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Airline experience not a strength of new Boeing CEO

David Calhoun's appointment is mostly viewed as positive but analysts believe it might just be an interim role for him

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Left: Mr Calhoun has vast experience in corporate turnarounds at Nielsen and Blackstone, though analysts say he lacks airline industry know-how. Right: Mr Muilenburg was ousted as CEO on Monday.

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Boeing last week suspended production of the 737 MAX following two plane crashes.

New York

THROUGHOUT a storied career in corporate America, David Calhoun has risen through the ranks at General Electric, taken Nielsen Holdings public and helped manage private equity giant Blackstone.

Mr Calhoun, 62, who is set to become chief executive of Boeing in January following a reorganisation announced Monday, will need all of his wiles as he takes the helm at the troubled aerospace giant mired in crisis after two deadly crashes on its best-selling jet.

Boeing announced that Mr Calhoun would shift from chairman to CEO after it ousted Dennis Muilenburg, who stumbled over the company's response to the disasters, alienating regulators, customers and victims' families.

The crisis led to last week's decision to suspend production of the 737 MAX, which provoked uncertainty in employees and suppliers, as well as hitting US growth forecasts, with no clear indication of when the aircraft will be clear to fly again.

In Mr Calhoun, Boeing has found a man who once led GE Infrastructure and who has experience with corporate turnarounds at both Nielsen and Blackstone.

"I strongly believe in the future of Boeing and the 737 MAX," Mr Calhoun said in a press release. "I am honoured to lead this great company and the 150,000 dedicated employees who are working hard to create the future of aviation."

But his background is in financial management and corporate strategy rather than engineering and the nitty-gritty of safety policy.

This has led some analysts to question whether he will turn out to be an interim leader to get Boeing through a bad period while it attempts to restore its reputation and win approval to return the MAX to the skies.

The incoming CEO spent much of Monday communicating with government officials, members of Congress, major airline CEOs, suppliers and investors, a spokesman said.

Mr Calhoun is "reaching out to many of our stakeholders to pledge his partnership and open line of communication," a Boeing spokesman said in an email.

Lawrence Kellner, a former Continental Airlines CEO who was tapped on Monday as Boeing's new board chairman, said Mr Calhoun "has deep industry experience and a proven track record of strong leadership, and he recognises the challenges we must confront".

After studying accounting at Virginia Tech, Mr Calhoun joined GE's corporate audit staff in 1981, the start of a nearly four-decade career where he ultimately led GE Infrastructure, a division that oversaw aircraft engines and rail, among other units.

Mr Calhoun outlined his philosophy of leadership at a 2005 commencement address at Virginia Tech, saying: "No one needs me for the normal course of business. The role of leaders is to inspire change."

The executive left GE in 2006 to lead VNU Group, which later became Nielsen Company, going public in 2011.

At Blackstone Group, where Mr Calhoun has worked since January 2014, he has focused on boosting the value of company holdings, telling Bloomberg in a 2017 interview that he prefers when a leadership team "plays offence instead of defence".

Jim Hall, the former head of the National Transportation Safety Board, said the shake-up at Boeing was a positive development, calling Mr Muilenburg's departure "long overdue".

"Boeing clearly needs to reset the table and put someone in who puts safety first," he said.

But Mr Hall also said it was not clear whether Mr Calhoun was a long-term choice, adding: "If he's going to do it long term, I would think that someone who has more knowledge of the aeronautical industry - hands-on experience - might be a good choice."

Richard Aboulafia of the Teal Group, a research consultancy focused on aviation and defence, said Mr Calhoun "seems good for short-term stabilisation".

"For the long term, I'm not sure this is the right move. Calhoun's background is in private equity, and in Jack Welch-era GE. That background brings skills that Boeing already has in abundance." AFP