Thu, Oct 24, 2019 - Page 10 News List

Boeing replaces commercial airplanes head


Boeing Commercial Airplanes chief executive Kevin McAllister poses with a 737 MAX 10 model during the 52nd Paris Air Show at Le Bourget Airport in France on June 20, 2017.

Photo: Reuters

Boeing Co is replacing the head of its commercial-airplanes division as it struggles with a crisis created by two deadly crashes of its newest airliner.

Boeing on Tuesday said that Kevin McAllister is out as chief executive of Boeing Commercial Airplanes. He is being replaced by Stanley Deal, leader of Boeing’s services division.

The shake-up in Boeing’s top ranks comes just days after the release of internal communications that showed a senior test pilot experienced serious problems while testing flight-control software for the 737 MAX on a simulator.

That software, called the Maneuvering Characteristics Augmentation System (MCAS), is at the center of investigations into two crashes that killed 346 people and led to grounding of the MAX.

Boeing is taking much longer than executives expected to change the software and get the plane flying again.

The company announced two other promotions, including a replacement for Deal, who has led Boeing Global Services since the division was created in 2016.

McAllister was recruited from General Electric Co’s jet-engine operation to run Boeing’s biggest division in 2016, just months before the 737 MAX went into service.

Boeing did not specify whether he quit or was fired.

“The Boeing board fully supports these leadership moves,” chairman David Calhoun said in a prepared statement.

Calhoun himself is new in his position.

Boeing CEO Dennis Muilenburg also served as company chairman until the board stripped him of that job and elevated Calhoun two weeks ago.

Boeing took a US$5.6 billion pretax charge this summer to cover its estimate for compensating airlines that have canceled thousands of flights because of grounded planes.

It has disclosed nearly US$3 billion in other additional costs related to the grounding.

The company faces dozens of lawsuits by families of passengers killed in the MAX crashes in Indonesia and Ethiopia. It is also the subject of investigations by the US Department of Justice and Congress.

S&P Global Ratings on Tuesday downgraded the outlook for Boeing, citing concerns the aerospace giant may have misled regulators about the 737 MAX.

The ratings firm kept the debt grade stable at “A,” but cut the outlook to negative from stable on the potential for “lasting damage” to the company’s finances.

“The outlook revision reflects concerns that recent reports that Boeing may have misled the [US] FAA [Federal Aviation Administration] about the problems with the 737 MAX MCAS software that likely caused two accidents could have wide-ranging effects on the company’s competitive and financial positions,” S&P said in a statement.

Additional reporting by AFP

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