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Why did Boeing CEO Dave Calhoun step down?

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USA (Commonwealth Union)_ Boeing CEO Dave Calhoun is slated to step down before the year end, marking a significant shift in leadership in response to the extensive safety crisis that has plagued the aerospace giant. This decision comes in the wake of a harrowing safety crisis triggered by a mid-air panel blowout aboard a 737 MAX aircraft in January. In addition to Calhoun’s departure, Boeing has disclosed that Stan Deal, the President and CEO of Boeing Commercial Airplanes, will also retire from his position. Accordingly, Stephanie Pope is set to assume leadership of this sector. Concurrently, Steve Mollenkopf has been appointed as the new chairman of the board.

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The leadership transition comes after the alarming mid-air incident involving an Alaska Airlines-operated MAX 9 jet carrying 171 passengers pushed the company into a vortex of safety concerns and reputational damage. In the aftermath of the incident, Boeing finds itself under intense regulatory scrutiny, with US authorities halting production while the company strives to address safety and quality issues. In a bid to get greater control over its supply chain, Boeing is engaged in discussions to acquire its former subsidiary, Spirit AeroSystems.

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During the unsettling ordeal, a Boeing Co. 737 Max jet, operated by Alaska Airlines, was forced into an emergency landing at Portland International Airport. The aircraft had ascended to just over 16,000 feet when a panel detached from its side, leaving behind a noticeable rectangular hole. This incident prompted Alaska Airlines to ground all its Boeing 737-9 aircraft. According to reports from Alaska Airlines, Flight 1282 was carrying 171 passengers and six flight crew members from Portland to Ontario, California. While passengers experienced a sudden rush of air and incurred minor injuries, there were fortunately no serious casualties.

Notably, a team of US airline CEOs had separate meetings with Boeing directors, expressing apprehension over the Alaska Airlines 737 MAX 9 accident. This display of concern underscores the gravity of the manufacturer’s crisis and raises questions about Calhoun’s leadership efficacy. Calhoun, known for his extensive experience in navigating crises, assumed the CEO role in January 2020 with the formidable task of steering Boeing through a series of hardships stemming from the two MAX crashes and a pandemic-induced downturn in demand for new aircraft.

Following the Alaska Airlines incident, the Federal Aviation Administration (FAA) imposed restrictions on Boeing’s production, capping it at 38 jets per month. However, according to CFO Brian West, the company had not even reached that threshold. The ongoing safety crisis surrounding Boeing’s 737 MAX jets was further compounded by the January mid-air panel blowout. In response, US regulators temporarily grounded certain planes for safety assessments, an action less severe than the worldwide grounding of all MAX-family jets nearly five years ago after two fatal crashes. Below is an overview of recent events concerning Boeing’s MAX planes:

  • In October 2018, a Lion Air MAX plane crashed in Indonesia, claiming the lives of all 189 individuals on board.
  • In November 2018, both the FAA and Boeing announced their evaluation of the necessity for software or design alterations to 737 MAX jets following the Lion Air tragedy.
  • By March 2019, an Ethiopian Airlines MAX crash resulted in the loss of all 157 passengers and crew on board, prompting China’s aviation regulator to become the first worldwide to ground the MAX, followed by others including the FAA.
  • In April 2019, the FAA assembled an international team to assess the safety of the 737 MAX, coinciding with Boeing’s reduction of monthly production by nearly 20%.
  • July 2019 witnessed Boeing recording its largest quarterly loss to date.
  • By September 2019, Boeing’s board of directors established a permanent safety committee to supervise the development, manufacturing, and operation of its aircraft.
  • In October 2019, Kevin McAllister, the top executive of Boeing’s commercial airplanes division, was dismissed.
  • December 2020 saw the dismissal of CEO Dennis Muilenburg in the aftermath of the twin crashes.
  • In January 2020, Boeing suspended 737 production, marking its most significant assembly-line halt in over two decades.
  • By May 2020, Boeing resumed 737 MAX production at a reduced rate.
  • In June 2020, Boeing commenced a series of prolonged flight tests for its redesigned 737 MAX under regulatory supervision.
  • September 2020 saw a US House of Representatives panel concluding an 18-month investigation, which revealed failures in Boeing’s design and development processes for the MAX, along with deficiencies in transparency with the FAA.
  • November 2020 marked the lifting of the grounding order by the US FAA, allowing the 737 MAX to return to service.
  • December 2020 witnessed the passing of legislation reforming FAA certification processes, including enhanced disclosure requirements for manufacturers.
  • By January 2021, the European Union Aviation Safety Agency had approved the MAX’s re-entry into service in Europe.
  • March 2021 saw China’s aviation regulator expressing significant safety concerns with the MAX, necessitating resolution before conducting flight tests.
  • In April 2021, Boeing halted 737 MAX deliveries due to electrical issues affecting part of the fleet.
  • November 2021 witnessed a $237.5 million settlement between current and former Boeing directors and shareholders over safety oversight of the 737 MAX.
  • By October 2022, the FAA informed Boeing of incomplete documentation in the certification review of the 737 MAX 7, necessitating reassessment.
  • In December 2022, Congress extended a deadline for new cockpit alert standards following intense lobbying from Boeing.
  • April 2023 saw Boeing pausing deliveries of certain 737 MAXs due to supplier quality issues.
  • July 2023 witnessed the delay of Boeing’s first delivery of the 737 MAX 7 to 2024.
  • In August 2023, Boeing identified a new supplier quality problem concerning improperly drilled holes on the aft pressure bulkhead of the 737 MAX.
  • By September 2023, Boeing’s 737 MAX deliveries declined to their lowest levels since August 2021.
  • December 2023 marked Boeing’s first direct delivery of a 787 Dreamliner to China since 2019, potentially signaling a thaw in relations for MAX deliveries.
  • In January 2024, an Alaska Air emergency landing involving a 737 MAX 9 prompted the FAA to ground 171 of these jets temporarily, initiating an investigation.
  • February 2024 saw the NTSB publishing a preliminary report on the Alaska Air incident, highlighting missing bolts on the door panel.
  • March 2024’s FAA audit of 737 MAX production identified multiple instances of non-compliance with manufacturing quality control requirements, coinciding with Boeing’s preliminary talks to acquire Spirit AeroSystems.

Overall, the ongoing financial challenges and Airbus securing orders from key Asian customers underscore Boeing’s ongoing crisis, culminating in the announcement of CEO Dave Calhoun’s impending departure and the appointment of Stephanie Pope as his successor.

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