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?
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