A lot of people have been looking aghast at what Boeing’s fired CEO Dennis Muilenburg is taking away with him after having crashed and burned the airline. More than $60 million says The New York Times. BBC figured $62 million, and The Financial times agrees. $80 million says CNN, taking into account stock options he still has.
What’s left of Boeing insists that Muilenberg got only what he was entitled to under his contract and no additional compensation for being fired. That’ll teach him!
It's a great country when someone can make an iconic corporation crash and burn and walk away with $60 million, give or take. Not as much as the bankers got for ruining borrowers in 2008, but the bankers were only evicting people, not flying them into the ground.
How did Muilenburg make his mess? Let the experts count the ways.
Basically, he led a transition from making airplanes to making money. Muilenburg went after defense and space contracts which Boeing was used to getting because of the strength of his engineering. Meanwhile he weakened his strength with a string of large layoffs starting in 2017. The big hits were to engineers and mechanics, not so much in sales and image departments.
Stockholders were happy. Employees, not so much. What exposed the flaws in Muilenberg's Boeing was the lick-and-promise stretch of the 737 MAX, which effectively turned a well designed airplane into a different, un-designed airplane. It lengthened the fuselage to add seats and didn't spend enough time thinking that a longer fuselage would change the plane's flight characteristics.
There was a time when pilots would chant, "If it ain't Boeing, it
ain't going." Now they say, "If it IS Boeing it ain't going." They knew,
while Boeing denied, that when you get a new aiplane you need more time
in the simulator. The corporation did it to save money and steal a march on Europe’s Airbus. But you can’t turn a Mini Cooper into school bus by adding seats, which is what Boeing effectively did with the MAX. It was that kind of thinking that caused one disgruntled employee to email that the project was “designed by clowns, who in turn are supervised by monkeys.”
That colorfully describes what the stockholders got from the guy with whom they were happily contracted. That's what he got fired (without additional compensation) for. He was replaced by a man who was serving on the Board while Muilenburg remade Boeing into a nightmare for airlines.
After a certain financial altitude is reached in America, going down still looks like going up. Which is why Bernie Sanders, bum ticker and all, is still viable.
Makes me glad I have no immediate travel plans.
ReplyDeleteWhy is it that crashing and burning a major corporation (and even losing lives in the process), and getting fired, is like winning the lottery several times over?
I'm not on the Bernie bus yet, but I'll get there if it's between him and Trump.
So are there going to be any criminal charges brought on the people who green-lighted bypassing more testing and simulator hours?
ReplyDeleteIs this why Bernie could win?
ReplyDeleteCould win what: the Democratic nomination? Unfortunately this is a possibility. The Presidency? Never in a cold day in hell. This country is not ready for a "socialist" no matter how much he clarifies, defines and obfuscates. His nomination is a sure guarantee of another 4 years of the Trumplicans in the POTUS and most likely in the Senate.
DeleteHarrumph, I just tried to post a lengthy comment, and ran into a byte limit again. So once again this will be in multiple parts:
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I mention occasionally that I get a daily e-newsletter from Matt Levine of Bloomberg News, who makes the financial industry sound comprehensible and amusing. What follows is his write-up from a few days ago on the Boeing debacle, wearing both his investment banker and attorney hats:
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The basic issue is, you are building a complicated thing, and there are lots of decisions to make, and you have lots of people involved in making those decisions, and sometimes they will disagree. One person will argue for using the size 5 widget, for safety, while another will argue for using the size 4 widget, for ease of use.
Really you hope that they will frequently disagree, particularly about the hard decisions that involve real tradeoffs; if they always agree then that is a sign of bigger problems. (A lack of courage or creativity or commitment or intellectual diversity, etc.) If you hire good people who care deeply about their work, their disagreements will be passionate, and they will bring evidence and argument and rhetoric and sarcasm and hyperbole to bear to try to convince their colleagues that they are right. Using the size 5 widget would be the greatest crime against good design and common sense ever perpetrated by mankind, someone will say, if they care enough about widgets.
The tone of their disagreements will probably say something about the culture of your organization. If the disagreements are passionate but respectful, if everyone acknowledges that their colleagues are brilliant and well-intentioned while disagreeing deeply on the right answer, if they can shout at each other all day while remaining friends, then that’s probably a good sign about your process. If the disagreements are hopeless and cynical, if they take the form “I know no one here cares about safety but I’ll just point out again that if you use the size 4 widget everyone will die,” then that’s bad. If you have a large corpus of these disagreements—if you save everything everyone said about every decision in some searchable format—then reviewing it will be revealing.
Part 2 - Levine (cont.):
ReplyDeleteBut there is another sort of meta-question of culture that has a huge practical importance, and that question is: Are you having those disagreements in a format that is easily preserved and searched? Are you creating a corpus? Are you writing this stuff down? Because if you are, and a decision turns out to be wrong or debatable—if something goes wrong with the complicated thing that you built—then, guess what, those disagreements are going to come out, and they are going to look bad for you. Even the good ones will look bad for you; even if your culture is one of passionate but respectful disagreement among talented people searching for the right answer, the passion, taken out of context, will look bad.
And if your culture is bad, that will look even worse:
“Would you put your family on a Max simulator trained aircraft? I wouldn’t,” one employee said to a colleague in another exchange from 2018, before the first crash. “No,” the colleague responded.
In another set of messages, employees questioned the design of the Max and even denigrated their own colleagues. “This airplane is designed by clowns, who are in turn supervised by monkeys,” an employee wrote in an exchange from 2017.
That’s from a corpus of “over a hundred pages of internal messages delivered Thursday to congressional investigators” by Boeing Co. yesterday, in the aftermath of the Boeing 737 Max’s grounding after two fatal crashes. One thing to say about these messages is that the internal critics—the people who thought that the design was flawed—seem to have been correct, while the people who thought it was fine seem to have been wrong. Another thing to say about them is that the tone of the internal critics—“clowns,” “monkeys”—does not seem like one of passionate but respectful disagreement; the messages do not fill you with a sense of confidence about Boeing’s robust decision-making process. I mean this is pretty explicit:
“We put ourselves in this position by picking the lowest cost supplier and signing up to impossible schedules. Why did the lowest ranking and most unproven supplier receive the contract? Solely based on bottom dollar. Not just MAX but also the 777X!”
Added the employee: “I don’t know how to fix these things... it’s systematic. It’s culture. It’s the fact that we have a senior leadership team that understand very little about the business and yet are driving us to certain objectives. Its lots of individual groups that aren’t working closely and being accountable. It exemplifies the ‘lazy B’” -- the nickname the person used for Boeing.
“This is a joke. This airplane is ridiculous,” said another. And: “I’ll be shocked if the FAA passes this turd.” Many messages are even more cynical, not criticisms of the design process but celebrations of putting one past regulators.
But one more thing to say about these messages is: Boy, they are in writing! After the fact—after the crashes—these messages are evidence; they are bad. “We regret the content of these communications, and apologize to the FAA, Congress, our airline customers, and to the flying public for them,” says Boeing.
Boeing is still doing it.
Delete“We regret the content of these communications, and apologize to the FAA, Congress, our airline customers, and to the flying public for them,” says Boeing.
Just what is that supposed to mean?
a) We are sorry these emails had to become public?
b) We are sorry for the tone?
c) We are sorry we didn't pay more attention to the writers?
d) We are sorry the emails don't reflect our current effort to seem to be as concerned about safety as our bottom line?
e) We wish the problem would just go away?
f) We wish the problem -- and you snickering airline customers -- would just go away and let us concentrate on flying to the moon?
Words, words, meaningless words.
If things were this bad at Boeing, how do we know other airplane manufacturers aren't cutting corners, too? Think I'll stay on the ground for awhile.
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