3 things Boeing can do to fix its problems: Leadership expert

Outgoing going Boeing CEO David Calhoun (BA) testified in front of a US Senate panel on Tuesday, addressing safety concerns within the company. Several heated exchanges between Calhoun and senators took place, including one where Senator Josh Hawley (R-MO) called out Calhoun's $33 million pay package while he is "cutting corners" and "eliminating safety procedures" for employees.

Former Medtronic CEO Bill George joins Market Domination to give insight into Calhoun's testimony before Congress and what Boeing needs to do to fix its problems.

When asked what he would do if he was CEO of Boeing, George responds: "First of all, I think you have to appoint someone who has an aeronautical background and has the courage to transform the company. But number one, move the company back to Seattle. That's its roots, that's its culture and by abandoning that, going to Chicago and now Arlington, Virginia, it's been a horrible mistake."

He continues: "It's not just fixing the instance quality problem. You've got to revamp the entire quality and supply chain. They farmed out the fuselage manufacturing to Spirit Aero (SPR). That was a big mistake. They've got to reinstate top to bottom a quality culture. People that just try to fix an individual quality problems will always have more that pop up somewhere else. It's like whack a mole."

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This post was written by Nicholas Jacobino

Video transcript

Outgoing Boeing Ceo Dave Calhoun testifying in front of a senate subcomittee today and addressing the safety culture at the company, much has been said about Boeing's culture.

We've heard those concerns loud and clear.

Our culture is far from perfect, but we are taking action and we are making progress.

We understand the gravity and we're committed to moving forward with transparency and accountability while elevating employee engagement every step of the way joining us now is Bill George, former Medtronic Ceo and author of True North Emerging Leader edition.

Good to see you.

So as we listen to Calhoun's words there, do you think he sort of accomplished what he set out to accomplish and what he should be accomplishing as for right now, the leader of Boeing?

Uh honestly, I wouldn't want to be in Dave Callan's shoes today, Julie, this is a very tough situ it's a no win situation because Boeing has so many problems that are not being addressed that uh there's no way he way he can win this and they haven't really gone back to the first fatal error.

Mistake was to redoing the Boeing 737 instead of launching new aircraft.

So, uh he's doing the best he can.

But that's a, it's an ugly scene there.

It's probably gonna get tougher.

Well, let me ask you, Bill, let, let's say I made you CEO and you've got the job now, Bill, right?

Ok. Congrats.

What would be your priorities?

Your strategy?

What would be the Bill?

George playbook for turnaround?

Boeing?

Well, number one, first of all, I think you have to appoint someone who has an aeronautical background and has uh has the courage to transform the company.

But number one, move the company back to Seattle.

That's its roots, that's its culture.

And by abandoning that, going to Chicago and now Arlington, Virginia, it's been a horrible mistake.

Second, they haven't had a new state, is aircraft in 60 years, don't you think that a nautical engineering has shown us new ways to design aircraft?

They have new engines, new avionics, but they need to design a whole new aircraft.

Yes, it'll take 7 to 8 years, but they've got to do it.

And then third, I it's not just fixing the instance quality problem.

You've got to revamp the entire quality and so supply chain, they farmed out the fuselage, manufacturing to Spirit Arrow.

That was a big mistake.

They've got to reinstate top to bottom a quality culture.

People that just try to fix individual quality problems will always have more that pop up somewhere else.

It's like whack a mole so they need to get at that whole culture.

And I think that's the, the key things they have to do and, uh, and I don't see any way around that it's gonna take time and they're gonna have to keep their customers in line until they can do it.

But, uh, it will not get better until they go back to the original air, which was refusing to uh design a new aircraft 20 years ago.

Bill.

Um How the heck are they gonna find a new CEO?

Right?

There's now these reports in the Wall Street Journal that several, several people have said they're not interested, including reportedly Larry Culp and Dave Gitlin and there are some issues with internal candidates.

So how is it a is it a hard um post to fill given, as you say, you don't envy Dave Calhoun?

And it's a tough job.

I said on your show several months ago, Larry Cope would not be interested in the job.

He's got a great job running a GES uh jet engine business.

No, they've got two people that could do the job today.

Pat Shanahan, who is CEO of Spirit AO, former Deputy Secretary of Defense worked with Boeing.

He's an aert engineer and he could do the job Steve Mollenkopf, the chair of the board.

Just step in.

He's got at least a technical background.

And so I think one of these people should do it.

I empathize with Calhoun, but it's not gonna get there and you can't have someone that doesn't understand the depths of engineering.

Uh, they had the right person 20 years ago and they passed him over twice.

Alan Mulally who went to Ford and saved Ford Bill.

How, how tough do you think it's gonna be to sort it for this company?

Really build back its reputation after the kind of missteps we've seen from Boeing.

Gosh, it's gonna be real tough.

It's a 10 year privacy.

They've lost the trust, not just to the airline manufacture, not the airlines themselves or customers, they lost the trust of the flying public.

And so people are always asking me, am I on a Boeing plane or I'm on a uh an Airbus plane?

Well, they shouldn't be asking that question.

Boeing's gotta regain it.

But look, we have no choice.

This can't be a ge we're just gonna uh Pha phase it out.

No, we have to rebuild Boeing.

It's a national treasure.

It's a great company.

And by the way, the engineers and people there wanna do the right thing.

The real core problem, Josh is that 20 years ago, they decided to focus on short term shareholder value.

Like a lot of companies have ge included and they're paying a huge price now, they got away with it for a few years now, the chickens have come home to roost.

They can't just focus on shareholder value.

The only way they can rebuild shareholder value is to build great aircraft.

That's what's gonna build it up again.

So they have a total revamp but you need to see o with a lot of courage who can do that.

It's not just pick this, pick that bill.

Is it possible that one of the other solutions to Boeing is to not have a single national company that we rely on in the United States to build aircraft?

Is it, is it splitting Boeing up into pieces of some kind?

I don't think so.

I, I think, you know, Boeing has problems in space business.

They have problems in military business.

No, it's a great aviation company.

They're the reason it can't be with the right leadership.

The people want to do the right thing.

They have great engineers.

That's not saying they have to get rid of the engineers.

Uh They have had some problems moving manufacturing around but uh no, I, I think they need leadership.

It's all a question of leadership that get the right leadership in there.

And they've had five, the bo the board is part of the issue.

They've had five failed CEO appointments.

They should look at themselves in the mirror and say, what did they do wrong?

And how are we gonna appoint the right person uh until they do that?

And the board needs to step up and admit its own shortcomings.