Boeing CEO To Resign After Long String Of Failures

Boeing has announced that Boeing CEO Dave Calhoun will resign after a long string of failures, and a board chaired by Steve Mollenkopf will select a new CEO.

Boeing CEO To Resign After Long String Of Failures 1

CEO of Boeing Dave Calhoun will retire at the end of 2024 as part of a significant management transition for the struggling aerospace behemoth.

The board chairman, Larry Kellner, announced on Monday that he will not seek reelection at Boeing’s annual meeting in May. Steve Mollenkopf, a former Qualcomm CEO and current director of Boeing, will take over as chair in his place. According to Boeing, Mollenkopf will guide the board in selecting a new CEO.

Additionally, Stan Deal, the president and CEO of Boeing’s commercial aircraft division, is quitting the business with immediate effect. Stephanie Pope, who was previously in charge of Boeing Global Services, is taking over for him as chief operating officer.

CEO of United Airlines, Scott Kirby, said that Boeing planes are safe despite the series of incidents involving the planes.

Following several production and quality issues with Boeing aircraft, airlines, and regulators have been calling for significant reforms within the firm, and this is reflected in the departures. After an incident on January 5 in which a door plug burst out of a fairly new Boeing 737 Max nine minutes into an Alaska Airlines flight, scrutiny grew more intense.

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“As you all know, the Alaska Airlines Flight 1282 accident was a watershed moment for Boeing,” Calhoun wrote to employees on Monday. “We must continue to respond to this accident with humility and complete transparency. We also must inculcate a total commitment to safety and quality at every level of our company.

“The eyes of the world are on us, and I know we will come through this moment a better company, building on all the learnings we accumulated as we worked together to rebuild Boeing over the last number of years,” he wrote.

In an interview with CNBC on Monday, Calhoun stated that he chose to step down “100%” on his own.

“We have another mountain to climb,” Calhoun said. “Let’s not avoid the call for action. Let’s not avoid the changes that we have to make in our factory. Let’s not avoid the need to slow down a bit and let the supply chain catch up.”

Having been on the board for more than ten years, Calhoun became the company’s top position in January 2020 following Dennis Muilenburg’s dismissal for his handling of the aftermath of two fatal 737 Max crashes.

Calhoun has been assuring investors, travelers, and the general public for months that Boeing will overcome its numerous quality issues. Following the Alaska Airlines disaster, agency Administrator Mike Whitaker announced that Boeing would not be permitted to increase 737 production until the FAA was happy with the company’s quality management. The Federal Aviation Administration has increased its surveillance of Boeing.

Boeing’s production issues have hindered growth goals and delayed customer deliveries of new aircraft. The chief executive officers of several of the company’s major clients, such as American Airlines, Southwest Airlines, and United Airlines, have openly voiced their dissatisfaction with the delays.

The biggest airline customer of Boeing in Europe, Ryanair, expressed its approval of the management changes in a statement on Monday.

In a video uploaded to social media site X, Ryanair CEO Michael O’Leary stated, “Stan Deal has done a great sales job for Boeing for many years, but he’s not the person to turn around the operation in Seattle, and that’s where most of the problems have been in recent years.”

Earlier this month, United’s CEO, Scott Kirby, stated that he had encouraged Boeing to cease producing Max 10 aircraft for the business that has not yet received certification since it was unclear when the FAA would grant those aircraft permission to fly.

Airline CEOs began setting up meetings with Boeing directors last week to express their dissatisfaction about the absence of manufacturing quality standards and the 737 Max jets’ lower-than-expected production. Kellner and one or more other board members were to attend the meetings.

Additionally last week, at an industry conference, Boeing Chief Financial Officer Brian West stated that the company would need to spend more money than anticipated due to the limited supply of the 737 Max.

Following the disclosures, Boeing’s stock increased by more than 1% during Monday afternoon trade. This year, the shares have decreased by 26%.

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