Boeing Leadership Shake-Up After 737 Max Incident: But 'Will This Change Be Enough?'

This year’s troubles at Boeing Co BA prompted promises of fast action on quality control, and over the past couple of days the company has announced a leadership shake-up.

Following the blow out of a door panel in mid-flight on one of its 737 Max 9 airliners in early January, the company admitted it had made mistakes — so-called “quality escapes” — which prompted regulatory scrutiny of the company’s safety record.

Shares of the aerospace manufacturer have fallen around 20% since the incident as it remains under investigation from the Federal Aviation Administration (FAA).

On Feb. 6, the newly appointed chief of the FAA told a Congressional subcommittee that scrutiny of Boeing was being increased.

Michael Whitaker said: “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.”

Also Read: Boeing Announces Leadership Shift For Troubled 737 Max Program After Recent Episode

Management Reshuffle

Boeing is now responding and on Thursday announced the appointment of Uma Amuluru as new human resources officer, replacing Michael D’Ambrose, ahead of crucial contract talks with the company’s largest union.

This appointment came a day after the company said it was replacing Ed Clark, the vice president of its 737 MAX program, with Katie Ringgold, who steps up from her previous role as VP of 737 Delivery Operations.

Meanwhile, Elizabeth Lund was named senior VP of Boeing Commercial Airplanes (BCA) Quality. Her previous role as senior VP of all BCA programs will be filled by Mike Fleming.

Positive Move, But Questions Remain

“We view the appointment of Lund as a positive,” said Ronald Epstein, analyst at Bank of America.

He added: “Lund brings with her over three decades of aerospace experience and is well respected in the industry as a strong operator and technical expert.”

The analyst said that the appointment of Ringgold may help Boeing usher in a new era with a culture more focused on quality and safety, but questioned whether the moves would be enough to help restore confidence in the manufacturer.

“The latest quality escape is only one of many which has been brought to the light in recent years,” said Epstein.

He added: “We continue to see it as fair for investors to ask, ‘will this change be enough?’, and if not, how high-up should the changes reach.”

Bank of America maintained a Neutral rating on Boeing and a price target of $225.

BA Price Check: Shares were up 0.27% at $202.04 at the time of publication Thursday.

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