DOD acquisition chief advises Boeing to be 'very forthcoming' amid troubling headlines

By Tony Bertuca  / January 14, 2020

Pentagon acquisition chief Ellen Lord said today Boeing should be "very forthcoming" with the Defense Department as the company's new chief executive pledges to "rebuild trust" amid alarming reports of efforts to mislead federal regulators about the troubled 737 MAX aircraft.

Lord, speaking to reporters at a Washington breakfast, said corporate culture is "extremely important."

"The shadow of the leader is very, very long," she said.

New CEO David Calhoun, who took the helm of the company after former chief executive Dennis Muilenburg resigned, sent an email to employees Monday promising to "rebuild trust."

"Many of our stakeholders are rightly disappointed in us, and it’s our job to repair these vital relationships," he wrote.

Muilenburg's departure followed the crashes of 737 MAX planes in October 2018 and March 2019, which collectively killed 346 people and led to a worldwide grounding of the planes.

The board said a "change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders."

Before becoming CEO of the entire company, Muilenburg led Boeing's defense business from September 2009 until July 2015.

Lord praised Leanne Caret, the current head of Boeing's defense unit, as one of the "most forthcoming CEOs" with whom she does business.

"I think what Boeing needs to do is tackle this with the Department of Defense one program at a time and make sure they are very forthcoming in terms of answering any questions we have," Lord said. "I can only judge it by their performance with us."

Boeing's reputation, meanwhile, is suffering after internal documents released last week revealed company employees sought to deceive federal regulators and had concerns about the safety of the 737 MAX when it was under development.

House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-OR) said the new Boeing documents are "incredibly damning."

"They paint a deeply disturbing picture of the lengths Boeing was apparently willing to go to in order to evade scrutiny from regulators, flight crews, and the flying public, even as its own employees were sounding alarms internally," he said in a statement. "They show a coordinated effort dating back to the earliest days of the 737 MAX program to conceal critical information from regulators and the public."

Boeing's defense business, meanwhile, has come under criticism for problems with the KC-46 tanker.

As of August 2019, the company has paid more than $3.5 billion to fix ongoing technical issues, according to the Congressional Research Service.

Boeing's relationship with the Pentagon was also scrutinized last year when the DOD inspector general probed the company's ties to Pat Shanahan, who was then acting defense secretary. An ethics investigation concluded Shanahan, who worked at Boeing for 31 years before joining the Trump administration, did not improperly favor the company in acquisition decisions.