Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 5. Turbofan design problems April 26, 2024
- Airbus 1Q2024 results: Airbus CEO: “A350 in-service experience drives positive reputation and orders” April 25, 2024
- A350-1000 or 777-9? Part 3 April 25, 2024
- 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: Calhoun to retire, Deal out, Pope in, Kellner leaving, Mollenkopf new chair at Boeing
Boeing press release; LNA take to follow.
Boeing Announces Board and Management Changes
- Dave Calhoun announces intent to step down as CEO at the end of 2024; Calhoun will continue to lead Boeing through year-end
- Independent Board Chair Larry Kellner announces his decision not to stand for re-election at annual meeting; Steve Mollenkopf appointed new chair
- Stan Deal to retire; Stephanie Pope named Commercial Airplanes CEO
ARLINGTON, Va., March 25, 2024 — Boeing [NYSE: BA] President and CEO Dave Calhoun today announced his decision to step down as CEO at the end of 2024, and he will continue to lead Boeing through the year to complete the critical work underway to stabilize and position the company for the future.
Board Chair Larry Kellner has informed the board that he does not intend to stand for re-election at the upcoming Annual Shareholder meeting. The board has elected Steve Mollenkopf to succeed Kellner as independent board chair. In this role, Mollenkopf will lead the board’s process of selecting Boeing’s next CEO.
In addition to these changes, Stan Deal, Boeing Commercial Airplanes President and CEO, will retire from the company and Stephanie Pope has been appointed to lead BCA, effective today.
“It has been the greatest privilege of my life to serve Boeing,” said Calhoun in a letter to employees. “The eyes of the world are on us, and I know that we will come through this moment a better company. We will remain squarely focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do.”
Read Calhoun’s letter to employees, below.
Kellner has served on the Boeing Board for 13 years and served as its chair since late 2019. As chair, he oversaw the establishment of a new board aerospace safety committee, and during his tenure led the recruitment of seven new independent directors, bringing deep engineering, safety, manufacturing and aerospace expertise to Boeing’s board.
“Boeing plays an essential role in our world, and serving this company, and our people, has been a true honor,” said Kellner. “After over a decade on the board and several years as its chair, I have been considering the right time for a transition of leadership on our board, and have been discussing that subject with Dave and the board in conjunction with Dave’s own planning about his succession timeframe. I want to thank Dave for his tremendous leadership of our company, and I know he will finish the job this year that he started in 2020 to position Boeing, and our employees, for a stronger future. With Dave’s decision to step down as CEO at the end of this year, now is the right time for a transition to my successor. Steve is the ideal next leader to take on the role of board chair, and it is important that the CEO selection process be led by a new chair who will stay at the helm as a partner to the new CEO. With a strong board, an excellent management team and 170,000 dedicated Boeing employees, I am fully confident in our company’s future.”
Mollenkopf has served on the board of directors since 2020. He was previously CEO of Qualcomm. He has bachelor’s and master’s degrees in electrical engineering.
“I am honored and humbled to step into this new role,” said Mollenkopf. “I am fully confident in this company and its leadership – and together we are committed to taking the right actions to strengthen safety and quality, and to meet the needs of our customers. I also want to thank both Larry and Dave for their exceptional stewardship of Boeing during a challenging and consequential time for Boeing and the aerospace industry.”
Pope has been serving as chief operating officer of Boeing since January of this year. Previously, she was president and chief executive officer of Boeing Global Services, where she was responsible for leading the company’s aerospace services for commercial, government and aviation industry customers worldwide. Prior, she was chief financial officer of Boeing Commercial Airplanes, and has held positions in every Boeing business unit. She begins her role as President and CEO of Commercial Airplanes immediately.
Calhoun message to employees
Boeing President and CEO Dave Calhoun shared the following message with all employees today:
Team,
As you all know, the Alaska Airlines Flight 1282 accident was a watershed moment for Boeing. We must continue to respond to this accident with humility and complete transparency. We also must inculcate a total commitment to safety and quality at every level of our company.
The eyes of the world are on us, and I know we will come through this moment a better company, building on all the learnings we accumulated as we worked together to rebuild Boeing over the last number of years.
I want to thank each and every one of you for how you have stepped up to this challenge and for the work now underway to make sure we demonstrate to all stakeholders that the Boeing of the future is everything they should expect it to be. We have been working together for the last five years to address some of the most significant challenges our company and industry have ever faced in our 108-year history. I am confident that the way we have confronted these challenges, and how we are responding to this specific moment, is establishing standards for future generations of employees and will be woven into the fabric of how we operate for decades to come.
It is the future of our company that is the subject of my letter to you today. I have been considering for some time, in discussion with our board of directors, the right time for a CEO transition at Boeing. I want to share with you that I have decided this will be my last year as CEO of our great company, and I have notified the board of that decision.
I originally agreed to take on the role of CEO of Boeing at the board’s request, stepping down as board chair in the process, because of the unprecedented circumstances the company was facing at that time. It has been the greatest privilege of my life to serve in both roles and I will only feel the journey has been properly completed when we finish the job that we need to do. We are going to fix what isn’t working, and we are going to get our company back on the track towards recovery and stability.
My decision to step down as CEO at the end of this year is one the board has been prepared for and will result in a number of changes at a management and governance level moving forward. My long-time partner in all things Boeing, our Chair Larry Kellner, has advised the board and me that he does not intend to stand for re-election at our upcoming Annual Meeting of Shareholders. The board has elected Steve Mollenkopf to succeed Larry as chair. Steve will lead the board process of selecting my successor as CEO. Larry, too, had been considering the appropriate moment to turn over the reins after more than four years as chair and 13 years on our board, and concluded that the CEO selection process should be led by a chair who will stay at the helm as a partner to the new CEO.
I want to express my deepest personal thanks to Larry for his outstanding leadership over the last number of years, and I know I speak for everyone at the company when I say, nobody could have worked harder or longer hours in dedication to his duties. Perhaps first, among the many legacies of his tenure, is profoundly strengthened governance at our company, including through his recruitment of several superb new board members, and his work with others on the board to establish our independent standing board aerospace safety committee. Larry is a professional in every way and someone to whom Boeing owes a great debt of gratitude.
I also want to thank Steve for his willingness to take on the role as chair. Steve has had a long and extraordinarily successful career with decades of experience as both a CEO of Qualcomm and a board member of several important public companies. Since joining the Boeing board, his contribution has been extremely valuable and his professional background as an engineer will serve him and the company well in this new role. I look forward to working with him for the remainder of this year to ensure a smooth transition.
In addition to these changes, Boeing Commercial Airplanes President and Chief Executive Officer Stan Deal will retire from the company and Stephanie Pope will lead our BCA business, effective today. I want to thank Stan for his many contributions and dedication since first joining our ranks 38 years ago, and for his tireless service as our BCA leader during an uncommonly difficult period for our company and for our industry.
I also want to thank Stephanie for taking on this critical role. With nearly 30 years of experience at Boeing, including her successful tenure leading our global services business, Stephanie knows our company inside and out and has a proven track record of superb leadership, including an innate talent for listening and responding to our people. Stephanie is a third-generation Boeing employee. She is deeply committed to our company, to our employees and to our shared future; and she is the perfect person to take on the leadership of our commercial airplanes business at this moment.
As we begin this period of transition, I want to assure you, we will remain squarely focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do.
Thank you,
Dave
The remarkable effect “judicial distancing”
Most people have now forgotten Boeing killing 2 plane loads of passengers and are now focused on someone forgetting about 4 bolts
So, let the guessing game begin:
How much does Calhoun get to ride off into the sunset?
Let the over/under start at $50 million.
You got that in the right ballpark.
OK. 2 quick thoughts.
1) “… [Calhoun] will continue to lead Boeing through the year to complete the critical work underway to stabilize and position the company for the future. …”
I’m struggling with the logic of failed leadership being the right choice to fix things. The logic of Stan Deal retiring immediately is a little easier to follow.
2) I’m trying to picture “stabilizing and positioning for the future.” Will the measure of success, in that respect, be generating enough free cash flow to restart the share repurchase program?
My take: nobody is in Boeing to replace Calhoun. Gives time to find a good outsider, maybe?
The chatter was Pope was the newly anointed CEO-in-waiting, but going to BCA president is strictly speaking a demotion compared to COO, unless she’s retaining that role as well.
I think she’d be viewed as more of the same. Maybe had Alaska not happened, it would have been OK. I’m thinking that the top slot will be between West and Pope in the future – ONCE adult supervision has been brought in to clean up the mess.
Then they can go back to buybacks and dividends once the ship is righted and cash starts flowing in….
West will retire too. IMO.
Top spot will be external candidate who is probably mid 50s and can go on for another 15 years at which point both west and Pope will be too old.
I think Pope as head of BCA is better than head of the company. She’s a great leader and listener
Pope is another accountant!
Lesson NOT learned…
I am going to hold my powder on that one.
I saw the previous comments on her and you can’t disagree with severe caution, maybe even move to your hand on the ejection seat handle.
Boeing himself was not an engineer or an airplane background.
And in its commercial glory years?
“Feeling that none of the company’s senior engineers had a sufficiently broad background to run the company, he turned to Bill Allen.”
What you want is someone who can manage a company and often engineers are not the people to do it.
If they can manage, that is what counts (pun not intended but taken).
Pope is actually a good leader.
Saying she’s an accountant and that’s why she won’t do well is rather simplistic.
Boeings problem is they incentivize the wrong things. It’s not because somebody is an accountant or an engineer and the accountants care about X or Y. If you incentivize the right things leaders will produce the results for the right things and in an environment where the right thing has not been incentivized Stephanie Pope has still done well to lead people the right way
Well mulinberg was an engineer and spent most of the money on stock buybacks. Please let us not be so one dimensional.
Pope is a far better leader than Stan Deal, a great listener and empowers the right people.
I am with Opus on this one.
Need to wait and see and oh by the way, it makes no difference what we think.
In a year we will have some idea if she works out or not.
Mullaly did not know anything about cares (well he knew they had 4 wheels generally and an engine).
By the time he was BCA, he was a manager.
Accountants keep the lights on in the building.
That’s definitely the case here. The end of the year ploy is more to do with bringing in an external person. That person who I’m sure they have an idea of will have their own stuff they need to wrap up and the Steve will need to be officially elected first.
Yep.
Huge mistake not to boot Calhoun, its not like he accomplished anything other than to make it all worse.
By that time Spirit will be purchased and Patrick M. Shanahan can become CEO of Boeing? McDonnell Douglas 2.0
Patrick M. Shanahan can become CEO of Boeing
…and there it is.
I dont think so, he knows too much about Airbus operations and design with Spirit…
That is kind of wild.
Buy Spirit and you get the whole kitten kabboodle of people that have super in depth tech knowledge.
Shanahan level gets you strategy not the nuts and bolts trade secrets. Top site managers and engineers are what gets you that.
Presumably if there’s the merest hint of a McDonnell Douglas 2.0 in the appointments, many of the customers and the regulators are going to become quite worried?
They certainly need a good outsider. The internal culture sounds pretty bad; an all-powerful outsider sounds more like the calibre of appointment that’s needed to show intent.
Thing is, who? It’d need to be someone ready, willing and able. It’s unlikely that the very best possible candidate is sat around twiddling their thumbs waiting for the call. Such people tend to be busy, permanently busy, and I suspect that a lot of the potential candidates are making themselves look as busy and as unavailable as possible.
There’s danger too in this. The company is now officially on the hunt for people. If they get to year’s end without a recognisably good / strong candidate, that’s hardly likely to encourage investors that the company can turn it round.
In other words, in addition to everything else the Calhoun era at Boeing brought, his “leadership” left the company bereft of qualified senior leaders. Quite a 15 year run.
Replying to Scott’s message way up the page:
Fair enough.
By the way, … I eagerly anticipate Stephanie Pope’s first message to employees and the public.
That message had better be she’s converting an office into an apartment at 737 Logan Way. I’m really not being snarky here
My take is that Calhoun is still in a strong enough position (within Boeing) and wanted to “save face” at all cost. Deal was not powerful enough and got the boot.
By planning his retirement with more than 9 months to go, Calhoun isn’t fired. It will look much nicer on his memoirs that he retired (instead of being kicked out).
The lack of successor is certainly his failure too, as he should have seen the signs already when he took the job.
From an external point of view I get the impression it’s too little, too late. It’s not the radical shift I would expect (fire both Calhoun and Deal, and possibly a few more), and let the company be run interim by any of the remaining managers, until a viable and suitable external iron broom is brought in.
I can’t stop thinking the main message is, we don’t want to change too much, so it’s mostly business as usual.
Larry Kellner’s eulogy to Cahoun’s leadership is tone deaf given what’s happened at Boeing. But I suppose he’s on his way out too. Hopefully Boeing will get a new leadership that’s more aware.
CNN “Boeing’s chairman, Larry Kellner, will not stand for re-election as a board director. The board has elected former Qualcomm CEO Steve Mollenkopf to succeed him.”
I’m not fully conversant in how the company is actually run, but if the Chairman packed off the CEO with a bad report wouldn’t that reflect back on the Chairman in the shape of questions along the lines of, “Why didn’t you sack him earlier?”?
The idea is that the CEO should execute the Board of directors goals/instructions. If they are wrong with the directions/resources they give the CEO to work with you get bad results. Hence the chairman of the board is a very important person. The CEO has limited options with the organisation and resources available. It takes time to develop new stuff, I remember talk of engine ceramics and AI 35-40 years ago and it became reality in commercial service just some years ago. Hence the CEO should drive change and at the same time enforce compliance of the system in place and not blink and hope problems will disappear when “shit hits the fan”.
Know we know why we haven’t heard a peep from Pope during the whole Alaska thing – she was kept on the sidelines so that she wouldn’t get splattered with the fallout.
I guess West is sticking around? Pope was CFO at BCA and now leads it. West is CFO at BA. Depending on who they bring in to lead them through the current mess, those two could be vying for the top slot in the future.
The United Airlines reactions to the 737MAX quality findings in addition to Boeing missing deliveries were the tipping point. SWA and Emirates might have helped push the change as not getting the aircrafts as promised. Ryanair always complains so no major impact from them at Boeing I guess.
I think it was all customers telling them how hosed up they were.
Don’t forget the FAA (White House), and Pentagon have been vocal too. There were a lot of conversations behind the scenes, will have to wait and hope some of it comes to light.
TLDR summary, Boeing will have another MBA leading BCA and Boeing will have Qualcomm CEO become chair of BOD and lead the selection for the next CEO.
So in reality nothing much will change, you can’t make this stuff up, I mean who else would you want to help pick our next CEO other than Qualcomm CEO. Will remain optimistic that this will really lead to step change in the BOD and executive leadership but I guess we will have to wait and see…
I am going to say I told you so.
Now, all in one felse swoop, that I had not predicted. It has a logic to it.
The Credit Union I worked for (mechanical systems, power backup for Computer center that sort of thing) had its own Prime Mortgage debacle in the 80s (along with all Alaska Banking entities )
They finally just wrote off all the loans in one quarter, huge hit and then it was done and over.
This has that same fingerprint. Gets all the flack negated, oh, they are gone or, they are leaving.
Only works of course if they get replaced with competent people. Ya gotta start someplace.
Calhoun should have been terminated immediately. Its not like he was effective (gufaw).
And they need to claw back his 5 million. Yea the MAX is in the air, but the 787 was halted and the 777X keeps gimping along. And the MAX is back in the air once again but not the way you want it.
I am just grateful that we did not see 177 people killed over the latest failure. And my gratitude is nothing compared to that of the people on that airplane and their families, loved ones, friends.
Its kit and kaboodle and fell swoop. Good grief, very much off topic, but you really murder the language sometimes.
Ok, parsin out some of the BS.
The MAX door plug blowout was not an accident, it was sheer gross and I have no issue in saying it was criminal Negligence.
I borrow that term from the Gun World (and no this is not to start a gun argument. But there is no longer accidental discharge, its now list as a Negligent Discharge.
“With a strong board, an excellent management team and 170,000 dedicated Boeing employees,”
And we are firing people why? Hmmm, it has all to do with a door plug blowout and massive quality control Negligence that really goes into criminal.
I love Calhoun comment on Stan Deal, “OUR RANKS”. Really, Calhoun was where 38 years ago? Helping Welch hose up GE.
And now we all can see through the rain and exactly why Boeing is such a horrid mess.
I hark back to the report on Boeing and the total chaos of what is supposed to be Quality Control on the floor of the factory. All the pie in the sky garbage is reflected there.
The Ivory tower is tone deaf.
Now to see if that changes or its plug and play the same oh same oh
About time this happened. Liz Pope may not be the most experienced in the industry to fill her post, but thats who is on Boeings bench. An outsider is my hope for a leadership change. Shanahan is there if need be, but he has issues that make him a sticky choice. Airbus may grumble. When we look around at who is available outside, its really hard to see where they go for THE guy……
Oh yeah, gimme some slack, im still at the rehab joint………
Wall Street seems underwhelmed by the news: the stock is currently up less than one percent (10:10 Eastern Time).
Whoever the new members of the Board turn out to be, it would be wise to pick people who don’t have unclean hands from the MAX crashes…because, when the DPA gets nixed (and it will), various (ex-)management figures will be receiving subpoenas, and Wall Street won’t be impressed if active Board members are among them.
At the end of the day, does any of this matter…other than as some symbolic gesture to assuage irritated customers?
Whoever the new CEO is, he/she won’t just be able to just open a can of fresh engineering talent (to correct the effects of the well-publicized braindrain) or to just wave the crippling debt burden away.
The deckchairs will have been re-arranged, but the ship will still be sinking.
Its called damage control and you need to stabilize first.
This move acknowledge the ship has a hole , counter flooding and the patches are being put in place.
Anything is on table. We do not know the behind-the-scenes conversations. The seed of change started when the Pentagon stated they lost confidence in Boeing. Funny it did not get a lot of pub but to go public with that is a strong message.
Would not be surprised if there is a merger announcement soon.
I’m with TransWorld. It’s too soon to say whether or not anything good will come of this. To me the real test will be a willingness to stop the lines, set a policy of stopping them every time a “need” for travelled work emerges, issuing a revised set of financials with values that are somewhat believable, and starting to measuring the right things. As an aside, take a look at the Google Maps satellite view of MWH (Grant County International in Moses Lake). No additional planes coming off of the lines are needed for at least a year. Also, do a little calculation on the dollar value of those engines (minimum of $10 mil a pop).
https://simpleflying.com/boeing-737-max-engines-swap/
Using the stored planes engines to plug gaps in delivery has been happening for some years
google maps/satellite in remote areas isnt always up to date
@Dukeofurl
Yes, despite original plans and commitments to not use stored airplanes for part scavenging, they conveniently let that plan slide by to enable unfathomable traveled work.