Boeing's next CEO should relocate to Seattle, analyst says

Boeing CEO David Calhoun announced Monday that he will step down by year's end. The company has had a rough start to 2024, with a door panel blowout on a 737 Max 9 jet, a subsequent criminal investigation, and tougher scrutiny from the FAA.

Calhoun's departure is part of a wider shake-up. The head of the commercial airplanes unit is retiring immediately. And there'll be a new board chair.

Bill Saporito is an editor at large at Inc. Magazine and a contributor to the New York Times. He told KUOW’s Kim Malcolm how he sees this new development.

This interview has been edited for clarity.

Kim Malcolm: Do you think there was something specific that led to Calhoun stepping down now?

Bill Saporito: No, I don't. I think this is a case of the hole getting deeper for Boeing, and the board decided to stop digging. The bad news would not end. Something has to change, and the board decided to change from the top.

What is the big strategic decision that the board is facing now?

They need a CEO who can run this thing, who can bring back the safety culture that defined Boeing for decades until it lost its way. So, that has to be reestablished.

How important an element is aerospace experience going to be in that?

This is a big debate that corporations have. Do you want somebody from within or without? Calhoun came from General Electric, so he's an outsider brought in to shake things up. Apparently, that didn't work out. You need the right person with the right skills, but you can't always be right about it.

What are the constituencies the next CEO has to have?

Okay, so, who are the constituencies? They're the shareholders, the customers, the employees, the suppliers, the community. I would say, right now, Boeing has to be run for the customers, because it has not been run for the customers. It has been run for the shareholders for the last five or six years. And that's been a failure. Shoveling money to the shareholders is bad for a manufacturing company like Boeing. If you run it for the customers, the shareholders will ultimately benefit.

And when you say customers, of course, some of the biggest ones are US airlines that buy Boeing's airplanes. What are they going to be looking for?

A, prompt delivery. Meeting delivery schedules is really important. Airlines have had to cancel flight schedules. They've had to cut flights out of the system because they don't have the planes. That's a huge problem.

The last time we talked, you stressed that the right CEO at the right time can be a game-changer for any organization. Do you see some likely candidates for the next CEO?

I think there will be quite a few people who wouldn't mind taking charge, who would say, ‘I can make that place go.’ There's an internal candidate, Stephanie Pope, who was put in line to succeed Calhoun. Now, you could make the argument that an insider might be the best person right now, someone who understands the culture from way back when.

So, in essence, Boeing has to go backward in a way. They need to revert to the culture that made them famous, And who would know that? It would be someone from the inside, and also someone who needs the trust of the employees straight away. So those are two important elements that favor an insider.

You know, we keep hearing of this wish, this thought that Boeing should move its headquarters back to Western Washington, to the Seattle area. How likely is that scenario?

Well, I agree with that sentiment. I think that when you live over the shop, you pay more attention. But when you think of Boeing’s customers, the US government is obviously the biggest. There’s so much business to be had there, so it's where they moved their headquarters. I think it would be a great kind of gesture to move back to Washington, where it all began, and to say, ‘I'm gonna live where the problem is right now.’ And even if they don't move the corporation back, the next CEO should set up shop in Seattle and say, ‘I'm not moving until we get this straightened out.’

What are you going to be looking for next in the search for the next positions of leadership that are open now?

I think you need someone who's experienced in high-tech manufacturing, who has shown that they can work in a union shop, which Boeing is for the most part, and who can kind of get the employees to rally around them, whoever that is. That's going to be really important. I think that Boeing employees have been discouraged, and frustrated. Teams want to win, right? Your team wants to win. My team wants to win. Boeing wants to win, and they need someone who's going to give them that chance.

Listen to the interview by clicking the play button above.