Boeing’s CEO steps down, and shares go up

Fired Boeing CEO Dennis Muilenburg.
Fired Boeing CEO Dennis Muilenburg.
Image: Jim Young/Pool via Reuters
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Boeing CEO Dennis Muilenburg is out. The aerospace company’s boss is resigning as the firm reels from the crisis caused by crashes of its 737 MAX jetliner. David Calhoun, a board member and executive at private-equity firm Blackstone, will replace the embattled Boeing chief.

The plane manufacturer’s reputation has been battered following two fatal crashes in which more than 300 people died. Calls from the victims’ families and politicians for Muilenburg to step down have grown louder as Boeing has tried to manage the crisis. The company’s 737 MAX aircraft remain grounded and production of the model has been suspended, a disruption that could ripple through the US economy.

“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,” Boeing said in its statement.

Boeing’s shares rose by more than 3% shortly after the news of Muilenburg’s resignation, before settling at around 2% higher, at the time of writing, versus last week’s close. Since March 10, 2019, the day of Ethiopian Airlines flight 302 crash (the second 737 MAX crash in less than six months, following Lion Air Flight 610 on October 29, 2018), Boeing’s shares have fallen by around 20%.

Muilenburg joined the company as an intern in 1985 and rose through the ranks to become CEO in 2015. The aerospace engineer initially maintained that the 737 MAX was safe to fly, but was forced to change his tone (paywall) as investigations unfolded. He resigned as chief executive and board director today.

Current Boeing chairman Calhoun, who is senior managing director at Blackstone and a board member of Caterpillar, will become president and CEO of Boeing on Jan. 13. He has had a long career in American industry, including 26 years at GE, where he ran businesses such as GE Transportation and GE Aircraft Engines. Boeing CFO Greg Smith will act as interim CEO before Calhoun takes over.

Calhoun said in a statement that he strongly believes in the company, as well the 737 MAX, which has been grounded since March. “I am honored to lead this great company and the 150,000 dedicated employees who are working hard to create the future of aviation,” he said.