Boeing CEO Calhoun exiting at end of year

WASHINGTON — Boeing CEO Dave Calhoun will step down at the end of 2024, the company announced today in a major leadership shakeup that comes as the aerospace giant reels from a safety crisis involving its bestselling commercial plane.

The US planemaker has yet to identify a replacement for Calhoun. Steve Mollenkopf, a member of Boeing’s board and previously the chief executive of technology firm Qualcomm, will lead the search for a new CEO.

In addition, it was announced today that Larry Kellner will be stepping down as chairman of the board, following Boeing’s annual meeting this spring, with Mollenkopf taking over that role. Stan Deal, head of Boeing’s commercial planes arm, has also resigned immediately and will be replaced by Boeing Chief Operating Officer Stephanie Pope.

Boeing’s leadership has come under fire since a Jan. 5 accident where a door plug blew out of a brand new 737 MAX while in mid-flight, prompting investigations into the incident as well as an audit of Boeing’s 737 production line.

Calhoun will stay on through the duration of the year to guide the company through the ongoing crisis, he said in a letter to employees, adding that Boeing must “inculcate a total commitment to safety and quality at every level of our company.”

In an interview with CNBC after the announcement, Calhoun said his departure from Boeing was his decision and said the next CEO must understand how to handle a long cycle business and have the experience needed to develop Boeing’s next commercial airplane.

Pope — a longtime Boeing veteran with a financial background who was elevated to COO last year  — was widely considered to be a successor to Calhoun for the chief executive role. At the time, Calhoun was anticipated to stay at Boeing through the 2025-2026 timeframe to oversee the company’s financial recovery from the original 737 MAX crisis and COVID-19 pandemic.

Robert Stallard, an analyst with Vertical Research Partners, said the changes to Boeing’s C-suite are a “wise move” to restore confidence with its supply chain and regulators, but that much will hinge on who becomes Boeing’s next chief executive.

“As we commented last week we think it will require someone with pedigree and patience, as fixing Boeing is probably a multi-year non-linear journey,” he wrote in a note to investors. “Despite this major unknown, we can see Boeing’s share price responding positively to this announcement.”

Analysts have speculated one top contender for the CEO role could be Patrick Shanahan, a former Boeing executive and deputy defense secretary who became chief executive of Spirit AeroSystems, Boeing’s top supplier, in October. Boeing has confirmed it is in negotiations to re-acquire Spirit, which was spun off from Boeing in 2005.

“Shanahan has the right pedigree, though we do not not know his intentions or how extensive a search the board aims to conduct,” Seth Seifman of J.P. Morgan said in a note. “We do think it’s worth considering candidates outside Aerospace, as some of the industry’s most successful leaders in recent years — including [General Electric CEO] Larry Culp and [Arconic CEO] John Plant — have come from other industrial verticals.”

The leadership changes do not directly touch Boeing’s defense division, which has been led by Ted Colbert since 2022. Byron Callan of Capital Alpha Partners said Boeing will likely retain its military aircraft business, but given media reports that the company is considering selling its stake in United Launch Alliance as well as some smaller defense units, “we suppose that there could be other questions about rotary, weapons and satellites.”

Updated 3/25/2024 at 11:37 AM with new analyst comments.