David Calhoun steps in as CEO of Boeing as the Max 737 crisis picks up speed.
This week, David Calhoun steps into his new role as CEO of Boeing. Calhoun is replacing former CEO, Dennis Muilenburg. The board fired Muilenburg just before Christmas and announced Calhoun as his replacement.
As a member of the Boeing board for over 10 years, Calhoun is already well-versed in the many challenges the company faces. But even still, many people are wondering whether he’s up to the task of repairing the company’s damaged reputation and culture.
The backstory on Boeing
Boeing continues to struggle with the fallout of the two Max 737 crashes over a year ago. 346 people were killed in the crashes, and the airliner has been grounded ever since.
Muilenburg was sharply criticized for his inappropriate response to the Max 737 crashes. He previously stated the federal regulators would allow the planes back in the air by the end of 2019. This statement put the company sharply at odds with the Federal Aviation Administration (FAA).
But even more surprising, last week, Boeing released documents showing that employees hid safety concerns about the Max 737 while it was still in development.
The documents contained over 100 pages of internal emails and messages between employees. In one exchange, two employees commented that they would never let their family members fly on a Max 737. Another employee referred to the company as having a “culture of good enough.”
Bottom line
One of the biggest criticisms of Calhoun is that he’s been on the board at Boeing since 2009. This has led many to argue that he’s too close to the problem and won’t be able to shift the company culture at Boeing. And according to a recent securities filing, Calhoun stands to earn a $7 million bonus if he can convince regulators to sign off on the Max 737.
Overall, the grounding of the Max 737 has lowered the company’s market value by over $50 billion. And according to Treasury Secretary Steve Mnuchin, the grounded 737 could curb economic growth in the U.S. by as much as 2.5% in 2020.
