Wanted: An Executive to Repair Boeing

"The plane maker, which is searching for a new chief executive, is likely to consider a small number of people, including several former Boeing executives.

When Boeing named Stephanie Pope to the new position of chief operating officer in December, the move was widely viewed as a sign that she might succeed the company’s chief executive, Dave Calhoun, in the next few years.

Four months later, facing its second big crisis in five years, the company has begun a fresh search for another chief executive. And Ms. Pope appears to be just one of several potential candidates for one of the most prominent and perilous positions in corporate America: fixing Boeing.

Late last month, the company announced that Mr. Calhoun would step down at the end of the year, much earlier than expected. The chairman of Boeing’s board vacated his position immediately, and the head of its troubled commercial planes business departed.

The management changes came after a panel blew off a 737 Max 9 jet during an Alaska Airlines flight in January, an incident that renewed questions about the quality and safety of Boeing’s planes several years after two fatal crashes of 737 Max 8 planes in 2018 and 2019.

As recently as 2021, Boeing had signaled that Mr. Calhoun, who took the company’s reins after the Max 8 crashes, would not leave anytime soon. The company’s board raised the mandatory retirement age for the chief executive to 70, from 65, a change that would have allowed Mr. Calhoun to stay in the job until April 2028.

But the Alaska Airlines incident disrupted those plans, and Boeing’s board must now identify a new top executive on a more compressed timeline. That new leader has to be someone who can prove to regulators, airline executives, employees and investors that Boeing is firmly committed to improving the quality and safety of its products.

“Given the nature of what’s required, the new C.E.O. may prove to be a bit of a unicorn,” analysts at Bank of America Global Research wrote in a research note this month. “They need a strong strategic view, an understanding of engineering, an understanding of manufacturing and they need to have an ability to win hearts and minds.”

Boeing declined to comment on its chief executive search.

Analysts and several people with ties to Boeing expect the company to focus on a small number of people who have experience leading large, complicated businesses. This could include a crop of former Boeing executives and people who have led other big corporations.

The top internal candidate for the job is Ms. Pope, a 30-year veteran of Boeing who has held a number of senior finance jobs and ran the company’s services business before becoming its chief operating officer in January.

Boeing recently also made Ms. Pope the head of its commercial plane division, which makes the 737 Max and other large planes used by airlines. The move appeared to be a vote of confidence given that the division is at the heart of Boeing’s current troubles.

But her appointment to that job, which was announced on the same day that the company said Mr. Calhoun was stepping down at the end of the year, may suggest that Boeing’s board wants to look beyond its own ranks for its next chief executive.

“We do believe Stephanie Pope enjoys strong support within Boeing, and it is possible that she could be a very strong C.E.O. candidate,” analysts at RBC Capital Markets wrote in a recent research note. “However, we believe that the recent issues at Boeing have disqualified anyone currently with the company, as far as investors are concerned.”

Analysts said they expected Boeing to consider several other candidates, chief among them Larry Culp, who recently orchestrated the three-way split of General Electric, which Wall Street investors have applauded for resolving that industrial conglomerate’s long-festering problems.

Mr. Culp is very familiar with Boeing — the company he now leads, GE Aerospace, makes engines for Boeing and Airbus planes. But he recently told Aviation Week, an industry publication, that he was not interested in the Boeing job.

Wesley Bush, a former chief executive of Northrop Grumman, could be another potential candidate from outside the company who has significant experience running an aerospace and defense manufacturer.

Several former Boeing executives may also be contenders.

One is Patrick Shanahan, a former Boeing executive who was the acting secretary of defense under President Donald J. Trump. Mr. Shanahan is the chief executive of Spirit AeroSystems, a troubled Boeing supplier based in Wichita, Kan., that was once part of Boeing and that Boeing is now in talks to acquire.

At Boeing, Mr. Shanahan was credited with helping restore troubled projects, including the 787 Dreamliner program, which struggled with delays and cost overruns. Last fall, he was appointed chief executive of Spirit after its previous chief executive resigned following a series of production issues, including problems with the bodies of 737 Max jets that it made for Boeing.

Another former Boeing executive the board may consider is Greg Smith, who worked at the company for 30 years and was the chief financial officer before he left. Mr. Smith, now the chairman of American Airlines, a large Boeing customer, was once considered in the running to succeed Mr. Calhoun. He left the company in 2021, however, after the board extended the retirement age for the chief executive to 70, allowing Mr. Calhoun to stay in the job longer.

Mr. Smith served as the interim chief executive of Boeing after the company pushed out Dennis A. Muilenburg, who led the company during the 737 Max 8 crashes, which killed nearly 350 people.

Marc Allen, who stepped down as Boeing’s chief strategy officer at the end of last year, may also be a contender.

The search for Boeing’s next chief executive is in its early stages, and it is not clear how quickly the board will move. The company has said its new chairman, Steve Mollenkopf, Qualcomm’s former chief executive, will lead the search.

“He’s got an engineering background. He’s got a no-nonsense style about him,” Ed Bastian, the chief executive of Delta Air Lines, said about Mr. Mollenkopf during a recent interview on CNBC. “I think the team that he’s going to wind up putting around him is going to be a great team.”" [1]

1. Wanted: An Executive to Repair Boeing. Ember, Sydney.  New York Times (Online)New York Times Company. Apr 24, 2024.