On October 29 and 30, Boeing’s CEO Dennis Muilenberg testified before a US House of Representatives committee about crashes of Boeing 737-Max jets in Ethiopia and Indonesia that resulted in the deaths of over 300 people. This being Congress and there being television coverage, Muilenberg’s testimony turned into a spectacle that included among other topics a public shaming of Muilenberg because of his high salary. I, as a Boeing shareholder and as an American citizen and taxpayer, was deeply offended by Congress’ browbeating of Muilenberg.
Why The Crashes?
According to this recent article in the New York Post, Boeing’s desire and need to get on the “right side” of the environmental movement may have caused it to make poor decisions about the design of the 737-Max. True, competition with its rival Airbus was part of the driver, but fuel efficiency was the underlying goal. Boeing put wrong-sized engines on wrong-sized fuselages and tried to fix the problem with software that didn’t always work. Consequently, planes in Ethiopia and Indonesia flown by poorly-trained pilots crashed. Fuel efficiency and environmentally-friendly planes were more important to Boeing than safety. If Congress wants to browbeat Muilenberg because of those decisions (made well before Muilenberg became CEO), that’s at least a logical leap. However, Muilenberg was browbeaten because, horror of horrors, Boeing wanted to maximize its profits, and because he is well-paid as CEO. Last I knew, maximizing profits is not yet wrong in this country, although the movement toward “stakeholder” management may move the needle in that direction.
Defense of Boeing
Boeing made this country great. Maybe not just Boeing, but they played a big part in it. Think about how many people fly around on Boeing planes and how many goods are flown around on Boeing cargo planes. Do you like clicking icons on Amazon and having stuff show up at your front door? Then thank Boeing for building a vehicle that transports all of those goods around the country. Boeing is the #1 exporter of industrial goods from the US to international markets. What really galls me is, what congressperson or even what entire congress has contributed or created one fraction of one iota of what Boeing has contributed to making this country great, and oh, by the way, to employ millions of Americans either directly or indirectly? What gives them the right to browbeat Dennis Muilenberg about how much he makes and to demand that he give up his salary until Congress says it is ok?
IMO
I do the Wall Street Journal Weekend Edition crossword puzzle every week. Last week, Clue #11 Down was “Suffers Insults”. The answer was “eats dirt”. Muilenberg played a good corporate citizen and ate dirt for 2 days in front of a bunch of losers in Congress for stuff he was not personally responsible for and for other stuff (his salary) that are not illegal here in the US, at least not yet. My hope is that this Congressional browbeating will soon be forgotten, which is true about much of what goes on in Congress, and Boeing and its customers can continue their businesses of making this country (and the world economy, for that matter) profitable and one that provides millions of jobs for people around the world. The 737-Max software issues are proving to be more time consuming than originally estimated. Let’s hope Boeing doesn’t make more decisions that sacrifice customer or passenger safety to the altar of environmentalism.
Full Disclosure: I am proud to be a Boeing shareholder.