US Markets
Monday, March 25th, 2024 3:46 pm EDT
Key Points
- Leadership Changes: Boeing CEO Dave Calhoun, along with Larry Kellner, chairman of the board, are stepping down, with Calhoun’s resignation effective at the end of 2024 and Kellner’s immediate resignation. Steve Mollenkopf, a Boeing director since 2020 and former Qualcomm CEO, will succeed Kellner as chairman and lead the board in selecting a new CEO. Additionally, Stan Deal, president and CEO of Boeing Commercial Airplanes, is leaving the company immediately, with Stephanie Pope assuming his role after serving as Boeing’s chief operating officer.
- Increased Calls for Reform: The departures coincide with mounting pressure from airlines and regulators for significant changes within Boeing following a series of quality and manufacturing issues, highlighted by a recent incident involving a Boeing 737 Max. Calhoun emphasized the need for humility, transparency, and a total commitment to safety and quality within the company, acknowledging the critical juncture Boeing faces.
- Challenges and Industry Response: Boeing’s production problems, including delays in delivering new planes and lower-than-expected production of 737 Max planes, have drawn public complaints from major customers such as United Airlines, Southwest Airlines, and American Airlines. The company’s stock, while experiencing marginal gains following Calhoun’s announcement, reflects ongoing challenges, with shares down by 26% year-to-date.
Boeing CEO Dave Calhoun is set to step down by the end of 2024, as part of a broader restructuring within the troubled aerospace giant. Larry Kellner, the current chairman of the board, will also resign and won’t seek reelection at Boeing’s annual meeting in May. He will be succeeded by Steve Mollenkopf, a Boeing director since 2020 and former CEO of Qualcomm, who will lead the board in selecting a new CEO. Stan Deal, president and CEO of Boeing Commercial Airplanes, is leaving the company immediately, with Stephanie Pope taking over his position after assuming the role of Boeing’s chief operating officer. These changes come amid increasing pressure from airlines and regulators for significant reforms at Boeing following a series of quality and manufacturing issues, exacerbated by a recent incident involving a Boeing 737 Max. Calhoun emphasized the need for transparency, safety, and quality commitment within the company, acknowledging the challenges ahead. He clarified in an interview that his decision to resign was entirely his own, recognizing the necessity for action and change to address production challenges and supply chain issues. Calhoun’s tenure began in early 2020 after Boeing ousted its previous CEO, Dennis Muilenburg, over handling concerns after two fatal 737 Max crashes. Despite promises to address quality struggles, Boeing faces intensified oversight from the Federal Aviation Administration and public criticism from major customers, including United Airlines, Southwest Airlines, and American Airlines, due to delivery delays and manufacturing issues. Ryanair’s CEO welcomed the management changes, indicating the need for a turnaround, particularly in Boeing’s Seattle operations. United’s CEO expressed concerns about the delayed certification of Max 10 planes, urging Boeing to prioritize manufacturing quality controls. Airline CEOs have recently engaged with Boeing directors to voice their discontent, reflecting the industry’s frustration. Boeing’s stock saw marginal gains following Calhoun’s announcement, but its year-to-date performance reflects ongoing challenges, with shares down by 26%.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/03/25/boeing-ceo-board-chair-commercial-head-out-737-max-crisis.html
