Three senior Boeing officials, including the CEO, are stepping down, the firm announced Monday, as the corporation grapples with an ongoing controversy and a federal inquiry into the safety of its passenger jets.
In a statement, CEO Dave Calhoun revealed that he would leave the company at the end of the year. Stan Deal, Boeing Commercial Airplanes’ CEO and president, has retired effective immediately.
Larry Kellner, chairman of the company’s board of directors, will not seek re-election at the upcoming shareholders’ annual meeting. Steve Mollenkopf, a Boeing board member and former Qualcomm CEO, will succeed Kellner.
Since a door panel blew off on a Boeing 737 Max plane flown by Alaska Airlines in January, the firm has been the subject of a wave of unfavorable reports. The impact from that deadly flight shows no signs of abating: the FBI alerted passengers last week that they could have been victims of a crime that is currently being investigated.
Despite Boeing’s announcement of many safety measures and its commitment to cooperating with federal authorities, some passengers have expressed concern about boarding the airplane.
Calhoun recognized, in a statement to employees posted on the Boeing website, that the Alaska Airlines tragedy had transformed the company.
“As you all know, the Alaska Airlines Flight 1282 accident was a watershed moment for Boeing,” he stated in an email. “We must continue to respond to this accident with humility and full honesty. We must also instill a complete commitment to safety and quality at all levels of our organization.
“The eyes of the world are on us,” he said, referring to ongoing attempts to reassure both the company’s airline customers and the flying public about the safety of its planes.
In an interview with CNBC following Monday’s announcement, Calhoun acknowledged Boeing’s continued issues.
“We have this bad habit in our company,” he admitted, adding that production pressures continued to weigh on performance. “When you move it down the line, you send a message to your people saying, ‘Wow, I guess the movement of the airplane is more important than the first-time quality of the product.'” And we need to get that much more balanced. Without a question.
Calhoun stated in the letter to staff that the company has experienced “some of the most significant challenges our company and industry have ever faced in our 108-year history.”
Calhoun was appointed CEO in 2020, following two additional flight disasters that several analysts blamed on Boeing’s faults. The Lion Air and Ethiopian Airlines crashes in 2018 and 2019, which killed a total of 346 people, were caused by the breakdown of a Boeing software system known as MCAS.
Calhoun, who had been on Boeing’s board since 2009 and was made non-executive chairman in 2019, pledged to transform the company’s internal culture in an interview with the New York Times shortly after his appointment.
“It’s more than I imagined it would be, honestly,” Calhoun remarked at the time, outlining the problems he was facing at the plane builder. “And it speaks to the weaknesses of our leadership.”
However, in the same interview, he appeared to indicate that American pilots would have reacted differently to the MCAS system failures than foreign-born pilots.
Following the second disaster in March 2019, the 737 Max was grounded worldwide and not certified for flight for nearly two years.
In 2021, Boeing agreed to pay a $2.5 billion penalty to settle criminal charges over allegations that it hid information concerning the 737 Max aircraft, saying that it had “deceived” the FAA about the MCAS system’s reliability.
Calhoun claimed at the time that the settlement “appropriately acknowledges how we fell short of our values and expectations.”
In an interview with NBC News last week, Michael Whitaker, administrator of the Federal Aviation Administration, stated that Boeing had no choice but to design a plan to reform its culture and processes to meet the agency’s safety standards.
Whitaker stated that Boeing’s efforts “have been on production and not on safety and quality.”
In a written statement in response to the leadership changes, Alaska Airlines stated that it has been flying Boeing aircraft for nearly 60 years and is dedicated to the firm.
“We share more than a hometown with Boeing; we share a love of aviation and a dedication to safety. We know the people behind the planes, who have committed their lives over the years to making air travel better and safer,” the statement stated, adding that “we will do everything we can to contribute to the crucial work underway to ensure excellence in manufacturing quality and safety.”
Following the January Alaska Airlines incident, some Wall Street analysts called for more radical changes.
“How many times can ‘won’t happen again’ happen again?” Ronald Epstein, an analyst at Bank of America Corp., said in a research in January.
“Both Boeing and [Boeing parts supplier] Spirit [AeroSystems] require a significant cultural revamp. This culture shift will not be achieved through FAA rules, congressional hearings, internal memoranda, or one-hour all-hands meetings. To shift the culture from corporate language to being embodied in the behaviors and minds of both workforces, we believe Boeing and Spirit must dramatically reconsider how they have operated.”
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