Boeing Fires CEO, Picks Interesting Replacement

Filed Under: Misc.

Boeing has had a really rough year with the grounding of the 737 MAX globally following two fatal crashes. That was bad enough, but all the scandals that have emerged following this have left a lot of us in shock regarding the culture of what was once a very respected company.

In late October, Boeing’s CEO of Commercial Airplanes was fired, and today a much bigger leadership change has been announced.

Boeing Fires CEO Dennis Muilenburg

Boeing CEO Dennis Muilenburg has “resigned” from his position as CEO of Boeing and Chairman of the Board effective immediately.

Boeing’s Board of Directors has named current non-Executive Chairman, David Calhoun, as the new CEO and President of the company. He will take the role effective January 13, 2020.

Boeing’s current Chief Financial Officer, Greg Smith, will serve as interim CEO over the next few weeks, while Calhoun exits his non-Boeing commitments.

In a statement, the company says that 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 says it will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA, other global regulators, and customers.

Lawrence Kellner, Boeing’s new non-Executive Chairman of the Board, said the following:

“On behalf of the entire Board of Directors, I am pleased that Dave has agreed to lead Boeing at this critical juncture. Dave has deep industry experience and a proven track record of strong leadership, and he recognizes the challenges we must confront. The Board and I look forward to working with him and the rest of the Boeing team to ensure that today marks a new way forward for our company.”

A Leadership Change Is Overdue At Boeing

Muilenburg has been CEO of Boeing since July 2015, so he served in the position for almost four and a half years. There’s no denying that he had an incredible career at Boeing, as he spent almost his entire career at the company. And I also commend Boeing for the extent to which they hire from within.

That being said, there’s no denying that the way that Boeing has handled the entire 737 MAX crisis has been nothing short of appalling. It sure seems like the company has been much more focused on saving face and getting the plane back in the sky than they’ve been on actually going through the correct certification process and taking accountability for their actions.

I definitely think Muilenburg has made significant mistakes, though I suspect that’s part of a larger culture problem at Boeing, as the company has always appeared to me to be rather proud and arrogant. The company has had a hard time reconciling that philosophy with the situation they’ve faced in recent months.

While this probably mostly isn’t directly his fault, if confidence in the company is going to be restored, the company needs to take a radically different approach, and that needs to start with new leadership.

Who Is Boeing’s New CEO?

Interestingly Boeing seems to be taking a new leadership direction with the appointment of Calhoun. He’s the global head of private equity at Blackstone, and Executive Chairman of Nielsen, after being CEO at the company from 2006 to 2013.

Prior to that he was the Vice Chairman of General Electric and CEO of GE Infrastructure, so he’s not an outsider to the aviation industry as such (GE is a huge aircraft engine manufacturer).

So he’s not a lifelong Boeing employee in the same way that many of Boeing’s other senior executives are. That being said, he has been on the Board of Directors of Boeing for the past decade, so he’s not fully “new blood,” even if he hasn’t been involved in running the company day-do-day.

Calhoun had the following the following to say about his new role:

“I strongly believe in the future of Boeing and the 737 MAX. I am honored to lead this great company and the 150,000 dedicated employees who are working hard to create the future of aviation.”

Bottom Line

I’m surprised it took Boeing this long to replace Muilenburg. It’s clear the company needed to take a new direction, and to regain public trust they needed someone else at the helm.

It’s also interesting to see them choose a non-airline guy for the new role, which is a very un-Boeing thing to do. Perhaps what Boeing needs right now is something that’s radically different than what they’d usually do.

What do you make of Boeing firing Muilenburg, and the new appointment?

Comments
  1. Dave Calhoun used to run GE Infrastructure which included GE Aviation. So hardly someone who doesn’t understand the industry. Plus he has been on the board of Caterpillar, another heavy industrial equipment manufacturer.

  2. The future of the 737 Max is whatever they do it is still a fundamentally aerodynamically flawed product. Good luck to the new CEO trying to sort this mess out.

  3. Finally!
    Although I have read two news articles in the last 10 days which for the first time talk about “if” the 737 Max returns service, rather than ‘when’. Any thoughts on that here?

  4. Honestly, he should have been fired after the second crash, when he called Trump to ask him not to ground the Max jets. That alone showed he didn’t get it, and he has continually since shown that he doesn’t get it.

  5. Great, they fired an engineer and replaced him with a finance guy. Expect more cost cutting and unsafe airplanes in the future.

  6. Unfortunately the problem at Boeing now stems from the injection of McDonnell Douglas DNA into Boeing, Which occurred when. Boeing’s purchase of MD in the late ‘90s effectively turned into a ‘reverse takeover’ as MD leadership took over most senior positions at the combined firm.

    To start reversing the influence of that (deeply flawed) corporate culture, a wholesale change in leadership across the c-suite is needed. A good first sign that Boeing was getting back to its engineering roots would be a move of corporate HQ back to Seattle, where their engineers actually sit, rather than leading remotely from Chicago. Don’t hold your breath though…

  7. Totally agree with @Kerry about the damage done to Boeing’s “culture” by the move to Chicago. The “new” leadership absolutely must realistically deal with the future (or lack thereof) of the MAX before confidence will be restored to Boeing.

  8. @Laurel
    You nailed it. A finance guy. Next thing you know, Boeing is bought up by a PE firm, which will split Boeing. Their defense business will thrive and their commercial business will rot and die before a merger with Bombardier.

  9. Boeing’s aggressive PR stance and bullying of anyone that doesn’t agree with its narrative has been more off-putting than the actual crashes. It’s become clear it is a deeply immoral and untrustworthy company.

  10. This is probably irrational/foolish, but I’d feel so much better as a passenger knowing they fired every engineer who worked on MCAS, and replaced them with a new team who is tearing MCAS apart and rebuilding it as part of recertification.

  11. Good news for Boeing, but should have been done months ago. I would have loved to see them hire Alan Mulally as the CEO for a few years, but he is probably too happy being retired to take over the mess that is currently Boeing.

  12. As an engineer myself (not in aviation though) I would have much rather seen a new Boeing CEO whose main priority is adhering to high safety/testing/design engineer standards. Hiring a finance guy doesn’t really give me the confidence that Boeing will fix its mistakes with the 737MAX. If anything, I foresee cost cutting and layoffs.
    Given Calhoun’s previous work experience at high management positions, he can probably retire comfortably now at age 62. Boeing must have offered him a lot of $$$ as he’s going to Boeing with a lot of mess to fix!

  13. Way overdue. But I can guarantee he is leaving with his pockets full of money. He could not care less about being fired and his severance plus bonuses will make it a very nice Christmas for him.

  14. If Boeing really are looking for a culture change and someone who understands the industry but has a different perspective and set of priorities it’s a pity they didn’t look further. Perhaps across the Atlantic to a town called Toulouse where there are a lot of people who know a lot about building aircraft, safely.

    It will take more than one appointee to change the culture at Boeing, they need a whole new team at the top and then they need to decide to scrap the Max and take back all existing models.

  15. Airbus fanboy shit aside (don’t worry, your number will come up eventually), this is a welcome sign. Day 1 of this shit and I was wondering how Muilenburg was holding on to his job. This level of a shitstorm only happens when there’s a fundamental disconnect between the top and the factory floor. Ditching Chicago might not be a horrible idea. Why not just pull an Amazon and have coHQs in Seattle and DC? There are obvious synergies between commercial and defense, just ask Airbus nee EADS, so a complete devolution isn’t warranted. But maybe a looser association with each side getting more independence in how to run things.

  16. This is probably irrational/foolish, but I’d feel so much better as a passenger knowing they fired every engineer who worked on MCAS,

    From what I understand objections were raised by rank and file engineers. The problem was that management began to feel that people who brought up problems were troublemakers and not team players. As a result you’d get one chance to object, maybe two, but after that you needed to keep your mouth shut if you wanted to keep your job.

    Boeing needs to be ruthless in rooting that culture out. Starting from the top is a good start.

  17. Muilenberg had to stay this long to announce the production stop and the further delays so it doesn’t fall on his successor. This way the new guy can stay fresh and is not connected to the negativity.

    The interesting question: At which company will Muilenberg re-appear next year? Any bets?

  18. Boeing is just window dressing. Their long list of loser CEO’ s started with Condit in the 90’s. It certainly wont get any better with a finance clown in charge. It will give the appearance that Boeing is “taking action” and give Wall Street an insulin boost, for the ahort term.

    This CEO will make millions as long as another crash doesn’t happen on his watch. But a crash with this unairworthy POS will happen. Boeing is just playing Russian Roulette. But its the passengers, machinists, and engineers that will eventually take the bullet for their gross incompetence and negligence.

    Muilenberg and the entire Corporate Board should be in jail right now, not revolving between CEO billets and unearned golden parachutes.

  19. Can’t understand the logic in total honesty. Fires the CEO (which makes logic) and replaces him with the Chairman who has even backed MAX in the aftermath of the tragedies?

  20. Ben your usually pretty knowledgeable on your subjects but in this case you leave something to be desired

    Dennis A. Muilenburg replaced James McNerney Jr. a former GE aviation head before that James Bell an interm CEO then Harry C. Stonecipher a McDonnald Douglas CEO and then we get to where Boeing promoted from within with Phil Condit who was a life long Boeing employee

  21. After all that we’ve seen and heard from Boeing over the last year, can anyone seriously be shocked they picked a Finance guy as the replacement?

    The company is definitely going to be facing some difficult financial times ahead, which (as we’ve seen over the last few months) is 110% their priority. Safety was secondary before all if this, so of course safety is going to be taking a back seat as Boeing’s commercial division keeps costing them big money.

  22. all the stuff about an “engineering” CEO being replaced by a “finance” CEO – it was the engineering guy who presided over this disaster … so don’t really see how another engineering guy would necessarily be superior !

    and if Boeing won’t appoint a properly external CEO, then at least the new CEO hasn’t spent his whole career there – which seems like a step in the right direction.

    and totally agree that Boeing HQ should move back to Seattle, as a step towards give aeroplane engineering back the status it once had.

  23. Can’t see this as an improvement as Boeing has only gone down the toilet since it’s had ex-GE execs running the show – even GE no longer has GE execs running the show.

    With his skills maybe they are looking to sell Boeing Commercial – sure Chinese or Japanese would buy it – and would definitely run it better.

  24. @Alex said: It’s become clear it is a deeply immoral and untrustworthy company.

    Check out the recognizable names on their board of directors.

  25. I’m generally oppose to firing for show but the 737MAX problem was so big that the CEO had to go. He was not expected to commit suicide so not the worst. Best of luck, CEO.

  26. @Mark – thought I was the only one who had that view of ex GE execs. Dont forget Boeing’s problems started with Jim McNerney and his fumbling the whole MAX situation. I am very excited to see Larry Kellner back in Aviation (remember when he ran CO and it was highly profitable and customer centric operation?).

  27. Boeing has never hired an airline guy as the CEO. It’s always been somebody from the defense side. Boeing is a defense contractor with an commercial airplane business on the side.

    Alan Mulally, who worked his way up from the 777 project and was the head of Boeing Commercial Airplanes, learned this as he was passed over for promotion, so he left for Ford.

  28. Good riddance. Dennis Muilenburg needs to go and so does the flying coffin 737 MAX. Boeing’s heydays are gone and no amount of window dressing can change that.

  29. Boeing needs to purge the MD guys, move HQ back to Seattle, and make a long term deal with the unions and come up with a MOM and a 737 replacement. That being said naysayers remember that the A319 had a nasty habit if flying into the ground and its one stretch away from a cluster like the max

  30. Passengers (and possibly flight attendants and pilots) will boycott the MAX even if it is re-certified. Changes in staff, no matter how senior, aren’t going to change that.

  31. John we can ask the rest of the world especially Europe when will they quit leaching off the US. After all we are the ones that spend our tax dollars for defense, so Europe doesn’t have to

  32. Jwak
    the early airbus narrow bodies had a nasty habit of flying themselves into the ground. At least two did. Their issue is that the computer in certain situations will not allow the pilot to take control of the aircraft. Not sure if its been fixed or not.

  33. Facts check: Since its first flight in August 1995, there have been no fatal accidents recorded involving the Airbus A319 as of today. However, Boeing 737 MAX only started flying since January 2016 and already had in 2 major crashes causing 346 deaths. Anybody who still try to defend Boeing’s credibility in handling the disasterous 737 MAX needs to have his brain checked.

  34. >The future of the 737 Max is whatever they do it is still a fundamentally
    >aerodynamically flawed product.

    And therein lies the problem. To properly fix the Max you can either get rid of MCAS and try and certify the aircraft as a totally new wide body that requires a different type rating to fly, or you can get rid of MCAS, put CFMs under the wings, and make the changes needed to make it similar enough to the -900 that it doesn’t.

    But there is no other legitimate path forward that can make it a good, safe jet.

  35. Unfortunately the problem can be laid at the feet of Jim McNerney, the last time they replaced an in house engineer guy with a finance guy, a Jack Welch “trained”, former McKinsey consultant. He was in charge when the decision was made to scrap the single aisle replacement for the 1962 design. Haven’t heard any suggestion yet that his golden parachute should be clawed back.
    As reported, he told financial analysts that running a company on the basis of “every 25 years a big moonshot, produce a 707 or a 787, that’s the wrong way to pursue this business. The more-for-less world will not let you produce moonshots.”
    Increase the stock price, increase my compensation is the norm today.
    I wonder if Boeing has a skunkworks type operation working on a new design or are they too busy with tamping down the fire caused by their current “problem?”
    Mullenburg seems more the scapegoat than the cause of the problem, an engineer not a PR guy. Hard to see how changing corporate pilots fixes a flawed design.

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