Boeing fired CEO Dennis Muilenburg following Boeing 737 Max crash issues
On Monday (December 21),
Boeing (BA) fired its CEO, Dennis Muilenburg. The company said it replaced him with
the company’s chairman as the organization struggles to regain the trust of
regulators, customers and the public in the wake of two fatal crashes of its
best-selling plane, the 737 Max.
Muilenberg was fired with the immediate effect, and Chairman David Calhoun will become the CEO on Jan. 13.
The transition period will allow him to exit his non-Boeing commitments. Board
member Lawrence Kellner will become Boeing’s nonexecutive chairman with
immediate effect.
This decision is coming
after Boeing's attempts to contain one of its biggest crises in history has
been futile, disrupting its relationships with its airline customers and its
pilots who have complained about broken trust.
At the beginning of the
month, the Federal Aviation Administration admonished Boeing for pushing an
unrealistic timeline for the planes’ return to service. The two crashes in
Indonesia in October 2018 and in Ethiopia last March claimed 346 lives.
This past weekend, Boeing
had a major challenge. 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. However, the craft returned safely to Earth on Sunday.
CFO Greg Smith, who has
become the interim CEO, said in a note to employees announcing the reshuffle, “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,”
The FAA in a statement
said, “Our first priority is safety, and we have set no timeframe for when the
work will be completed. We expect that Boeing will support that process by
focusing on the quality and timeliness of data submittals for FAA review, as
well as being transparent in its relationship with the FAA as safety
regulator.”
Earlier this month, Boeing
said it was going to suspend production of the 737 Max early next year. Boeing has
been resisting calls to replace Muilenburg. The board removed him 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 he would not rule out fining Boeing for
failure to make disclosures about the 737 Max.
Muilenburg who was an
engineer became the CEO in 2015 and had been with the company since he was an
intern. Boeing replaced Kevin McAllister, the head of its commercial airplane
unit, shortly after removing Muilenburg as chairman. Stan Deal, a three-decade
Boeing employee who most recently led its global services business, replaced
McAllister.
Calhoun has been on
Boeing’s board since 2009. In October, he took on the role of non-executive
chairman. Calhoun was once a senior managing director at Blackstone, and worked
at General Electric for more than two decades.
Kellner, who now will
become chairman, is the former CEO of Continental Airlines. He has been on
Boeing’s board since 2011.
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