Boeing Co CEO Dave Calhoun will step down by the end of the year, in a broad management shakeup brought on by the planemaker’s sprawling safety crisis stemming from a January mid-air panel blowout on a 737 MAX plane.
Boeing Commercial Airplanes president and CEO Stan Deal would retire, and Stephanie Pope would lead that business, the planemaker said yesterday. Steve Mollenkopf has been appointed the new chair of the board.
The leadership change caps weeks of turmoil at Boeing, after the mid-air incident involving an Alaska Airlines-operated MAX 9 jet carrying 171 passengers turned into a full-blown safety and reputational crisis for the iconic planemaker.
Photo: AFP
Boeing shares have lost roughly one-quarter of their value since the incident. They were up 4 percent in premarket trading.
The company is facing heavy regulatory scrutiny and US authorities curbed production while it attempts to fix safety and quality issues. The company is in talks to buy its former subsidiary Spirit AeroSystems Holdings Inc to try to get more control over its supply chain.
Some investors expressed concern that this shake-up would not be enough to address long-standing safety issues that were the reason for Calhoun’s ascendance to CEO in the first place in 2020.
"We’ve long thought that the issues at Boeing have been seated in cultural challenges," Newedge Wealth LLC chief investment officer Cameron Dawson said.
Last week, a group of US airline CEOs sought meetings with Boeing directors without Calhoun to express concern over the Alaska Airlines Flight 1282 accident, saying it was an unusual sign of frustration with the manufacturer’s problems and Calhoun.
Calhoun, an industrial veteran who has held top positions at several troubled companies, became CEO in January 2020 with the mandate of steering the planemaker through a series of crises emanating from two MAX crashes in 2018 and 2019 that killed nearly 350 people.
Following the incident, the US Federal Aviation Administration (FAA) curbed Boeing production to a rate of 38 jets per month, but company chief financial officer Brian West said last week it had not even reached that figure.
Since Calhoun took the reins, the company has endured ongoing delays in production. Still, in October last year, Calhoun was upbeat over how fast Boeing could raise output of its MAX jets, saying Boeing would get back to 38 jets a month and was "anxious to build from there as fast as we can."
But weeks after the mid-air cabin panel blowout in January, Calhoun said it’s time to "go slow to go fast."
The company’s crisis has frustrated airlines already struggling with delivery delays from both Boeing and its rival Airbus SE, and the planemaker has been burning more cash than expected this quarter.
"For years, we prioritized the movement of the airplane through the factory over getting it done right, and that’s got to change," West said last week.
Airbus recently clinched orders for 65 jets from two of Boeing’s key Asian customers — Japan Airlines Co and Korean Air Lines Co, in what some saw as a sign of executives’ concerns about Boeing.
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