Job 1 for Boeing’s new jetliner chief is making amends for the Max
Stanley Deal previously ran Boeing’s $17 billion a year Global Services group based in Plano.
Days after Stanley Deal took the helm of Boeing’s jetliner business last month, he was winging across the globe to meet with the airline bosses most shaken by the deadly crashes that have plunged the manufacturer into crisis.
Deal spent the Oct. 29 anniversary of the first of two 737 Max crashes with Rusdi Kirana, founder of Indonesia’s Lion Air. And Deal apologized in person to Ethiopian Airlines Chief Executive Officer Tewolde GebreMariam in Addis Ababa, the site of the second disaster. The accidents killed 346 people, prompting a worldwide grounding of the Max and raising troubling questions about Boeing’s design and testing of new aircraft.
“It has been a humbling and inspiring first week at Commercial Airplanes,” Deal wrote to employees in a Nov. 1 memo seen by Bloomberg. “The past few days have also been filled with emotion and a heavy heart.”
Trying to make amends isn’t just good customer relations for Deal, a genial aerospace engineer who worked his way up the ranks at Boeing and the rival it acquired in 1997, McDonnell Douglas Corp. Until Oct. 22, Deal had headed up the company’s Global Services group based in Plano.
“Customer skills are going to be critical as Boeing works with the airlines to bring the aircraft back into service,” said aerospace consultant Kevin Michaels. Deal is the rare senior aerospace leader with “emotional intelligence,” he added.
Deal, previously known to suppliers for his efforts to handle some of their business in house at Boeing, will see his people skills put to the test. His next task is to soothe airlines and lessors dismayed at the abrupt exit of his predecessor, Kevin McAllister. He was well-regarded for his years leading sales and services at General Electric’s aviation division before joining Boeing in 2017.
The new leader makes his trade-expo debut as chief of Boeing’s $61 billion jetliner business over the next few days at the Dubai Airshow. Deal, who declined to comment for this story, will field questions from reporters Saturday. He will also huddle with customers and suppliers desperate for insights into how Boeing plans to emerge from the Max’s unprecedented global flying ban, which is now entering its ninth month.
More broadly, Deal is jumping into the maelstrom around the jet. He’s stepping into a tense regulatory environment, with the Federal Aviation Administration under pressure for having certified the plane and members of Congress continuing to flay Boeing after tumultuous hearings last month.
The crisis has thrown the company’s product strategy into disarray while Airbus racks up sales in the crucial market for workhorse single-aisle jets. And if Boeing’s plight worsens — a plausible scenario — Deal could end up shouldering the blame like McAllister, who was ousted Oct. 22 after a tense boardroom session.
“The good news is he’s very much the right person for the job,” said Richard Aboulafia, a consultant at Teal Group. “The problem is that if things go wrong, it could still potentially have a bad outcome, especially if folks at the top are determined to insulate themselves with another purge.”
Deal was a contender for the top post at the jetliner division in 2016 when Boeing CEO Dennis Muilenburg turned to McAllister, the first outsider to run the company’s biggest business. The fit was awkward at times for the GE veteran, who had never run an operation the size of Boeing Commercial Airplanes.
“It’s just a hard place to come into as an outsider,” said consultant Michaels, author of “Aerodynamic: Inside the High-Stakes Global Jetliner Ecosystem.”
McAllister had never sought the spotlight, and he shunned it after the crashes, breaking with precedent. Muilenburg bore the brunt of questions and criticisms, while senior engineers fielded technical queries.
Deal, in his previous job as head of Boeing Global Services, helped meld a sprawling collection of product offerings into a division with $17 billion in sales. That meant wresting high-margin sales from suppliers, which roiled longstanding relationships and helped prompt a megamerger between United Technologies Corp. and Raytheon Co.
Before that, he was a close adviser to Ray Conner, McAllister’s predecessor at Boeing Commercial Airplanes. Deal’s roles overseeing suppliers and then customer services didn’t give him a prominent role as the 737 Max was developed.
Now he’s trying to repair customer relationships shaken by the Max as Boeing faces billions of dollars in reimbursement claims from airlines and lessors. With Max-related costs at $9 billion and rising at Boeing, the planemaker can’t be overly generous. But employing bare-knuckle negotiating tactics risks driving more customers to Airbus.
The chorus of complaints about Boeing is growing louder. Ed Sims, CEO of Canada’s WestJet Airlines, recently criticized Boeing’s overly optimistic estimates of when the revamped Max would be cleared to fly and its slowness in acknowledging its own lapses.
“I would grade it no higher than a B,” Sims said of Boeing’s outreach, speaking to BNN Bloomberg. “I expect A-plus service from every supplier to WestJet, just as we expect our customers to evaluate us in the same way.
Southwest Airlines Co. CEO Gary Kelly, typically loath to badmouth partners, has questioned the way Boeing treated McAllister. The pilots union for Southwest is suing Boeing for lost pay. The carrier, the largest Max customer and operator of an all-737 fleet, has said it will explore adding Airbus models — a move also endorsed by pilots.
”Boeing will never, and should not ever, be given the benefit of the doubt again,“ Jon Weaks, head of Southwest’s pilots union, wrote in a Nov. 13 letter to members.
Kirana, Lion Air’s founder, was enraged after Boeing issued a lengthy statement last year highlighting the budget carrier’s miscues flagged in a preliminary report on the 2018 crash. Lion, the third-largest Max customer, publicly threatened to scrap hundreds of orders. Kirana privately hurled expletives at Muilenburg, Bloomberg News reported earlier this year.
Ahead of a luncheon meeting with Deal and a teary gathering with crash victims’ relatives last month, the Lion Air boss brushed off a question about whether Boeing was taking steps to compensate the carrier. It’s too early for commercial discussions, said Kirana.
Deal described the encounter in his later memo to Boeing staff: ”I also appreciated our conversations about the road ahead.“
Julie Johnsson and Harry Suhartono, Bloomberg