Boeing's Teflon CEO
CEOs often depart without much explanation, outside of pablum about wanting to spend more time with their families or pursue new challenges.
- At Boeing, whose 737 Max planes killed 346 people, the situation is reversed: CEO Dennis Muilenburg still has his job, despite a ruinous year that would have toppled most other CEOs.
- No one seems to know why.
Muilenburg has led Boeing since 2015, and he has been heralded for achieving record profits and tripling the company's stock price.
But then came two crashes of Boeing 737 Max jets:
- Lion Air Flight 610 — with 189 people aboard — took off from Jakarta in October 2018 and plunged to its demise within minutes.
- Then came Ethiopian Airlines Flight 302, which crashed and killed 157 in March shortly after taking off from Addis Ababa.
Why it matters: These horrors laid bare a culture at Boeing in which safety concerns were discounted — and federal regulators were treated as little more than malleable rubber stamps.
- Muilenburg has proven unable to get Boeing's 737 Max fleet back in operation, and this week the company announced an indefinite production stoppage that was at one point unthinkable.
- Boeing's profits have sagged, even turning a loss in Q2. Shareholders have lost more than $65 billion since March.
Where it stands: Muilenburg was stripped of his chairman title in October and recently vowed to forgo any 2019 bonuses, but he continues to lead the company and earn millions of dollars in base salary.
- No member of Boeing's board, which includes Nikki Haley and Caroline Kennedy, has publicly declared opposition to Muilenburg.
- No activist investor has threatened to wage a proxy fight over management.
- Muilenburg told Congress in October that "you don’t run away from challenges” and that Boeing is "fixing" its "mistakes," but he's so far been unable to meet the challenges or fix the mistakes.
- No one has given a rationale for why Muilenburg remains CEO — including nearly a dozen Boeing analysts contacted by Axios. One theory is that they simply don't think they can find someone better, but, again, it's just a theory.
The bottom line: Hundreds are dead. Families are devastated. Safety was secondary. Billions of dollars have been lost. Projected timelines have been scrapped, and optimism has proven misplaced. Suppliers now face their own uncertainties, threatening livelihoods beyond Boeing.
- Many, many other CEOs have been fired for much, much less — particularly in 2019.