Boeing CEO Dave Calhoun will step down amid scrutiny over 737 Max

Three of Boeing’s top executives will leave the company ― including its chief executive, board chair and head of commercial airplanes ― as the company faces heightened scrutiny amid a host of quality control issues that came to light after a piece of an Alaska Airlines jet fell off midflight in January.

Chief executive Dave Calhoun will depart at the end of 2024, according to an announcement from the company. Board chair Larry Kellner announced he will not run for reelection at the company’s upcoming shareholder meeting, and commercial airlines CEO Stan Deal will retire from the company effective Monday.

In a letter to employees, Calhoun, 66, called the Alaska Airlines accident a “watershed moment” for Boeing.

“We must continue to respond to this accident with humility and complete transparency,” he said. “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.”

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He also thanked Deal for his “tireless service as our [Boeing Commercial Airplanes] leader during an uncommonly difficult period for our company and our industry.”

The leadership shake-up is the latest fallout from the Jan. 5 accident that has renewed scrutiny of the aerospace giant, which faces multiple investigations as well as FAA-imposed limits on its production of 737 Max jets.

A preliminary investigation by the National Transportation Safety Board indicated that four bolts needed to secure the door plug that blew out of the Alaska Airlines jet were missing. Efforts to determine why have been stymied because Boeing said it cannot produce records of the work done on that part of the plane once it arrived at its Renton, Wash., factory.

Not long after the door blowout incident, the Justice Department began interviewing witnesses in connection with a criminal investigation, while an FAA audit identified multiple issues with quality control.

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The door blowout was followed by a steady stream of often unrelated bad news, creating further headaches for company leadership.

Boeing recently alerted airlines to a potential problem with loose switches on the pilot seats of its 787 Dreamliner jets after one of them went into a nosedive on a flight from Australia to New Zealand. The company warned that the switch could press the pilot’s body against the plane’s controls if it gets stuck. John Barnett, a former Boeing employee who raised quality-control and safety concerns, was reported dead with what appeared to be a self-inflicted gunshot wound.

Calhoun took over as chief executive in January 2020, pledging greater transparency at a company reeling from fatal crashes in 2018 and 2019 that killed 346 people.

His appointment drew immediate fire from some lawmakers, who criticized the company’s board of directors for offering the former GE executive a $7 million bonus for reaching a number of milestones, including returning the 737 Max to service. Federal regulators had grounded the plane in the wake of the fatal crashes in Indonesia and Ethiopia.

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Calhoun spent 10 years on Boeing’s board of directors before stepping into the chief executive’s role in 2020, bringing with him a reputation for deep operational skills, a plain-spoken communication style and a track record of crisis management.

Even before the recent safety problems, some analysts questioned whether he had the right background to restore Boeing’s reputation for being an engineering-led company, rather than one critics charged was too focused on financial results. Before Boeing, Calhoun had been an executive at GE and Blackstone Group. In 2022, the most recent year for which data is available, Calhoun’s total compensation was $22.5 million.

The immediate departure of Deal from the company’s commercial airline division, which is responsible for the 737 Max, is also a significant change for Boeing. Deal, a nearly 40-year veteran of the company, was appointed chief executive of Boeing’s commercial airplane division in October 2019 after holding a number of senior executive positions in the division. He was the company’s senior executive in the Pacific Northwest.

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Deal is being replaced by Stephanie Pope, who most recently served as chief operating officer after more than three decades at the company. The new board chair is Steve Mollenkopf, a former Qualcomm executive who joined Boeing’s board in 2020. Mollenkopf will lead the selection of Boeing’s new chief executive after Calhoun retires.

The leadership shake-up drew mixed reactions from analysts. Such a move was largely expected and could help the company move toward broader cultural change and rebuild public confidence. However, there are also concerns that some of the most desperately needed changes will have to wait at least nine months before Calhoun retires.

“To me, the end of the year feels like a really long timeline,” said George Ferguson, a senior aerospace analyst with Bloomberg Intelligence. “This is a super important year for Boeing, and to have a caretaker in that space? Then again, maybe it’s better to have him hold it than have another person come in and run it.”

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Richard Aboulafia, managing director at AeroDynamic Advisory, said the leadership change should give the company hope.

Pope, the new head of commercial airlines, “is well-regarded, but she’s a finance person,” Aboulafia said, adding: “I’d be more encouraged with an engineer or a program manager. Still, she might be quite good in this role.”

“This delay may reflect poor succession planning or a desire by Calhoun to keep power a little longer,” said Timothy Hubbard, assistant professor of management at the University of Notre Dame’s Mendoza College of Business.

John Gradek, a lecturer in McGill University’s aviation management program, said the leadership changes were not unexpected, given the pressure the company was under. But, he said, more is needed.

“The entire board needs to resign and stand for reappointment,” Gradek said. “The employees at Boeing deserve a say, and a few board seats while we’re at it.”

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