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Dave Calhoun ‘shaken to the bone’ by Alaska Air accident, and admits Boeing mistake

January 10, 2024
in Business
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Dave Calhoun ‘shaken to the bone’ by Alaska Air accident, and admits Boeing mistake
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A visibly shaken Dave Calhoun struggled to maintain composure in front of his workforce as the Boeing CEO pictured the horrifying thought of passengers sucked out of a gaping hole in one of his commercial jets in mid-air.

Days ago, video footage showed Alaska Airlines crew narrowly avoiding disaster when a door panel on a nearly new 737 Max 9 tore off at 16,000 feet.

Despite the close call, Flight 1282 safely landed with all 177 occupants unharmed, preventing what could have been the first fatal aviation accident in U.S. skies since 2009.

“All I could think about [was] I didn’t know what had happened to whoever was supposed to be in that seat next to that hole in the airplane,” Calhoun told Boeing staff on Tuesday, adding it “shook him to the bone”. 

Addressing the troops, he thanked the crew of Alaska Air for saving the day before warning Boeing needed to acknowledge its mistake and strive for full transparency: “This event can never happen again.”

Stockholders will no doubt agree: 171 Boeing aircraft have now been grounded, and other carriers including United Airlines, the largest 737 Max 9 customer, reported loose bolts in their planes.

Shares have shed more than 8% of their value in the aftermath.   

Boeing CEO Dave Calhoun fought back tears as he said the planemaker must own up to its shortcomings after a door plug ejected from a 737 Max 9 https://t.co/kEv3uSLlvN pic.twitter.com/VHLTdtrvxI

— Bloomberg TV (@BloombergTV) January 10, 2024

The incident is starkly reminiscent of the cover-up around its 737 Max flight software that was directly responsible for two crashes in Ethiopia and Indonesia, causing hundreds of deaths.

It later emerged that senior leadership, led at the time by CEO Dennis Muilenburg, had ignored warnings brought by engineers.

After putting profits before safety, Boeing needs a savior

Few U.S. corporations have been more mismanaged than Boeing in recent history.

In the five years prior through 2019, it borrowed money to shower shareholders with $40 billion in stock buybacks and nearly $20 billion in dividends—even during the 737 MAX crisis. 

Having privatized what profits it could scrape up, it then sought to socialize the losses when the pandemic hit a year later.

By the time Calhoun had gone cap in hand to the government for a bailout, the former Boeing chairman had already replaced his disgraced CEO at the helm.

“This is a company that seems to be focused on profits rather than safety—and you need to do both,” Dartmouth University corporate communications professor Paul Argenti told CNBC on Tuesday. 

The latest crisis couldn’t have come at a worse time.

December’s record new plane orders were supposed to mark a turnaround for the iconic American manufacturer.

“Now they’re right back where they have been for the last five years,” said Argenti, calling for Calhoun to step aside in favor of fresh management that can credibly signal a change of culture.

“They need a hero to come in and save this company.”

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up for free.


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