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Boeing CEO to resign in broad management shakeup as 737 Max crisis weighs on aerospace giant

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Boeing CEO Dave Calhoun speaks to reporters as he leaves a meeting at the office of Senator Mark Warner (D-VA) on Capitol Hill January 24, 2024 in Washington, DC.

Anna Moneymaker | Getty Images

Boeing CEO Dave Calhoun will step down at the end of 2024 as part of a broad management shakeup at the embattled aerospace giant.

Larry Kellner, Chairman of the Board of Directors, will not seek reelection at Boeing’s annual meeting in May, Boeing announced Monday. He will be replaced as president by Steve Mollenkopf, director of Boeing since 2020 and former CEO of Qualcomm. Mollenkopf will lead the board in choosing a new CEO, Boeing said.

And Stan Deal, president and CEO of Boeing’s commercial aircraft division, is leaving the company effective immediately. Stephanie Pope, who recently became Boeing’s chief operating officer after leading Boeing Global Services, now takes up the role.

The departures come as airlines and regulators have increased calls for major changes at the company after a slew of quality and manufacturing defects on Boeing planes. Checks intensified after an accident on January 5, when a door plug exploded from a nearly new Boeing 737 Max 9 minutes later. Alaska Airlines flight.

“As you all know, the accident of Alaska Airlines Flight 1282 was a watershed moment for Boeing,” Calhoun wrote to employees Monday. “We must continue to respond to this accident with humility and complete transparency. We must also instill a total commitment to safety and quality at every level of our company.

“The eyes of the world are on us and I know we will emerge from this moment a better company, building on all the lessons we have accumulated working together to rebuild Boeing over the past several years,” he said. -he writes.

Boeing CEO Dave Calhoun: “My decision was to resign”

Calhoun told CNBC in an interview Monday that the decision to resign was “100 percent” his.

“We have another mountain to climb,” Calhoun said. “Let’s not avoid the call to action. Let’s not avoid the changes we need to make in our factory. Let’s not avoid the need to slow down a little and let the supply chain catch up.”

Calhoun, a Boeing board member for more than a decade, took over as CEO of Boeing in January 2020 after the company ousted its former chief executive, Dennis Muilenburg, over his handling of the aftermath of two fatal Boeing crashes. 737 Max.

For months, Calhoun has been promising investors, airline customers and the general public that Boeing will get its myriad quality problems under control. The Federal Aviation Administration has increased oversight of Boeing, and agency administrator Mike Whitaker after the Alaska Airlines crash said Boeing would not be allowed to increase production of the 737 as long as that the FAA was dissatisfied with the company’s quality control.

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Boeing’s production problems have delayed deliveries of new planes to customers and hampered growth plans. CEO of some of the company’s largest clients, including United Airlines, Southwest Airlines And American airlines publicly complained about the delays.

Ryanair, Boeing’s largest airline customer in Europe, said in a statement Monday that it welcomed the management changes.

“Stan Deal has done excellent business work for Boeing for many years, but he is not the person to turn around the operations in Seattle, and that is where most of the problems have been in recent years,” said Michael O’Leary, CEO of Ryanair. a video posted on the social media platform

United CEO Scott Kirby said earlier this month that he had urged Boeing to stop making not-yet-certified Max 10 planes for the company because it was unclear when the FAA would authorize the planes. to fly.

Last week, airline CEOs began planning meetings with Boeing executives to express their displeasure over the lack of manufacturing quality controls and lower-than-expected production of the 737 Max planes. The meetings were to include Kellner and one or more other board members.

Also last week, Boeing Chief Financial Officer Brian West told an industry conference that Boeing would burn through more cash than expected due to limited production of the 737 Max.

Boeing shares gained 1.4% on Monday after these announcements. Its shares have fallen more than 26% since the start of the year.

Don’t miss these stories from CNBC PRO:

Watch CNBC's full interview with Boeing CEO Dave Calhoun

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