Boeing CEO to step down over safety crisis
BOEING Co chief executive officer Dave Calhoun is stepping down at the end of the year, part of a sweeping leadership overhaul as the planemaker struggles to get a handle on a spiralling safety crisis.
Chairman Larry Kellner will not stand for re-election, Boeing said in a statement on Monday. Stan Deal, the embattled chief of Boeing’s commercial airplane division, is also departing immediately and will be replaced by chief operating officer Stephanie Pope.
The shake-up reflects growing customer frustration as the crisis centring on the planemaker’s manufacturing quality and safety shows no signs of receding. Kellner, Calhoun and Deal mark the highest-profile departures since a near-catastrophic incident in January involving its 737 Max jetliner plunged Boeing into ever-deepening turmoil.
Calhoun and Deal faced growing criticism from unhappy customers after the Alaska Airlines incident exposed lapses in Boeing’s manufacturing controls, and pressure had been growing on directors to revamp Boeing’s senior management.
Questions over their leadership reached a crescendo last week when the heads of major airlines asked the board to meet directly, without Calhoun present.
The move to bypass the CEO offered a signal to investors and company officials alike: The airlines were losing patience with the top brass.
The leadership shuffle was finalised during a board session over the weekend, according to people familiar with the matter who asked not to be identified.
The changes had been discussed for months amid the growing crisis, the people said, but the matter was brought to a head by the need to issue the annual proxy statement, which already is weeks later than is typical for Boeing.
Kellner in particular wanted to make sure the handoff for the chair and CEO roles were mapped out ahead of the company’s annual meeting, one of the people said.
“While someone losing their job is rarely something to celebrate, we think that this is probably a wise move by the Boeing board of directors,” Robert Stallard, an analyst with Vertical Research Partners, told clients Monday. “Many of Boeing’s customers, suppliers and other stakeholders have arguably lost faith in the company, while its relations with the FAA and NTSB are clearly strained.”
A detailed audit of Boeing and its suppliers by the US Federal Aviation Administration raised concerns about the company’s safety culture, the agency’s top official said last week.
Former Qualcomm chief Steve Mollenkopf, who has been on Boeing’s board since 2020, will head the search for a new CEO as lead independent director, the company said.
Potential candidates for the top job include Pope, who remains in the running despite changing roles in Monday’s reshuffling, according to a person familiar with the matter. Others potentially under consideration could include General Electric CEO Larry Culp; David Gitlin, a Boeing director and CEO of Carrier Global Corp.; Patrick Shanahan, CEO of Boeing supplier Spirit AeroSystems Holdings; and Greg Smith, chairman of American Airlines Group Iand Boeing’s former finance chief.
Representatives for Gitlin, Shanahan and Smith didn’t immediately respond to requests for comment. In a February interview, when asked if he would be interested in becoming Boeing’s CEO, Culp said he was “looking forward to serving Boeing as their most important partner and supplier.”
GE had no additional comment. Whoever is chosen will take over a company that “has been playing a reactionary defense for quite some time,” Ron Epstein, an analyst with Bank of America, said in a note.
“This may be the first real chance, in a long time, Boeing has had to clean house and reset their own narrative.”
Boeing’s shares rose 1,6 percent at 12:59 p.m. on Monday in New York, paring earlier gains. The stock had tumbled 28 percent this year through March 22, the worst performer in the Dow Jones Industrial Average.
Calhoun, a long-time Boeing director and veteran of General Electric and Blackstone Group LP, stepped into the top role in early 2020 as the planemaker was reeling from a global grounding of the 737 Max following two crashes. He is ending a four-year stint as CEO dealing with the fallout from another near-catastrophe with the same model. - Bloomberg