Achi news desk-
Boeing Co CEO Dave Calhoun will step down by the end of the year, in a wide-ranging management shakeup brought on by the airline’s sprawling safety crisis stemming from the mid-air panel blowout in January on a 737 MAX plane.
The aviator also said that Stan Deal, President and CEO of Boeing Commercial Airplanes, would retire, and that Stephanie Pope would lead that business. Steve Mollenkopf has been appointed as the new chairman of the board.
The leadership change caps weeks of turmoil at Boeing, after the mid-air incident involving the MAX 9 jet operated by Alaska Airlines carrying 171 passengers turned into a full-blown safety and reputational crisis for the iconic aviator.
Boeing shares have lost about a quarter of their value since the incident. They were up 2.8 percent in pre-market trading.
The company faces heavy regulatory scrutiny and US authorities have restricted production as it tries to fix safety and quality issues. The company is in talks to buy its former subsidiary Spirit AeroSystems to try and gain more control over its supply chain.
Some investors expressed concern that this shakeup would not be enough to address long-standing security issues that were the reason for Calhoun’s ascension to CEO in the first place in 2020.
“We’ve long thought that the problems at Boeing have been part of cultural challenges,” said Cameron Dawson, chief investment officer at Newedge Wealth.
Last week, a group of US airline CEOs requested meetings with Boeing directors without Calhoun to express concern over the Alaska Airlines crash, saying it was an unusual sign of frustration with the manufacturer’s and Calhoun’s problems.
Calhoun, an industrial veteran who has held top positions at several troubled companies, became CEO in January 2020 with the mandate to steer the airline through a series of crises stemming from two MAX crashes in 2018 and 2019 that killed almost 350 people.
Following the incident, the FAA curbed Boeing’s production to a rate of 38 jets per month, but Chief Fire Officer Brian West said last week that it had not even reached that figure.
Since Calhoun took over, the company has suffered continuous production delays. Still, in October, Calhoun was upbeat about how quickly Boeing could ramp up output of its MAX jets, saying Boeing would return to 38 jets a month and was “concerned to build from there as quickly as that we can.”
But weeks after the mid-air cabin panel blew in January, Calhoun said it was time to “go slow to go fast.”
The company’s crisis has hampered airlines already struggling with delivery delays from Boeing and rival Airbus, and the airliner has been burning more cash this quarter than expected. .
“For years, we prioritized moving the plane through the factory over getting it right, and that has to change,” West said last week.
The company’s main rival, Airbus, recently won orders for 65 jets from two of Boeing’s key Asian customers, in what some saw as a sign of executives’ concerns about Boeing.
(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Anil D’Silva and Sriraj Kalluvila)
