'Given The Fact That Your Airplanes Are Falling Out Of The Sky...’: Hawley Drills Down On Boeing CEO

4 months ago

At today's Senate Homeland Security Committee hearing, Sen. Josh Hawley (R-MO) grilled Boeing CEO David Calhoun about its production practicses.

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00:00Senator Hawley, thank you. Mr. Chairman. Mr. Calhoun just to come back to you isn't

00:05Isn't a big part of this story not just what's happened at Boeing in the last year or two

00:09But what's happened over the last 20 what the what the c-suite has done to this company. Let me give an example

00:16This is from the Atlantic magazine last month

00:20For nearly 40 years the company Boeing built the 737 fuselage itself in the same plant that turned out

00:28It's b-29 and b-52 bombers in

00:312005 it sold this facility to a private investment firm

00:35offloading Boeing called it

00:37the tail the landing gear the flight controls and other essentials were outsourced to factories around the world owned by others and

00:44Then just shipped to Boeing for final assembly

00:48Mr. Chairman, I'd like to with consent to have this article Boeing of the dark age of American manufacturing without a jet

00:55You now have 600 at least 600 direct suppliers

01:00Worldwide who knows how many subcontractor subcontractors? You've got 35 direct suppliers in China alone. I

01:07Mean hasn't this really been the hollowing out of Boeing?

01:12Senator Hawley, I I

01:15think the decision that we have made with respect to

01:20Spirit Arrow and our

01:22Determination to bring it back into the Boeing fold is is definitely a vote in favor of vertical integration

01:31I can't I can't comment on all the ones of the past

01:36And we have not had

01:38the number of issues

01:40And those that we are currently dealing with with respect to our fuselage

01:46So I can't rewrite history

01:49You're in charge of that you're in charge of the company I'm just asking you

01:53You're in charge of a company. You're getting paid 33 million dollars a year. You're in charge of a company that has systematically over decades now

02:02Shipped out its job shipped out its production

02:06Over the last decade while you've either been in charge of CEO or on the board stock prices have rose

02:12600% at Boeing you've in fact

02:16Done 59 billion dollars in returning cash to shareholders 20 billion of that in dividends 39 billion of that in stock

02:22Buyback, some people are doing great here. I'm just wondering

02:26Given the fact that your airplanes are falling out of the sky

02:29Do you think that any of that has to do with the fact that you really don't make that much anymore in this country or?

02:34In-house, I mean hasn't it been a mistake?

02:37To hollow out the company and ship your production and your manufacturing and your know-how to other places around the world

02:45Instead of doing it yourself the American engineers American workers

02:50sir, Ali I I

02:52Think I read an annual report going all the way back to the introduction of the 747

02:58Which highlighted the fact that 65% of that airplane would be sourced by?

03:03US manufacturers here and there and the other thing I do know that since 2015 again

03:09I don't have all that history, but before that

03:13we have actually

03:15Brought more work to the US than we have taken out of the US and at an absolute level

03:22Our work in the US is in the high 80% and that is unlike any other industry

03:27I have ever worked in these are your suppliers. You're saying these are your subcontractors, right?

03:31but the ones who are using dawn dish soap to test their doors and cheesecloth to

03:36Test the plugs right those your CFO Brian West recently went on the record and said that Boeing

03:42Probably got a little too far ahead of itself on the topic of outsourcing you agree with that

03:47He was speaking directly to our decision to go after spirit

03:52So he was right

03:54He was speaking directly to our decision to vertically integrate spirit

03:58So he was right you you got too far ahead of yourself on outsourcing for all of these years

04:04It's Boeing gonna change course on this we we are most certainly changing course on spirit

04:10You've got

04:1132,000 machinists

04:13Sir, American workers who work for you. These are Boeing employees in the Pacific Northwest

04:19Your contract negotiations with them right now

04:2332,000 that's a lot of them the last time that they got a contract was 16 years ago

04:27Do you remember the terms of that contract? I don't know what there was a very long contract. Yeah

04:32Well, they got a 1% wage increases over eight years

04:381% over eight years you got a 45% increase just last year and you're making 33 million dollars

04:46You think maybe these folks deserve a raise? Oh

04:49They will definitely get a raise good good

04:52I hope it's a substantial one and I hope that maybe this will be an opportunity for Boeing under new leadership

05:00to reverse course and

05:03Actually start making things again

05:05Start making things in this country again and start paying its people

05:08well

05:08I've listened to your testimony and you know

05:10It seems like the gist of it seems to be that if you could just get your employees to comply, you know

05:16Follow the rules follow your your management techniques, etc. Things would be better. I don't think the problems with the employees

05:22Oh, actually, I think the problems with you

05:25You it's the c-suite. It's the management. It's what you've done to this company. That's where the problem is

05:31The problem is at the top your engineers. They're probably the best in the world your machinists. They're outstanding. You're the problem and

05:40I just hope to God that you don't destroy this company before it can be saved. Thank you. Mr. Chairman

'Given The Fact That Your Airplanes Are Falling Out Of The Sky...’: Hawley Drills Down On Boeing CEO

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