““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Boeing Business Jets president Steve Taylor
Steve Taylor, the new president of Boeing Business Jets, grew up around airplanes. "My first airplane ride was in an Aero Commander at age a-month-and-a-half and I have kind of been in them ever since," he told me. "I was a kid who read airplane magazines front to back-your basic airplane geek."
His father, Richard (Dick) Taylor, flew in the Army Air Corps during World War II and afterward worked for Boeing for 50 years, most of that time as director of engineering. He is known for his work on the 737, the two-crew flight deck and ETOPS (Extended-range Twin-engine Operational Performance Standards). "My father still flies his Aerostar [a six-seat, light piston twin] at age 87," said his son proudly. When the younger Taylor was 14, his father bought a 1958 Super Cub, a two-seat, piston-single airplane, which arrived in pieces on a trailer. The two of them put it back together and Taylor soloed it on his 16th birthday. He still has the airplane.
BBJ announced Taylor's appointment in May. From that time, he served as company president together with his predecessor, Steven J. Hill, until July, when Hill retired. Before then, Taylor was BBJ's chief pilot. In this interview, Taylor explains what sets BBJ apart from the rest of the Boeing organization, why the company chose him to replace Hill and how he went from aviation geek to chief pilot and then to company president.
How is BBJ different from the rest of Boeing?
Within the Boeing hierarchy, Boeing Business Jets is a sales unit. However, it is very different from the other sales organizations. We have our own field service staffers, people who are dedicated to fleet support, spare-parts people, procurement people. The airplane is unique in that it has virtually no options compared to the commercial airplanes. We've done all of that work. We have engineers who manage the configuration of the airplane. My role as chief pilot was to manage the flight deck and make sure that it had the latest possible avionics.
BBJ tries to be the face of Boeing to business jet customers. The Boeing Company can be very challenging to work with because it is so big. If a BBJ customer called the Boeing switchboard, he would have a hard time getting to the right person. So we try to provide a buffer so that all of our customers know us on a first-name basis. They know to call me and the people dedicated to field service, and then we take on the challenge of going into Boeing Commercial Airplanes and getting that customer's problem taken care of.
Why did Boeing decide to make you, the BBJ chief pilot, its president?
When they were looking to replace Steve Hill, they were looking at two different sets of résumés. The question was, do you want a president who understands the BBJ business unit, our customers and where we're trying to take this business from a customer standpoint, or do you want someone who understands the Boeing selling process and managing the Boeing part of the business? When it came down to it, all the other résumés were from career sales guys. And then there was me.
I believe the fact that they picked me reflects that the company recognizes the value of the Boeing Business Jets brand, knows what we're doing is different and reinforces the importance of that one face we put out to the BBJ customer.
So how did you go from airplane geek to president?
After getting a degree in economics and business administration in 1986, I went to work for Boeing as a buyer. But because Boeing is very engineering-driven,
I didn't see much of a future there. So I went back to school and got a degree in mechanical engineering. I then worked in Boeing flight ops engineering for two years and was promoted into management.
In 1997 Borge Boeskov, the first BBJ president, called me to interview for a job as a sales director. After about two minutes, he said, "I think you're the right guy. What do you need to do this job?" At the time I had about 800 flight hours, but I had never flown professionally. I said, "If I'm going to sell 737s, I'm going to need a 737 type rating in order to talk to the customers." Borge said, "Absolutely!" One phone call later, I was in the Boeing training program, getting a 737 type rating.
After the training what did you do?
I became a BBJ sales guy. At the time Boeing policy allowed us to use private airplanes, so I spent two years flying my dad's Aerostar to visit customers in the eastern U.S. I quickly learned that the flight department guys treat you much better if you show up on the ramp in an airplane and wearing a ratty, sweat-stained shirt than if you show up at the front door wearing a business suit and carrying a brief case. That helped me develop strong relationships with them. And with all the flying, I got the 1,500 hours I needed for my airline transport pilot rating.
And then you left Boeing.
That's right. In 2000, the chief pilot for Michael Chowdry [founder of cargo carrier Atlas Air], who was one of our customers, offered me a chance to fly for Atlas Air. Mr. Chowdry also needed a director of maintenance and I had a mechanic's license. So I
was hired as first officer and director of maintenance. Within a month the chief pilot left, so I was the flight department. Mr. Chowdry [who died in the crash of his personal jet trainer aircraft in 2001] and I and about a half dozen contract guys would fly the airplane. I got to live the BBJ, flying it all over the world, taking it back to Lufthansa for warranty work, and doing all of the maintenance. I was gone from home almost the whole time, but I got a lot of flying experience-about
600 hours in six months.
Why did you leave Atlas Air?
My wife basically told me I had to make a decision. So I struck out on my own as a contract pilot from 2000 to 2002. I helped four customers manage their BBJ completions. While doing this, I got hired by a Canadian family that has an older 737-500. Soon after, Boeing hired me as captain for its executive flight operations. I had been gone from the company for only two years, but I went from someone who had never flown professionally to an almost 3,000-hour, seasoned veteran with airplane completion experience.
Then, in 2004, after Boeing had moved its corporate headquarters from Seattle to Chicago [in 2001] and decided to consolidate its executive flight operations
in Gary [Ind.], I became a production test pilot, doing acceptance testing in new airplanes. I did that until 2007, when BBJ chief pilot Mike Hewitt, before his retirement, hired me to replace him.
How many people are assigned to the BBJ organization?
About 50. The hard-line relationships are in sales and marketing, about 17 people. The dotted-line relationships, meaning they report back to the mother ship, include the 737 engineers who are assigned full time to BBJ.
What are your biggest challenges as president?
First, I need to find a new chief pilot to replace myself, probably a pilot from production flight test. Probably my single biggest challenge is getting the field-service network and the people in place as we expand the BBJ business model to encompass the twin-aisle airplanes. We've already developed VIP specifications for the 787, 777 and 747-8. So when someone buys a 747-8 VIP from Boeing, we will be the single face of Boeing for that airplane.
If I can manage all of these tasks, that will be enough for now, won't it?
Is Boeing considering bringing completions in-house, as other business jet manufacturers have done?
No. We think that the expertise to develop the interiors to the level of quality that our VIP customers expect is best served by the completion businesses that are in place. Boeing's real expertise is in producing a product again and again. VIP customers want a unique, customized airplane and that's not Boeing's strength. While I can understand when people consider this an opportunity for another profit center, we think it's more important to focus on the customer experience.
What advice would you give to a customer who's planning to have his new BBJ completed or a used one refurbished?
Plan ahead as far as possible and once that plan is established, stick to the plan. As in home construction, changes are expensive and disruptive.
Does BBJ have an interest in supersonic business jets?
We've had long dialogues with several of the supersonic business jet programs. We don't see the technology as mature enough, but we will continue
to keep our pulse on that business.
How do you plan to travel to visit customers now that you are president?
Primarily via airlines. However, I'm retaining my currency in the BBJ and will still serve as a captain in our executive flight operations group, so when my travel schedule coincides with other executive travel requirements, I'll serve as a crewmember. I also plan to fly various customer demonstration flights, as well as fly BBJs to the shows we attend.
Resume: Steve Taylor
Position: President, Boeing Business Jets
Education: B.S. with honors, economics and business administration, University
of Redlands, Calif., 1986; B.S. with honors, mechanical engineering, Seattle University, 1991; Executive Leadership Program, Seattle University, 2008.
Pilot Ratings: Airline transport pilot with ratings in the B737, B747-4, B777, Challenger 604 and Falcon 10; private pilot seaplanes; Airframe and powerplant mechanic. Total flight time: 5,000+ hours.
Personal: Born 1962 in Wichita, Kan., the youngest of five children. Married to Kris, an aeronautical engineer, "on 1/1/2000 at high noon, so it's always easy to figure out to the minute how long we've been married." Two children. Hobbies include occasional golf with customers and an old mahogany Chris-Craft boat. Also, used to race cars in competitions of International Motor Sports Association and Sports
Car Club of America.