Good morning.
“Is this the toughest job in America?” That’s the question Fortune‘s Erik Sherman asked about the new CEO of Boeing, David Calhoun, who started yesterday. I’m sure some sharp-minded CEO Daily readers can think of a worse job. But this one has to rank high on the list. Boeing has dug a deep reputational hole for itself since the crash of the two 737 Max airplanes, and it has a big financial hole as well—burning $4.1 billion in cash in the third quarter. Treasury Secretary Steven Mnuchin said on Fox TV on Sunday that the airplane maker’s problems could shave 50 basis points off U.S. GDP growth this year.
It was obvious a few days after the second crash that Dennis Muilenburg’s days were numbered. (See my March commentary here.) And it has been obvious for some time that Calhoun was CEO-in-waiting. He ran GE’s aircraft unit, he’s been on the Boeing board for a decade, he’s relatively young (62), and he was available. One question for a future business case study: should he have been given the job nine months ago? Or was the company better off letting Muilenburg take three quarters of grief, then allowing Calhoun to orchestrate a turnaround?
The Schumpeter column in this week’s Economist calls Calhoun “The Last GE Man.” Once upon a time, that would have been a compliment. Calhoun is the last in a long line of Jack Welch protégés that included David Cote of Honeywell, Welch’s successor Jeff Immelt, Bob Nardelli of Home Depot and Chrysler, and Jim McNerney of 3M and Boeing. As the column notes, “GE Man’s legacy is a chequered one.” It’s up to Calhoun to restore two legacies—Boeing’s and GE management’s. I’m guessing he’ll succeed…because Boeing is too big to be allowed to fail.
By the way, Boeing is expected to report 2019 figures today that are likely to underscore the rough year it had; Reuters has a helpful summary of last year’s mess here.
Also out this morning, a couple of interesting CEO data points. A YPO survey of top executives around the world found that 96% believe building “stakeholder” trust is a high priority, and 42% say it is more important today than it was five years ago. And 90% of North American CEOs surveyed by GLG said “they agree with the Business Roundtable’s recent policy statement that corporations should be responsible not only to shareholders but also to customers, employees, communities, and suppliers.”
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
