BA Boeing Co

By Alison Sider and Andrew Tangel 

Boeing Chief Executive Dave Calhoun told executives that he regretted voicing criticisms of the company's leadership and former CEO in an interview with the New York Times this past week.

Mr. Calhoun, who started as CEO in January, is dealing with the fallout of his candid assessment of Boeing's problems, telling executives they have his support despite sometimes harsh comments published in the article.

"I am both embarrassed and regretful about the article," Mr. Calhoun wrote in a message addressed to Boeing senior leaders, reviewed by The Wall Street Journal. "It suggests I broke my promise to former CEO Dennis Muilenburg, the executive team and our people that I would have their back when it counted most. I want to reassure you that my promise remains intact."

Mr. Calhoun, who served on Boeing's board about a decade before being appointed CEO, had vowed to make a fresh start for the beleaguered company. He has said he planned to focus on rebuilding trust in the company and being more transparent.

Boeing has been in crisis since two of its 737 MAX planes crashed within a five-month period, killing 346 people. The MAX has been grounded world-wide since last March and Boeing had to shut down production of the plane earlier this year. The crashes have drawn scrutiny of the plane maker's engineering culture, and damaged the company's relationships with suppliers, customers, and regulators.

In a preliminary report released Friday, House investigators said production pressures, faulty assumptions, and a "culture of concealment, " combined with insufficient federal safety oversight, led to the two crashes. Separately, in Boeing's latest reported production lapse, the FAA on Friday proposed a $19.7 million penalty against the company for installing unapproved sensors on hundreds of planes, including some MAX jets. A Boeing spokesman said the company has done a thorough internal review and implemented changes to address the FAA's concerns.

Mr. Calhoun told the New York Times that the challenges he is facing are more than he'd anticipated, according to the March 5 article.

"And it speaks to the weaknesses of our leadership," he said.

He said his predecessor, Mr. Muilenburg, may have increased production of the 737 MAX too quickly at the expense of quality. Mr. Calhoun suggested that Mr. Muilenburg had been chasing a higher share price, according to the article.

"I'll never be able to judge what motivated Dennis, whether it was a stock price that was going to continue to go up and up, or whether it was just beating the other guy to the next rate increase," Mr. Calhoun said, adding that the board had trusted Mr. Muilenburg and his proven record of taking risks that had paid off.

Mr. Muilenburg couldn't be reached for comment.

Mr. Calhoun publicly expressed support for Mr. Muilenburg in the months leading up to his removal in December, but the board eventually became frustrated with Mr. Muilenburg's overly optimistic projections and convinced that he had mismanaged the company's relationship with the Federal Aviation Administration, potentially complicating the plane's return to service, people familiar with the matter have said.

Mr. Calhoun had become more engaged in managing the company after being made chairman in October, when the board stripped Mr. Muilenburg of that role, but has sought to draw a clean break from the company's past missteps.

"I watched the same movie you did -- I think I was in the front-row seat, and I might come to exactly the same conclusions you do," Mr. Calhoun said in a call with reporters in January. "My leadership role here at Boeing is intended to make changes that correct a lot of those situations."

A Boeing spokesman said Mr. Calhoun wanted to provide Boeing executives with more context about what he had said in the interview.

"It is important to Dave that his teammates have a full understanding of his views and the context they were given in," a Boeing spokesman said. "And like many interviews, not everything makes it into the story, and Dave wanted to share some of the points he made about the good work of our team and the strength of our portfolio of products and services."

In the message Friday, Mr. Calhoun said that he had wanted to speak candidly about the company's challenges, but hadn't intended to undermine its current leadership team. He said that he was invested in Mr. Muilenburg's success, and that the disappointments he discussed in the interview mostly related to the company's failure to return the plane to service going into the fourth quarter.

"Now is not the time to look behind us. I regret doing it. Now is the time to look forward and build on our foundation," he wrote.

Mr. Calhoun said he maintained his commitment to being more transparent.

"I have said that transparency is a messy process but worth it in the end, and I still believe it."

Write to Alison Sider at alison.sider@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

March 07, 2020 17:55 ET (22:55 GMT)

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