Dave Calhoun became CEO of frame maker Boeing in 2019. His objective was to reorganize the company and introduce product quality as top priority. His announcement sounded like a turnaround from the previously favored principle of shareholder value. But instead of building on earlier successes, the crises aggravated, evidenced by two fatal crashes of Boeing 737 MAX aircraft and repeated serious incidents thereafter.
Last week, the aircraft manufacturer announced that Calhoun will be leaving the company – but only at the end of this year.
Calhoun will be joined by other high-ranking executives of the Boeing Group, among them chairman Larry Kellner and Stan Deal, CEO of Boeing Commercial Airplanes.
In the end, there were probably too many scandals that led to the major shakeup at Boeing. Lost fuselage parts at Alaska Airlines, a wheel that fell off after departure of a United Airlines B777 at San Francisco Airport, missing bolts on a B737 MAX door and numerous other design flaws: under Calhounce’s guidance, the aircraft manufacturer, once known for its technical reliability has not been able to escape the negative headlines due to repeated design faults and a lack of product control.
The personnel shakeup at the top of the company, resembling a tsunami, could be an act of liberating, according to the motto: new heads, new ideas. However, it is completely unclear how the personnel gaps that have now been announced are to be filled. The Boeing management has not yet named any successors. Why, in view of the serious deficits combined with an alarming loss of reputation, the Supervisory Board allowed Calhoun to stay in office until 31DEC24, remains their secret. Fact is that from now on he is a lame duck whose departure is sweetened by the Boeing board with US$14.9 million. A golden parachute that lets the 66-year-old land very softly.
The massive problems began even before Calhoun was appointed CEO
The 66-year-old aviation veteran, a longtime board member at Boeing, became chairman of the company in late 2019, when the board stripped his predecessor Dennis Muilenburg of that title. He was tapped as CEO after Muilenburg was ousted in December of that year, starting in the job in January 2020.
Calhoun’s tenure began about halfway through a 20-months grounding of the B737 MAX due to a design flaw that was determined to have caused two fatal crashes; and just before the Covid pandemic broke out globally, causing a near halt in air travel and massive losses for the airlines Boeing depends upon to buy its aircraft variants.
In a letter to the employees Calhoun stated: “It has been the greatest privilege of my life to serve Boeing. The eyes of the world are on us, and I know that we will come through this moment a better company. 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.”
More managers depart Boeing
Simultaneously to Calhoun’s decision, Board Chair Larry Kellner has informed the board that he does not intend to stand for re-election at the upcoming Annual Shareholder meeting. The board has elected Steve Mollenkopf to succeed Kellner as independent board chair. In this role, Mollenkopf will lead the board’s process of selecting Boeing’s next CEO. “I am honored and humbled to step into this new role,” said Mollenkopf. “I am fully confident in this company and its leadership – and together we are committed to taking the right actions to strengthen safety and quality, and to meet the needs of our customers. I also want to thank both Larry and Dave for their exceptional stewardship of Boeing during a challenging and consequential time for Boeing and the aerospace industry.”
Pope to replace Deal
In addition to these changes, Stan Deal, Boeing Commercial Airplanes President and CEO, will retire from the company and Stephanie Pope has been appointed to lead BCA, effective today.
Pope has been serving as chief operating officer of Boeing since January of this year. Previously, she was president and chief executive officer of Boeing Global Services, where she was responsible for leading the company’s aerospace services for commercial, government and aviation industry customers worldwide. Prior, she was chief financial officer of Boeing Commercial Airplanes, and has held positions in every Boeing business unit.
The fact that in recent times Airbus got significantly more orders from international airlines than Boeing may also have played a decisive role in the exit of Calhoun and Co.
