Boeing CEO Dave Calhoun to step down in wake of 737 MAX struggles

Dave Calhoun stepped in to address a crisis at Boeing four years ago. He is stepping aside with the manufacturer still mired in a crisis over the quality of its planes.

Dave Calhoun stepped in to address a crisis at Boeing. He is stepping aside four years later with the manufacturer still mired in a crisis over the quality of its planes.

The Boeing chief executive will exit at the end of the year, part of a broader executive shake-up after a January 5 midair blowout and sweeping production problems that have angered airlines and regulators.

The aircraft maker also said the head of its commercial-aircraft business, Stanley Deal, will step aside immediately and its chairman, Larry Kellner, won’t stand for re-election. Steve Mollenkopf, a former CEO of Qualcomm, will take over as board chair and lead the search for the next Boeing boss.

Boeing has been under pressure from investors and airline operators since the door-panel blowout on an Alaska Airlines flight to spell out a plan for fixing the company’s quality problems. A group of airline CEOs had recently requested meetings with Boeing’s board, an unusual move showing their dissatisfaction with the company and Calhoun.

The Boeing board of directors met this weekend and decided to address their leadership plans ahead of the planned meetings with the airline CEOs, said people familiar with the matter. Mollenkopf will now attend the meetings.

Michael O’Leary, the CEO of Ryanair, said on Monday that he “welcomed these much-needed management changes.” The European carrier, like some of its U.S. peers, has had to reduce its flight schedules this year because of Boeing delays in delivering 737 jets.

Calhoun, who turns 67 next month and took over as CEO in January 2020, had promised a turnaround of the manufacturer. Instead, he becomes the second consecutive Boeing boss to exit amid quality concerns and production problems.

His exit leaves the board openly searching for a replacement, and the board is looking both inside and outside its executive ranks for a new leader.

Calhoun had been preparing to step aside before the latest crisis and the Boeing board had been working on succession plans, recently elevating company veteran Stephanie Pope as the heir apparent. But frustration from airlines and regulators accelerated the announcement and will put pressure on the company to bring in fresh blood.

In a memo to staff on Monday, Calhoun said, “The eyes of the world are on us, and I know that we will come through this moment a better company.” “I will only feel the journey has been properly completed when we finish the job that we need to do,” he wrote. “We are going to fix what isn’t working, and we are going to get our company back on the track towards recovery and stability.” Calhoun — enlisted to fix Boeing following a pair of fatal 737 MAX crashes in 2018 and 2019 — has spent the past couple of months trying to convince investors, regulators and airlines that the company is still capable of building a quality aircraft. Before Boeing, Calhoun had climbed the ranks inside General Electric for two decades and was a senior executive at the private-equity firm Blackstone.

Boeing and its supply chain have been beset by snafus — from misdrilled holes on 737 fuselages and production slip-ups on the 787 Dreamliner to mishaps with the new Air Force One — which have disrupted production at several factories. None of those issues resulted in an in-flight incident.

The company has slowed production at its factories this year as it seeks to address quality issues. Analysts expect Boeing to produce about 15 737s per month at the start of 2024, less than half the planes it was producing at the end of last year. That has left major airlines scrambling to rework schedules or warning that their 2024 financial results will suffer.

The slowdown also means Boeing’s operations are burning cash. At an investor conference last week, finance chief Brian West said Boeing would take a hit of between $4 billion and $4.5 billion for the current quarter, larger than it previously forecast.

West also said Boeing was taking more measures to reduce so-called travelled work, where problems with parts or aircraft are moved along its production lines and addressed later. That effort will also slow production, which West said would increase later in the year.

Boeing stock, which has tumbled more than 25% so far this year, was up about 2% in premarket trading. The shares were trading above $330 when Calhoun took over as CEO and were recently trading around $190.

Kellner, a former Continental Airlines chief executive, has served on Boeing’s board for about 13 years. Deal, who has spent nearly 40 years at Boeing, has been the head of the troubled commercial-airlines segment since 2019.

Deal will be replaced by Pope, who was appointed operating chief in January at age 51 shortly before the Alaska Airlines accident put the company back into crisis mode. A three-decade Boeing veteran, Pope beat out other top executives for the role.

She has worked in various parts of the company, including stints as the finance chief of both the commercial-airline business and services unit, which she helped form.

Boeing’s problems have drawn greater scrutiny from the Federal Aviation Administration as well as accident investigators at the National Transportation Safety Board and prosecutors at the Justice Department, which is conducting a criminal probe into the Alaska accident. The Justice Department is also reviewing a separate 2021 criminal settlement it struck with Boeing after two earlier fatal 737 MAX crashes.

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