With the company facing mounting losses and a damaged
reputation due to the 737 Max crisis, the Boeing board of directors has forced
the resignation of CEO Dennis Muilenberg.
He’ll be replaced by current board chairman David Calhoun.
Photo Credit: Dennis Muilenberg
“The board of directors decided that a change in leadership
was necessary to restore confidence in the company moving forward as it works
to repair relationships with regulators, customers, and all other stakeholders,”
the company said.
The move came a week after Boeing’s Dec. 16 decision to temporarily
halt production of the 737 Max, which has been grounded worldwide since March.
Regulators have set no timeline for recertification of the aircraft. The
grounding followed Max crashes in October 2018 and March
2019. The accidents killed a combined 346 people. The crashes were caused by a faulty
sensor, which transmitted erroneous information to the planes’ automated
flight-control system, leading the aircraft to nosedive.
Muilenberg, who had been the Boeing CEO since 2015, has been
criticized for initially defraying responsibility for the crashes, though he
eventually apologized to the families of the crash victims. Boeing and
Muilenberg have subsequently come under withering criticism as investigations
revealed that the aerospace manufacturer failed to properly inform the FAA as
it increased the impact of the automated flight-control system over the course
of the aircraft’s design.
Boeing’s decision to keep the 737 Max in the air after the
first of the two crashes, involving Lion Air of Indonesia, has also been
questioned.
In October, Boeing stripped Muilenberg of his role as
chairman of the company and moved Calhoun, then the board’s lead non-executive
director, into the chairman’s seat. But Muilenberg retained the CEO post.
“The board has full confidence in Dennis as CEO and believes
this division of labor will enable maximum focus on running the business with
the board playing an active oversight role,” Calhoun said at the time.
But instead, the 737 Max crisis continued to deepen as regulators
defied Boeing’s expectations by making it clear they would not recertify the
aircraft ahead of the new year, causing the company to halt production. Through
the third quarter, Boeing had already reported realized and estimated losses due
to the Max grounding of $9.2 billion, a figure that is sure to climb much
higher.
Calhoun is currently senior managing director of the
investment firm Blackstone. Formerly, he was CEO of Nielsen. He’ll take the
helm on Jan. 13, a giving him time to step down from all non-Boeing
commitments, the company said. Boeing CFO Greg Smith will serve as interim CEO
during the brief interlude.