Boeing Strips CEO of Chairman's Job -- Update
October 11 2019 - 7:52PM
Dow Jones News
By Andrew Tangel
Boeing Co.'s board stripped Chief Executive Dennis Muilenburg of
his dual role as chairman on Friday in an unexpected shake-up at
the highest ranks of the company amid the prolonged crisis of its
737 MAX plane.
Boeing said it took the action to allow Mr. Muilenburg to focus
on returning the MAX fleet to service after it was grounded
world-wide in March following two fatal crashes within less than
five months.
The leadership change came hours after a panel or air-safety
experts sharply criticized Boeing and the U.S. Federal Aviation
Administration for missteps that led to the crashes that killed all
346 people on flights in Indonesia and Ethiopia.
David Calhoun, a private-equity executive who has been the
board's lead director, will become its chairman, the company said.
The board has "full confidence in Dennis as CEO and believes this
division of labor will enable maximum focus on running the business
with the board playing an active oversight role," Mr. Calhoun said
in a statement.
Getting control of the crisis proved challenging for Mr.
Muilenburg, who is slated to testify before a House committee in
Washington, D.C., at the end of the month.
The prolonged grounding of the MAX, the Chicago-based aerospace
giant's best-selling jet, has disrupted the plans of airlines and
passengers around the world. Boeing is considering further cutting
production or temporarily shutting down MAX assembly at the Renton,
Wash., factory where the airplane is built.
The manufacturer has faced repeated setbacks in working to get
the MAX flying again. An update to the MAX flight-control software
to fix problems with the jet had previously been expected to gain
FAA approval as early as April. The discovery of another flaw has
added to delays.
Boeing hasn't yet submitted the revised software for FAA
approval amid scrutiny by aviation regulators, further pushing back
the aircraft's return to passenger service.
Three U.S. operators of the MAX -- United Airlines Holdings
Inc., American Airlines Group Inc. and Southwest AIrlines Co. --
don't expect to again fly passengers on the aircraft until early
next year.
Mr. Muilenburg said he fully supported the board's move and said
the team was focused on returning the 737 MAX safely to service.
Mr. Muilenburg will remain a director on the board. Boeing said it
also plans to name a new director with "deep safety experience and
expertise" to serve on the board's newly formed safety
committee.
Boeing's shares were little changed in aftermarket trading, but
the biggest U.S. exporter has lost around $30 billion in market
value since the Ethiopian Airlines crash in March.
Earlier this year, Boeing shareholders rejected a proposal for
an independent chairman following criticism of the company's
response to the two 737 MAX crashes. The push for an independent
chairman was rejected by 66% of shares. The 34% vote in support of
the proposal compared with a 25% favorable vote for a similar
measure last year.
After an April shareholder meeting, Mr. Muilenburg didn't
respond directly to questions about whether he had considered
resigning. "I am very focused on safety," he said.
--Robert Wall contributed to this article.
Write to Andrew Tangel at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
October 11, 2019 19:37 ET (23:37 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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