Abu Dhabi, UAESaturday 19 September 2020

Boeing chief executive Dennis Muilenburg ousted as Max crisis drags on

Chief financial officer Greg Smith appointed interim chief executive during 'brief transition period', US plane maker says

Dennis Muilenburg, centre, pictured in October, appearing before the US Senate Committee on Commerce, Science and Transportation hearing on 'Aviation Safety and the Future of Boeing's 737 MAX' in Washington. EPA
Dennis Muilenburg, centre, pictured in October, appearing before the US Senate Committee on Commerce, Science and Transportation hearing on 'Aviation Safety and the Future of Boeing's 737 MAX' in Washington. EPA

Boeing said its chief executive Dennis Muilenburg has resigned from his position with immediate effect as the aerospace giant grapples with a series of setbacks after two fatal crashes grounded its best-selling 737 Max jet.

The US company’s board of directors appointed chairman David Calhoun as chief executive and president, starting on January 13, Boeing said on Monday. Boeing shares rose 3.3 per cent in New York to $339.10 (Dh1,245.53) at 6.50pm UAE time after the announcement. The company also said chief financial officer Greg Smith was appointed interim chief executive during the “brief” transition period.

“The board of directors 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,” Boeing said.

The top management change comes as the world’s biggest aerospace company faced a grim year marked by the worst crisis in its 103-year history.

Its best-selling industry workhorse has been grounded for nine months after the two tragedies in Indonesia and Ethiopia within a span of five months claimed 346 lives.

The disasters rocked the aviation industry, leading to multiple regulatory and criminal investigations that have damaged Boeing’s reputation, shattered travellers’ confidence in the plane, and also hurt airlines and suppliers.

Mr Calhoun, who has served as chairman since October, will remain a member of the board. Another board member Lawrence Kellner will become non-executive chairman of the board.

Mr Muilenburg’s exit comes at a critical time as the company is struggling to win regulatory approval to return the grounded jet to commercial service while trying to win back the trust of the public and repair the confidence of airline customers.

“Under the company’s new leadership, Boeing will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA, other global regulators and its customers,” Boeing said.

Mr Calhoun reiterated his confidence in the embattled aircraft. “I strongly believe in the future of Boeing and the 737 Max,” he said.

“I am honoured to lead this great company and the 150,000 dedicated employees who are working hard to create the future of aviation.”

Mr Muilenburg, who started at Boeing as an intern in 1985, ended his 34-year service at the company after attempting to navigate through a series of setbacks following the two disasters and ensuing grounding and investigations.

It proved a tumultous year for the Boeing chief executive, capped by the company’s decision this month to suspend production of the 737 Max in January amid growing uncertainty about when US regulators would clear the jet for commercial flight. The company had stripped Mr Muilenburg of his chairman role in October to allow focus on bringing the Max to service, a process that has been delayed many times by regulators. Mr Muilenburg’s relationship with the US Federal Aviation Administration also deteriorated after perceptions that Boeing was trying to pressure the agency into clearing the plane to fly again.

After a gruelling two-day testimony before Congress in October, Mr Muilenburg faced heavy criticism from policymakers and the families of the crash victims, amid repeated calls for him to be ousted.

Adding insult to injury for Boeing on Sunday was the embarrassment caused by its Starliner spacecraft, which failed to accomplish its mission of docking at the International Space Station.

Updated: December 24, 2019 12:37 PM

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