“Is this the toughest job in America?” That’s the question Fortune‘s Erik Sherman asked about the new CEO of Boeing, David Calhoun, who started yesterday. I’m sure some sharp-minded CEO Daily readers can think of a worse job. But this one has to rank high on the list. Boeing has dug a deep reputational hole for itself since the crash of the two 737 Max airplanes, and it has a big financial hole as well—burning $4.1 billion in cash in the third quarter. Treasury Secretary Steven Mnuchin said on Fox TV on Sunday that the airplane maker’s problems could shave 50 basis points off U.S. GDP growth this year.
It was obvious a few days after the second crash that Dennis Muilenburg’s days were numbered. (See my March commentary here.) And it has been obvious for some time that Calhoun was CEO-in-waiting. He ran GE’s aircraft unit, he’s been on the Boeing board for a decade, he’s relatively young (62), and he was available. One question for a future business case study: should he have been given the job nine months ago? Or was the company better off letting Muilenburg take three quarters of grief, then allowing Calhoun to orchestrate a turnaround?
The Schumpeter column in this week’s Economist calls Calhoun “The Last GE Man.” Once upon a time, that would have been a compliment. Calhoun is the last in a long line of Jack Welch protégés that included David Cote of Honeywell, Welch’s successor Jeff Immelt, Bob Nardelli of Home Depot and Chrysler, and Jim McNerney of 3M and Boeing. As the column notes, “GE Man’s legacy is a chequered one.” It’s up to Calhoun to restore two legacies—Boeing’s and GE management’s. I’m guessing he’ll succeed…because Boeing is too big to be allowed to fail.
By the way, Boeing is expected to report 2019 figures today that are likely to underscore the rough year it had; Reuters has a helpful summary of last year’s mess here.
Also out this morning, a couple of interesting CEO data points. A YPO survey of top executives around the world found that 96% believe building “stakeholder” trust is a high priority, and 42% say it is more important today than it was five years ago. And 90% of North American CEOs surveyed by GLG said “they agree with the Business Roundtable’s recent policy statement that corporations should be responsible not only to shareholders but also to customers, employees, communities, and suppliers.”
More news below.
BlackRock on Climate Change
On Monday, the fund said it will drop investments that have high sustainability-related risks, including thermal coal producers, and launch new products that screen fossil fuels, among other moves. Chief Executive Larry Fink said that climate change has become a "defining factor" in companies' long-term prospects, and warned that he believes we are on the edge of a "fundamental reshaping of finance." Fortune
Security experts say Russian military hackers have gained access to Burisma, the Ukrainian gas company that hired Hunter Biden as a board member, though it's not clear what the hackers found. The tactics are strikingly similar to those American intelligence agencies say were used during the 2016 presidential campaign. New York Times
Currency Manipulator No More
The U.S. has dropped the designation of China as a currency manipulator, ahead of a deal this week to halt the trade war between the two countries. That reverses the labelling last summer, and led the Chinese renminbi to rise to a five-month high against the dollar in early morning trading in Asia. FT
Greta Vs. Siemens
As young climate activist Greta Thunberg turns her attention to CEOs, German industrial giant Siemens finds itself in a predicament: while it has pitched itself as a corporate advocate of climate action, Fortune's Christiaan Hetzner writes, it is now the focus of protests online and at its offices over an 18 million euro rail contract for a planned Australian coal mine. Fortune
AROUND THE WATER COOLER
U.S.-EU Trade Talks Begin
The EU's top trade regulator will be in Washington today to discuss tariffs, and has said he is looking to "refresh" the relationship. Meanwhile, California winemakers are speaking out on behalf of their European competitors, with both the Californian and a European wine trade associations saying that wine tariffs should be eliminated. Bloomberg
Bollywood Turns on Modi
Indian prime minister Narendra Modi enjoyed star-studded support ahead of his re-election last year, but now the alliance is cracking, with Bollywood superstars including both actors and directors showing up at protests and speaking out against a citizenship law critics say is anti-Muslim. FT
Earlier this week, incumbent president Tsai Ing-wen won 58% of the vote, underscoring support for her progressive agenda and criticism of Beijing. But as the island looks to chart a more independent economic future, it may be pushed into closer alignment with other countries in Asia, and the U.S. Fortune
We Want A Refund
Boris Johnson's government gave out £10 million to trade organizations last fall to help them prepare for a "hard Brexit"—that is, leaving the EU without a deal. But now, with the U.K. finally on track to leave the EU at the end of January, the government is trying to claw back the money, which has already been largely spent on preparation and awareness meetings for members. FT
This edition of CEO Daily was edited by Katherine Dunn.