Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Boeing CEO promises company is turning around…again April 24, 2024
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
Breaking News: Muilenburg out, Calhoun becomes president and CEO, Kellner named chairman
Dec. 23, 2019: Boeing press release:
(Leeham News analysis to come.)
New Leadership to Bring Renewed Commitment to Transparency and Better Communication With Regulators and Customers in Safely Returning the 737 MAX to Service
CHICAGO, Dec. 23, 2019 /PRNewswire/ — Boeing [NYSE: BA] announced today that its Board of Directors has named current Chairman, David L. Calhoun, as Chief Executive Officer and President, effective January 13, 2020. Mr. Calhoun will remain a member of the Board. In addition, Board member Lawrence W. Kellner will become non-executive Chairman of the Board effective immediately.
David Calhoun is named president and CEO of Boeing. Source: CNBC photo.
The Company also announced that Dennis A. Muilenburg has resigned from his positions as Chief Executive Officer and Board director effective immediately. Boeing Chief Financial Officer Greg Smith will serve as interim CEO during the brief transition period, while Mr. Calhoun exits his non-Boeing commitments.
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.
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.
“On behalf of the entire Board of Directors, I am pleased that Dave has agreed to lead Boeing at this critical juncture,” Mr. Kellner said. He added, “Dave has deep industry experience and a proven track record of strong leadership, and he recognizes the challenges we must confront. The Board and I look forward to working with him and the rest of the Boeing team to ensure that today marks a new way forward for our company.”
Mr. Calhoun said, “I strongly believe in the future of Boeing and the 737 MAX. I am honored to lead this great company and the 150,000 dedicated employees who are working hard to create the future of aviation.”
It was going to happen anyway. Now we need to see board members heads roll as well.
Totally agree with your recommendation, since they were all aware of the B737 Max development issues, and are as much of Penally Liable.
I don’t know how or why Muilenburg was able to keep his job past his nonsense with staying on Trump’s side after Charlottesville. That showed a lack of moral integrity (that other CEOs demonstrated by leaving Trump’s Economic Council as soon as he “both sides are bad” comments), and then he compounded it with a legacy of failures uninterrupted by success (737Max fiasco, losing Project Sunrise, delay after delay for the 777X, KC-46a screwups, and now a Boeing Starliner that couldn’t find the brightest star in the sky (the ISS).
His continued support by the board just showed me (and a lot of others) that white privilege was/is ENORMOUS in Boeing. He should’ve been thrown out on his ear a long time ago, and don’t think the F-15X purchase by the Air Force is not going to come back and bite Boeing in the rear end, as that tender has raised more than a few eyebrows, what with Shanahan being ousted as SecDef (albeit over an unrelated matter, but still, looks real uncool a former Boeing exec happens to get Boeing some nice contracts on his way out the door)
Ah Neo-Marxist PC binary thinking was really lacking here… How you do fail to discover the intersectionality of a management culture and ascribe it to skin color is itself a telling sign of formulaic approach to reality and lack of skills when confronted out your very self-restricted privilege zone.
[Edited. Totally off topic, delving into politics.]
You exemplify how to avoid credibility, with your ‘white privilege scam.
It’s ‘content of character’ that counts, in the words of a famous American who was assassinated for his efforts.
In politics, for example, black-skinned people have been no better than whiteys – Barack Obama, Condoleeza Rice (who was promising but wimped out against Islamic Totalitarians despite her childhood experience), and The Squad in Congress today. Not too mention blacks killing blacks in Africa (and the violent young-black-male culture in some US cities).
(http://www.moralindividualism.com/whycondi.htm
Good, this is at least somewhat of a change. Now many, if not most of the BOD have to go as well.
Hopefully this will bring back some confidence in Boeing and especially the B737MAX program.
The stock is up (pre-market) >2.6% – right now, it seems like a good thing.
Look only at stock market long term. 2.6% is even a feeble amount which shows to me that stock market is in a wait and see mood.
One way to read this is that, all the dirt is now out and Muilenburg gets the blame. Better news is coming and the new guy gets the credit.
Maybe, but this is not how it looks to me. D.M. getting fired a few days after announcing the full stop of production tells me that D.M.s one-way strategy (software fix) was collapsing over him. Both combined I see this as proof that the MAX will require significant hardware changes.
From this perspective the reaction of the stock market is looking pretty stupid. No surprise there.
I think it is enough that he failed to predict how much time the MAX would be grounded.
I really hope this is not coming too late…
Good, a non McD alumnus. Hopefully this paves the way for return to service, better customer relations, and a decision forward for NSA/NMA shortly.
Not an Mcd alum, but a Neutron Jack welch – GE Alum plus mckinsey alum which is either just as bad or worse-great beancounter, which is what caused the problem and pee-poor response to date.
The three most important things ast boeing for the last 3 decades- are profit- bonus- and shareholder value
A stand by the former CEO to take full responsibility early on and step down then (latest after the ET crash) would have sent a strong signal that the top walks the talk. Opportunity missed big time.
Unfortunately, it is now an uphill battle – but better now than later. Wishing D. Calhoun and the entire team success in reeestablishing Boeing.
Was this Trump?
As if the BOD knew nothing and is not guilty too.
Transparency, should start tomorrow, firefighters need to work too.
CEO and President again, as if that has worked well.
Thanks to the regulators who uncover this deadly story.
Boeing Boeing Boeing. Surely the change should have happened months ago? Instead one press briefing after the other saying one thing, meanwhile the truth has been something different. We always have to try and read between the lines. My read? Production of MAX won’t restart until July at the latest. 777x test flights will not start in 2020. Of course the company will blame the outgoing CEO, as if they didn’t know what was really going on. And of course, many will drink the Kool Aid.
@Ebbuk – the stock is (still) up right now by almost 2.6% so maybe many are drinking the koolaid.
I still see Boeing with A LOT of issues and IMHO the stock price will drop accordingly.
My God! That press releases didn’t pull any punches about the board’s opinion of Muilenburg.
It’s mainly about the optics. They can now say that DM was the stumbling block and that has now been removed.
So it’s part of the public circus, and the general rule of management, to preserve itself always by assigning responsibility to a lesser position. It’s notable that the board choose from among its own, that indicates a lack of recognition of their own role.
The truth will become more obvious as we see whether things change significantly with RTS. We’ll have to wait and see..
I agree. The CEO doesn’t do anything the board doesn’t agree with, so the board has been complacent as well and should go as well. Now it’s all optics and marketing to say we got rid of the problem. But have they and will they get away with it.
After all the truth you speak, you incidentally throw in a “RTS”, as if that was a given. Until your last paragraph, I thought I could be surprised.
Bernardo, I meant whether the attitude towards RTS changes in such a way that moves it forward, and does not hold it up or result in further delay. I think RTS will be the benchmark by which Boeing progress is measured, by customers and shareholders and the general public.
Well the board have been in hibernation all this time.
Remember that the board was ruled by Muilenburg too, contrary to any orthodox management policy.
MAX happened and he got slapped and thrown out of the board top.
As a CEO he choose to go ahead with a strong MAX production level despite the risk. Production stoppage shows he was never in control of anything and makes it seem he had no reliable input from engineering regarding the time to have a workable solution which opens another can of worms.
And we will all forget that McNerney made the decision to build the MAX, was there until 6 months before the first flight and retired in wonderful comfort. Another ex GE success story.
So the main fuse has now blown.
The Board now stands exposed directly to the increased voltage of the public opinion current⚡️⚡️⚡️.
Welcome to Mr. Calhoun as the new fuse, but can he be effective?
Great, another ex GE person to continue the slow erosion of Boeing. As if Harry & then James weren’t bad enough…
Anyone care to take a look at today’s GE and tell me why having a 3rd six-sigma guy running things is good?
6sigma isn’t really the issue, it is the GE culture that 10% of employees need to be fired at all times, employees are disposable, and engineering is an expense to be minimized rather than the crown jewels of a technology company.
I do wonder how GE can apparently do successful engine development with that philosophy.
Or do we see the “unsuitable for (GE) management” fallout from GE “parachuted” away from GE to wreak havoc elsewhere?
I am reminded of that Lopez guy gifted to VW ( away from GM )
https://de.wikipedia.org/wiki/Jos%C3%A9_Ignacio_L%C3%B3pez_de_Arriort%C3%BAa ( use Google translate )
The new CEO is an accountant from GE. Gee, great.
“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.”
Translation: the new CEO will do a better job pressuring regulators and smooth talking customers. The words “engineering”, “software”, and “safety” appear nowhere in the press release because the new guy knows nothing about them.
“The words “engineering”, “software”, and “safety” appear nowhere in the press release because the new guy knows nothing about them.”
Good point. I also like to do word checks on important speeches . In most cases shows a lot.
“”The words “engineering”, “software”, and “safety” appear nowhere in the press release because the new guy knows nothing about them.””
Only because of his not knowing he can “strongly believe in the future of Boeing and the 737 MAX”.
The news is welcome.
But it wouldn’t have happened without a very serious issue with the MAX. Please remember that.
I for one think there is a lot more news to this in the background. The fact that airlines are pushing back reintroduction of the MAX to June is not a good sign. On top of this there will be no production of new MAX aircraft. I’m confident there will be no production for at least 3 months as a minimum, which is going to be a massive disaster for airlines, suppliers, and shareholders.
I think it was the airlines who finally said enough, we dont believe a word Boeing is telling us anymore.
That was after the other world aviation regulatory agencies stopped listening a little while back , and the FAA and finally its administrator last week said the same.
Its incredible that such a huge company , with all its technical capabilities, could be so clueless on a matter that is core to its business…. and its paraded for all its customers to see.
Well said, classic reassurance that “the emperor has no clothes”. Go LFC!!
Plausible that airlines ‘had words’ with the board.
Certainly Boeing failed to grasp the scrutiny it would be under from regulators – for example FAA ruling that multiple SEOs must be considered, which was a key reason for Boeing changing to dual concurrent processing to detect AOA failure.
(SEO = Single Event Upset, flipping of a digital bit by a particle spawned by cosmic rays.
Small size of circuits facilitated the problem.
Known to Collins and Boeing since after the 777 entered service.
There are methods used in circuitry to reduce impact on functioning of circuitry.
I don’t know why it is a problem with fast computing, as the next cycles should wash it out.
“I don’t know why it is a problem with fast computing, as the next cycles should wash it out.”
As an example of risk:
If you load config data (multiplyer, offsets, config bits ) from nonvolatile once and then store it in volatile, flip susceptible RAM memory
and use it from there it will not “wash out”.
Once flipped you will continue to use false information.
Same for computations that create are “infinite response” ( like digital filters with backfeed )
Thanks.
Back when, configuration data was loaded at bootup but should have been locked during flight. The 757 and 767 used wiring jumpers to ID airplane and engine, required pilot verification of displayed IDs, I don’t know how they protected it during flight. I don’t recall who made the computer, IIRC just for engine and troubleshooting display in centre forward panel, Collins did the displays IIRC.
(In those days Boeing often mixed and matched, for example Collins flight director and Sperry gyros. I saw the benefit of that on the commercial C-130 (L100), Lockheed bought a Collins package but their gyros were not the equal of Sperry’s.)
I notice CFO Greg Smith is effectively in charge till the current Chairman steps down from all his other responsibilities with other companies.
Smith is the one to watch, as I dont think hes got the Boeing hubris, and could see another disaster for the NMA program the way it was previously planned and his other position in Boeings executive row – Exec VP for Enterprise Performance & Strategy- was resisting the earlier launch.
Is he the next permanent CEO ?
Another jack welch GE beancounter type is NOT what boeing needs
dennis got the best lifeboat on then Boetanic
calhoun is trying to plug the leaks as the Band plays nearer my golden chute to thee.
Studies will be published on this later. I think strong groupthink, a feeling of being untouchable supported by strong stock value will be in the conclusions.
The A350 is not a problem, 737 can compete until 2030, CSeries will fail, A330 is dead, airlines will always wait for us and Washington will back us up, push FAA, right or wrong. Stock owners only hear what they want to hear.
After telling each other 20 times they started believing themselves.
Bring back Alan Mullaly! I know he’s in his 70’s but give him 4-5 year reign to get Boeing back.
In fact, IMHO the biggest mistake Boeing made was not to make Mullaly the CEO of Boeing (I even mentioned this on other boards years ago).
“Bring back Alan Mullaly! I know he’s in his 70’s but give him 4-5 year reign to get Boeing back. ”
Personally, I’d like to see Boeing hire Elon Musk for the CEO job. That would make me laugh!
Everyone: stop the politics. Not relevant.
Hamilton
What’s interesting to me is the board did not say fresh blood was needed or such, it specifically talked about transparency and collaboration which infers Muilenberg was not doing enough of those things.
How much it actually changes things in substance not PR we will eventually see.
Both Stonecifer and Mc Nermey killed the venerable high tech culture at Boeing …
Muillenberg just inherited of an already catastrophic situation (MAX, KC 46 , 787 , unprepared competitive product line …)
good luck Mr. Calhoun !! :=((