Boeing, a globally recognized aerospace company, is undergoing a huge management shakeup. The CEO, Dave Calhoun, is preparing to step down by year-end. This decision comes during a broader restructuring caused by the planemaker’s extensive safety crisis.
There was a safety incident involving an Alaska Airlines flight in January. During the flight, a door plug blew out of Boeing’s 737 Max 9 aircraft while the plane was in mid-air. This drew attention to potential safety concerns and increased investigations into Boeing’s operations.
Alongside Calhoun’s step down, board chair Larry Kellner and Stan Deal, who heads the company’s commercial planes business, are also set to leave their positions. These moves show Boeing’s board’s effort to address the issues severely affecting the aerospace manufacturer over the past several weeks.
At 66, Calhoun assumed the CEO role after two tragic crashes in 2018 and 2019. The crashes claimed the lives of nearly 350 people. Following the mid-air panel blowout incident on January 5, airline executives initially supported Calhoun.
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However, sentiments shifted when further production delays surfaced, and regulatory authorities highlighted quality issues at Boeing’s manufacturing facility located outside Seattle. Nevertheless, many investors feel that the management changes won’t solve Boeing’s ongoing problems.
Calhoun explained that he personally decided to step down. During an interview with CNBC, the CEO said, “It was me giving them notice that at the end of this year, I plan to retire.” He said that his intention to remain in his position until the end of the year was to address the ongoing quality issues within Boeing.
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In a statement issued on Monday, Calhoun openly acknowledged the challenges confronting Boeing. “The eyes of the world are on us, and I know that we will come through this moment a better company,” Calhoun said.
“We will remain squarely focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do.”
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Since the incident, Boeing shares have dropped by about 25%. On Monday, they closed up by 1.4%, although they didn’t reach the highs seen earlier in the day. “They need more than just a shakeup at the CEO and the chairman of the board level, they’re just paralyzed from making decisions,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
“It’s going to take a little bit more time for Boeing to get it straightened out.” Boeing is currently under federal investigation. The U.S. authorities have reduced production while the company works to address safety and quality concerns. Boeing is negotiating to purchase its former subsidiary, Spirit AeroSystems, to gain better control over its supply chain.
Michael O’Leary, the CEO of Ryanair, one of Boeing’s key customers, welcomed the management changes at Boeing. He stated on Monday that the airline sees the shake-up as a positive development for Boeing’s customers. He emphasized the need for these changes within the planemaker.
Boeing announced that Steve Mollenkopf, the former CEO of chipmaker Qualcomm, will immediately assume the role of Boeing’s board chair. According to Boeing’s statement, he will also spearhead the search for a new chief executive officer.
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