In an attempt to control the ongoing crises with the Boeing 737MAX and other projects in the company, Boeing has ousted its Chief Executive Officer, Dennis Muilenburg on Monday, December 23, 2019. Mr Muilenburg will leave his position with immediate effect.
David L. Calhoun, who was recently appointed as the Chairman of the company, shall take Muilenburg’s place on January 13, 2020. Until then, Chief Financial Officer, Greg Smith shall serve as the interim executive.
The manufacturer was in an arduous phase after the 737 MAX was grounded since March 2019, following the deadly crashes of Ethiopian Airlines and Lion Air. Just last week, Boeing stated it would cease the production of 737 MAX aircraft. The manufacturer has severely dented its reputation among airlines, aviation authorities and pilot unions alike; and has been hurt substantially by its rutted communication with regulators and lawmakers.
Mr. Muilenburg had repeatedly made over-optimistic statements about the 737 MAX returning to service, which created a multitude of issues for the airlines, leading to cancellation of a plethora of flights and a loss of billions of dollars. The Federal Aviation Administration (F.A.A.) head, Steve Dickinson, also recently criticised Mr. Muilenburg for pressurising the F.A.A. into taking quicker action on the 737 MAX re-certification process.
Mr. David Calhoun, the current Chairman, shall take over as the Company Executive, come January. Image Credits: leehamnews.com
On the financial side of the crisis, the stock of Boeing has fell by 22% since March 2019, costing the company more than $8b, and affecting a supply chain that supports more than 8000 companies. Furthermore, on Friday (December 20, 2019), a Boeing space capsule which was designed for NASA failed in its attempt to reach the correct orbit, thereby, crushing the company’s morale.
In a statement issued by its Board of Directors, Boeing said:
‘(It was) decided that a change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders.’
The report also stated that ‘Boeing will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA, other global regulators and its customers’.
Image Credits: Boeing
In a note sent to all employees today morning, Mr. Greg Smith stated that:
‘Boeing would proceed with a renewed commitment to full transparency, including effective and proactive communications with the F.A.A., other global regulators and our customers.’
As Boeing seeks a new direction, we should all also ask ourselves; What responsibility does the Board of directors hold in all of this? It’s important to remember that the CEO’s main job is to execute the vision of the Board. If a company is heading in the wrong direction, especially in terms of culture, the Board should are the ones ultimately responsible for that.
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This post has first appeared in the TRAVEL RADAR website but has been edited for content and headline by the Mentour Pilot team.