Boeing CEO out amid effort to 'restore confidence' in planemaker
Boeing CEO Dennis Muilenburg is out, resigning more than nine months in to the global grounding of the planemaker's bread-and-butter 737 MAX.
Mulienburg, whose resignation is effective immediately, will temporarily be succeeded by Boeing chief financial officer Greg Smith. The Chicago-based company's chairman David Calhoun will permanently replace Muilenburg as president and CEO on Jan. 13.
The leadership change -- just two days before Christmas -- is part of an effort by the Board of Directors to "restore confidence in the company," Boeing said in a statement Monday.
The New York Times is reporting he was fired, but the company press release calls it a resignation.
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"[Calhoun] has deep industry experience and a proven track record of strong leadership, and he recognizes the challenges we must confront," said Lawrence Kellner, the newly appointed non-executive chairman of Boeing's board, in the statement. "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."
Calhoun has been on Boeing's board since 2009, and became chairman in October. He has worked at private equity firm Blackstone, and previously led General Electric's aircraft engine business, according to The Wall Street Journal.
"David Calhoun is respected, and will provide a much better outside image for Boeing... That will provide the company with short-term stability," Teal Group aerospace analyst Richard Aboulafia told TPG.
Other analysts agree that Calhoun is a good choice to restore confidence in the planemaker. Cowen analyst Cai von Rumohr said in a report Monday that he is expected to focus on "closer coordination with all regulatory bodies and customers to rebuild confidence." In addition, he anticipates the new CEO will take a more cautious approach on forecasting the MAX's return to service.
Calhoun's tenure as CEO of Boeing may be short. While Aboulafia considers him a good choice now, he questions what Calhoun is the right man to lead the planemaker long term.
"Boeing isn't exactly lacking in [Calhoun's] financial management skills, and they're probably wrong for an engineering company that needs to restore its program management and new product development capabilities," said Aboulafia.
Related: Boeing to suspend 737 MAX production
Muilenburg, who took over the top spot at Boeing in 2015, has seen the planemaker's reputation take a beating following two fatal crashes of the 737 MAX that took the lives of 346 people in a five month period. The crashes were followed by the grounding of jet in March, which continues to this day -- with no clear timeline of when the plane will return to the skies.
American Airlines and Southwest Airlines have pulled the jets from their schedules through April, while United Airlines has pulled it through June citing a lack of clarity in the return-to-service timeline.
An engineer by training, Muilenburg was Boeing's president and chief operating officer with a reputation for cutting costs and pushing automation before taking the CEO job.
"He’s an engineer," said former Boeing Commercial CEO Jim Albaugh on Muilenburg in an interview with The Wall Street Journal in 2015. "He likes to gather all the facts and data and to the extent that he can get a consensus he’ll go for that.”
Muilenburg inherited the MAX program only six months before the jet took its maiden flight in January 2016, and well into the certification process. While he did not oversee the development of the aircraft, he has received criticism for how he has handled the grounding.
This is a developing story and we will update it as more information becomes available.