Boeing Co on Monday pushed out its embattled chief executive officer, Dennis Muilenburg, as it attempts to pivot from a protracted crisis surrounding the grounding of its top-selling 737 MAX after two deadly crashes.
More than nine months after the 737 MAX was grounded and a week after halting production of the aircraft, Boeing named board chairman David Calhoun as chief executive and president, saying that the company needed to “restore confidence” and “repair relationships with regulators, customers and all other stakeholders.”
Although coming during the sleepy days ahead of the Christmas holiday, the move was not entirely unexpected after Boeing stripped Muilenburg of his chairman title in October, installing board member Calhoun in that post.
Photo: AFP
Still, while Boeing watchers had seen Muilenburg’s days as numbered, some expected him to stay on until the 737 MAX was returned to service, but the timing of that landmark event remains unclear and depends on the US Federal Aviation Administration (FAA), which has made it clear it is not in a hurry.
The agency does not comment on personnel decisions, an FAA spokesman said.
“The FAA continues to follow a thorough process for returning the Boeing 737 MAX to passenger service,” the spokesman said. “Our first priority is safety, and we have set no time frame for when the work will be completed.”
Muilenburg repeatedly offered predictions on the 737 MAX’s return to service that proved overly optimistic.
His prospects further dimmed last week when its Starliner unmanned spacecraft came up short in a NASA mission to reach the International Space Station.
Boeing shares rallied on the announcement of the leadership shake-up, which came after calls in the US Congress for Muilenburg to go.
The stock price jumped 2.9 percent to finish at US$337.55.
However, Scott Hamilton of Leeham News, an aviation Web site, said that Calhoun had roundly praised Muilenburg’s performance as CEO in a television interview last month.
The executive had been “part of the board policy-making that led to the cost-cutting some say had deleterious impact on the development of the MAX,” Hamilton wrote.
“Calhoun has been on the board 10 years,” he said. “Is Calhoun, an insider, the right person to pull Boeing out of its dive?”
US Senator Richard Blumenthal called for a “complete management house cleaning” at Boeing and new leadership “who will take safety seriously.”
Calhoun previously served as vice chairman of General Electric Co, where he had a long career after starting with the company soon after graduating from Virginia Tech.
He serves as senior managing director of investment banking firm Blackstone Group LP.
Following the announcement, Calhoun reached out to lawmakers, airline CEOs, suppliers, regulators and other key stakeholders, a Boeing spokesman said.
Muilenburg is to leave the company immediately, but Calhoun would not take the CEO post until Jan. 13, while he exits existing commitments, Boeing said in a news release.
During that period, Boeing chief financial officer Greg Smith is to serve as interim CEO. Meanwhile, board member Lawrence Kellner is to become non-executive chairman of the board, effective immediately.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
RSS