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Updated Mar 25, 2024, 12:13pm EDT
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Semafor Signals

Boeing CEO to step down as company faces ongoing 737 Max crisis

Boeing CEO Dave Calhoun. Valerie Insinna/Reuters/File Photo
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The News

Boeing CEO Dave Calhoun will step down by the end of this year, the company said on Monday, as the plane maker battles an ongoing safety crisis.

Calhoun’s resignation comes alongside a wide-scale shakeup at the embattled aerospace firm. Larry Kellner, chairman of the board, is also resigning and will step down from the board in May. Stan Deal, president and CEO of Boeing Commercial Airplanes, has resigned effective immediately.

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In January, a door blew off of an Alaska Airlines Boeing 737 Max 9 flight in mid-air just minutes after takeoff.

“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,” Calhoun wrote in a memo to staff on Monday.

The company’s safety record has come under intense scrutiny in recent years. In 2018 and 2019, two separate Boeing 737 Max 8 planes crashed, killing 346 people.

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SIGNALS

Semafor Signals: Global insights on today's biggest stories.

Calhoun was hired to fix Boeing but failed

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Source:  
CNN

Calhoun retaining his job despite Boeing’s problems persisting during his three-year tenure was an “extreme embarrassment” for the company, one aviation analyst told CNN earlier this month. In fact, Boeing even raised Calhoun’s compensation to $22.5 million in 2022 despite numerous issues with the 777 and 787 programs that delayed orders. Critics also questioned Boeing’s decision to hire Calhoun, who had no engineering background, to fix the company’s corporate culture and refocus on its engineering prowess. While the bulk of Boeing’s problems started before Calhoun’s ascension, the company “hasn’t been able to shake its enormous problems” under his leadership, CNN wrote.

Boeing is in shaky financial waters

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Source:  
Forbes

Boeing has historically relied on its defense division when its commercial division struggles, but given the government’s mounting deficits and high interest rates, “there simply isn’t room in the [Pentagon’s] budget for Boeing to grow enough there to make up for its losses in civil aviation,” business author Gautam Mukunda wrote for Forbes. While Boeing’s rival Airbus has suffered its own production quality issues, “anytime anything happens with Boeing, news headlines will inevitably spotlight it,” making it difficult for its commercial division to recover, Mukunda argued. The company needs to revive its “old culture,” he wrote, one that prioritizes building state-of-the-art aircraft instead of one led by “Wall Street disciples more interested in squeezing out an extra penny per share.”

Flying is safe, but intense attention on incidents could make it safer

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Sources:  
The New York Times, The Wall Street Journal

Despite weeks of headlines about flying safety incidents, there has been no actual uptick in the number of accidents from last year, and data shows that “commercial flying has never been safer,” Zeynep Tufekci, a columnist at The New York Times wrote. But Boeing’s safety scandals and numerous near-misses, likely caused by a broken air-traffic control system, “are all signaling that things are not going in the right direction,” Tufekci argued. The close public attention on these incidents will hopefully ensure that things get better, because, “Safety, like trust, is a hard currency to gain but is easy to lose — and it’s what everything runs on,” she wrote.

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