Boeing’s Management Overhaul Reveals the Severity of the Company’s Crisis | Business Updates
The significant management changes announced by Boeing reflect the serious situation the company is facing.
It is uncommon for the chairman and chief executive of an organization to step down simultaneously, as Larry Kellner and Dave Calhoun are doing.
The departure of another senior executive, Stan Deal, who immediately steps down as head of Boeing’s commercial airlines operation, is almost unprecedented and is likely due to the crisis surrounding the 737 MAX 9 jet.
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Boeing has faced mass groundings of the 737 MAX 9 since January, prompting an investigation into its fuselage production and causing delays in aircraft deliveries to customers like Ryanair and Southwestern Airlines.
The departure of Mr. Calhoun is particularly damning as the second consecutive Boeing chief executive forced to step down due to production and supply chain issues.
Mr. Calhoun’s decision to depart at the end of the year indicates that Boeing has learned from past mistakes but also highlights investor concerns over production quality.
Boeing’s ability to immediately appoint a new chairman like Steve Mollenkopf may offer some reassurance amid the crisis.
Johns second task will be to identify a new chief executive, with Stephanie Pope likely being seen as a contender.
However, investors may push for an external candidate to avoid any association with the production disasters of recent years.
In a way, Mr. Calhoun deserves sympathy for the challenging situation he inherited.
Read more:
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US regulator increases oversight of Boeing
Boeing’s historical focus on financial engineering rather than research and development has resulted in challenges with the 737 MAX family and has allowed Airbus to surpass Boeing in terms of production and aircraft sales.
The new management at Boeing must focus on rebuilding trust with regulators, customers, investors, and employees to overcome the current crisis.
