In my utopian world, Boeing CEO David Calhoun would be rotting in jail right now.

Calhoun, an accountant who crawled out of the private equity world, was on Boeing’s board for more than a decade, serving as lead director and later as chairman. It was during Calhoun’s period of supposed oversight that Boeing engaged in aggressive cost cutting that testimony at government hearings revealed contributed to the crashes of two 737 MAX jets, killing 346 people. Calhoun pleaded the Sgt. Schultz defense, and blamed former CEO Dennis Muilenburg for Boeing’s troubles. The Wall Street Journal in this 2020 story quoted an unidentified “person close to Boeing’s senior management” saying, “(Calhoun’s) known everything.”

Calhoun’s arrogance reaches an altitude far higher than Boeing’s airplanes can fly. At the outbreak of the pandemic when Boeing was facing a cash drain and seeking taxpayer money, Calhoun had the audacity to go on TV and say if the government were to seek an equity stake in Boeing as a condition for providing the funds, he’d flip Uncle Sam the bird.

“We’d just look at all the other options, and we have plenty,” he said.

Boeing is America’s No. 1 corporate moocher, having received more than $15 billion in taxpayer money. That’s more than the combined monies Ford and GM have sponged off taxpayers to ensure their CEOs can continue living the lifestyles to which they’ve become accustomed.

Calhoun succeeded Muilenburg as CEO in January 2020 and from the get-go worsened Boeing’s troubles. Calhoun angered senior Federal Aviation Administration officials with rosy projections about when the 737 MAX would be returned to service and then he antagonized his own leadership team by telling the New York Times that Boeing’s problems were worse than he imagined, a public rebuke of Muilenburg.

Calhoun laid low these past few years, but the Journal impressively kept tabs on him, albeit not at Boeing’s supposed headquarters in Arlington, VA. Turns out, Calhoun doesn’t spend much time there. Instead, he uses private jets to hopscotch across the country from two homes, one a sprawling waterfront house at New Hampshire’s Lake Sunapee, the other in a gated South Carolina resort community.

According to the Journal, Calhoun has made more than 400 trips to or from airports near Calhoun’s homes in the past three years.

The Journal also reported that Boeing is no longer a company run by a management housed in traditionally opulent offices located on a rarified floor at corporate headquarters, but rather by a confederation of executives linked together by Boeing servers.

Boeing’s CFO Brian West works out of an office in New Canaan, CT, about five minutes from his home where a Journal reporter on a midsummer Monday morning found him parading around in shorts, a polo shirt, and slip-on shoes. The office is diagonally across the street from the former office of a charity run by West’s spouse Sheri. West sits on the board of the charity.

Another New Canaan occupant is Treasurer David Whitehouse, who oversees a Treasury staff mostly ensconced in Chicago. Two senior Boeing executives are based in Orlando: Michael D’Ambrose, the company’s HR chief, and Brian Besanceney, who oversees communications.

Brian West/Boeing

Not surprisingly, Calhoun regards Boeing’s headquarters as being wherever he and CFO West happen to be. “Remember now what headquarters is – it’s me, CFO,” Calhoun said at a June 2022 press event for the official launch of its new Arlington office.

A Boeing spokesman, who the Journal unfortunately neglected to identify, championed Boeing’s work-from-home management as being beneficial.

“Rather than this ivory tower corporate headquarters approach, there’s another approach, which is: Encourage leaders to travel, get out there and engage the best they can and not worry about sitting tied to a desk at a traditional corporate HQ,” the Boeing spokesman said.

The spokesman would have a somewhat credible argument if Calhoun flew commercial airlines and was constantly interacting with pilots, mechanics, and customers who fly, maintain, or purchase Boeing’s airplanes. The Journal reported that Boeing’s board requires Calhoun to use company supplied private jets for all his business and personal travel for security reasons.

Sorry, I don’t buy the security argument. Congresspeople routinely fly commercial, as does Transportation Secretary Pete Buttigieg, who says he mostly flies economy class. Even if Calhoun travelled with two personal security guards that would still be cheaper than his costly jaunts across the country in private jets.

Calhoun understandably isn’t looking to interact with customers. Here’s what Michael O’Leary, CEO of Ryanair — Europe’s largest discount carrier, which has ordered nearly 400 jets from Boeing since 2010 — said on an earnings call last year about Boeing’s geographically dispersed senior managers.

Michael O’Leary/Ryanair

“At the moment we think Boeing management is running around like headless chickens, not able to sell aircraft, and then even the aircraft they deliver, they’re not able to deliver them on time,” O’Leary said, arguing that Boeing executives need either an immediate “reboot, or a boot up the a**.”

Domhnal Slattery, the CEO of Avolon, one of the world’s leading aircraft leasing companies, suggested last year that Boeing needed a change in culture — and maybe leadership.

“It’s fair to say that Boeing has lost its way,” Slattery told the Airfinance Journal conference in Dublin, a gathering of the world’s aircraft lessors who together own most of the world’s passenger jets. “Boeing has to fundamentally re-imagine its strategic relevance in the marketplace,” he said, noting that this would require “fresh vision, maybe fresh leadership.”

As recently as 2007, investors were unwilling to tolerate CEOs using private jets for personal travel on their companies’ dimes.

Mark Fields, who served as CEO of Ford for three years and refused to move his family to Michigan, agreed to stop using the company’s private jet to travel to Florida on weekends where his family lived after the practice was made public. Ford’s proxy statement revealed that Fields’ use of the corporate jet for personal travel in 2005, when he was in the job for about three months, cost the company $214,479, meaning the full-year expense would have cost about $900,000.

Fields’ use of Ford’s corporate jet was revealed during a period when the company’s North American operations were bleeding red ink. The practice sparked a backlash and Fields agreed to fly commercial, albeit first-class and subsidized by Ford. Notably, Fields wasn’t regarded as an effective CEO, and he was ousted after only three years on the job.

Jim Farley, Ford’s current CEO and whose family lives in the UK, in 2022 received $21 million in compensation, which included $903,857 for personal use of aircraft.

NYTimes, June 1, 2022

While there are many who argue, or wish to believe, that managers and employees are just as effective and possibly more so working from home, one notable naysayer is Elon Musk, who summoned his Tesla and Space X employees back to the office more than a year ago.

“The more senior you are, the more visible must be your presence,” Mr. Musk said in an email. “That is why I spent so much time in the factory — so that those on the line could see me working alongside them. If I had not done that, SpaceX would long ago have gone bankrupt.”

In Tesla’s early years, Musk famously slept under his desk at Tesla’s Fremont factory, about a one-hour drive from San Francisco. I’m comfortable speculating that Calhoun never once slept at any of Boeing’s manufacturing plants.

Boeing in 2022 lost $5 billion due to labor instability and supply chain disruption issues. The company’s stock has lost about 35% of its value since Calhoun assumed command.

Calhoun in 2022 received $22.5 million in compensation, which included $238,782 for personal use of company aircraft.

At the end of the day, Calhoun functions as an absentee corporate lord siphoning tens of millions off the labors of others, most of whom must go into Boeing’s offices or factories to build or support the products that finance Calhoun’s compensation largess. Rest assured, if the company sustains another disaster, Lord Calhoun of Lake Sunapee won’t be held accountable.

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.