Boeing CEO Dave Calhoun to resign —
setting up succession fight following
Alaska Air door blowout
Boeing CEO Dave Calhoun is resigning effective at the end of 2024. AFP via Getty ImagesBoeing CEO Dave Calhoun pulled the ripcord on his turbulent tenure – setting off a succession battle as the aerospace giant grapples with a string of problems including the Alaska Air door blowout.
Calhoun said Monday he will step down at the end of the year amid a wider shakeup that also includes the company’s chairman, Larry Kellner, who will exit the board of directors in May, and Stan Deal, president and CEO of Boeing Commercial Airplanes, who is resigning effective immediately.
Steve Mollenkopf, former CEO of tech giant Qualcomm, will be Boeing’s new board chairman, succeeding Kellner.
Others on the short-list floated by Wall Street analysts were Mollenkopf himself and Pat Shanahan, former deputy defense secretary under Donald Trump, who took over as CEO of Spirit AeroSystems last year, the Wall Street Journal reported.
However, Shanahan’s ascent could face difficulty, considering his company was the parts supplier behind the door disaster in January that resulted in an emergency landing – and has led to safety scrutiny by the feds.
“They need more than just a shakeup at the CEO and the chairman of the board level… they’re just paralyzed from making decisions,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
“The problems in Boeing’s executive suite are systemic. Nothing is going to change for the better without company leadership acknowledging their failures and thoroughly committing to fixing them,” added Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace, which represents more than 19,000 workers at Boeing and Spirit AeroSystems.
Nevertheless, news of the leadership overhaul was positively received by Ryanair CEO Michael O’Leary, who said on Monday that he “welcomed these much-needed management changes.”
Ryanair was one of several carriers that had to cut flights as a result of safety inspections that were carried out in the wake of the near-disaster.
The company’s stock, which has fallen by some 25% since the start of the year, closed up 1.4% at $191.43 on Monday.
Last week, The Wall Street Journal reported that a group of CEOs from major US-based airlines requested a meeting with Boeing’s board to express concerns over production problems.
On Jan. 5, the rear door plug of a Boeing 737 Max 9 passenger plane operated by Alaska Airlines came loose in mid-flight – resulting in the FAA ordering the grounding of the same model of aircraft for weeks.
Calhoun — who fought back tears while “acknowledging our mistake” that caused the blowout at 16,000 feet and led to an emergency landing — reportedly encouraged the meetings between the CEOs and the company’s board.
The grounding of the jets resulted in thousands of canceled flights by Alaska and United Airlines.
Preliminary investigations found that loose bolts that needed tightening may have been to blame for the incident.
In late January, the FAA gave the green light for the Max 9 jets to be put back into service.
Last month, the National Transportation Safety Board issued initial findings of their investigation which concluded that bolts were missing from the Alaska Airlines jet.
Earlier this month, the FAA released the results of an audit of Boeing and Spirit AeroSystems, its main supplier.
While investigating Boeing supplier Spirit AeroSystems in response to the door plug blowout, the agency found that mechanics were using hotel key cards and liquid dish soap as makeshift tools to test compliance.
The agency said that it “found multiple instances where the companies allegedly failed to comply with manufacturing quality control requirements.”
Days later, the head of the NTSB, Jennifer Homendy, told Congress that Boeing did not fully cooperate with its investigation.
On March 8, Ziad Ojakli, Boeing executive vice president of government operations, wrote in a letter to Sen. Maria Cantwell (D-Wa.) that the company could not find any documents on the “opening and closing of the door plug.”
The next day, John Barnett, a former Boeing quality control manager who blew the whistle on the company’s practices at the Charleston, SC plant, where he worked, was found dead of a self-inflicted gunshot wound, according to authorities.
Barnett filed a whistleblower complaint against Boeing in court in 2017.
The NTSB said it would hold an investigative hearing on Boeing in early August.
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