Embattled Boeing announced a wholesale management shake-up last month. David Calhoun, a Boeing board member for 15 years and CEO for the last four, will leave the company at year’s end. Stan Deal, head of the commercial airplanes division, will give way to Stephanie Pope, Boeing’s COO since December. And Steve Mollenkopf, former CEO of Qualcomm, will replace board Chair Larry Kellner and oversee the selection of a new CEO.
“You could expect changes given the recent issues,” says Peter Arment, Boeing analyst at Milwaukee-based investment firm Baird. “There was obviously pressure on the board to react.”
The aerospace giant’s quality control has been under a microscope since Boeing 737 Max planes crashed in 2018 and 2019.
Manufacturing quality issues resurfaced in January, after a door panel blew off an Alaska Airlines 737 Max 9 plane. A subsequent FAA audit found dozens of problems with Boeing’s manufacturing and control processes. The Max 9 planes were grounded briefly, but most are now back in service.
Calhoun, who received more than $5 million in restricted Boeing stock early last year to induce him to stay through the company’s recovery process, chose not to remain at the helm.
“It has been the greatest privilege of my life to serve Boeing,” he wrote in a recent letter to employees. “The eyes of the world are on us, and I know that we will come through this moment a better company.” Most analysts expect the company to pick an outsider as its next CEO. Pope, who joined Boeing in 1994, was seen as a potential successor to Calhoun, but may have her hands full with the commercial plane division. While Arment includes her on a shortlist for the top slot that includes insiders and near-insiders like board member David Gitlin and Pat Shanahan, CEO of Spirit AeroSystems and a former Boeing executive, respectively, he believes she might get edged out. “Stephanie Pope is a very talented executive, but she comes from the finance angle and I’m not sure that’s the direction the board will go,” Arment says. “They’ll do an exhaustive search and I think the most likely choice will be an engineer.”
