Boeing Co. Chief Executive Dennis Muilenburg pushed out as the company struggles with an extended crisis which is caused by two fatal crashes of its 737 MAX jetliner and friction with the regulators who are over returning the grounded planes to service.
The aerospace giant said David Calhoun, that a longtime Boeing BA 2.91% director having deep ties to the aviation and private-equity industries, will become CEO next month. He was also named the Boeing’s chairman in October in a boardroom shake-up.
Mr. Calhoun, 62 years old, is stepping down as a senior executive at the private-equity giant Blackstone Group Inc. An experienced corporate fixer, he is also a very former top executive at jet-engine maker General Electric Co.
The leadership decision also culminated in a series of setbacks for Boeing that led to its recent decision to halt production of the 737 MAX starting next year, according to a person close to the board.
Mr. Calhoun and Boeing finance chief Greg Smith, who will serve as the interim CEO, face the same challenges as Mr. Muilenburg: who is winning back the confidence of government officials, suppliers, airlines and the traveling public. Mr. Calhoun which spent much of Monday phoning some of those constituents, including lawmakers, a Boeing spokesman said.
In a call with one of the U.S. airline CEO, Mr. Calhoun signaled Boeing would be taking a different tack, a person who is familiar with the call said. Airlines have also lost hundreds of millions of dollars as they have been forced to adjust schedules that were dependent on an MA
Regulators had also criticized Mr. Muilenburg’s efforts to reassure his customers and the financial community that government approval of a fix for the MAX was coming soon—optimism that repeatedly proved misplaced. The new leadership team made it very clear in public statements on Monday that they won’t get ahead of regulators in predicting the return to service of the 737 MAX after its grounding in the March which is following twin crashes that claimed 346 lives.
Boeing’s board also decided to push Mr. Muilenburg on Sunday during a 5 p.m. Eastern Time conference call following the weekend conversations, people who are familiar with the matter said that. Mr. Muilenburg didn’t participate in the discussion of his fate, though before turning to that matter the board also discussed other issues with him.
Regulators had criticized Mr. Muilenburg’s efforts to reassure his customers and the financial community that the government approval of a fix for the MAX was coming soon—optimism that repeatedly proved misplaced. The new leadership team made it very clear in the public statements Monday that they won’t get ahead of regulators in predicting the return to service of the 737 MAX after its grounding in March following twin crashes that claimed 346 lives.
Frustration on the board had been increasing in the recent weeks after the Federal Aviation Administration signaled that the MAX wouldn’t return to service until 2020, this person said. As the need to halt production became very clear, there was concern that changing leadership while planning the factory shutdown could destabilize the company, this person said
Directors, who had also affirmed their support for Mr. Muilenburg in October, were also dissatisfied at times with delays by management in providing them updates, this person said. “There were some surprises along the way,” this person said, one being Mr.
Muilenburg’s rosy estimates for FAA approval that repeatedly proved inaccurate.
The malfunction of Boeing’s Starliner space capsule during its maiden flight on Friday, which left it unable to dock with the international space station, added to setbacks at the Chicago-based company. Mr. Muilenburg tweeted his congratulations to the Starliner team before the problem was disclosed on Friday.
The person close to the board noted that the mission was partly successful and said the mishap wasn’t a significant factor in the directors’ decision.