Kansas Rep. Sharice Davids blasts ‘golden parachute’ for fired Boeing CEO

January 15, 2020
In The News

Democratic Rep. Sharice Davids ripped Boeing Wednesday for the more than $60 million it will pay its fired CEO while Kansas aviation workers lose their jobs because of the grounding of the company’s 737 Max airliner for safety issues.

Davids, D-Kansas, is a member of the House Transportation Committee, which has been investigating Boeing since last year after two deadly crashes caused the deaths of 346 people.

Boeing’s uncertain future prompted Wichita-based Spirit AeroSystems, the city’s largest employer which manufactures parts for Boeing, to announce 2,800 layoffs.

In an interview, Davids noted that the layoffs came the same day it was reported that fired Boeing CEO Dennis Muilenburg would receive $62.2 million in stock and pension benefits.

She said it was “completely unacceptable for him to be walking away with 60-plus million dollars when 2,800 families and an entire community, and really the economy of the state of Kansas, is being impacted.”

The congressional investigation into Boeing uncovered internal messages revealing that employees concealed problems with the aircraft from the Federal Aviation Administration. The FAA is conducting its own review of the crashes and Boeing 737 Max line has been grounded indefinitely.

Davids called Muilenburg’s compensation “a golden parachute” and said 2,800 people in Wichita have “to live with the effects of the decisions he’s responsible for.”

A Boeing spokesman, reiterating what the company said last week, said that Muilenburg “received the benefits to which he was contractually entitled and he did not receive any severance pay or a 2019 annual bonus.”

The Boeing board has approved a $1.4 million base salary for Muilenburg’s successor, David Calhoun.

“The Board is confident Dave is the right leader to strengthen Boeing’s safety culture, improve transparency and rebuild trust... Long term incentives will be tied to business outcomes enabled by improved safety and the Board is also adding enhanced claw-back provisions that will sharpen our focus on safety and apply to situations of misconduct that compromise safety,” spokesman Charles Bickers said.

When Muilenburg testified before the committee in October, Davids and other Democrats pressed him about the company’s push to limit pilot training requirements for the Max line.

Internal messages released last week show that Boeing employees talked internally about the insufficiency of the simulators as a training tool for pilots.

“Would you put your family on a MAX simulator trained aircraft?” one employee asked another in one of the messages. “I wouldn’t.”

Davids said she thinks the committee needs to hear from Mark Forkner, Boeing’s former chief technical pilot.

She said she’s not ready to discuss what legislation lawmakers may pursue to tighten regulations while the investigation is ongoing.

In the meantime, Kansas’ economy will take a hit. Wichita is heavily reliant on jobs at Spirit AeroSystems, whose success is tied to Boeing in general and the 737 Max, which generates half of the company’s revenue.

Since Spirit halted production, the company has announced that more than a fifth of the workers at its Wichita plant (2,800) will lose their jobs in January and February. Spirit’s CEO and President Tom Gentile has signaled that more layoffs are coming if the 737 Max stays grounded much longer.

In another blow to the company this week, Moody’s Investors Service downgraded its debt rating to junk-bond status because of the 737 Max debacle, noting that its earnings and cash flow will likely remain weakened for the next two years. Boeing is also being considered for a downgrade, the Moody’s statement on Spirit said.

If Spirit workers aren’t re-hired by 2021, the Wichita area economy could lose an estimated $220 million from the loss of their salaries alone.

Smaller Wichita companies, such as Cox Machine, have also had to make cuts.

Davids said she reached out to Kansas Gov. Laura Kelly and Rep. Ron Estes, the Republican who represents the Wichita area, about the impact to the Kansas economy.

Asked about his conversation with Davids, Estes suggested that public criticism of Boeing by a member of the Kansas delegation was hurtful to the state’s interests.

“My top priorities are supporting the workers at Spirit and others impacted by the 737 MAX production halt and getting grounded aircraft safely back to the skies without any unnecessary delays. Attacking Boeing at this time does not help accomplish either goal and is counterproductive to the employees at Spirit impacted by the grounding of the 737 Max,” Estes said in a statement.

“Boeing is under new leadership and I am encouraged that they have demonstrated a renewed commitment to transparency and safety.”

One of Davids’ Republican challengers in Kansas’ 3rd Congressional District race criticized the congresswoman for speaking out about Boeing’s internal messages last week.

“Instead of taking cheap shots and pandering to the extreme left, Rep. Davids should use her platform to work together and encourage the FAA Administrator and incoming Boeing CEO to do everything they can to resolve the issue and get production restarted,” Johnson County Republican Sara Hart Weir said Friday.

Davids stressed that the ungrounding process should not be rushed for economic reasons.

“The ungrounding of the Max line is completely dependent upon when the public safety aspect of it is in the clear. It’s really unfortunate that we’re even having to talk about ungrounding a Boeing line, but at the end of the day it’s because 346 people died,” she said.

“I mean, the two tragedies that led to the grounding of the Max are what dictate that we have to be ultimately concerned with public safety and making sure that people’s lives are not at risk. And unfortunately because that happened we’re now talking about people’s livelihoods being at risk.”