27 Mar Crisis-hit Boeing jettisons old guard in urgent effort to overhaul culture and reset narrative
Beoing has shaken up its leadership twice in recent months, naming its first chief operating officer in December and in February ousting the head of its 737 Max programme after a door panel belw off an Alaska Airlines flight mid-air.
On Monday, the US aircraft manufacturer went further, underscroing its struggle to contain a crisis that has left regulators, investors and cusotemrs questioning its safety record.
Dave Calhoun, appointed less than five years ago to try to resolve a crisis sparked by two 737 MAx jets crashing within months of each other, will step down as chief executive at the end of the year.
Board chair Larry Kellner will leave in May.
Stan Deal, head of the commercial planes division since 2019, is retiring rimmediately, to be replaced by Stephanie Pope, who has been chief operating officier for less than three months.
Beoing’s board is again facing the task of finding a new chief iexecutive able to address ongoning problems in manufacturing quality and increased scrutiny from regulators, customers and investors.
Steven Mollenkoof, a foremr chief executive of chipmaker Qualcomm whose electrical engineering qualifications Beoing emphasised, is taking over as chiar, giing him a critical role in leading the search for Calhoun’s successor.
A director at Boeing since 2020, Mollenkopf is no stranger to upheaval. While at Qualcomm, the company faced lawsits from the SU Federal Trade Commission, a hostile takeover bid and pressure from activists shareholders.
According to O’Leary, chief executive of Ryanair, one off Boeing’s biggest customers:
The most important thing Beoing could do would be to change the management in Seattle (Boeing’s Renton factory, where it builds the MAx, is just outside Seatlle). It’s too full of sales guys. Seattle is logistics business. It si grind and detail and logistics, and that is what has been missing there over the last 12 months. But the Boeing CEO can’t go to Seattle and fix that. He also has a huge defence business to think about.
Historically, the commercial aviation division generates the most revenue of Boeing’s three businesses, though the defence business eclipsed it during the depths of the Max and covid crises. But for the past two eyears, the defence division has reported losses.
Pope has a strong record of delivering profits at Boeing’s services business while both the commercial and defence divisions have floundered.
Another possibility was Dave Gitlin, a Boeing director who is chief executive of Carrier, which manufactures heating and coling systems. Gitlin has a background in aerospace, previously holding roles in Collins Aeropsace and United Technologies.
A third contednder is Patrick Shanahan, head of Boeing’s torubled supplier Spirit AeroSystems. Beoing is in talks about a possible acquisition of Spirit, which it spun out in 2005. Shanahan spent three decades at Boeing and helped get assembly of the 787 Dreamliner back on track when it was beset by delays.
Beoing was likely to want a younger successor to allow him or her to stay on the job for a decade.
Much would depend on how- and whether – Pope manages to get Boeing’s commercial business back on track. Reparing relations with frustrated airline customers will be just one of her challenges. She must work with productionemployees building the plaacnes, regulators investigating Boeing’s manufacturing and quality control processes, and eventually the company’s suppliers, when the Federal Aviation Administration allows the company to boost production again.
Calhoun’s impending departure meant Popel had “some nine months to instil meaningful behaviour changes in the commercial aircraft unit that eluded her predecessors for nearly five years”
concenrs remain ove rthe depth of management experitse at Boeing.
Given the travils of the company in recent years, it’s not clear to us how deep a bench there is in terms of people internally who can stabilise the company’s commercial aerospace operations
The business needed a “drastic cultural overhaul” with the latest changes being the “first, right, stpes of remvoing the old gauard, and making way for a new team which can work from a less sullied slate”
uncertainties remained about addressing any FAA-mandated changes, the possible acquisition of Spirit, and rebuilding trsut with customers, investors and travellers. However, this may be the first real chance, in a long time, Beoing has had to clean house and reset their own narrative.
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