Boeing CEO to step down as safety worries soar
NEW YORK — Boeing announced on Monday a leadership shake-up headlined by the departure of CEO Dave Calhoun as the aviation giant faces intense scrutiny following safety incidents and manufacturing issues.
Calhoun will depart at the end of this year. Stan Deal, Boeing’s head of commercial airlines since 2019, will retire immediately, while the company’s chairman, Larry Kellner, a former airline CEO, will depart after the company’s annual meeting this spring.
Replacing Deal will be long-time Boeing executive Stephanie Pope, while former Qualcomm CEO Steve Mollenkopf will serve as the new chairman.
As to who would take the helm of the troubled planemaker, many industry executives and analysts have predicted it will seek an outside remedy.
Just three months ago, Boeing appeared to appoint Pope as a future leader after naming her chief operating officer following a successful stint running its services division. But her new position makes a move into the top job less likely, at least for now, analysts said.
“The company was teeing up Stephanie Pope to likely succeed Calhoun but that seems to have changed in favor of an external search for a new CEO,” Stifel analyst Bert Subin said. “This could result in a high-profile hire.”
The sweeping personnel changes come in the wake of Boeing’s nearcatastrophic incident in January when a fuselage panel on a Boeing 737 MAX 9 Alaska Airlines jet blew off mid-flight.
Calhoun called the Alaska Airlines incident a “watershed moment” for the company in a letter to employees, predicting it would ultimately emerge as “a better company”.
Several analysts greeted the action, but cautioned that it would take time for Boeing to turn itself around.
Shares advanced on the announcement, which follows criticism of Boeing’s manufacturing and quality control practices from the Federal Aviation Administration.
Heavy questioning
Boeing has also faced heavy questioning from airlines, who had requested a meeting with the Boeing board in a move seen as a sign of restiveness among carriers.
The Alaska Airlines incident put Boeing back in the hot seat, a familiar spot after a 20-month grounding of the 737 MAX following fatal crashes in 2018 and 2019.
Boeing had originally tapped Calhoun, a longtime board member, as CEO after ousting former chief Dennis Muilenburg in December 2019 amid widespread criticism of Muilenburg’s handling of the MAX crisis following the crashes.
The leadership changes were praised by Ryanair Chief Executive Michael O’Leary as “much needed” as the Irish carrier pointed to delayed new aircraft deliveries as a drag on the company’s prospects.
But Michel Merluzeau, an aeronautics specialist with consulting firm AIR, expressed misgivings, saying that while there is a need for “fresh enterprise leadership” at the top, “the urgency lies primarily on the factory floor”.
Susannah Streeter of Hargreaves Lansdown said Boeing “has been left largely rudderless”, and that whoever is recruited as the next CEO “will have a mountain to climb in terms of enacting culture change in the organization and restoring the company’s safety credentials”.
Some investors said the shake-up would not be enough to address these persistent issues.
“They need more than just a shake-up at the CEO and the chairman of the board level ... they’re just paralyzed from making decisions,” said Robert Pavlik, senior portfolio manager at Dakota Wealth. “It’s going to take a little bit more time for Boeing to get it straightened out.”