David Calhoun, who will take over as Boeing’s chief executive next year, faces the daunting task of repairing the broken relationship between Boeing and U.S. regulators while saving the 737 Max. But it was only the first hurdle to wait for him. Calhoun, who will take over on January 13th, will lead a company that once prides itself on but is now discredited for engineering problems.
In addition to the suspension of its best-selling aircraft after two serious crashes, Boeing has suffered a series of other setbacks, including a difficult production of the KC-46 tanker, a delay in the 777X and an embarrassing accident over the weekend that prevented its new capsule from docking with the International Space Station.
There are growing signs that sales of the jetliner market are cooling after an unprecedented 15 years of prosperity. What about the rest of the aircraft demand? Airbus has had successful sales at the high and low end of a key market for single-aisle jets, which could squeeze orders for Boeing’s Max aircraft, even if the global ban on the latter is lifted.
“First of all, Dave Calhoun’s mission is to manage this Max crisis in all aspects of operations, finance, regulation and reputation,” JPMorgan analyst Seth Seifman said in a note to clients on Monday. “Calhoun will probably play an important role in product development, starting with the completion of the 777X and then extending to what new aircraft Boeing should develop.” ”
Boeing closed up 2.9 per cent at $337.55 in New York after Calhoun was named as the new CEO, its biggest gain in six weeks. Boeing’s shares have fallen 20 percent since the second Max crash on March 10, the biggest drop in the Dow during that period.
A person close to the board said Boeing’s directors voted unanimously to elect Calhoun as CEO at a special meeting on December 22. Calhoun, 62, has been chairman since October.
Boeing’s board said in a statement Monday that replacing the leader is necessary to restore confidence in the company’s future and that the company is working to restore relationships with regulators, customers and all other stakeholders.
Larry Kellner will replace Calhoun as chairman. As Blackstone Group Inc. Greg Smith, chief financial officer, will serve as interim CEO during a short transition period as Calhoun, the executive, is removing a number of complicated corporate connections.