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The Guardian - US
The Guardian - US
Business
Callum Jones in New York

Boeing CEO Dave Calhoun to step down in wake of cabin panel blowout

a balding man in a suit and tie in an elevator
Boeing chief executive Dave Calhoun on Capitol Hill in Washington DC on 24 January 2024. Photograph: Samuel Corum/Bloomberg via Getty Images

The CEO of Boeing has announced plans to resign amid a sweeping overhaul of the planemaker’s management as it fights to repair its reputation following a terrifying cabin panel blowout.

Dave Calhoun will step down at the end of this year. Larry Kellner, chair of Boeing’s board of directors, will also leave the role.

Calhoun plans to “complete the critical work under way to stabilize and position the company for the future” over the coming months, it said.

Boeing has scrambled to reassure regulators, airlines and passengers since a brand-new 737 Max 9 jet was forced into an emergency landing in January.

The dramatic incident during an Alaska Airlines flight – which prompted 171 Max 9 jets to be grounded for several weeks – has sparked the biggest safety crisis for Boeing since the crashes of two of its Max 8 jets, in 2018 and 2019, in which 346 people were killed.

Stan Deal, who leads Boeing’s commercial airplanes business, has also left the job with immediate effect. He has been replaced by Stephanie Pope, the group’s chief operating officer.

“The eyes of the world are on us, and I know that we will come through this moment a better company,” Calhoun said. “We will remain squarely focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do.”

Steve Mollenkopf, who has been on Boeing’s board of directors since 2020, has been lined up to replace Kellner as its chair. Mollenkopf will lead the search for Calhoun’s replacement.

Those who last recruited a CEO for Boeing did not look far. Calhoun, who took the job in January 2020, was a veteran of the group’s board, and served as chairman for a few months the previous year.

“I want to thank Dave for his tremendous leadership of our company,” said Kellner, “and I know he will finish the job this year that he started in 2020 to position Boeing, and our employees, for a stronger future.”

Shares in Boeing opened higher in New York on Monday, before losing ground. By late morning, they were up by 1%.

The group’s stock has come under pressure in recent months, falling by about a quarter since the turn of the year as the Alaska incident renewed questions about the quality of its planes. Regulators and airlines have been demanding answers.

An initial report by the National Transportation Safety Board (NTSB) found the cabin panel that blew off Alaska’s new Max 9 jet in January appeared to be missing four key bolts. The agency publicly criticized Boeing this month for failing to disclose details linked to its investigation.

Boeing claimed it had been cooperating “fully and transparently” with the NTSB. After the agency published its preliminary report, Calhoun said Boeing was “squarely focused” on strengthening quality and confidence.

The Federal Aviation Administration conducted a six-week audit of Boeing’s production line which found multiple compliance failures. The US Department of Justice is conducting its own investigation into the 5 January incident.

Calhoun, who was quick to acknowledge Boeing had “much to prove” following the panel blowout, was himself appointed four years ago after the group faced intense criticism for its response to the fatal Max 8 crashes of 2018 and 2019.

On his watch, however, the planemaker faced another severe crisis as Covid-19 swept the world. The global travel industry was upended during the early months of the pandemic, before entering recovery mode. Shares in Boeing, however, have yet to return to the levels at which they traded before March 2020.

Key customers welcomed news of the company’s management overhaul. The changes were “much-needed”, according to Michael O’Leary, boss of Ryanair. Focus will now turn to who Boeing will select as its next boss.

While Calhoun, 66, refrained from commenting on who should succeed him as CEO, his message to employees announcing his exit included a striking endorsement of Pope – a company veteran widely deemed to be in the running – who is taking charge of its commercial airplanes business.

“With nearly 30 years of experience at Boeing, including her successful tenure leading our global services business, Stephanie knows our company inside and out,” Calhoun wrote, “and has a proven track record of superb leadership, including an innate talent for listening and responding to our people.”

Pope was “deeply committed” to Boeing, “our employees and to our shared future”, Calhoun wrote: the “perfect person to take on the leadership of our commercial airplanes business at this moment”.

Justin Green, an attorney at Kreindler & Kreindler who represents 34 families who lost loved ones on Ethiopian Flight 302, which crashed in 2019, said Calhoun’s departure was “positive” but “quite late”.

“The next CEO must know that his or her role will be to prioritize safety, not just profit,” added Green. “For too long, Boeing has been avoiding public accountability and these leadership changes open a window for the company to do so.”

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