Boeing CEO Dave Calhoun will step down by year-end, 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.
Quick Read
- Boeing Leadership Changes: CEO Dave Calhoun will depart from Boeing at year’s end, following various troubles at the iconic American aircraft manufacturer.
- Board Chair’s Decision: Larry Kellner, the Board Chair, has communicated to Boeing that he will not seek re-election.
- Boeing Executive Changes: Boeing announces the retirement of Stan Deal, President and CEO of Boeing Commercial Airplanes, with Stephanie Pope set to take over the division. Steve Mollenkopf has been appointed as the new chair of the board.
- Calhoun’s Challenges: CEO Dave Calhoun has faced intense scrutiny since an incident on January 5 involving an Alaska Airlines flight, leading to significant regulatory oversight and production limitations for Boeing.
- Airline CEOs’ Concerns: The Alaska Airlines 737 MAX 9 incident prompted U.S. airline CEOs to seek discussions with Boeing’s directors, signaling widespread frustration with ongoing issues under Calhoun’s leadership.
- Spirit AeroSystems Acquisition Talks: Boeing is in negotiations to acquire its former subsidiary, Spirit AeroSystems, amidst its ongoing crisis.
- Operational and Financial Strain: Boeing’s recent troubles have exacerbated delivery delays, impacting airlines and leading to increased cash burn for the planemaker in the current quarter.
- Strategic Shift in Production: Boeing’s CFO Brian West emphasized the need for a shift in production priorities, focusing on quality over speed, in response to the company’s challenges.
- Airbus Competition: Boeing’s main competitor, Airbus, has secured orders from key Asian customers, reflecting growing concerns among executives about Boeing’s situation.
- Stock Market Reaction: In light of these developments, Boeing’s shares saw a 2.8% increase in premarket trading.
- Executive Retirement at Boeing: Stan Deal, the president and CEO of Boeing’s commercial airplanes unit, is set to retire, with Stephanie Pope taking the helm of the division.
- FAA’s Increased Oversight: The Federal Aviation Administration is closely monitoring Boeing and has initiated an audit of the company’s assembly lines at a Seattle-area factory, following a door-panel malfunction on an Alaska Airlines 737 Max on January 5th.
- Safety and Quality Concerns: The January incident, caused by missing bolts post-repair, has escalated scrutiny around Boeing’s safety protocols, marking the most significant attention since the fatal 737 Max crashes in 2018 and 2019, which resulted in 346 deaths.
The Associated Press has the story:
Boeing CEO to step down this year, board chairman to exit, head of commercial airplanes retires
Newslooks- (AP)
Boeing CEO Dave Calhoun will step down from the embattled plane maker at the end of the year after a series of mishaps at one of America’s most storied manufacturers.
Board Chair Larry Kellner has also told the company he doesn’t plan to stand for re-election.
The planemaker 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.
Boeing also said Monday that Stan Deal, president and CEO of its commercial airplanes unit, will retire from the company. Stephanie Pope will now lead the division.
The Federal Aviation Administration has put the company under intense scrutiny and recently ordered an audit of assembly lines at a Boeing factory near Seattle, where the company builds planes like the Alaska Airlines 737 Max that suffered a door-panel blowout on Jan. 5. Investigators say bolts that help keep the panel in place were missing after repair work at the Boeing factory. The incident has raised scrutiny of Boeing to its highest level since two crashes of Boeing 737 Max jets in 2018 and 2019 that killed 346 people.
Calhoun’s has been under pressure ever since the Jan. 5 incident, when a door plug ripped off an Alaska Airlines flight about 16,000 feet above the ground. The company is facing heavy regulatory scrutiny and U.S. authorities curbed production while it attempts to fix safety and quality issues.
Last week, a group of U.S. airline CEOs sought meetings with Boeing directors to express concern over the Alaska Airlines 737 MAX 9 accident, saying it was an unusual sign of frustration with the manufacturer’s problems and Calhoun.
The company is in talks to buy its former subsidiary Spirit AeroSystems (SPR.N)
The company’s crisis has frustrated airlines already struggling with delivery delays from both Boeing and its rival Airbus, and the planemaker 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,” CFO Brian West said last week.
The company’s main rival, 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.
Boeing shares were up 2.8% in premarket trading on the news.
