaday

            It’s perfunctory not even ‘performative’, his lawyers will tell him he must at least pretend

          • @Richard Davenport

            Thanks for this link : it was every bit as shocking to read this as to read of Obama flying around the world chatting up the 737

            The purchase of legal indemnity, as the buying of regulatory capture, marginally different, seems to poison all participants, but especially the company

            FAA self certification may be considered an essential ingredient for ignorant engineering

            Indemnity essential for irresponsibility, loss of any notion of correct procedure, management, or organisation

            In an industrial nation Boeing had some claim to be essential – in one which has sold off, & off shored almost every industry, Boeing is merely one of the last to go

          • Another data point showing what a bunch of amoral goons this gang of GE mafia is. These people feel they have been engaged by the shareholders to do whatever they can get away with to protect the stock price.
            I can almost see a short, hairless, Calhoun slinking and slithering about, muttering “…precious, my precious…”.
            But in his case his “precious” is the plummeting market cap of his amoral company.

          • @JB

            As far as I know many in the US believe that the ‘shareholders’ are the ‘owners’ of a public corporation, such as BA

            It follows from this belief, it is said, that the managers, i.e. Chairman Cal et al, are duty bound to return every penny they have to the ‘owners’, who, uniquely, may decide otherwise

            This obligation is sacrosanct to the point of destroying the company in the process, which is very largely what Boeing management has done

            A clear understanding of the nature of ‘ownership’, and ‘duty’, would avoid such failures

  22. Oh yes, pontificating continues.

    Gerrard claims Boeing achieved a “previously impossible level of failure”.

    Never mind the Convair 880/990, failing to meet is range guarantees despite repeated iterations including addition of ‘shock pods’. Good size strategy perhaps of smaller than its competition but failed to execute well despite having built airliners that sold well in the past.

    OTOH, Douglas produced a fine jetliner in the DC-8, despite not having the podded swept wing experience Boeing had.

    And many more failures in that era, of airplanes and engines like the Wright Turbo-Compound on the B-29 that took years and lives to make mature, later the composite fan blade design failure that hurt sales of good L1011 airliner, and fiasco’s like Airbus software loading on the A400.

    • Gerrard referred to Boeing as a *company* — in its entirety.
      You’re referring to individual *programs* from various companies.
      See the difference?

  23. And ‘William’ making the suspicious claim that Boeing had an exclusivity deal with major US airlines.

    I say Airbus had to prove itself as a sustainable company and in product support – which was not fully competitive in the beginning.

    (An operator of F-28s judged that the airplane was better out of the box than Boeing’s B737 but Europeans did not understand why anyone would need to improve their fine design.)

    As for deHavilland Canada, Boeing’s claim at the time was that sales of deHC products to airlines would provide an easier path to sell larger airplanes. I understand Boeing was appalled at the state of the deHC factory, but those were early days – Twin Otter doors were not interchangeable just as B707 floor track beams were not precision drilled. Being supportive in general, Boeing agreed to supply new beams without pilot holes that it had started to use, so PW could drill to match holes in mating parts One of Viking’s brags for the Twin Otter 400 is that its doors are interchangeable between individual aircraft.

    • “And ‘William’ making the suspicious claim that Boeing had an exclusivity deal with major US airlines.”

      Ha! If you’d read Air Wars, Keith, you will find the documentation in there about the exclusive deals.

      • I hear you, I won’t be reading the book to see how you define ‘exclusive’. (Noting you mis-use the word ‘war, which error I include in http://www.moralindividualism.com/monopol3.htm: “And let’s dispense with “war talk”. War proceeds by destroying values using physical force, whereas business succeeds by providing more value to customers who freely trade their values for the company’s product. War intends to have only one “winner” whereas a free market place has many – both suppliers and customers.”).

        I do question how long an ‘exclusive’ deal is contracted to last for, in each case.

        And I repeat that product support was a major question when Airbus was getting rolling. Even something as simple as good translations of manuals (translators of Aerospatiale helicopter manuals for example were not done by people with knowledge of subject matter, good English but watered own meaning).

        I will say that ‘exclusive’ supplier deals are not rare in the world, a minor example being office supplies. With the problem being lack of choice thus loss of efficiency. Businesses have to integrate – consider all factors, if they don’t they will be less successful in a free market supported by a justice system.

        Yes, government force was in action in the 1970s, in the form of regulation of airlines which shut out most people who wanted to enter the industry and grow. That bit established US majors whose culture was not efficient enough to handle deregulation. (PA and TW gone, DL had great culture, NW made good decisions in maintenance and operations. PA bit by acquiring Northeastern before deregulation, in order to feed its international routes.) Perhaps also in Europe to sell Airbus products, though real airliners were already being made in Europe and exported to North America (think BAC-111 in particular, also Fokker airlines).

        With considerations of licensed production of twinjets, actual licensed production of Fokker turboprops (F-27 and Fairchild’s FH-227 derivative), and licensed production of derivatives of the Brittania (the CL-44 freighter and the Argus frankenplane).

        BTW, how was it that US majors purchased Douglas and Lockheed trijets if Boeing was so great? (One reason is that Boeing avoided sizes in between 707 and 747 – stretches of 707s did not fly off of paper, in part to sell 747s and in part because landing gear height and structure were a challenge adding cost.)

        • @Keith: Don’t be obtuse. I don’t define exclusive. Contracts defined exclusive. The EU defined exclusive. Give me a break.

          Boeing and the three airlines involved agreed to buy nothing but Boeing airplanes for 20 years, from 1996-97. DC-10 and L-1011 purchases were from the 1970s.

          I’m not even going to go there about office supplies and all that other stuff.

  24. So why was the merger between McDonnell Douglas and Boeing such an abysmal failure? (As is apparent to anyone other than Condit Stonecipher, Calhoun and the rest of the GE executive mafia.) I would point to these two facts:
    1. The corporate cultures were like oil and water. At the time of the merger it was hoped that the two cultures would merge and that the result would be stronger, melding the engineering prowess of Boeing to the financial accumen of McD. Problem is, oil and water don’t mix. What they wound up with was a struggle for control between the nerdy Boeing boy scouts and the McD hunter-killers. This struggle was done before it began. It was like send Wally and the Beav out to take on a team of Eddie Haskells. No chance, especially since Wally and the Beav didn’t even realize they were in a fight till it was too late.
    2. The business models of commercial aviation and military/space are worlds apart, even opposite in many ways. Wall Street doesn’t get this: it’s all cool stuff that flies, so what’s the difference. Well, how about: upfront investment, ability to pass costs to customer, certification requirements, legal liability…the list goes on and on. Realistically, these two businesses are NOT natural bedfellows at all. In fact, a business culture attuned to the requirements of one is totally inappropriate for the other. Managers who have climbed to the top of one business have spent 30 years learning lessons which are inapplicable to the other. This whole merger was the product of Wall Street analysts salivating over the prospect of linking complimentary revenue streams, without bothering to consider the divergent fundaments of the two businesses.

    Hard to feel sorry for the post merger GE mafia. For ye who sow the wind shall surely reap the whirlwind!

    • Uh, ‘JB’:
      – Douglas had good engineers of air transport airplanes, many good features in the DC-10 such as flight deck windows and fuselage joints, yes some skimpy ones. (I exclude Bendix avionics which were not good.) C-17 has worked well for decades now., it is a big transport airplane.
      – McDonnell fighter airplanes are a different business of course, as many chunks of Boeing are going way back such as helicopters (Piasecki/Vertol), bombers (though with aspects closer to airliners than to fighters).
      – Boeing did OK with gas turbine engines and hydrofoil boats, trying to diversify, but market was weak and distracted from core business of aviation.

      Boeing had its design stumbles before the merger you decry, such as SST wing configuration and location of radome on AWACS version of 707 (Lockheed was smarter).

      • Certainly pre-merger Boeing management was not perfect by any means but did they:
        1. Let Douglas commercial die from lack of investment in product development?
        2. Were they responsible for the grounding of the DC-10, 787, and Max? (I believe the only 3 commercial transport class a/c grounded were products of McD and post merger McD-Boeing.
        3. The Boeing errors you mentioned, how much did they cost to fix? Anywhere near the $20 billion that was lost due to the disastrous 787 global supply chain?
        4. Or how did those Boeing errors compare to the $20 billionand 346 lives lost on the Max?
        5. I have no doubt that Douglas and McD had great engineering staffs and never said they did not, the problem has always been the slash-and-burn take-no-prisoners no-holds-barred philosophy of management under which the only thing that matters is boosting short term profits as much as possible with no consideration to long term consequences.

        • The managers overriding engineers on engineering decisions .. reminds me of the Morton Thiokol Challenger disaster. The engineers knew the problem and the consequences, but, management overrode them. How to stop this madness?
          =============
          https://www.youtube.com/watch?v=xV25ol-NedQ
          ==========

          • Morton-Thiokol management’s bad behaviour was a case of collectivism – a vote was taken in the meeting, despite only one person in it having much technical background.

  25. As airlines struggle with jerk whiners like https://www.seattletimes.com/seattle-news/alaska-state-senator-says-she-cant-work-at-capitol-after-alaska-airlines-ban/.

    She could take an apartment in Juneau? (Perhaps has a day job near Anchorage. Driving through Canada takes some time, two days she claimed when she did it earlier, she should hire a driver, I forget how far south in Canada she had to drive – not as far as Prince Rupert AFAIK, there are several towns in Alaska accessed by road from the highway in Canada, at least some have ferry service but that takes time too.)

    Should be able to take small charter flights to Juneau.

    But instead she plays the ‘political’ card.

    The chickens are roosting on her jerk shoulders.

    (Alaska Airlines banned her after an argument with its staff in a terminal in Alaska.)

  26. In my humble opinion, Joyce’s aerospace experience is more impressive than Calhoun, who is really more of an accountant type.

    I wonder if there was pressure from large institutional investors to put Joyce on the board. If Boeing continues to falter under Calhoun’s leadership, Joyce could be parachuted into the top position.

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