Boeing CEO Dave Calhoun will step down from his position by the end of the year, while the company's board chairman will resign this spring in a massive management overhaul. The decision comes as Boeing faces increased regulatory scrutiny following several incidents, including a mid-flight door blowout earlier this year.
The announcement was met with a favorable response on Wall Street, as Boeing shares surged by 4 percent by 8:45 a.m. EST during premarket trading. The company has been grappling with various safety issues for a while now, including a near-catastrophic incident on January 5, when a fuselage panel on an Alaska Airlines 737 MAX 9 jet blew off mid-flight.
Emergency Exit of Top Management
Boeing's chairman, Larry Kellner, is set to step down from the board of directors in May, while Stan Deal, who is the president and CEO of Boeing Commercial Airplanes, is resigning with immediate effect, according to reports.
The company has faced questions about several other potentially hazardous incidents this year. However, regulators, airlines, and passengers have expressed frustration over the lack of answers from Calhoun. As a result, the company's shares have plummeted 25 percent since the incident.
Steve Mollenkopf, who has been a Boeing director since 2020, will assume the role of chairman and spearhead the quest for a successor to Calhoun.
Boeing also announced that Deal's role will be assumed by Stephanie Pope, who was recently appointed Boeing's chief operating officer.
In a letter to employees announcing his resignation, Calhoun referenced putting "safety and quality at the forefront of everything that we do.
"The eyes of the world are on us, and I know that we will come through this moment a better company," Calhoun added.
After the news broke, Robert Pavlik, senior portfolio manager at Dakota Wealth said: "They need more than just a shake-up at the CEO and the chairman of the board level... they're just paralyzed from making decisions."
Boeing in Crisis
The head of the Federal Aviation Administration slammed Boeing last week, accusing the company of prioritizing "production" over "safety and quality." Administrator Michael Whitaker expressed disappointment with the aerospace giant after visiting its facilities, indicating that he was unimpressed with what he observed.
"My impressions were similar to the culture survey that just got completed at Boeing and our audit, which is that there are issues around the safety culture at Boeing," Whitaker told Lester Holt on NBC Nightly News in a segment that will air on Tuesday evening.
"Their priorities have been on production, and not on safety and quality. So what we really are focused on now, is shifting that focus, from production to safety and quality."
The FAA has put the company under rigorous scrutiny and recently mandated an audit of assembly lines at a Boeing factory near Seattle. This factory is where the company manufactures planes such as the Alaska Airlines 737 Max, which suffered a door-panel blowout.
