Boeing (BA) CEO Dave Calhoun will retire at the end of the year. The company announced on Monday.
Calhoun’s resignation comes as the plane maker faces a number of production and quality control issues this year, including one of its 737 MAX 9 planes operated by Alaska Airlines in January that lost a panel during a flight. This was done in the midst of dealing with the
Last week, Boeing Chief Financial Officer Brian West said the company is working to ramp up its production lines and expects to incur up to $4.5 billion in cash this quarter.
Boeing shares rose as much as 2.5% on the news. By Friday’s close, the stock had fallen more than 27% since the beginning of the year.
The company also announced Monday that Larry Kellner, chairman of the board, will not stand for re-election at the company’s next annual meeting. Steve Mollenkopf, the former CEO of Qualcomm and a member of Boeing’s board since 2020, will replace Kellner and lead the company’s search for its next CEO. Boeing also announced that Stan Diehl, currently CEO of its commercial aircraft division, will be stepping down.
in Letter to employees on MondayCalhoun said the Alaska Airlines disaster was “a turning point for Boeing.”
Calhoun continued, “The world’s eyes are on us. We will emerge from this moment as a better company, building on all the learnings we have accumulated over the past several years as we helped rebuild Boeing.” I am confident that we will be able to do so,” he added.
Calhoun became Boeing’s CEO in January 2020, as the company was dealing with the fallout from the crashes of two 737 MAX planes, one on a Lion Air flight in October 2018 and one on Ethiopian Airlines in March 2019. Appointed. A total of 346 people died in these crashes. .
Calhoun said in the letter that he had been considering the decision to resign “for some time.”
Calhoun replaces Dennis Muilenburg, who served as Boeing CEO from 2015 to 2019. Muilenburg was at the helm during the 737 MAX crash and subsequent grounding of MAX aircraft around the world.
Mr. Calhoun’s tenure began in January 2020, when Boeing halted production of all 737 aircraft. At the time, it was the largest Boeing assembly line outage in more than 20 years. Boeing restarted production at a “low rate” in May, and the Federal Aviation Administration (FAA) lifted its grounding order for the 737 MAX in November.
One year after Calhoun’s arrival, Boeing and the Department of Justice (DOJ) reached an agreement. pay a $2.5 billion fine To resolve criminal charges of conspiracy to defraud the FAA related to the evaluation of Boeing’s 737 MAX jet.
Boeing admitted in court documents that it misled the FAA about the functionality of the Maneuvering Characteristics Augmentation System (MCAS), which allegedly affected the Boeing 737 MAX’s flight control system.
In the wake of the settlement, Boeing increased 737 production and deliveries to get more MAX jets into the air.
In the fall of 2023, MAX production problems arose, further raising doubts about Boeing’s safety and manufacturing systems.Boeing in August due to supplier issues improperly drilled holesAnd in December, Boeing asked its airline partners to inspect all 737 MAX jets. loose hardware Airplane rudder control system.
Boeing’s safety and production problems reached an all-time low after a door plug exploded mid-air on an Alaska Airlines 737-MAX 9 passenger plane on January 5th. The aftermath of this incident led to new investigations and oversight by the FAA. Start of new criminal investigation By the Department of Justice.
Boeing Chief Financial Officer Brian West said this at an investor conference last week. Calhoun’s decision to stop travelingBoeing’s commitment to safety and better production would improve dramatically if airline production was sometimes done out of sequence.
But with new criminal investigations, rising cash burn rates in 2024, and a further slowdown in 737 MAX production after the Alaska Airlines scandal, Calhoun is effectively running out of time and perhaps investor patience to get Boeing back on track. It means that the amount has been used up.
With additional reporting from Yahoo Finance’s Pras Subramanian.
For the latest stock market news and in-depth analysis of price-moving events, click here.
Read the latest financial and business news from Yahoo Finance
