Boeing CEO David Calhoun to Step Down Amid Commercial Woes

Dave Calhoun Photo: Boeing

Boeing President and CEO Dave Calhoun said on Monday that he will step down at the end of 2024, initiating a leadership transition as the aerospace and defense giant continues to grapple with safety lapses that have plagued its 737 MAX commercial aircraft.

The search for Calhoun’s successor will be led by Steve Mollenkopf, who has been a member of Boeing’s board since 2020 and has been elected as the company’s new chairman. Mollenkopf is a former CEO of the wireless technology company Qualcomm.

This change will be effective when current Chairman Larry Kellner exits at the upcoming annual shareholders meeting. The date for the meeting has not been announced but is expected in the May timeframe.

Byron Callan, an aerospace and defense analyst with Capital Alpha Partners, said in a client note that Boeing’s potential acquisition of Spirit AeroSystems [SPR], a key supplier, could open the door for Pat Shanahan, Spirit’s CEO, to become the top executive at Boeing. Shanahan spent 30 years with Boeing, including leadership roles within its Commercial Airplanes and Defense segments, and led the company’s supply chain and manufacturing operations, before leaving the company in 2017 to become deputy defense secretary in the Trump administration.

Boeing also announced other senior management changes, including the immediate retirement of Stan Deal, who has led Commercial Airplanes since 2019. Stephanie Pope, who has served as Boeing’s chief operating officer (COO) since January and before that led the Global Services segment, is now president and CEO of Commercial Airplanes. Before leading Global Services, she was the chief financial officer at Commercial Airplanes.

The naming of Pope as COO earlier this year also fueled speculation that she was in line to be the next CEO of Boeing. She joined Boeing in 1994 and has also held financial positions in the company’s defense business.

Ted Colbert, who became president and CEO of Boeing’s Defense, Space, & Security segment in March 2022, retains his job. The defense business has struggled with cost overruns on a number of its fixed-price development programs that it won in the mid-2010s.

Jefferies aerospace and defense analyst Sheila Kahyaoglu said the management changes are no surprise and overall are a positive.

“The moves are not surprising as Boeing has come under intense scrutiny from customers and the FAA/government with the change signifying the next chapter for Boeing which includes an intense focus on safety, manufacturing, and customers/ government relations that have come under stress as of late,” Kahyaoglu said in a note to clients. “We view the moves as positive. Current CFO Brian West has been a positive, visible, and vocal around number changes and [Wall] Street interactions.”

In a letter to Boeing’s employees, Calhoun said he and the board have been considering the CEO succession “for some time.” He said Kellner had also been mulling his retirement as chairman and from the board “and concluded that the CEO selection process should be led by a chair who will stay at the help as a partner to the new CEO.”

Deal took the helm at Commercial Airplanes following two fatal crashes of Boeing’s 737 MAX aircraft that led to a worldwide grounding of the aircraft. In January, a door plug on an Alaska Airlines 737 MAX blew out shortly after takeoff, forcing an emergency landing of the plane.

This article was first published by Defense Daily