Boeing CEO to step down
• Plane maker faces heavy regulatory scrutiny, curbed production
Boeing CEO Dave Calhoun will step down by year-end in a broad management shake-up brought on by the plane maker’s safety crisis stemming from a January midair panel blowout on a 737 MAX plane.
The plane maker also said that Stan Deal, Boeing Commercial Airplanes president and
CEO, would retire, and Stephanie Pope would lead that business. Steve Mollenkopf has been appointed the new chair of the board.
The leadership change caps weeks of turmoil at Boeing, after the midair incident involving an Alaska Airlines-operated MAX 9 jet carrying 171 passengers turned into a full-blown safety and reputational crisis for the iconic plane maker.
Boeing shares have lost about one-quarter of their value since the incident. They were up 2.8% 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 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 Boeing’s issues have been seated in cultural challenges,” said Newedge Wealth chief investment officer Cameron Dawson.
Last week, a group of US airline CEOs sought meetings with Boeing directors without Calhoun to express concern over the Alaska Airlines 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 plane maker through a series of crises emanating from two MAX crashes in 2018 and 2019 that killed nearly 350 people.
After the incident, the FAA curbed Boeing production to a rate of 38 jets a month, but CFO Brian West said last week it had not even reached that figure.
Since Calhoun took the reins, the company has endured delays to production.
In October, 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 midair cabin panel blowout in January, Calhoun said it was time to “go slow to go fast”.
The company’s crisis has frustrated airlines struggling with delivery delays from both Boeing and its rival Airbus, and the plane maker has been burning more cash than expected in this quarter.
“For years, we prioritised the movement of the airplane through the factory over getting it done right, and that’s got to change,” West said last week.
Rival Airbus clinched orders for 65 jets from two of Boeing’s key Asian customers recently, in what some saw as a sign of concern about Boeing.