Boeing CEO to step down in management shakeup after blowout of 737 Max door plug

Boeing Chief Executive David Calhoun will step down from the embattled plane maker at the end of the year as part of a broader management shake-up after a series of mishaps at one of America’s most storied manufacturers.

Stan Deal, president and CEO of Boeing’s commercial airplanes unit, will retire immediately, and Stephanie Pope, the company’s chief operating officer, will lead the division.

The company said board Chairman Lawrence Kellner does not plan to stand for reelection in May.

Boeing has been under intense pressure since early January, when a panel called a door plug blew off a brand-new Alaska Airlines 737 Max. Investigators say bolts that help keep the panel in place were missing after repair work at the Boeing factory.

The Federal Aviation Administration has stepped up its scrutiny of the company, including putting a limit on production of 737s. An FAA audit of Boeing’s 737 factory near Seattle gave the company failing grades on nearly three dozen aspects of production.

Airline executives have expressed their frustration with the company, and even seemingly minor incidents involving Boeing jets have attracted extra attention.

Fallout from the Jan. 5 blowout has raised scrutiny of Boeing to its highest level since two Boeing 737 Max jets crashed, in 2018 in Indonesia and in 2019 in Ethiopia. In all, the crashes killed 346 people.

In a note Monday to employees, Calhoun, 67, called the latest accident “a watershed moment for Boeing that requires a total commitment to safety and quality at every level of our company.”

“The eyes of the world are on us, and I know we will come through this moment a better company, building on all the learnings we accumulated as we worked together to rebuild Boeing over the last number of years,” he said.

Boeing’s most significant effort to improve quality has been the opening of discussions about bringing Spirit AeroSystems, which builds fuselages for the Max and many parts for that and other Boeing planes, back into the company.

Mistakes made at Spirit, which Boeing spun off nearly 20 years ago, have compounded the company’s problems. Bringing the work of key supplier Spirit back in-house would, in theory, give Boeing more control over the quality of manufacturing crucial components.

Calhoun said the two companies are making progress in talks “and it’s very important.”

Calhoun said the decision to leave was his. He had been a Boeing director since 2009 when he became CEO in January 2020, replacing Dennis Muilenburg, who was fired in the aftermath of the Max crashes. In 2021, Boeing’s board raised the mandatory retirement age for CEO to keep Calhoun in the job.

Calhoun oversaw the Max’s return to service after a worldwide grounding that lasted nearly two years, and orders for the plane quickly picked up. Since then, however, a series of manufacturing flaws delayed deliveries of new 737s and larger 787 Dreamliners to airlines, forcing the carriers to reduce growth plans.

Boeing, based in Arlington, Va., has lost more than $23 billion since Calhoun took over, although most of that is residual damage from the two crashes. Boeing shares have fallen more than 40% in that time — 24% since the Alaska incident, through trading on Friday.

Last week, Chief Financial Officer Brian West warned that the company burned $4 billion to $4.5 billion more cash than it expected in the first quarter as it slowed down airplane production after the Alaska Airlines accident.

The company said its board has picked former Qualcomm Chief Executive Steven Mollenkopf to become the new chairman and lead the search for Calhoun’s replacement.

Shares of Boeing rose 2% at the opening bell.

Koenig writes for the Associated Press.