I wonder what their golden parachutes look like.
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Think this will change the culture at Boeing?
Remember the guy who was CEO between McNerney and Calhoun, Dennis Muilenburg?
A blast from the beginning of 2020, after the first two Maxes fell out of the sky because of Boeingâs cheap and nasty engineering.
Muilenburg was criticized for failing to recognize safety risks and for allowing the company to cut corners to get the planes to market.
Did his termination change the Boeing culture one whit? Nope. Boeing has exactly the same problems now.
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One hopes that since there isnât a succession plan in place that the board will FINALLY come to its senses and put a couple of engineers higher up in the food chain. Radical thought, I realize, but one can always hope, largely because where I live I am consigned to fly on Boeing aircraft.
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Calhoun is 67, retirement age, anyway. The BoD must have already had a succession plan in place. Calhoun probably has a hand picked successor already. Frank Shrontz retired as CEO in 96, at 65 years old, but Condit had been elevated from the 77 program to President of the company, and heir apparent, two years earlier. The only surprise change of CEO was when Muilenburg, McNerneyâs hand picked successor, was tossed, at age 55. Calhoun was on the Board at that time, so was handy, and all in on Welchism, so was handed the CEO job.
Bernie Appel, who I saw in action with my own eyes, was âkicked upstairsâ at RS, at age 59 after his latest concept, Incredible Universe, crashed and burned. They went outside the company to hire Len Roberts. In an interview, Roberts said he had wondered, for a long time, why RS did things the way it did. He said Appel took him to lunch and converted him to the RS way of doing things. Presidents and CEOs after Roberts also did things âthe RS wayâ, and we know how the company ended up.
Steve
Apparently not
âLarry Kellner ⌠will be replaced by former Qualcomm chief executive Steve Mollenkopf, who will lead the search for Calhounâs successor.â
â Calhoun told CNBC ⌠he was giving the board âplenty of noticeâ to plan his succession.â
Boeing CEO Dave Calhoun to step down (ft.com)
But the more important question is whether this will be another round of the musical chairs you describe or a serious root canal treatment of the rot inside Boeing
Surprising there was no plan in place. Remember what they teach us in b-school? âfailure to plan, is planning to fail.â
Hereâs the piece about Mollenkopf from the Boeing proxy. He is an engineer. Spent 25 years at Qualcomm.
On the other hand, he has been on the GE Board. So, how infused is he with Welchism.
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Speaking of rot, once it takes hold in a company, seems nearly impossible to get rid of, because TPTB tend to gather like-minded people around them.
Remember the succession at Ford, after Mulally retired? First there was Mark Fields. He had a track record with Ford going back to 1989. He was gone in three years, replaced by former Steelcase CEO Jim Hackett. I had worked at Steelcase dealers during his tenure, and had no use for Hackett, for the way he shafted dealers and cheapened the product. After three years of Hackett muttering about âfitnessâ, but not offering any sort of coherent plan, he retired, and was replaced by Jim Farley. Farley talks about moving the brand upmarket, and pushing ATP and GP ever higher, partly by the simple expedient of discontinuing the cheaper models. During Farleyâs tenure, Ford has earned a reputation for building some of the worst, most trouble-prone cars in the US market, and warranty claims expense has soared.
Iâd still rather be an ousted Division1 Head Football Coach â $100 million failure packages are not uncommon.
intercst
New âLead Directorâ who will head search for replacement CEO is former COO of Qualcomm. a Masterâs level electrical engineer by training.
Of course, Jack Welch himself had a PhD in Chemical Engineering. It wonât matter if youâve accepted the Milton Friedman dogma of shareholder returns and excessive Executive Compensation at all costs.
intercst
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Well, letâs take a look who moved up:
Boeing announced that Stan Deal, the head of the division that makes planes for airlines and other commercial customers, would retire immediately. He will be replaced by Stephanie Pope, Boeingâs chief operating officer, the company said in a statement.
From Forbes a few days ago:
In fact, if you look at Boeingâs senior executives, Calhounâs lack of engineering background is typical. Stephanie Pope, his COO, is also an accountant. Of the first nine senior executives listed on Boeingâs site, only two hold engineering degrees.
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Peanuts.
Former CEO of United Healthcare walked away with $1.6bil
There was a news items there are over 300K mistakes in companies financial statements and someone attributed this to the lack of accountants. Whether that, or the problem at Boeing is not because there are not enough qualified people, but a fundamental problem with American companies is, their obsession with ever increasing marginâs, ever increasing profits.
This obsession directly resulted in eliminating lot of labor, and lots of functions companies start thinking they are not âcore or criticalâ and offloading it to somewhere else and then aggressively pushing for cost cuts with them.
I donât think that can be fixed by having an engineer CEO. I donât know what is the solution for this, but feel the society in general has become too financialized perhaps with an exception of congress.
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Or have the accountants been shown was happens to a low level beancounter, when he tries to tell management the way management wants things accounted for isnât compliant with GAAP?
Steve
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These are basic math related issues. Not someone who cannot stand up to management. Ignore the noise, the real issue here is companies have significantly reduced labor, and thus organizations have to cut corners. This is not something news to anyone who works in corporates.
Of course in the name of celebrating capitalism folks like McNerney are celebrated.
US has lost most of its manufacturing related engineering talent. I think to begin with we should start by shutting down the management courses and departments in IVY league. They truly produce a$$holes, who knows only to cut costs, and never cared about anything other than their bonuses.
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Onward Welchism. The CEO between McNerney and Calhoun, was an engineer, but, as I have seen in the companies I worked for, the only way ahead was to drink the kool-aid and sing the company song. Same goes for the engineer that has been CEO at Spirit, whose QC is even worse than Boeingâs.
Steve
End of the Jack Welch legacy.
Informative article discusses all of the Jack Welch followers who went elsewhere and failed.
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From Paulâs link
After Welch retired from GE, it became clear that the company had been playing earnings and accounting games that were made possible by the dozens of acquisitions that Welch made and by the fact that heâd built GEâs finance subsidiary into a gigantic operation. Financial assets allow far more flexibility than manufacturing does when it comes to reporting gains and losses.
As offered before, the Shiny-land economy is geared for financial manipulation, not productive endeavor. This slant is encouraged by the tax code.
Welchism, more than anything else, resembles a Ponzi scheme. The CEO that implements the program, if his timing is good, takes his loot and âretiresâ before the roof falls in, leaving someone else to deal with the mess of a hollowed out company, and employees, customers, and shareholders, who have been robbed, to make the âJCâ richer.
I donât know how the US gets out of this phase. The people who are in line to be CEOs over the next ten to twenty years have been raised on Welchism, been required to drink the Welchist kool-aid and sing the Welchist song, to be promoted by the Welchists above them.
Steve
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This is the million dollar question; is it even possible to get out? I say we tax the crap out of corporations and the leadership! Eliminate stock buybacks!
JimA
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MmmmâŚWelchâs! Oh wait, thatâs not what you meant.
Having worked for both large public and private companies - I can honestly say the culture is colder, harsher, and generally shattier in the public companies. That said, there are a number of good examples, where CEOs have driven positive corporate cultures - Paul OâNeill is one such example.