Supply Chain Matters highlights breaking news of an announced major senior leadership change for commercial aircraft designer and producer Boeing. The executive changes involve the CEO, head of commercial aircraft business unit, along with board of directors leadership.

Significant Management Leadership Shakeup

According to published reports from both Bloomberg and The Wall Street Journal  this morning, Boeing is undergoing senior management leadership changes in the wake of the ongoing production quality corporate and other challenges that have tarnished this aircraft maker.

This morning’s announcement calls for a reported set of sweeping changes to senior management which include the company’s CEO, head of commercial airplanes business unit, and board chairperson. They are far reaching in their implication and resolve.

Existing CEO Dave Calhoun will reportedly be leaving the company at the end of 2024. Calhoun, a former General Electric and Blackstone executive was appointed in 2020 in the midst of the global wide grounding of Boeing 737 MAX aircraft as a result of two fatal crashes.

Reportedly in a communication to Boeing employees today, Calhoun indicated that he has been considering stepping down for some time. He further communicated: “We are going to fix what isn’t working, and we are going to get our company back on track towards recovery and stability.

The head of Boeing’s commercial aircraft business unit, Stanley Deal, will reportedly retire from the company, effective immediately. Deal will be replaced by Stephanie Pope, a 30-year Boeing employee, was appointed to be the commercial aircraft producer’s first appointed Chief Operations Officer as of the start of 2024.

Boeing’s board chair, Larry Kellner, a former Continental Airlines CEO, will not stand for re-election.

The new board chair is reported to be Steve Mollenkopf, a former CEO at Qualcomm. He will reportedly be leading the search for a new CEO.  According to The Wall Street Journal, the company’s CEO search will focus both inside and outside of its executive ranks. It was Kellner who reportedly fielded interest among major airline customer CEO’s for their interest in speaking directly with the company’s board members regarding plans as to how the company is going to address its ongoing production quality and other aircraft related challenges.

Culmination of Long History of Events

Boeing has been dealing with a long history of events related to aircraft design and safety, along with quality shortcomings in aircraft production processes.

The 737 MAX aircraft program has a long history dating back to two fatal aircraft crashes that occurred in 2018 and 2019. The tragic incidents were related to flaws in the aircraft’s control systems and were subsequently addressed by a redesign of the system.

Supply Chain Matters has previously provided multiple commentaries related to incidents of production shortcomings and quality lapses involving not only the 737 MAX product family, but the wide body 787 Dreamliner aircraft.

In February of 2021, we published a commentary summarizing the engineering and supply network challenges surrounding the company. Each of these incidents have prompted the FAA and other global regulators to step-up their monitoring of Boeing’s production and engineering processes.

Since January’s incident involving an Alaska Airlines 737 MAX aircraft experiencing cabin de-pressurization because of a rear cockpit door blowout the crisis surrounding Boeing with airline customers, flyers, and major suppliers has only deepened.

Our regular updates regarding that incident had culminated in last week’s update which noted that major U.S. and international airline CEO’s were seeking to meet directly with the company’s board members to ascertain when will the company’s production deficiencies be addressed.

Added Perspectives

Today’s announcement was in context, only a matter of time given the litany of events and frustrations. Airline passengers demanding that booking sites highlight the type of aircraft being utilized for a flight in order to avoid certain Boeing aircraft, is a reflection of a crisis of perception and confidence.

The fixing of Boeing’s design and production challenges will take added time and patience, in addition to new leadership with added resolve and purpose.

We trust that the company’s board of directors and investors will further seek to externally recruit leadership with extensive operational and supply chain leadership track records.

Boeing needs to rebuild itself to again be a vibrant industry competitor, aircraft designer and contributor to innovation. A lot of the industry’s suppliers, airlines and travelers have a vested interest in the company’s success.

 

Bob Ferrari

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