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. 

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