- Boeing announced Monday that CEO Dave Calhoun will step down at the end of the year.
- This makes him the second consecutive Secretary of State to experience the 737 Max crisis.
- Lawyers for crash victims say he failed to prioritize safety over profit.
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On Monday morning, Dave Calhoun became the second consecutive Boeing CEO to lose his job in the wake of the 737 Max crisis.
The company announced that he would step down at the end of the year, and was immediately replaced by Stan Deal, Boeing’s head of commercial aircraft.
Calhoun, a former Boeing Co. chairman, became CEO in 2020 after Dennis Muilenburg was removed from the company’s board of directors. A year later, Boeing raised the retirement age from 65 to 70. This was an indication that Mr. Calhoun, then 64 years old, believed he could continue to fly the aircraft. Hard.
Muilenburg was fired as the company fought for its reputation after two 737 Max 8 crashes in 2018 and 2019 that killed 346 people.
The company was accused of putting profits before safety as it rushed production of the Max to compete with the Airbus A320neo, which broke orders at the 2011 Paris Air Show.
In the longest grounding of a U.S. airliner in history, the 737 Max was grounded 10 months into the Calhoun administration.
Under his leadership, the company worked to reassure both customers and the general public that Max was safe. MCASthe software that played a key role in the crash now relies on two sensors instead of one and is easier for pilots to override.
In 2021, Boeing paid $2.5 billion in a deferred prosecution agreement to resolve charges that it defrauded the Federal Aviation Administration by misleading the agency about MCAS.
Families of victims of the 737 Max 8 crash attended then-CEO Dennis Muilenburg’s Senate testimony.
Win McNamee/Getty Images
Most people’s concerns about the 737 Max appeared to be over until the Alaska Airlines explosion on January 5th.
The fact that the incident occurred on a jet that had been delivered just 66 days earlier immediately raised alarms that the manufacturer, rather than the airline’s maintenance issues, was to blame.
The National Transportation Safety Board said in a preliminary report that a 737 Max 9 abandoned at a Boeing factory was missing a key bolt that secures a door plug, causing it to come loose in mid-air.
The Justice Department is currently considering whether the incident violates a deferred prosecution agreement, and the FBI has sent letters to passengers in the explosion saying they may be victims of a crime.
“A watershed moment occurred many years ago when nearly 400 people died in the Boeing Max 8 crash,” Bob Clifford, lead attorney in a pending federal lawsuit against the families of victims of the 2019 Ethiopian Airlines crash, said in an email. It should have been.”
“If the company had taken the Max crash seriously, the Alaska Airlines debacle could have been avoided, and the company is on track to recovery, ensuring the safety of the public on board its planes.” “I would have done that,” he added.
About 40% of news coverage about Calhoun was negative last quarter, compared to 50% this quarter, according to data from media monitoring firm Mac Luck.
Maintenance problems at United Airlines, Boeing Co.’s biggest customer, also led to bad headlines for the plane maker, including a tire falling off a 777 plane. Although Boeing was not to blame, the explosions have heightened attention to the aircraft manufacturer’s problems.
In the wake of the Alaska Airlines explosion, there has been a surge in reports about Boeing.
Provided by Mackrack
But airline leaders appear to have the most influence over Boeing’s delayed delivery of its new jet.
wall street journal We first reported last Saturday that airline CEOs had requested a meeting with Boeing’s board to discuss their grievances. The meeting has not yet taken place, but the leaders of United Airlines, Southwest Airlines, Alaska Airlines and American Airlines called it a symbolic vote of no confidence in Mr. Calhoun. air current report.
Boeing declined to comment when contacted by Business Insider.
“His resignation is a long time coming. The embattled leader has lost faith in Boeing products after years of design and manufacturing problems,” Timothy Hubbard, assistant professor of business administration at the University of Notre Dame, said in an email to BI. We’ve had a hard time getting it back.” ”
He added that Boeing’s culture around safety and quality needs to change, but that it was “unfortunate” that it would take nine months for a new CEO to take over and manage the process.
“This delay may reflect poor succession planning or Mr. Calhoun’s desire to remain in power a little longer,” Hubbard said.
In an interview with CNBC after the announcement, Calhoun said the decision to step down was “100 percent” his own.
He added that Boeing has a “bad habit” of focusing too much on delivering planes on time, suggesting that “the movement of the plane is more important than the first-time quality of the product.” He added that he is doing so.
This is notable, given that the company has often faced criticism for putting profits over safety.
For example, Clifford said, “The victims’ families knew that when Mr. Calhoun took office in January 2020, the culture of profit over safety remained the same. Because that’s how I was raised.”
Dave Calhoun served as chairman of Boeing’s board of directors before becoming CEO.
David Ryder/Reuters
Last September, the newspaper reported that Boeing staffers were unhappy about Mr. Calhoun’s use of a private jet to commute to work. He added that he rarely showed up at the company’s headquarters, even as executives encouraged employees to return to the office after the pandemic.
Critics also point to the distance between Boeing’s headquarters in Virginia and the 737 factory near Seattle as evidence that safety is not a priority. In February, the board blocked an attempt by shareholders to force a vote to move Boeing’s headquarters to its historic home.
Mr. Calhoun’s interview with CNBC, which took place in Renton, Washington, where the 737 is manufactured, is a sign of the company’s renewed focus on manufacturing.
So far, the outgoing CEO seems to agree with his critics. In a memo to his employees, Calhoun said the company must “put safety and quality at the forefront of everything we do.”
“The next CEO must understand that his role is to prioritize safety, not just profits,” said Kreindler & Kreindler partner and CEO of 34 families of Max 8 accident victims. Justin Green, an attorney for the company, said in an email.
Green praised the personnel changes but called for “full transparency” about any changes to the manufacturing process.
“For too long, Boeing has avoided public accountability, and this leadership change opens up an opportunity for the company to do so,” he added.