An aerial photo shows Boeing 737 Max airplanes parked on the tarmac at the Boeing Factory in Renton, Washington, on March 21, 2019.
Lindsey Wasson | Reuters
Help wanted at Boeing.
CEO Dave Calhoun on Monday announced he’s stepping down from the aerospace giant’s top post at yr’s end as the company struggles with a security and production quality crisis tied to its bestselling airplane, the 737 Max. Boeing said it would begin a seek for Calhoun’s alternative.
Boeing also announced Monday it’s replacing board Chair Larry Kellner and the chief executive of its all-important business airplanes unit, Stan Deal.
Calhoun told CNBC on Monday that the decision to retire was “100%” his own and that he can be involved to find his successor. His departure is not much of a surprise given the struggles of the previous couple of months.
Boeing’s customers had grown frustrated under Calhoun’s watch as they faced the fallout from recurring quality issues that span programs like the 737 Max, the 787 Dreamliner and the two 747s that can function Air Force One aircraft.
“We want someone to repair Boeing,” one major airline executive, who wasn’t authorized to talk to the media, told CNBC after Boeing announced the management shake-up Monday. “They unequivocally needed a change.”
With supply chain issues, quality lapses and more regulator scrutiny in the wake of a panel blowout from an Alaska Airlines 737 Max 9 in January, airplane deliveries are arriving late, and airline executives say the problems have forced them to vary their growth and fleet plans.
Executives at Boeing’s customers told CNBC they need the company’s latest leader to have manufacturing acumen, expertise in the highly regulated and technical world of aviation, and, perhaps most difficult of all, the ability to rally Boeing’s employees and ensure a culture of safety, consistency and innovation.
“That is going to be a difficult role to fill. You are going to need someone with an enormous amount of energy and commitment,” said John Plueger, CEO of Air Lease, a serious buyer of Boeing planes that leases them to airlines. “You don’t need anyone for 2 years. You wish someone at the head of the ship for so long as possible.”
The subsequent boss at Boeing could have to contend not only with the company’s internal struggles but lost market share to rival Airbus. Meanwhile, China has been pushing ahead with constructing its own business aircraft.
“I would like anyone who knows how one can handle an enormous, long-cycled business like ours,” Calhoun told CNBC in an interview Monday while announcing his departure. “It isn’t just the production of the airplane. It’s the development of the next airplane. Our next lead goes to develop … the next airplane for the Boeing company.”
Financial analysts applauded the period of time Boeing is giving itself to search out Calhoun’s alternative. 4-year Boeing board member Steve Mollenkopf, an ex-Qualcomm CEO who will take over as independent chairman of the board, will lead the search.
“It provides leadership continuity, which a knee-jerk change wouldn’t, and CEO Dave Calhoun clearly is on board with the must bolster safety,” said TD Cowen analyst Cai von Rumohr, in a note Monday.
While Boeing didn’t comment on its top candidates, here’s who some aviation experts say could potentially lead Boeing:
Larry Culp
Larry Culp, chairman and chief executive officer of General Electric Co., speaks during the Semafor World Economy Summit in Washington, DC, on Wednesday, April 12, 2023.
Al Drago | Bloomberg | Getty Images
General Electric CEO Larry Culp is “probably at the top of the list for a Boeing CEO,” said Richard Aboulafia, managing director at AeroDynamic Advisory, an aviation consulting firm.
Culp is ready to move the aviation unit of GE that’s about to spin off, an organization that makes and overhauls engines that power each Boeing and rival Airbus planes. Culp has led a turnaround for the conglomerate and oversaw the split of the company.
“The connection with Boeing has never been stronger,” Culp told reporters earlier this month at an investor event. “Clearly, 2024 hasn’t played out the way they might have liked let alone the way we might have liked. We’re attempting to support them in every possible way.”
But Culp is specializing in GE’s aerospace unit as a stand-alone company, a GE spokesperson said in response to questions on a possible future for him at Boeing.
Pat Shanahan
Pat Shanahan, then-senior vp of Airplane Programs for Boeing Business Airplanes, speaks during the grand opening of the latest Boeing 737 Delivery Center on October 19, 2015 in Seattle, Washington.
Stephen Brashear | Getty Images
Pat Shanahan, the interim CEO of Spirit AeroSystems, is one other possibility, Aboulafia said.
A 3-decade Boeing veteran, Shanahan was appointed last October to move the Boeing supplier, which makes fuselages for the company’s 737 Max and other parts, as Spirit handled its own quality problems which have spilled over to Boeing.
Boeing is in talks to purchase Spirit, bringing the fuselage manufacturer back in-house after spinning it off almost 20 years ago. A reunion could naturally slot Shanahan in as chief executive of the merged company.
“Mr. Shanahan stays solely focused on driving a zero-defects culture across all features of Spirit AeroSystems,” Spirit spokesman Joe Buccino told CNBC on Monday.
David Gitlin
David Gitlin, chief executive officer of Carrier Global Corp., during a Bloomberg Television interview on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday, May 25, 2022.
Jason Alden | Bloomberg | Getty Images
Aboulafia also mentioned Carrier Chairman and CEO David Gitlin, who serves on Boeing’s board.
Gitlin has experience in aviation, previously working as president and chief operating officer at Collins Aerospace. Aviation experts have said said someone with a powerful background in manufacturing and operations can be needed.
Carrier didn’t reply to a request for comment.
Stephanie Pope
Boeing’s Stephanie Pope gives a press conference at the Paris Le Bourget Airport, on June 20, 2023.
Geoffroy Van Der Hasselt | AFP | Getty Images
Stephanie Pope, who was recently promoted to chief operating officer after serving as head of Boeing’s global services unit, is the most blatant internal choice to succeed Calhoun. (Former Boeing CFO Greg Smith retired from the company in 2021. He was also seen as a possible successor.)
But Pope will take over from Deal, who is retiring from his post as head of Boeing’s business airplane division. And one aviation executive questioned why Boeing would not have announced her appointment on Monday if she were the alternative.
The “management changes are geared to institutionalize a priority on safety throughout the company by bringing in latest blood,” TD Cowen’s von Rumohr wrote.
— CNBC’s Phil LeBeau contributed to this report.