A leadership shake-up at Boeing, including news Monday that its top executive plans to step down, highlights the difficult path facing the iconic aircraft manufacturer as it tries to navigate through yet another safety crisis.
CEO David Calhoun, who has been under unrelenting pressure since a panel blew off a Boeing 737 Max jetliner during a January flight, said he would retire at the end of the year. He said the decision to leave was his and the timing would allow for an orderly transition.
The head of the company’s commercial airplanes unit, Stan Deal, is already out. Boeing said he was replaced immediately by Stephanie Pope, a fast-rising insider who on Jan. 1.
In a third high-profile decision, board Chairman Lawrence Kellner, a former Continental Airlines chief, won’t stand for reelection in May, Boeing said. A former Qualcomm CEO who was appointed to succeed Kellner will lead the search for Calhoun’s replacement.
Calhoun was on the Boeing board during its worst time 鈥 the in 2018 and 2019 that killed 346 people. He leaves with the company under intense scrutiny from regulators and lawmakers since a door-plug panel blew off a in midflight on Jan. 5.
Investigators say bolts that help keep the panel in place were at the Boeing factory.
The reviewed Boeing’s 737 factory near Seattle and gave the company on nearly three dozen aspects of production. The company has until late May to give the FAA a plan for improvement. In the meantime, the federal agency is limiting production of 737s.
The FBI recently told passengers from the Alaska Airlines flight that they might be .
Airline executives have with Boeing, and even minor incidents involving jets the company produced are .
In a note to employees on Monday, Calhoun called the Alaska Airlines blowout a 鈥渨atershed moment for Boeing” that requires a 鈥漷otal commitment to safety and quality at every level of our company.”
鈥淭he 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,鈥 he said.
Boeing鈥檚 most significant effort to improve quality has been about bringing Spirit AeroSystems, which builds fuselages for the Max and many parts for that and other Boeing planes, back into the company.
Mistakes made at Spirit, which Boeing spun off nearly 20 years ago, have compounded the company’s problems. Bringing the work of the supplier back in-house would, in theory, give Boeing more control over the quality of manufacturing key airplane components.
Calhoun said the two companies were making progress in talks 鈥渁nd it鈥檚 very important.鈥
Calhoun had been a Boeing director since 2009 when he in January 2020, replacing Dennis Muilenburg, who was fired in the aftermath of the Max crashes. In 2021, Boeing’s board for CEO to keep Calhoun in the job.
He oversaw the Max鈥檚 return to service after a worldwide grounding that lasted nearly two years, and orders for the plane quickly picked up. Since then, however, a series of manufacturing flaws have delayed deliveries of new 737s and larger 787 Dreamliners to airlines, forcing the carriers to reduce growth plans.
Boeing has not filed its proxy statement for 2023, but previous filings show that Calhoun received compensation valued at more than $64.6 million from 2020 through 2022. Almost all of it was in the form of stock awards, options and bonuses.
The company, based in Arlington, Virginia, has lost more than $23 billion since Calhoun took over, although most of that is residual damage from the two Max crashes in Indonesia and Ethiopia. Boeing shares have fallen more than 40% in that time 鈥 24% since the Alaska incident, through trading on Friday.
Last week, Chief Financial Officer Brian West warned that Boeing burned between $4 billion and $4.5 billion more cash than it expected in the first quarter as it slowed down airplane production after the Alaska Airlines accident.
The company tapped former Qualcomm CEO Steven Mollenkopf to become the new board chairman and lead the search for Calhoun鈥檚 replacement.
Some in Congress said the shake-up in the top ranks is not enough and that Boeing needs to worry more about safety and less about producing more airplanes. That view is shared by a leading Boeing whistleblower.
鈥淚t is going to be hard to fix the culture, but the people at Boeing (who build planes) are capable of it,鈥 said Ed Pierson, a former manager at Boeing’s 737 factory who is now director of a . 鈥淭hose employees need to feel valued and supported instead of (management) just directing them and pressuring them to produce planes.鈥
The focus on Boeing since early January took some of the surprise out of Monday鈥檚 news. Citi analyst Jason Gursky called the shake-up 鈥渂oth predictable and thoughtful.鈥
Some analysts had viewed the fast-rising Pope as a likely successor to Calhoun. Gursky said, however, that her move to lead commercial airplanes opens the way for an outsider to become CEO.
Before her promotion to chief operating officer at the beginning of the year, Pope, 51, was president and CEO of Boeing鈥檚 services business, where she dealt with both airline and military customers. She served as chief financial officer of the airplanes division before that.
Richard Aboulafia, a longtime aerospace analyst and now a consultant at AeroDynamic Advisory, said the management shake-up 鈥渋s likely to be a pivotal moment in Boeing鈥檚 history, and probably a very positive one,鈥 but the outcome depends on the next CEO.
Rebuilding Boeing will be 鈥渧ery hard, and a long road,鈥 Aboulafia said. Putting people with technical skill in higher leadership positions would be a plus, he said.
He said Patrick Shanahan 鈥 a former Boeing executive and acting U.S. defense secretary during the Trump administration who has led Spirit AeroSystems since the fall 鈥 would be a 鈥済reat choice.鈥
Cai von Rumohr, an aerospace analyst at financial services firm TD Cowen, said the management changes are 鈥渁 partial step toward changing its culture to underscore safety and rebuild investor confidence in the company.” He said the fact that Calhoun gave more than eight months鈥 notice will help the Boeing board make 鈥渁 considered decision鈥 instead of 鈥渁 knee-jerk reaction.鈥
The CEO of Irish airline Ryanair, a major Boeing customer, welcomed the management changes, including the replacement of Deal at the head of the commercial airplanes division. Michael O鈥橪eary said in a video posted on X that Deal did a good job at Boeing sales, 鈥渂ut he鈥檚 not the person to turn around the operation in Seattle, and that鈥檚 where most of the problems have been in recent years.鈥
Shares of The Boeing Co. rose about 1% in trading Monday.
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AP Business Writer Michelle Chapman contributed to this report from New York.
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