Key Takeaways
- Boeing CEO Dave Calhoun announced Monday that he will step down at the end of 2024.
- The company also announced a new independent board chair, as Larry Kellner won’t seek re-election to the position, and named a new CEO of the company’s Commercial Airplanes division.
- The executive shakeup follows incidents—such as a door plug coming loose from an Alaska Airlines flight—that have sparked criticism and investigations into the company’s production and safety policies.
- Boeing shares, which have fallen sharply this year, rose in early trading Monday after news of the management shakeup.
Boeing Co. (BA) said Monday Chief Executive Officer Dave Calhoun plans to step down at the end of 2024 as part of a broader management shakeup at the aircraft manufacturer, which has faced production and quality issues that have led to investigations and a steep share-price decline.
In addition to Calhoun’s departure, independent board chair Larry Kellner won’t seek re-election at this year’s annual shareholders meeting, and Boeing Commercial Airplanes CEO Stan Deal is retiring, the company announced Monday.
The executive changes come amid a rocky 2024 for Boeing, which through the end of last week had lost about a quarter of its value already this year as issues with its 737 Max planes have led to criticism and investigations from regulators and law enforcement.
Boeing shares were up 0.9% at $190.53 at around 10:45 a.m. ET Monday.
“The eyes of the world are on us, and I know that we will come through this moment a better company,” Calhoun said in a letter to employees. “We will remain squarely focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do.”
Aaron Schwartz / NurPhoto / Getty Images
Boeing Chief Operating Officer Stephanie Pope will replace Deal as CEO of Boeing’s Commercial Airplanes division, and former Qualcomm Inc. (QCOM) CEO Steve Mollenkopf will be the new board chair, and lead the search for a new CEO.
“With Dave’s decision to step down as CEO at the end of this year, now is the right time for a transition to my successor,” Kellner said. “Steve is the ideal next leader to take on the role of board chair, and it is important that the CEO selection process be led by a new chair who will stay at the helm as a partner to the new CEO.”
Bank of America’s Ronald Epstein said in a research note that the changes at Boeing are “a positive for investors, the aerospace and defense industry, and passengers overall,” noting that the company was in need of drastic change.
“This may be the first real chance, in a long time, Boeing has had to clean house and reset their own narrative,” Epstein said. “While we view the changes as a positive, uncertainties remain, and we reiterate our Neutral rating,” he added.
Most notable in 2024’s issues for Boeing was a Jan. 5 Alaska Airlines (ALK) flight in which a door plug detached mid-flight, forcing the plane to make an emergency landing. The incident led to the grounding of a number of Boeing planes and several investigations, raising concerns about Boeing’s production safety practices as bolts were found to be loose or missing on a number of planes.
The airplane manufacturer also suspended its forward guidance earlier this year as it investigated the January incident and planes were grounded, and other production numbers that came in below expectations have also hurt the stock in recent quarters.
Reports also emerged earlier this month that the Department of Justice was interviewing crew and passengers from the Alaska Airlines flight as part of an investigation into whether Boeing violated a settlement over a pair of 737 Max crashes in 2018 and 2019.
UPDATE: This article was updated after publication with a photo of Boeing CEO Dave Calhoun, comments from an analyst and the company’s latest share price.