Eyes on the Skies: Boeing’s Sherry Carbary on the Future of Aviation in China
In the latest in our series profiling current Board members, Sherry Carbary discusses her role within the AmCham China community, the new unique challenges she faces as Boeing’s China President, and why you should not be afraid to change course.
Could you briefly outline your career with Boeing?
Sherry Carbary: I have been with Boeing for 32 years. To be honest, I have said that every job I’ve had, I thought was my best job. I never really had a career plan, but I was fortunate to have amazing bosses and mentors who pushed me along the way. I have occupied roles in supply chain, finance, investor relations, and sales and marketing. All these experiences helped to position me for my current role in China.
About 20 years ago, I became strategy leader for Boeing commercial airplanes. One of our first objectives was to create detailed country strategies, and China was the first. I was able to lead the team when we came here for a month – that trip was when I really fell in love with China. I was also lucky to enough to work as a business unit leader in services for our global pilot and maintenance training business. That experience exposed me to a lot of China. From then, I continued to be very active in China, until early 2019, when Boeing asked me to take on this opportunity as China President, and I jumped at the chance.
You also sit on the AmCham China Board with several China’s CEOs. What are some of the leadership lessons that you have picked up along the way?
Sherry Carbary: Leadership is all about people, strategy, and communication. The foundation of any great business is its people. I am a big believer in empowering teams, working with them to pinpoint their potential, and helping them unlock that potential. However, as a leader you must also have clear vision and strategy about what you’re trying to accomplish. Teams must be aligned around that strategy and clear metrics for success should be established. Finally, it’s all about communication – you can never communicate enough!
The most important lesson I learned was from a boss of mine who always said, “You need to create an environment as a leader, where it’s okay to be red.” At Boeing, we use a stoplight approach: green, yellow, and red. Green means you’re on plan, yellow means you’re off plan, but you have a recovery plan in place, and red means you’re off plan, and you’re not going to recover. So, when you’re going through your business plan, it takes a lot of trust for a team to step up and say, “We’re red, and we need help.” If a team is in the red, the rest of the team needs to step up and rally around them. When you can achieve that level of trust and engagement with a team, it’s golden as a powerful business tool.
Talk about some of the unique challenges of your role in particular as President of Boeing China.
Sherry Carbary: It’s an interesting time to be in China. It feels like I came in during the perfect storm. I was offered the position in February 2019. Then in March 2019, the CAAC was the first regulator around the world to ground our 737 Max airplane, following the crash of Ethiopian Airlines, which was six months after the Lion Air crash. In total 346 souls were lost, and I can say all of us at Boeing have been forever changed by those tragedies. After coming into that situation, I worked throughout the rest of 2019 to meet with government officials and to start developing relationships. It was a very challenging time. In early 2020, we finally turned a corner, and we signed the US-China Phase One Trade Agreement. I remember feeling optimistic, but literally 10 days later, COVID-19 began to emerge. I commend China, because they worked very quickly to control, and recover from, COVID-19, as we watched it spread to become a worldwide pandemic. Finally, in the fourth quarter of 2020, we were able to begin having in-person meetings with the Chinese government again.
So where are we now in this perfect storm? Well, the reality is our 737 Max remains grounded in China, and international borders here remain mostly closed. Even with all that, I can honestly say there’s no place else in the world I would rather be than in this job right now.
China is by far the most exciting airline market in the world in terms of its growth potential. What can you do to stay focused on commerce rather than being eclipsed by politics in certain areas?
Sherry Carbary: China is Boeing’s only trillion-dollar market. There is a demand for $1.4 trillion worth of airplanes, and $1.7 trillion worth of services over the next 20 years. Currently, we are forecasting the need for 8,600 new airplanes over the next two decades. It took Boeing 40 years to deliver the first 1,000 airplanes to China, but only five years to deliver the next 1,000. China is on its way to becoming the largest aviation market in the world, and today, Boeing delivers one out of every four airplanes to China. We’re proud to have history as a longstanding, trusted partner to the China aviation industry. I believe Boeing has always been viewed as a symbol of strength and a critical driver to economic growth in the bilateral relationship. When you think about Boeing, what we do is we connect countries, and allow for safe exchange of people-to-people conversations, which is more important than ever. We continue to advocate in Washington DC on the importance of engagement and partnership with China. Free and fair trade is not only critical to Boeing, but to the whole world in order to facilitate positive mutual benefits.
Aviation is an unusual industry in that there aren’t too many competitors when it comes to building planes. Here in China, you have Comac, the state-owned enterprise. AmCham China member companies often talk about the challenges posed by Chinese SOEs and some of the more protectionist practices. How much of a concern is Comac from that perspective?
Sherry Carbary: Comac is a supplier to us, they are a partner to us, and they are certainly a competitor. When you look at their C-919, which is their single aisle airplane – that’s equivalent to a 737 Max or an Airbus A-320 – it’s expected to be certified by the end of this year. We can anticipate, over next five to 10 years, to see Comac ramping up their production rates and continuing to grow. But the fact remains that the China domestic market is huge. For the foreseeable future, I think there is plenty of work for all three manufacturers to keep very busy. We always welcome competition because it makes everyone in the industry invest in better technologies and more innovative solutions that ultimately drive higher performance from our business and deliver more value for our customers.
Sherry Carbary delivering a keynote at the 2019 CAAC-ACP Airline Operations Safety Symposium in Xiamen.
Photo courtesy of ACP/AmCham China
The third supplier of course is Airbus. Is there a concern, as US-China relations experience a downturn, that the Europeans can sneak in and steal a march?
Sherry Carbary: That is one of our biggest worries and one of the areas about which we continue to communicate with Washington DC. The current Biden administration has made it clear that they view China as a competitor, and they’ve been putting a lot of public pressure on issues like human rights, the national security law, Taiwan, and even the South China Sea. It is important to have a platform to address those sensitive issues, but we also need a platform for trade because China is our largest trade partner. And if Boeing were to get locked out of China, Airbus would certainly step in.
Boeing’s CEO recently called on the US government to normalize trade relations with China. Both from your perspective at Boeing and in your role with AmCham China, how positive are you about the outlook of the US-China relationship?
Sherry Carbary: I think government-to-government is very challenging right now and it will remain so. Most importantly, our two great countries need to find a way to trade. Boeing is the largest US net exporter and has been for a long time. Free and fair trade is critical for us to sell our planes and invest around the world. There is a solution there, but we’ve all got to keep focused and keep advocating. I believe we will find a way forward, but the next few years will be tough.
You’ve been closely involved in AmCham China, both through the Aviation Cooperation Program (ACP) and now as a member of the Board of Governors. Could you talk a little about what you have brought to the AmCham China community and what you’ve gained from it?
Sherry Carbary: I just recently joined the Board of AmCham China. I’m looking forward to contributing in a meaningful way, getting to know the other US business leaders here, and collaborating to achieve collective goals. For the past two years, I have been the Executive Co-Chair of the ACP. The ACP was started back in 2005 as a public-private partnership between the Chinese regulator CAAC, the US regulator FAA, and US aviation businesses operating in China. We have been the hallmark of how to collectively create change with respect to improving the safety, capacity, and efficiency of China’s aviation market. I’m excited to continue to work with US businesses and regulators to achieve something similar on the Board.
“The stronger we are as a united front, the more ability we’ll have to wield influence, advocate for US business, and arrive at a mutually beneficial outcome.”
In which areas would you like to see the Chamber doing more work?
Sherry Carbary: In these times, it’s important that we lean in. All of us need to step up, do a bit more, and work together. Although I’m new to the Board, one of the things I would like to see is for us to stretch our wings. Let’s reach out to other China-focused US organizations to see if we can partner for greater results. The stronger we are as a united front, the more ability we’ll have to wield influence, advocate for US business, and arrive at a mutually beneficial outcome.
Climate is one of the key areas where the US and China have some optimism for cooperation and partnership moving forward. What are some of the initiatives that Boeing is doing in that space?
Sherry Carbary: We’ve always been focused on sustainability. We define sustainability as a focus on the environment, social responsibility, and governance. Today, global aviation accounts for about 2% of all human-induced carbon emissions, and the aviation industry continues to grow. Every time we bring a new generation airplane to market, it provides at least 15 to 25% improvement in efficiencies. That’s driven by advanced, lighter materials like carbon fiber and new engine technologies that drive lower fuel burn. Last year, we announced our plan to reach carbon neutral growth, with a 50% reduction by 2050, from a 2005 base. We are also the only aviation company in the world that recycles 100% of our carbon fiber waste. While Boeing is exploring different solutions, our main focus is on sustainable aviation fuels and biofuels. This is a solution in which our customers are also interested, and one that could provide the biggest impact for long-term carbon emission reductions.
With all these potential technologies and possible solutions, how do you as a company weigh up the costs of developing each with the likelihood of greater success for the long term?
Sherry Carbary: Thankfully, Boeing has the resources to have a broad portfolio. We can continue to invest in multiple solutions and see which ones will be most effective. It’s important to stay close to government for support and aid. Some of these investments are quite large and to get the supply chain scale required, you need to have a partnership with government. An example is hydrogen. Today, the Europeans are investing heavily in R&D around green hydrogen, and one of the biggest benefactors of that is going to be Airbus. While they seek to be the largest green hydrogen producer, China is currently the largest producer of hydrogen in the world. This is a space that we need to continue to watch closely and be involved in. We can expect to see studies in a multitude of areas before determining which one will be most beneficial to the industry.
Do you look at these technologies on a country-by-country basis? Different countries clearly have different targets and goals, but flights are international. So how does that fit into a global framework?
Sherry Carbary: Ultimately, you need to be everywhere, but you start where the feedstock exists. For example, sustainable aviation fuels should be developed locally, otherwise you’re just moving the carbon footprint around. In China, and in other countries, we look at who we can partner with to make sure our airplanes can be supplied with biofuels in the future. However, in some places, the expertise might be on hydrogen, or electric batteries, so we make the investment in the appropriate area depending on the country. It really depends on where the expertise lies and where we need to be.
This article is from the AmCham China Quarterly Magazine (Issue 2, 2021). To access the entire publication for free, sign up on our member portal here.