Boeing CEO Calhoun to step down by year-end

Amid ongoing bad press over production problems and fallout from a high-profile January incident in which a 4-foot wall panel blew out of a Boeing 737 Max 9 jet cabin in mid-air, Boeing announced Monday that its president and CEO, Dave Calhoun, would step down from his position leading the embattled Arlington County-based Fortune 500 aerospace company and defense contractor by the end of 2024. 

Additionally, Boeing Board Chair Larry Kellner will not stand for re-election during the company’s April 18 annual shareholders meeting. The board has elected a new independent board chair, Steve Mollenkopf, to succeed Kellner. The former CEO of semiconductor manufacturer Qualcomm, Mollenkopf will lead the board in selecting Boeing’s next CEO. Kellner, who has chaired Boeing since 2019, joined the board 13 years ago, and Mollenkopf has been on the board since 2020.

As part of the management shakeup, Boeing Chief Operating Officer Stephanie Pope has been appointed to lead the company’s Boeing Commercial Airplanes business unit, replacing BCA President and CEO Stan Deal, who retired from Boeing effective Monday.

“It has been the greatest privilege of my life to serve Boeing,” Calhoun wrote in a letter to employees. “The eyes of the world are on us, and I know that we will come through this moment a better company. 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.”

In a statement, Mollenkopf said, “I am honored and humbled to step into this new role. I am fully confident in this company and its leadership – and together we are committed to taking the right actions to strengthen safety and quality, and to meet the needs of our customers. I also want to thank both Larry and Dave for their exceptional stewardship of Boeing during a challenging and consequential time for Boeing and the aerospace industry.”

In January, terrified Alaska Airlines passengers were exposed to open air at 16,000 feet. Reports followed that the wall panel that blew out was missing bolts and Alaska Airlines found loose bolts on other Boeing aircraft. Amid questions about whether Boeing cut corners on quality control, the incident is under investigation by the National Transportation Safety Board and the Federal Aviation Administration. The Justice Department opened a criminal investigation into the incident, and on Friday, it was announced that the FBI notified passengers of that Alaska Airlines flight that they may be crime victims.

Following the blowout, the FAA conducted a six-week examination of the company’s 737 Max jet production process, including 89 product audits. According to The New York Times, Boeing failed 33 of the audits.

The FAA halted expanded production of the 737 Max, and customer United Airlines has approached competitor Airbus. Boeing reported that it had net-zero orders for new commercial aircraft during January.

The writing was on the wall for Calhoun, with one industry veteran telling Reuters in February, “I can’t see how the CEO can survive and how he should survive.” Last week, Boeing board directors, including Kellner, said they would conduct a “listening tour” with their largest airline customers — sans Calhoun — Bloomberg reported. 

Following the Alaska Airlines incident on Jan. 5, all Boeing 737 Max jets were grounded temporarily in the U.S., although flights were allowed to resume later in the month. In February, the company announced it would rework 50 undelivered 737 Max jets after finding mistakes in drilled holes in the fuselage of some of them, Reuters reported.

Meanwhile, some Alaska Airlines passengers filed a $1 billion lawsuit against the airline and Boeing, and Boeing’s chief financial officer said in March at a Bank of America conference that the company would burn between $4 billion and $4.5 billion in the first quarter of the year because of lower delivery volume and pressure on working capital, according to Reuters.

There was more financial fallout over recent weeks, as some travelers changed plans to avoid flying on Boeing planes and air carriers said they would be cutting back flights this summer and seeking alternatives to 737 Max planes they had already ordered.

Also in March, a former Boeing quality manager-turned-whistleblower, John Barnett, was found dead of an apparently self-inflicted gunshot wound. Although he left the company years earlier, Barnett had called attention to safety concerns regarding Boeing 787 jets under construction in South Carolina, where he started working in 2010. Several former Boeing employees alerted authorities to a series of quality control problems at Boeing plants dating back several years, according to a Washington Post story. In December 2021, the Senate Commerce Committee produced a report following the two deadly 737 Max crashes in October 2018 and March 2019, documenting metal shavings and tools left on jets in production.

A Virginia Tech alumnus, Calhoun has steered Boeing through strong headwinds since becoming its CEO in 2020, including the aftermath of the deadly 737 Max crashes off the coast of Indonesia and in Ethiopia, which together claimed 346 lives. Following the January Alaska Airlines incident, Calhoun said Boeing will “cooperate fully and transparently” with federal investigators in the most recent probe.

Calhoun previously held C-suite positions at Blackstone, Nielsen Holdings and General Electric.

Boeing, which moved its headquarters to Arlington from Chicago in 2022, has about 170,000 employees worldwide, including 400 workers in Arlington.