Boeing CEO Dennis Muilenburg was ousted on Monday after a tumultuous period in which the company faced a series of setbacks, including two fatal crashes, delays and numerous issues with its 737 Max airplane. Boeing continues to struggle to get its most important product back in the air, Eurasia Diary reports citing CNN.
Chairman David Calhoun will take over as CEO, effective January 13, 2020.
Boeing (BA) said in a press release that its board of directors decided to part ways with Muilenberg in part because its customers and regulators no longer trusted the company's decision-making.
"A change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders," the company said.
Boeing's 737 Max, which was the company's bestselling commercial jet, was grounded worldwide in March 2019 after two fatal crashes killed 346 people. It still hasn't returned to flight, despite Boeing's efforts to clear a software fix with regulators.
Other problems have plagued Boeing during Muilenberg's tenure. Another version of the 737 Max, an older version of 737 NG aircraft, was found to have structural cracks that forced airlines to inspect their fleets.
Boeing still has a strong balance sheet, and its stock is up marginally this year despite all of its setbacks. But questions about the company's leadership grew louder as the company's missteps added up.
"Under the company's new leadership, Boeing will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA, other global regulators and its customers," the company said in a statement.
Boeing's stock rose 3% in early trading Monday.
Muilenburg was informed Sunday night that Boeing's board of directors would ask him to resign, according to a person familiar with the board's decision.
The call came after board members met in-person last weekend and expressed concerns that Muilenburg got "sideways" with the FAA as well as with some customers who have been hurt and confused by all the shifting timelines for the 737 Max, the source said. The board, however, didn't directly address Dennis's future at the board meeting last weekend.
Some board members expressed concerns that a leadership change could destabilize the company. But, ultimately, the board concluded the company and the FAA are in a good place now with a schedule and timeline to get the 737 the certification it needs.
Muilenburg, 55, became CEO of the world's largest aerospace company in July 2015. He previously held the chairman role as well but relinquished that seat in October. He had worked at Boeing in a number of different roles since 1985.
Incoming CEO Calhoun has served on Boeing's board since 2009. He has also served as a senior managing director at Blackstone Group and he previously was the chairman and CEO of Nielsen Holdings.
