CEO leaving as Boeing battles safety problems
Boeing CEO Dave Calhoun will step down by year-end in a broad management shake-up brought on by the plane-maker’s sprawling safety crisis exacerbated by a January midair panel blowout on a 737 MAX plane.
Stan Deal, Boeing Commercial Airplanes president and CEO, will retire, and Stephanie Pope will take over that business, the company said Thursday. Steve Mollenkopf, former CEO of tech company Qualcomm, has been appointed new chair of the board and is leading the search for the next CEO.
The leadership changes cap weeks of turmoil at Boeing, after the midair incident involving an Alaska Airlinesoperated MAX 9 jet carrying 171 passengers turned into a full-blown safety and reputational crisis for the iconic company.
Boeing shares have lost roughly onequarter of their value since the incident.
The January incident was only the most recent in a series of safety crises that have shaken the industry’s confidence in Boeing and hampered its ability to increase production. Calhoun himself was brought in as CEO following a pair of crashes in 2018 and 2019 that killed nearly 350 people.
Some investors expressed concern that this shake-up would not be enough to address these issues.
“We’ve long thought that the issues at Boeing have been seated in cultural challenges,” said Cameron Dawson, chief investment officer at NewEdge Wealth.
Analysts and investors called the shake-up positive for Boeing, but stressed that much depends on Calhoun’s successor and changing the company’s culture from the top.
Some suggested Spirit AeroSystems CEO Patrick Shanahan, a former Boeing executive and U.S. government official, as a possible successor to Calhoun.
“We think it will require someone with pedigree and patience, as fixing Boeing is probably a multiyear non-linear journey,” Vertical Research Partners aerospace analyst Robert Stallard said in a note to clients.
Following the January incident, the FAA curbed Boeing production to a rate of 38 jets per month, but CFO Brian West said last week it had not even reached that figure.
Since Calhoun, 66, took the reins, the company has endured ongoing production delays. Still, 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’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 main rival, Airbus, and the plane-maker has been burning more cash than expected in this quarter than expected.
“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 clinched orders for 65 jets from two of Boeing’s key Asian customers recently, in what some saw as a sign of executives’ concerns about Boeing.