BA Boeing Co

By Andrew Tangel 

Boeing Co. has replaced Kevin McAllister as head of its commercial airplanes unit, making him the highest-profile departure from the company as a result of the crisis surrounding its 737 MAX airliner.

Stan Deal, head of Boeing's fast-growing services unit, will succeed the former General Electric Co. executive who joined the p[lane-maker about three years ago, the company said Tuesday.

The executive reshuffle comes on the eve of Boeing's quarterly earnings. Investors expect Boeing to take additional charges as the grounding of the MAX moves into its eighth month following two deadly crashes, with a return to service not expected until early next year.

Mr. McAllister joined Boeing in November 2016 as president and chief executive of Boeing Commercial Airplanes, where he was credited by analysts with improving its production system, but he has faced criticism from some airlines over his communication surrounding the grounding of the MAX and efforts to return it to service.

Mr. McAllister's tenure has been marked by problems that extend beyond the MAX. Various Boeing airplane programs have suffered setbacks in recent years, including the delayed introduction of the latest wide-body 777X and U.S. Air Force criticism of the company's military tanker.

The departure comes after a two-day board meeting in San Antonio that took place as the company's crisis deepened, and 10 days after Chief Executive Dennis Muilenburg was stripped of his chairman role at the world's largest aerospace company by sales. He remains CEO, with David Calhoun, a senior executive at the Blackstone Group Inc., taking on the chairman role. Mr. McAllister's departure was earlier reported by the New York Times,

Mr. Deal, a 33-year company veteran, previously ran Boeing Global Services, which Mr. Muilenburg aims to grow into a $50 billion-a-year business. He will be succeeded by Ted Colbert, Boeing's current chief information officer.

Attempts to reach Mr. McAllister weren't immediately successful. In a statement, he said: "Boeing is a great company with a commitment to safety I have seen firsthand working side-by-side with many thousands of tremendously talented and dedicated employees."

Mr. Deal was picked to run Boeing's new services arm two years ago when the company consolidated its units providing parts and training for commercial and military aircraft in an effort to boost market share.

The services market is larger and more profitable than the jetliner business, and Boeing's push under Mr. Deal has upset some suppliers.

Write to Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

October 22, 2019 16:09 ET (20:09 GMT)

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