An aerial photo shows Boeing 737 Max planes parked on the tarmac at the Boeing factory in Renton, Washington, on March 21, 2019.
Lindsey Wasson | Reuters
Boeing Help Wanted.
CEO Dave Calhoun announced Monday that he is stepping down from the aerospace giant’s top job at the end of the year as the company grapples with a safety and production quality crisis linked to its 737 Max plane. Boeing said he would begin a search for Calhoun’s replacement.
Boeing also announced Monday that it is replacing chairman Larry Kellner and the chief executive of its all-important commercial aircraft unit, Stan Deal.
Calhoun told CNBC on Monday that the decision to retire was “100 percent” his and that he will be involved in finding his successor. His departure comes as no surprise given his struggles in recent months.
Boeing customers had been frustrated under Calhoun’s watch as they dealt with the fallout from recurring quality issues covering programs like the 737 Max, the 787 Dreamliner and the two 747s that will serve as Air Force One aircraft.
“We need someone to fix Boeing,” a senior airline executive, who was not authorized to speak to the media, told CNBC after Boeing announced a management shakeup on Monday. “They definitely needed a change.”
With supply chain issues, quality gaps and more regulator scrutiny after a board explosion from Alaska Airlines 737 Max 9 in January, deliveries of the planes are arriving late, and airline executives say the problems have forced them to change their deployment and fleet plans.
Executives at Boeing customers told CNBC they want the company’s new leader to have manufacturing acumen, expertise in the highly regulated and technical world of aviation and, perhaps most difficult of all, the ability to rally Boeing employees and ensure a safety culture, consistency. and innovation.
“This will be a difficult role to fill. You will need someone with a tremendous amount of energy and dedication,” said John Plueger, CEO of Air Lease, a major buyer of Boeing planes that leases them to airlines. “You don’t want anybody for two years. You want somebody at the head of the ship for as long as possible.”
Boeing’s next boss will have to deal not only with the company’s internal difficulties, but also with lost market share to competitors Airbus. Meanwhile, China is promoting the construction of its own commercial aircraft.
“I want someone who knows how to operate a large, long-cycle business like ours,” Calhoun told CNBC in an interview Monday, announcing his departure. “It’s not just the production of the airplane. It’s the development of the next airplane. Our next chief will develop … the next airplane for the Boeing Company.”
Financial analysts applauded the time Boeing is taking to find Calhoun’s replacement. Four-year Boeing board member Steve Mollenkopf, a former Qualcomm CEO who will serve as independent chairman of the board, will lead the investigation.
“It provides leadership continuity that a crazy change wouldn’t, and CEO Dave Calhoun clearly agrees with the need to strengthen security,” TD Cowen analyst Cai von Rumohr said in a note Monday.
While Boeing hasn’t commented on its top candidates, here’s who aviation experts say could potentially lead Boeing:
Larry Culp
Larry Culp, chairman and CEO of General Electric Co., speaks during the Semafor World Economy Summit in Washington, DC, Wednesday, April 12, 2023.
Al Drago | Bloomberg | Getty Images
General Electric CEO Larry Culp is “probably at the top of the list for a Boeing CEO,” said Richard Aboulafia, managing director at AeroDynamic Advisory, an aviation consulting firm.
Culp will lead GE’s soon-to-be spun-off aerospace unit, a company that makes and repairs engines that power both Boeing and rival Airbus planes. Culp led a turnaround for the conglomerate and oversaw the breakup of the company.
“The relationship with Boeing has never been stronger,” Culp told reporters earlier this month at an investor event. “Clearly, 2024 didn’t turn out the way they would have liked, let alone the way we would have liked. We’re trying to support them in any way we can.”
But Culp is focusing on GE’s aerospace unit as a standalone company, a GE spokesman said in response to questions about his possible future at Boeing.
Pat Shanahan
Pat Shanahan, then senior vice president of Boeing Commercial Airplanes programs, speaks during the opening of the new Boeing 737 Delivery Center on October 19, 2015 in Seattle, Washington.
Stephen Brashear | Getty Images
Pat Shanahan, its interim CEO Spirit AeroSystemsis another possibility, Aboulafia said.
A three-decade Boeing veteran, Shanahan was appointed last October to head the Boeing supplier, which makes fuselages for the company’s 737 Max and other components, as Spirit grappled with its own quality problems that have been passed on to Boeing.
Boeing is in talks to buy Spirit, bringing the fuselage maker back in-house after it spun off nearly two decades ago. A reunion could of course bring Shanahan as CEO of the merged company.
“Mr. Shanahan remains solely focused on driving a culture of zero defects across all aspects of Spirit AeroSystems,” Spirit spokesman Joe Buccino told CNBC on Monday.
David Gitlin
David Gitlin, CEO of Carrier Global Corp., during a televised interview with Bloomberg on day three of the World Economic Forum (WEF) in Davos, Switzerland, Wednesday, May 25, 2022.
Jason Alden | Bloomberg | Getty Images
Abulafia also mentioned Carrier Chairman and CEO David Gitlin, who serves on Boeing’s board of directors;
Gitlin has experience in aviation, previously serving as president and chief operating officer at Collins Aerospace. Aviation experts said it would need someone with a strong background in manufacturing and business.
The carrier did not respond to a request for comment.
Stephanie Pope
Boeing’s Stephanie Pope gives a press conference at Le Bourget airport in Paris on June 20, 2023.
Geoffroy Van Der Hasselt | AFP | Getty Images
Stephanie Pope, who was recently promoted to chief operating officer after serving as head of Boeing’s global services unit, is the most obvious internal choice to succeed Calhoun. (Former Boeing CFO Greg Smith retired from the company in 2021. He was also considered as a possible successor.)
But Pope will take over from Deal, who is retiring as head of Boeing’s commercial airplanes division. And an air force official questioned why Boeing would not have announced its appointment on Monday if it had been the option.
“The management changes are intended to institutionalize a priority for safety across the company, bringing in new blood,” TD Cowen’s von Rumohr wrote.
— CNBC’s Phil LeBeau contributed to this report.