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Do you want to fly on it? I sure as hell don’t.
I have a daughter, age 33, I want to see her graduate and grow up, flourish in her life. I don’t want to end up in a black hole in the ground, because of some greedy Boeing CEO, who puts profits before human lives. To hell with that.
Such is the immense Everest-like challenge, faced by the US airplane manufacturer, as it seeks to regain public trust and re-establish itself with the appointment of a new CEO.
To quote the British band, The Who: “Here’s the new boss … same as the old boss.”
Correcting the engineering flaws in the 737 MAX jet may be the easy part, according to analysts. Gaining public trust, yet another, according to a report by China Daily.
To restore credibility, Boeing must be open and direct when dealing with the US Federal Aviation Administration, or FAA, customers, pilots and the public, say the analysts. But a plaintiff’s attorney believes harm to the company’s reputation may be irreparable.
“I’m not sure there is anything the new CEO can do to correct the damage as far as how the victim’s families view Boeing,” said Floyd Wisner, an Illinois lawyer who has negotiated out-of-court settlements for some of the relatives of those killed in the Indonesian crash of a 737 MAX in October 2018.
“All trust is lost and there’s a great deal of anger — especially among the families of those killed in the Ethiopian Airlines crash, who rightfully believe Max should have been grounded immediately after the Lion Air crash in Indonesia, ” he said. All 737 MAX planes around the world were grounded following the Ethiopian Airlines crash in March 2019, which killed all 157 people aboard.
Analysts have estimated that Boeing will spend at least US$20 billion to return the MAX to service. Costs include compensation to airlines for lost revenue due to the grounding of the jet, out-of-court settlements with family members of those killed in the crashes as well as the cost of storing new but undelivered aircraft and returning grounded planes to the air.
The New York Times reported that Boeing has developed strategies for airlines to win back public trust and customers, including handing out cards to passengers stating why the plane is safe, having flight attendants or members of the flight crew personally address a customer’s fears, or even rebooking passengers on a non-MAX flight.
The crashes of the Lion Air flight in Indonesia and the Ethiopian Airlines flight in Ethiopia, killing a total of 346 passengers and crew, sparked the exodus of Boeing’s top management.
The Scrooge-like CEO, Dennis Muilenburg, 55, was fired on Dec 23. David Calhoun, currently board chairman of Boeing, takes over as CEO on Jan 13.
Muilenburg, an aerospace engineer, assumed the top post in 2015 after being with Boeing for 34 years.
CNN reported last week that public filings show he could be entitled to more than US$30 million in compensation — $20 million-plus worth of vested stock and a pension package totaling more than US$11 million — and potentially a severance payment of about US$7 million.
Muilenburg was criticized for making overly optimistic statements about the MAX’s return to service and for the lack of any remorse in dealing with criticism from Congress, regulators and family members of the crash victims.
So far, Muilenberg has not given a single penny to the crash victims — not even a hollow gesture. The man is a walking dumpster fire, for how not to behave in a crisis.
After the second crash, Muilenburg said the MAX would return to service by December. But United Airlines recently said it had pulled the jet from its schedule until June 4 after previously expecting flights to resume in March. Southwest and American airlines hope the plane will return to service by spring.
More Boeing executives are also leaving. The company’s top lawyer, Mike Luttig, who advised Muilenburg on strategic and legal matters following the crashes, will retire in early January. Kevin McAllister has been removed as head of Boeing’s commercial airliner division and Anne Toulouse will resign at the end of the year as vice-president for communications.
Calhoun, the new CEO, is former senior managing director and head of private equity at investment firm Blackstone Group and former chairman of Nielsen Holdings, a marketing and media information company.
He has served as a member of Boeing’s board of directors since 2009 and, like other directors, approved the initial version of the MAX’s flawed MCAS anti-stall system. He therefore shares final responsibility for the MAX’s design and the company’s response to the crashes.
Calhoun appears to be setting a different tone with the FAA. Last week, he personally called the regulatory agency and talked privately with officials rather than including other top executives on the call, The Wall Street Journal reported.
But Boeing may need much more than that — in fact, the challenge appears insurmountable.
I’m not saying it can’t be done. But no one wants to end up in a hole in the ground, no one wants to be a statistic. And no one trusts Boeing.
Meanwhile, Turkish Airlines and Boeing have agreed on a compensation deal over undelivered aircraft and the grounding of the MAX.
“Boeing will cover some of our loss and the revenue that we cannot generate because our grounded aircraft are not used in operations,” said the flagship carrier of Turkey in a statement published on the Public Disclosure Platform (KAP).
The statement did not specify the value of the deal, but local media reported that it was worth US$225 million including US$150 million in compensation and US$75 million covering spare parts and training.