Archie McCardell is the worst CEO in history. However, we realized Archie’s management talents aren’t unique. Granted, nobody is likely to replicate his success decimating two businesses in entirely separate industries. Archie’s ability to destroy was positively Romanesque in scope, unlikely to be repeated anytime soon.
However, their failure to fail, and to flame-out spectacularly, won’t be for lack of ambition. In this spirit, we’ve decided to create an award, the Archie McCardell Award, for absolutely horrendous management.
Archie McCardell Award Winner:
Dennis Muilenburg of Boeing
Countless CEOs figuratively drive their businesses into the ground, and Dennis Muilenburg of Boeing certainly did that. Others are told they “really killed it” after completing a project. You could say that, too.
Dennis literally drove his company, Boeing, into the ground. He killed it with his last project, the Boing 737 MAX: 346 people are dead. On October 29, 2018, 189 died when Lion Air Flight 610 flew into the ground. Thanks to a bunch of lies the MAX wasn’t grounded and another 157 died on Ethiopian Airlines Flight 302 March 10, 2019.
Briefly reviewing the back-story, Dennis wanted to build a new plane to compete against Airbus. However, new jets are expensive to design and build then there’s the annoying need to test, certify, and train pilots on the new technology.
Yawn-o-li-o, right? Seriously, how do any of those boring old-school activities jack the stock price? And we all know why Boeing exists: to build reliable, dependable, safe, aircraft, right? Hahaha. Fuck, no! You can’t be serious. The firm exists to reward shareholders. Safety, reliability, and integrity … what are you, some sort of socialist? Get the fuck outta’ here, commie.
Rather than go through the hassle, Dennis took a shortcut. He built a new plane and lied that it was a small modification to the existing 737.
Since the MAX flew differently, thanks to the engines being further up-front, Boeing created a computer program to correct flying too steeply upwards. Why might that happen? Because Dennis’ Boeing certified that normal 737 pilots could fly the new jet after viewing a 45-minute training app. Except they couldn’t since it wasn’t really the same plane and flying it like a 737 could make it stall.
The new system pushed the nose down under certain conditions. To figure out if that needed to happen, on-board computers relied on one of two inexpensive sensors that could easily be banged out of position. This is exactly what happened; the computer thought the plane was going up too steeply (it wasn’t) and fought the pilots to push the nose down. And down and down it went, the pilots fighting the whole time until it dove straight into the ground. Then Boeing lied they didn’t know what happened and oops, they did it again.
All this could’ve been avoided by additional testing, training, and some relatively inexpensive safety equipment. That equipment exists but it was an optional add-on. Most US airlines purchased it but the two flights that crashed did not, presumably because the airlines reasonably didn’t think vital safety equipment would be optional.
Optional safety equipment to protect a jet full of people and the airlines that trusted Boeing (past tense)? It seems like something they’d include as part of the standard package, right?
Dude: get real! Boeing exists to reward shareholders. After all, the company wouldn’t exist without them. Think about all those shareholders who funded Boeing when it was founded in 1916. OK – so they’re all long since dead. Or maybe it was when the already entirely established and profitable firm decided to offer shares to the public in 1962. Uh…
OK – so the shareholders didn’t actually ever do squat to help the business. But Boeing exists to take care of them rather than, say, the people flying on their aircraft or the airlines that purchased them in good faith. Milton Friedman says so.
Take Southwest Airlines. They drank the Kool-Aid, trusted Boeing, and bought 31 of the 737 MAX jets with another 280 on order. Thanks to Dennis’ incompetence, the loyal Boeing customer has been forced to cancel over 30,000 flights. Southwest pilots have lost over $100 million in wages. (A digression with some unsolicited business advice to Southwest: cancel the orders.)
What’s the difference between the 737 and 737 MAX? Well, they’re a different size. And the engines are in a different place. And they fly differently. And – fuck it. It’s a plane, right? There are wings and engines and whatnot. Giving it the same name saved a lot of money. To maximize shareholder value, Dennis decided that rather than go through the hassle of testing and certifying a new plane he’d name the new one as if it was a minor upgrade.
“It’s running rampant,” texted Boeing test pilot Mark Fornker. He was talking about the system that pushes the plane down, not Boeing management thought the sentiment works for both.
Dennis effectively sacrificed 346 people on the holy altar of shareholder value theory. Blood Tributes to the God of Greed.
How did Boeing punish CEO Dennis Muilenburg for creating a culture that deceived customers and regulators, killed 346 people and tarnished the company’s brand? They increased his compensation by 27 percent to $23.4 million though they stripped him of the Chairman title, poor guy.
Boeing is deluded into thinking that once they fix the problems that any sane person will step foot on that aircraft. Dennis claims that he flies on it regularly. Assuming that’s true – the guy’s credibility is down there with Trump’s and it is an awfully big plane to use as a corporate jet — I’d imagine his pilots have more than the 45-minutes of training offered to ordinary 737 pilots. And the optional safety equipment.
In any event, Wall Streeters don’t mind. Boeing stock hasn’t crashed as one would expect. Rather than bidding up the stock, maybe they should all fly together, with their families, on a 737MAX flown by an ordinary pilot from a third-world country who normally flies 737’s with the 45-minute training app. Hahaha – get real – those who make trades large enough to matter fly private.
Dennis cut corners, killed hundreds of people, lied to regulators, and tarnished the brand of a once-great American company. His punishment? A pay raise and a bonus.
Here’s to Dennis Muilenburg, proud recipient of our latest Archie McCardell Award for Horrendous Management.