(Bloomberg) — Boeing Co. Chief Executive Officer Dave Calhoun faced searing criticism in a Senate hearing that zeroed in on the company’s manufacturing shortcomings and accused its leader of putting profit ahead of safety.
Calhoun’s testimony before a subcommittee chaired by Senator Richard Blumenthal of Connecticut marked his first public appearance before Congress since taking over the top job at Boeing in early 2020. After Boeing’s safety record came under renewed public scrutiny in the wake of a near-catastrophic accident in January, the CEO was called to appear in Washington to defend his record.
“You and your board of directors have a duty to your shareholders, but they will be deeply ill served if you fail to correct course and confront the root cause of this broken safety culture,” Blumenthal, a Democrat from Connecticut, said in his opening comments. “For Boeing, it is a moment of reckoning.”
Calhoun began with a gesture of contrition by apologizing directly to relatives of people who died in two crashes involving Boeing aircraft in 2018 and 2019. The hearing was at times testy, with Blumenthal accusing Boeing of providing what he called “gobbledygook” documents to the panel, while others took offense at Calhoun’s compensation or his perceived lack of engagement with whistleblowers.
“I’m here in the spirit of transparency and I’m here to take responsibility,” Calhoun told reporters ahead of the session.
The almost two-hour hearing exposed the challenge of turning around a US manufacturing icon that senators said had lost its way. Calhoun sought to defend his record, saying he’d done everything he believed was required and calling some of the changes on his watch “dramatic.” Blumenthal retorted that Boeing had done “virtually nothing” and instead only recycled “old ideas.”
Blumenthal asked the CEO to explain how Boeing allegedly retaliated against whistleblowers while at the same time encouraging workers to come forward with complaints. When asked if anyone had been fired for punishing whistleblowers, Calhoun said the company had done so but could not specify how many.
Calhoun said he’d not spoken to any whistleblowers directly. He acknowledged that doing so would be a “good idea.” More than a dozen have contacted the committee to share their concerns, Blumenthal said.
As CEO, Calhoun has presided over one of the most turbulent stretches in Boeing’s century-long history. The planemaker has wracked up almost $26 billion in annual losses during his watch as it dealt with a global grounding of the 737 Max, the pandemic, worker exodus and supply chain chaos. In January, a Boeing aircraft suffered a near-catastrophic accident while in flight, prompting the latest crisis at the manufacturer.
While Calhoun stressed transparency and vowed to uphold accountability by senior management, the pressure to speed up manufacturing and deliveries often took precedence on the factory floor, whistleblowers have said.
The quality lapses at Boeing and supplier Spirit AeroSystem Holdings Inc., which makes the 737 Max’s hull, came to the forefront after the jet’s suffered an airborne blowout of a fuselage panel in January. While no one on board was killed, investigators determined that the nearly new jet was delivered without four bolts needed to secure the door plug.
Some of the harshest criticism was leveled at Calhoun’s compensation package for 2023 totaling almost $33 million, with Missouri Republican Josh Hawley saying it was a “travesty” that the CEO was still in his job, asking if he would resign.
“Senator, I’m sticking this through,” Calhoun responded.
(Updates with additional comment from senators beginning in the third paragraph.)
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Published: 19 Jun 2024, 02:57 AM IST