Outgoing Boeing CEO Vows Persistence In Crisis Aftermath: 'We Have Another Mountain To Climb'

David Calhoun, the CEO of Boeing Co BA, has stepped down along with chairman Larry Kellner in the wake of an investigation by federal authorities into the January Alaska Airlines AAL incident when a door panel blew out in mid-flight.

Calhoun has said he will stay on until the end of the year, to aid the company’s efforts to rebuild its reputation, while Kellner is expected to leave following the manufacturer’s annual general meeting in May.

Following the investigation by the Federal Aviation Authority (FAA), which found a number of failures on safety issues, Boeing has also announced the immediate departure of Stan Deal, president and CEO of the company’s Commercial Airplanes division.

Clean Sweep

The departures will effectively take a fresh broom to the company leadership, following the announcements last month of several other high-level departures, including those responsible for Commercial Airplanes Quality and the president of the 737 Max program.

Asked on CNBC on Monday, why he was not departing immediately, Calhoun said: “We have another mountain to climb. Let's not avoid what happened with Alaska Air. Let's not avoid the call for action. Let's not avoid the changes that we need to make in our factories.

“We will get through that. I’ve committed myself to the board to do exactly that.”

Yet, it was problems with the 737 Max aircraft that bought Calhoun to this position in the first place.

In 2019, former CEO Dennis Muilenberg was sacked following two fatal crashes in 2018 and 2019 of 737 Max 8 planes — An Indonesian Lion Air flight that killed 189 and an Ethiopian Airlines flight from Addis Ababa that killed 157.

Also Read: Emergency Landings Put Boeing Under Further Pressure: ‘Serious Transformation’ Needed

Investors Show Little Confidence

The reaction in the share price to the Alaska Airlines incident in January — down 23% — appears to reflect that Calhoun failed in his attempts to improve on Muilenberg’s safety record. Following Monday’s announcement, shares are up 1.3%.

Earlier this month, a court in South Carolina heard testimony from a Boeing whistleblower who told of a culture of sloppy practices and management that didn’t want to hear about safety standards being violated.

The whistleblower, John Barnett, was said by his brother to have been so traumatized by his treatment after trying to report safety issues to bosses, that his mental health suffered. On the day he was to resume giving evidence at the hearing, he was discovered dead in his vehicle, having committed suicide.

Industry Reaction

Industry reactions to the departure of Calhoun and the other executives has been scant.

The FAA, when asked by Benzinga to comment, said “refer to Boeing,” but last month, recently appointed chief Michael Whitaker, told a Congressional subcommittee that he was increasing scrutiny of Boeing.

He added: “There have been issues in the past. They don’t seem to be getting resolved, so we feel like we need to have a heightened level of oversight.”

What happens now with the company following the FAA investigation remains to be seen, but it leaves many important airline companies still waiting for crucial deliveries of orders while Boeing comes to grips with its mistakes.

Michael O’Leary, CEO of Ryanair Holdings Plc RYAAY, which has 400 Boeing 737 Max 10 jets on order and a large fleet of other Boeing aircraft, said: “We welcome these much-needed management changes in Seattle.”

“We also look forward to continuing to work with Boeing CEO Dave Calhoun and CFO Brian West, and to helping Boeing recover its aircraft deliveries so that Ryanair can continue to grow strongly as Boeing's no.1 customer in Europe,” he added.

Now Read: Boeing CEO Dave Calhoun To Resign In 2024: ‘Eyes Of The World Are On Us’

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