Boeing CEO Dave Calhoun To Step Down; Stock Climbs

(RTTNews) - After being in the lead role during the tumultus years of Boeing Co., Dave Calhoun announced his intention to step down as the Chief Executive Officer of the aerospace and defence major. The company further announced a new Board Chair as well as a new CEO for its major division, Boeing Commercial Airplanes.

Following the news, Boeing shares were gaining around 1.3 percent on the NYSE to trade at $191.37. The shares gained around 4 percent in pre-marke activity.

Boeing, which has been facing headwinds especially after the January 5 incident involving a new, Boeing 737-9 MAX aircraft, issued Monday a statement, announcing the major changes to its Board and Management.

Calling the Alaska Airlines Flight 1282 accident a watershed moment for Boeing, Calhoun, in a letter to employees, said, "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."

Calhoun, Boeing's CEO since January 13, 2020, announced his decision to step down from the role at the end of 2024. He will continue to lead the firm through the year to complete the critical work underway to stabilize the firm.

The company also appointed Steve Mollenkopf as its new independent board chair, succeeding Larry Kellner, who announced his decision not to stand for re-election at annual meeting. In this role, Mollenkopf will lead the board's process of selecting Boeing's next CEO. Kellner has served on the Boeing Board for 13 years and served as its chair since late 2019.

In addition, the firm named Stephanie Pope Boeing Commercial Airplanes CEO, effective immediately. She succeeds Stan Deal, who will retire from his role and the company. Pope has been serving as chief operating officer of Boeing since January of this year, prior to which she was president and chief executive officer of Boeing Global Services.

Boeing, with its 108-year history and a strong 170,000 employee count, has been offering commercial airplanes, defense products and space systems for customers in more than 150 countries.

In his address to the employees, Calhoun acknowledged that they have been working together for the last five years to address some of the most significant challenges the firm and the industry have ever faced.

Boeing' latest issues started in March 2019 when 737 MAX, which was then the world's biggest-selling aircraft, was grounded worldwide following two accidents within just six months, which together claimed 346 lives. However, the Federal Aviation Administration lifted its 20-month safety ban on the 737 Max aircraft in mid November 2020.

The company had also halted deliveries of the 787 Dreamliner during this time due to manufacturing defects.

Then came the global pandemic which halted the international traffic, and with it, the demand for airplanes. In 2020, Boeing reported a sharp drop in deliveries across its commercial and defense operations, the lowest since 1978. It also recorded weak orders for the year.

Amid the slow recovery over the next years, the company had to face the grounding of its 737 MAX 9 airplanes in January this year by the FAA after a mid-cabin door plug from Alaska Airlines' Boeing 737-9 MAX airplane blew out in the middle of the flight.

The federal regulator had also started a probe into Boeing's manufacturing practices and production lines, including those involving subcontractor Spirit AeroSystems.

In early March, the FAA announced that its production audit of Boeing and Spirit AeroSystems identified multiple quality control lapses, and halted production expansion of the Boeing 737 MAX.

Calhoun now said he became CEO in 2020, stepping down as board chair in the process, because of the unprecedented circumstances the company was facing at that time.

"I am confident that the way we have confronted these challenges, and how we are responding to this specific moment, is establishing standards for future generations of employees and will be woven into the fabric of how we operate for decades to come..... As we begin this period of transition, I want to assure you, 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," Calhoun said.