Business

Boeing chief executive Dave Calhoun to step down

Aircraft manufacturer announces sweeping management changes

Dave Calhoun, chief executive of Boeing, is to step down at the end of this year, as part of a sweeping overhaul at the embattled US aircraft manufacturer. Photograph: Cristobal Herrera-Ulashkevich

Sylvia Pfeifer
Mon Mar 25 2024 - 12:32

Dave Calhoun, chief executive of Boeing, is to step down at the end of this year, as part of a series of top-level personnel changes at the US aircraft manufacturer.

Boeing said on Monday that its chair Larry Kellner would also leave the board. He will be replaced by former Qualcomm chief executive Steve Mollenkopf, who will lead the search for Calhoun’s successor.

The changes cap weeks of turmoil for the group, which has struggled to contain the fallout from an incident in January in which a door panel on an Alaska Airlines aircraft blew out mid-flight.

The accident, which involved Boeing’s 737 Max 9, is being investigated by the US department of justice and the US Federal Aviation Administration.

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Boeing also announced that Stan Deal, head of its commercial aeroplane division, which has been at the centre of the recent crisis gripping the group, would retire immediately. He will be replaced by the company’s chief operating officer, Stephanie Pope.

Calhoun (66) described the January accident as a “watershed moment” for Boeing. In an internal memo to employees, he said the company “must continue to respond to this accident with humility and complete transparency”.

He added that he had been “considering for some time, in discussion with our board of directors, the right time for a CEO transition at Boeing”.

“I will only feel the journey has been properly completed when we finish the job that we need to do,” he said.

Boeing shares were up more than 3 per cent in pre-market trading on Monday. The share price had plunged 24 per cent to $188.85 in the wake of the door panel incident.

Boeing’s biggest airline customers had strongly criticised the manufacturer’s production problems and quality lapses following the accident, but stopped short of calling for Calhoun to step down.

Several airlines have had to amend their flight schedules due to delays in deliveries of Boeing aircraft. The company has had to slow production of the 737 Max as it has battled to resolve manufacturing flaws.

Last month, Ryanair chief executive Michael O’Leary, who has an order book of 400 Boeing aircraft, said “the last thing” he wanted was to see Calhoun or chief financial officer Brian West step down. “If they go, there is no management in Boeing,” he said.

However, on Monday O’Leary welcomed the changes at the top of Boeing’s commercial business, which he said he hoped would help to “eliminate Boeing’s delivery delays”.

Analysts praised the moves. Robert Stallard, analyst at Vertical Research Partners, said the changes were “probably a wise move by the Boeing board of directors [given that] many of its customers, suppliers and other stakeholders have arguably lost faith in the company”.

Calhoun, who has sat on Boeing’s board since 2009, replaced Dennis Muilenburg as chief executive four years ago in the wake of two crashes involving the 737 Max 8 in 2018 and 2019 that killed a combined 346 people.

The planes had a flawed flight-control system, which was designed to push the nose of the plane down when necessary to prevent it from stalling. However, it was connected to just one sensor and so was vulnerable to erroneous readings that could prompt dangerous downward corrections.

The company paid more than $2.5 billion to defer criminal prosecution by the department of justice for misleading aviation regulators. Prosecutors agreed to ask the court to dismiss the case in three years if Boeing adhered to a compliance programme, but the door panel blew off shortly before the agreement was set to expire. – Copyright The Financial Times Limited 2024

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