Besieged Boeing Chief to Quit --- Calhoun to leave at year-end, chairman to be replaced amid 737 MAX struggles

"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 an executive shake-up after a Jan. 5 midair blowout and sweeping production problems that have angered airlines and regulators.

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

The next leader will confront several problems at the company, including quality issues that have alarmed regulators, production snarls that have angered airlines and restless labor unions and suppliers. The stock has declined about 25% year to date.

Calhoun has been in the hot seat since the door panel detached on an Alaska Airlines flight after Boeing delivered a jet that was missing bolts.

The Federal Aviation Administration imposed production limits and an audit later found widespread problems with 737 production.

The Justice Department is conducting a criminal probe into the Alaska accident and recently told passengers they could be victims of a crime.

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 held a hastily scheduled virtual meeting over the weekend to formally vote on the leadership changes, people familiar with the matter said. The new chairman, Mollenkopf, is slated now to attend the planned meetings with airline CEOs.

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.

The board also faced a protest from within. A labor union representing 32,000 Boeing workers in Washington state was demanding a seat on the 13-person board. The International Association of Machinists and Aerospace Workers union had just commenced contract talks with Boeing.

"The problems in Boeing's executive suite are systemic," said Ray Goforth, the executive director of another union, which represents thousands of engineers, scientists and technical workers at Boeing.

Calhoun, who turns 67 years old 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. 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."

He continued: "I will only feel the journey has been properly completed when we finish the job that we need to do. 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 -- 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 climbed the ranks inside General Electric for two decades and was a senior executive at the private-equity firm Blackstone.

Shortly after he became CEO in January 2020, Calhoun said Boeing's fortunes would suffer without a focus on the safety culture as the top priority. He said Boeing's board installed him to shake up the company and "can have me as long as they want me."

"I was always the backup plan for this," Calhoun said during a call with reporters, outlining promised changes to how Boeing approaches safety and engineering. "Whether you might think I am the right guy to do it or not, I've probably got more conviction around these topics than almost anybody."

Instead, 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.

Analysts expect Boeing to produce about 15 737s a 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.

Boeing stock gained about 1% in Monday 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 the age of 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." [1]

One drunk low qualification worker does not turn in the screws and the whole upper management changes. Strict order. It would be good for us to have one.

1. Besieged Boeing Chief to Quit --- Calhoun to leave at year-end, chairman to be replaced amid 737 MAX struggles. Terlep, Sharon.  Wall Street Journal, Eastern edition; New York, N.Y.. 26 Mar 2024: A.1.