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Boeing (NYSE:BA) has announced the departure of CEO Dave Calhoun, Board Chairman Larry Kellner, and Commercial Airplanes CEO Stan Deal amidst the company’s latest quality-control scandal.
Shares of BA stock are up approximately 1%, currently trading at around $190 each on March 25, with a market capitalization of $116 billion.
Stan Deal has retired immediately, while Larry Kellner will not seek re-election as Board Chairman. Calhoun will continue as CEO until the end of 2024.
Challenges with the MAX Aircraft
Calhoun took over as CEO in 2020 following the 737-MAX crashes that led to the ousting of his predecessor, Dennis Muilenburg. However, Boeing’s troubles persisted, raising serious concerns.
The aerospace giant has faced allegations of prioritizing rapid deliveries over safety. With BA stock down more than 20% in 2024 and 42% since Calhoun’s appointment, investor confidence has taken a significant hit.
In January, an Alaska Air (NYSE:ALK) 737-MAX experienced a door plug blowout due to missing cap screws. Additionally, a Boeing 787 encountered instrument failure mid-flight between Australia and New Zealand earlier this month, resulting in 50 injuries.
Tragically, the recent apparent suicide of Boeing whistleblower John Barnett adds to the company’s woes. Barnett’s legal team accused Boeing of a protracted campaign of intimidation against him, with the whistleblower first stepping forward in 2017 before facing company-dismissed charges in late 2020.
Corporate governance expert Nell Minow has criticized Boeing’s board, suggesting that the company’s competition with Airbus has led to financial priorities overshadowing safety concerns.
Forecasting the Future
Despite these challenges, Boeing retains profitability potential thanks to its substantial order backlog, a backlog that Airbus cannot match. Yet, the task of replacing Calhoun will be no walk in the park.
Rumors are swirling about potential successors, with General Electric (NYSE:GE) CEO Larry Culp’s name circulating as a probable candidate. Culp is set to lead GE Aerospace, a crucial Boeing supplier, following GE’s impending split.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
