Boeing CEO Aims to Restore MAX Trust--Update
January 22 2020 - 5:18PM
Dow Jones News
By Doug Cameron and Andrew Tangel
Boeing Co. Chief Executive David Calhoun expressed confidence
the 737 MAX would eventually fly passengers again despite repeated
delays in winning regulatory approval for the troubled jet.
"It will fly safely," Mr. Calhoun said Wednesday, speaking
publicly for the first time since taking over the top job at the
plane maker last week. "When that happens, and pilots get on that
airplane and support that airplane, I believe passengers will
follow."
Mr. Calhoun said the company didn't see a risk the plane
wouldn't resume service, even as it endures heightened scrutiny by
the Federal Aviation Administration and overseas regulators. "I'm
all in on it, and the company's all in on it, and I believe the FAA
is all in on it," he told reporters.
His comments come a day after Boeing said it didn't expect
regulators to approve the return of the MAX to commercial service
until midyear, at least three months later than many analysts and
industry executives had thought possible.
The global MAX fleet has been grounded since last March
following two crashes that took a total of 346 lives.
Mr. Calhoun said the latest MAX forecast was a departure from
the company's prior practice that included best-case scenarios. The
new guidance was driven in large part by the company's announcement
in early January that it was reversing a long-held position and
would recommend simulator training for MAX pilots. Regulators in
the U.S. and around the world increasingly have been leaning toward
requiring the extra training.
"It took us too long to do it," said Mr. Calhoun, who met with
Boeing employees in the Seattle area this week.
He said Boeing for months has been laying the groundwork for
airlines to get access to MAX simulators, which have been in short
supply around the globe. "We are way more ahead of that problem
than has been written about," he said.
Mr. Calhoun faces a challenge in restoring public trust in the
company itself. Days before his tenure began, the manufacturer
released internal Boeing messages that suggested employees took a
cavalier attitude toward safety and mocked regulators. In one
message, a management pilot said: "I still haven't been forgiven by
god for the covering up I did last year."
Mr. Calhoun, in the call with reporters on Wednesday, said he
found the messages from Boeing employees, who were involved with
the MAX's development, "totally appalling." But he also said he
believed the messages were part of a "micro culture" within Boeing.
"We will be on the lookout for every pocket that exhibits anything
close to that behavior," Mr. Calhoun said.
Boeing earlier this month halted production of the MAX at its
Renton, Wash., facility, setting off a ripple effect for the
manufacturer, suppliers and customers. Spirit AeroSystems Holdings
Inc, the biggest MAX supplier, has already announced plans to lay
off 2,800 staff. Other suppliers said they are awaiting further
guidance on production from Boeing, which next week releases
financial results that are likely to show the aerospace giant
nursing a full-year loss.
Many airlines have already removed the plane from schedules
through at least early June. United Airlines Holdings Inc. said
Wednesday it didn't plan to fly the plane this summer.
Mr. Calhoun said Boeing didn't expect to lay off any production
workers even though the company expects the plane's grounding to
last for months. He said MAX production would likely resume
"months" before the aircraft was cleared by regulators.
Boeing has set aside more than $9 billion to cover customer
compensation and higher costs to work through an order backlog of
4,500 MAX jets, but analysts expect this figure to climb to $16
billion or more.
Mr. Calhoun, 62 years old, said he intends to work "well past
65," beyond the company's typical retirement age for
executives.
"This is way more important than my life in many ways and I'm
going to do it," he said. "The board can have me as long as they
want me."
An extended tenure would allow work to start on a new
clean-sheet aircraft design to replace Boeing's original plan for a
middle-of-the-market jet it aimed to have in service by around 2025
to counter soaring sales of a rival plane made by Airbus SE.
Mr. Calhoun said initial work on such a plane may start with
"flight control systems" rather than the airframe or engines, given
regulators' renewed focus on the interaction between pilots and
technology in the cockpit in the wake of the two MAX crashes.
Write to Doug Cameron at doug.cameron@wsj.com and Andrew Tangel
at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
January 22, 2020 17:03 ET (22:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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