Boeing, the embattled aerospace giant, is undergoing a major management shake-up, with CEO Dave Calhoun set to step down at the end of 2024. Along with Calhoun, Chairman of the board Larry Kellner is also resigning and will not stand for reelection at Boeing's annual meeting in May. These changes are part of a broader restructuring effort within the company to address the numerous quality and manufacturing flaws that have plagued Boeing in recent years.
In addition to Calhoun and Kellner, Stan Deal, president and CEO of Boeing Commercial Airplanes, is leaving the company with immediate effect. Stephanie Pope, who recently took on the role of Boeing's chief operating officer, will now assume Deal's responsibilities. Steve Mollenkopf, a Boeing director since 2020, will take over as the new chairman of the board and lead the process of selecting a new CEO. These changes come at a crucial time for Boeing, as airlines and regulators have been pushing for significant improvements in the wake of recent incidents involving Boeing planes.
Boeing has been grappling with a series of quality and manufacturing issues, culminating in a recent incident where a door plug blew out of a nearly new Boeing 737 Max just minutes into an Alaska Airlines flight. This event served as a wake-up call for the company, prompting a renewed focus on safety and quality at all levels of the organization. The Federal Aviation Administration has also increased oversight of Boeing, with Administrator Mike Whitaker insisting that the company must address its quality control issues before ramping up production of the 737 Max.
The production problems at Boeing have had a ripple effect on its customers, with major airlines such as United Airlines, Southwest Airlines, and American Airlines expressing frustration over delays in plane deliveries. United Airlines CEO Scott Kirby even urged Boeing to halt production of yet-to-be-certified Max 10 planes until the FAA gives its approval. The lack of manufacturing quality controls and lower than expected production of 737 Max planes have prompted airline CEOs to schedule meetings with Boeing directors to voice their concerns.
Boeing's stock has taken a hit this year, down 27% as of Friday's close. The company's Chief Financial Officer, Brian West, recently announced that Boeing would burn more cash than anticipated due to limited 737 Max production. Despite these challenges, Boeing's stock saw a modest increase of more than 2% in early trading following the announcement of Calhoun's resignation. The company is now at a critical juncture as it navigates the road ahead under new leadership.
Boeing's management shake-up marks the beginning of a new chapter for the aerospace giant. With a renewed focus on safety, quality, and customer satisfaction, Boeing is poised to emerge from its current challenges as a stronger and more resilient company. The coming months will be crucial for the new leadership team as they work to restore trust in the Boeing brand and address the systemic issues that have plagued the company in recent years.