Boeing has announced that David Calhoun, the current President and chief executive officer (CEO) of the manufacturer, will step down at the end of 2024, with other company executives also retiring or not seeking re-election for their positions.
In a message to Boeing employees, which the manufacturer shared publicly, Calhoun said that the Alaska Airlines flight AS1282 incident, when a door plug blew out from a Boeing 737 MAX 9, was a watershed moment for the company.
“We must continue to respond to this accident with humility and complete transparency. We also must inculcate a total commitment to safety and quality at every level of our company.”
While Calhoun expressed that he believes Boeing will come through its current adversity as a better company, the executive stated that it was the right time for a CEO transition at the planemaker. As a result, 2024 will be the last year that Calhoun will act as the chief executive of the company.
However, Calhoun’s letter did not indicate whether the executive would abandon his position as President of Boeing. Calhoun replaced Dennis Muilenburg in December 2019 while the company was still dealing with the fallout following the two fatal Boeing 737 MAX crashes in Indonesia and Ethiopia.
Nevertheless, Calhoun emphasized that the company’s board has been prepared for the transitionary process, which will result in a number of changes at Boeing. For one, Larry Kellner, the current Chairman of the Board of Boeing, has informed Calhoun that he will not seek re-election for his position at the upcoming annual general meeting (AGM), which should happen in April 2024.
Steve Mollenkopf should replace Kellner, with the former leading the process of finding a new CEO for Boeing. According to Calhoun, after being the chairman for more than four years and 13 years on the company’s board, Kellner decided it was best that a new chair select the CEO they would accompany.
Meanwhile, Stan Deal, the current president and CEO of Boeing Commercial Airplanes (BCA), will also retire. Deal will be replaced by Stephanie Pope, who has been the chief operating officer (COO) of Boeing since January 2024.
Reacting to the news, the company’s shares were trading up to 3% higher during pre-market trading than it closed on March 22 at the time of writing, possibly indicating a positive response from Wall Street.
Nevertheless, in April 2021, Boeing raised the minimum mandatory retirement age for its CEO from 65 to 70, allowing the then-64-year-old Calhoun to continue serving his role for a couple of years. The 66-year-old executive could have served as the CEO of Boeing for four more years until he would be forced into retirement.
While Calhoun led Boeing out of the 737 MAX crisis, with the FAA leading the way with the type’s ungrounding in November 2020, the executive has had to deal with several issues of his own, most recently the Alaska Airlines door plug event. The incident resulted in the FAA, as well as other stakeholders, scrutinizing the manufacturer’s quality control processes even more.
At the same time, Boeing has struggled to certify the 777X, as well as the 737 MAX 7 and MAX 10. The Alaska Airlines incident only threw another spanner into the works, and, for example, Boeing was forced to withdraw its exemption request for the 737 MAX 7’s anti-ice system for the engine’s nacelles.
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