Boeing fires CEO amid 737 Max scrutiny

Move comes as it struggles to win regulatory approvals for jet; chairman to take over role

Mr Dennis Muilenburg spent more than 30 years at Boeing, and served as chief executive since mid-2015.
Mr Dennis Muilenburg spent more than 30 years at Boeing, and served as chief executive since mid-2015.

CHICAGO • Boeing has fired chief executive Dennis Muilenburg, following a year of intense scrutiny and industrial setbacks set off by twin fatal crashes of its 737 Max jetliner.

The management shake-up comes as the world's largest planemaker struggles to win regulatory approvals for its grounded best-selling jetliner while trying to regain trust with passengers and airline customers.

Mr David Calhoun, who had served as chairman since October, will replace Mr Muilenburg as CEO and president on Jan 13, Boeing said in a statement yesterday.

The move followed a rare public rebuke on Dec 12 by the US Federal Aviation Administration (FAA) and a damaging two-day stint in October before Congress, where Mr Muilenburg faced calls to resign from lawmakers and victims' relatives.

Chief financial officer Greg Smith will serve as interim CEO during a brief transition period, and board director Larry Kellner will replace Mr Calhoun as chairman.

The CEO switch punctuates Boeing's effort to regain its footing amid one of the worst crises of the modern jet era. The planemaker's reputation and finances have been battered after the Max disasters killed 346 people and prompted a worldwide grounding.

Boeing's design decisions and cosy relationship with the FAA are being scrutinised by Congress while the Justice Department is conducting a criminal probe.

"The board of directors decided that 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 in the statement.

A senior industry source called the wording of Boeing's statement "brutal".

Another said the decision was inevitable after spiralling pressures from the 737 production halt to the public slap-down from the FAA, topped off by an embarrassing space launch snafu last Friday.

Speculation that Mr Muilenburg would be fired had been circulating in the industry for months, intensifying in October when the board stripped him of his chairman title.

A Boeing official said that the board deliberated over the weekend and it made the decision to fire Mr Muilenburg in a phone call on Sunday.

Mr Muilenburg's departure caps an extraordinary fall from grace for an Iowa farmer's son who had dreamed of turning Boeing into a globally admired corporate paragon.

For two years as CEO, Mr Muilenburg seemed to have the Midas touch. Then a brand-new Lion Air 737 Max plunged into the Java Sea on Oct 29 last year.

While the plane's design was largely set before Mr Muilenburg became CEO, he bore responsibility for the firm's initial muted response - and the media firestorm that ensued when a second Max crashed less than five months later in Ethiopia.

He would later describe the Max tragedies as the most difficult moments of a career spanning more than three decades, all at Boeing.

Mr Muilenburg joined Boeing from Iowa State University as an intern in 1985. Over the next three decades, the aerospace engineer rose to increasingly prominent positions in the defence business of the Chicago-based manufacturer.

He succeeded Mr James McNerney as CEO in mid-2015 amid the biggest sales boom in aviation history, fuelled by low interest rates, readily available financing and the rapid expansion of low-cost airlines, particularly in Asia.

An avid cyclist fuelled by Diet Mountain Dew, the whip-thin Mr Muilenburg brought an unapologetic, hard-charging edge to Boeing. But the approach came back to haunt Boeing and its CEO.

Professor Paul Argenti of Dartmouth College's Tuck School of Business said that in keeping Mr Muilenburg in the job as long as Boeing has, the company was ignoring elements of the classic crisis communications playbook used by other companies.

"You want to bring somebody from the outside to bring fresh perspective to 'save the day'," Prof Argenti said.

"He should have been gone a long time ago. He is part of the problem."


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A version of this article appeared in the print edition of The Straits Times on December 24, 2019, with the headline Boeing fires CEO amid 737 Max scrutiny. Subscribe