Who will be Boeing’s new leaders?
As Boeing deals with the fallout from the crisis triggered by the crash involving a 737 Max jet earlier this year and other safety issues, CEO Dave Calhoun has announced he will step down by the end of the year
Boeing's number one steps back under growing pressure from airlines, regulators and investors.
The CEO of the US aviation giant, Dave Calhoun, will resign at the end of this year. We read this in a company note, explaining that the decision is part of a broader reshuffle at the top in response to the recent problems that emerged in security checks.
“As we begin this transition period, I want to assure you that we will remain focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the last five years, with safety and quality at the forefront of everything we we do,” reads the conclusions of Calhoun's letter to employees.
Just three months ago, Boeing appeared to have anointed Stephanie Pope as a future leader after naming its chief operating officer following a successful stint running its services division. But at the moment the reorganization of Boeing has led Stephanie Pope to lead, effective immediately, Boeing Commercial Aeroplanes, replacing Stan Deal who has retired.
Boeing shares may have risen a bit yesterday on the news, but many questions were still circulating among analysts, one of them being whether the plane maker would follow through on its plan to acquire its fuselage supplier Spirit AeroSystems , he points out Quartz . Calhoun said the deal is still pending, but he won't have much to say on the matter for much longer.
All the details.
CEO CALHOUN'S ANNOUNCEMENT
“As you all know, the Alaska Airlines Flight 1282 crash was a watershed moment for Boeing. We must continue to respond to this incident with humility and complete transparency. We must also instill total commitment to safety and quality at every level of our company.” Dave Calhoun, CEO of Boeing, wrote this in the letter – sent to employees – with which he announced his resignation, which will be effective at the end of the year.
Calhoun, a member of Boeing's board of directors since 2009, replaced Dennis Muilenburg as CEO four years ago following two fatal crashes involving the 737 Max 8 in 2018 and 2019, recalls the Financial Times .
“The eyes of the world are on us, and I know we will emerge from this moment a better company because of what we have learned working together to rebuild Boeing over the past few years,” Calhoun added. Speaking on CNBC , Calhoun later said that "the decision to resign was 100% mine."
MANEUVERS AT THE TOP OF BOEING
The company's president, Larry Kellner, will not run for re-election, while the head of the commercial aircraft division, Stan Deal, will step aside immediately and be replaced by chief operating officer Stephanie Pope.
The board then elected Steve Mollenkopf to succeed Kellner as independent chair of the board. In this role, Mollenkopf will lead the selection process for Boeing's next CEO. In addition to these changes, Stan Deal, president and CEO of Boeing Commercial Airplanes, will retire from the company and Stephanie Pope will be named to lead BCA, effective today. His new position makes a move to the top job less likely, at least for now, according to analysts.
FOLLOWING THE CRISIS TRIGGERED BY THE ALASKA AIRLINES ACCIDENT
These developments come about three months after the accident – without casualties – which occurred aboard a Boeing Max 9 operated by Alaska Airlines, which lost a panel in flight without four bolts holding it to the fuselage.
Last January 6, the Federal Aviation Administration (FAA), the regulator of US airlines, ordered the temporary grounding and immediate inspection of dozens of Boeing 737 Max jets. The measure is the consequence of the accident involving an Alaska Airlines 737 Max 9 aircraft on Friday, January 5.
But the Jan. 5 crash is just the latest blow for Boeing, which has struggled with 737 manufacturing defects and has continued to suffer the consequences of a 20-month worldwide grounding imposed by regulators after a pair of fatal crashes at five months apart in 2018 and 2019, in which a total of 346 people died. Airlines had resumed using planes of the same model only after they had undergone various modifications by Boeing.
Since that grounding began, Boeing has posted total operating losses of $31.5 billion through the end of last year.
THE MANAGEMENT REorganisation
Last February, Boeing had already announced the replacement of Ed Clark, vice president for the 737 program and general manager of the company's plant in Renton, Washington, with Katie Ringgold, who until now oversaw deliveries of the 737s to customers. On the same occasion, the company also announced the creation of a new management role for the supervision of quality control, entrusted to another vice president of the company, Elizabeth Lund. “The company was grooming Stephanie Pope to succeed Calhoun, but things appear to have changed in favor of an external search for a new CEO,” Stifel analyst Bert Subin said. “This could result in a high-profile hire.”
THE TOTAL APPOINTMENTS
As Reuters reports, many investors say GE CEO Larry Culp possesses "the star quality" Boeing desperately needs to rebuild trust after splitting the historic conglomerate into three public companies. But Culp recently told reporters that he is fully focused on leading GE Aerospace as a stand-alone engine maker and looks forward to continuing to serve Boeing as a key partner and supplier.
Pat Shanahan, a former Boeing executive and former U.S. defense secretary in the Trump administration who now runs struggling supplier Spirit Aerosystems, is also mentioned as a possible favorite to succeed Calhoun. “He's the perfect outsider; he knows Boeing inside and out, and now he knows the people who make fuselages who seem destined to be part of Boeing again,” observed industry veteran Adam Pilarski, also quoted by Reuters . For its part, the Spirit company stated that “Shanahan's sole priority remains building a culture of safety at Spirit AeroSystems.”
Another Boeing veteran tipped for a possible return, industry sources say, is former chief financial officer Greg Smith, who was relieved by Calhoun in 2021 and is now president of American Airlines. Several analysts said Boeing would prefer a clean cut to stem a wave of safety criticism from regulators and Congress.
THE CHALLENGES FOR THE NEW BOSS
What is certain is that Boeing's new CEO will face numerous tasks, including improving the company's safety culture, resolving quality issues and regaining the trust of regulators, customers and the public.
Additionally, the company will also need to meet goals of increasing production and increasing cash flow. Boeing warned last week that first-quarter cash flow will come in worse than the company forecast last January as it seeks to reduce debt. Without forgetting the challenge with European rival Airbus.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/chi-saranno-i-nuovi-vertici-di-boeing/ on Tue, 26 Mar 2024 14:50:22 +0000.