U.S. airline executives rose in a rebellion and deposed Boeing’s senior leadership, including CEO Dave Calhoun.
The company’s heavyweight American clients insisted on a boardroom meeting without Calhoun. The chief executive officer, chairman, and leader of Boeing’s commercial aircraft division were all ousted due to a forced reorganization. Airlines are demanding more significant changes, including appointing a manufacturing expert as CEO, in response to the jet supply’s ongoing uncertainty.
According to former Air Canada CEO Calin Rovinescu, the airline community had requested a change in strategy, not a Band-Aid.
Five years after the second of two deadly disasters grounded the MAX, Boeing’s tragedy on January 5th was the last straw. Fewer aircraft are available for delivery because regulations have reduced Boeing’s output, and airlines have adjusted their plans to accommodate the continuous delays.
After safety board reports highlighted manufacturing chain problems, Boeing had difficulty convincing customers it could withstand intense examination. The critical event occurred last week when the chief executive officers of four large US MAX customers—American, Southwest, United, and Alaska—demanded a meeting with the board to voice their dissatisfaction with the lack of progress. Instead, Boeing chairman Larry Kellner proposed arranging bilateral meetings. But that move was thwarted over the weekend by the Boeing board, which agreed to the staggered exits of Stan Deal (CEO of planemaking), Kellner, and Calhoun—the latter three were succeeded by chief operating officer Stephanie Pope.
The term used to characterize the management change at Boeing was “fired by its customers.” According to those in the know, this was the most extensive purge of upper-level executives since 2003, when CEO Phil Condit stepped down after dismissing the company’s finance director over a military contract controversy.
Late in January, further loose bolts were discovered, culminating in weeks of mounting pressure from the industry and authorities.
The severity of the intervention this month shocked some in the boardroom and showed how shaky the trust was in Boeing’s once-firm control over reliability and safety concerns.
