You're not getting a competitive bar
wink. They're listening.
They know they've got to respond. They know they've got to fix it.
I want to give you credit. You came out early and talked about the
culture, that something was wrong within this company.
What are we learning from the regulator in the people conducting this review?
I think to your point, they are saying the right things now, but it would have
meant a lot more if they had been saying this earlier and they had plenty of
opportunity to do that in the wake of the two max great crashes.
And I think what's important to note here is this report was started in March
2023. They didn't start this investigation
into Boeing safety practices because of what happened with Alaska Airlines.
That was a symptom of a culture that is just lacking when you read this.
The crux of it is really how do you figure out how to get bad news to the
people that can do something about it before it morphs into a crisis?
How do you flag problems before you have something like Alaska Airlines Happen?
And this just goes back to the basics of how you run a manufacturing company.
It shouldn't be that hard, but I think in practice it is not just for Boeing,
but for some of these other companies that have sort of lost sight of what
they really do, and that is manufacture products.
You know, what I think about GE a lot, just because these companies do share so
much overlap from their executives over the years.
And you look at the transformation under that company.
And CEO Larry Culp is known for being extremely hands on, for being very
invested in what happens on his factory floors at Boeing.
Dave Calhoun is known for being the opposite of being more hands off.
I don't know if that's what Boeing needs right now.
I think you really need somebody to get in there and to pay attention to what's
happening with these manufacturing processes, because I think the people at
the factories pay attention to that. They pay attention to what the
executives are saying and what they're doing.
And when you move your headquarters to Arlington, Virginia, even further away
from that of a 37 factory outside of Seattle, I do think that send a message.
Interesting, separate. Let's talk about personnel.
Tell us about the changes that have happened and the changes that you'd
anticipate to happen in the coming weeks and months.
At Boeing specifically. I think, you know, there's been a number
of different changes. If you look sort of over the the time
period in the wake of the max crashes, we've seen sort of a revolving door of
executives. And yet I still don't feel like and if
you look at this report that they have their hands around, you know, what
exactly is wrong here with the culture and part of it.
Just to go back to your initial point about, you know, they're saying the
right things now, but we have not ever heard from Boeing top management.
We have a culture problem. They've been very reluctant to say that
this is some sort of systemic issue. And, you know, the reasons for that are
perhaps obvious when you're talking to analysts and investors.
But I do think, you know, addressing this problem starts with calling it out
and accepting it and really being willing to get your hands dirty and dig
in and figure out how you solve this. Well, regulators seem to have attempted
here just to give some details and what they found, constant changes to complex
procedures and trainings leading to confusion.
Other shortcomings hindered the average employee's understanding of their role
in how Boeing manages safety. I mean, this is pretty basic.
And then it said that regulators requested information that Boeing
demonstrate commitment to safety because the materials it received, quote, did
not provide objective evidence of a foundational commitment to safety that
matched Boeing's descriptions. Can Dave Calhoun remain at the head of a
company where you had this type of scathing description from US regulators
trying to understand why there have been repeated errors and repeated incidents?
I think you have to think about the incentives of the different players
here. And I think what makes Boeing so unique
is that it exists in a duopoly that you were never really going to have the type
of accountability to Boeing that you might have at another company simply
because the world cannot exist just with Airbus airplanes.
You know, you do have some planes coming out of China, out of Comac, which had a
pretty impressive showing at the Dubai Air show.
But you're just never going to see the Western world buy those planes.
And we just cannot live in a world where there is only Airbus.
And so I think, you know, you've seen customers come out and be a lot more
aggressive in their criticism of Boeing in the wake of the Alaska Airlines
incident. But at the end of the day, they also
want their airplanes. And so I think it's going to be really
interesting to see just how much pressure there ultimately is on Boeing
to change its ways, because I think you could argue that in the wake of the max
incidents, there wasn't enough pressure or certainly Boeing didn't feel it for
the FAA to now be able to come out with a report like it just it the CEO will be
sitting down with the head of the FAA today.
What do you expect anything tangible to come from that, Brooke?
You know, I think it'll be interesting to see how much they actually share
about what's discussed in that meeting. I think, you know, if Dave Calhoun wants
to show that he is taking this seriously, they should come out with
something tangible and it needs to be real.
I mean, we've heard about changes from Boeing, you know, to two ways in which
they've improved their safety culture. I think it needs to go beyond that.
I think you need to really get specific and talk about how you're going to
address some of these issues that were raised in the FAA report.
I mean, I think that's what they should do now, how much they'll actually talk
about changes that they're making or what was discussed, what we'll have to
see.
