Boeing has ousted its chief executive in an attempt to restore confidence in the troubled company in the wake of the 737 MAX fiasco.
US lawmakers and others had been calling for Dennis Muilenburg’s head after the company’s controversial handling of the MAX crisis but his demise came sooner than many expected.
It followed a series of setbacks for the company, including this month’s decision to halt production of the MAX due to delays in getting it recertified.
READ: Boeing’s Starliner in historic landing after docking failure.
Boeing has been reeling for most of 2019 from the fallout from two fatal 737 MAX accidents in which 346 people died and which prompted the grounding of the global MAX fleet in March.
Problems have included friction with the US Federal Aviation Administration over documents provided by the company as well as with airlines losing money because of the groundings.
The company was also slow to publicly acknowledge the severity of its problems and the damage to its reputation.
Muilenburg’s resignation from the top job and board is effective immediately and recently appointed chairman David L. Calhoun has been named as chief executive and president from January 13.
Long-time Boeing director Calhoun, 62, was appointed chairman in October after a board shake-up saw him replace Muilenburg.
He is a senior executive at private equity company Blackstone Group and a former top executive at engine-maker General Electric.
Calhoun is being replaced as chairman by board member Lawrence W. Kellner and chief financial officer Greg Smith will serve as interim CEO during the brief transition period to allow the new CEO to exit his non-Boeing commitments.
The company said in a statement that it believed the change in leadership was necessary to restore confidence in the company as it moved to repair relationships with regulators, customers and other stakeholders.
It said this would include a renewed commitment to full transparency, “including effective and proactive communication with the FAA, other global regulators and its customers”.
“Dave has deep industry experience and a proven track record of strong leadership, and he recognizes the challenges we must confront, “ Kellner said.
“The board and I look forward to working with him and the rest of the Boeing team to ensure that today marks a new way forward for our company.”
Moody’s Investors Service said the change in CEO was not unexpected and would not immediately affect the company’s ratings.
The ratings agency had already downgraded Boeing’s senior unsecured and short-term debt after the announcement it would halt MAX production.
According to The Wall Street Journal, Muilenburg is eligible for a $US39 million payout. He had been CEO since July 2015 and presided over robust growth at the company.
Boeing also announced that communications veteran and former fighter pilot Niel Golightly would be its new senior vice president of communications from January 1.
He replaces Anne Toulouse, who previously announced plans to retire in early 2020, and was most recently global chief communications officer at Chrysler Automobiles.
His 25 years of communications and strategy experience includes leadership roles with several large, global industrial companies such as Royal Dutch Shell and Ford Motor Company.
Prior to his corporate experience, Golightly served for 14 years in the U.S. Navy, including as a fighter pilot and as a speechwriter to the Secretary of the Navy and the chairman of the Joint Chiefs of Staff.
