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Boeing fires CEO Dennis Muilenburg, as the company struggles with 737 Max crisis

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Boeing 737 Max: BOEING

Boeing on Monday said it replaced CEO Dennis Muilenburg, effective immediately. Chairman David Calhoun will become the manufacturer’s new CEO in January.
By CNBC
Lawrence Kellner is tapped as chairman.The company has been struggling to regain the trust of regulators, customers and the public after two fatal crashes of its best-selling plane, the 737 Max.

Boeing has fired CEO Dennis Muilenburg and said Monday it replaced him with the company’s chairman as the manufacturer struggles to regain the trust of regulators, customers and the public after two fatal crashes of its best-selling plane, the 737 Max.

Chairman David Calhoun will become the manufacturer’s new CEO on Jan. 13. The transition period will allow him to exit his non-Boeing commitments. Board member Lawrence Kellner will become Boeing’s non-executive chairman of the board, effective immediately.

Boeing shares rose 2.5% in morning trading.

The resulting turmoil from the crashes has consumed Boeing. The two crashes sparked numerous investigations, including a federal criminal probe, about the aircraft’s development and certification by the Federal Aviation Administration in 2017. Earlier this month, Boeing said it would suspend production of the 737 Max early next year.

The company’s board removed Muilenburg as chairman in October saying he could better focus on bringing the Max back to service, a process that has been delayed by additional questions from regulators. Earlier this month, the FAA’s chief said that he would not rule out fining Boeing for failure to make disclosures about the 737 Max.

Muilenburg became CEO in 2015 and had been with the company since he was an intern.

Boeing replaced the head of its commercial airplane unit, Kevin McAllister, shortly after removing Muilenburg as chairman. Stan Deal, a three-decade Boeing employee who most recently led its global services business, replaced McAllister.

In addition to the Max problem, Boeing suffered a major embarrassment this weekend with its Starliner space capsule. Its autonomous flight control system fired at the wrong time shortly after launch, putting Starliner in the wrong orbit. A planned docking with the International Space Station to deliver supplies had to be aborted. The craft did safely return to Earth on Sunday.

Greg Smith, Boeing’s CFO became the company’s interim CEO and sent the following note to employees on Monday:

Colleagues, This morning, Boeing announced leadership changes made by our Board of Directors:

Dave Calhoun, currently Chairman of the Board, will become Chief Executive Officer of Boeing on January 13, 2020.

Larry Kellner, currently a Board director, will become Chairman of the Board effective immediately.

Dennis Muilenburg has resigned from his positions as CEO and Board director effective immediately.

I will serve as interim CEO during the brief transition period as Dave Calhoun prepares to assume leadership of the company.

The Board determined that a change in leadership was necessary to restore confidence in the company moving forward and that we will proceed with a renewed commitment to full transparency, including effective and proactive communications with the FAA, other global regulators and our customers.

On a personal note, I want to extend my deep gratitude to Dennis for his deep and abiding commitment to Boeing as CEO over these past four years, and for his nearly 35 years of service to the company. Dennis gave his all to the company under extraordinarily difficult circumstances. I look forward to working closely with Dave Calhoun, whom I have known for a very long time.

Dave and I share a mutual respect for one another, and I know we will work well together as we chart a new direction for Boeing. This has obviously been a difficult time for our company, and our people have pulled together in extraordinary ways. Over the next few weeks as we transition to new leadership, I am committed to ensuring above all that we meet the needs of our stakeholders – especially our regulators, customers and employees – with transparency and humility.

I am confident in our new leadership and I believe in our team — we have a plan in place, and it is very important that all of us remain focused on the tasks at hand. While this has been an extremely difficult year for all of us at Boeing, I firmly believe we are taking the right steps to reinforce the best in our values and to put the Company on the right path for a strong future. While today brings important changes for our company, I am also reminded of the many things that will remain exactly the same.

We will continue to operate according to our purpose and values in service of our customers, business partners, regulators, and other stakeholders. I want to thank you for going above and beyond expectations during what has been an extremely challenging year. I hope you are able to enjoy some time with loved ones and friends during these holidays. I am so proud to work alongside you all as part of this great company.

Greg

—— AUTO – GENERATED; Published (Halifax Canada Time AST) on: December 23, 2019 at 11:48AM

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