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Boeing abruptly announced Monday that it is undergoing an overhaul of its leadership amid its most serious safety crisis in years, with major changes including CEO Dave Calhoun stepping down at the end of the year. announced personnel changes.
The aircraft manufacturer is struggling to respond to an accident in early January when a panel of its Boeing 737 Max 9 plane was blown off mid-air during an Alaska Airlines flight, and has faced criticism from regulators, airlines and passengers. Pressure is mounting.
The incident has shaken the company, considered by many to be a treasured American institution, and comes five years after two 737 Max 8 crashes killed a total of nearly 350 people. There was renewed concern about quality efforts.
In addition to Mr. Calhoun’s resignation, Stan Deal, head of the company’s division that manufactures aircraft for airlines and other commercial customers, is also retiring immediately. He will be succeeded by Stephanie Pope, Boeing’s chief operating officer, the company said in a statement.
Boeing also announced that Chairman Larry Kellner will not run for re-election. The board of directors elected Steve Mollenkopf, an electrical engineer by training and former CEO of Qualcomm, as the company’s new chairman. In his role, he will lead the process to select Boeing’s next chief executive officer.
The Federal Aviation Administration, which regulates aircraft manufacturers, grounded the 737 Max 9 aircraft across the United States after the Alaska Airlines incident. When the agency allowed the plane to return to service at the end of January, it also imposed limits on Boeing’s planned production increase of Max planes, the company’s latest attempt to better compete with European rival Airbus. was prevented.
A recent FAA audit of Boeing’s Max production found dozens of deficiencies. The agency gave Boeing 90 days to address the issue. The Justice Department also contacted Alaska Airlines passengers to notify them that they “may be victims of a crime,” according to a copy of one notice.
Airlines leaders publicly expressed their dissatisfaction with the manufacturer after the incident. Chief executives from several of the largest U.S. carriers are scheduled to meet with Kellner and other board members this week, according to people familiar with the plans. Mr. Calhoun supported those meetings, but did not intend to attend them. Mr. Molenkopf will also be participating in the future.
In a memo to employees Monday announcing the leadership changes, Calhoun said the Jan. 5 disaster of Alaska Airlines Flight 1282 was “a turning point for Boeing.”
“The world’s attention is on us, and we are determined to take this moment as a better company, building on all the learnings we have accumulated over the past years as we helped rebuild Boeing. I am confident that we can overcome this,” he said.
Discussions about changing the company’s management have been going on for some time. The company named Ms. Pope as chief operating officer late last year, with the expectation that she would succeed Mr. Calhoun within the next few years.
Pope has enjoyed a relatively rapid rise in recent years. In early 2022, she was promoted from her role as chief financial officer of the commercial aircraft division to head of Boeing Global Services, which provides aftermarket support to her customers.
In an interview with CNBC, Calhoun said he would participate in the search for his successor. He also characterized all leadership changes, including his own, as “very planned.”
“Why now? We’re in our fifth year.” “I will be approaching 68 years of age at the end of this year. I have always said to the board that we are very prepared, but that we need sufficient notice so that the board can understand and plan for succession.” I’m going to give you.”
Monday’s announcement was made ahead of the company’s annual general meeting scheduled for May, when board members will be elected.
Boeing’s board appointed Mr. Calhoun as CEO after firing his predecessor, Dennis A. Muilenburg, who had led the company through the 2018 and 2019 crashes. Mr. Calhoun, who assumed the leadership of the company in January 2020, had served as a member of the company’s board of directors since 2009. He spent much of his career at General Electric, where he previously served as vice chairman and head of infrastructure.
Calhoun’s departure is all the more surprising because Boeing’s board raised the retirement age for chief executives from 65 to 70 in 2021, allowing Calhoun to remain in the job until April 2028. is.
The leadership shakeup is raising urgent questions about Boeing’s succession plans. Mr. Pope is currently doing a major job of restoring the civil aviation sector. Analysts say the company may be considering bringing in executives from outside the company, but the number of people with the experience needed to lead an engineering and manufacturing company with more than 170,000 employees is extremely limited. It states that
Since the door plug incident in January, Calhoun has reiterated the company’s commitment to quality and safety. But pressure on him and Boeing continued to mount. The company announced in February that the head of its 737 Max program would be stepping down, but it did little to address mounting criticism. Even some travelers have become wary of his 737 Max, the company’s most popular series of aircraft. After the Alaska Airlines crash, flight reservation service Kayak announced a significant increase in users opting out of scheduled flights on 737 Max planes.
Southwest Airlines, which is a large Boeing customer and operates only the company’s aircraft, said in a statement that it will “work with Boeing’s new management team to ensure each aircraft meets the highest quality and safety standards. I will do my best to do so.” Delta Air Lines and United Airlines issued similar statements.
Boeing stock rose about 1% Monday morning after the company announced management changes.
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