New Boeing boss prepares to unveil €5.4bn cost over 737 Max crisis

New Boeing boss prepares to unveil €5.4bn cost over 737 Max crisis

The opening gambits by Boeing’s new boss show the risks Dave Calhoun is willing to take to reset the deeply troubled planemaker.

Mr Calhoun, who officially took charge this week, pushed to release humiliating internal messages last week even though they may darken public perception for years to come — with Boeing’s own employees suggesting rot in a once-vaunted safety culture, and mocking designers and regulators on the ill-fated 737 Max.

He also was heavily involved in the decision to drop Boeing’s long-held opposition to simulator training for Max pilots, sources said.

Those steps are just the start as Mr Calhoun settles into a 36th-floor suite at Boeing’s Chicago headquarters, entrusted with turning around a company that has been widely censured for its arrogance, failure to take responsibility after two crashes killed 346 people, and unrealistic estimates of when the Max would be cleared to fly again.

The bungling cost former CEO Dennis Muilenburg his job, and the bad news is far from over: Boeing is expected to reveal one of the largest writedowns in its history this month along with fourth-quarter results.

“The company has a unique opportunity to get all the bad news on the table now,” said Jim Schrager, professor of entrepreneurship and strategy at the University of Chicago’s Booth School of Business.

It’s time to get this right and make the turnaround.

The accounting charge is likely to be in the $6bn (€5.4bn) range, said Cowen & Co. analyst Cai von Rumohr, as Boeing’s reserve to compensate airlines balloons to $12bn.

That’s another risk for investors, who have taken a hit from the crisis while dodging a full-fledged meltdown.

- Bloomberg

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